Would you trust your Global Mobility Assignment to a Crowdsourced Cost-of-Living Calculator?

    Oct 23, 2017 @ 11:46 AM / by Morgan Grenier

    Can’t you just get all that cost-of-living information online?

    Have you ever asked, or been asked, this question? While the internet has made it possible to collect and manipulate data in the form of on-line cost-of-living calculators, the integrity, objectivity, and reliability of the data produced by these calculators cannot be verified.In the context of assignee allowances, these limitations of on-line sources make COL (cost-of-living) data difficult, if not impossible, to support and defend. Even worse, the data can be misleading and inaccurate.

    As such, even in our digitally connected world, locally-collected data remains essential.

    Hamilton, Bermuda as see during AIRINC's recent on-site cost of living survey. Photo taken by AIRINC surveyor Lauren Basler.

    The Risks of Crowdsourcing Data in Global Mobility

    Most on-line cost-of-living calculators rely on crowdsourced information, which is self-reported and typically anonymous. These calculators use small, limited market baskets to determine cost relationships based on the prices that individuals enter on a voluntary basis. Not only is there a lack of regular update schedules, but the degree of precision - inclusion of necessary taxes and fees, retail outlets priced, target brands, and product sizing – varies widely. Price data may also be supplemented with information from unspecified sources such as newspaper articles and other surveys.

    Crowdsourced data is not only subject to error, lack of completeness, and inconsistency, but personal bias as well – particularly for qualitative assessments.

    When coupled with vague definitions of market basket items (such as a meal or basic menu) this can have dramatic impacts on the validity of COL comparisons.

    Hamilton, Bermuda as see during AIRINC's recent on-site cost of living survey. Photo taken by AIRINC surveyor Lauren Basler.

    Global Mobility and the Value of Quality Data

    AIRINC differs as we use an objective, scientific approach to data collection and analysis. Our in-house full-time professional surveyors are trained to obtain target items so that cost relationships between the home and host country can be ideally determined. Each survey is comprised of over 350 individual items (with up to 1800 prices collected per survey), and it is conducted by one person without a vested interest in the outcome. Outlets are routinely reviewed and vetted by our clients, and refreshed each survey to recognize changes in shopping preferences. This ensures that prices are collected from the appropriate source: the outlets where assignees shop for their everyday purchases.

    While on-site, surveyors also report on product availability and substitute products, and frequently meet with expatriates to have a live exchange regarding their host usage and purchase patterns.

    Before and after our on-site surveys, our team applies smart-surveying techniques to monitor data through phone, internet, and data crawls.

    This process complements our robust on-site data, particularly in developed locations, and streamlines our data collection process and analysis. Our meticulous data collection process is an important part of our COLA (Cost-of-Living Allowance) methodology, and ensures that our price comparisons accurately capture place to place differences in costs. However, unlike the free crowdsourced sites that use simple price comparisons, our COL methodology recognizes that assignees change their usage of some goods and services while on assignment, and that typical usage patterns vary on a location by location basis.

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     Hamilton, Bermuda as see during AIRINC's recent on-site cost of living survey. Photo taken by AIRINC surveyor Lauren Basler.

    Topics: Data Collection, Mobility Policy, Cost of Living Surveys, Cost of living data, Global mobility, Data and Infographics

    Morgan Grenier

    Written by Morgan Grenier

    Morgan graduated with a BA in Communications and Journalism from Simmons College, where she received a Gold Medal from the Columbia Scholastic Press Association. She joined AIRINC in 2016 as a Goods and Services Analyst. In this role, she aids in the quarterly analysis of survey data and evaluates hardship for AIRINC’s Hardship Database.