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International City Comparisons


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									Melbourne City Research

International City Comparisons


March 2011
                                                                   International City Comparisons

     Executive summary                                                                                    3
     1.        Introduction                                                                               4
     2.        Purpose                                                                                    5
     3.        Discussion                                                                                 5
        3.1.   What the comparison studies say about Melbourne                                            5
          3.1.1.      People cities and liveability                                                       5
          3.1.2.      Prosperous cities                                                                   7
          3.1.3.      Knowledge                                                                           9
          3.1.4.      Creativity and innovation                                                          10
          3.1.5.      Sustainability                                                                     10
          3.1.6.      Connected cities                                                                   11
        3.2.   Critique of benchmarking and liveability surveys                                          12
          3.2.1.      Overstating outcomes                                                               12
          3.2.2.      Treating city comparisons as progress indicators                                   13
          3.2.3.      How the aims behind city comparisons affect rigour                                 13
          3.2.4.      Subjectivity of method, analysis and conclusions                                   15
          3.2.5.      City comparison studies hide findings within complexity                            16
          3.2.6.      Weighting                                                                          16
          3.2.7.      Volatility of currency                                                             17
          3.2.8.      City ranking is not within City of Melbourne’s control                             18
          3.2.9.      Integrity and compatibility of data among cities                                   18
        3.3.   Public policy limitations of city rankings and indexes, specifically                      19
        3.4.   How City of Melbourne can use international city comparison studies                       20
        3.5.   Existing alternatives for measuring city performance                                      20
          3.5.1.      Future Melbourne Community Plan monitoring                                         20
          3.5.2.      An Australian National Development Index                                           22
          3.5.3.      International benchmarking with the World Bank                                     22
          3.5.4.      Using Community Indicators Victoria to monitor progress                            23
     4.        Conclusion                                                                                24
     5.        Appendices                                                                                25
     6.        References                                                                                27

    This research report was written by Nick Casey, Melbourne City Research.

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               Executive summary
               There is a growing number of national and international city awards, indexes, lists, ranks
               and studies which purport to benchmark cities against one another in various categories.
               These studies often receive widespread media attention and consequently are of
               particular interest to the City of Melbourne for their potential to influence the city’s
               reputation or suggest ways Melbourne’s rankings might be “improved”.
               Many of these city comparison studies suggest it is possible to assess complex issues
               and policy responses by reducing them to a single indexed score or rank. This report
               argues that in many cases such an approach is flawed for the following reasons:
               •    the aims and audience of are often narrow, biasing the selection of indicators
               •    small survey samples and subjective measures are used and hence the results do not
                    reflect the quality of life for the majority a city’s citizens
               Very few of these studies are actually city benchmarking exercises and hence should not
               be used as such. Consequently they have little or no value as progress indicators for city
               monitoring or as tools to inform public policy.
               The City of Melbourne should be justifiably proud that Melbourne continues to be
               assessed as amongst the best cities in the world from a range of different perspectives.
               However the methodology behind different international city accolades and comparison
               rankings should be understood to keep their results in perspective and ensure they are
               used appropriately. In many cases this use should be limited to promotional activities only
               Finally, this paper discusses some alternatives to monitor the progress or the performance
               of the ‘city’ over time or compared to other cities. These alternatives most often involve
               locally developed indicators and point to some existing frameworks that are better suited
               to City of Melbourne’s needs to benchmark or measure progress, including:
                   Future Melbourne Community Plan
                   World Bank Global City Indicator Facility
                   Community Indicators Victoria and
                   The Australian National Development Index.

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    1.    Introduction
    A growing number of city accolades and studies are being published, purporting to
    compare various cities, including Melbourne, against one another in various categories.
    Any city can be ranked or listed on almost anything that can be collected in a comparable
    way and some international comparisons also suggest it is possible to assess complex
    issues and policy responses by reducing them to a single indexed score or rank.
    These studies are typically presented as statistical tools making comparisons between
    cities for some purpose and they get widespread media attention. Even U.S. celebrity
    Oprah Winfrey acknowledged Melbourne’s liveability ranking (The Age10/12/10) during a
    brief visit, in 2010, and was reported across Australia and at least parts of the Pacific
    region. City of Melbourne shows interest in research about the ‘city’s’ reputation, but also
    monitors both the results of its own activities and overall state of the ‘city’. Many city
    comparison studies are interesting or informative, if used appropriately, but others are not.
    The number and range of rankings is not only growing but seems increasingly frivolous.
    For example, one academic (Woolcock, 2010) listed just some rankings from 2009
    including ‘best and worst city’ for men (askmen.com ranked Melbourne second best after
    New York, in 2010), women, travellers, families, GenYs, office costs, pets, recreation,
    jobs, street art, book-buying, architecture, coffee, and partying. There are also indexes,
    ranks and awards that are used to rank cities for car friendliness, ease of commute,
    parking fees, romance, vegetarianism (in 2008, onlymelbourne reported Melbourne was
    Australia’s most romantic and vegetarian friendly city), literature, commerce, business
    cost, dynamism, innovation, knowledge, sport events, entrepreneurship, housing
    affordability, university life, quality of life, cost of living, sustainability and brand. Many
    international city comparison studies discussed in this paper purport to measure quality of
    life outright, or treat it as a component, among others, of whatever they rank (see
    Appendix 2). Querying about the sources revealed most of these indexes and rankings
    are frequently available to subscribers of newspaper travel sections!
    The ubiquity and frequent triviality of surveys, indexes and ranks in the media is now
    reaching the point where a recent newspaper article (The Age, on-line, 5/10/10) even
    remarked on, ‘pointless and incredibly self-serving surveys”, and another, entitled The
    Trouble With Cool (The Age, on-line, 25/02/11), was similarly dismissive of city rankings.
    This report argues that international city comparison ranks often use small samples and
    subjective measures that don’t reflect quality of life for the average citizen of a city and
    sometimes appear to offer convenient promotional vehicles for companies producing
    them. Analysts and policy makers should avoid the temptation to treat them all as
    progress indicators or public policy tools. City of Melbourne should, however, maintain a
    watching brief on many of these accolades, ranks, and indexes for use when it wants to
    enhance and promote ‘Melbourne’s’ image and reputation nationally and overseas.

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               2.    Purpose
               The purpose of this paper is to summarise and discuss key international city study
               outcomes comparing ‘Melbourne’ globally against other major cities.

               It also seeks to clarify the differences between monitoring and benchmarking.

               The report will evaluate the philosophies, purposes, methodologies and uses of
               international city comparisons, making conclusions about their usefulness for community
               or city progress measurement, city benchmarking and detailed city policy input.

               Finally, the paper considers whether other authors have suggested constructive
               alternatives, for measuring city performance and whether they point to some alternative
               city measurement frameworks the City of Melbourne can use.

               3.    Discussion

               3.1. What the comparison studies say about Melbourne

               Melbourne is consistently well regarded in the various national and international awards
               and studies. Most recently, for example, Melbourne received an honourable mention in
               the inaugural Lee Kuan Yew World City Prize, 2010 (City of Melbourne, on-line, 23/11/10),
               for its integrated and inclusive approach to strategic planning over time.

               Some of the most well known accolades and city rankings, by broad category, are
               mentioned below (see Appendix 2 for rankings table).

                     3.1.1.   People cities and liveability

               In 2011, Melbourne (liveability score 97.5) is the second most liveable city in the world
               after Vancouver. Sydney was seventh with a score of 96.1. Vancouver hosted the Winter
               Olympic Games recently and this contributed to its strong score in the cultural and
               sporting events category and pushed it to number one (EIU.com, on-line, 12/02/10).
               Melbourne rated first in the Economist Intelligence Unit’s (EIU’s) Global Liveability Report
               from 2002–04, second from 2005–07 and third from 2008–10.

               In contrast to the EIU’s findings, in 2010 Mercer Human Resource Consulting’s latest
               Global Liveability Report, ranked Melbourne’s liveability eighteenth of 215 cities. The
               survey has rated Melbourne in its top 20 since 2003 (Mercer, 28/04/09).

               In 2011 a new national liveability report was released, entitled My City: The People’s
               Verdict Survey, and commissioned by the Property Council of Australia. It revealed
               Adelaide to be Australia’s most liveable city, followed by Canberra. Sydney was ranked
               Australia’s worst city – by its own residents. Melbourne was rated third most liveable

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    Australian City and scored highest of all cities for range of cultural activities and design
    and appearance (Stolper, D, 2011). The Property Council of Australian anticipates
    repeating this survey regularly in future.

    Monocle Magazine’s Liveable Cities Index rated Melbourne eleventh in 2007 and ninth
    most liveable in 2008 and 2009 (Monocle 2007 and 2008). In 2010 it again ranked
    Melbourne ninth and Sydney twelfth most liveable city, with Munich named most liveable
    city (Monocle, 2010).

    RMIT University’s Global University Cities Index (discontinued and apparently under
    review) ranked Melbourne the world’s fourth best education centre in 2008 (RMIT, on-line,
    09/12/08). Melbourne’s highly regarded liveability was a contributor to its success in the
    ranking (although there is the obvious question whether it was an unbiased study).

    Anholt GfKRoper’s City Brand Index ranked Melbourne the eighth best city in 2006 and
    the sixth best in 2007. Melbourne was not ranked amongst the top ten global cities in
    2009, however it was (GfKAmerica, on-line, 2010) placed third in the domain of ‘People’,
    suggesting that the rest of the world regards Melbourne as possessing a friendly and
    culturally diverse population (after Sydney and Toronto at first and second place,

    As well as producing indexes rankings of liveability, Mercer and the EIU produce cost of
    living studies. Bi-annually, Mercer conducts a Cost of Living Survey that is generally
    similar to the EIU’s in that it collects prices for approximately 200 products and services in
    more than 140 cities. In 2010, Mercer Human Resource Consulting published its latest
    cost of living study, which ranked Melbourne thirty-third most expensive city out of 215
    cities worldwide. For the first time, an African city (Luanda, in Angola) was ranked most
    expensive (Mercer 29/09/08).

    EIU’s Worldwide Cost of Living Survey enables managers and executives to compare the
    cost of living in other cities and calculate compensation for relocating employees. It
    gathers data (in each city) on the cost of over 160 products or services, for example, food,
    toiletries, clothing, domestic help, transport and utility bills. More than 50,000 individual
    prices are collected and by a small sample of expatriates residing in each country. For
    each product the survey data is collected in three stores: A supermarket; a mid priced
    store; and a high priced specialist store. Surveys are taken at specifically selected, typical
    central shopping locations in the city in question (not suburban neighbourhoods). These
    are places where people would do their shopping for the items included in the survey and
    they vary by country depending on identified local trends. There are sound methodological
    reasons for this, including the size of the overall project and logic of sampling prices
    where we know ‘people’ shop.

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               A cost of living index is calculated from price data to express cost of living differentials
               between any two cities. EIU also releases the data to the media, in list form, ranking each
               city in the survey according to total score. According to EIU Melbourne was thirty-ninth
               most expensive city in 2009 (EIU.com, on-line, 26/06/10).

               Mercer and EIU price indexes are ‘customizable’ on line or in software packages. This
               means users may subtract, from a price index, items that are not necessary to calculating
               employee costs of living in another city on a case by case basis.

               The sixth Demographia International Housing Affordability Study, Cox and Pavletich, on-
               line, 2010), covered 272 urban markets in 6 countries, including Australia and found that
               in 2010 Melbourne’s median multiple was 6.8, or third least affordable. A market with a
               median multiple (ratio of average household earnings to house costs) of 3 is considered
               affordable. Vancouver is the least affordable market, with a median multiple of 9.3,
               followed by Sydney (9.1).

                     3.1.2.   Prosperous cities

               In 2008 MasterCard Worldwide ranked Melbourne forty-first in its Worldwide Centres of
               Commerce Rankings. London was ranked number one commerce centre. Melbourne’s
               greatest strength was its liveability, but its greatest weakness was its ‘financial flow’
               because of the lack of key institutions, such as the Australian Stock Exchange, Reserve
               Bank of Australia and Futures Exchange which are all based in Sydney (Mastercard, on-
               line, 28/10/08).

               While the Mastercard commerce rankings focused most on evaluating the structure and
               frameworks of city financial sectors the Brookings Institute’s Global Metro Monitor
               (Berube, et al, 2010) compared the recent economic performance of cities around the
               world on three important economic indicators: growth in population, employment and
               income. The study examined the performance of the latter two (standardised and added)
               before, during and after the recent financial crisis and found the world's fastest recovering
               cities were overwhelmingly from China, India, Southeast Asia, and Latin America. Only
               three cities from outside this region appeared on the list: Montreal, Austin and Melbourne.
               There were no European cities in the top 30 and nor were there African cities outside
               Egypt in the top 50 (The Atlantic Monthly, on-line, 3/12/10).

               The study ranked Melbourne 14 out of 150 of the world’s metropolitan areas studied in
               terms of post 'recession' performance. The Atlantic Monthly’s analysis drew attention to
               Melbourne’s status as the only city from Australia on the list and expressed surprise given
               Australia’s commodity economy and the proximity of Asia. Its analysis considered that
               Melbourne was chosen for being the nation's busiest seaport.

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    Melbourne’s business cost competitiveness and it tax competitiveness were highly
    regarded by KPMG in 2010. Melbourne was rated number one by consultants KPMG for
    cost competitiveness in the Asia-Pacific region and eleventh most cost competitive of 41
    large cities internationally. For example, clinical trials management costs nearly 35% less
    in Melbourne than in the United States, while electronic systems development and testing
    industries are 20% less (Invest Victoria, on-line, 21/12/10). This study measured all costs
    to corporations, labour, facility, transport utility and tax costs. Costs were calculated and
    then indexed against costs of business in the U.S. Business costs in the U.S. was
    assigned a score of 100 with a city score under 100 indicating a lower operating cost.

    Further, KPMG’s study on average annual tax costs on (foreign owned and newly located)
    businesses in their first 10 years, in 41 cities globally, found Melbourne was the 9th most
    competitive location for tax costs in the world and the most competitive in Asia (KPMG,
    2010). Similarly to the business costs index, this study measured all taxes on
    corporations, including income taxes, capital taxes, sales taxes, property taxes,
    miscellaneous local business taxes and statutory labour costs. The taxes applying to
    corporations were calculated and then indexed against taxes paid by companies
    operating in the U.S, with the U.S. assigned a score of 100. Scores under 100 indicate a
    lower tax cost.

    Melbourne was ranked number one in the world for its tax treatment of research and
    development (10% of the tax costs of the U.S.) and sixth in the world for its treatment of
    manufacturing. For corporate and IT services, however, it was ranked 30th (KPMG, 2010).

    Perhaps Melbourne’s tax regime for research activities pays dividends in its ability to
    foster innovative business ideas. The information this paper uncovered about innovation
    and creativity rankings (discussed below) is unclear whether such a connection has been

    Apart from strictly economic studies, Melbourne is well regarded as a destination for
    tourism, business travel and events.

    Conde Nast Traveller magazine (2009) has given the Readers’ Travellers Choice Awards
    annually since 1997. The results of the awards are based on a questionnaire asking
    readers (around 30,000) to choose the best the travel world has to offer across a number
    of categories.

    The questionnaire was a self select form, sent to readers in the United Kingdom and
    made available on the website. In the Overseas Cities category, which determines
    readers favourite travel cities outside the United Kingdom, respondents were asked to
    rate a city with marks out of five for: aesthetics/architecture; culture; cleanliness; user-
    friendliness;   range    of     accommodation;      food/restaurants;     people/hospitality;

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               nightlife/entertainment; safety; and value for money. Votes were calculated as an average
               on each criterion, providing the overall satisfaction index.

               After being ranked twelfth best city for travellers, in 2005 and 2006 (a score of 85.6, in
               2006), Melbourne has not been ranked in the top cities since 2007. Sydney, however, has
               been voted the world’s number one city for travellers every year from 2001 to 2009.

               Accommodation website ‘Wotif’, however, found Melbourne was voted the most popular
               destination for business travel, according to thirty-three percent of business travellers
               surveyed. Business travellers chose Melbourne above Sydney (27%), Brisbane (10%),
               Perth (9%) and the Gold Coast (7%) during the company's annual business traveller
               survey. Melbourne was first place each year from 2006-08 (MICEBTN News, 2008).

               Euromonitor International, an independent provider of business intelligence on industries,
               countries and consumers, releases an annual City Destinations Ranking, covering over
               230 of the world's leading cities in terms of international tourist arrivals. The methodology
               used is an objective one that uses many data sources, including World Tourism
               Organisation; European cities tourism; national statistics; national tourist boards; local
               tourism & convention bureaux; trade press (local and national newspapers, business
               travel news) and Euromonitor International’s own data.

               Melbourne was the 95th largest tourist destination in the world (out of 230 surveyed) in
               2007 (Euromonitor, 2007). While this rank seems mediocre, Melbourne still attracted
               approximately 954,000 international visitors in 2007. In 2008 (the latest ranking to be
               released by Euromonitor) Melbourne has disappeared from the published list of 100 cities.
               All cities on that list have more than one million visitors per year and Melbourne, it seems,
               has not kept up. Sydney, meanwhile is ranked fifty-fourth (Euromonitor, 2008) with more
               than 2.2 million visitors (though this is down 2.2 percent on 2007).

               In terms of events, Melbourne won the biennial, Ultimate Sports City Award in 2006, 2008
               and 2010 (Sportbusiness, on-line, 29/04/10), recognizing its facilities, government
               support, legacy planning, good weather and its calendar of events. Events held in
               Melbourne over this time included hosting the Australian Open Tennis, Formula One
               Grand Prix, the AFL season, Boxing Day Test, Bledisloe Cup, President’s Cup golf, Spring
               Racing Carnival and Australian Masters Golf.

                     3.1.3.   Knowledge

               The World Capital Institute voted Melbourne the Most Admired Knowledge City in 2010.
               The institute considers Melbourne’s multiculturalism and some recent knowledge-based
               initiatives (Melbourne Knowledge Management Leadership Forum, and Association of
               Knowledge Work) as contributing to Melbourne’s success (World Capital Institute, 2010).

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          3.1.4.   Creativity and innovation

     Melbourne has long been considered a creative capital and, in 2007, Melbourne was
     made the world’s first City of Literature by UNESCO.

     Creativity is about more than art or literature, however. It is also about innovation and
     entrepreneurship. An international study by the OECD named Melbourne the third most
     entrepreneurial city of 27 OECD cities in 2008. Almost 12 per cent of Melbourne’s
     population are entrepreneurs, according to the Global Entrepreneurship Monitor.
     Auckland and Vancouver had slightly higher proportions of entrepreneurs than Melbourne.
     Cities in Anglo Saxon countries are characterised by a high surplus of in-migration,
     individualism, and a “more or less” passive role of government, according to the authors of
     the study. Sydney (ranked sixth in the study) outranked Melbourne on job growth oriented
     criteria, sectors linked to the creative classes criteria and use of latest technology.

     From 2007-08 Melbourne was ranked eighth most innovative city in the world, by
     2Thinknow’s Innovation Cities Index and was ranked among the top 20 cities every year
     since. Most recently, in 2010, Melbourne was ranked nineteenth most innovative city (of
     289 cities). Boston was considered the world’s most innovative city in 2010. Melbourne
     was considered a ‘Nexus’ by 2Thinknow. Nexus cities dominate the innovation across
     many economy sectors (2Thinknow, on-line, 09/08/10). It is interesting to note that
     2Thinknow also highly regards Melbourne’s ability to inspire innovation through art, food,
     high culture, design, its people and its openness.

          3.1.5.   Sustainability

     In 2008 MasterCard Worldwide ranked Melbourne first in its Environmental Ranking of
     Centres of Commerce in Asia/Pacific, Middle East and Africa. Melbourne’s result
     highlights how government policies and actions make a difference in creating a high urban
     quality of life and the potential impact of climate change (Mastercard, on-line, 09/12/08).

     Also in 2008, the Ethisphere Institute rated Melbourne sixth of the ten most sustainable
     cities in the world. The institute referred to key objectives of the Future Melbourne
     Community Plan (Herald-Sun, 2008). This was enough to label Melbourne a 2020 ‘Global
     Sustainability Centre’. The Institute describes Global Sustainability Centres as large,
     international cities demonstrating a strong, dedicated commitment to long-term
     sustainability without sacrificing economic potential and quality of life.

     In contrast, in 2010 the Australian Conservation Foundation considered Melbourne only
     the seventh most sustainable of 20 Australian cities. Darwin was considered the most
     sustainable city. Melbourne’s lowest score was for Public Participation, with only 12.6 per
     cent of residents volunteering. Density was Melbourne’s best performing indicator with the

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               city taking third place (behind Sydney and Newcastle) with 1808 residents per square
               kilometer (Trigg et al, 2010).

               For the first time, in the 2010 quality of living report, Mercer included an ‘Eco-ranking’, in
               its liveability survey, mentioned above (City Mayors, on-line, 23/11/10). The ranking
               criteria included water availability, water potability, waste removal, sewage, air pollution
               and traffic congestion. The results contrast with other published comparisons of
               sustainable cities, such as Mastercard’s and this could be explained by Mercer’s
               emphasis on transport congestion rather than water, waste and sewerage issues on
               which Mastercard concentrated its analysis. In this rank, Melbourne was twenty-fifth, with
               other Australian cities such as Adelaide, Perth, Canberra and Brisbane being ranked
               higher (seventh, twelfth, twenty-first and twenty-third, respectively).

                     3.1.6.   Connected cities

               When it comes specifically to transport, international city indexes and rankings seem to
               focus on cars. While it is easy to locate comparisons of how good cities are for cars and
               car parking it proved finding comparisons of the best and worst cities for public transit.
               Consequently this section discusses national and international ‘best and worst’ city
               comparisons for driving and car parking.

               In May 2008 and August 2009, IBM conducted a survey of more than 8,000 adult drivers
               in twenty major cities around the world, repeating similar surveys done in the United
               States. The survey intended to gather drivers’ opinions about local traffic and related
               issues. IBM compiled the results of the survey into an index, ranking the emotional and
               economic toll of commuting in each city on a scale of one to 100, with 100 being the most
               onerous. The index reveals Stockholm (score of 15) had the least painful commute of the
               cities studied, followed by Melbourne and Houston (which tied with scores of 17). Beijing
               and Mexico City had the ‘worst’ commutes (scored 99 each).

               The index is comprised responses to 10 questions and issues: 1) commuting time, 2) time
               stuck in traffic, agreement that: 3) price of gas is already too high, 4) traffic has got worse,
               5) start-stop traffic is a problem, 6) driving causes stress, 7) driving causes anger, 8)
               traffic affects work, 9) traffic so bad driving stopped, and 10) decided not to make trip due
               to traffic.

               The study itself made some interesting and potentially useful findings, including the
               degree of physical, economic, emotional and other harm being done to commuters by
               traffic congestion. It also drew attention to the fact that Melbourne has a driving level
               comparable to north American cities (greater than 90%). The authors themselves also
               expressed their hope that the report will stimulate debate, thinking, and solutions to traffic
               congestion problems.

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     New research from Virgin Car Insurance suggests Perth is the best place to drive in
     Australia, and Sydney is the worst,. The study ranked Australian cities ranked in order of
     best to worst for drivers in capital cities: 1. Perth 2. Darwin 3. Hobart 4. Adelaide 5.
     Canberra 6. Melbourne 7. Brisbane 8. Sydney. According to this study, Melburnians pay
     $0.29 per kilometre and Brisbane residents pay $0.13 per kilometre while in Sydney the
     cost is $2.02. Melbourne’s average $60 parking fines for expired meters were higher than
     Perth’s ($50), they were lower than Sydney’s at $84.

     Virgin Car Insurance undertook research in December 2009 and January 2010 to
     determine which cities across Australia could be considered ‘unfriendly’ for motorists. The
     results were weighted and cities ranked highest to lowest based on most to least car
     friendly city. Criteria were costs of: petrol; comprehensive car insurance; vehicle
     registration; expired parking fines; two hour metered parking; two hour commercial
     parking; toll roads per kilometre; as well as numbers of parking spaces available and car

     Colliers 2010 International Parking Rate Survey, Melbourne’s monthly ($310.35) and daily
     ($31.05) car parking fees compared favourably with most other Australian capital cities.
     Melbourne was ranked thirty-fourth lowest monthly parking fees (Sydney and Perth were
     seventh and eight, respectively) and twenty-fourth lowest for daily parking fees (Sydney
     had the fourth most expensive daily parking fees). This survey was conducted in major
     cites around the world and included cities such as London (highest monthly parking fees
     at $977.63), Tokyo, Oslo (highest daily parking fees at $57.19), Hong Kong, Rome, New
     York, Amsterdam, Vienna, Athens, Zurich, Stockholm and Copenhagen.

     3.2. Critique of benchmarking and liveability surveys

     The outcomes of International city ranks, lists and indexes should be kept in perspective
     and used with some care for the reasons this report outlines below.

           3.2.1.   Overstating outcomes

     Overstating the cause and effect relationship between indicators and city performance
     (Holloway and Wajzer, 2008 and Stokie, 1999) is not just a flaw of city comparison
     indexes but is often the mistake made by analysts or policy makers who refer to them.

     Although Melbourne is ranked eighteenth in the Mercer liveability index, with a score of
     104.8, the difference between the top cities in the survey represents little practical
     difference in liveability between them. Similarly, the Economist Intelligence Unit (EIU)
     Global Liveability Report for example, advises every city with a score above 80 per cent
     belongs to the same ‘very top tier of liveability’. There were 64 cities (almost half the cities
     surveyed) internationally, including Melbourne, that could lay a claim to sharing the same
     effective quality of life (EIU.com, on-line, 12/02/10).

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               The top tier of liveability features cities from Europe, North America, Australia, New
               Zealand and some Asian countries (Singapore, Tokyo) and these cities could be
               considered the world’s truly global cities where, setting aside superficial differences, and
               the weather, a person could enjoy good quality of life. This becomes important when we
               consider next the purpose of the EIU and Mercer surveys.

               In another example Simon Anholt warns readers against overstating top line brand scores
               (Anholt. S, on-line, 17/03/10) in the City Brand Index (although - for a different reason -
               these rankings are based on scores that are ‘averages of averages’, and simply illustrate
               a summary of responses to the survey).

                     3.2.2.   Treating city comparisons as progress indicators

               Another common mistake made by analysts and policy makers when using international
               city benchmarking indexes (such as the Mercers or EIU’s Liveability and Cost of Living
               indexes, Demographia Housing Affordability Index or the Anholt City Brand Index) is to
               treat them as progress indicators, when changes in Melbourne’s rank or score from year
               to year are less relevant than its position relative to other cities globally in any given year.
               This is the case because, “benchmarking and indicators are two separate concepts”
               (Holloway and Wajzer, pg 4).

               Monitoring progress indicators involves comparison of an indicator itself over time, to
               measure progress while benchmarking is the systematic comparison of an indicator or
               entity against another (for the purposes of this report, another ‘city’) to learn what works
               well and what doesn’t. Since they don’t perform this function of a benchmarking exercise,
               such studies as the indexes and ranks discussed in this paper are not real benchmarking.

               One solution is to compare actual indexed scores and other survey results over time. A
               positive case in point is Demographia’s Housing Affordability Index which advises readers
               (Cox and Pavletich, 2010) to compare cities’ broad affordability categories, rather than
               overstate the relativities of actual index scores or ranks from year to year.

                     3.2.3.   How the aims behind city comparisons affect rigour

               International city comparisons are often treated by the media and some analysts as
               though they rate the quality of life for day-to-day residents of a city (Holloway and Wajzer,
               2008 and Stokie 1999), when they don’t. There are many definitions of ‘liveability’ and
               methodologies for measuring it in city benchmarking rankings and indexes. Unfortunately,
               they don’t cover the range of issues needed to provide a comprehensive picture of quality
               of life from the perspective of the resident community. Analysts would be advised not to
               use those city benchmarking studies to monitor or infer actual city performance or rely
               upon them when preparing a plan.

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     Aims and audience influence the indicators included in assessments of liveability (or
     whatever is being scored). For example, the intent of Mercer’s quality of living and cost of
     living surveys is to judge how liveable cities would be for a worker from overseas, help
     firms decide where to send workers and how much hardship allowance to pay them
     (Mercer, on-line, 29/09/08). The EIU’s liveability ranking similarly aims to quantify
     challenges that might be presented to an individual's lifestyle in other cities worldwide,
     and suggest indexes for providing that persons a premium on their salary (EIU.com, on-
     line, 12/02/10). Mercer and EIU don’t rate a city’s liveability for average citizens, rather, for
     expatriate executives (as New Geography on-line [05/03/10] magazine puts it, “for people
     with a lot of money and a big expense account”) so data about currency exchange rates
     are pertinent, whereas in a locally derived indicator for measuring liveability for residents
     it’s unlikely to be considered. Mercer and EIU conduct research to understand how
     workers and employees, across the world, define liveability and have constructed a
     common framework to gather data from cities, globally.

     Mercer’s quality of living index is based on a survey of a small number of expatriate
     workers in each city, while the EIU’s liveability index awards ratings for indicators based
     on the judgment of a small number of expert country analysts employed by the EIU (in-
     house analysis) and a field correspondent based in each city and the relative performance
     of a city or country using metrics sourced externally. Similarly, Monocle magazine uses
     data and information collected by in-house experts and correspondents to derive its
     liveable cities index.

     A limitation with the narrow aims, samples and methodologies, described above, is
     illustrated in the EIU’s Global Liveability Report. The EIU report draws conclusions about
     costs and quality of rental accommodation, using data gathered from a select group of
     suburbs (Caulfield, South Yarra, Hawthorn, Toorak, Albert Park, East Melbourne, Port &
     South Melbourne) in Melbourne’s inner east and south (EIU, on-line, 26/06/10). Expatriate
     workers are unlikely to rent in Melbourne’s suburban fringe, so conclusions about housing
     quality and affordability for ordinary Melburnians, based on this sample, is irrelevant.

     Monocle magazine and website pitches its most liveable cities index to individuals on a
     personal level, rather than to international companies. The magazine, however, provides
     a globalist perspective on international affairs, business, travel, culture, fashion and
     design to wealthy, mobile, cosmopolitan readers, so the target audience is still selective.

     In contrast to these examples, the ‘Peoples Verdict’ survey, conducted by Auspoll on
     behalf of the Property Council of Australia, surveyed 4,000 Australian residents about
     their own cities and asked what felt was important to liveability. The survey covered
     seventeen aspects of liveability.

     Considering the Anholt/GfKRoper City Brand Index, it is important to remember the
     purpose of its survey is to record people's perceptions of the brand image and reputations

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               cities, whether they are realistic or not (Anholt. S on-line, 17/03/10). The underlying
               premise of the City Brand Index is that there are already many surveys and publications in
               existence which evaluate the reality of visiting or living in places (already noted in the
               introduction), but that what is missing is what people believe about those places – even if
               they haven’t directly experienced them. The way city comparisons introduce this kind of
               subjectivity is a recurring theme of this paper.

                     3.2.4.   Subjectivity of method, analysis and conclusions

               City indexes (Stokie. T, 1999) are subjective in their selection of indicators, methodology,
               analysis and conclusions. Some examples follow.

               In one example, 2Thinknow previously sent a request to the administrations of major cities
               around the world to participate in its annual innovation cities study. In effect it invited city
               administrations to score their own cities (introducing a potential source of bias). Where
               there wasn’t a reliable source for participants ‘estimate’ or they didn’t participate (or they
               provided clearly biased information), the company did the work in-house using its own
               estimates, opinions and data from a variety of publicly available sources and this could be
               argued to introduce subjectivity into the index (2Thinknow, on-line, 08/09/10). Latest
               advice from the company itself is that 2Thinknow has changed to using external personnel
               as analysts, rather than city administrations.

               The Anholt City Brands Index (already described) presents another example of the
               application of a mix of objective data and surveys of respondents, which can introduce a
               degree of subjectivity to the ranking process, thus opening it to the variation of attitudes
               based on fashion and exposure/awareness. The author himself suggests outcomes of the
               surveys should be read as indicative only (Anholt. S, on-line, 17/03/10)

               Similarly, Conde Nast travel magazine’s readers’ travel awards, which are based on the
               views of its readership, are hence a product of fashion (City of Melbourne, 2009).

               Monocle magazine’s liveability ranking seems to be the product of the staff’s value
               judgments about what is liveable.

               Likewise, Mastercard Worldwide’s indexes for centres of commerce and for urbanization
               and environmental challenges appear to be products of professional and corporate value
               judgments about what is important in the context of commerce or urbanization and
               environmental challenges. This becomes important when we consider the subjectivity
               applied in weighting indexes used to rank cities.

               Demographia’s rankings are based on the premise that urban planning places unnatural
               restrictions on the supply of land for development, thus putting pressure on housing
               affordability. Demographia’s philosophy equates to a perspective that planning for growth
               in many guises constitutes an artificial restriction on the supply of residential land which

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     drives down housing affordability. This philosophy should be borne uppermost in mind
     when analysing Demographia’s housing affordability benchmarks (City of Melbourne plays
     an advocacy role for sustainable residential development and as a local authority has
     planning regulation responsibilities.). It has potential to introduce a value judgment that
     ‘colours’ Demographia’s interpretation of the survey outcome and dismisses other
     possible causes of unaffordable housing. City of Melbourne should not rely upon
     Demographia’s conclusions alone (City of Melbourne, 2009).

     There is a potentially positive side to subjectivity in methodologies (although this doesn’t
     refute discussion above). City indexes usually don’t include the intangible aspects of what
     makes a city great, but Monocle magazine’s liveability index is an example that tries to
     balance subjective input, such as ambience, against simple externally derived metrics.

           3.2.5.   City comparison studies hide findings within complexity

     “Benchmarking studies hide findings within complexity” (Holloway and Wajzer, 2008 and
     Stokie, 1999). While it is superficially attractive to present a ranking or a single indexed
     figure, the reality is that it is difficult to ‘unpick’ most city benchmarking results and to
     understand relationships between ranks, scores, data, subjective judgments and the
     realities the rankings purport to describe.

     2Thinknow uses a scoring scheme involving more than 160 indicators across many
     domains (2Thinknow, on-line, 08/09/10). Mastercard Worldwide’s indexes for centres of
     commerce and for urbanization and environmental challenges are also detailed indexes
     covering up to ten domains, with sub indicators and indexed scores for each domain, plus
     an overall city score (discussed below).

     Mercer’s quality of living index is based on 10 domains covering 39 indicators (Mercer, on-
     line, 2009), including air pollution and currency-exchange rules which EIU does not cover,
     while EIU’s global liveability report uses five domains, including 30 indicators and, for
     example, treats housing more comprehensively. Mercer’s worldwide cost of living survey
     however, includes fewer (nine) cost and price indexes than EIU’s which has 13 sub
     categories. The EIU’s Worldwide cost of living survey includes utility costs and Mercer‘s
     cost of living survey doesn’t (EIU Worldwide Cost of Living, on-line, 26/06/10).

           3.2.6.   Weighting

     Many indexes use weightings that are unclear and subjective and this further
     demonstrates the complexity hidden within. The EIU’s Worldwide Cost of Living index, on-
     line (accessed 26/06/10), demonstrates how different methods of calculation can return
     different indexes, even using the same prices data. Using the same price data for two
     cities, but treating their data differently, for example treating one city as the ‘base’ city or
     weighting prices for different goods inconsistently between cities, will return a different

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               score. Scores can be combined and weighted to give more importance to categories
               deemed significant by the in-house expert staff.

               Mastercard Worldwide’s indexes for centres of commerce and for urbanization and
               environmental challenges present a further example of how the application of weightings
               can present a flaw in a city benchmarking index (it is interesting to note Mastercard’s
               Worldwide Centres of Commerce Index actually includes a dimension for ‘liveability’, in
               which Melbourne received its best score in 2008).

               The Index of Urbanization and Environmental Challenges (Mastercard, 2008) applied a
               weight to enhance the importance of subjective assessments of everyday environmental
               health issues under government control (water potability and availability, sewage system,
               waste removal, air quality, and infectious diseases). Mastercard explains its reasons for
               doing so but this introduces a skew in favour of measures relating to the daily city
               environment that are under government control and, arguably, does play down impacts of
               climate change on cities. The weights applied to indicators under government control
               helped Melbourne top this particular ranking.

               The Australian Bureau of Statistics advises indicators to, “be able to be disaggregated
               and easily interpreted” (ACT Government, 2008).

                     3.2.7.   Volatility of currency

               International cost of living, tax or business cost competitiveness rankings (conducted by
               KPMG, for example) can be subject to volatility of currency exchange rates. There are a
               number of explanations for the volatility of prices and hence, indexes. While they are not
               all relevant to Melbourne, the most common sources of price volatility generally are:
                  Inflation (or even deflation) within a city or even between some products between
                  Currency exchange rates and imports can change prices, particularly if they’re
                  Local shortages: drought, flood, failed harvests, local disasters, panic buying and civil
                  unrest-all affect local availability and prices;
                  Legislative changes;
                  Increasing competition or new products introduced in a growing market;
                  Seasonal fluctuations;
                  Package size can affect unit cost;
                  Deregulation and liberalisation; and
                  Taxation (EIU Worldwide cost of Living, on-line, 26/06/10).

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     External factors outside a municipality’s, or even a national government’s control, can
     change cost of living indexes and rankings and it is important to understand that these
     also have a bearing on other cost of living indexes and rankings.

           3.2.8.   City ranking is not within City of Melbourne’s control

     In a city rank or list, changes in Melbourne’s rank from year to year is relative and
     effectively beyond the influence of the city administration to change through its activities.
     To illustrate, any out of the cities in a ranking system could do anything to try to improve
     their city’s position in the rank for next year (or do nothing at all) and with the number of
     cities and other variables involved it may not make any difference.

           3.2.9.   Integrity and compatibility of data among cities

     Benchmarking exercises between many cities internationally can be limited by the
     availability and comparability of data and this often results in selecting indicators simply
     because they’re available rather than being meaningful (Holloway and Wajzer, 2008). A
     prime example is the Brookings Institute’s Global Metro Monitor (2010), an otherwise clear
     and reliable method, which relied upon forecasted data from different providers, each
     using a different model, and advised some caution when interpreting results. Furthermore,
     work was limited to the data collection and statistical methods utilised by each country’s
     statistical agencies. Therefore, indicators may be calculated slightly differently between

     New Geography magazine critiqued Mercers’ liveability and cost of living rankings for
     inconsistent and selective comparison of different geographic areas within the New York
     metropolitan area. Mercers’ liveability rankings were based on the New York City
     municipality while the cost of living study ranks White Plains, New York (population:
     57,000) separately in the New York metropolitan area, but has no ranking for the many
     larger cities in the metropolitan area, except for New York itself (New Geography, on-line,
     2010, 18/11/10).

     The Melbourne Urbanist (on-line, 04/06/10) points out that city liveability indexes are also
     of limited value in making intra-country comparisons (for example between Sydney and
     Melbourne). They include variables that reflect national characteristics rather than city-
     specific characteristics, so their ability to discriminate between places in the same country
     isn’t high. A clear demonstration is EIU’s global liveability survey which measures the
     dimension of stability, for example, using EIU’s assessment of the threat of military conflict
     and civil war. For obvious reasons, there are negligible differences between Melbourne
     and Sydney in regard to the threat of armed conflict and civil war.

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               3.3. Public policy limitations of city rankings and indexes, specifically

               Authors, such as Holloway and Wajzer, 2008 and Stokie, 1999 opine that city indexes,
               ranks and lists have limited value to inform public policy.

               This is because most of these city comparisons aren’t made to inform public policy and
               also don’t take account of the perceptions of local residents. EIU and Mercer liveability
               studies can highlight an indicator or domain where a city such as Melbourne has not
               scored as highly as other domains or as highly as it has in the past but don’t provide a lot
               of detailed explanation or policy prescription beyond very broad suggestions to provide
               the basics of liveability, for example.

               In the case of Monocle magazine’s liveability index, the writers do go a step further and
               suggest a “Monocle Fix” for one identified shortcoming per city, per year (the index is
               annually updated). In 2008, for example, an airport rail link between Melbourne and the
               Tullamarine Airport was suggested as a ‘fix’ for Melbourne. In 2009 the suggested ‘fix’
               was tackling youth violence in the city (Monocle, 2009) and in 2010 it was ‘ramping up’
               public housing construction (Monocle, 2010). Many of these ideas get a public airing
               anyway and other than suggesting what to do, broadly, not much more detail was offered
               by Monocle so the suggestions don’t necessarily add anything from a policy perspective
               (although they do add to the weight of commentary, however, about a city’s perceived
               shortcomings and this is discussed below).

               Comparisons by Demographia have limited value for policy development. Demographia’s
               interpretation of its own findings should not be relied upon by Council, for the reasons
               discussed earlier. Additionally, Demographia’s policy recommendations to remove land
               regulation are unrealistic and beyond City of Melbourne’s control (City of Melbourne,

               Finally, city indexes, lists and ranks are not designed as progress indicators for use in city
               monitoring projects. There are good reasons, explained throughout section 3.2, why
               experts don’t consider them appropriate for use as indicators.

               In the Grattan Institute's The Cities We Need (2010) report, the authors argued that a
               city's most important characteristic is whether it meets all residents' needs. For example,
               it would be more constructive if governments set out to understand what liveability means
               to local people, then plan, deliver and measure it. This implies a process similar to Future
               Melbourne Community Plan (described below). The idea has some support, since it has
               been observed in a review of city planning by the Federal Government’s Major cities Unit
               that “we should not get hung up on benchmarking cities against each other, if the goal is
               liveability it is not about competing with other cities. Data should be used to analyse what
               is going on and improve the place rather than competing’ (Elton Consulting, 2009). In the
               executive summary of its report entitled, Liveable cities: Challenges and opportunities for

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     policymakers, the EIU argued that governments and citizens benefit when they
     collaborate in planning and service delivery, to the ultimate benefit of the ‘city’ (on-line,

     3.4. How City of Melbourne can use international city comparison studies

     Liveability rankings are popular with the media and City of Melbourne uses them to
     enhance and promote Melbourne’s image and reputation, for example providing some
     cost of living and liveability information as part of the promotion articulating why overseas
     companies may want to establish staff in Melbourne. The City of Melbourne’s Enterprise
     Melbourne website uses some benchmark surveys, rankings and lists backed by other
     indicators, data (for example economic information about the municipality
     (www.melbourne.vic.gov.au/AboutMelbourne/Statistics/Pages/EconomicProfile.aspx) and
     marketing, to promote Melbourne as a location for business and investment.

     There are some good reputation management reasons why City of Melbourne notes the
     outcomes of liveability studies as they are released. They often seem to enhance
     Melbourne’s reputation and frequently concur with ‘Melbourne’s’ claim to liveability or
     world/global city status. They can highlight the extent of reputational harm done by failing
     to constructively address some existing and often already publicly known problems in a

     City of Melbourne’s Research and Media, Marketing and Communication staff collaborate
     to prepare for media enquiries following the public release of international city
     benchmarking results, maintaining a shared understanding of their implications and an
     agreed approach for responding to these media enquiries.
     When potentially useful information or conclusions (apart from lists, rankings or indexed
     scores) are provided by city comparison surveys, appropriate staff can be made aware of
     its existence, if they’re not already.

     3.5. Existing alternatives for measuring city performance

           3.5.1.   Future Melbourne Community Plan monitoring

     An alternative approach to measuring ‘Melbourne’ could be to concentrate on measuring
     progress, which could be achieved by continuing to develop local community indicators
     monitoring the Future Melbourne Community Plan (www.futuremelbourne.com.au).

     The plan’s development was sponsored by the City of Melbourne and developed
     collaboratively through a wide ranging and ongoing open public engagement with the
     community. Melbourne City Council invited 12 prominent Melburnians to be the Future
     Melbourne Reference Group. This group of thinkers and leaders championed and guided
     the development of Future Melbourne.

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               Public participation occurred, between May 2007 and June 2008, via public forums, face-
               to-face meetings, round table discussions, an online discussion forum, community
               surveys, public road shows, community art-making, an exhibition, a state-wide newspaper
               campaign and information hubs around the municipality. In May 2008 the draft Future
               Melbourne plan was made available as an online wiki with an open invitation to the
               ‘Melbourne’ community and the world to contribute directly. The Future Melbourne plan is
               the product of this engagement.

               Future Melbourne is, therefore, a community plan and its goals outline what ‘Melbourne's’
               community wants to achieve and how. Local governments are increasingly developing
               community plans alongside their council plans. Community plans are aspirational, long
               term, involving community consultation and dealing with matters often outside local
               governments' domain and direct control. Community plans have key features in common
                  Engaging citizens in creating a vision for the future, setting priorities and contributing to
                  Valuing and utilising local networks
                  Focussing on people and place that requires a more flexible and joined-up approach to
                  policy and service delivery
                  Connecting top-down and bottom-up policy processes that influence resource
                  allocation (www.futuremelbourne.com.au).

               Future Melbourne is a plan to grow ‘Melbourne’ as a global, liveable and sustainable city
               in the world. The measures of success will be the published goals under the following

                  A city for people
                  A creative city
                  A prosperous city
                  A city of knowledge
                  An eco-city
                  A connected city.

               For measuring goals under these themes, fifty to sixty indicators have been identified and
               will be reported to provide a progressive measure of ‘city’ outcomes. In situations where
               monitoring requires new data collection, a program of research is being designed to meet

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     The City of Melbourne has accepted responsibility for monitoring the Future Melbourne
     indicators over the ten years from 2008.

          3.5.2.   An Australian National Development Index

     Another option is participating in the creation of an Australian National Development Index
     (ANDI). Amongst other things, the Australia 2020 Summit in April 2008, recommended
     creating a National Development Index to measure Australia’s economic, social and
     environmental progress. It would include social inclusion indicators and be reported
     annually in Federal Budget papers. The Australian Government has endorsed the idea,
     and the need to ‘engage the community in discussion about what is important to
     Australia’s progress and development’. Participation in this project could present a real
     opportunity to help shape the approach to be taken.

     Latest thinking from the project may require choices to be made between differing
     approaches (The Allen Consulting Group, 2010); one (called top-down) which offers
     potential to benchmark internationally with one index number and a dashboard of
     composite indicators and another (bottom-up) which offers a locally and perhaps more
     consultatively developed composite indicators of wellbeing that can be benchmarked
     locally. While the consultants preparing that analysis argue that the two options should be
     considered as a continuum, there are important differences between their approaches and
     outcomes. The former may experience issues (raised in section 3) relating to
     incomparability and inconsistent data quality between international cities, or having a
     limited range of cities to compare performance against. It appears likely it would be
     accessible in the sense that the index could be easily unpicked by users and the
     methodology is likely to be quite sound. The latter approach, while not promising a
     measure or comparison of national progress, seems to focus on developing better tools
     for local government to measure and benchmark local wellbeing as well as models and
     processes for engaging Council’s local communities about the aspects of wellbeing that
     are most important to their citizens.

          3.5.3.   International benchmarking with the World Bank

     In 2010, City of Melbourne joined the World Bank Global City Indicators Facility (managed
     by Toronto University). It is a database of city indicators, established on-line
     (www.cityindicators.org) with a globally standardised methodology for comparability of city
     performance and knowledge sharing. The website serves more than 200 cities that have
     become members to measure and report on a core set of indicators. Indicators include 22
     measures of city service provision and quality of life. It could allow ‘Melbourne’ to be
     benchmarked against other world cities and is a potentially useful development.

     It attempts to provide a globally standardised performance benchmarking system for city
     governments that purports to include not just performance metrics but also opportunities

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               for exchanging knowledge about best practices, she says, cities can improve their quality
               of life and attractiveness to international investors

               The main drawback of this framework appears to that it relies upon officials in city
               governments to contribute data in a similar way to that which was formerly used by
               2Thinknow in its Innovation rankings.

                     3.5.4.   Using Community Indicators Victoria to monitor progress

               Established in 2007, Community Indicators Victoria (www.communityindicators.net.au)
               provides a comprehensive community indicator suite (more than 70 indicators across
               several domains of wellbeing) for every municipality in Victoria and has developed some
               trends over the past few years. It is used by the City of Melbourne in an ad hoc way at
               present but when it is used provides excellent insights about community wellbeing and
               sustainability in the municipality. This facility could also be used to measure social
               wellbeing progress and benchmark selected issues against other Victorian areas.

               Community Indicators Victoria is a collaborative project, funded by VicHealth and hosted
               by the McCaughey Centre, School of Population Health, at the University of Melbourne.
               The McCaughey Centre works in partnership with a wide range of government,
               community, and academic organisations to ensure its indicators Victoria remain relevant
               to its users.

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     4.      Conclusion
     There are a number of recurring themes that this paper has sought to illustrate.
     International city comparisons, ranks, lists and indexes should be kept in perspective.
     Most acknowledge Melbourne is amongst the most liveable and economically dynamic
     cities in the world and City of Melbourne should be justifiably proud that
     Melbourne continues to be ranked so.
     City of Melbourne can use them to alert it to public relations issues (positive and negative)
     and enhance and promote its reputation accordingly. Free publicity is probably the most
     effective use for city comparison studies. City of Melbourne still maintains a ‘watching
     brief’ on any city comparisons it encounters or its staff hear of and it should continue to do
     so. This activity, however, should be one among a suite of activities that City of Melbourne
     uses to help monitor and manage its reputation.
     Some international city comparisons yield useful information and use what appear to be
     comprehensive analyses or apply well regarded methodologies. The IBM Commuter Pain
     Index made some interesting findings about the costs of traffic congestion, for example.
     Demographia’s method of assessing housing affordability is used by the United Nations
     and World Bank for assessing home ownership affordability and the trends it identifies are
     real. The EIU or Mercer Cost of Living and Quality of Life indexes are also appropriate,
     quality tools when used for their intended purposes – calculating compensation for
     relocated employees. While popular with the media, however, most city lists rankings and
     indexes have methodological or other issues, making their results unsuitable for
     monitoring community wellbeing or city progress over time and rendering them unsuitable
     for developing city policy.
     International city indexes and rankings are not necessarily comprehensive definitions of
     liveability, sustainability or anything else and they don’t recognise how these things are
     defined by average citizens. City comparison studies don’t necessarily aim for citizen
     inclusion and this influences indicator choice, treatment, ranking and therefore their
     indexes and ranked results. Governments have realised that it’s important to agree
     meaningful indicators of wellbeing, progress or performance, with their local communities
     and linked these to a plan for how a city’s performance should be improved.
     The final theme is that there are better options available for benchmarking and city
     monitoring and the City of Melbourne is using several of these to good effect. City of
     Melbourne’s alternatives for benchmarking performance and measuring progress include:
          Monitoring Future Melbourne Community Plan
          Participating in the World Bank Global City Indicator Facility
          Analysing data provided by Community Indicators Victoria and
          Participating in the development of an Australian National Development Index..

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               5.    Appendices

               Appendix 1.

               International city comparisons that include or mention liveability
               1. 2thinknow’s Global Innovation Review;
               2. Anholt/Gfk Roper’s City Brands Index;
               3. Australian Conservation Foundation’s Sustainable Australian Cities; and
               4. Demographia International Housing Affordability Survey;
               5. ECA International 15 Best Locations in the World for Asian to Live
               6. Economist Intelligence Unit’s Cost of Living indexes;
               7. Lee Kuan Yew World City Prize
               8. Mastercard Worldwide’s Worldwide Centres of Commerce Rankings (no longer
               9. Mastercard Worldwide’s Worldwide Environmental Rankings (no longer published);
               10. Mercer’s Quality of Living rankings;
               11. Monocle magazine’s
               12. RMIT’s Global University City Index (under review and no longer published);
               13. Sportbusiness, Ultimate Sports City Award.

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Appendix 2.

Recent international city accolades and rankings for Melbourne
Study                                                                 Year   Accolade or ranking
2thinknow - Global Innovation Review                                  2009   20th most ionnovative city out of 256 internationally
Anholt - City Brands Index                                            2009   15th best city brand out of 40 internationally
Askmen Best Cities to Live in for Men                                 2010   2nd of 29 cities internationally
Australian Conservation Foundation Sustainable Australian Cities      2010   7th out of 20 Australian cities
Brookings Institute’s Global Metro Monitor                            2010   14th most dynamic city economy out of 150, post 'recession'
Conde Nast Traveller - Readers' Travelers Awards                      2006   12th best city to visit out of 20 cities internationally
Demographia - International Housing Affordability                     2009   4th most unaffordable housing market out of 325 city markets
ECA International 15 Best Locations in the World for Asians to Live   2010   8th of 15 locations
Economist Intelligence Unit - Business Trip Index                     2006   9th best city for business travellers out of 127 cities internationally
Economist Intelligence Unit - Quality of Life Ranking                 2011   2rd most liveable of 140 cities internationally
Economist Intelligence Unit - Worldwide Cost of Living Survey         2009   39th most expensive of 149 cities internationally
Ethisphere Institute - 2020 Global Sustainability Centres             2008   6th out of 10 cities internationally
Euromonitor - Top Destination Cities                                  2007   95th of 150 cities internationally
IBM Commuter Pain Index - Cities With the Least Painful Commute       2009   2nd best commute of the of the 100 cities surveyed internationally
KPMG's Competitive Alternatives - Business Costs                      2010   1st for cost competitiveness in the Asia-Pacific, 11th of 41 large cities internationally.
KPMG's Competitive Alternatives - Tax Competitiveness                 2010   9th most competitive for tax costs, of 41 large cities and 1st in Asia.
Lee Kuan Yew World City Prize                                         2010   Honourable mention for Melbourne municipality
MasterCard Worldwide Centres of Commerce                              2008   41st out of 50 cities internationally
MasterCard Worldwide Urbanization & Environmental Challenges          2007   1st meeting environmental challenges out of 21 cities internationally
Mercer - Eco Ranking                                                  2010   25th most sustainable out of 50 cities internationally
Mercer - Worldwide Cost of Living Survey                              2010   33rd most expensive out of 221 cities internationally
Mercer - Worldwide Quality of Living Survey                           2010   18th most liveable out of 221 cities internationally
Monocle - Quality of Life Survey                                      2010   9th most liveable out of 30 cities internationally
Most Admired Knowledge City (MAKCi)                                   2010   First prize winner
OECD Entrepreneurial City                                             2008   3rd highest proportion of entrepreneurs in 27 cities in OECD countries
RMIT - Global University City Index                                   2008   4th best education centre of 30 cities internationally, for students
Sportsbusiness Ultimate Sports City Prize                             2010   Ultimate Sports City (1st of 25 cities internationally)
City of Literature by UNESCO                                          2007   First City of Literature
Property Council’s My City: The People’s Verdict                      2010   Third most Liveabile city after Adelaide and Canberra
The New York Times 41 Places to Go in 2011                            2011   15th out of 41 locations world wide - "a foodie hotspot".
Virgin Car Insurance - Australia's Car Friendly Cities                2010   7th most car friendly city out of 8 Australian capital cities
International City Comparisons

               6.    References
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Melbourne City Research                                                                                  27
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28                                                                       Melbourne City Research
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 CoM Ref. Docs: #6163032-v5
 Date prepared: 27/4/2011 4:57 PM
 Date printed: 27/4/2011

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