Median Household Income (MHI) data provided by the U.S. Census Department is crucial to understanding the economic conditions of counties across the country. However, to accurately compare counties with higher and lower than average costs of living, these data must be used in conjunction with a cost of living adjustor.
The Council for Community and Economic Research (C2ER) has created a County Cost of Living (CCOL) adjustment which can be used to standardize the Census MHI so that when comparing incomes from two regions, cost of living differentials are already factored in. For example, if someone is comparing MHI data from the Census for New York County, NY and Zapata County, TX, they would see that the MHIs are $66,739 and $33,462 respectively, which may lead them to incorrectly infer that a person in New York County could buy more with their higher salary than a person in Jackson County (see chart below). However, modifying the MHI based on the CCOL indicates that the MHI in New York County is actually much lower at $35,978 while Jackson County is higher at $39,684. Living differentials can drastically change the MHI in some regions while others remain constant. The CCOL adjustment puts these MHIs into perspective, allowing for a more accurate picture of living costs.
Based on C2ER's research, of 3,099 counties in the U.S., 494 experienced a change of 10% or more (both positive and negative 10%) in Median Household Income (MHI) after adjusting for County Cost of Living (CCOL). These discrepancies have implications for individuals looking at the Census published MHI to make a determination in taking a job; government officials making tax and policy decisions; and general information on buying power of income.
* This chart compares the Median Household Income (MHI) data from the US Census website to the County Cost of Living adjusted MHI calculated by C2ER.
If you need additional information on the County Cost of Living (CCOL) or other COLI-related products, please contact Erol Yildirim at email@example.com or by phone at 703-522-4980.
C2ER provides the adjusted median household income, along with the county level cost of living index, for 3,099 U.S. counties in our online store for $425.
Purchase the COLI Adjusted Median Household Income data