Greater St. Louis Standard of Living Ranked 7th Highest Among Largest Metros

by Eliza Murray and Tim Alexander | Oct 20, 2017

A new report released by the Federal Reserve Bank of St. Louis provides further details on a new way to measure standards of living, termed Regional Price Parities (RPP). RPPs compare price level differences, and thus cost of living between states or metro areas.

St. Louis enjoys a significantly lower cost of living compared to U.S. averages, especially for an area its size. Cost of living indexes provide information about quality of life and general living standards. These indexes are useful for measuring how much an individual can consume. The most well-known cost of living index is the ACCRA Cost of Living Index (COLI) produced by the Council for Community and Economic Research. The COLI measures the relative cost of U.S. metropolitan areas. The following table includes cost index components for the St. Louis, MO-IL metro area. 

Cost of Living – St. Louis, MO-IL MSA, 2016 Average

Metro Area

100% Composite Index

Grocery Items

Housing

Utilities

Transportation

Health Care

Misc. Goods and Services

St. Louis

90.4

103.2

70.5

112.8

94.2

96.3

92.9

Note:  U.S. metro average cost of living = 100.
Source:  “ACCRA Cost of Living Index, 2016 Average Annual Data” Council for Community and Economic Research, Jan. 2017.

Regional Price Parities are spatial price indexes used to compare costs across different areas, like the ACCRA Cost of Living Index. However, the RPP is better suited to adjusting income for cost of living.

In 2015, Missouri’s RPP was 89.3, more than ten percent below the national average of 100. The St. Louis region has an RPP of 90.6, considerably below the national average.

Standards of living can also be measured by per capita personal income. In 2015, the Bureau of Economic Analysis ranked metro areas according to per capita personal income. The region’s per capita personal income in chained 2009 dollars was $44,715 and ranked 67th out of all U.S. metro areas in 2015. However, when adjusted for RPPs, the region’s per capita personal income increased to $49,598, ranking 20th. “On an RPP-adjusted basis, per capita personal income in St. Louis jumped from 1.6 percent above the national average to 12.7 percent above the national average” (1). An article on the report by the Federal Reserve Bank of St. Louis stated, “St. Louis has the seventh highest standard of living among 53 U.S. metro areas with populations of more than 1 million” (2).

Sources: (1) “Living Standards in St. Louis and the Eighth Federal Reserve District: Let’s Get Real” Federal Reserve Bank of St. Louis Review, 2017. (2) “St. Louis Standard of Living Ranked 7th Among Large U.S. Metros” St. Louis Post-Dispatch, October 7, 2017.