What is the 'ACCRA Cost Of Living Index - COLI'

The ACCRA Cost of Living Index is a dataset containing key living costs compiled by the Council for Community and Economic Research. Economists can use the index to make an apples-to-apples comparison of the cost of living between two different urban areas in the United States.

BREAKING DOWN 'ACCRA Cost Of Living Index - COLI'

The ACCRA Cost of Living Index is a quarterly publication put out by the American Chamber of Commerce Researchers Association and the Council for Community and Economic Research. The index uses a set of broad categories calculated based upon consumer spending on groceries, housing, utilities, transportation, health care and a miscellaneous collection of goods and services that do not fit under other categories. The composite index weights costs based upon spending patterns identified in households with mid-management income, as measured by government surveys.

Price comparison data exist within the index for over 300 U.S. cities, aggregated by county and by metropolitan statistical area.

Using the COLI

The index publishes a national average for the cost of each item in a category and extrapolates an expected expenditure by various family types in a specific area based on the variance from the national baseline across categories. For example, the index looks at a variety of staple grocery items to generate its overall category expenditure, including items such as ground beef, eggs, bananas, coffee and facial tissues. Average rental costs for apartments and average home sale prices yield a cost for housing. A similar approach across categories led to a national average of $5,976 per month in 2017 for a husband and wife with children under six years of age.

Job seekers and human resources departments can use the ACCRA Cost of Living Index to compare salaries and salary requirements in different parts of the country by looking at the deviation from average in a given area. Apartment rent averaged $1,037 per month on a national level in 2017 according to the index, significantly lower than the rent one might pay in Manhattan or other major coastal urban areas. Employers might use COLI data to ensure their pay remains competitive with salaries in other areas or to ensure that job seekers considering a move understand how much farther their take-home pay would go.

COLI vs. CPI

The ACCRA Cost of Living Index provides points of comparison between two geographic areas at a single point in time. It has little statistical value in terms of tracking prices over time, or charting inflation, however. For those interested in measuring inflation, the U.S. Bureau of Labor Statistics publishes the Consumer Price Index, which uses a somewhat similar approach to capture changes in cost of living over time.

RELATED TERMS
  1. Indexing

    In the financial markets, indexing can be used as a statistical ...
  2. Composite

    A composite is a grouping of equities, indexes or other factors ...
  3. Indexation

    Indexation is a method of linking the price or value of an asset ...
  4. Consumer Price Index - CPI

    The Consumer Price Index examines the weighted average of prices ...
  5. Company-Owned Life Insurance - ...

    Company-owned life insurance is a kind of policy that corporations ...
  6. Employment Cost Index (ECI)

    The Employment Cost Index (ECI) is a quarterly economic series ...
Related Articles
  1. Personal Finance

    The Most Affordable Cities To Live In

    Here is a look at some of the places in the United States where your money will go the furthest.
  2. Personal Finance

    How Inflation Affects Your Cost of Living

    How will your wallet be impacted by inflation?
  3. Insurance

    Everything You Should Know About Corporate-Owned Life Insurance

    This type of insurance is a policy taken out on you by your company. Read on to find what it's all about.
  4. Insights

    The 5 Cities Where $50K Goes Furthest

    If you are comparing cost of living to see where a $50,000 salary will stretch the furthest, these 5 cities are at the top of the list.
  5. Managing Wealth

    The 5 Most Expensive Places To Buy A Home

    Find out what makes these areas so desirable to live in despite the high costs of real estate.
  6. Investing

    5 Things You Need To Know About Index Funds

    Index funds, at their best, offer a low-cost way for investors to track popular stock and bond market indexes. But not all index funds are created equally.
  7. Personal Finance

    How Much Money Do You Need to Live in NYC?

    Learn how much money you need to meet basic expenses in New York City as a student, as a professional and as an unemployed job seeker.
  8. Insights

    The Consumer Price Index

    Find out how this economic measure can help you make key financial decisions.
  9. Personal Finance

    How Much Rent Can You Afford on a $100K Salary?

    You know your salary, but how much should you be spending on rent? Here's how to figure it out.
  10. Personal Finance

    What Consumer Spending Reveals About The Economy

    We compare U.S. consumer spending patterns, especially in housing, food, and healthcare, against consumer spending in other countries.
RELATED FAQS
  1. In economics, what is an index number?

    Read about the role of an index number in economics and how index numbers can be applied to all kinds of data, such as inflation ... Read Answer >>
  2. What is the cost of living difference between Boston and New York City?

    Discover MIT and Numbeo statistics that show that the cost of living in Boston, except for rental prices, is basically equal ... Read Answer >>
  3. What are some limitations of the consumer price index (CPI)?

    Explore some of the basic limitations of the widely used economic indicator, the consumer price index, or CPI, and examine ... Read Answer >>
  4. Is the consumer price index (CPI) the best measure of inflation?

    Discover how the CPI is one of the most used indexes to measure inflation, but due to its limitations, the PPI and GDP deflator ... Read Answer >>
Trading Center