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Cost of living For Members

REVEALED: Why Switzerland is the most expensive country in Europe

Helena Bachmann
Helena Bachmann - [email protected]
REVEALED: Why Switzerland is the most expensive country in Europe
It takes a whole lot of these to live in Switzerland. Image by cosmix from Pixabay

People in Switzerland pay more for their goods than anywhere else in Europe, a comparison study published by the Federal Statistical Office (FSO) has revealed.

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Concretely, the study compared Switzerland's purchasing power parity (PPP) at gross domestic product level with European nations.

Purchasing power parity is used to compare economic productivity and standards of living in various countries.

In their simplest form, PPPs are price ratios for an identical product in two or more countries.

The 27 states of the European Union were given the collective PPP index of 100, with Switzerland’s being 157.4.

Iceland is in close second place (156.7), followed by Norway (134.3).

This FSO chart shows how much higher prices are in Switzerland than in other European countries.

Which specific products are services are more expensive in Switzerland than elsewhere in Europe?

According to the study, the highest values are for inpatient health services (price level index for Switzerland is 324.6 francs), education (272.7) and meat (233.9).

As this FSO chart indicates, Switzerland (red dot) is far ahead, in terms of prices, than its neighbours Germany (yellow), France (blue), Italy (green), and Austria (orange). 


 
Statistics aside, is Switzerland really so much more expensive?

Generally speaking, yes.

Various studies have shown time and again that Swiss consumers pay much more for basic goods and services than their European counterparts, with Norway and Iceland trailing close behind,

There are many reasons cited for this phenomenon, ranging from high salaries (higher than in the EU) to protectionism and lack of competition, which are inter-related, as the former invariably leads to the latter.

This is done mostly to privilege domestic products and economy over imported goods.

However, there are other factors as well.

study by the University of Applied Sciences of Northwestern Switzerland shows that foreign producers and suppliers impose large price increases in Switzerland, exploiting high salaries and consumers’ purchasing power.

READ ALSO: Why is Switzerland so expensive? 

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And speaking of purchasing power…

You may be wondering whether Swiss wages make up for the high cost of living?

It all depends on how much you earn, of course.

But various studies and surveys provide some interesting and no doubt surprising insights into Switzerland’s PPP in comparison with other nations.

"Taking not only income and cost of living into account, but also the effects of differences in taxation, it is possible to derive an indication of after-tax, local purchasing-power-based, standard of living”, one study reported.

“On this basis, the highest overall standard of living is found in the cities of Switzerland, Denmark, and Germany. Although the cost of living can be relatively high in these countries, so are average wages and purchasing power.”
 
 READ ALSO: Do wages in Switzerland make up for the high cost of living?
 
 
 
 
 
 
 
 
 
 
 

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