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Unpacking the Cost of Living

The cost of living index (COLI) is a powerful measurement, but exercise discretion when applying this number to salaries at your church.
Unpacking the Cost of Living
Image: erhui1979 | Getty

To quantify how far a salary will stretch, every ChurchSalary report includes a zip-code level cost of living index (COLI). To fully understand how this index should (or should not) affect salaries at your church, we need to unpack what it does and does not measure.

Methodology

There are different methodologies for calculating the “cost of living” in a given area. Many websites offer free cost-of-living metrics, which are calculated using publicly available data. These free indexes combine government data, such as grocery, gas, and housing price indexes (which are part of the Consumer Price Index [CPI]) as well as housing cost-to-income ratios and median home values. Because the formula varies from website to website, these free indexes cannot be compared with one another and differ from website to website. This can cause confusion for users.

The cost of living index (COLI) used ...

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