UBS's "Prices and Earnings" study has dubbed Oslo, Zurich, Copenhagen, Geneva, Tokyo and New York as the world's most expensive cities based on a standardized basket of 122 goods and services. When rent prices are factored into the equation, New York, Oslo, Geneva and Tokyo emerge as especially pricey places to live. The basket costs the least in Kuala Lumpur, Manila, Delhi and Mumbai. The study was based on data collected in 73 cities around the world between March and April of this year.

Earnings highest in Switzerland, Denmark and the US

The survey of 73 international cities found that employees in Copenhagen, Zurich, Geneva and New York have the highest gross wages. Zurich and Geneva - the two Swiss cities in the study - top the rankings in the international comparison of net wages. By contrast, the average employee in Delhi, Manila, Jakarta and Mumbai earns less than one-fifteenth of Swiss hourly wages after taxes.

Zurich and New York: nine hours of work for an iPod nano

One vivid way to illustrate the relative purchasing power of wages is to replace the abstract basket of goods and services with a specific, highly uniform product that is available everywhere with the same quality, and then calculate how long an employee would have to work to be able to afford it in each city. The study determined that employees have to work a global average of 37 minutes to earn enough to pay for a Big Mac, 22 minutes for a kilo of rice and 25 minutes for a kilo of bread. For the first time, a non-food product was used in the study to compare working hours.

The iPod nano with 8 GB of storage is an ideal example of a globally uniform product. An average wage-earner in Zurich and New York can buy a nano from an Apple store after nine hours of work. At the other end of the spectrum, workers in Mumbai, need to work 20 nine-hour days - roughly the equivalent of one month's salary - to purchase an iPod nano.

Long working hours in the Middle East and Asia - shortest in France

People work an average of 1,902 hours per year in the surveyed cities but they work much longer in Asian and Middle Eastern cities, averaging 2,119 and 2,063 hours per year respectively. Overall, the most hours are worked in Cairo (2,373 hours per year), followed by Seoul (2,312 hours). People in Lyon and Paris, by contrast, spend the least amount of time at work according to the global comparison: 1,582 and 1,594 hours per year respectively.

Americas:

A dollar earned in the US is worth more after deducting taxes and social security contributions than in neighboring Canada. While the basket of 122 goods and services is somewhat cheaper in Montreal and Toronto, the net hourly wage in these Canadian cities is also lower than in the surveyed US cities of New York, Los Angeles, Miami and Chicago.

Asia-Pacific:

In no other continent is the price spread between the most expensive and the cheapest city as wide as in Asia. While Tokyo ranks as one of the world's five costliest cities, Kuala Lumpur, Manila, Delhi and Mumbai are all at the bottom of the price range. Workers in Tokyo earn the highest wages in Asia. Likewise, consumers in Tokyo, Hong Kong and Taipei have the greatest purchasing power in the continent. Sydney ranks among the top ten cities in the international comparison.

David Fuller's view I find this report fascinating, not least for the unstated implications regarding future economic trends. Consider the iPod nano comparison study above. Is the average white-collar wage earner in Mumbai any less educated or ambitious than his or her equivalent in Zurich or New York? I doubt it.

With no disrespect to Mumbai, I certainly know where I would rather live, for climate alone. However this is not the point. What the study confirms, and veteran subscribers know, is that the emerging (progressing) and frontier economies of Asia offer an incredibly competitive, hard working, increasingly educated and vast labour force.

We know that wages will rise in these regions, but it will take many years for them to catch up with the West. Meanwhile, as Asia increases its market share in terms of goods and services provided, this generates strong GDP growth and elevates hundreds of millions to the ranks of middleclass. That remains an attractive long-term investment climate for those of use contemplating the reality of slow growth, deficits and declining purchasing power in the West.

Provided, that is, the world does not experience some horrendous game changing exogenous shock, such as an environmental catastrophe. It has happened before and will always remain a possibility, certainty even, whether manmade or celestial. Hopefully, the odds of that happening on our watch remain small, so let's look on the bright side. I say this not for some Pollyannaish reason, but because of economic and market facts, led by Fullermoney themes. I also maintain that there has been too much irrational pessimism in the West, partly reflecting a loss of confidence due to serious economic problems but also influenced by gratuitous gloom.