Improving the ACCRA U.S. regional cost of living index

Christina Daly and Keith Phillips

No 902, Working Papers from Federal Reserve Bank of Dallas

Abstract: The broadest and most commonly used measure of the cost of living across U.S. cities is the American Chamber of Commerce Research Association (ACCRA) index. This index is used by business and government organizations and the media to rank living standards and real wages across U.S. cities. In this study we reduce the aggregation bias in the index by calculating national average prices for the 59 item prices using population weights instead of the equal weight formula used by ACCRA. This correction results in a decline in the index values for all cities and changes in the rankings and bi-variate comparisons between city pairs. In some high-cost cities the index values decrease by over 25 percent, and in 74 percent of the cities the rank changes by greater than one spot.

Keywords: Cost and standard of living; Wages; Prices (search for similar items in EconPapers)
Pages: 17 pages
Date: 2009
New Economics Papers: this item is included in nep-geo and nep-ure
Note: Published as: Phillips, Keith R. and Christina Daly (2010), "Improving the ACCRA U.S. Regional Cost of Living Index," Journal of Economic and Social Measurement 35 (1-2): 33-42.
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Citations: View citations in EconPapers (5)

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