Cost of living
Cost of living measures the expense of a given standard of living.
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An individual's or household's cost of living refers to the expense needed to sustain a particular standard of living.[1] A cost-of-living index serves as a tool to track how the cost of living shifts across different time periods.[1] Purchasing power parity rates allow for comparisons of living costs between different geographical regions.[1]
Quick Facts
- Definition
- Cost of maintaining a certain standard of living
- Major components
- Food
- housing costs
- and energy
- Measurement tool
- Consumer price index (CPI)
- Inflation link
- Increase in CPI over one year is called the inflation rate
- Survey producer
- Economist Intelligence Unit
- Base city for comparison
- New York City (index set at 100)
Facts from the source article.
Key facts and history
In the United Kingdom, about 18% of an average home's energy costs are for water heating.[2] The consumer price index (CPI) measures the prices of goods and services bought by households.[3] Food, housing, and energy are primary elements that make up the cost of living.[4] Expenses for heating, lighting, and cooking fall under the category of energy costs.[4]
When the Consumer Price Index (CPI) rises over time, it indicates that the cost of living has also risen during that same interval.[3] A cost of living crisis, characterized by diminished purchasing power, can result from a sudden increase in living expenses.[4] Research indicates that sales taxes can raise prices, thereby increasing the cost of living.[5] The consumer price index (CPI) is frequently the cost-of-living index used to link employment contracts and pension benefits.[6]
What the cited sources add
The International Rescue Committee reported that a series of climate-induced disasters and ongoing political unrest have left Somalis with an extreme cost of living crisis.[7] The Alberta Teachers' Retirement Fund account states that cost-of-living adjustments (COLA) are an inflation adjustment to a gross pension, based on the Alberta Consumer Price Index (ACPI).[8] OPTrust explains that every January, pensions are adjusted for the increase in the cost of living, as measured by the consumer price index (CPI) reported by Statistics Canada.[9] According to OPTrust, a pension of $20,000 starting in 1995 would reach $37,313 by 2025, representing an 87% rise across thirty years.[10]
For the first quarter of 2025, Old Age Security (OAS) payments did not increase because the CPI experienced a slight decline in the preceding three months, according to the same source.[11][12]
References
- Wikipedia, "Cost of living" (CC BY-SA 4.0), which cites: Jambrina-Canseco, "Local cost of living and the geography of inequality: evidence from Spain", The Journal of Economic Inequality, 2026-07-25 (original not read by us) en.wikipedia.org
- Wikipedia, "Cost of living" (CC BY-SA 4.0), which cites: Yorkshire Water (2024), Summer of Saving (original not read by us) en.wikipedia.org
- Wikipedia, "Cost of living" (CC BY-SA 4.0), which cites: "OECD (2008), OECD Glossary of Statistical Terms", OECD Publishing, Paris, 2008 (we also read that source) en.wikipedia.org
- Wikipedia, "Cost of living" (CC BY-SA 4.0), which cites: "What the cost of living crisis looks like around the world", International Rescue Committee, 7 May 2024 (we also read that source) en.wikipedia.org
- Wikipedia, "Cost of living" (CC BY-SA 4.0), which cites: Besley, "Sales Taxes and Prices: An Empirical Analysis", National Tax Journal, 1999, p. 157–178; Zhao, "The incidence of grocery taxes in US food and factor markets", American Journal of Agricultural Economics, 2025; Lyons, "Rental Prices and the Cost of Living in the United States, 1914–2006", National Bureau of Economic Research, 2026; Hovhannisyan, "The relationship between price and retail concentration: evidence from the US food industry", European Review of Agricultural Economics, 2019, p. 319–345 (original not read by us) en.wikipedia.org
- Wikipedia, "Cost of living" (CC BY-SA 4.0), which cites: "Cost-of-Living Adjustment (COLA) Information SSA", www.ssa.gov (original not read by us) en.wikipedia.org
- "What the cost of living crisis looks like around the world", International Rescue Committee, 7 May 2024. facts only, no text reused. rescue.org
- "Cost-of-Living Adjustments (COLA)", Alberta Teachers' Retirement Fund (ATRF). facts only, no text reused. atrf.com
- "Cost of Living Adjustment for Your Pension OPTrust", optrust.com. facts only, no text reused. optrust.com
- Wikipedia, "Cost of living" (CC BY-SA 4.0), which cites: "Cost of Living Adjustment for Your Pension OPTrust", optrust.com (we also read that source) en.wikipedia.org
- Wikipedia, "Cost of living" (CC BY-SA 4.0), which cites: "Key Pension Updates for 2025 (CPP, OAS, GIS, Payment Dates) - Blueprint Financial", 2025-01-13; "Key Pension Updates for 2025 (CPP, OAS, GIS, Payment Dates) - Blueprint Financial", 2025-01-13; "$400 Increase In CPP/OAS Benefits in February 2025: Who will get this? Check Payment Date - UP Excise Portal", UP Excise Portal, 2025-02-25 (we also read that source) en.wikipedia.org
- "Key Pension Updates for 2025 (CPP, OAS, GIS, Payment Dates) - Blueprint Financial", 2025-01-13. facts only, no text reused. blueprintfinancial.ca
Each numbered sentence above was checked against the source it cites before publication. Sentences citing Wikipedia adapt text from the English Wikipedia article Cost of living (contributors), used under CC BY-SA 4.0; this entry is available under the same licence. Other sources were used for facts only; no text or images are copied from them.
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Sources
Compiled from Wikipedia and the sources listed below. Text from Wikipedia is available under CC BY-SA 4.0; this entry is adapted from it.
- Wikipedia: Cost of living (CC BY-SA 4.0).
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