The survey allows for city to city comparisons, but for the purpose of this report all cities are compared to a base city of New York, which has an index set at 100. The survey has been carried out for more than 30 years. Panama City is the fifth least expensive in the world, with a cost of living index of 58 points. The fact that Panama has been considered among the least expensive cities worldwide can be good because it makes it a more attractive destination for companies and investors.
More than 50,000 individual prices are collected in each survey, conducted each March and September and published in June and December. EIU researchers survey a range of stores: supermarkets, midpriced stores and higher-priced specialty outlets. Prices reflect costs for more than 160 items in each city. These are not recommended retail prices or manufacturersâ€™ costs; they are what the paying customer is charged. Prices gathered are then converted into a central currency (US dollars), using a prevailing exchange rate and weighted in order to achieve comparative indices. The cost-of-living index uses an identical set of weights that is internationally based and not geared toward the spending pattern of any specific nationality. Items are individually weighted across a range of categories and a comparative index is product, using the relative difference by weighted item. For more information on the Worldwide Cost of Living survey.