Cities Household Necessities Spending Index

June 2022

The briefing introduces the Cities Households Necessities Spending Index. The index ranks 1,075 cities by household expenditure on non-discretionary items, namely food, housing, and clothing and footwear. This analysis focuses on 160 major cities. The report goes on to assess the non-discretionary spending patterns during the current inflationary environment in 2022, and the implications of consumer spending differences on business strategies.

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This report comes in PPT.

Key findings

Cities Household Necessities Index

The Cities Household Necessities Index examines the household expenditure size and patterns for essential outlays, which include food and non-alcoholic beverages, housing, and clothing and footwear. The index provides a means of assessing city affordability, and covers 1,075 cities, with this report zoning in on 160 major cities.

San Francisco and Kolkata

Among the 160 major cities, households in San Francisco spent the most on necessities. In 2021, the city had a Necessities Spending Index of 130, with households on average spending USD52,588 on food, housing, and clothing and footwear. Conversely, Kolkata was the most affordable city. Its Household Spending Index of 6.9 made it 93.1% cheaper than the base city, with household expenditure on necessities standing at a mere annual average of USD2,800.

Tbilisi, Surabaya and Jakarta

Necessity costs are expected to rise fastest in Tbilisi, Surabaya and Jakarta over 2021-2026. Economic growth is raising incomes, and this is expected to be reflected in higher average spending on necessities.

Food and housing spending

Food and non-alcoholic beverages tend to take up a larger share of household expenditure in less affluent cities. In some, food accounts for half of all expenditure. In more affluent cities, housing is typically the largest household expenditure category. Expenditure on clothing and footwear shows little difference between more affluent and less affluent cities.

Relative costs

The share of household expenditure on necessities is an important parameter in gauging city affordability. It can help estimate how much disposable income is left for discretionary goods and services and, in turn, provide a more intuitive assessment of consumer spending by taking into account income differences.


Rising inflation due to supply chain challenges and the war in Ukraine are pushing up living costs. The rising cost of fuel and supply chain disruptions are increasing food costs. This is expected to have most impact on low-income cities, where a large share of consumer expenditure goes on food.

Government regulations

Protecting the poor remains crucial, especially in a fast-rising inflationary environment, where living costs are reaching new highs. Governments have a number of options, which can include providing cash transfers, temporarily reducing value-added taxes on essential consumer goods and introducing rent caps.

Business implications

The Cities Household Necessities Index can provide insights into spending patterns, and assist in estimating living costs. It can help also help some businesses adjust pricing strategies based on consumer incomes at the regional or city level.

Key findings
Key findings
San Francisco boasts the highest spending on necessities
Indian cities are home to some of the lowest absolute spending on necessities
High necessity spending in affluent cities cushioned by higher average disposable incomes
Food dominates spending in poorer cities while housing costs are higher in wealthier cities
Necessity spending growth can outstrip income growth leading to a lower standards of living
Tbilisi to continue moving up the ranking, thanks to rising incomes
Inflation growth undermines consumer spending power
Rising inflation puts the greatest risk on cities with a high share of spending on necessities
Conservative spending to hit business revenues as consumers become more frugal in 2022
Government intervention is needed to protect the least well-off households
British Columbia’s 1.5% rent cap helps mitigate inflationary pressures
Austin to join at least 28 US cities providing financial assistance to low-income households
Household spending patterns can offer insights into which industries to target in cities
Discount supermarkets can target cities with a high share of expenditure on food
Discount chain Lidl penetrates the Baltic market to increase competition
Businesses can adopt regional pricing to drive profits and provide fairer consumer costs
Affordable housing an opportunity in expensive cities
Real estate developer Common banks on co-living spaces to provide affordable homes
Cities Household Necessities Spending Index can assist in calculating remuneration packages
Big tech firms warn staff that pay may be linked to cost of living by location
Key insights in brief
Rankings of major cities 1-20
Rankings of major cities 21-40
Rankings of major cities 41-60
Rankings of major cities 61-80
Rankings of major cities 81-100
Rankings of major cities 101-120
Rankings of major cities 121-140
Rankings of major cities 141-160
How the Cities Necessities Spending Index is calculated


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