May 29, 2004
A survey released in 1997 placed four Alaska cities, Kodiak, Juneau, Fairbanks and Anchorage, among the nation's eight most expensive places to live.
Now the current version of the same survey ranks just two of those communities, Juneau and Kodiak, in the top 20 at 16th and 17th respectively.
The cost of living in Alaska is examined in the June 2004 issue of Alaska Economic Trends. Economists Neal Fried and Dan Robinson explore a variety of cost of living issues facing Alaska, from recent trends in inflation to the overall cost of living around the state and nation.
Among communities where housing costs were measured, Juneau tops the list and the Wrangell-Petersburg area and the Mat-Su Borough were the lowest.
When housing affordability was estimated by comparing the cost of housing and the average earning power of area residents, Fairbanks was the most affordable community. Bethel ranked the least affordable with Ketchikan second to Bethel in least affordability.
Housing represents the single largest weight since that is where average consumers spend the largest share of their consumption dollars. As a result housing has the most influence on the overall index.
According to information provided in the June 2004 issue of Alaska Economic Trends, housing affordability is determined by the number of wage earners needed to buy an average house. Ranked lowest in the state in the number of wage earners needed to buy a home is Fairbanks at 1.2 wage earners. The highest is 1.9 in Bethel followed by Ketchikan at 1.7 wage earners needed to buy an average home.
Mat-Su Valley residents working in Anchorage have a combination of housing costs and earnings matching Fairbanks in affordability, and that may help explain the daily flow of commuters between the Mat-Su Valley and Anchorage.
According to the December study, a family of four enjoyed the lowest food costs in Alaska in Anchorage ($106.65), Ketchikan ($116.39), Tok ($117.29) and Mat-Su ($118.55). An analysis of the cost of food for a family of four for a week shows that the Naknek-King Salmon area has the highest grocery costs in the state ($214.39). Being mostly limited to food, which makes up a relatively small portion of total consumption dollars, the food costs survey is unsuitable for use as a comprehensive cost of living measure.
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