How cost-effective is your city? More precisely, how well does your hometown rank in median income when incomes are adjusted for the local cost of living? This combination of qualities can be thought of as the “cost-effectiveness” of a city, as measured by adjusting income for cost of living. A number of news sources produce “best cities” lists, and Kiplinger Magazine’s list enables a simple calculation of cost-effectiveness, since it publishes both median income and a cost-of-living index for each city [1]. The ranking of the 50 largest cities in the US by cost-effectiveness (median income / cost of living) is provided below:
Metro Area |
Cost of Living Index [2]
|
Median Household Income |
Adjusted Income [3]
|
1. Atlanta-Sandy Springs-Marietta, GA |
0.94 |
57307 |
60965 |
2. Indianapolis-Carmel, IN |
0.88 |
52607 |
59781 |
3. St. Louis, MO-IL |
0.87 |
51713 |
59440 |
4. Washington-Arlington-Alexandria, DC-VA-MD-WV |
1.38 |
81163 |
58814 |
5. Dallas-Fort Worth-Arlington, TX |
0.92 |
53748 |
58422 |
6. Austin-Round Rock, TX |
0.94 |
54827 |
58327 |
7. Houston-Sugar Land-Baytown, TX |
0.89 |
51685 |
58073 |
8. Cincinnati-Middletown, OH-KY-IN |
0.9 |
51926 |
57696 |
9. Denver-Aurora, CO |
1.01 |
58039 |
57464 |
10. Nashville-Davidson–Murfreesboro–Franklin, TN |
0.88 |
49979 |
56794 |
11. Kansas City, MO-KS |
0.95 |
53564 |
56383 |
12. Charlotte-Gastonia-Concord, NC-SC |
0.92 |
51702 |
56198 |
13. Salt Lake City, UT |
0.98 |
55064 |
56188 |
14. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD |
1.03 |
57831 |
56147 |
15. Minneapolis-St. Paul-Bloomington, MN-WI |
1.14 |
63866 |
56023 |
16. Columbus, OH |
0.94 |
51687 |
54986 |
17. Hartford-West Hartford-East Hartford, CT |
1.19 |
64989 |
54613 |
18. Jacksonville, FL |
0.94 |
51269 |
54541 |
19. Las Vegas-Paradise, NV |
1 |
54299 |
54299 |
20. Seattle-Tacoma-Bellevue, WA |
1.14 |
61740 |
54158 |
21. Richmond, VA |
1.05 |
56277 |
53597 |
22. Detroit-Warren-Livonia, MI |
1 |
53593 |
53593 |
23. Phoenix-Mesa-Scottsdale, AZ |
1 |
52857 |
52857 |
24. San Francisco-Oakland-Fremont, CA |
1.37 |
72059 |
52598 |
25. San Jose-Sunnyvale-Santa Clara, CA |
1.58 |
82664 |
52319 |
26. Chicago-Naperville-Joliet, IL-IN-WI |
1.13 |
58946 |
52165 |
27. Birmingham-Hoover, AL |
0.9 |
46667 |
51852 |
28. Boston-Cambridge-Quincy, MA-NH |
1.29 |
66870 |
51837 |
29. Louisville-Jefferson County, KY-IN |
0.89 |
46095 |
51792 |
30. Memphis, TN-MS-AR |
0.86 |
44495 |
51738 |
31. Baltimore-Towson, MD |
1.21 |
62524 |
51673 |
32. Sacramento–Arden-Arcade–Roseville, CA |
1.15 |
58480 |
50852 |
33. Orlando-Kissimmee, FL |
0.98 |
49789 |
50805 |
34. Milwaukee-Waukesha-West Allis, WI |
1.02 |
51669 |
50656 |
35. New York-Northern New Jersey-Long Island, NY-NJ-PA |
1.21 |
60964 |
50383 |
36. Rochester, NY |
0.99 |
49508 |
50008 |
37. San Antonio, TX |
0.93 |
46203 |
49681 |
38. Virginia Beach-Norfolk-Newport News, VA-NC |
1.1 |
54442 |
49493 |
39. Oklahoma City, OK |
0.89 |
43652 |
49047 |
40. Pittsburgh, PA |
0.92 |
44814 |
48711 |
41. Buffalo-Niagara Falls, NY |
0.93 |
44747 |
48115 |
42. Cleveland-Elyria-Mentor, OH |
0.99 |
47600 |
48081 |
43. Providence-New Bedford-Fall River, RI-MA |
1.16 |
54064 |
46607 |
44. San Diego-Carlsbad-San Marcos, CA |
1.32 |
60970 |
46189 |
45. Portland-Vancouver-Beaverton, OR-WA |
1.17 |
53935 |
46098 |
46. Tampa-St. Petersburg-Clearwater, FL |
0.99 |
45243 |
45700 |
47. Riverside-San Bernardino-Ontario, CA |
1.23 |
54991 |
44708 |
48. New Orleans-Metairie-Kenner, LA |
1.06 |
45802 |
43209 |
49. Los Angeles-Long Beach-Santa Ana, CA |
1.42 |
56680 |
39915 |
50. Miami-Fort Lauderdale-Pompano Beach, FL |
1.2 |
47527 |
39606 |
Atlanta tops the list, followed by Indianapolis, St. Louis, Washington D.C., and Dallas. Rounding out the top 10 are Austin, Houston, Cincinnati, Denver, and Nashville. What city holds the unfortunate designation of being least cost-effective? Miami/Ft. Lauderdale is dead last, with Los Angeles, New Orleans, Orange County (California), and Tampa/St. Petersburg all in the bottom 5.
It clearly pays to live in Atlanta or the other top cities, as higher incomes and lower costs translate into a higher quality of life or simply greater net savings. The cities at the bottom of the list generally suffer from high real estate prices and rental costs coupled with lower median incomes.
[1] Here’s the full spreadsheet of data from Kiplinger.com including 300+ metro areas.
http://www.kiplinger.com/tools/bestcities_sort/index.php?sortby=hhi&sortorder=DESC
[2] The Cost of Living Index in Kiplinger.com’s original list is set so that the average cost of living in the US is 100. Here I have divided the Kiplinger index by 100 so that it can be more easily used in the Adjusted Income calculation.
[3] The Adjusted Income, or cost-effectiveness, is calculated by simply dividing a city’s median income by its cost of living (when the cost of living is a ratio centered around 1 as discussed above).