Cost of Living Comparisons

How to find online cost of living calculators
By Sharon Moran, Freelance writer and editor Consumers who are planning to relocate aren't the only ones who can benefit from understanding cost of living comparisons. Small business owners can also benefit from understanding cost of living variations in different regions, states, or countries.

Understanding cost of living comparisons is important for your small business for the following reasons:

1. Optimize your business's bottom line by conducting online cost of living comparisons before extending employment offers to potential employees or offering relocation assistance.
2. Understanding the cost of living index and a cost of living city comparison can help you determine if it's economically sensible to open an additional business location in a different geographic region.
3. If you want to market a product in other geographic regions, you can determine pricing more effectively by comparing cost of living by cities. Understanding an international cost of living comparison and the international cost of living index helps if you're considering an international market for your products or services.
   

Use online cost of living calculators

When you want to compare cost of living in different states, online cost of living calculators can help streamline the process.
Try:  Try the cost of living calculator at CNNMoney.com. It's geared toward job seekers, but the results will be just as helpful to small business owners. For a cost of living international comparison, try an international cost of living calculator like the one available at SalaryExpert.

Utilize online information about the cost of living index and international cost of living index

To compare cost of living, international and national comparisons are sometimes helpful.
Try:  Compare the cost of living index for select U.S. cities at Infoplease. For an international cost of living comparison, use an international cost of living index in addition to an international cost of living calculator. EuroCost International provides clients with international cost of living indices. The Economic Research Institute's Relocation Assessor software program allows small business owners to conduct cost of living comparisons. If you don't plan on using the software frequently, you might find the yearly subscription cost prohibitive.

Understand currency comparisons

Currency comparisons are constantly changing, and they're part of cost of living comparisons. That's why it's helpful to use online currency comparison tools.
Try:  Expedia has a useful currency comparison tool. Certain consumer goods are also indicative of currency value. Economists have used the cost of the Apple iPod to determine currency value, and it has been termed the iPod index.

• Try several online cost of living calculators since the results might vary depending on the calculator used.
• Cost of living in certain areas is more closely connected to real estate value rather than the cost of items more relevant to businesses. Keep this in mind when performing either a domestic or international cost of living comparison.
• The iPod index is based on the same economic principle, purchasing-power parity, as the Big Mac index.