The ACCRA Index gathers data on consumer prices for specific items in six major areas: housing, groceries, utilities, transportation, health care, and miscellaneous goods and services.  Each item is carefully weighted according to typical expenditure patterns of professional or management-level households.  The average of all the participating locations is then scaled to 100, and each location receives an index score expressed as a percentage of the average.  The index also reports subscores for each of the six expenditure categories.  ACCRA Index scores above 100 indicate that local costs are higher than the average of all locations surveyed, while an index score below 100 means that local costs are lower than the average.  It is important to note that the index scores and overall ranking are not strictly comparable over time, as the value of the average depends on data from the individual communities included each quarter.  However, relative ranking with respect to other specific metro areas can be compared across time.

Although housing costs play an increasingly large part in the affordability of a city, there are other costs that determine its residents’ ability to afford a high quality of life.  The ACCRA Index captures these other costs and measures the overall cost of living in a certain location as compared with other locations.  Measuring the overall cost of living provides an important complement to housing costs data.  Because this index takes into account the many other daily expenses which also vary from place to place, it moderates the effect of an extremely differentiated housing market plagued by speculative bubbles in many areas.  In doing so, it provides a more balanced picture of how affordable Dallas is as compared with other areas of the country.

• Of the 298 urban areas surveyed in the fourth quarter of 2005, Dallas was ranked 160th with an index score of 94.6.
• Plano, Fort Worth, and Arlington were also included in the survey separately.  Fort Worth was significantly less expensive, ranking at 258th with an index score of 88.6.  Arlington ranked 219th with a score of 91.1, and Plano was slightly more expensive than Dallas, ranking 148th with an index score of 95.0.  
• Among other major Texas cities, only Austin was more expensive than Dallas, ranking 127th with an index score of 96.1.
• San Antonio and El Paso ranked 215th and 220th with index scores of 91.6 and 91.1, respectively.  
• Houston’s cost of living is significantly less expensive than that of Dallas, with an index score of 88.9 and a rank of 250th out of 298.

Among the largest metro areas in the country, Dallas has a significantly lower cost of living, with the notable exception of Houston.  We can conclude that as compared with our country’s largest cities, Dallas continues to maintain a significant competitive advantage with respect to costs of living.  New York (Manhattan), San Francisco, and Los Angeles had index scores ranging from 150 to more than 200, compared with Dallas’ score of 94.6.

However, Dallas is not alone in having a lower cost of living as compared with the largest U.S. cities.  Across the country, other cities are gaining prominence as vibrant, lower-cost alternatives to New York and Los Angeles.

• Of 20 commonly identified “peer cities,” 15 were more expensive than Dallas.
• However, the differences among these cities are slight; of the 20 cities studied, 10 had index scores between 90 and 100.