Our Methodology
How we collect, analyze, and present cost of living data to help you make informed decisions.
Cost of Living Index
Our cost of living index uses a national average baseline of 100. A city with an index of 90 is 10% cheaper than the national average, while a city with an index of 120 is 20% more expensive. This makes it easy to compare cities at a glance.
Data Collection
We gather data from multiple authoritative sources to ensure accuracy and comprehensiveness:
- Bureau of Labor Statistics (BLS) — Consumer Price Index data, regional price parities, and employment statistics
- U.S. Census Bureau — American Community Survey data on median incomes, housing costs, and demographics
- Bureau of Economic Analysis (BEA) — Regional economic data and personal consumption expenditures
- HUD Fair Market Rents — Rental cost data by metro area
Category Weights
Our composite cost index weights each expense category based on the typical American household budget:
- Housing (30%) — Rent, mortgage costs, and home values
- Groceries (13%) — Food at home and dining out
- Transportation (12%) — Gas, car insurance, public transit
- Utilities (10%) — Electric, gas, water, internet
- Healthcare (10%) — Insurance premiums, out-of-pocket costs
- Taxes (10%) — State income, sales, and property taxes
- Entertainment and Other (15%) — Recreation, personal care, apparel
Ranking Methodology
Different rankings use tailored criteria. For example, our retirement rankings emphasize healthcare access, tax burden, and climate, while our family rankings weigh school quality and safety more heavily. Each ranking page specifies the criteria used.
Quality of Life Scores
In addition to cost data, we incorporate quality of life indicators including crime rates, education rankings, healthcare access, and climate data. These metrics come from the FBI Uniform Crime Report, U.S. News education rankings, and NOAA climate data.
Update Frequency
Our data is reviewed and updated periodically to reflect the latest available figures. Government data sources typically release annual updates, and we incorporate new data as it becomes available. All figures represent the most recent data at the time of publication.
Limitations
While we strive for accuracy, cost of living can vary significantly within a single city or metro area. Our data represents metro-area averages and may not reflect specific neighborhoods. Individual expenses will vary based on personal lifestyle, family size, and spending habits. We recommend using our tools as a starting point for research, not as the sole basis for financial decisions.