There is no officially issued federal cost-of-living index, states PayScale. The closest benchmark put together by the U.S. Bureau of Labor Statistics is the Consumer Price Index. However, the CPI tracks inflation better than it compares the cost of living between locations. The independent Council for Community and Economic Research puts together its own ACCRA Cost of Living Index, which websites such as CNN Money, Bankrate and PayScale use for their cost-of-living calculators.Continue Reading
The CPI measures price changes over time by tracking consumer price changes in urban areas for a certain selection of goods, explains PayScale. The ACCRA Cost of Living Index tracks prices in both urban and suburban areas to better show differences between areas. However, the ACCRA index does not attempt to track price changes over time.
Cost-of-living calculators, such as those offered by CNN Money, PayScale and Bankrate, use the ACCRA index to compare relative salaries in various locations. For instance, someone earning $50,000 per year in Amarillo, Texas, would need to earn approximately $128,000 per year to maintain the same lifestyle in Manhattan, New York, as of 2015, according to Bankrate. Though the ACCRA index allows relative salary comparisons between areas, it does not note whether a certain standard of living is the norm in an area, explains PayScale.Learn more about Financial Calculations