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Federal Reserve Bank of Dallas
Working Papers
Improving the ACCRA U.S. regional cost of living index
Keith R. Phillips
Christina Daly
Abstract

The broadest and most commonly used measure of the cost of living across U.S. cities is the American Chamber of Commerce Research Association (ACCRA) index. This index is used by business and government organizations and the media to rank living standards and real wages across U.S. cities. In this study we reduce the aggregation bias in the index by calculating national average prices for the 59 item prices using population weights instead of the equal weight formula used by ACCRA. This correction results in a decline in the index values for all cities and changes in the rankings and bi-variate comparisons between city pairs. In some high-cost cities the index values decrease by over 25 percent, and in 74 percent of the cities the rank changes by greater than one spot.


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Keith R. Phillips & Christina Daly, Improving the ACCRA U.S. regional cost of living index, Federal Reserve Bank of Dallas, Working Papers 0902, 2009.
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Note: Published as: Phillips, Keith R. and Christina Daly (2010), "Improving the ACCRA U.S. Regional Cost of Living Index," Journal of Economic and Social Measurement 35 (1-2): 33-42.
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Subject headings:
Keywords: Cost and standard of living; Wages; Prices
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