Several
studies exist for the purpose of comparing the
cost of living between cities in Alaska and
around the country. Because of differences in
methodology used to determine cost of living
statistics, each survey shows a different result
when comparing costs between locations.
In the
American Chamber of Commerce Researchers Association
(ACCRA) cost of living study, a standardized
list of 59 items is priced during a fixed
period of time. The average price data for
these cities are then converted into an index
number which is used for comparative purposes.
Only
four Alaskan cities are included in the most
recently published ACCRA study—Anchorage,
Fairbanks, Juneau, and Kodiak. In addition
to only including four Alaskan cities, the
ACCRA index is further limited in two respects.
First, only a limited number of items are
priced by the study and, second, the ACCRA
index does not take into account state and
local taxes, which are typically lower in
Alaska than other states.
The following
chart shows the most recent indexs, which are
basically the cost of living of each town listed
as a percentage of the national average (national
average = 100). So, for the 2nd qtr of 2004
Kodiak is shown as having a COL 30.4% above the
national average.
Cost of
living index based on the ACCRA
quarterly survey *
2nd qtr 2004
3rd qtr 2004
4th qtr 2004
1st qtr 2005
2nd qtr 2005
3rd qtr 2005
Fairbanks
125.1
128.4
127.8
126.8
130.2
128.6
Kodiak
130.4
130.8
131.2
131.6
129.5
130.2
* the national average =100
Because
there can be differences in consumption patterns
between Alaskan communities and those in the lower
48, it is perhaps more appropriate to use the
ACCRA information to compare Alaskan communities
to other Alaskan communities. When we do
this Kodiak's COL has been about 2-3% higher than
the COL in Fairbanks since the middle of 2002.
There also appears to be a downward trend as you
can see from the graph below.
The Runzheimer
Living Cost Standards survey, a cost-of-living
study that does account for taxes, indicates
that the portion of income going to taxes is
about 16 percent lower in Kodiak than the average
U.S. city. According to the survey, Kodiak only
pays 84.3% as much in taxes as the "standard"
U.S. city. As such, Kodiak is only 13.4% more
expensive than the average U.S. city in terms
of total costs. For more information on local
taxes, see the Government
Section.
It is
also important to remember is that the above
studies does not take into account the Alaska
Permanent Fund Dividend Program. The Runzheimer
study is based on a family of four (two parents,
two kids). If every member of the family got
a dividend check, about $6,000 would be added
to the household's pre-tax income.
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