Swedbank Finance Institute expert Evija Kropa told Latvian Radio that the hypothetical family would reside in a 70 m2 apartment at a non-renovated prefab building. The research assumes that the family commutes using public transportation and both parents bring home the average pay at the capital.
Expenses highest in Rīga
The research looks at food, housing and transportation expenses. These are the most expensive for the Rigan family. In comparison to Tallinn and Vilnius, the Latvian capital has the highest expenses for food and public transportation.
"If we assume that a family uses public transportation and both of the adults have a monthly ticket, [in Rīga] the expenses are €100 per month. In Tallinn it's €0 exactly, as locals enjoy free public transportation there. In Vilnius it's €64," Kropa said.
Meanwhile housing expenses are highest in Tallinn and smallest in Vilnius. At the same time, Kropa notes that within the past two years expenses in this category have increased steeply as, starting 2016, the Value-added tax applies to housing management expenses.
Electricity and heating expenses have, however, decreased.
Lower income in Rīga
The research also shows both income and expenses have increased. "The average wage has grown more steeply than the expenses within the past few years," said Kropa. The proportion of the three categories take up in expenses has decreased.
In comparison to the neighboring countries, the average wage in Tallinn is much higher than in Rīga, but Vilnius takes last place.
Swedbank has also reviewed the tax burden on employees. "Employees in Tallinn - from their higher wages - pay less than the Rigans do from their wages, which are smaller. In Tallinn, wages have increased by about €360 before taxes and €370 after taxes...because of changes in taxes," said Kropa.
Employees' taxes are highest for Riga residents, while in Lithuania they increased slightly. "Lithuania has eliminated tax breaks for dependents, but has instead introduced welfare payments for children, paid by the state. It's about €30," said the Swedbank representative.
In sum, life is most convenient for a family of four in Tallinn. Up until now, Vilnius had ranked last within this research but now it has surpassed Rīga. "When the main expenses are covered, we have the least left for any extra spending," said Kropa.
