by Matthew Hubacher, Research Specialist
Among the million reasons why Buffalo Niagara is “Where Life Works” is its affordable cost-of-living. Numerous media outlets, including CNN-Money, Forbes Magazine and CNBC, have lauded Buffalo Niagara as a low-cost place to live and do business. In fact, the cost of living in the region is routinely below the national average. But what are these data based on and from where do these statistics originate?
The research department at Buffalo Niagara Enterprise is one of hundreds of academic institutions, chambers of commerce and economic research teams that participate in The Council for Community and Economic Research’s (C2ER) Cost of Living Index (COLI). COLI data are recognized as the most reliable source for comparative consumer costs by the US Census Bureau, US Bureau of Labor Statistics and the President’s Council of Economic Advisors. It is designed to provide the best possible means to compare cost of living differences among metro areas.
Participating researchers are provided a diverse list of nearly 60 goods and services, which range from doctor’s office visits to fast-food items, to price in their regions on specific dates. The prices are compiled and transmitted to C2ER, whose researchers calculate the region’s cost of living index scores.
The overall index is comprised of six component indexes – housing, utilities, grocery items, transportation, health care and miscellaneous goods and services – and is the ratio of a metro area’s average price to the average price of the same item nationwide (the nation’s index score is 100.0). The share of consumer spending on each category, as defined by the US Bureau of Labor Statistics’ 2004 Consumer Expenditure Survey, determines the category’s weight in the Index. In Q3-2012, cost of living index score for the Buffalo-Niagara Falls MSA was 99.2 (0.8% below the national average).
Businesses that have questions on cost of living differences, or any other detailed comparative analysis needs, are encouraged to contact BNE’s Research Department.