What does this indicator measure?
This indicator measures consumers’ buying power within a region.
Why is this indicator important?
A relatively high cost of living can have a significant impact on a region’s economic competitiveness. Companies are less likely to locate their operations in high cost areas, not only due to the direct costs which they incur, but also because they must pay their employees more to compensate for the higher cost of living. Additionally, because many products are priced in a nationwide or global market, companies may not be able to pass these higher costs to consumers through the prices of their products.
A high cost of living affects individuals also, as they have less income left after paying bills to invest in continuing education or job training. It also limits their ability to improve their quality of life and save for their children’s education and their own retirement.
Conversely, areas that combine a relatively low cost of living with a high average wage can be attractive to both individuals and employers. A low cost of living allows employers to hire unskilled or entry-level workers at a reasonable cost. Higher wages, adjusted for the cost of living, leave workers with more disposable income to invest in themselves, their children, and their community.
How are we doing?
According to the ACCRA (Council for Community and Economic Research), the cost of living in Dallas, during the fourth quarter of 2005, was approximately 94.6% of the national average.
- Dallas’ cost of living ranked 19th out of the largest 25 metropolitan areas in the nation.
- Living in Dallas costs less than half the cost of living in New York City and approximately 40 to 45% less than that of San Francisco, Los Angeles, or San Diego.
- Dallas’ per capita income, adjusted for the cost of living, ranks 4th highest out of the 25 largest metropolitan areas in the nation.
- Dallas’ adjusted per capita income trails only that of Houston, Fort Worth, and Denver.
- Dallas’ adjusted per capita income is 12% higher than the average of the 25 largest U.S. cities.
Inflation within the Greater Dallas Area has declined from 5.0% in 2000 to 2.9% in 2005. During the years 2002 through 2005, the rate of inflation in Dallas was less than the national average.
