Every year the Economist Intelligence Unit publishes its Global Liveability Index. And every year the same cities appear near the top: Vienna, Melbourne, Vancouver, Zurich, Copenhagen.
The results are reported in newspapers as if they told us what these cities are like to live in. Vienna is called the most livable city in the world, Melbourne nearly as good, Zurich excellent as always. Nobody bothers to ask: livable for whom?
The index evaluates 173 cities across five categories: stability, healthcare, culture and environment, education and infrastructure. While these sound reasonable, they are deceptive because they measure something entirely different. At least from the perspective of the general reader of these newspapers. Not so for the institutions who spend twelve thousand dollars to buy the complete liveability matrix from the Economist Intelligence Unit.
The index was built for the human resources departments of multinational corporations. Its purpose is to calculate hardship allowances — how much extra a company like Shell or McKinsey needs to pay an employee to accept a posting in Lagos rather than London. The customer is not a curious potential resident of Copenhagen, but someone in corporate HR.
Take healthcare. The index measures the availability and quality of private healthcare. Not public healthcare as a system accessible to all residents, but private healthcare available to someone with employer-provided international insurance. The question is not whether the average resident can see a doctor without going bankrupt. It is whether an expat's corporate health plan will find adequate private facilities. By this metric, a city with excellent universal public healthcare but few private clinics would score lower than a city with world-class private hospitals and millions of uninsured residents.
Education follows the same logic. The index focuses on whether quality international schools exist for the children of relocated executives. It does not measure equality of educational access, the quality of public schools or whether a child born in the wrong district has any realistic path to a university. Detroit, a city where the public school system has been in crisis for decades, scores a perfect 100 in education.1 That is not what most people mean by education.
The category called "culture and environment" is the most misleading. The name makes you think of parks, clean air, green spaces, biodiversity. Instead, the subcategories include humidity and temperature ratings (i.e. discomfort of climate to travellers), sporting and cultural events, food and drink options and consumer goods and services. The "environment" is not the natural environment. It is the city as experienced by a business traveller or newly arrived expat: can I find a good restaurant, will the weather bother me, is there a football match to watch on Saturday.
This is the category that has kept Vienna from a perfect score in recent years: not enough large sporting events. The implication is that Vienna would be a better city if it hosted a Grand Prix or an NFL franchise. Anyone who has lived through a forty-degree summer here, on streets where trees were replaced by parking spaces, might have a different list of priorities.
Stability, weighted at twenty-five percent, measures petty crime, violent crime, threat of terrorism, threat of military conflict and, notably, the threat of civil unrest. European cities regularly lose points because of protests. From the corporate perspective, this is straightforward: if your expat's commute is disrupted by a demonstration, that is an inconvenience to be quantified. The demonstration might be a sign of a functioning civil society, of citizens exercising fundamental democratic rights, of a political culture healthy enough to permit dissent. None of this enters the calculation. A city where protest is impossible because dissent is crushed scores better on stability than a city where people take to the streets when they disagree with their government.
Infrastructure, weighted at twenty percent, treats road networks and public transport as equivalent subcategories. A city with excellent highways but no usable public transit receives the same score as a city with world-class public transit but narrow roads. This is how American cities, built around the automobile and hostile to pedestrians, end up scoring surprisingly well. Houston, a city where you literally cannot survive without a car, scores 89.3 in infrastructure. The metric cares that infrastructure exists, not whom it serves.
There is no metric for housing affordability. No metric for prices relative to local income. No metric for inequality, job opportunities for residents or social mobility. For actual residents, these are not side issues. They are the city. They are absent because the person the index is designed for does not need them. The expat's housing is paid for by the company, the income set by headquarters. The expat does not compete in the local job market. The children attend international schools funded by the relocation package. For this person, housing affordability is irrelevant. For everyone else, it is the single most important factor in whether a city is livable or not.
Sydney and Vienna both sit near the top of the ranking. Sydney's housing market is among the most unaffordable in the developed world, with median house prices exceeding fifteen times median household income. For the index, this does not exist. A city where a nurse or a teacher cannot afford to live within an hour of work is treated like one where housing is still accessible to the working class.
Nassim Taleb observed that IQ tests are not particularly good at identifying genius but reasonably good at identifying the other end. The same applies here. The liveability index cannot meaningfully distinguish between the top-ranked cities. The difference between Vienna and Melbourne is 0.1 points. The difference between Vienna and Vancouver is 0.1 points.
But at the bottom of the ranking, Damascus, Dhaka, Lagos, Port Moresby, the index does capture something real: these are cities afflicted by war, extreme poverty or institutional collapse. You do not need a ranking to tell you that Damascus in 2015 was a difficult place to live in. But if you are British Petroleum sending an engineer there, you do need a metric to calculate how much extra to pay him for the displeasure. That is what this index provides.
The ranking is a measure of the bottom, not the top. It can tell you that Tripoli is worse than Tokyo. It cannot tell you anything meaningful about whether Vienna is better than Melbourne or Copenhagen is better than Zurich.
And yet I hear this ranking quoted constantly. Vienna, the most livable city in the world. It appears in tourism campaigns, newspaper headlines and political speeches. The phrase is taken at face value because it sounds like it should mean something, and questioning it would require the minor inconvenience of reading a methodology document rather than a press release.
Whether Vienna deserves to be called a highly livable city depends on who you are. Some cities are extraordinarily livable if you are in the top one percent of income. Others are bearable at the top and brutal at the bottom. Some remain livable even for those in the lower half. A ranking that does not account for this is not measuring livability. It is measuring comfort for a specific class.
The suggestion that all Vienna needs for a perfect score is a major football league is absurd enough to expose the methodology on its own. The things the index ignores are the things that define daily life. Vienna has barely any trees in its inner districts. Where trees should stand, parked cars line every block. Corruption and nepotism run through its institutions. Residents are often hostile to non-Austrians. Public transport is adequate but far from what a city of its wealth could achieve. The city remains deeply awkward about its antisemitic past, hyper-conservative in its social norms and segregated by nationality and class in ways that determine who gets which jobs and which schools. It is a great city. But it has a long way to go before earning full marks in any metric that measures what living in a city is actually like.
But don't listen to me. Just send your expats here. They will love it.
According to the 2015 EIU report. One hundred out of one hundred. The same score as Vienna, Zurich and Tokyo. ↩