By James Clary
The most recent edition of the Hampton Roads Economic Quarterly focused on the change in relative price levels in Hampton Roads over time, and discussed how the region went from a region with a relatively low cost of living to a region with a relatively high cost of living. During the same period of growth in relative prices, Hampton Roads experienced significant income growth. The correlation between growth in the region’s incomes and growth in the region’s price levels suggests that increased discretionary income played a significant role in driving up the region’s price levels. Luckily, the growth in regional income compared to the U.S. metro average outpaced the increase in relative price levels, indicating standard of living in Hampton Roads increased over the past decade. In the course of researching this article, several interesting items were discovered.
- The Council for Community and Economic Research determines a “basket of goods” each period that is representative of the local price level, and the price for each item in that basket is collected and used to create the regional cost of living index. It is a local organization in each region that collects that price data for the index, and in this region, the Hampton Roads Economic Development Alliance (HREDA) collects that data.
- The basket of goods that is used to make price comparisons is based on the buying habits of professionals, which the ACCRA COLI defines as those in the top income quintile. Using this high-income approach has several impacts, including increasing the percentage of the index related to housing costs, and lowering the percentage related to grocery shopping relative to the average person.
- The basket of goods has changed over time, with a notable example being that liquor was a part of the miscellaneous category in 2000, but is not part of the current survey (for those interested, the liquor used for the index was a 750mL bottle of J & B Scotch).
- There are several other cost of living indexes available, most notably Kiplinger’s; however, there is consensus that Hampton Roads has a relatively expensive cost of living relative to the national average.
The quarterly also included the Regional Forecast that was presented and approved by the Hampton Roads Planning District Commission at its Quarterly Meeting on January 20, 2011.
Click HERE to review the Winter 2011 Hampton Roads Economic Quarterly .