Bozeman’s overall cost of living was 0.4 percent below average as of April, compared to 260 other urban areas in the United States. The Cost of Living Index compares costs for professional and executive households. The latest report compared data for the second quarter of 2016. Bozeman’s overall index score resulted from below average costs in four of the six index sub-categories. Nationwide, the after-tax cost for a professional standard of living ranged from 126 percent above the national average in Manhattan, NY to about 24 percent below the national average in McAllen, TX.
The composite Cost of Living Index score is based on six categories—housing, utilities, grocery items, transportation, health care, and miscellaneous goods and services. The national average composite index is set at 100 each period. So the index conveys relative price levels at a specific point in time. Each place’s index score is expressed as a percentage of the average. The Index does not measure inflation (price change over time).
Housing: The second quarter 2016 housing index score was 106.6, meaning that area housing was 6.6 percent above the national average for the quarter. The average price of a new 2,400 square foot home on an 8,000 square foot lot that met the index collection specifications was $367,241. The average monthly rental rate for a 950 square foot apartment in the Bozeman area that met the index collection specifications was $1,019. Mortgage rates are also taken into consideration when computing the housing index score.
All Other Categories: For Bozeman residents, all expense categories except for housing and health care came in below national averages for the quarter. Health care expenses were 3.9 percent above the national average while groceries were 2.1 percent below the average, utilities were 2.5 percent below the average, transportation costs were 4.6 below the average, and miscellaneous goods and services were 4.3 below the average.
Area Comparisons: To put Bozeman’s index scores in perspective, the table below includes the cities with the most expensive and least expensive composite scores for the quarter—Manhattan, New York and McCallen, Texas respectively. The table also includes the most comparable cities to Bozeman in the Western region that participate in the index.
Prospera Business Network provides accurate, dependable information that helps inform and advance local businesses. The Cost of Living Index measures regional differences in the cost of consumer goods and services for professional and managerial households in the top income quintile. It is based on more than 50,000 prices covering almost 60 different items for which prices are collected three times a year by chambers of commerce, economic development organizations, and universities in each participating area. Prospera collects prices for the index items in Bozeman and submits its research to be analyzed and compared to other communities.
All items are priced in each place at a specified time and according to standardized specifications. Small differences in the index numbers should not be interpreted as significant. The Index does not measure inflation (price change over time). Because each quarterly report is a separate comparison of prices at a single point in time, and because both the number and the mix of participants changes from one quarter to the next, Index data from different quarters cannot be directly compared.
C2ER is a nonprofit professional organization comprising research staff of chambers of commerce, economic development organizations and agencies, and related organizations throughout the United States and Canada. In its dedication to improving business information through research, C2ER developed the Cost of Living Index to meet the need for a measure of living cost differentials among urban areas. Originally titled Inter-City Cost of Living Indicators Project, the Cost of Living Index has been published quarterly since 1968. For more information about participating in this project or joining C2ER, please visit www.c2er.org/ or call (703) 522-4980.
Prospera is a local nonprofit that leads the way in building strong businesses, establishing powerful partnerships, and sustaining vibrant communities throughout southwestern Montana. We provide a range of services including confidential business counseling, premier events and trainings, small business loans, grant assistance, and timely economic research. Prospera proudly hosts the statewide Montana Women’s Business Center, a program partially funded by the U.S. Small Business Administration. Since 1985, all of Prospera’s offerings have been provided at no-cost or low-cost thanks to the support of our industry- leading members, generous sponsors, and visionary charitable donors. To learn more, visit www.ProsperaBusiness-Network.org/. •
