Living Index is a calculator by which international students can find the estimated cost of living. For those students who aim to study abroad, can use this as a tool to determine the costs. Countries can be compared and checked how they have been scored out of 100. This article will help international students understand the dynamics of a living index calculator.
Students who go abroad for higher education have to check for a lot of things like the cost of studying, living, rankings and other parameters. But most importantly, the cost of living is the second most important parameter after the costs of studying abroad. There are details about how to check for a living index of a country to plan expenses for students who will study abroad. So check out the article.
What is the Living Index?
The Living Index is a measure by which the cost of living can be compared from one city to another metropolitan area. This measure is important for international students because it records how much they will have to spend on food, clothing, shelter, and other components of living in another country or metropolitan area.
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Importance of Living Index for International Students
The importance of the living index for international students lies in how much they will have to spend while studying in a country abroad. The living index will help them understand the importance of various components. They are as follows:
- The living index for international students helps students navigate their expenditures in a country abroad while studying.
- The calculation of the price of living index in comparison to the country of current address versus the country of study can be compared.
- Percentage change (high or low) for living expenditures can be computed. Expenses can be managed accordingly.
- Also, the affordability of goods and services or high expenditures can be calculated with the living index.
- The index of cost of living directly affects the taxation of a country’s economy, which is another important aspect for international students to consider.
Before leaving their home country, international students should always understand the basic living index of the country of study. This way, they will keep their expenses in check and not overspend.
How to Calculate Living Index?
Living index of any country abroad is calculated out of 100. There are four key indicators which are marked based on the country in question and a total score is derived at. So coming to how cost of living index is calculated, the following is one way of looking at it:
The cost of living index is calculated by using the following formula:
Cost of Living Index=Total expenditure current year / Total expenditure base year × 100
Thus, the two countries can be compared by using this formula.
In case, the cost of living index is higher than 100, then the cost of living index is higher for that country. But if the cost of living index is lower than 100, then the cost of living index for that country is lower.
If country ‘x’ has a living index of 100 and country ‘y’ has a living index of 125, this means that country ‘y’ is 25% more expensive than country ‘x’. So those going from country ‘x’ to country ‘y’ for study, will have to pay 25% more than their current country of stay.
Key Indicators of Cost of Living Index
There are four key indicators based on which the living index is calculated. Each of these indicators has a certain percentage assigned to them, based on which the living index is calculated. The following are the indicators with their explanation for calculating the living index:
- Cost of Living / CPI (25%): Including the cost on food, accommodation, commute, personal expenses and tourism which can help an international student understand the expenditure on living.
- Lifestyle of the Place (30%): This helps students understand what kind of lifestyle is followed in countries abroad. This is also based on the standard of living and spending accordingly.
- Cultural Integration (25%): Based on this component, the international students will know the type of people and cultures they come from. Adjustments become easier when interactions increase among students.
- Healthcare Services (20%): Each country has a distinct medical service per se. Thus, in some cases, healthcare is a part of the study visa but in some cases, international students will have to pay for it separately. Thus, these key indicators help students understand the healthcare system and expenditures.
These indicators give a holistic view of the country the international students will be studying in. Plus each indicator will elucidate how much the students will have to pay more attention to in the context of a given country.
Living Index Tools for Calculations
Though there are no official agencies to compute the cost of living index, yet there are a couple which are country-based. Some of the commonly used tools to calculate the living index of a country are as follows:
Living Index Tools
Apart from the tools, there are also ranking agencies which collate data and give international students a ranking based on the living index. These are:
- QS - ‘Best Student Cities’ Rankings (Check: Best Student Cities in USA)
- ‘Mercer Cost of Living’ Survey
Thus, these are the most accurate cost of living index tools which can be considered by international students before going to study abroad.
Country Wise Cost of Living Index
For international students, here is a how living cost index by countries and top metropolitan cities look like for the year 2023 as per Numbeo:
Countries / Cities
Cost of Living Index
Cost of Living Index Dubai
Cost of Living Index Singapore
Cost of Living Index Japan
Cost pf Living Index Malaysia
Varies between 31.5 - 35
Cost of Living Index Boston
Cost of Living Index Chicago
Cost of Living Index Vancouver
Ideally, this is what the global living index values look like. These may vary across different tools or platforms.
Thus, the living index is an indicator for international students about how to go about their expenses while studying abroad. These indicators help students manage their expenses, and plan their expenditures ahead of time.