Worldwide, Covid-19 has affected the cost of living.
However, it all depends on where you live and what you buy.
The Cost of Living
During 2020, for many of us, the cost of living has gone up and it has also gone down.
Mostly for the Americas, we have the downward slide whereas in Asia and Europe, we see the reverse:
Looking more closely, though, price trends are tough to summarize. Up rather than down, inflation measures in the U.S. say that what we spend on food is 4.6 percent more than last year at this time. Similarly, classified as recreation, our books, TVs, electronic devices, take-in dinners, and personal computers are more expensive. So too are personal care items and tobacco and alcohol. Then, as you might expect, clothing is a minus:
Correspondingly, world food prices seem to be heading upward but not nearly where they were a decade ago:
The reasons for all of these fluctuations also vary. They include taxes, subsidies, and sanctions, supply chain glitches, and currency appreciation. In addition, there was the impact of tariffs, changes in life style, unemployment, and dips in disposable income.
The one definitive information I got was where the cost of living is the highest. Paris is at the top, and then Hong Kong and Zurich:
Our Bottom Line: Quality of Life
Trying to make some sense out of all of this, I wound up with the Deutsche Bank Quality of Life Index. Yes, the impact of Covid-19 on the Cost of Living matters. And the EIU’s overall conclusion is that it adds up to pretty flat prices. But perhaps, as we contemplate 2021, we can look at the cost of living from a different perspective. We can see how it connects to the variables that compose our quality of life.
In a 2019 mapping prices report, Deutsche Bank created a Quality-of-Life Index. Below, I’ve listed the top ten countries and cities in their list of 58. Most crucially, you can see their criteria (which I retyped):
Perhaps we can better judge the impact of Covid on the cost of living when we see it is just one of eight components in a quality-of-life barometer.
My sources and more: I began with all that The Economist Intelligence Unit said about the 2020 cost of living. Next, I found clarification at NPR, and at the Economist, here and here. Then finally, the Deutsche Bank “Mapping the World’s Prices” report helped me make some sense from a bunch of facts that did not really fit together.