SINGAPORE (Mar 25): This is the season for indices. On March 20, Singapore was ranked 34th in the World Happiness Index — less happy than Taiwan, but far more cheery than Hong Kong and China, as well as its neighbours, Thailand, Malaysia and Indonesia. Globally, the Scandinavian and north European cities top the index; and New Zealand, Canada and Austria round out the top 10. The index this year focuses on happiness and the community, taking into account how happiness has evolved over the years, as affected by technology, social norms, conflicts and government policies.

A week earlier, the Economist Intelligence Unit pronounced Singapore as the world’s most expensive city to live in. It may be in good company — it is tied for first place with Hong Kong and Paris — but it is the only city that has maintained this ranking from the previous year. What is perhaps a point for concern is that Singapore first topped the index in 2014, making this the sixth year running that it has been ranked by the EIU as the most expensive city in the world to live in.

Fortunately, the EIU’s Worldwide Cost of Living Survey, which is published twice a year, reflects living costs for expatriate workers. According to the EIU, it surveys 400 individual prices across 160 products and services in cities across the world. These include food, transport and rents, as well as recreation and private schools. The resulting data ranks the world’s major cities for the benefit of human resource departments to help them work out compensation packages and allowances for expatriates and employees who travel on business.

Still, the Singapore government was concerned that people were getting the wrong idea. Last year, it published an article, accompanied by an infographic, using data from the Department of Statistics. It explained that the survey findings do not reflect the cost of living of Singaporean households for three reasons.

First, the prices were converted to US dollars, which meant they were exposed to fluctuations in currency exchange. Second, the basket of goods that the EIU used to work out the cost of living is markedly different from what would be in the shopping basket of an ordinary Singaporean. For instance, the EIU’s basket had a foreign newspaper and filet mignon, while a local basket of goods would have a local newspaper and chicken rice, which tend to be cheaper. The cost of living for an expatriate here would typically also include international school fees and a car — the latter does not apply to locals, who are aware that Singapore is the world’s most expensive place to own a car. Third, according to the Department of Statistics, which had comparable data for 120 items, the average prices that Singaporeans paid for goods and services tended to be lower than those paid by expatriates for similar goods and services.

In fact, expatriates themselves have reported enjoying the perks of living like locals — meals at hawker centres and using public transport, rather than restaurant dining and a private car.

As part of its services for corporations’ planning, the EIU also publishes a Global Liveability Index, which assesses living conditions qualitatively, grouped into the five broad categories of stability, healthcare, culture and environment, education, and infrastructure.

In the 2018 index, Singapore was placed 37th, together with Washington DC, and just behind Hong Kong and Manchester, which tied at 35th. Vienna topped the ranking, with Melbourne coming in second and Osaka third. According to the EIU’s global chief economist Simon Baptist, Singapore was marked down, compared with Vienna, because the city state had fewer social freedoms — one example being restrictions on protests — as well as higher levels of censorship.

There are indices, produced by other organisations, that rank Singapore higher on liveability. Last year, the world’s largest human resource consultancy, Mercer, in its annual Quality of Living survey, placed Singapore 25th, which made it the top-ranking city in Asia. Tokyo and Kobe in Japan both came in at 50th. Globally, Vienna also topped that survey. The index, also targeted at human resource managers, takes into account factors such as political stability and crime levels, media censorship and limitations on personal freedom, healthcare, school standards and public services and transport. It also takes into account a city’s record of natural disasters, which could explain the lower-than-expected ranking of some cities.

Separately, researchers at the Asia Competitiveness Institute at the Lee Kuan Yew School of Public Policy have crafted a framework that combines global liveability standards with technological advancements. The Global Liveable and Smart Cities Index takes the perspective of ordinary citizens in terms of economic vibrancy and competitiveness; environmental friendliness and sustainability; domestic security and stability; socio-cultural conditions; and political governance.

According to that framework, Singapore ranks ninth, a touch above London and below Stockholm. Zurich topped the list, followed by Geneva, Luxembourg, Berlin, Helsinki and Copenhagen.

To be sure, as the EIU rankings were published, observers cautioned against taking them too seriously. There is certainly a need to be circumspect about such studies, which cater for narrow objectives, such as corporations’ human resource planning.

Yet, precisely because these surveys might factor into companies’ calculations on important human capital decisions, they would certainly be worth considering. Their findings are a measure of global competitiveness: A liveable city attracts people and, by extension, business. How would an increasingly expensive city with a moderate level of liveability continue to attract international business?

Singapore has certainly gone to great lengths to improve the lives of its residents — the public transport system, for one, is much lauded by foreigners who have been used to car-centric cities or unreliable bus and train services. The apparent high cost of living can be mitigated by different choices of goods and services. But as is illustrated by the various indices, a city is a complex blend of hardware, functions, systems and people. All these factors may contribute to the concept of “happiness”. But perhaps true happiness does not belong on an index at all. 

This story appears in The Edge Singapore (Issue 874, week of Mar 25) which is on sale now. Subscribe here