---
title: "Locations"
book: "The Industry: Firms, Roles and Careers"
subject: quant
language: en
chapter: 27
exercises: 8
source: https://one-course.com/books/quant/17/en/chapter/27-locations
---

# Chapter 27 — Locations

A $300 000 package, after income tax and a year’s rent of a two-bedroom flat by each city’s official statistic, leaves $139 220 in London and $214 938 in Hong Kong. The ordering is not fixed: New York leaves more than London at that package and less above about $851 900, because the two tax schedules cross and the rents are almost equal. This chapter describes the industry’s cities, computes what a package is worth in five of them after tax and housing, sets out the visas a move needs, and discusses what moving costs.

## 27.1 The trading cities and what is there

The industry’s employers concentrate where its markets and clients are (chapter 1): New York and Chicago for US equities, options and futures; London for currencies, rates and European markets; Amsterdam for European options and ETF market making (chapters 2 and 3); Zurich for banks; Hong Kong and Singapore for Asia; and Dubai, whose absence of income tax chapter 15 measured. Colocation (Book 14, chapter 9) ties the trading systems to the exchanges’ data centres, but not the people: a firm’s researchers and engineers can sit far from its servers. The chapter compares five cities with official rent statistics: London, New York, Chicago, Zurich and Hong Kong.

**Definition 27.1 (Price level index, disposable pay after housing).**

A *price level index* is the ratio of a country’s purchasing power parity to its market exchange rate, expressed against a reference area: above 100, the same basket costs more there than in the reference. *Disposable pay after housing* is a package’s pay after income tax and employee social contributions, minus a year’s rent of a standard home in the city.

## 27.2 Pay, tax and housing

**As of August 2026 — Rents in the chapter’s five cities.**

London, August 2026: average private rent of a two-bedroom home in the London region, £2 232 a month (ONS). New York and Chicago, fiscal 2026: fair market rents of a two-bedroom unit, $2 910 and $1 781 a month; fair market rents “are estimates of 40th percentile gross rents for standard quality units” (HUD). Zurich, March 2024: median net rent of a three-room flat in the city, 1 578 francs a month (City of Zurich). Hong Kong, August 2026 (provisional): average rent of class B flats (40 to 69.9 square metres) on Hong Kong Island, HK$446 a square metre a month (Rating and Valuation Department). Price level indices of actual individual consumption, 2024 (EU = 100): Switzerland 184.3, United States 149.2, United Kingdom 129.1, Netherlands 121.0 (Eurostat).

The five statistics measure different things: an average, a 40th percentile, a median; rents with utilities (HUD’s gross rents) and without (Zurich’s net rent); a region (London), a metropolitan area (New York, Chicago) and a city (Zurich). For Hong Kong the chapter multiplies the rent per square metre by an illustrative 55 square metres. The comparison is therefore of orders of magnitude and of how the ranking moves, not of exact differences.

**Method 27.2 (Disposable pay after housing).**

For a package $G$ in US dollars and a city $c$ with tax function $T_c$ (chapter 15’s `firm.aftertax`, at the ECB’s 2025 average exchange rates) and monthly rent $r_c$ in local currency with $k_c$ units per dollar,

$$
D_c(G)=G-T_c(G)-12\,r_c/k_c .
$$

Two cities are compared by the package $G_b$ with $D_b(G_b)=D_a(G_a)$, and by the packages at which $D_a=D_b$.

![A $300 000 package split into disposable pay after housing, a year’s rent of a two-bedroom home by each city’s official statistic, and tax with employee social contributions (single employee, no other income, standard deductions). Data: data/industry/rents.csv, chapter 15’s tax data and two constants, through in_locations.table.](https://one-course.com/images/onecourse/chapters/quant-17/in-locations/fig-a7201f15f533.svg)

***Figure 27.1.** A $300 000 package split into [disposable pay after housing](#def-in-locations-pli), a year’s rent of a two-bedroom home by each city’s official statistic, and tax with employee social contributions (single employee, no other income, standard deductions). Data: `data/industry/rents.csv`, chapter 15’s tax data and two constants, through `in_locations.table`.*

At $300 000 ([Figure 27.1](#fig-in-locations-split)) the order is Hong Kong $214 938, Zurich $184 855, Chicago $178 955, New York $149 062 and London $139 220. Tax separates the cities more than rent does: London’s tax and contributions take $125 455 and Hong Kong’s $47 309, while the rents lie between $21 372 (Chicago) and $37 753 (Hong Kong). The ordering moves with the package ([Figure 27.2](#fig-in-locations-vslondon)): New York is ahead of London from about $134 100 to about $851 900 and behind outside that range, because New York’s schedule taxes large incomes more heavily than London’s (chapter 15) while their rents are within $400 a year of each other.

![Disposable pay after housing in four cities minus London’s, for packages from $100 000 to $1 million. The New York line crosses zero twice; the Hong Kong line leaves the chart just above $300 000 and reaches $296 131 at $1 million. Data: in_locations.curves.](https://one-course.com/images/onecourse/chapters/quant-17/in-locations/fig-48aaccd75080.svg)

***Figure 27.2.** [Disposable pay after housing](#def-in-locations-pli) in four cities minus London’s, for packages from $100 000 to $1 million. The New York line crosses zero twice; the Hong Kong line leaves the chart just above $300 000 and reaches $296 131 at $1 million. Data: `in_locations.curves`.*

Price levels add a third layer that the chapter does not model: the same disposable pay buys less in Switzerland, whose price level for household consumption was 184.3 against the European Union’s 100 in 2024, than in the United Kingdom (129.1) or the Netherlands (121.0) ([Figure 27.3](#fig-in-locations-pli)). The chapter subtracts rent because official statistics measure it city by city; the rest of the cost of living is better handled by such an index than by city-specific guesses.

![Price level indices of household consumption in four countries, 2024, from Eurostat’s purchasing power parities. Data: Eurostat prc_ppp_ind, through in_locations.PLI_2024.](https://one-course.com/images/onecourse/chapters/quant-17/in-locations/fig-abb5e3506058.svg)

***Figure 27.3.** Price level indices of household consumption in four countries, 2024, from Eurostat’s purchasing power parities. Data: Eurostat `prc_ppp_ind`, through `in_locations.PLI_2024`.*

## 27.3 Visas and work permits

**Definition 27.3 (Specialty-occupation visa, skilled-worker visa).**

A *specialty-occupation visa* is a US temporary work status (H-1B) for jobs requiring at least a bachelor’s degree in a specific field, sponsored by an employer who files a labour condition application (chapter 14). A *skilled-worker visa* is the United Kingdom’s sponsored work route, for a job at a required skill level paid at least a salary threshold.

**As of September 2026 — Visas for the industry’s cities.**

United States (USCIS, September 2026): H-1B regular cap 65 000 a year plus 20 000 for holders of US master’s degrees; from fiscal year 2027 a “weighted selection process which favors the allocation of H-1B visas to higher skilled and higher paid” applicants; a proclamation of 19 September 2025 requires an additional $100 000 payment for certain petitions filed from 21 September 2025, whose implementing guidance a district court vacated on 8 June 2026, an order administratively stayed while the government appeals. United Kingdom: Skilled Worker visa at “at least £41 700 per year, or the ’going rate’ for your job, whichever is higher”. Singapore: Employment Pass qualifying salary for financial services S$6 200 a month, rising with age to S$11 800, and S$6 600 for new applications from 1 January 2027, plus the COMPASS points test. Netherlands, 2026: highly skilled migrant or EU Blue Card, EUR 5 942 a month gross (30 or older), EUR 4 357 (under 30).

For a quantitative hire the thresholds are rarely binding (chapter 14’s offers sit far above them); the constraints are elsewhere. The US lottery decides whether a first H-1B is possible at all in a given year, and the 2027 weighting and the disputed $100 000 payment change the odds and the cost for the employer. Other countries’ routes are closer to an administrative check, which is one reason firms open offices where hiring from abroad is predictable.

## 27.4 Moving: relocation, remote work and the cost of leaving

A move has three costs beyond the new city’s tax and rent. **Relocation**: flights, temporary housing, deposits and the months of double rent, which an employer may cover for a hire. **The cost of leaving**: unvested deferred pay and non-compete periods at the old employer (chapters 13 and 28), which the new employer may buy out. **[Tax residence](https://one-course.com/books/quant/17/en/chapter/15-pay-regulation-and-tax-by-location#def-in-pay-regulation-and-tax-by-location-expat)**: moving mid-year can split a year between two tax systems (chapter 15). Remote work changes the first but not the last: an employee who works from another country may create tax and regulatory obligations for the employer, one reason a firm whose staff handle regulated activities may require them to work from an office where it is licensed.

## 27.5 Tutorial: the same offer in five cities

**Goal.** Compute [disposable pay after housing](#def-in-locations-pli) for a package in five cities, and the packages at which two cities are equal. **End state:** Figures [27.1](#fig-in-locations-split), [27.2](#fig-in-locations-vslondon) and [27.3](#fig-in-locations-pli).

1. **Cities.** `firm.locations.City` records join a `firm.aftertax` location, a rent with its measure and period, and a ledger id; `data/industry/rents.csv` holds the ONS and HUD rows.
2. **Disposable pay.** `disposable(params, city, gross)` subtracts a year’s rent from the net pay ([Listing 27.1](#lst-in-locations-disposable)). `def rent_usd_year (params, city): return 12.0 * city.rent_month / at.local_per_usd(params, city.location) def disposable (params, city, gross_usd, expat=False ): net = at.net_usd(params, city.location, gross_usd, expat)[" net " ] rent = rent_usd_year(params, city) return {" net " : net, " rent " : rent, " disposable " : net - rent}` **Listing 27.1.** A year’s rent in dollars and disposable pay after housing. code/firm/locations/firm_locations.py
3. **Comparisons.** `equivalent` finds the package in one city that matches another city’s disposable pay; `crossing` the package at which two cities are equal, by bisection.

For $300 000 in London the equivalent New York package is $281 047, and for $300 000 in New York the equivalent London package $318 569; the two cities cross at about $134 100 and $851 900.

**What to change next.** Replace the rent statistics with one measure for all cities (a median two-bedroom asking rent from one provider, with its licence); add the bonus-deferral profile (chapter 13), which changes the year of taxation; add schooling and commuting for a family.

## 27.6 Build: firm.locations

**Purpose.** Compare what a package leaves after tax and housing in different cities, and find the packages that make two cities equal.

**Interface.** `firm.locations`: `City(name, location, rent_month, currency, measure, period, source, visas)`; `rent_usd_year`; `disposable(params, city, gross)`; `equivalent(params, a, gross_a, b)`; `crossing(params, a, b, lo, hi)`; on `firm.aftertax`.

**Rules.** Every rent carries its measure, period and source; the exchange rates are the tax data’s; a crossing is reported only inside the searched range, and the caller chooses the range.

**Acceptance tests.** `code/firm/locations/tests/`: with no tax, disposable pay is gross minus rent; `equivalent` inverts `disposable`; two cities that never cross give no crossing.

**Stretch.** Price level adjustment; families (two earners, children); a Monte Carlo over the bonus.

Sources and further reading

- ONS, Price Index of Private Rents; HUD, Fair Market Rents FY2026; City of Zurich, Mietpreiserhebung 2024; Hong Kong Rating and Valuation Department; Eurostat, purchasing power parities.
- USCIS, H-1B pages; GOV.UK, Skilled Worker visa; Singapore MOM, Employment Pass; IND, required amounts 2026.
- Chapter 15’s tax data and `firm.aftertax` .

## 27.7 Exercises

**Exercise 27.1 ★.**

What is a year’s rent in dollars in London, and in Hong Kong, by the chapter’s statistics?

**Solution of Exercise 27.1.**

London: $12\times2\,232$ pounds at 0.758 pounds a dollar, $35 324. Hong Kong: $12\times446\times55$ Hong Kong dollars at 7.80 a dollar, $37 753.

**Exercise 27.2 ★.**

By how much does Hong Kong’s disposable pay exceed London’s at $300 000, and what share of the difference is tax?

**Solution of Exercise 27.2.**

By $75 718. Tax and contributions are $78 147 lower in Hong Kong and rent $2 429 higher: tax accounts for more than the whole difference.

**Exercise 27.3 ★.**

What monthly salary must a 30-year-old highly skilled migrant earn in the Netherlands in 2026, and what is that a year?

**Solution of Exercise 27.3.**

EUR 5 942 a month gross, EUR 71 304 a year.

**Exercise 27.4 ★★.**

Why do New York and London cross twice?

**Solution of Exercise 27.4.**

Their rents are almost equal, so the comparison is between the two tax schedules. London’s personal allowance taper and higher-rate bands take more at moderate packages; New York’s federal, state and city taxes, with the state’s recapture, take more at high ones. Each difference changes sign once, at about $134 100 and $851 900.

**Exercise 27.5 ★★.**

Zurich’s rent is a 2024 median net of charges; London’s is a 2026 average. In which direction does each difference bias the comparison?

**Solution of Exercise 27.5.**

Zurich’s rent is net of charges (lower than a gross rent) and from 2024 (before two more years of increases), so it flatters Zurich; London’s average includes all tenancies across the region, cheaper areas included, which also flatters London against a central-city figure. Both differences are of measure, not of the cities.

**Exercise 27.6 ★★.**

A candidate compares $300 000 in New York with $280 000 in Chicago. Which leaves more after tax and rent, and what else should she weigh?

**Solution of Exercise 27.6.**

Chicago leaves $167 415 against New York’s $149 062, although the package is $20 000 smaller. She should also weigh the career: which office carries the work she wants, the chance of moving later, and bonus opportunity, which a base-pay comparison omits.

**Exercise 27.7 ★★★.**

*Coding.* Double the Hong Kong flat to 110 square metres. What happens to Hong Kong’s disposable pay at $300 000 and to its lead over Zurich?

**Solution of Exercise 27.7.**

The rent doubles to $75 507 and Hong Kong’s disposable pay falls to $177 185, below Zurich’s $184 855: the lead depends on the size of home assumed.

**Exercise 27.8 ★★★.**

*Find the flaw.* “Zurich pays the most after tax and rent among the European cities, so it is the best place to live on a quant’s salary.”

**Solution of Exercise 27.8.**

Among the chapter’s cities with official rents, yes after tax and rent; but Switzerland’s price level for consumption is the highest of the four countries measured (184.3 against 129.1 for the United Kingdom), so the same disposable pay buys less there; and the rent is a 2024 median net of charges. “Best place to live” also depends on work, family and taste.

## 27.8 Problem: The Same Offer in Five Cities

**Problem 27.1.**

Weekend problem — the same offer in five cities

A researcher has the same $300 000 offer from one firm’s offices in London, New York, Chicago, Zurich and Hong Kong.

**Part I — The cities.**

1. Which of the industry’s cities does the chapter compare, and why these?
2. Define the [price level index](#def-in-locations-pli) and [disposable pay after housing](#def-in-locations-pli) .
3. State the five rent statistics and how they differ.
4. Why can colocation not decide where people work?
5. Which measures would make the comparison more consistent?

**Part II — The numbers.**

6. State the method.
7. Give the net pay, rent and disposable pay in each city at $300 000.
8. Which separates the cities more, tax or rent?
9. Give the equivalent packages between London and New York.
10. At which packages do London and New York cross?

**Part III — Visas and moving.**

11. Define the specialty-occupation and [skilled-worker visas](#def-in-locations-visas) .
12. State the H-1B cap, the weighting from fiscal 2027 and the status of the $100 000 payment.
13. State the UK, Singapore and Dutch thresholds.
14. What are the three costs of moving beyond tax and rent?
15. Why do trading firms tend to require presence in an office?

**Part IV — The verdict.**

16. State the *named result* : disposable pay after tax and a year’s two-bedroom rent for the chapter’s package in five cities, and the gross package that equalises London and New York.
17. How would price levels change the ranking?
18. What would change at $1 million?
19. What does the visa situation add for a non-US citizen choosing New York?
20. In two sentences, advise the researcher.

**Solution of Problem 27.1.**

1. London, New York, Chicago, Zurich and Hong Kong: industry centres with an official rent level statistic.
2. As in the chapter’s definition.
3. ONS average two-bed (London, 2026), HUD 40th-percentile gross two-bed (New York, Chicago, FY2026), Zurich median net three-room (2024), Hong Kong average per square metre of class B flats times 55 square metres (2026).
4. Only the servers need to be near the exchange; people can work elsewhere.
5. One measure (for example a median asking rent for one flat type) from one provider for all cities.
6. $D_c(G)=G-T_c(G)-12r_c/k_c$ .
7. London 174 545, 35 324, 139 220; New York 183 982, 34 920, 149 062; Chicago 200 327, 21 372, 178 955; Zurich 207 691, 22 835, 184 855; Hong Kong 252 691, 37 753, 214 938 (dollars).
8. Tax.
9. $281 047 in New York matches $300 000 in London; $318 569 in London matches $300 000 in New York.
10. At about $134 100 and $851 900.
11. As in the chapter’s definition.
12. 65 000 plus 20 000; weighted by [wage level](https://one-course.com/books/quant/17/en/chapter/14-pay-levels-by-role-firm-type-and-seniority#def-in-pay-levels-by-role-firm-type-and-seniority-soc) from fiscal 2027; the $100 000 payment’s guidance vacated in June 2026, the order stayed pending appeal.
13. £41 700 or the going rate; S$6 200 a month in financial services (rising with age); EUR 5 942 a month at 30 or older.
14. Relocation, the cost of leaving (unvested pay, non-competes) and split [tax residence](https://one-course.com/books/quant/17/en/chapter/15-pay-regulation-and-tax-by-location#def-in-pay-regulation-and-tax-by-location-expat) .
15. Remote work abroad can create tax and regulatory obligations where the firm is not licensed.
16. Hong Kong $214 938, Zurich $184 855, Chicago $178 955, New York $149 062, London $139 220; London and New York equal at about $851 900 (and $134 100).
17. Switzerland’s high price level would narrow Zurich’s lead.
18. London would pass New York ($510 220 against $505 664), and Hong Kong’s lead would widen.
19. The lottery and the disputed payment make a first H-1B uncertain for the employer; a London or Hong Kong office might be the realistic route.
20. On the numbers, Hong Kong leaves the most and London the least of $300 000 after tax and rent, with Zurich and Chicago between. Choose among the offices by the work and the career, knowing that the money differs by up to half.

## 27.9 Interview questions

**Interview question 27.1 ★ researcher.**

How would you compare two offers in different countries?

**Solution of Interview question 27.1.**

Convert each to net pay after tax and contributions, subtract housing and other costs that differ, adjust for price levels and for the structure of pay (bonus, deferral, equity), and then weigh the job itself.

*What the interviewer is looking for: net, housing, price level and structure, in that order.*

**Interview question 27.2 ★ developer.**

Why might a firm keep its engineers in the city of its main exchange rather than anywhere?

**Solution of Interview question 27.2.**

Engineers who work on the trading systems need to reach the colocated machines, the exchange’s staff and the traders during trading hours; time zone and access matter more than distance.

*What the interviewer is looking for: time zone and operational access.*

**Interview question 27.3 ★★ researcher.**

Two cities’ [average tax rates](https://one-course.com/books/quant/17/en/chapter/15-pay-regulation-and-tax-by-location#def-in-pay-regulation-and-tax-by-location-rates) are equal at $300 000. Can their [disposable pay after housing](#def-in-locations-pli) differ by more than the rent difference?

**Solution of Interview question 27.3.**

Yes: equal average rates at one package can hide different marginal rates, and social contributions, exchange rates and deductions can differ; the disposable difference then includes both tax and rent effects.

*What the interviewer is looking for: average against marginal, and more than one difference.*

**Interview question 27.4 ★★ researcher, developer.**

Design a function that returns the break-even package between two cities, and say what can go wrong numerically.

**Solution of Interview question 27.4.**

Bisection on the difference of disposable pay over a bracket where it changes sign; the difference can have several roots (New York and London have two), can be flat, and can jump at tax thresholds, so scan a grid first and bracket each root.

*What the interviewer is looking for: several roots and discontinuities.*

**Interview question 27.5 ★★ trader.**

Why might a market maker keep offices in several time zones rather than in one place?

**Solution of Interview question 27.5.**

To trade each region’s markets in its own hours with people who know them, to be near clients and regulators, and to hire where the people are.

*What the interviewer is looking for: time zones, markets and hiring.*

**Interview question 27.6 ★★★ researcher.**

The dollar falls 10% against the pound. What happens to the London side of the chapter’s comparison, and to a London employee paid in pounds?

**Solution of Interview question 27.6.**

The London numbers, converted at a weaker dollar, would be worth more dollars: a package fixed in dollars converts to fewer pounds and leaves less after London’s tax and rent. A London employee paid in pounds sees no change at home, but more dollars if converted.

*What the interviewer is looking for: which currency the package is set in.*