Where Is Switzerland Cheapest Place to Live

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SWISS INFO.CH

Nov 11, 2008 - 17:27
Where is Switzerland's cheapest place to live?

While Switzerland may not be known for its low cost of living, a study has revealed the most affordable place to set up home.
Inhabitants of canton Appenzell Inner Rhodes, in the east of Switzerland, enjoy the highest levels of disposable income after tax and fixed costs such as housing. Geneva residents have less in their pockets than people in any other region.

The survey by Credit Suisse bank measured a range of expenses - from tax rates, social security payments, health insurance premiums to utility bills, house prices and rent – in a number of communities.



It found the cost of living varied enormously depending on where people chose to
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Supply is a curve showing the different amounts of a product suppliers are willing to provide at different prices. Equilibrium price and quantity are determined by the intersection of demand and supply. Price elasticity of demand (PED) indicates the responsiveness of consumers to a change in price, and is reflected in the relative slope of demand.
In the graph below, the markets for housing in Geneva and AIR are shown.

Demand for housing in Geneva (Dg), is high because of the many employment opportunities there. In addition, Geneva’s scarce land means supply of housing is low, resulting in a high equilibrium rent (Rg). Demand for housing in Geneva is inelastic, since renters in Geneva are less responsive to changes in rent compared to AIR, perhaps due to the perceived necessity of living close to their work.
Demand for housing in AIR (Da) is low, but supply is high due to the abundance of land. AIR is a rural canton with few jobs, therefore fewer people are willing and able to live there than in Geneva. Since living in the countryside is not a necessity, demand is relatively elastic, or responsive to changes in rent. The lower demand and greater supply make the AIR’s equilibrium rent relatively low.
The effect of a tax on property is a shift of the supply curve to the left and in increase in rents as landowners, forced to pay the canton a share of their rental incomes,

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