Analyzing Cost-of-Living and Groceries Indices for 7 U.S. Cities

Abstract

Date of Submission Introduction This paper will analyze the Cost-of-Living Index and Groceries Index for seven U.S. cities, aiming to understand the relationship between these indices. The primary objective of this analysis is to identify how the cost of groceries affects the overall cost of living in these cities. By examining these indices, insights can be gained into the affordability and cost disparities among these urban areas (Numbeo. 2020). Data Collection The data for this analysis was collected from the "Northern America: Current Cost of Living Index by City" webpage, as shown below. https://www.numbeo.com/cost-of-living/region_rankings_current.jsp?region=021 Data Table The table below presents the data for seven selected cities, including their Groceries Index (independent variable) and Cost of Living Index (dependent variable): Scatterplot Check on Excel Analysis The scatterplot and equation of the trend line play a pivotal role in our analysis, shedding light on the intricate cost dynamics within the selected cities. The scatterplot primarily aims to visually represent the relationship between the Cost of Living Index and the Groceries Index. In this context, a small but noticeable negative correlation is observed (Numbeo, 2020). There is a clear association between increases in the Cost of Living Index and a decrease in the Groceries Index. This negative correlation is corroborated by the trend line's equation, which indicates a negative slope of -0.0817. This implies that a minor increase in the Cost of Living Index is associated with a slight decrease in the Groceries Index. It is important to note that while this relationship is statistically significant, it may still be relatively weak. Furthermore, the low R-squared value of 0.0948 strengthens this observation. This value suggests that approximately 9.48% of the total variance in the Cost of Living Index can be explained by variations in the Groceries Index. It is evident that this relationship, while present, is not particularly strong, and there are other factors contributing to the overall cost of living in these cities that are...