-- Measuring Alaska's Cost of Living by John Boucher W hat is the current cost of living in Alaska, and what has the inflation rate in Alaska been? These are two of the most frequently requested pieces of information available from the Alaska Department of Labor's Re- search and Analysis section. This article provides some of the latest cost of living measurements available for Alaska, and explains the uses and limitations of these indexes. Measuring Inflation and cost Two types of cost of living measurements are available for Alaska. If you are interested in how prices have changed in one place over a period of time, commonly referred to as the inflation rate, y ou should use the Consumer Price Index (CPl). If you're interested in cost differences between two places, posed ina question like: Is it more expensive to live in Fairbanks than SeauJe?, then a cost of living measurement like the American Chamber of Commerce Researchers Association (AC- CRA) index or the Runzheimer International studies best suits your needs. The method and the market basket Since it is too expensive to price every item available to purchase, cost of living surveys track price changes of a sample of items from various expenditure categories (such as housing expenses, medical expenses, food expenses, etc.). This sample of items is called the survey's market basket. Most surveys gear their market baskets toward a "typical" consumer. When you choose a costofliving survey, it's a good idea to know what the survey ' s market basket is, and whose buying habits the survey is trying to simulate. All surveys either give a listing of the items which make up the market basket, or define the type of consumer(s) the market basket was des igned to represent. For example, the Consumer Price Index for All Urban Consumers (CPI- U) is designed to represent the consumption pat- terns of 80% of all the urban consumers in the nation. The other surveys in this article tend to have a narrower focus. The Consumer Price Index - The majority of requests about Alaska's cost of living relate to the rate of inflation. The Conswn er Price Index (CPl) is a national survey designed to answer ques tion s about price changes. CPI information is often used to adjust rents, wages or other monetary payments fo r the effects of inflation. To produce the CPI, the U.S. Department of Labor's Bureau ofLabor Statistics gathers prices in 85 metropol- itan areas throughout the COWltry. In Alaska, only Anchorage prices are surveyed, and consequently the Anchorage CPI is the onl y" Alaskan" inflation measure. One shortcoming of having only Anchorage prices tracked is that the inflation rate in Anchorage may not be suitable for every area of the state. In general though, Anchorage price trends reflect changes in the cost of living for most Alaskans. If you feel that the Anchorage CPl doesn't adequately measure inflation in your area there are alternate measurements available. For exam- ple, the Bureau of Labor Statistics recommends that the national CPI data be used when adjusting for the effects of inflation. As a matter of practice though, most Alas- kan users are more comfortable using the Anchorage CPI rather than the national CPt Medical Care Costs Soar, Housing Lags Since 1982 Anchorage CPI·U - 160 140 120 100 .li:..Ao__ ....... 82 83 84 85 86 87 B8 89 90 91 Source: U.S. Department of Labor, Bureau of Labor Statistics. John Boucher is a labor economi st employed with the Research & Analysis Section, Administrative Services Division. Alaska Department of Labor. He is based in Juneau. Figure·1 All Items .... Housing Medical ..... Food & Beverage . . . . .. 1 Alaska Economic Trends November 1992
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Measuring Alaskas Cost of Living by John Boucher
W hat is the current cost of living in Alaska and whathas the inflation rate in Alaskabeen These are two of the most frequently requested pieces of information available from the Alaska Department of Labors Reshysearch and Analysis section This article provides some of the latest cost of living measurements available for Alaska and explains the uses and limitations of these indexes
Measuring Inflation and cost
Two types ofcost of living measurements are available for Alaska If you are interested in how prices have changed in one place over a period of time commonly referred to as the inflation rate you should use the Consumer Price Index (CPl) Ifyoure interested in cost differences between twoplaces posed ina question like Is it more expensive to live in Fairbanks than SeauJe then a cost of living measurement like the American Chamber of Commerce Researchers Association (ACshyCRA) index or the Runzheimer International studies best suits your needs
The method and the market basket
Since it is too expensive to price every item available to purchase cost of living surveys track price changes of a sample of items from various expenditure categories (such as housing expenses medical expenses food expenses etc) This sample of items is called the surveys market basket Most surveys gear their market baskets toward a typical consumer
When you choose a costofliving survey its a good idea to know what the surveys market basket is and whose buying habits the survey is trying to simulate All surveys either give a listing of the items which make up the market basket or define the type of consumer(s) the market basket was designed to represent For example the Consumer Price Index for All Urban Consumers (CPI-U) is designed to represent the consumption patshyterns of 80 of all the urban consumers in the nation The other surveys in this article tend to have a narrower focus
The Consumer Price Index -The majority of requests about Alaskas cost of living relate to the rate of inflation The Conswner Price Index (CPl) is a national survey designed to answer questions about price changes CPI information is often used to adjust rents wages or other monetary payments for the effects of inflation
To produce the CPI the US Department of Labors Bureau of Labor Statistics gathers prices in 85 metropolshyitan areas throughout the COWltry In Alaska only Anchorage prices are surveyed and consequently the AnchorageCPI is the only Alaskan inflation measure One shortcoming of having only Anchorage prices tracked is that the inflation rate inAnchorage may notbe suitable for every area of the state In general though Anchorage price trends reflect changes in the cost of living for most Alaskans Ifyou feel that the Anchorage CPl doesnt adequately measure inflation in your area there are alternate measurements available For examshyple the Bureau of Labor Statistics recommends that the national CPI data be used when adjusting for the effects of inflation As a matter of practice though most Alasshykan users are more comfortable using the Anchorage CPI rather than the national CPt
Source US Department of Labor Bureau of Labor Statistics
John Boucher is a labor economist employed with the Research amp Analysis Section Administrative Services Division Alaska Department of Labor He is based in Juneau
Figuremiddot1
All Items
Housing
Medical
Food amp Beverage
1Alaska Economic Trends November 1992
Tablemiddot1
Consumer Price Index - Urban Consumers US and Alaska
ALL ITEMS ALL ITEMS LESS SHELTER HOUSING
Annual Annual Annual Annual Annual Annual Year US Percent Ancb Percent US Percent Ancb Percent US Percent Anch Percent
Average Cbange Average Change Average Cbange Average Change Average Cbange Average Change
Source US Departmenr of Housing key to Inflation rate The strong influence that housing costs have on Ihe Labor Bureau of Labor overall movement of Ihe Anchorage CPI has beenStatisrics
By analyzing Ihe different rates of inflation among particularly noticeable the lastseveral years From 1986 expenditure categories one can see how different pans to 1988 falling housing costs offset increases in the of the market basket affect the overall CPr (See Table other components of the CPI and the result was that the 1and Figure 1) For example since Ihe early 80s health Anchorage CPI rose only slightly during these three care costs have increased at a much more rapid rate han years The recent increase in inflation in Anchorage can has the overall Anchorage CPI while housing costs be largely accounted for by the change in the housing have lagged behind until recenlly market When the housing component jumped from a
09 increase in 1989 to a 79 increase in 1990 the Each commodity group is given a weight- its contribu- overall Anchorage CPI followed suit going from a 29- tion to Ihe overall cost of living While health care costs to a 62 increase in the rate of inflation During 1990 have shot up in recent years they account for slightly and 1991 the improved Anchorage housing market was more han 5 of Ihe total cost of living Housing costs the primary reason for Anchorages inflation rate being on the other hand account for almost 40 of the higher than the rest of the nation Anchorage CPI (See Figure 2)
2 Alaska Economic Trends November 1992
FOOD amp TRANSPORTATION BEVERAGE MEDICAL
Annual Annual Annual AnnWlI Annual AnnWlI Us Percent Anch Percent US Percent Anch Percent US Percent Anch Percent
Average Cbange Average Change Average Cbange Average Change Average Change Average Change
The housing cost component is unique in the CPI eludes housing-related costs- its referred to as the All especially in regard to homeownership costs The CPI Items Less Shelter Index (See Table 1) uses a method called rental equivalency which asswnes that the conswner has just purchased or rented a home CPI measures Inflation To gauge housing expenditures this method can have some shortcomings In areas where housing prices and CPI users should be aware of a common misinterpretashyor rents are changing rapidly the inflation rate for the tion of the index It occurs when users compare CPI housing portion of the CPI could be inaccurate for numbers among areas Forexample at 1240 the annual homeowners who have a long term fixed rate mortgage average Anchorage cpr for 1991 is lower than the This is because their monthly house payments tend not United States average of 1362 This does not mean that to fluctuate to the extent that house prices and rents do Anchorage has a lower cost of living than the rest of the For this reason the overall CPI figures can understate United States The CPI measures inflation nOl costs the inflation rate for homeowners during periods of The fact that the 1991 AnchorageCPI number is smaller rapidly declining house prices The opposite is true than the overall US index means that Anchorage prices during a period of rapidly increasing house prices and have not risen as quickly as they have in the rest of the rents To measure the inflation rate without the housing US since the early 80s (The base period or when the componeot BLS publishes a special index which ex- two indexes equaled ]00 is 1982-84)
Alaska Eoonomic Trends November 1992 3
Tab l e middot 2 Three comparisons
Cost of Food for a Week In Various differ Alaskan Communities - June 1992
There are several different indices which comparelivshying costs between places
Cost of Cost or Each of these cost of living Food Percent of Food Percent of indices show a different
Community 1 Week Anchorage Community 1 Week Anchorage result when you compare living costs between locashy
Costs are for a family 01 four Anchorage $9841 na Ketchikan 9517 97 with elementary school children tions The main reason for
Barrow 20264 206 Kodiak 12957 132 thi is that the surveys use
Mat-Su aroas 2 tax is the Bethel 14385 146 MatSu 1 10239 104 different methods to meashyrate for Palmer and is not used Cordova 13915 14 1 McGrath 15498 157 In tabulating costs sure cost of living differshyDelta 11889 121 Nome 15958 162
ences For example theDillingham 16254 165 Petersburg 10935 111
terly by the University of Source Cost of Food at Home Glenallen 14068 143 Tok 13731 140 for a Week June 1991 Alaska s Cooperative ExshyHomer 1148 1 117 Valdez 12657 129 University of Alaska tension Service measuresJuneau 10292 105 Wales 20918 213 Cooperative Extension Service only the cost of food ThisUS Dept ofAgriculture and Kenai 11278 115 SEA Grant Cooperating represents a significant
portion of a consumers budgetbut it is not intendshyed to be a comprehensive F i u r e bull 29 measurementofthecostof living
Relative Importance of the Components of the Anchorage CPI-U - December 1991 The Cost of Food at Home study measures the cost 10
feed various size families in different locations in Alasshyka The market basket offood provides aminimum level of nutrition 10 an individual or family at the lowest possible cost The report also contains comparative infonnation on some utility and fuel costs One of its strengths is its wide geographic coverage of Alaska It provides comparative measures for locations in Alska not covered by any other cost index
Transport ation 187 Comparing the cost of living between communities in
Alaska is complicated by several factors Many goods and services available in larger cities are not readily available in rural areas The buying habits of urban residents vary from people in rural communities which can confuse cost of living comparisons Subsistence connibutions to some households also make cost of living comparisons more complex The Cost of Food
Housing survey assumes that all goods are purchased in the local399
community- none are acquired through subsistence means or from merchants outside of the community
Food costs higher In rural Alaska 6 4
Other goods amp services Table 2 shows the costoffood for a week for a family of
53 four with elementary school children for 23 Alaska communities The June 1992 figur s show that Fairshy
Source US Department of banks has the lowest food costs of the areas surveyed Labor Bureau of Labor Statistics
59 Medical care
4 Alaska Economic Trends November 1992
Table middot 3
Cost of Food at Home for a Week 1978-1991
Percent Percent Percent Percent Percent Percent Percent Month of of of of of of of Year Anch Fbks Anch Juneau Ancb Bethel Anch Nome Anch Kod iak Anch Kenai Anch Tok Anch
The survey has tended to show lhat larger cities in ACCRA shows Alaskan Alaska have food costs which are fairly comparable to cities most expensive those in Anchorage
Family with four with Another place-to-placecost of living measure is providshyelementary school chifdren Overallfood costs tend to havethree tiers inAlaska The ed by the American Chamber of Commerce Researchshy
major urban areas have the lowest food costs smaller ers Association (ACCRA) The ACCRA cost of living Sales tax induded in food prices communities on a major distribution system like a road swdy compares costs for roughly 286cities in the United
or the Alaska Marine Highway tend to have slightly States The ACCRA study can be used to compare some - Data unavailable higher costs than the urban areas The highestfood costs costs among a few of Alaskas cities and other cities
Source Cost of Food at Home are always found in isolated communities solely supshy across the nation In the ACCRA study a standardized for a Week September 1978 to plied by air In places such as Bethel and Dillingham list of 59 items is priced during a fixed period of time June 1992 University ofAlaska
Cooperative Extension Service food costs are 45 to 65 higher than in Anchorage The market basket is intended to reflect the spending US Department of Agriculture patterns of a mid-management executive household and SEA Grant Cooperating
The urbanrural cost differential in the Cost of Food at Home swdy presents an interesting contrast between Although state and local taxes are a part of the cost of Alaska and other areas oftheUnited States In the lower living the ACCRA index does not take them into 48 larger urban areas tend to have highercostsofliving account Because of the limited numberofiterns priced including food costs than less populated areas The a difference of less than three in the ACCRA cost of opposite is true fOT Alaska The cost of food and other living index (such as 129 vs 131) are considered statisshybasics such as fuel are higher in rural Alaskan commushy tically insignificant A difference in the index greater nities than in the states urban centers than three implies a cost of living differential
Another interesting point about this survey is lhat the Four Alaskan cities are included in the most recently basic relationship of higher food costs in Alaskas rural published ACCRA study (1st quarter 1992)-- Anchorshyareas has not changed much during the last 15 years age FairbanksJuneau and Kodiak Oftentimes KetchshyTable 3 shows the difference in the cost of food between ikan also has price data available in the ACCRA survey Anchorage and other Alaskan communities It also The 1st Quarter 1992 ACCRA data show that the shows the changes in costs over time within several Alaskan cities are among the 10 highest cost areas communities in the study surveyed (See Table 4) Fairbanks has the lowest index
of the five Alaskan cities in the ACCRA study however
Alaska Economic Trends November 1992 5
eTab l e 4 utilities index was lower than about halfof the citiesACCRA Cost of U ving Index in the ACCRA study
First Quarter 1992 - 20 High Cost Urban Areas Comparative figures for Alaskan cities and other cities around the nation areTotal
City Index Grocery Housing UtU Transp Health presented in Tables 5 and 6 Table 5 shows the ACshy
New York NY 2191 1414 3942 1961 1279 2099 CRA cost of living indexshyANCHORAGE AK 13 10 1321 1411 985 1069 1785 es while Table 6 contains KODIAKAK 1457 1606 1568 1728 1122 171 4 prices for some of the FAIRBANKS AK 1298 1255 1232 1407 1157 1899 goods and services in the JUNEAU AK 1331 1377 1317 1576 1299 1822 ACCRA study Los Angeles-Long Beach CA 1326 1077 1853 800 1196 1365 Palm Springs CA 1203 1065 1368 1072 1181 1329
The ACCRA cost of livingBaltimore MD 1223 1360 1181 1458 1260 1264 study is designed aroundWashington IX 1344 11 86 1758 1137 1304 1422
Albany NY 1142 1108 1198 1282 1044 1125 spending patterns found in Philadelphia P A 1293 11 70 1460 1884 1130 1281 major American urban Visalia CA 1149 1078 1289 1 t 88 1065 1l01 centers The data collectshySeattle WA 1176 1076 1509 617 1078 1442 ed in the pricing survey is BoslOn MA 1336 11 06 1806 1323 1203 i420 an attempt to match the ManchesterNH 1182 1026 1330 1455 1128 1154 items found in the largerSpringfield MA 1187 1099 1358 1349 11 12 1184 areas This process tendsSan Diego CA 1327 1089 1984 722 1285 1295
to ignorespending patterns Lancaster PA 1135 1028 1261 1270 1138 954
found in atypicalareas ForSchawnburg1L 1240 1073 1645 1167 1120 1075 example thetransportation
Ranking or Alaska Cities by Category costs in the ACCRA study include items such as bus
Anchorage AK 8 5 10 140 42 4 fare Lhe price of a gallon of Fairbanks AK 9 6 28 9 12 2 gasoline and automobile JuneauAK 4 3 18 4 2 3 wheel balancing This is Kodiak AK 2 1 7 3 22 5 problematic for Alaskan
communities because air
Source American Chamber of the difference between Anchorage Fairbanks and J umiddot transportation is a more prevalent and more expensive Commerce Resellfchers
Association Urban Area Index neau was nearly insignificant According to the index mode of travel in Alaska Data 1st Quarter 1992 (286 all three of these communities have a cost of living
Urban Aress Surveyed) roughly 30 higher than the all cities average New Runzhelmer shows low cost of living York City had Lhe highest cost of living in the survey more than twice the all-cities average A slightly different approach 10 calculating the differshy
ences among cities is taken in a study commissioned by The four Alaska cities in the ACCRA study were among the Alaska Department of Labor Runzheimer Intemashythe highest cost cities surveyed for several of the six tionala privateresearchfinnlookedatthecomparative major components of the ACCRA index (Table 4) incomes necessary to maintain a certain standard of Kodiak had the highest index for groceries Alaskas living in 253 different areas of the country Thlsincome represented cities had four of the five highest index approach takes into account certain elements left out of numbers for groceries health care costs and the other the ACCRA cost ofliving measuresuch as an areas tax services and miscellaneous goods category rates
Difference In housing costs For this study a base family was created-two parshyents two children living in a 1500 square foot home shy
Housing costs have always been thought of as excep- with 3 bedrooms and 1S baths driving two automoshytionally high in Alaska Althougb they are high the biles This family had an income of $32000 in Standard ACCRA housing index shows that some areas in the City a fictitious city which had costs close to Lhe median nation have comparable housing costs Generally the of all the cities in the survey The standard of living lowest rankings for Alaskas cities were in the ACCRA attainable in Standard City was then priced ineach of the housing or transportation cost indexes The Anchorage surveyed areas
6 Alaska Economic Trends November 1992
T a b I e bull 5 The October 1990 Runshyzheimersurvey shows that ACCRA Cost of Living Index the three Alaskan cities studied Anchorage Fair- First Quarter 1992 banks and Juneau have quite moderate costs comshypared to the other areas Ail MIscsurveyed In this survey Items Grocery Transport- Health Goods amp costs were only 13 to City Index Items Housing Utilities atlon Care Services 43 above Standard Cily (See Table 7) West
ANCHORAGE AK 1310 1321 1411 98 5 1069 1785 1311 Oneasswnption critical to FAIRBANKS AK 1298 1255 1232 1407 1157 1899 1292
JUNEAUAK 1331 1377 13 17 1576 1299 1822 1202the results of the survey KODIAKAI 1457 1606 1568 1728 1122 1714 1302was the duration of home Portland OR 1090 974 1296 708 1126 1209 1038ownership Like the Con-Salt Lake City UT 951 1053 844 912 1004 1005 985sumer Price Index and San Diego CA 1327 1089 1984 722 1285 1295 1063
ACCRA surveys the Seattle WA 11 76 1076 1509 617 1078 1442 1081guidelines in the RWlZheshyimer survey assume a re- Southwest cent home purchase The Santa FeNM 1073 982 1334 849 1023 1033 977 volatility of the Alaska Dallas TX 991 1008 931 11 60 1032 1073 965 housing market greatly Phoenix JJ 1005 1000 926 1001 1068 1170 1029
impacted the cost of hous-Midwest ing in the results Mort-
Minneapolis MN 1017 908 1149 918 1074 11 13 947gage payments accounted Omaha NE 881 907 807 915 996 85 4 892 for 26 of the familyS St Louis MO 961 979 955 1042 968 1006 931
total living costs in Stanshydard City Anchorage was Southeast only slightly higher than Atlanta GA 997 977 978 1117 97 2 1123 11 89 26 while Juneau and Binningham AL 992 962 948 1214 98 7 935 99 2 Fairbanks were between Louisville KY 921 882 892 797 929 852 997 22 and 25 of totalliv- Winston-Salem NC 98 5 920 982 1018 974 916 1015
ing costs going towards AtlanticNew England mortgage payments Boston MA 1336 1106 1806 1323 1203 1420 1074 MontpeliermiddotBarre VT 1090 1116 1189 1098 1059 1029 1018Alaskas real estate prices Philadelphia P A 1293 1170 1460 1884 1130 1281 1101
have escalated since the Syracuse NY 1010 1040 913 1285 1136 1084 960 time theRunzheimerstudy was done Its a near certainty that a larger share of the anywhere from 10 to 15 percent below the average of the average Alaskans total income is going toward hoosing areas studied This is a significant reason why the costs now than went towards housing costs several years Runzheimer index does not show living costs to be Saurce American Chamber o(
Commerce Researchers ago This would have the effect of increasing the total higher in Anchorage Fairbanks and Juneau than else-Assodation Urban Area Index
living cost for the Alaskan cities Some of the highest where in the country Another factor to remember is that Data 1st Quarter 1992 (286 cost areas in the Runzheimer study have the greatest Runzheimer does not take into account a program like Urban Areas surveyed)
difference in the housing cost component- in Los An- AlaskasPermanentFundDividendlfeverymemberof geles over 40 of total living costs go towards mortgage the fictitious Runzheimer family received an Alaska payments Permanent Fund check that would add about $3700 to
the households income This amounts Lo a significant Lower taxes contribute to reduction in the overall laX burden on Alaskans lower living costs
Summary If you examine the component indexes of the Alaskan cities in the RlDlZheimer study they range from five to The first question one must answer when looking for ten percent above the average cost of living except the cost of living information is what type of comparison taxation componenl The Runzheimer study indicates needs to be made Is one interested in how costs changed that the portion of income that goes to taxes in Alaska is over time or how costs differ between places Answer-
Alaska Economic Trends November 1992 7
Tablemiddot6
ACCRA Inter-City Cost of living Index First Quarter 1992
lib 12 gal 1 doz House Total Office Ground Whole Grade A lib Purchase Energy 1 gal Hospital Visit
City Beer MUk Lg Eggs Coffee PrIce Cost Ga Room Doctor
West ANCHORAGE AK $188 $190 $163 $255 154067 $11210 $104 $52250 $5700 FAIRBANKS AK 173 196 157 250 133600 16457 115 39800 6140 JUNEAUAK 187 196 101 318 138750 18494 154 38000 4680 KODIAKAK 202 218 172 371 172667 19903 141 40600 4433 Portland OR 153 123 103 271 141 950 73 76 117 4161 0 3620 Salt Lake City UT 117 158 099 285 87488 10032 102 32300 3740 San Diego CA 147 111 125 203 228300 7880 110 49525 4420 Seattle WA 159 154 079 239 172300 6412 106 45180 4560
AtlanticNew England Boston MA 167 135 105 240 225432 15058 115 50617 5140 Montpelier-Barre VT 178 123 126 249 135000 12000 11 6 45000 3167 Philadelphia P A 187 120 109 277 158180 22269 113 43800 45 40 Syracuse NY 183 131 093 239 102380 13719 115 34000 4160
ALL CITIES MEAN 11 154 139 086 226 110716 11 071 105 29777 3404
All cities mean is the ing this question narrows the field of appropriate cost of three largest Alaska cities These surveys have limitashyarithmetic mean price of al 286 living surveys tions in the scope of goods priced For this reason a data
cities in the 1st quarter 1991 survey user might be forced to use an index which only approxshy
Next a decision mUSl be made on the suitability of imates cost of living differences Source American Chamber of different surveys-some surveys look at subsets of theCommerce Researchers
Association Cost of Uving total cost of living package such as the Cost of Food at Given their limitations most cost of living indexes Index Average Price Data (286 Home survey Some surveys might look ata population involve some sort of compromise answer Still Ihe
Urban Areas surveyed) 1st unlike the one being studied The ACCRA surveys indexes mentioned in this anicle provide some baselineQuarter 1992 mid-managemenl family might not reflect the cost of information to help answer these questions When used living for poveny income level families with proper care the information can help one compare
how far their dollar will go In Alaska particularly in smaller communities survey choices are few Only the Cost of Food at Home and the ACCRA Cost of Living Index include more than the
8 Alaska Economic Trends November 1992
T a b I e bull 7
Runzheimer International Living Cost Standards October 1990
of of of of Goods amp of Total Standard Standard Trans- Standard Standard Services Standard
City Costs City Taxation City portatlon City Housing City Other City
Anchorage AK $33380 1043 $4719 804 $4540 1128 $14493 1101 $10412 1084 Fairbanks AK 32426 1013 5123 873 4481 1113 12623 959 10533 1097 Juneau AI 33255 1039 5232 892 4327 1075 13461 1022 10569 1101 STANDARD CITY 32000 5868 4025 13169 9601 Albuquerque NM 31 050 970 6102 1040 4047 1005 12383 940 8852 922 Atlanta GA 32944 1030 6203 1057 4458 1l08 13359 1014 9268 965 Augusta ME 32379 1012 5508 939 3856 95 8 14136 1073 9213 960 B irmingham AL 29589 92 5 688 1 11 73 3777 93 8 10302 782 8963 934 Boston MA 40723 1273 5501 937 5043 1253 21132 1605 9381 977 Chicago IL 36293 1l34 5648 963 4329 1076 17206 1307 9444 984 Dallas TX 30926 966 5570 94 9 4580 1138 11634 883 9476 987 Denver CO 30690 95 9 6066 1034 4468 11 10 11 497 873 8993 937 Detroit MI 35527 1110 5350 912 4642 1153 16672 1266 9197 958 Honolulu HI 42535 1329 4113 701 4841 1203 22538 1711 11 377 1185 Jndianapolis IN 30834 964 6680 1138 4173 1037 11439 869 8876 924 Jacksonville FL 30081 940 5606 95 5 4041 1004 11558 878 9210 959 Los Angeles CA 43823 1369 3842 655 5527 1373 25250 1917 9538 993 Milwaukee WI 32629 1020 6220 1060 3969 986 13880 105 4 8894 926 New York NY 43804 1369 48 11 820 7165 1780 22239 1689 9923 1034 Philadelphia P A 37440 1170 6445 1098 5004 1243 16981 1289 10165 1059 Portland OR 32629 1020 5836 995 4174 1037 13621 1034 9332 972 San Francisco CA 48948 1530 3210 547 5065 1258 31281 2375 9726 1OL3 Seattle WA 34332 1073 51 34 875 4521 11 23 1571 4 11 93 9297 968 SL Louis MO 32207 1006 6426 1095 3984 990 13055 991 9076 945 Washington DC 38942 1217 4889 833 4432 1101 20055 1523 9900 1031
Source Runzheimers Living Cosr Index October 1990
Summary of Cost of Living Indexes ----------------------------------~~-
Survey Consumer Price Index Survey ACCRA Cost of Uving Survey Cost of Food at Home Survey RUnzheimers Uving COS InOOK Study Index
PopulationAll urban consumers (CPI-U) or urban wage and clerishy Population Midmanagemenl Population Lower income indishy Population Family with $32000 cal woi(ers (CPImiddotW) executive family viduals or families in income living in average cost
city Slrenglh Measures costs in one Strength Compares many Slrenglh Compares minimum location over time the only availshy locations to a nalional average food costs for smaller Alaskan Strength Considers income able inHation measure communrties excluded rom other needed to maintain aspecific stanshyAverage pricedata for some comshy Weakness No tracking of studies dard of living in different cities modities available for large cilies changes over time lacks includes taxes
consistency in price collection Weakno$8 No good comparison Weakness Can only compare the of national data only looks at food Weakness Market basket may change In the cost-of-living for difshy costs not entire cost of living not reflect local consumption patshyierentlocations only one Alaskan terns area surveyed Anchorage
Alaska Economic Trends November 1992 9
Tablemiddot1
Consumer Price Index - Urban Consumers US and Alaska
ALL ITEMS ALL ITEMS LESS SHELTER HOUSING
Annual Annual Annual Annual Annual Annual Year US Percent Ancb Percent US Percent Ancb Percent US Percent Anch Percent
Average Cbange Average Change Average Cbange Average Change Average Cbange Average Change
Source US Departmenr of Housing key to Inflation rate The strong influence that housing costs have on Ihe Labor Bureau of Labor overall movement of Ihe Anchorage CPI has beenStatisrics
By analyzing Ihe different rates of inflation among particularly noticeable the lastseveral years From 1986 expenditure categories one can see how different pans to 1988 falling housing costs offset increases in the of the market basket affect the overall CPr (See Table other components of the CPI and the result was that the 1and Figure 1) For example since Ihe early 80s health Anchorage CPI rose only slightly during these three care costs have increased at a much more rapid rate han years The recent increase in inflation in Anchorage can has the overall Anchorage CPI while housing costs be largely accounted for by the change in the housing have lagged behind until recenlly market When the housing component jumped from a
09 increase in 1989 to a 79 increase in 1990 the Each commodity group is given a weight- its contribu- overall Anchorage CPI followed suit going from a 29- tion to Ihe overall cost of living While health care costs to a 62 increase in the rate of inflation During 1990 have shot up in recent years they account for slightly and 1991 the improved Anchorage housing market was more han 5 of Ihe total cost of living Housing costs the primary reason for Anchorages inflation rate being on the other hand account for almost 40 of the higher than the rest of the nation Anchorage CPI (See Figure 2)
2 Alaska Economic Trends November 1992
FOOD amp TRANSPORTATION BEVERAGE MEDICAL
Annual Annual Annual AnnWlI Annual AnnWlI Us Percent Anch Percent US Percent Anch Percent US Percent Anch Percent
Average Cbange Average Change Average Cbange Average Change Average Change Average Change
The housing cost component is unique in the CPI eludes housing-related costs- its referred to as the All especially in regard to homeownership costs The CPI Items Less Shelter Index (See Table 1) uses a method called rental equivalency which asswnes that the conswner has just purchased or rented a home CPI measures Inflation To gauge housing expenditures this method can have some shortcomings In areas where housing prices and CPI users should be aware of a common misinterpretashyor rents are changing rapidly the inflation rate for the tion of the index It occurs when users compare CPI housing portion of the CPI could be inaccurate for numbers among areas Forexample at 1240 the annual homeowners who have a long term fixed rate mortgage average Anchorage cpr for 1991 is lower than the This is because their monthly house payments tend not United States average of 1362 This does not mean that to fluctuate to the extent that house prices and rents do Anchorage has a lower cost of living than the rest of the For this reason the overall CPI figures can understate United States The CPI measures inflation nOl costs the inflation rate for homeowners during periods of The fact that the 1991 AnchorageCPI number is smaller rapidly declining house prices The opposite is true than the overall US index means that Anchorage prices during a period of rapidly increasing house prices and have not risen as quickly as they have in the rest of the rents To measure the inflation rate without the housing US since the early 80s (The base period or when the componeot BLS publishes a special index which ex- two indexes equaled ]00 is 1982-84)
Alaska Eoonomic Trends November 1992 3
Tab l e middot 2 Three comparisons
Cost of Food for a Week In Various differ Alaskan Communities - June 1992
There are several different indices which comparelivshying costs between places
Cost of Cost or Each of these cost of living Food Percent of Food Percent of indices show a different
Community 1 Week Anchorage Community 1 Week Anchorage result when you compare living costs between locashy
Costs are for a family 01 four Anchorage $9841 na Ketchikan 9517 97 with elementary school children tions The main reason for
Barrow 20264 206 Kodiak 12957 132 thi is that the surveys use
Mat-Su aroas 2 tax is the Bethel 14385 146 MatSu 1 10239 104 different methods to meashyrate for Palmer and is not used Cordova 13915 14 1 McGrath 15498 157 In tabulating costs sure cost of living differshyDelta 11889 121 Nome 15958 162
ences For example theDillingham 16254 165 Petersburg 10935 111
terly by the University of Source Cost of Food at Home Glenallen 14068 143 Tok 13731 140 for a Week June 1991 Alaska s Cooperative ExshyHomer 1148 1 117 Valdez 12657 129 University of Alaska tension Service measuresJuneau 10292 105 Wales 20918 213 Cooperative Extension Service only the cost of food ThisUS Dept ofAgriculture and Kenai 11278 115 SEA Grant Cooperating represents a significant
portion of a consumers budgetbut it is not intendshyed to be a comprehensive F i u r e bull 29 measurementofthecostof living
Relative Importance of the Components of the Anchorage CPI-U - December 1991 The Cost of Food at Home study measures the cost 10
feed various size families in different locations in Alasshyka The market basket offood provides aminimum level of nutrition 10 an individual or family at the lowest possible cost The report also contains comparative infonnation on some utility and fuel costs One of its strengths is its wide geographic coverage of Alaska It provides comparative measures for locations in Alska not covered by any other cost index
Transport ation 187 Comparing the cost of living between communities in
Alaska is complicated by several factors Many goods and services available in larger cities are not readily available in rural areas The buying habits of urban residents vary from people in rural communities which can confuse cost of living comparisons Subsistence connibutions to some households also make cost of living comparisons more complex The Cost of Food
Housing survey assumes that all goods are purchased in the local399
community- none are acquired through subsistence means or from merchants outside of the community
Food costs higher In rural Alaska 6 4
Other goods amp services Table 2 shows the costoffood for a week for a family of
53 four with elementary school children for 23 Alaska communities The June 1992 figur s show that Fairshy
Source US Department of banks has the lowest food costs of the areas surveyed Labor Bureau of Labor Statistics
59 Medical care
4 Alaska Economic Trends November 1992
Table middot 3
Cost of Food at Home for a Week 1978-1991
Percent Percent Percent Percent Percent Percent Percent Month of of of of of of of Year Anch Fbks Anch Juneau Ancb Bethel Anch Nome Anch Kod iak Anch Kenai Anch Tok Anch
The survey has tended to show lhat larger cities in ACCRA shows Alaskan Alaska have food costs which are fairly comparable to cities most expensive those in Anchorage
Family with four with Another place-to-placecost of living measure is providshyelementary school chifdren Overallfood costs tend to havethree tiers inAlaska The ed by the American Chamber of Commerce Researchshy
major urban areas have the lowest food costs smaller ers Association (ACCRA) The ACCRA cost of living Sales tax induded in food prices communities on a major distribution system like a road swdy compares costs for roughly 286cities in the United
or the Alaska Marine Highway tend to have slightly States The ACCRA study can be used to compare some - Data unavailable higher costs than the urban areas The highestfood costs costs among a few of Alaskas cities and other cities
Source Cost of Food at Home are always found in isolated communities solely supshy across the nation In the ACCRA study a standardized for a Week September 1978 to plied by air In places such as Bethel and Dillingham list of 59 items is priced during a fixed period of time June 1992 University ofAlaska
Cooperative Extension Service food costs are 45 to 65 higher than in Anchorage The market basket is intended to reflect the spending US Department of Agriculture patterns of a mid-management executive household and SEA Grant Cooperating
The urbanrural cost differential in the Cost of Food at Home swdy presents an interesting contrast between Although state and local taxes are a part of the cost of Alaska and other areas oftheUnited States In the lower living the ACCRA index does not take them into 48 larger urban areas tend to have highercostsofliving account Because of the limited numberofiterns priced including food costs than less populated areas The a difference of less than three in the ACCRA cost of opposite is true fOT Alaska The cost of food and other living index (such as 129 vs 131) are considered statisshybasics such as fuel are higher in rural Alaskan commushy tically insignificant A difference in the index greater nities than in the states urban centers than three implies a cost of living differential
Another interesting point about this survey is lhat the Four Alaskan cities are included in the most recently basic relationship of higher food costs in Alaskas rural published ACCRA study (1st quarter 1992)-- Anchorshyareas has not changed much during the last 15 years age FairbanksJuneau and Kodiak Oftentimes KetchshyTable 3 shows the difference in the cost of food between ikan also has price data available in the ACCRA survey Anchorage and other Alaskan communities It also The 1st Quarter 1992 ACCRA data show that the shows the changes in costs over time within several Alaskan cities are among the 10 highest cost areas communities in the study surveyed (See Table 4) Fairbanks has the lowest index
of the five Alaskan cities in the ACCRA study however
Alaska Economic Trends November 1992 5
eTab l e 4 utilities index was lower than about halfof the citiesACCRA Cost of U ving Index in the ACCRA study
First Quarter 1992 - 20 High Cost Urban Areas Comparative figures for Alaskan cities and other cities around the nation areTotal
City Index Grocery Housing UtU Transp Health presented in Tables 5 and 6 Table 5 shows the ACshy
New York NY 2191 1414 3942 1961 1279 2099 CRA cost of living indexshyANCHORAGE AK 13 10 1321 1411 985 1069 1785 es while Table 6 contains KODIAKAK 1457 1606 1568 1728 1122 171 4 prices for some of the FAIRBANKS AK 1298 1255 1232 1407 1157 1899 goods and services in the JUNEAU AK 1331 1377 1317 1576 1299 1822 ACCRA study Los Angeles-Long Beach CA 1326 1077 1853 800 1196 1365 Palm Springs CA 1203 1065 1368 1072 1181 1329
The ACCRA cost of livingBaltimore MD 1223 1360 1181 1458 1260 1264 study is designed aroundWashington IX 1344 11 86 1758 1137 1304 1422
Albany NY 1142 1108 1198 1282 1044 1125 spending patterns found in Philadelphia P A 1293 11 70 1460 1884 1130 1281 major American urban Visalia CA 1149 1078 1289 1 t 88 1065 1l01 centers The data collectshySeattle WA 1176 1076 1509 617 1078 1442 ed in the pricing survey is BoslOn MA 1336 11 06 1806 1323 1203 i420 an attempt to match the ManchesterNH 1182 1026 1330 1455 1128 1154 items found in the largerSpringfield MA 1187 1099 1358 1349 11 12 1184 areas This process tendsSan Diego CA 1327 1089 1984 722 1285 1295
to ignorespending patterns Lancaster PA 1135 1028 1261 1270 1138 954
found in atypicalareas ForSchawnburg1L 1240 1073 1645 1167 1120 1075 example thetransportation
Ranking or Alaska Cities by Category costs in the ACCRA study include items such as bus
Anchorage AK 8 5 10 140 42 4 fare Lhe price of a gallon of Fairbanks AK 9 6 28 9 12 2 gasoline and automobile JuneauAK 4 3 18 4 2 3 wheel balancing This is Kodiak AK 2 1 7 3 22 5 problematic for Alaskan
communities because air
Source American Chamber of the difference between Anchorage Fairbanks and J umiddot transportation is a more prevalent and more expensive Commerce Resellfchers
Association Urban Area Index neau was nearly insignificant According to the index mode of travel in Alaska Data 1st Quarter 1992 (286 all three of these communities have a cost of living
Urban Aress Surveyed) roughly 30 higher than the all cities average New Runzhelmer shows low cost of living York City had Lhe highest cost of living in the survey more than twice the all-cities average A slightly different approach 10 calculating the differshy
ences among cities is taken in a study commissioned by The four Alaska cities in the ACCRA study were among the Alaska Department of Labor Runzheimer Intemashythe highest cost cities surveyed for several of the six tionala privateresearchfinnlookedatthecomparative major components of the ACCRA index (Table 4) incomes necessary to maintain a certain standard of Kodiak had the highest index for groceries Alaskas living in 253 different areas of the country Thlsincome represented cities had four of the five highest index approach takes into account certain elements left out of numbers for groceries health care costs and the other the ACCRA cost ofliving measuresuch as an areas tax services and miscellaneous goods category rates
Difference In housing costs For this study a base family was created-two parshyents two children living in a 1500 square foot home shy
Housing costs have always been thought of as excep- with 3 bedrooms and 1S baths driving two automoshytionally high in Alaska Althougb they are high the biles This family had an income of $32000 in Standard ACCRA housing index shows that some areas in the City a fictitious city which had costs close to Lhe median nation have comparable housing costs Generally the of all the cities in the survey The standard of living lowest rankings for Alaskas cities were in the ACCRA attainable in Standard City was then priced ineach of the housing or transportation cost indexes The Anchorage surveyed areas
6 Alaska Economic Trends November 1992
T a b I e bull 5 The October 1990 Runshyzheimersurvey shows that ACCRA Cost of Living Index the three Alaskan cities studied Anchorage Fair- First Quarter 1992 banks and Juneau have quite moderate costs comshypared to the other areas Ail MIscsurveyed In this survey Items Grocery Transport- Health Goods amp costs were only 13 to City Index Items Housing Utilities atlon Care Services 43 above Standard Cily (See Table 7) West
ANCHORAGE AK 1310 1321 1411 98 5 1069 1785 1311 Oneasswnption critical to FAIRBANKS AK 1298 1255 1232 1407 1157 1899 1292
JUNEAUAK 1331 1377 13 17 1576 1299 1822 1202the results of the survey KODIAKAI 1457 1606 1568 1728 1122 1714 1302was the duration of home Portland OR 1090 974 1296 708 1126 1209 1038ownership Like the Con-Salt Lake City UT 951 1053 844 912 1004 1005 985sumer Price Index and San Diego CA 1327 1089 1984 722 1285 1295 1063
ACCRA surveys the Seattle WA 11 76 1076 1509 617 1078 1442 1081guidelines in the RWlZheshyimer survey assume a re- Southwest cent home purchase The Santa FeNM 1073 982 1334 849 1023 1033 977 volatility of the Alaska Dallas TX 991 1008 931 11 60 1032 1073 965 housing market greatly Phoenix JJ 1005 1000 926 1001 1068 1170 1029
impacted the cost of hous-Midwest ing in the results Mort-
Minneapolis MN 1017 908 1149 918 1074 11 13 947gage payments accounted Omaha NE 881 907 807 915 996 85 4 892 for 26 of the familyS St Louis MO 961 979 955 1042 968 1006 931
total living costs in Stanshydard City Anchorage was Southeast only slightly higher than Atlanta GA 997 977 978 1117 97 2 1123 11 89 26 while Juneau and Binningham AL 992 962 948 1214 98 7 935 99 2 Fairbanks were between Louisville KY 921 882 892 797 929 852 997 22 and 25 of totalliv- Winston-Salem NC 98 5 920 982 1018 974 916 1015
ing costs going towards AtlanticNew England mortgage payments Boston MA 1336 1106 1806 1323 1203 1420 1074 MontpeliermiddotBarre VT 1090 1116 1189 1098 1059 1029 1018Alaskas real estate prices Philadelphia P A 1293 1170 1460 1884 1130 1281 1101
have escalated since the Syracuse NY 1010 1040 913 1285 1136 1084 960 time theRunzheimerstudy was done Its a near certainty that a larger share of the anywhere from 10 to 15 percent below the average of the average Alaskans total income is going toward hoosing areas studied This is a significant reason why the costs now than went towards housing costs several years Runzheimer index does not show living costs to be Saurce American Chamber o(
Commerce Researchers ago This would have the effect of increasing the total higher in Anchorage Fairbanks and Juneau than else-Assodation Urban Area Index
living cost for the Alaskan cities Some of the highest where in the country Another factor to remember is that Data 1st Quarter 1992 (286 cost areas in the Runzheimer study have the greatest Runzheimer does not take into account a program like Urban Areas surveyed)
difference in the housing cost component- in Los An- AlaskasPermanentFundDividendlfeverymemberof geles over 40 of total living costs go towards mortgage the fictitious Runzheimer family received an Alaska payments Permanent Fund check that would add about $3700 to
the households income This amounts Lo a significant Lower taxes contribute to reduction in the overall laX burden on Alaskans lower living costs
Summary If you examine the component indexes of the Alaskan cities in the RlDlZheimer study they range from five to The first question one must answer when looking for ten percent above the average cost of living except the cost of living information is what type of comparison taxation componenl The Runzheimer study indicates needs to be made Is one interested in how costs changed that the portion of income that goes to taxes in Alaska is over time or how costs differ between places Answer-
Alaska Economic Trends November 1992 7
Tablemiddot6
ACCRA Inter-City Cost of living Index First Quarter 1992
lib 12 gal 1 doz House Total Office Ground Whole Grade A lib Purchase Energy 1 gal Hospital Visit
City Beer MUk Lg Eggs Coffee PrIce Cost Ga Room Doctor
West ANCHORAGE AK $188 $190 $163 $255 154067 $11210 $104 $52250 $5700 FAIRBANKS AK 173 196 157 250 133600 16457 115 39800 6140 JUNEAUAK 187 196 101 318 138750 18494 154 38000 4680 KODIAKAK 202 218 172 371 172667 19903 141 40600 4433 Portland OR 153 123 103 271 141 950 73 76 117 4161 0 3620 Salt Lake City UT 117 158 099 285 87488 10032 102 32300 3740 San Diego CA 147 111 125 203 228300 7880 110 49525 4420 Seattle WA 159 154 079 239 172300 6412 106 45180 4560
AtlanticNew England Boston MA 167 135 105 240 225432 15058 115 50617 5140 Montpelier-Barre VT 178 123 126 249 135000 12000 11 6 45000 3167 Philadelphia P A 187 120 109 277 158180 22269 113 43800 45 40 Syracuse NY 183 131 093 239 102380 13719 115 34000 4160
ALL CITIES MEAN 11 154 139 086 226 110716 11 071 105 29777 3404
All cities mean is the ing this question narrows the field of appropriate cost of three largest Alaska cities These surveys have limitashyarithmetic mean price of al 286 living surveys tions in the scope of goods priced For this reason a data
cities in the 1st quarter 1991 survey user might be forced to use an index which only approxshy
Next a decision mUSl be made on the suitability of imates cost of living differences Source American Chamber of different surveys-some surveys look at subsets of theCommerce Researchers
Association Cost of Uving total cost of living package such as the Cost of Food at Given their limitations most cost of living indexes Index Average Price Data (286 Home survey Some surveys might look ata population involve some sort of compromise answer Still Ihe
Urban Areas surveyed) 1st unlike the one being studied The ACCRA surveys indexes mentioned in this anicle provide some baselineQuarter 1992 mid-managemenl family might not reflect the cost of information to help answer these questions When used living for poveny income level families with proper care the information can help one compare
how far their dollar will go In Alaska particularly in smaller communities survey choices are few Only the Cost of Food at Home and the ACCRA Cost of Living Index include more than the
8 Alaska Economic Trends November 1992
T a b I e bull 7
Runzheimer International Living Cost Standards October 1990
of of of of Goods amp of Total Standard Standard Trans- Standard Standard Services Standard
City Costs City Taxation City portatlon City Housing City Other City
Anchorage AK $33380 1043 $4719 804 $4540 1128 $14493 1101 $10412 1084 Fairbanks AK 32426 1013 5123 873 4481 1113 12623 959 10533 1097 Juneau AI 33255 1039 5232 892 4327 1075 13461 1022 10569 1101 STANDARD CITY 32000 5868 4025 13169 9601 Albuquerque NM 31 050 970 6102 1040 4047 1005 12383 940 8852 922 Atlanta GA 32944 1030 6203 1057 4458 1l08 13359 1014 9268 965 Augusta ME 32379 1012 5508 939 3856 95 8 14136 1073 9213 960 B irmingham AL 29589 92 5 688 1 11 73 3777 93 8 10302 782 8963 934 Boston MA 40723 1273 5501 937 5043 1253 21132 1605 9381 977 Chicago IL 36293 1l34 5648 963 4329 1076 17206 1307 9444 984 Dallas TX 30926 966 5570 94 9 4580 1138 11634 883 9476 987 Denver CO 30690 95 9 6066 1034 4468 11 10 11 497 873 8993 937 Detroit MI 35527 1110 5350 912 4642 1153 16672 1266 9197 958 Honolulu HI 42535 1329 4113 701 4841 1203 22538 1711 11 377 1185 Jndianapolis IN 30834 964 6680 1138 4173 1037 11439 869 8876 924 Jacksonville FL 30081 940 5606 95 5 4041 1004 11558 878 9210 959 Los Angeles CA 43823 1369 3842 655 5527 1373 25250 1917 9538 993 Milwaukee WI 32629 1020 6220 1060 3969 986 13880 105 4 8894 926 New York NY 43804 1369 48 11 820 7165 1780 22239 1689 9923 1034 Philadelphia P A 37440 1170 6445 1098 5004 1243 16981 1289 10165 1059 Portland OR 32629 1020 5836 995 4174 1037 13621 1034 9332 972 San Francisco CA 48948 1530 3210 547 5065 1258 31281 2375 9726 1OL3 Seattle WA 34332 1073 51 34 875 4521 11 23 1571 4 11 93 9297 968 SL Louis MO 32207 1006 6426 1095 3984 990 13055 991 9076 945 Washington DC 38942 1217 4889 833 4432 1101 20055 1523 9900 1031
Source Runzheimers Living Cosr Index October 1990
Summary of Cost of Living Indexes ----------------------------------~~-
Survey Consumer Price Index Survey ACCRA Cost of Uving Survey Cost of Food at Home Survey RUnzheimers Uving COS InOOK Study Index
PopulationAll urban consumers (CPI-U) or urban wage and clerishy Population Midmanagemenl Population Lower income indishy Population Family with $32000 cal woi(ers (CPImiddotW) executive family viduals or families in income living in average cost
city Slrenglh Measures costs in one Strength Compares many Slrenglh Compares minimum location over time the only availshy locations to a nalional average food costs for smaller Alaskan Strength Considers income able inHation measure communrties excluded rom other needed to maintain aspecific stanshyAverage pricedata for some comshy Weakness No tracking of studies dard of living in different cities modities available for large cilies changes over time lacks includes taxes
consistency in price collection Weakno$8 No good comparison Weakness Can only compare the of national data only looks at food Weakness Market basket may change In the cost-of-living for difshy costs not entire cost of living not reflect local consumption patshyierentlocations only one Alaskan terns area surveyed Anchorage
Alaska Economic Trends November 1992 9
FOOD amp TRANSPORTATION BEVERAGE MEDICAL
Annual Annual Annual AnnWlI Annual AnnWlI Us Percent Anch Percent US Percent Anch Percent US Percent Anch Percent
Average Cbange Average Change Average Cbange Average Change Average Change Average Change
The housing cost component is unique in the CPI eludes housing-related costs- its referred to as the All especially in regard to homeownership costs The CPI Items Less Shelter Index (See Table 1) uses a method called rental equivalency which asswnes that the conswner has just purchased or rented a home CPI measures Inflation To gauge housing expenditures this method can have some shortcomings In areas where housing prices and CPI users should be aware of a common misinterpretashyor rents are changing rapidly the inflation rate for the tion of the index It occurs when users compare CPI housing portion of the CPI could be inaccurate for numbers among areas Forexample at 1240 the annual homeowners who have a long term fixed rate mortgage average Anchorage cpr for 1991 is lower than the This is because their monthly house payments tend not United States average of 1362 This does not mean that to fluctuate to the extent that house prices and rents do Anchorage has a lower cost of living than the rest of the For this reason the overall CPI figures can understate United States The CPI measures inflation nOl costs the inflation rate for homeowners during periods of The fact that the 1991 AnchorageCPI number is smaller rapidly declining house prices The opposite is true than the overall US index means that Anchorage prices during a period of rapidly increasing house prices and have not risen as quickly as they have in the rest of the rents To measure the inflation rate without the housing US since the early 80s (The base period or when the componeot BLS publishes a special index which ex- two indexes equaled ]00 is 1982-84)
Alaska Eoonomic Trends November 1992 3
Tab l e middot 2 Three comparisons
Cost of Food for a Week In Various differ Alaskan Communities - June 1992
There are several different indices which comparelivshying costs between places
Cost of Cost or Each of these cost of living Food Percent of Food Percent of indices show a different
Community 1 Week Anchorage Community 1 Week Anchorage result when you compare living costs between locashy
Costs are for a family 01 four Anchorage $9841 na Ketchikan 9517 97 with elementary school children tions The main reason for
Barrow 20264 206 Kodiak 12957 132 thi is that the surveys use
Mat-Su aroas 2 tax is the Bethel 14385 146 MatSu 1 10239 104 different methods to meashyrate for Palmer and is not used Cordova 13915 14 1 McGrath 15498 157 In tabulating costs sure cost of living differshyDelta 11889 121 Nome 15958 162
ences For example theDillingham 16254 165 Petersburg 10935 111
terly by the University of Source Cost of Food at Home Glenallen 14068 143 Tok 13731 140 for a Week June 1991 Alaska s Cooperative ExshyHomer 1148 1 117 Valdez 12657 129 University of Alaska tension Service measuresJuneau 10292 105 Wales 20918 213 Cooperative Extension Service only the cost of food ThisUS Dept ofAgriculture and Kenai 11278 115 SEA Grant Cooperating represents a significant
portion of a consumers budgetbut it is not intendshyed to be a comprehensive F i u r e bull 29 measurementofthecostof living
Relative Importance of the Components of the Anchorage CPI-U - December 1991 The Cost of Food at Home study measures the cost 10
feed various size families in different locations in Alasshyka The market basket offood provides aminimum level of nutrition 10 an individual or family at the lowest possible cost The report also contains comparative infonnation on some utility and fuel costs One of its strengths is its wide geographic coverage of Alaska It provides comparative measures for locations in Alska not covered by any other cost index
Transport ation 187 Comparing the cost of living between communities in
Alaska is complicated by several factors Many goods and services available in larger cities are not readily available in rural areas The buying habits of urban residents vary from people in rural communities which can confuse cost of living comparisons Subsistence connibutions to some households also make cost of living comparisons more complex The Cost of Food
Housing survey assumes that all goods are purchased in the local399
community- none are acquired through subsistence means or from merchants outside of the community
Food costs higher In rural Alaska 6 4
Other goods amp services Table 2 shows the costoffood for a week for a family of
53 four with elementary school children for 23 Alaska communities The June 1992 figur s show that Fairshy
Source US Department of banks has the lowest food costs of the areas surveyed Labor Bureau of Labor Statistics
59 Medical care
4 Alaska Economic Trends November 1992
Table middot 3
Cost of Food at Home for a Week 1978-1991
Percent Percent Percent Percent Percent Percent Percent Month of of of of of of of Year Anch Fbks Anch Juneau Ancb Bethel Anch Nome Anch Kod iak Anch Kenai Anch Tok Anch
The survey has tended to show lhat larger cities in ACCRA shows Alaskan Alaska have food costs which are fairly comparable to cities most expensive those in Anchorage
Family with four with Another place-to-placecost of living measure is providshyelementary school chifdren Overallfood costs tend to havethree tiers inAlaska The ed by the American Chamber of Commerce Researchshy
major urban areas have the lowest food costs smaller ers Association (ACCRA) The ACCRA cost of living Sales tax induded in food prices communities on a major distribution system like a road swdy compares costs for roughly 286cities in the United
or the Alaska Marine Highway tend to have slightly States The ACCRA study can be used to compare some - Data unavailable higher costs than the urban areas The highestfood costs costs among a few of Alaskas cities and other cities
Source Cost of Food at Home are always found in isolated communities solely supshy across the nation In the ACCRA study a standardized for a Week September 1978 to plied by air In places such as Bethel and Dillingham list of 59 items is priced during a fixed period of time June 1992 University ofAlaska
Cooperative Extension Service food costs are 45 to 65 higher than in Anchorage The market basket is intended to reflect the spending US Department of Agriculture patterns of a mid-management executive household and SEA Grant Cooperating
The urbanrural cost differential in the Cost of Food at Home swdy presents an interesting contrast between Although state and local taxes are a part of the cost of Alaska and other areas oftheUnited States In the lower living the ACCRA index does not take them into 48 larger urban areas tend to have highercostsofliving account Because of the limited numberofiterns priced including food costs than less populated areas The a difference of less than three in the ACCRA cost of opposite is true fOT Alaska The cost of food and other living index (such as 129 vs 131) are considered statisshybasics such as fuel are higher in rural Alaskan commushy tically insignificant A difference in the index greater nities than in the states urban centers than three implies a cost of living differential
Another interesting point about this survey is lhat the Four Alaskan cities are included in the most recently basic relationship of higher food costs in Alaskas rural published ACCRA study (1st quarter 1992)-- Anchorshyareas has not changed much during the last 15 years age FairbanksJuneau and Kodiak Oftentimes KetchshyTable 3 shows the difference in the cost of food between ikan also has price data available in the ACCRA survey Anchorage and other Alaskan communities It also The 1st Quarter 1992 ACCRA data show that the shows the changes in costs over time within several Alaskan cities are among the 10 highest cost areas communities in the study surveyed (See Table 4) Fairbanks has the lowest index
of the five Alaskan cities in the ACCRA study however
Alaska Economic Trends November 1992 5
eTab l e 4 utilities index was lower than about halfof the citiesACCRA Cost of U ving Index in the ACCRA study
First Quarter 1992 - 20 High Cost Urban Areas Comparative figures for Alaskan cities and other cities around the nation areTotal
City Index Grocery Housing UtU Transp Health presented in Tables 5 and 6 Table 5 shows the ACshy
New York NY 2191 1414 3942 1961 1279 2099 CRA cost of living indexshyANCHORAGE AK 13 10 1321 1411 985 1069 1785 es while Table 6 contains KODIAKAK 1457 1606 1568 1728 1122 171 4 prices for some of the FAIRBANKS AK 1298 1255 1232 1407 1157 1899 goods and services in the JUNEAU AK 1331 1377 1317 1576 1299 1822 ACCRA study Los Angeles-Long Beach CA 1326 1077 1853 800 1196 1365 Palm Springs CA 1203 1065 1368 1072 1181 1329
The ACCRA cost of livingBaltimore MD 1223 1360 1181 1458 1260 1264 study is designed aroundWashington IX 1344 11 86 1758 1137 1304 1422
Albany NY 1142 1108 1198 1282 1044 1125 spending patterns found in Philadelphia P A 1293 11 70 1460 1884 1130 1281 major American urban Visalia CA 1149 1078 1289 1 t 88 1065 1l01 centers The data collectshySeattle WA 1176 1076 1509 617 1078 1442 ed in the pricing survey is BoslOn MA 1336 11 06 1806 1323 1203 i420 an attempt to match the ManchesterNH 1182 1026 1330 1455 1128 1154 items found in the largerSpringfield MA 1187 1099 1358 1349 11 12 1184 areas This process tendsSan Diego CA 1327 1089 1984 722 1285 1295
to ignorespending patterns Lancaster PA 1135 1028 1261 1270 1138 954
found in atypicalareas ForSchawnburg1L 1240 1073 1645 1167 1120 1075 example thetransportation
Ranking or Alaska Cities by Category costs in the ACCRA study include items such as bus
Anchorage AK 8 5 10 140 42 4 fare Lhe price of a gallon of Fairbanks AK 9 6 28 9 12 2 gasoline and automobile JuneauAK 4 3 18 4 2 3 wheel balancing This is Kodiak AK 2 1 7 3 22 5 problematic for Alaskan
communities because air
Source American Chamber of the difference between Anchorage Fairbanks and J umiddot transportation is a more prevalent and more expensive Commerce Resellfchers
Association Urban Area Index neau was nearly insignificant According to the index mode of travel in Alaska Data 1st Quarter 1992 (286 all three of these communities have a cost of living
Urban Aress Surveyed) roughly 30 higher than the all cities average New Runzhelmer shows low cost of living York City had Lhe highest cost of living in the survey more than twice the all-cities average A slightly different approach 10 calculating the differshy
ences among cities is taken in a study commissioned by The four Alaska cities in the ACCRA study were among the Alaska Department of Labor Runzheimer Intemashythe highest cost cities surveyed for several of the six tionala privateresearchfinnlookedatthecomparative major components of the ACCRA index (Table 4) incomes necessary to maintain a certain standard of Kodiak had the highest index for groceries Alaskas living in 253 different areas of the country Thlsincome represented cities had four of the five highest index approach takes into account certain elements left out of numbers for groceries health care costs and the other the ACCRA cost ofliving measuresuch as an areas tax services and miscellaneous goods category rates
Difference In housing costs For this study a base family was created-two parshyents two children living in a 1500 square foot home shy
Housing costs have always been thought of as excep- with 3 bedrooms and 1S baths driving two automoshytionally high in Alaska Althougb they are high the biles This family had an income of $32000 in Standard ACCRA housing index shows that some areas in the City a fictitious city which had costs close to Lhe median nation have comparable housing costs Generally the of all the cities in the survey The standard of living lowest rankings for Alaskas cities were in the ACCRA attainable in Standard City was then priced ineach of the housing or transportation cost indexes The Anchorage surveyed areas
6 Alaska Economic Trends November 1992
T a b I e bull 5 The October 1990 Runshyzheimersurvey shows that ACCRA Cost of Living Index the three Alaskan cities studied Anchorage Fair- First Quarter 1992 banks and Juneau have quite moderate costs comshypared to the other areas Ail MIscsurveyed In this survey Items Grocery Transport- Health Goods amp costs were only 13 to City Index Items Housing Utilities atlon Care Services 43 above Standard Cily (See Table 7) West
ANCHORAGE AK 1310 1321 1411 98 5 1069 1785 1311 Oneasswnption critical to FAIRBANKS AK 1298 1255 1232 1407 1157 1899 1292
JUNEAUAK 1331 1377 13 17 1576 1299 1822 1202the results of the survey KODIAKAI 1457 1606 1568 1728 1122 1714 1302was the duration of home Portland OR 1090 974 1296 708 1126 1209 1038ownership Like the Con-Salt Lake City UT 951 1053 844 912 1004 1005 985sumer Price Index and San Diego CA 1327 1089 1984 722 1285 1295 1063
ACCRA surveys the Seattle WA 11 76 1076 1509 617 1078 1442 1081guidelines in the RWlZheshyimer survey assume a re- Southwest cent home purchase The Santa FeNM 1073 982 1334 849 1023 1033 977 volatility of the Alaska Dallas TX 991 1008 931 11 60 1032 1073 965 housing market greatly Phoenix JJ 1005 1000 926 1001 1068 1170 1029
impacted the cost of hous-Midwest ing in the results Mort-
Minneapolis MN 1017 908 1149 918 1074 11 13 947gage payments accounted Omaha NE 881 907 807 915 996 85 4 892 for 26 of the familyS St Louis MO 961 979 955 1042 968 1006 931
total living costs in Stanshydard City Anchorage was Southeast only slightly higher than Atlanta GA 997 977 978 1117 97 2 1123 11 89 26 while Juneau and Binningham AL 992 962 948 1214 98 7 935 99 2 Fairbanks were between Louisville KY 921 882 892 797 929 852 997 22 and 25 of totalliv- Winston-Salem NC 98 5 920 982 1018 974 916 1015
ing costs going towards AtlanticNew England mortgage payments Boston MA 1336 1106 1806 1323 1203 1420 1074 MontpeliermiddotBarre VT 1090 1116 1189 1098 1059 1029 1018Alaskas real estate prices Philadelphia P A 1293 1170 1460 1884 1130 1281 1101
have escalated since the Syracuse NY 1010 1040 913 1285 1136 1084 960 time theRunzheimerstudy was done Its a near certainty that a larger share of the anywhere from 10 to 15 percent below the average of the average Alaskans total income is going toward hoosing areas studied This is a significant reason why the costs now than went towards housing costs several years Runzheimer index does not show living costs to be Saurce American Chamber o(
Commerce Researchers ago This would have the effect of increasing the total higher in Anchorage Fairbanks and Juneau than else-Assodation Urban Area Index
living cost for the Alaskan cities Some of the highest where in the country Another factor to remember is that Data 1st Quarter 1992 (286 cost areas in the Runzheimer study have the greatest Runzheimer does not take into account a program like Urban Areas surveyed)
difference in the housing cost component- in Los An- AlaskasPermanentFundDividendlfeverymemberof geles over 40 of total living costs go towards mortgage the fictitious Runzheimer family received an Alaska payments Permanent Fund check that would add about $3700 to
the households income This amounts Lo a significant Lower taxes contribute to reduction in the overall laX burden on Alaskans lower living costs
Summary If you examine the component indexes of the Alaskan cities in the RlDlZheimer study they range from five to The first question one must answer when looking for ten percent above the average cost of living except the cost of living information is what type of comparison taxation componenl The Runzheimer study indicates needs to be made Is one interested in how costs changed that the portion of income that goes to taxes in Alaska is over time or how costs differ between places Answer-
Alaska Economic Trends November 1992 7
Tablemiddot6
ACCRA Inter-City Cost of living Index First Quarter 1992
lib 12 gal 1 doz House Total Office Ground Whole Grade A lib Purchase Energy 1 gal Hospital Visit
City Beer MUk Lg Eggs Coffee PrIce Cost Ga Room Doctor
West ANCHORAGE AK $188 $190 $163 $255 154067 $11210 $104 $52250 $5700 FAIRBANKS AK 173 196 157 250 133600 16457 115 39800 6140 JUNEAUAK 187 196 101 318 138750 18494 154 38000 4680 KODIAKAK 202 218 172 371 172667 19903 141 40600 4433 Portland OR 153 123 103 271 141 950 73 76 117 4161 0 3620 Salt Lake City UT 117 158 099 285 87488 10032 102 32300 3740 San Diego CA 147 111 125 203 228300 7880 110 49525 4420 Seattle WA 159 154 079 239 172300 6412 106 45180 4560
AtlanticNew England Boston MA 167 135 105 240 225432 15058 115 50617 5140 Montpelier-Barre VT 178 123 126 249 135000 12000 11 6 45000 3167 Philadelphia P A 187 120 109 277 158180 22269 113 43800 45 40 Syracuse NY 183 131 093 239 102380 13719 115 34000 4160
ALL CITIES MEAN 11 154 139 086 226 110716 11 071 105 29777 3404
All cities mean is the ing this question narrows the field of appropriate cost of three largest Alaska cities These surveys have limitashyarithmetic mean price of al 286 living surveys tions in the scope of goods priced For this reason a data
cities in the 1st quarter 1991 survey user might be forced to use an index which only approxshy
Next a decision mUSl be made on the suitability of imates cost of living differences Source American Chamber of different surveys-some surveys look at subsets of theCommerce Researchers
Association Cost of Uving total cost of living package such as the Cost of Food at Given their limitations most cost of living indexes Index Average Price Data (286 Home survey Some surveys might look ata population involve some sort of compromise answer Still Ihe
Urban Areas surveyed) 1st unlike the one being studied The ACCRA surveys indexes mentioned in this anicle provide some baselineQuarter 1992 mid-managemenl family might not reflect the cost of information to help answer these questions When used living for poveny income level families with proper care the information can help one compare
how far their dollar will go In Alaska particularly in smaller communities survey choices are few Only the Cost of Food at Home and the ACCRA Cost of Living Index include more than the
8 Alaska Economic Trends November 1992
T a b I e bull 7
Runzheimer International Living Cost Standards October 1990
of of of of Goods amp of Total Standard Standard Trans- Standard Standard Services Standard
City Costs City Taxation City portatlon City Housing City Other City
Anchorage AK $33380 1043 $4719 804 $4540 1128 $14493 1101 $10412 1084 Fairbanks AK 32426 1013 5123 873 4481 1113 12623 959 10533 1097 Juneau AI 33255 1039 5232 892 4327 1075 13461 1022 10569 1101 STANDARD CITY 32000 5868 4025 13169 9601 Albuquerque NM 31 050 970 6102 1040 4047 1005 12383 940 8852 922 Atlanta GA 32944 1030 6203 1057 4458 1l08 13359 1014 9268 965 Augusta ME 32379 1012 5508 939 3856 95 8 14136 1073 9213 960 B irmingham AL 29589 92 5 688 1 11 73 3777 93 8 10302 782 8963 934 Boston MA 40723 1273 5501 937 5043 1253 21132 1605 9381 977 Chicago IL 36293 1l34 5648 963 4329 1076 17206 1307 9444 984 Dallas TX 30926 966 5570 94 9 4580 1138 11634 883 9476 987 Denver CO 30690 95 9 6066 1034 4468 11 10 11 497 873 8993 937 Detroit MI 35527 1110 5350 912 4642 1153 16672 1266 9197 958 Honolulu HI 42535 1329 4113 701 4841 1203 22538 1711 11 377 1185 Jndianapolis IN 30834 964 6680 1138 4173 1037 11439 869 8876 924 Jacksonville FL 30081 940 5606 95 5 4041 1004 11558 878 9210 959 Los Angeles CA 43823 1369 3842 655 5527 1373 25250 1917 9538 993 Milwaukee WI 32629 1020 6220 1060 3969 986 13880 105 4 8894 926 New York NY 43804 1369 48 11 820 7165 1780 22239 1689 9923 1034 Philadelphia P A 37440 1170 6445 1098 5004 1243 16981 1289 10165 1059 Portland OR 32629 1020 5836 995 4174 1037 13621 1034 9332 972 San Francisco CA 48948 1530 3210 547 5065 1258 31281 2375 9726 1OL3 Seattle WA 34332 1073 51 34 875 4521 11 23 1571 4 11 93 9297 968 SL Louis MO 32207 1006 6426 1095 3984 990 13055 991 9076 945 Washington DC 38942 1217 4889 833 4432 1101 20055 1523 9900 1031
Source Runzheimers Living Cosr Index October 1990
Summary of Cost of Living Indexes ----------------------------------~~-
Survey Consumer Price Index Survey ACCRA Cost of Uving Survey Cost of Food at Home Survey RUnzheimers Uving COS InOOK Study Index
PopulationAll urban consumers (CPI-U) or urban wage and clerishy Population Midmanagemenl Population Lower income indishy Population Family with $32000 cal woi(ers (CPImiddotW) executive family viduals or families in income living in average cost
city Slrenglh Measures costs in one Strength Compares many Slrenglh Compares minimum location over time the only availshy locations to a nalional average food costs for smaller Alaskan Strength Considers income able inHation measure communrties excluded rom other needed to maintain aspecific stanshyAverage pricedata for some comshy Weakness No tracking of studies dard of living in different cities modities available for large cilies changes over time lacks includes taxes
consistency in price collection Weakno$8 No good comparison Weakness Can only compare the of national data only looks at food Weakness Market basket may change In the cost-of-living for difshy costs not entire cost of living not reflect local consumption patshyierentlocations only one Alaskan terns area surveyed Anchorage
Alaska Economic Trends November 1992 9
Tab l e middot 2 Three comparisons
Cost of Food for a Week In Various differ Alaskan Communities - June 1992
There are several different indices which comparelivshying costs between places
Cost of Cost or Each of these cost of living Food Percent of Food Percent of indices show a different
Community 1 Week Anchorage Community 1 Week Anchorage result when you compare living costs between locashy
Costs are for a family 01 four Anchorage $9841 na Ketchikan 9517 97 with elementary school children tions The main reason for
Barrow 20264 206 Kodiak 12957 132 thi is that the surveys use
Mat-Su aroas 2 tax is the Bethel 14385 146 MatSu 1 10239 104 different methods to meashyrate for Palmer and is not used Cordova 13915 14 1 McGrath 15498 157 In tabulating costs sure cost of living differshyDelta 11889 121 Nome 15958 162
ences For example theDillingham 16254 165 Petersburg 10935 111
terly by the University of Source Cost of Food at Home Glenallen 14068 143 Tok 13731 140 for a Week June 1991 Alaska s Cooperative ExshyHomer 1148 1 117 Valdez 12657 129 University of Alaska tension Service measuresJuneau 10292 105 Wales 20918 213 Cooperative Extension Service only the cost of food ThisUS Dept ofAgriculture and Kenai 11278 115 SEA Grant Cooperating represents a significant
portion of a consumers budgetbut it is not intendshyed to be a comprehensive F i u r e bull 29 measurementofthecostof living
Relative Importance of the Components of the Anchorage CPI-U - December 1991 The Cost of Food at Home study measures the cost 10
feed various size families in different locations in Alasshyka The market basket offood provides aminimum level of nutrition 10 an individual or family at the lowest possible cost The report also contains comparative infonnation on some utility and fuel costs One of its strengths is its wide geographic coverage of Alaska It provides comparative measures for locations in Alska not covered by any other cost index
Transport ation 187 Comparing the cost of living between communities in
Alaska is complicated by several factors Many goods and services available in larger cities are not readily available in rural areas The buying habits of urban residents vary from people in rural communities which can confuse cost of living comparisons Subsistence connibutions to some households also make cost of living comparisons more complex The Cost of Food
Housing survey assumes that all goods are purchased in the local399
community- none are acquired through subsistence means or from merchants outside of the community
Food costs higher In rural Alaska 6 4
Other goods amp services Table 2 shows the costoffood for a week for a family of
53 four with elementary school children for 23 Alaska communities The June 1992 figur s show that Fairshy
Source US Department of banks has the lowest food costs of the areas surveyed Labor Bureau of Labor Statistics
59 Medical care
4 Alaska Economic Trends November 1992
Table middot 3
Cost of Food at Home for a Week 1978-1991
Percent Percent Percent Percent Percent Percent Percent Month of of of of of of of Year Anch Fbks Anch Juneau Ancb Bethel Anch Nome Anch Kod iak Anch Kenai Anch Tok Anch
The survey has tended to show lhat larger cities in ACCRA shows Alaskan Alaska have food costs which are fairly comparable to cities most expensive those in Anchorage
Family with four with Another place-to-placecost of living measure is providshyelementary school chifdren Overallfood costs tend to havethree tiers inAlaska The ed by the American Chamber of Commerce Researchshy
major urban areas have the lowest food costs smaller ers Association (ACCRA) The ACCRA cost of living Sales tax induded in food prices communities on a major distribution system like a road swdy compares costs for roughly 286cities in the United
or the Alaska Marine Highway tend to have slightly States The ACCRA study can be used to compare some - Data unavailable higher costs than the urban areas The highestfood costs costs among a few of Alaskas cities and other cities
Source Cost of Food at Home are always found in isolated communities solely supshy across the nation In the ACCRA study a standardized for a Week September 1978 to plied by air In places such as Bethel and Dillingham list of 59 items is priced during a fixed period of time June 1992 University ofAlaska
Cooperative Extension Service food costs are 45 to 65 higher than in Anchorage The market basket is intended to reflect the spending US Department of Agriculture patterns of a mid-management executive household and SEA Grant Cooperating
The urbanrural cost differential in the Cost of Food at Home swdy presents an interesting contrast between Although state and local taxes are a part of the cost of Alaska and other areas oftheUnited States In the lower living the ACCRA index does not take them into 48 larger urban areas tend to have highercostsofliving account Because of the limited numberofiterns priced including food costs than less populated areas The a difference of less than three in the ACCRA cost of opposite is true fOT Alaska The cost of food and other living index (such as 129 vs 131) are considered statisshybasics such as fuel are higher in rural Alaskan commushy tically insignificant A difference in the index greater nities than in the states urban centers than three implies a cost of living differential
Another interesting point about this survey is lhat the Four Alaskan cities are included in the most recently basic relationship of higher food costs in Alaskas rural published ACCRA study (1st quarter 1992)-- Anchorshyareas has not changed much during the last 15 years age FairbanksJuneau and Kodiak Oftentimes KetchshyTable 3 shows the difference in the cost of food between ikan also has price data available in the ACCRA survey Anchorage and other Alaskan communities It also The 1st Quarter 1992 ACCRA data show that the shows the changes in costs over time within several Alaskan cities are among the 10 highest cost areas communities in the study surveyed (See Table 4) Fairbanks has the lowest index
of the five Alaskan cities in the ACCRA study however
Alaska Economic Trends November 1992 5
eTab l e 4 utilities index was lower than about halfof the citiesACCRA Cost of U ving Index in the ACCRA study
First Quarter 1992 - 20 High Cost Urban Areas Comparative figures for Alaskan cities and other cities around the nation areTotal
City Index Grocery Housing UtU Transp Health presented in Tables 5 and 6 Table 5 shows the ACshy
New York NY 2191 1414 3942 1961 1279 2099 CRA cost of living indexshyANCHORAGE AK 13 10 1321 1411 985 1069 1785 es while Table 6 contains KODIAKAK 1457 1606 1568 1728 1122 171 4 prices for some of the FAIRBANKS AK 1298 1255 1232 1407 1157 1899 goods and services in the JUNEAU AK 1331 1377 1317 1576 1299 1822 ACCRA study Los Angeles-Long Beach CA 1326 1077 1853 800 1196 1365 Palm Springs CA 1203 1065 1368 1072 1181 1329
The ACCRA cost of livingBaltimore MD 1223 1360 1181 1458 1260 1264 study is designed aroundWashington IX 1344 11 86 1758 1137 1304 1422
Albany NY 1142 1108 1198 1282 1044 1125 spending patterns found in Philadelphia P A 1293 11 70 1460 1884 1130 1281 major American urban Visalia CA 1149 1078 1289 1 t 88 1065 1l01 centers The data collectshySeattle WA 1176 1076 1509 617 1078 1442 ed in the pricing survey is BoslOn MA 1336 11 06 1806 1323 1203 i420 an attempt to match the ManchesterNH 1182 1026 1330 1455 1128 1154 items found in the largerSpringfield MA 1187 1099 1358 1349 11 12 1184 areas This process tendsSan Diego CA 1327 1089 1984 722 1285 1295
to ignorespending patterns Lancaster PA 1135 1028 1261 1270 1138 954
found in atypicalareas ForSchawnburg1L 1240 1073 1645 1167 1120 1075 example thetransportation
Ranking or Alaska Cities by Category costs in the ACCRA study include items such as bus
Anchorage AK 8 5 10 140 42 4 fare Lhe price of a gallon of Fairbanks AK 9 6 28 9 12 2 gasoline and automobile JuneauAK 4 3 18 4 2 3 wheel balancing This is Kodiak AK 2 1 7 3 22 5 problematic for Alaskan
communities because air
Source American Chamber of the difference between Anchorage Fairbanks and J umiddot transportation is a more prevalent and more expensive Commerce Resellfchers
Association Urban Area Index neau was nearly insignificant According to the index mode of travel in Alaska Data 1st Quarter 1992 (286 all three of these communities have a cost of living
Urban Aress Surveyed) roughly 30 higher than the all cities average New Runzhelmer shows low cost of living York City had Lhe highest cost of living in the survey more than twice the all-cities average A slightly different approach 10 calculating the differshy
ences among cities is taken in a study commissioned by The four Alaska cities in the ACCRA study were among the Alaska Department of Labor Runzheimer Intemashythe highest cost cities surveyed for several of the six tionala privateresearchfinnlookedatthecomparative major components of the ACCRA index (Table 4) incomes necessary to maintain a certain standard of Kodiak had the highest index for groceries Alaskas living in 253 different areas of the country Thlsincome represented cities had four of the five highest index approach takes into account certain elements left out of numbers for groceries health care costs and the other the ACCRA cost ofliving measuresuch as an areas tax services and miscellaneous goods category rates
Difference In housing costs For this study a base family was created-two parshyents two children living in a 1500 square foot home shy
Housing costs have always been thought of as excep- with 3 bedrooms and 1S baths driving two automoshytionally high in Alaska Althougb they are high the biles This family had an income of $32000 in Standard ACCRA housing index shows that some areas in the City a fictitious city which had costs close to Lhe median nation have comparable housing costs Generally the of all the cities in the survey The standard of living lowest rankings for Alaskas cities were in the ACCRA attainable in Standard City was then priced ineach of the housing or transportation cost indexes The Anchorage surveyed areas
6 Alaska Economic Trends November 1992
T a b I e bull 5 The October 1990 Runshyzheimersurvey shows that ACCRA Cost of Living Index the three Alaskan cities studied Anchorage Fair- First Quarter 1992 banks and Juneau have quite moderate costs comshypared to the other areas Ail MIscsurveyed In this survey Items Grocery Transport- Health Goods amp costs were only 13 to City Index Items Housing Utilities atlon Care Services 43 above Standard Cily (See Table 7) West
ANCHORAGE AK 1310 1321 1411 98 5 1069 1785 1311 Oneasswnption critical to FAIRBANKS AK 1298 1255 1232 1407 1157 1899 1292
JUNEAUAK 1331 1377 13 17 1576 1299 1822 1202the results of the survey KODIAKAI 1457 1606 1568 1728 1122 1714 1302was the duration of home Portland OR 1090 974 1296 708 1126 1209 1038ownership Like the Con-Salt Lake City UT 951 1053 844 912 1004 1005 985sumer Price Index and San Diego CA 1327 1089 1984 722 1285 1295 1063
ACCRA surveys the Seattle WA 11 76 1076 1509 617 1078 1442 1081guidelines in the RWlZheshyimer survey assume a re- Southwest cent home purchase The Santa FeNM 1073 982 1334 849 1023 1033 977 volatility of the Alaska Dallas TX 991 1008 931 11 60 1032 1073 965 housing market greatly Phoenix JJ 1005 1000 926 1001 1068 1170 1029
impacted the cost of hous-Midwest ing in the results Mort-
Minneapolis MN 1017 908 1149 918 1074 11 13 947gage payments accounted Omaha NE 881 907 807 915 996 85 4 892 for 26 of the familyS St Louis MO 961 979 955 1042 968 1006 931
total living costs in Stanshydard City Anchorage was Southeast only slightly higher than Atlanta GA 997 977 978 1117 97 2 1123 11 89 26 while Juneau and Binningham AL 992 962 948 1214 98 7 935 99 2 Fairbanks were between Louisville KY 921 882 892 797 929 852 997 22 and 25 of totalliv- Winston-Salem NC 98 5 920 982 1018 974 916 1015
ing costs going towards AtlanticNew England mortgage payments Boston MA 1336 1106 1806 1323 1203 1420 1074 MontpeliermiddotBarre VT 1090 1116 1189 1098 1059 1029 1018Alaskas real estate prices Philadelphia P A 1293 1170 1460 1884 1130 1281 1101
have escalated since the Syracuse NY 1010 1040 913 1285 1136 1084 960 time theRunzheimerstudy was done Its a near certainty that a larger share of the anywhere from 10 to 15 percent below the average of the average Alaskans total income is going toward hoosing areas studied This is a significant reason why the costs now than went towards housing costs several years Runzheimer index does not show living costs to be Saurce American Chamber o(
Commerce Researchers ago This would have the effect of increasing the total higher in Anchorage Fairbanks and Juneau than else-Assodation Urban Area Index
living cost for the Alaskan cities Some of the highest where in the country Another factor to remember is that Data 1st Quarter 1992 (286 cost areas in the Runzheimer study have the greatest Runzheimer does not take into account a program like Urban Areas surveyed)
difference in the housing cost component- in Los An- AlaskasPermanentFundDividendlfeverymemberof geles over 40 of total living costs go towards mortgage the fictitious Runzheimer family received an Alaska payments Permanent Fund check that would add about $3700 to
the households income This amounts Lo a significant Lower taxes contribute to reduction in the overall laX burden on Alaskans lower living costs
Summary If you examine the component indexes of the Alaskan cities in the RlDlZheimer study they range from five to The first question one must answer when looking for ten percent above the average cost of living except the cost of living information is what type of comparison taxation componenl The Runzheimer study indicates needs to be made Is one interested in how costs changed that the portion of income that goes to taxes in Alaska is over time or how costs differ between places Answer-
Alaska Economic Trends November 1992 7
Tablemiddot6
ACCRA Inter-City Cost of living Index First Quarter 1992
lib 12 gal 1 doz House Total Office Ground Whole Grade A lib Purchase Energy 1 gal Hospital Visit
City Beer MUk Lg Eggs Coffee PrIce Cost Ga Room Doctor
West ANCHORAGE AK $188 $190 $163 $255 154067 $11210 $104 $52250 $5700 FAIRBANKS AK 173 196 157 250 133600 16457 115 39800 6140 JUNEAUAK 187 196 101 318 138750 18494 154 38000 4680 KODIAKAK 202 218 172 371 172667 19903 141 40600 4433 Portland OR 153 123 103 271 141 950 73 76 117 4161 0 3620 Salt Lake City UT 117 158 099 285 87488 10032 102 32300 3740 San Diego CA 147 111 125 203 228300 7880 110 49525 4420 Seattle WA 159 154 079 239 172300 6412 106 45180 4560
AtlanticNew England Boston MA 167 135 105 240 225432 15058 115 50617 5140 Montpelier-Barre VT 178 123 126 249 135000 12000 11 6 45000 3167 Philadelphia P A 187 120 109 277 158180 22269 113 43800 45 40 Syracuse NY 183 131 093 239 102380 13719 115 34000 4160
ALL CITIES MEAN 11 154 139 086 226 110716 11 071 105 29777 3404
All cities mean is the ing this question narrows the field of appropriate cost of three largest Alaska cities These surveys have limitashyarithmetic mean price of al 286 living surveys tions in the scope of goods priced For this reason a data
cities in the 1st quarter 1991 survey user might be forced to use an index which only approxshy
Next a decision mUSl be made on the suitability of imates cost of living differences Source American Chamber of different surveys-some surveys look at subsets of theCommerce Researchers
Association Cost of Uving total cost of living package such as the Cost of Food at Given their limitations most cost of living indexes Index Average Price Data (286 Home survey Some surveys might look ata population involve some sort of compromise answer Still Ihe
Urban Areas surveyed) 1st unlike the one being studied The ACCRA surveys indexes mentioned in this anicle provide some baselineQuarter 1992 mid-managemenl family might not reflect the cost of information to help answer these questions When used living for poveny income level families with proper care the information can help one compare
how far their dollar will go In Alaska particularly in smaller communities survey choices are few Only the Cost of Food at Home and the ACCRA Cost of Living Index include more than the
8 Alaska Economic Trends November 1992
T a b I e bull 7
Runzheimer International Living Cost Standards October 1990
of of of of Goods amp of Total Standard Standard Trans- Standard Standard Services Standard
City Costs City Taxation City portatlon City Housing City Other City
Anchorage AK $33380 1043 $4719 804 $4540 1128 $14493 1101 $10412 1084 Fairbanks AK 32426 1013 5123 873 4481 1113 12623 959 10533 1097 Juneau AI 33255 1039 5232 892 4327 1075 13461 1022 10569 1101 STANDARD CITY 32000 5868 4025 13169 9601 Albuquerque NM 31 050 970 6102 1040 4047 1005 12383 940 8852 922 Atlanta GA 32944 1030 6203 1057 4458 1l08 13359 1014 9268 965 Augusta ME 32379 1012 5508 939 3856 95 8 14136 1073 9213 960 B irmingham AL 29589 92 5 688 1 11 73 3777 93 8 10302 782 8963 934 Boston MA 40723 1273 5501 937 5043 1253 21132 1605 9381 977 Chicago IL 36293 1l34 5648 963 4329 1076 17206 1307 9444 984 Dallas TX 30926 966 5570 94 9 4580 1138 11634 883 9476 987 Denver CO 30690 95 9 6066 1034 4468 11 10 11 497 873 8993 937 Detroit MI 35527 1110 5350 912 4642 1153 16672 1266 9197 958 Honolulu HI 42535 1329 4113 701 4841 1203 22538 1711 11 377 1185 Jndianapolis IN 30834 964 6680 1138 4173 1037 11439 869 8876 924 Jacksonville FL 30081 940 5606 95 5 4041 1004 11558 878 9210 959 Los Angeles CA 43823 1369 3842 655 5527 1373 25250 1917 9538 993 Milwaukee WI 32629 1020 6220 1060 3969 986 13880 105 4 8894 926 New York NY 43804 1369 48 11 820 7165 1780 22239 1689 9923 1034 Philadelphia P A 37440 1170 6445 1098 5004 1243 16981 1289 10165 1059 Portland OR 32629 1020 5836 995 4174 1037 13621 1034 9332 972 San Francisco CA 48948 1530 3210 547 5065 1258 31281 2375 9726 1OL3 Seattle WA 34332 1073 51 34 875 4521 11 23 1571 4 11 93 9297 968 SL Louis MO 32207 1006 6426 1095 3984 990 13055 991 9076 945 Washington DC 38942 1217 4889 833 4432 1101 20055 1523 9900 1031
Source Runzheimers Living Cosr Index October 1990
Summary of Cost of Living Indexes ----------------------------------~~-
Survey Consumer Price Index Survey ACCRA Cost of Uving Survey Cost of Food at Home Survey RUnzheimers Uving COS InOOK Study Index
PopulationAll urban consumers (CPI-U) or urban wage and clerishy Population Midmanagemenl Population Lower income indishy Population Family with $32000 cal woi(ers (CPImiddotW) executive family viduals or families in income living in average cost
city Slrenglh Measures costs in one Strength Compares many Slrenglh Compares minimum location over time the only availshy locations to a nalional average food costs for smaller Alaskan Strength Considers income able inHation measure communrties excluded rom other needed to maintain aspecific stanshyAverage pricedata for some comshy Weakness No tracking of studies dard of living in different cities modities available for large cilies changes over time lacks includes taxes
consistency in price collection Weakno$8 No good comparison Weakness Can only compare the of national data only looks at food Weakness Market basket may change In the cost-of-living for difshy costs not entire cost of living not reflect local consumption patshyierentlocations only one Alaskan terns area surveyed Anchorage
Alaska Economic Trends November 1992 9
Table middot 3
Cost of Food at Home for a Week 1978-1991
Percent Percent Percent Percent Percent Percent Percent Month of of of of of of of Year Anch Fbks Anch Juneau Ancb Bethel Anch Nome Anch Kod iak Anch Kenai Anch Tok Anch
The survey has tended to show lhat larger cities in ACCRA shows Alaskan Alaska have food costs which are fairly comparable to cities most expensive those in Anchorage
Family with four with Another place-to-placecost of living measure is providshyelementary school chifdren Overallfood costs tend to havethree tiers inAlaska The ed by the American Chamber of Commerce Researchshy
major urban areas have the lowest food costs smaller ers Association (ACCRA) The ACCRA cost of living Sales tax induded in food prices communities on a major distribution system like a road swdy compares costs for roughly 286cities in the United
or the Alaska Marine Highway tend to have slightly States The ACCRA study can be used to compare some - Data unavailable higher costs than the urban areas The highestfood costs costs among a few of Alaskas cities and other cities
Source Cost of Food at Home are always found in isolated communities solely supshy across the nation In the ACCRA study a standardized for a Week September 1978 to plied by air In places such as Bethel and Dillingham list of 59 items is priced during a fixed period of time June 1992 University ofAlaska
Cooperative Extension Service food costs are 45 to 65 higher than in Anchorage The market basket is intended to reflect the spending US Department of Agriculture patterns of a mid-management executive household and SEA Grant Cooperating
The urbanrural cost differential in the Cost of Food at Home swdy presents an interesting contrast between Although state and local taxes are a part of the cost of Alaska and other areas oftheUnited States In the lower living the ACCRA index does not take them into 48 larger urban areas tend to have highercostsofliving account Because of the limited numberofiterns priced including food costs than less populated areas The a difference of less than three in the ACCRA cost of opposite is true fOT Alaska The cost of food and other living index (such as 129 vs 131) are considered statisshybasics such as fuel are higher in rural Alaskan commushy tically insignificant A difference in the index greater nities than in the states urban centers than three implies a cost of living differential
Another interesting point about this survey is lhat the Four Alaskan cities are included in the most recently basic relationship of higher food costs in Alaskas rural published ACCRA study (1st quarter 1992)-- Anchorshyareas has not changed much during the last 15 years age FairbanksJuneau and Kodiak Oftentimes KetchshyTable 3 shows the difference in the cost of food between ikan also has price data available in the ACCRA survey Anchorage and other Alaskan communities It also The 1st Quarter 1992 ACCRA data show that the shows the changes in costs over time within several Alaskan cities are among the 10 highest cost areas communities in the study surveyed (See Table 4) Fairbanks has the lowest index
of the five Alaskan cities in the ACCRA study however
Alaska Economic Trends November 1992 5
eTab l e 4 utilities index was lower than about halfof the citiesACCRA Cost of U ving Index in the ACCRA study
First Quarter 1992 - 20 High Cost Urban Areas Comparative figures for Alaskan cities and other cities around the nation areTotal
City Index Grocery Housing UtU Transp Health presented in Tables 5 and 6 Table 5 shows the ACshy
New York NY 2191 1414 3942 1961 1279 2099 CRA cost of living indexshyANCHORAGE AK 13 10 1321 1411 985 1069 1785 es while Table 6 contains KODIAKAK 1457 1606 1568 1728 1122 171 4 prices for some of the FAIRBANKS AK 1298 1255 1232 1407 1157 1899 goods and services in the JUNEAU AK 1331 1377 1317 1576 1299 1822 ACCRA study Los Angeles-Long Beach CA 1326 1077 1853 800 1196 1365 Palm Springs CA 1203 1065 1368 1072 1181 1329
The ACCRA cost of livingBaltimore MD 1223 1360 1181 1458 1260 1264 study is designed aroundWashington IX 1344 11 86 1758 1137 1304 1422
Albany NY 1142 1108 1198 1282 1044 1125 spending patterns found in Philadelphia P A 1293 11 70 1460 1884 1130 1281 major American urban Visalia CA 1149 1078 1289 1 t 88 1065 1l01 centers The data collectshySeattle WA 1176 1076 1509 617 1078 1442 ed in the pricing survey is BoslOn MA 1336 11 06 1806 1323 1203 i420 an attempt to match the ManchesterNH 1182 1026 1330 1455 1128 1154 items found in the largerSpringfield MA 1187 1099 1358 1349 11 12 1184 areas This process tendsSan Diego CA 1327 1089 1984 722 1285 1295
to ignorespending patterns Lancaster PA 1135 1028 1261 1270 1138 954
found in atypicalareas ForSchawnburg1L 1240 1073 1645 1167 1120 1075 example thetransportation
Ranking or Alaska Cities by Category costs in the ACCRA study include items such as bus
Anchorage AK 8 5 10 140 42 4 fare Lhe price of a gallon of Fairbanks AK 9 6 28 9 12 2 gasoline and automobile JuneauAK 4 3 18 4 2 3 wheel balancing This is Kodiak AK 2 1 7 3 22 5 problematic for Alaskan
communities because air
Source American Chamber of the difference between Anchorage Fairbanks and J umiddot transportation is a more prevalent and more expensive Commerce Resellfchers
Association Urban Area Index neau was nearly insignificant According to the index mode of travel in Alaska Data 1st Quarter 1992 (286 all three of these communities have a cost of living
Urban Aress Surveyed) roughly 30 higher than the all cities average New Runzhelmer shows low cost of living York City had Lhe highest cost of living in the survey more than twice the all-cities average A slightly different approach 10 calculating the differshy
ences among cities is taken in a study commissioned by The four Alaska cities in the ACCRA study were among the Alaska Department of Labor Runzheimer Intemashythe highest cost cities surveyed for several of the six tionala privateresearchfinnlookedatthecomparative major components of the ACCRA index (Table 4) incomes necessary to maintain a certain standard of Kodiak had the highest index for groceries Alaskas living in 253 different areas of the country Thlsincome represented cities had four of the five highest index approach takes into account certain elements left out of numbers for groceries health care costs and the other the ACCRA cost ofliving measuresuch as an areas tax services and miscellaneous goods category rates
Difference In housing costs For this study a base family was created-two parshyents two children living in a 1500 square foot home shy
Housing costs have always been thought of as excep- with 3 bedrooms and 1S baths driving two automoshytionally high in Alaska Althougb they are high the biles This family had an income of $32000 in Standard ACCRA housing index shows that some areas in the City a fictitious city which had costs close to Lhe median nation have comparable housing costs Generally the of all the cities in the survey The standard of living lowest rankings for Alaskas cities were in the ACCRA attainable in Standard City was then priced ineach of the housing or transportation cost indexes The Anchorage surveyed areas
6 Alaska Economic Trends November 1992
T a b I e bull 5 The October 1990 Runshyzheimersurvey shows that ACCRA Cost of Living Index the three Alaskan cities studied Anchorage Fair- First Quarter 1992 banks and Juneau have quite moderate costs comshypared to the other areas Ail MIscsurveyed In this survey Items Grocery Transport- Health Goods amp costs were only 13 to City Index Items Housing Utilities atlon Care Services 43 above Standard Cily (See Table 7) West
ANCHORAGE AK 1310 1321 1411 98 5 1069 1785 1311 Oneasswnption critical to FAIRBANKS AK 1298 1255 1232 1407 1157 1899 1292
JUNEAUAK 1331 1377 13 17 1576 1299 1822 1202the results of the survey KODIAKAI 1457 1606 1568 1728 1122 1714 1302was the duration of home Portland OR 1090 974 1296 708 1126 1209 1038ownership Like the Con-Salt Lake City UT 951 1053 844 912 1004 1005 985sumer Price Index and San Diego CA 1327 1089 1984 722 1285 1295 1063
ACCRA surveys the Seattle WA 11 76 1076 1509 617 1078 1442 1081guidelines in the RWlZheshyimer survey assume a re- Southwest cent home purchase The Santa FeNM 1073 982 1334 849 1023 1033 977 volatility of the Alaska Dallas TX 991 1008 931 11 60 1032 1073 965 housing market greatly Phoenix JJ 1005 1000 926 1001 1068 1170 1029
impacted the cost of hous-Midwest ing in the results Mort-
Minneapolis MN 1017 908 1149 918 1074 11 13 947gage payments accounted Omaha NE 881 907 807 915 996 85 4 892 for 26 of the familyS St Louis MO 961 979 955 1042 968 1006 931
total living costs in Stanshydard City Anchorage was Southeast only slightly higher than Atlanta GA 997 977 978 1117 97 2 1123 11 89 26 while Juneau and Binningham AL 992 962 948 1214 98 7 935 99 2 Fairbanks were between Louisville KY 921 882 892 797 929 852 997 22 and 25 of totalliv- Winston-Salem NC 98 5 920 982 1018 974 916 1015
ing costs going towards AtlanticNew England mortgage payments Boston MA 1336 1106 1806 1323 1203 1420 1074 MontpeliermiddotBarre VT 1090 1116 1189 1098 1059 1029 1018Alaskas real estate prices Philadelphia P A 1293 1170 1460 1884 1130 1281 1101
have escalated since the Syracuse NY 1010 1040 913 1285 1136 1084 960 time theRunzheimerstudy was done Its a near certainty that a larger share of the anywhere from 10 to 15 percent below the average of the average Alaskans total income is going toward hoosing areas studied This is a significant reason why the costs now than went towards housing costs several years Runzheimer index does not show living costs to be Saurce American Chamber o(
Commerce Researchers ago This would have the effect of increasing the total higher in Anchorage Fairbanks and Juneau than else-Assodation Urban Area Index
living cost for the Alaskan cities Some of the highest where in the country Another factor to remember is that Data 1st Quarter 1992 (286 cost areas in the Runzheimer study have the greatest Runzheimer does not take into account a program like Urban Areas surveyed)
difference in the housing cost component- in Los An- AlaskasPermanentFundDividendlfeverymemberof geles over 40 of total living costs go towards mortgage the fictitious Runzheimer family received an Alaska payments Permanent Fund check that would add about $3700 to
the households income This amounts Lo a significant Lower taxes contribute to reduction in the overall laX burden on Alaskans lower living costs
Summary If you examine the component indexes of the Alaskan cities in the RlDlZheimer study they range from five to The first question one must answer when looking for ten percent above the average cost of living except the cost of living information is what type of comparison taxation componenl The Runzheimer study indicates needs to be made Is one interested in how costs changed that the portion of income that goes to taxes in Alaska is over time or how costs differ between places Answer-
Alaska Economic Trends November 1992 7
Tablemiddot6
ACCRA Inter-City Cost of living Index First Quarter 1992
lib 12 gal 1 doz House Total Office Ground Whole Grade A lib Purchase Energy 1 gal Hospital Visit
City Beer MUk Lg Eggs Coffee PrIce Cost Ga Room Doctor
West ANCHORAGE AK $188 $190 $163 $255 154067 $11210 $104 $52250 $5700 FAIRBANKS AK 173 196 157 250 133600 16457 115 39800 6140 JUNEAUAK 187 196 101 318 138750 18494 154 38000 4680 KODIAKAK 202 218 172 371 172667 19903 141 40600 4433 Portland OR 153 123 103 271 141 950 73 76 117 4161 0 3620 Salt Lake City UT 117 158 099 285 87488 10032 102 32300 3740 San Diego CA 147 111 125 203 228300 7880 110 49525 4420 Seattle WA 159 154 079 239 172300 6412 106 45180 4560
AtlanticNew England Boston MA 167 135 105 240 225432 15058 115 50617 5140 Montpelier-Barre VT 178 123 126 249 135000 12000 11 6 45000 3167 Philadelphia P A 187 120 109 277 158180 22269 113 43800 45 40 Syracuse NY 183 131 093 239 102380 13719 115 34000 4160
ALL CITIES MEAN 11 154 139 086 226 110716 11 071 105 29777 3404
All cities mean is the ing this question narrows the field of appropriate cost of three largest Alaska cities These surveys have limitashyarithmetic mean price of al 286 living surveys tions in the scope of goods priced For this reason a data
cities in the 1st quarter 1991 survey user might be forced to use an index which only approxshy
Next a decision mUSl be made on the suitability of imates cost of living differences Source American Chamber of different surveys-some surveys look at subsets of theCommerce Researchers
Association Cost of Uving total cost of living package such as the Cost of Food at Given their limitations most cost of living indexes Index Average Price Data (286 Home survey Some surveys might look ata population involve some sort of compromise answer Still Ihe
Urban Areas surveyed) 1st unlike the one being studied The ACCRA surveys indexes mentioned in this anicle provide some baselineQuarter 1992 mid-managemenl family might not reflect the cost of information to help answer these questions When used living for poveny income level families with proper care the information can help one compare
how far their dollar will go In Alaska particularly in smaller communities survey choices are few Only the Cost of Food at Home and the ACCRA Cost of Living Index include more than the
8 Alaska Economic Trends November 1992
T a b I e bull 7
Runzheimer International Living Cost Standards October 1990
of of of of Goods amp of Total Standard Standard Trans- Standard Standard Services Standard
City Costs City Taxation City portatlon City Housing City Other City
Anchorage AK $33380 1043 $4719 804 $4540 1128 $14493 1101 $10412 1084 Fairbanks AK 32426 1013 5123 873 4481 1113 12623 959 10533 1097 Juneau AI 33255 1039 5232 892 4327 1075 13461 1022 10569 1101 STANDARD CITY 32000 5868 4025 13169 9601 Albuquerque NM 31 050 970 6102 1040 4047 1005 12383 940 8852 922 Atlanta GA 32944 1030 6203 1057 4458 1l08 13359 1014 9268 965 Augusta ME 32379 1012 5508 939 3856 95 8 14136 1073 9213 960 B irmingham AL 29589 92 5 688 1 11 73 3777 93 8 10302 782 8963 934 Boston MA 40723 1273 5501 937 5043 1253 21132 1605 9381 977 Chicago IL 36293 1l34 5648 963 4329 1076 17206 1307 9444 984 Dallas TX 30926 966 5570 94 9 4580 1138 11634 883 9476 987 Denver CO 30690 95 9 6066 1034 4468 11 10 11 497 873 8993 937 Detroit MI 35527 1110 5350 912 4642 1153 16672 1266 9197 958 Honolulu HI 42535 1329 4113 701 4841 1203 22538 1711 11 377 1185 Jndianapolis IN 30834 964 6680 1138 4173 1037 11439 869 8876 924 Jacksonville FL 30081 940 5606 95 5 4041 1004 11558 878 9210 959 Los Angeles CA 43823 1369 3842 655 5527 1373 25250 1917 9538 993 Milwaukee WI 32629 1020 6220 1060 3969 986 13880 105 4 8894 926 New York NY 43804 1369 48 11 820 7165 1780 22239 1689 9923 1034 Philadelphia P A 37440 1170 6445 1098 5004 1243 16981 1289 10165 1059 Portland OR 32629 1020 5836 995 4174 1037 13621 1034 9332 972 San Francisco CA 48948 1530 3210 547 5065 1258 31281 2375 9726 1OL3 Seattle WA 34332 1073 51 34 875 4521 11 23 1571 4 11 93 9297 968 SL Louis MO 32207 1006 6426 1095 3984 990 13055 991 9076 945 Washington DC 38942 1217 4889 833 4432 1101 20055 1523 9900 1031
Source Runzheimers Living Cosr Index October 1990
Summary of Cost of Living Indexes ----------------------------------~~-
Survey Consumer Price Index Survey ACCRA Cost of Uving Survey Cost of Food at Home Survey RUnzheimers Uving COS InOOK Study Index
PopulationAll urban consumers (CPI-U) or urban wage and clerishy Population Midmanagemenl Population Lower income indishy Population Family with $32000 cal woi(ers (CPImiddotW) executive family viduals or families in income living in average cost
city Slrenglh Measures costs in one Strength Compares many Slrenglh Compares minimum location over time the only availshy locations to a nalional average food costs for smaller Alaskan Strength Considers income able inHation measure communrties excluded rom other needed to maintain aspecific stanshyAverage pricedata for some comshy Weakness No tracking of studies dard of living in different cities modities available for large cilies changes over time lacks includes taxes
consistency in price collection Weakno$8 No good comparison Weakness Can only compare the of national data only looks at food Weakness Market basket may change In the cost-of-living for difshy costs not entire cost of living not reflect local consumption patshyierentlocations only one Alaskan terns area surveyed Anchorage
Alaska Economic Trends November 1992 9
eTab l e 4 utilities index was lower than about halfof the citiesACCRA Cost of U ving Index in the ACCRA study
First Quarter 1992 - 20 High Cost Urban Areas Comparative figures for Alaskan cities and other cities around the nation areTotal
City Index Grocery Housing UtU Transp Health presented in Tables 5 and 6 Table 5 shows the ACshy
New York NY 2191 1414 3942 1961 1279 2099 CRA cost of living indexshyANCHORAGE AK 13 10 1321 1411 985 1069 1785 es while Table 6 contains KODIAKAK 1457 1606 1568 1728 1122 171 4 prices for some of the FAIRBANKS AK 1298 1255 1232 1407 1157 1899 goods and services in the JUNEAU AK 1331 1377 1317 1576 1299 1822 ACCRA study Los Angeles-Long Beach CA 1326 1077 1853 800 1196 1365 Palm Springs CA 1203 1065 1368 1072 1181 1329
The ACCRA cost of livingBaltimore MD 1223 1360 1181 1458 1260 1264 study is designed aroundWashington IX 1344 11 86 1758 1137 1304 1422
Albany NY 1142 1108 1198 1282 1044 1125 spending patterns found in Philadelphia P A 1293 11 70 1460 1884 1130 1281 major American urban Visalia CA 1149 1078 1289 1 t 88 1065 1l01 centers The data collectshySeattle WA 1176 1076 1509 617 1078 1442 ed in the pricing survey is BoslOn MA 1336 11 06 1806 1323 1203 i420 an attempt to match the ManchesterNH 1182 1026 1330 1455 1128 1154 items found in the largerSpringfield MA 1187 1099 1358 1349 11 12 1184 areas This process tendsSan Diego CA 1327 1089 1984 722 1285 1295
to ignorespending patterns Lancaster PA 1135 1028 1261 1270 1138 954
found in atypicalareas ForSchawnburg1L 1240 1073 1645 1167 1120 1075 example thetransportation
Ranking or Alaska Cities by Category costs in the ACCRA study include items such as bus
Anchorage AK 8 5 10 140 42 4 fare Lhe price of a gallon of Fairbanks AK 9 6 28 9 12 2 gasoline and automobile JuneauAK 4 3 18 4 2 3 wheel balancing This is Kodiak AK 2 1 7 3 22 5 problematic for Alaskan
communities because air
Source American Chamber of the difference between Anchorage Fairbanks and J umiddot transportation is a more prevalent and more expensive Commerce Resellfchers
Association Urban Area Index neau was nearly insignificant According to the index mode of travel in Alaska Data 1st Quarter 1992 (286 all three of these communities have a cost of living
Urban Aress Surveyed) roughly 30 higher than the all cities average New Runzhelmer shows low cost of living York City had Lhe highest cost of living in the survey more than twice the all-cities average A slightly different approach 10 calculating the differshy
ences among cities is taken in a study commissioned by The four Alaska cities in the ACCRA study were among the Alaska Department of Labor Runzheimer Intemashythe highest cost cities surveyed for several of the six tionala privateresearchfinnlookedatthecomparative major components of the ACCRA index (Table 4) incomes necessary to maintain a certain standard of Kodiak had the highest index for groceries Alaskas living in 253 different areas of the country Thlsincome represented cities had four of the five highest index approach takes into account certain elements left out of numbers for groceries health care costs and the other the ACCRA cost ofliving measuresuch as an areas tax services and miscellaneous goods category rates
Difference In housing costs For this study a base family was created-two parshyents two children living in a 1500 square foot home shy
Housing costs have always been thought of as excep- with 3 bedrooms and 1S baths driving two automoshytionally high in Alaska Althougb they are high the biles This family had an income of $32000 in Standard ACCRA housing index shows that some areas in the City a fictitious city which had costs close to Lhe median nation have comparable housing costs Generally the of all the cities in the survey The standard of living lowest rankings for Alaskas cities were in the ACCRA attainable in Standard City was then priced ineach of the housing or transportation cost indexes The Anchorage surveyed areas
6 Alaska Economic Trends November 1992
T a b I e bull 5 The October 1990 Runshyzheimersurvey shows that ACCRA Cost of Living Index the three Alaskan cities studied Anchorage Fair- First Quarter 1992 banks and Juneau have quite moderate costs comshypared to the other areas Ail MIscsurveyed In this survey Items Grocery Transport- Health Goods amp costs were only 13 to City Index Items Housing Utilities atlon Care Services 43 above Standard Cily (See Table 7) West
ANCHORAGE AK 1310 1321 1411 98 5 1069 1785 1311 Oneasswnption critical to FAIRBANKS AK 1298 1255 1232 1407 1157 1899 1292
JUNEAUAK 1331 1377 13 17 1576 1299 1822 1202the results of the survey KODIAKAI 1457 1606 1568 1728 1122 1714 1302was the duration of home Portland OR 1090 974 1296 708 1126 1209 1038ownership Like the Con-Salt Lake City UT 951 1053 844 912 1004 1005 985sumer Price Index and San Diego CA 1327 1089 1984 722 1285 1295 1063
ACCRA surveys the Seattle WA 11 76 1076 1509 617 1078 1442 1081guidelines in the RWlZheshyimer survey assume a re- Southwest cent home purchase The Santa FeNM 1073 982 1334 849 1023 1033 977 volatility of the Alaska Dallas TX 991 1008 931 11 60 1032 1073 965 housing market greatly Phoenix JJ 1005 1000 926 1001 1068 1170 1029
impacted the cost of hous-Midwest ing in the results Mort-
Minneapolis MN 1017 908 1149 918 1074 11 13 947gage payments accounted Omaha NE 881 907 807 915 996 85 4 892 for 26 of the familyS St Louis MO 961 979 955 1042 968 1006 931
total living costs in Stanshydard City Anchorage was Southeast only slightly higher than Atlanta GA 997 977 978 1117 97 2 1123 11 89 26 while Juneau and Binningham AL 992 962 948 1214 98 7 935 99 2 Fairbanks were between Louisville KY 921 882 892 797 929 852 997 22 and 25 of totalliv- Winston-Salem NC 98 5 920 982 1018 974 916 1015
ing costs going towards AtlanticNew England mortgage payments Boston MA 1336 1106 1806 1323 1203 1420 1074 MontpeliermiddotBarre VT 1090 1116 1189 1098 1059 1029 1018Alaskas real estate prices Philadelphia P A 1293 1170 1460 1884 1130 1281 1101
have escalated since the Syracuse NY 1010 1040 913 1285 1136 1084 960 time theRunzheimerstudy was done Its a near certainty that a larger share of the anywhere from 10 to 15 percent below the average of the average Alaskans total income is going toward hoosing areas studied This is a significant reason why the costs now than went towards housing costs several years Runzheimer index does not show living costs to be Saurce American Chamber o(
Commerce Researchers ago This would have the effect of increasing the total higher in Anchorage Fairbanks and Juneau than else-Assodation Urban Area Index
living cost for the Alaskan cities Some of the highest where in the country Another factor to remember is that Data 1st Quarter 1992 (286 cost areas in the Runzheimer study have the greatest Runzheimer does not take into account a program like Urban Areas surveyed)
difference in the housing cost component- in Los An- AlaskasPermanentFundDividendlfeverymemberof geles over 40 of total living costs go towards mortgage the fictitious Runzheimer family received an Alaska payments Permanent Fund check that would add about $3700 to
the households income This amounts Lo a significant Lower taxes contribute to reduction in the overall laX burden on Alaskans lower living costs
Summary If you examine the component indexes of the Alaskan cities in the RlDlZheimer study they range from five to The first question one must answer when looking for ten percent above the average cost of living except the cost of living information is what type of comparison taxation componenl The Runzheimer study indicates needs to be made Is one interested in how costs changed that the portion of income that goes to taxes in Alaska is over time or how costs differ between places Answer-
Alaska Economic Trends November 1992 7
Tablemiddot6
ACCRA Inter-City Cost of living Index First Quarter 1992
lib 12 gal 1 doz House Total Office Ground Whole Grade A lib Purchase Energy 1 gal Hospital Visit
City Beer MUk Lg Eggs Coffee PrIce Cost Ga Room Doctor
West ANCHORAGE AK $188 $190 $163 $255 154067 $11210 $104 $52250 $5700 FAIRBANKS AK 173 196 157 250 133600 16457 115 39800 6140 JUNEAUAK 187 196 101 318 138750 18494 154 38000 4680 KODIAKAK 202 218 172 371 172667 19903 141 40600 4433 Portland OR 153 123 103 271 141 950 73 76 117 4161 0 3620 Salt Lake City UT 117 158 099 285 87488 10032 102 32300 3740 San Diego CA 147 111 125 203 228300 7880 110 49525 4420 Seattle WA 159 154 079 239 172300 6412 106 45180 4560
AtlanticNew England Boston MA 167 135 105 240 225432 15058 115 50617 5140 Montpelier-Barre VT 178 123 126 249 135000 12000 11 6 45000 3167 Philadelphia P A 187 120 109 277 158180 22269 113 43800 45 40 Syracuse NY 183 131 093 239 102380 13719 115 34000 4160
ALL CITIES MEAN 11 154 139 086 226 110716 11 071 105 29777 3404
All cities mean is the ing this question narrows the field of appropriate cost of three largest Alaska cities These surveys have limitashyarithmetic mean price of al 286 living surveys tions in the scope of goods priced For this reason a data
cities in the 1st quarter 1991 survey user might be forced to use an index which only approxshy
Next a decision mUSl be made on the suitability of imates cost of living differences Source American Chamber of different surveys-some surveys look at subsets of theCommerce Researchers
Association Cost of Uving total cost of living package such as the Cost of Food at Given their limitations most cost of living indexes Index Average Price Data (286 Home survey Some surveys might look ata population involve some sort of compromise answer Still Ihe
Urban Areas surveyed) 1st unlike the one being studied The ACCRA surveys indexes mentioned in this anicle provide some baselineQuarter 1992 mid-managemenl family might not reflect the cost of information to help answer these questions When used living for poveny income level families with proper care the information can help one compare
how far their dollar will go In Alaska particularly in smaller communities survey choices are few Only the Cost of Food at Home and the ACCRA Cost of Living Index include more than the
8 Alaska Economic Trends November 1992
T a b I e bull 7
Runzheimer International Living Cost Standards October 1990
of of of of Goods amp of Total Standard Standard Trans- Standard Standard Services Standard
City Costs City Taxation City portatlon City Housing City Other City
Anchorage AK $33380 1043 $4719 804 $4540 1128 $14493 1101 $10412 1084 Fairbanks AK 32426 1013 5123 873 4481 1113 12623 959 10533 1097 Juneau AI 33255 1039 5232 892 4327 1075 13461 1022 10569 1101 STANDARD CITY 32000 5868 4025 13169 9601 Albuquerque NM 31 050 970 6102 1040 4047 1005 12383 940 8852 922 Atlanta GA 32944 1030 6203 1057 4458 1l08 13359 1014 9268 965 Augusta ME 32379 1012 5508 939 3856 95 8 14136 1073 9213 960 B irmingham AL 29589 92 5 688 1 11 73 3777 93 8 10302 782 8963 934 Boston MA 40723 1273 5501 937 5043 1253 21132 1605 9381 977 Chicago IL 36293 1l34 5648 963 4329 1076 17206 1307 9444 984 Dallas TX 30926 966 5570 94 9 4580 1138 11634 883 9476 987 Denver CO 30690 95 9 6066 1034 4468 11 10 11 497 873 8993 937 Detroit MI 35527 1110 5350 912 4642 1153 16672 1266 9197 958 Honolulu HI 42535 1329 4113 701 4841 1203 22538 1711 11 377 1185 Jndianapolis IN 30834 964 6680 1138 4173 1037 11439 869 8876 924 Jacksonville FL 30081 940 5606 95 5 4041 1004 11558 878 9210 959 Los Angeles CA 43823 1369 3842 655 5527 1373 25250 1917 9538 993 Milwaukee WI 32629 1020 6220 1060 3969 986 13880 105 4 8894 926 New York NY 43804 1369 48 11 820 7165 1780 22239 1689 9923 1034 Philadelphia P A 37440 1170 6445 1098 5004 1243 16981 1289 10165 1059 Portland OR 32629 1020 5836 995 4174 1037 13621 1034 9332 972 San Francisco CA 48948 1530 3210 547 5065 1258 31281 2375 9726 1OL3 Seattle WA 34332 1073 51 34 875 4521 11 23 1571 4 11 93 9297 968 SL Louis MO 32207 1006 6426 1095 3984 990 13055 991 9076 945 Washington DC 38942 1217 4889 833 4432 1101 20055 1523 9900 1031
Source Runzheimers Living Cosr Index October 1990
Summary of Cost of Living Indexes ----------------------------------~~-
Survey Consumer Price Index Survey ACCRA Cost of Uving Survey Cost of Food at Home Survey RUnzheimers Uving COS InOOK Study Index
PopulationAll urban consumers (CPI-U) or urban wage and clerishy Population Midmanagemenl Population Lower income indishy Population Family with $32000 cal woi(ers (CPImiddotW) executive family viduals or families in income living in average cost
city Slrenglh Measures costs in one Strength Compares many Slrenglh Compares minimum location over time the only availshy locations to a nalional average food costs for smaller Alaskan Strength Considers income able inHation measure communrties excluded rom other needed to maintain aspecific stanshyAverage pricedata for some comshy Weakness No tracking of studies dard of living in different cities modities available for large cilies changes over time lacks includes taxes
consistency in price collection Weakno$8 No good comparison Weakness Can only compare the of national data only looks at food Weakness Market basket may change In the cost-of-living for difshy costs not entire cost of living not reflect local consumption patshyierentlocations only one Alaskan terns area surveyed Anchorage
Alaska Economic Trends November 1992 9
T a b I e bull 5 The October 1990 Runshyzheimersurvey shows that ACCRA Cost of Living Index the three Alaskan cities studied Anchorage Fair- First Quarter 1992 banks and Juneau have quite moderate costs comshypared to the other areas Ail MIscsurveyed In this survey Items Grocery Transport- Health Goods amp costs were only 13 to City Index Items Housing Utilities atlon Care Services 43 above Standard Cily (See Table 7) West
ANCHORAGE AK 1310 1321 1411 98 5 1069 1785 1311 Oneasswnption critical to FAIRBANKS AK 1298 1255 1232 1407 1157 1899 1292
JUNEAUAK 1331 1377 13 17 1576 1299 1822 1202the results of the survey KODIAKAI 1457 1606 1568 1728 1122 1714 1302was the duration of home Portland OR 1090 974 1296 708 1126 1209 1038ownership Like the Con-Salt Lake City UT 951 1053 844 912 1004 1005 985sumer Price Index and San Diego CA 1327 1089 1984 722 1285 1295 1063
ACCRA surveys the Seattle WA 11 76 1076 1509 617 1078 1442 1081guidelines in the RWlZheshyimer survey assume a re- Southwest cent home purchase The Santa FeNM 1073 982 1334 849 1023 1033 977 volatility of the Alaska Dallas TX 991 1008 931 11 60 1032 1073 965 housing market greatly Phoenix JJ 1005 1000 926 1001 1068 1170 1029
impacted the cost of hous-Midwest ing in the results Mort-
Minneapolis MN 1017 908 1149 918 1074 11 13 947gage payments accounted Omaha NE 881 907 807 915 996 85 4 892 for 26 of the familyS St Louis MO 961 979 955 1042 968 1006 931
total living costs in Stanshydard City Anchorage was Southeast only slightly higher than Atlanta GA 997 977 978 1117 97 2 1123 11 89 26 while Juneau and Binningham AL 992 962 948 1214 98 7 935 99 2 Fairbanks were between Louisville KY 921 882 892 797 929 852 997 22 and 25 of totalliv- Winston-Salem NC 98 5 920 982 1018 974 916 1015
ing costs going towards AtlanticNew England mortgage payments Boston MA 1336 1106 1806 1323 1203 1420 1074 MontpeliermiddotBarre VT 1090 1116 1189 1098 1059 1029 1018Alaskas real estate prices Philadelphia P A 1293 1170 1460 1884 1130 1281 1101
have escalated since the Syracuse NY 1010 1040 913 1285 1136 1084 960 time theRunzheimerstudy was done Its a near certainty that a larger share of the anywhere from 10 to 15 percent below the average of the average Alaskans total income is going toward hoosing areas studied This is a significant reason why the costs now than went towards housing costs several years Runzheimer index does not show living costs to be Saurce American Chamber o(
Commerce Researchers ago This would have the effect of increasing the total higher in Anchorage Fairbanks and Juneau than else-Assodation Urban Area Index
living cost for the Alaskan cities Some of the highest where in the country Another factor to remember is that Data 1st Quarter 1992 (286 cost areas in the Runzheimer study have the greatest Runzheimer does not take into account a program like Urban Areas surveyed)
difference in the housing cost component- in Los An- AlaskasPermanentFundDividendlfeverymemberof geles over 40 of total living costs go towards mortgage the fictitious Runzheimer family received an Alaska payments Permanent Fund check that would add about $3700 to
the households income This amounts Lo a significant Lower taxes contribute to reduction in the overall laX burden on Alaskans lower living costs
Summary If you examine the component indexes of the Alaskan cities in the RlDlZheimer study they range from five to The first question one must answer when looking for ten percent above the average cost of living except the cost of living information is what type of comparison taxation componenl The Runzheimer study indicates needs to be made Is one interested in how costs changed that the portion of income that goes to taxes in Alaska is over time or how costs differ between places Answer-
Alaska Economic Trends November 1992 7
Tablemiddot6
ACCRA Inter-City Cost of living Index First Quarter 1992
lib 12 gal 1 doz House Total Office Ground Whole Grade A lib Purchase Energy 1 gal Hospital Visit
City Beer MUk Lg Eggs Coffee PrIce Cost Ga Room Doctor
West ANCHORAGE AK $188 $190 $163 $255 154067 $11210 $104 $52250 $5700 FAIRBANKS AK 173 196 157 250 133600 16457 115 39800 6140 JUNEAUAK 187 196 101 318 138750 18494 154 38000 4680 KODIAKAK 202 218 172 371 172667 19903 141 40600 4433 Portland OR 153 123 103 271 141 950 73 76 117 4161 0 3620 Salt Lake City UT 117 158 099 285 87488 10032 102 32300 3740 San Diego CA 147 111 125 203 228300 7880 110 49525 4420 Seattle WA 159 154 079 239 172300 6412 106 45180 4560
AtlanticNew England Boston MA 167 135 105 240 225432 15058 115 50617 5140 Montpelier-Barre VT 178 123 126 249 135000 12000 11 6 45000 3167 Philadelphia P A 187 120 109 277 158180 22269 113 43800 45 40 Syracuse NY 183 131 093 239 102380 13719 115 34000 4160
ALL CITIES MEAN 11 154 139 086 226 110716 11 071 105 29777 3404
All cities mean is the ing this question narrows the field of appropriate cost of three largest Alaska cities These surveys have limitashyarithmetic mean price of al 286 living surveys tions in the scope of goods priced For this reason a data
cities in the 1st quarter 1991 survey user might be forced to use an index which only approxshy
Next a decision mUSl be made on the suitability of imates cost of living differences Source American Chamber of different surveys-some surveys look at subsets of theCommerce Researchers
Association Cost of Uving total cost of living package such as the Cost of Food at Given their limitations most cost of living indexes Index Average Price Data (286 Home survey Some surveys might look ata population involve some sort of compromise answer Still Ihe
Urban Areas surveyed) 1st unlike the one being studied The ACCRA surveys indexes mentioned in this anicle provide some baselineQuarter 1992 mid-managemenl family might not reflect the cost of information to help answer these questions When used living for poveny income level families with proper care the information can help one compare
how far their dollar will go In Alaska particularly in smaller communities survey choices are few Only the Cost of Food at Home and the ACCRA Cost of Living Index include more than the
8 Alaska Economic Trends November 1992
T a b I e bull 7
Runzheimer International Living Cost Standards October 1990
of of of of Goods amp of Total Standard Standard Trans- Standard Standard Services Standard
City Costs City Taxation City portatlon City Housing City Other City
Anchorage AK $33380 1043 $4719 804 $4540 1128 $14493 1101 $10412 1084 Fairbanks AK 32426 1013 5123 873 4481 1113 12623 959 10533 1097 Juneau AI 33255 1039 5232 892 4327 1075 13461 1022 10569 1101 STANDARD CITY 32000 5868 4025 13169 9601 Albuquerque NM 31 050 970 6102 1040 4047 1005 12383 940 8852 922 Atlanta GA 32944 1030 6203 1057 4458 1l08 13359 1014 9268 965 Augusta ME 32379 1012 5508 939 3856 95 8 14136 1073 9213 960 B irmingham AL 29589 92 5 688 1 11 73 3777 93 8 10302 782 8963 934 Boston MA 40723 1273 5501 937 5043 1253 21132 1605 9381 977 Chicago IL 36293 1l34 5648 963 4329 1076 17206 1307 9444 984 Dallas TX 30926 966 5570 94 9 4580 1138 11634 883 9476 987 Denver CO 30690 95 9 6066 1034 4468 11 10 11 497 873 8993 937 Detroit MI 35527 1110 5350 912 4642 1153 16672 1266 9197 958 Honolulu HI 42535 1329 4113 701 4841 1203 22538 1711 11 377 1185 Jndianapolis IN 30834 964 6680 1138 4173 1037 11439 869 8876 924 Jacksonville FL 30081 940 5606 95 5 4041 1004 11558 878 9210 959 Los Angeles CA 43823 1369 3842 655 5527 1373 25250 1917 9538 993 Milwaukee WI 32629 1020 6220 1060 3969 986 13880 105 4 8894 926 New York NY 43804 1369 48 11 820 7165 1780 22239 1689 9923 1034 Philadelphia P A 37440 1170 6445 1098 5004 1243 16981 1289 10165 1059 Portland OR 32629 1020 5836 995 4174 1037 13621 1034 9332 972 San Francisco CA 48948 1530 3210 547 5065 1258 31281 2375 9726 1OL3 Seattle WA 34332 1073 51 34 875 4521 11 23 1571 4 11 93 9297 968 SL Louis MO 32207 1006 6426 1095 3984 990 13055 991 9076 945 Washington DC 38942 1217 4889 833 4432 1101 20055 1523 9900 1031
Source Runzheimers Living Cosr Index October 1990
Summary of Cost of Living Indexes ----------------------------------~~-
Survey Consumer Price Index Survey ACCRA Cost of Uving Survey Cost of Food at Home Survey RUnzheimers Uving COS InOOK Study Index
PopulationAll urban consumers (CPI-U) or urban wage and clerishy Population Midmanagemenl Population Lower income indishy Population Family with $32000 cal woi(ers (CPImiddotW) executive family viduals or families in income living in average cost
city Slrenglh Measures costs in one Strength Compares many Slrenglh Compares minimum location over time the only availshy locations to a nalional average food costs for smaller Alaskan Strength Considers income able inHation measure communrties excluded rom other needed to maintain aspecific stanshyAverage pricedata for some comshy Weakness No tracking of studies dard of living in different cities modities available for large cilies changes over time lacks includes taxes
consistency in price collection Weakno$8 No good comparison Weakness Can only compare the of national data only looks at food Weakness Market basket may change In the cost-of-living for difshy costs not entire cost of living not reflect local consumption patshyierentlocations only one Alaskan terns area surveyed Anchorage
Alaska Economic Trends November 1992 9
Tablemiddot6
ACCRA Inter-City Cost of living Index First Quarter 1992
lib 12 gal 1 doz House Total Office Ground Whole Grade A lib Purchase Energy 1 gal Hospital Visit
City Beer MUk Lg Eggs Coffee PrIce Cost Ga Room Doctor
West ANCHORAGE AK $188 $190 $163 $255 154067 $11210 $104 $52250 $5700 FAIRBANKS AK 173 196 157 250 133600 16457 115 39800 6140 JUNEAUAK 187 196 101 318 138750 18494 154 38000 4680 KODIAKAK 202 218 172 371 172667 19903 141 40600 4433 Portland OR 153 123 103 271 141 950 73 76 117 4161 0 3620 Salt Lake City UT 117 158 099 285 87488 10032 102 32300 3740 San Diego CA 147 111 125 203 228300 7880 110 49525 4420 Seattle WA 159 154 079 239 172300 6412 106 45180 4560
AtlanticNew England Boston MA 167 135 105 240 225432 15058 115 50617 5140 Montpelier-Barre VT 178 123 126 249 135000 12000 11 6 45000 3167 Philadelphia P A 187 120 109 277 158180 22269 113 43800 45 40 Syracuse NY 183 131 093 239 102380 13719 115 34000 4160
ALL CITIES MEAN 11 154 139 086 226 110716 11 071 105 29777 3404
All cities mean is the ing this question narrows the field of appropriate cost of three largest Alaska cities These surveys have limitashyarithmetic mean price of al 286 living surveys tions in the scope of goods priced For this reason a data
cities in the 1st quarter 1991 survey user might be forced to use an index which only approxshy
Next a decision mUSl be made on the suitability of imates cost of living differences Source American Chamber of different surveys-some surveys look at subsets of theCommerce Researchers
Association Cost of Uving total cost of living package such as the Cost of Food at Given their limitations most cost of living indexes Index Average Price Data (286 Home survey Some surveys might look ata population involve some sort of compromise answer Still Ihe
Urban Areas surveyed) 1st unlike the one being studied The ACCRA surveys indexes mentioned in this anicle provide some baselineQuarter 1992 mid-managemenl family might not reflect the cost of information to help answer these questions When used living for poveny income level families with proper care the information can help one compare
how far their dollar will go In Alaska particularly in smaller communities survey choices are few Only the Cost of Food at Home and the ACCRA Cost of Living Index include more than the
8 Alaska Economic Trends November 1992
T a b I e bull 7
Runzheimer International Living Cost Standards October 1990
of of of of Goods amp of Total Standard Standard Trans- Standard Standard Services Standard
City Costs City Taxation City portatlon City Housing City Other City
Anchorage AK $33380 1043 $4719 804 $4540 1128 $14493 1101 $10412 1084 Fairbanks AK 32426 1013 5123 873 4481 1113 12623 959 10533 1097 Juneau AI 33255 1039 5232 892 4327 1075 13461 1022 10569 1101 STANDARD CITY 32000 5868 4025 13169 9601 Albuquerque NM 31 050 970 6102 1040 4047 1005 12383 940 8852 922 Atlanta GA 32944 1030 6203 1057 4458 1l08 13359 1014 9268 965 Augusta ME 32379 1012 5508 939 3856 95 8 14136 1073 9213 960 B irmingham AL 29589 92 5 688 1 11 73 3777 93 8 10302 782 8963 934 Boston MA 40723 1273 5501 937 5043 1253 21132 1605 9381 977 Chicago IL 36293 1l34 5648 963 4329 1076 17206 1307 9444 984 Dallas TX 30926 966 5570 94 9 4580 1138 11634 883 9476 987 Denver CO 30690 95 9 6066 1034 4468 11 10 11 497 873 8993 937 Detroit MI 35527 1110 5350 912 4642 1153 16672 1266 9197 958 Honolulu HI 42535 1329 4113 701 4841 1203 22538 1711 11 377 1185 Jndianapolis IN 30834 964 6680 1138 4173 1037 11439 869 8876 924 Jacksonville FL 30081 940 5606 95 5 4041 1004 11558 878 9210 959 Los Angeles CA 43823 1369 3842 655 5527 1373 25250 1917 9538 993 Milwaukee WI 32629 1020 6220 1060 3969 986 13880 105 4 8894 926 New York NY 43804 1369 48 11 820 7165 1780 22239 1689 9923 1034 Philadelphia P A 37440 1170 6445 1098 5004 1243 16981 1289 10165 1059 Portland OR 32629 1020 5836 995 4174 1037 13621 1034 9332 972 San Francisco CA 48948 1530 3210 547 5065 1258 31281 2375 9726 1OL3 Seattle WA 34332 1073 51 34 875 4521 11 23 1571 4 11 93 9297 968 SL Louis MO 32207 1006 6426 1095 3984 990 13055 991 9076 945 Washington DC 38942 1217 4889 833 4432 1101 20055 1523 9900 1031
Source Runzheimers Living Cosr Index October 1990
Summary of Cost of Living Indexes ----------------------------------~~-
Survey Consumer Price Index Survey ACCRA Cost of Uving Survey Cost of Food at Home Survey RUnzheimers Uving COS InOOK Study Index
PopulationAll urban consumers (CPI-U) or urban wage and clerishy Population Midmanagemenl Population Lower income indishy Population Family with $32000 cal woi(ers (CPImiddotW) executive family viduals or families in income living in average cost
city Slrenglh Measures costs in one Strength Compares many Slrenglh Compares minimum location over time the only availshy locations to a nalional average food costs for smaller Alaskan Strength Considers income able inHation measure communrties excluded rom other needed to maintain aspecific stanshyAverage pricedata for some comshy Weakness No tracking of studies dard of living in different cities modities available for large cilies changes over time lacks includes taxes
consistency in price collection Weakno$8 No good comparison Weakness Can only compare the of national data only looks at food Weakness Market basket may change In the cost-of-living for difshy costs not entire cost of living not reflect local consumption patshyierentlocations only one Alaskan terns area surveyed Anchorage
Alaska Economic Trends November 1992 9
T a b I e bull 7
Runzheimer International Living Cost Standards October 1990
of of of of Goods amp of Total Standard Standard Trans- Standard Standard Services Standard
City Costs City Taxation City portatlon City Housing City Other City
Anchorage AK $33380 1043 $4719 804 $4540 1128 $14493 1101 $10412 1084 Fairbanks AK 32426 1013 5123 873 4481 1113 12623 959 10533 1097 Juneau AI 33255 1039 5232 892 4327 1075 13461 1022 10569 1101 STANDARD CITY 32000 5868 4025 13169 9601 Albuquerque NM 31 050 970 6102 1040 4047 1005 12383 940 8852 922 Atlanta GA 32944 1030 6203 1057 4458 1l08 13359 1014 9268 965 Augusta ME 32379 1012 5508 939 3856 95 8 14136 1073 9213 960 B irmingham AL 29589 92 5 688 1 11 73 3777 93 8 10302 782 8963 934 Boston MA 40723 1273 5501 937 5043 1253 21132 1605 9381 977 Chicago IL 36293 1l34 5648 963 4329 1076 17206 1307 9444 984 Dallas TX 30926 966 5570 94 9 4580 1138 11634 883 9476 987 Denver CO 30690 95 9 6066 1034 4468 11 10 11 497 873 8993 937 Detroit MI 35527 1110 5350 912 4642 1153 16672 1266 9197 958 Honolulu HI 42535 1329 4113 701 4841 1203 22538 1711 11 377 1185 Jndianapolis IN 30834 964 6680 1138 4173 1037 11439 869 8876 924 Jacksonville FL 30081 940 5606 95 5 4041 1004 11558 878 9210 959 Los Angeles CA 43823 1369 3842 655 5527 1373 25250 1917 9538 993 Milwaukee WI 32629 1020 6220 1060 3969 986 13880 105 4 8894 926 New York NY 43804 1369 48 11 820 7165 1780 22239 1689 9923 1034 Philadelphia P A 37440 1170 6445 1098 5004 1243 16981 1289 10165 1059 Portland OR 32629 1020 5836 995 4174 1037 13621 1034 9332 972 San Francisco CA 48948 1530 3210 547 5065 1258 31281 2375 9726 1OL3 Seattle WA 34332 1073 51 34 875 4521 11 23 1571 4 11 93 9297 968 SL Louis MO 32207 1006 6426 1095 3984 990 13055 991 9076 945 Washington DC 38942 1217 4889 833 4432 1101 20055 1523 9900 1031
Source Runzheimers Living Cosr Index October 1990
Summary of Cost of Living Indexes ----------------------------------~~-
Survey Consumer Price Index Survey ACCRA Cost of Uving Survey Cost of Food at Home Survey RUnzheimers Uving COS InOOK Study Index
PopulationAll urban consumers (CPI-U) or urban wage and clerishy Population Midmanagemenl Population Lower income indishy Population Family with $32000 cal woi(ers (CPImiddotW) executive family viduals or families in income living in average cost
city Slrenglh Measures costs in one Strength Compares many Slrenglh Compares minimum location over time the only availshy locations to a nalional average food costs for smaller Alaskan Strength Considers income able inHation measure communrties excluded rom other needed to maintain aspecific stanshyAverage pricedata for some comshy Weakness No tracking of studies dard of living in different cities modities available for large cilies changes over time lacks includes taxes
consistency in price collection Weakno$8 No good comparison Weakness Can only compare the of national data only looks at food Weakness Market basket may change In the cost-of-living for difshy costs not entire cost of living not reflect local consumption patshyierentlocations only one Alaskan terns area surveyed Anchorage
