The prices for groceries and gasoline have increased noticeably in Conway in recent months. But how does Conway compare to other cities? And what about other categories such as housing, health, and utilities?
A Cost of Living Index is prepared quarterly by the Council of Community and Economic Research. It establishes comparative living costs among 300 cities. The national average is arbitrarily set at 100 and Conway’s index is 90.1. The cost of living in Conway, Arkansas is 10% below the U.S. national average.
Data are collected for specific commodities in six categories: groceries, housing, utilities, transportation, health care and miscellaneous expenditures. The data are weighted — housing is 27% and groceries is 13.6%. Miscellaneous gets the most weight, 32.2%. Miscellaneous consists of clothing, personal care items, recreation, fast food (use restaurants?), and sales tax (state and local). State income taxes and real estate taxes are not included in these calculations. Comparing the tax burden of Arkansans to other states is a topic for a future article. These weights are the same as those the US Bureau of Labor Statistics uses to compute the consumer price index (CPI), which is somewhat different from the Cost of Living Index.
The table compares Conway to selected cities in Arkansas and the U.S. nationally. Average rent is for a 2 bedroom, 1-1/2 bath 950 sq. ft. unfurnished apartment, recently constructed and excluding utilities except for water and sewer. Average home is for a 2400 sq. ft. four-bedroom new home of good or very good construction.
Except for Little Rock–NLR (98.3), the cost of living in the listed Arkansas cities are all about the same (range 87.7 to 92.5). There is no surprise that San Jose, in the heart of California’s Silicon Valley, is very expensive. Data for Palo Alto California, the brains of Silicon Valley, are not available. Dallas and St. Louis are more expensive cities to live in than Conway but Fayetteville and Hot Springs are less expensive. Memphis is the least expensive city on the list.
The Council of Community and Economic Research conducts the quarterly survey for the American Chamber of Commerce Research Association Cost of Living index publication. To gather data, the Council has participating organizations (usually Chambers of Commerce or local government agencies) follow strict guidelines to collect data. The council lists 60 specific items and participants obtain prices from specified vendor types. Approximately 300 cities across the nation participate. Cities that participate must be within a metropolitan statistical area or have a population greater than 35,000 in a county with more than 50,000 people.
Whereas the Cost of Living Index is designed to compare costs among urban areas, the US Bureau of Labor Statistics Consumer Price Index (CPI) measures the cost of living for the entire U.S. The Cost of Living Index is recognized by the US Census Bureau, US Bureau of Labor Statistics, and The President’s Council of Economic Advisors. It is often referenced in their publications.
You can obtain comparisons among cities by going to the Pulse of Conway website (www.pulseofconway.com). Select cost of living under the Business Data tab.
I thank my friend Chris Spatz for editing and helping me with this article.