Cost of Living Survey Report

Transcription

1 Date: 1 January 2012 Ref: ICSC FIN Cost of Living Survey Report City/Country: Helsinki, Finland Type of Survey: Place-to-place Date of Survey: September 2011 I. INTRODUCTION 1. A place-to-place cost-of-living survey was carried out by the Cost-of-living Division of the International Civil Service Commission's secretariat in Finland in September 2011 for post adjustment purposes. The survey covered data collection and index calculations for a basket of goods and services including housing and domestic service costs. 2. As part of the exercise, a price collection was carried out in Helsinki in September The international officials in grades P-1 through D-1, stationed in Finland at that time, were requested to provide information on their household expenditures, as well as on housing and domestic service. 3. Price data collection for an all-inclusive basket of goods and services was carried out in June 2010 in New York, the base city for cost-of-living index comparisons. Expenditure data collection covering monthly and less frequent expenditures on food, beverages, clothing and footwear, housing, domestic service, transportation, communication, furniture and household equipment, health, recreation, education, miscellaneous goods and services and out-of-area commitments was undertaken in 2010 in the eight headquarters duty stations and Washington, D.C. The expenditure data excluding housing, pension contribution, medical insurance and out-of-area expenditures, for those eight duty stations, with minor adaptations, constituted the common weights that are used for post adjustment index calculations for all duty stations including Finland. II. DATA COLLECTION AND TREATMENT OF PRICES 4. The price collection was carried out by an independent pricing agent selected after consultation with the co-ordinator of the survey in Helsinki. The price collection covered outlets located in Helsinki. As a general rule, only prices of goods and services available in the outlets at the time of the visit by the pricing agent were collected. 5. The coordinator provided supplementary data on public transportation fares, utility, postal and telephone service rates and tuition fees. Average prices 6. Average prices were calculated for each item as simple arithmetic averages. Page 1 of 8

2 Surveys 7. The data collection process for housing and domestic service costs and household expenditures in September 2011 involved the use of two questionnaires, which were distributed to staff members, stationed in Finland. The survey response by type of questionnaire is presented in table 1 below. Table 1. Survey response Type of questionnaire Housing & domestic service costs Household expenditures Number of Staff Number of respondents Response Rate % Number of responses used Responses used (%) The number of responses presented above refers to returned questionnaires properly filled and used in the calculation. A number of questionnaires could not be used because they referred to non-eligible staff or were returned blank, incomplete or with inconsistent data. 9. Non-eligible respondents were staff members with less than 3 months at the duty station or living outside of Helsinki completing the hous ing and domestic service costs questionnaire, and those with less than 6 months for the household expenditure questionnaire and those with income less than 40 per cent of their family income. Weights - Common expenditures and other costs III. DERIVATION OF EXPENDITURE WEIGHTS 10. The common expenditure shares, mentioned in paragraph 3, were combined with the housing costs in Helsinki, pension contribution, medical insurance premiums and out-of-area expenditures to establish the weighting pattern for Helsinki. The final weights were redistributed based on remuneration of a staff member in Finland at the dependency rate of a P4 step VI. Housing and domestic service costs 11. Information regarding housing and domestic service was derived from the questionnaire. 12. The following types of expenditures were included in the determination of monthly housing costs: Page 2 of 8

3 (a) Rental and homeownership costs: - Rents net of subsidies for renters. - Shared maintenance costs in cases of co-operatives, condominiums, etc. - Imputed rents for homeowners - Utility costs, such as electricity, water and heating. - Amortized cost of a stove and other facilities. - Amortized cost of repairs and repainting. - Amortized cost of non-refundable key-money. (b) Domestic service: The average monthly cost of a part-time maid in Helsinki was also added to housing costs for comparison with appropriate data for New York. Pension 13. The actual amount of pension contribution of a staff member at the P4 step 6 level was included in the overall expenditure pattern. Medical insurance 14. This referred to the actual premiums paid by the staff in Finland for medical and dental insurance coverage. Out-of-area expenditures 15. Twenty per cent of the net income (net base salary plus post adjustment) at the P-4 step 6 remuneration plus 5 per cent of net base salary (non-consumption commitments) was used as out-of-area expenditures. Adapted common weights 16. As a result of the above, the common expenditure weights adapted for Helsinki together with those for housing, medical insurance, pension contribution are shown in table 2 below: Page 3 of 8

4 Table 2. Helsinki expenditure weights (In U.S. Dollars) Expenditure category Weight Total in-area 6, Total in-area excluding housing 5, Food and non-alcoholic beverages Alcoholic beverages and tobacco Clothing and footwear Housing, water, electricity, gas and fuels 1, Furniture, household equipment and routine maintenance of the house Health Transport Communication Recreation and culture Education Restaurants and hotels Miscellaneous goods and services Pension contribution 1, Medical insurance provided by UN organization Out-of-area 2, IV. INDEX CALCULATION Calculation of price ratios, cost-of-living comparison index and post adjustment index. Price ratios 17. In comparing average prices for individual items in Helsinki and New York, every effort was made to ensure comparability of items between the two cities. Before comparing average prices, those for Helsinki were converted to U.S. dollar equivalents at the exchange rate of Euros (EUR) to the U.S. dollar. Housing 18. External housing data was used for calculating the rent index for Helsinki. External data in Helsinki was collected from the real estate agencies of the Inter-Organizational Section (IOS) of the Organization for Economic Cooperation and Development (OECD). The data covered the period 2006 to The purpose for using a six-year rolling average was to produce more reliable average rents for the period under consideration. The average rents for 2006 to 2010 were updated to Page 4 of 8

5 8. A housing index was calculated by aggregating the following components: Education a. rent index - which is a comparison of rents provided by IOS/OECD between The Hague and New York (see Annex I); b. electricity, gas and water indexes - which are a comparison of costs for the same consumption amounts. c. other housing costs index - which is a comparison of other installation, operational and maintenance costs. 19. The index was based on a comparison of tuition fees between schools attended by the children of staff in Helsinki and in New York. Out-of-area expenditures 20. The index for out-of-area expenditures, including dollar-driven, was based on the application of a special index recommended for use by Advisory Board on Post Adjustment Questions. Medical insurance 21. The index for medical insurance was a comparison of the average premium paid by the staff in Finland with that paid by those at the same level in New York. V. SURVEY RESULTS 22. A summary of the relationship between the cost-of-living in Helsinki in September 2011 and that in New York in June 2010 is shown below. Details of indices and weights are shown in the annex. Page 5 of 8

6 Table 5. Summary results of comparison of living costs in Helsinki in September 2011 and in New York in June 2010 (Exchange rate: EUR = US $1.00) Expenditure category US $ weight % Weight Index Total 10, Total Excluding housing 9, Total in-area 6, Total in-area excluding housing 5, Food and non-alcoholic beverages Alcoholic beverages and tobacco Clothing and footwear Housing, water, electricity, gas and fuels 1, Rental for housing 1, Maintenance and repair of the dwelling Water supply and miscellaneous services relating to the dwelling Electricity, gas and other fuel Other housing costs Furniture, household equipment and routine maintenance of the house Health Transport Communication Recreation and culture Education Restaurants and hotels Miscellaneous goods and services Pension contribution 1, Medical Insurance Out of Area 2, PAI The results of the comparison showed that the cost-of-living index for Helsinki in September 2011 was on the base New York, June 2010 = 100 at the exchange rate of EUR to the U.S. dollar. When that index was rebased to the base, New York August 1996 = 100, it resulted in a post adjustment index of Page 6 of 8

7 Updating 24. Updating the latter index (163.4) for implementation in January 2012 and using the adapted common expenditure weights and the change in the out-of-area index, resulted in an index of at the latest exchange rate of EUR per US dollar. Implementation 25. As a result of the place-to-place survey in September 2011 and the other adjustments mentioned above, the existing post adjustment classification of multiplier 55.1 was changed to multiplier 57.4 effective 1 January 2012 on the base New York January 1996 = 100. Page 7 of 8

8 Finland-Helsinki [Sep-2011] Weighting 3 bedroom flat 2 bedroom flat 1 bedroom flat Studio Non-Detached House Detached House Indices Year Pattern Survey Updated Survey Updated Survey Updated Survey Updated Survey Updated Survey Updated for the % data to 2011 data to 2011 data to 2011 data to 2011 data to 2011 data to 2011 updating Local cur. Local cur. Local cur. Local cur. Local cur. Local cur ,700 1,899 1,031 1, ,741 1,945 2,663 2, ,878 2,047 1,075 1, ,831 1,996 2,906 3, ,325 2,428 1,369 1,429 1,037 1, ,104 2,197 3,246 3, ,055 2,148 1,305 1, , ,716 1,793 2,816 2, ,939 2,008 1,246 1,290 1,021 1, ,935 2,004 2,729 2, ,114 2,114 1,322 1,322 1,003 1, ,108 2,108 2,982 2, years average 2,107 1,301 1, ,012 3,014 Exchange rate: Data source: OECD Size Adj Factor Duty station Avg.rent US $ 3,612 2,302 1, ,451 4,134 Total Dw. size weights New York Avg.rent US $ 6,215 3,945 2,704 2,111 3,191 4,420 Dw. size weights Laspeyres Paasche Fisher Page 8 of 8