El Dorado County ranks No. 2 in state purchasing power
SOUTH LAKE TAHOE, Calif. — A study comparing places in the U.S. with the most purchasing power showed that El Dorado County ranked second in California when it comes to residents getting the most mileage from their money.
El Dorado County was edged out of the top spot by Placer County, where the average cost of living was $48,775, the median income was $89,691 and the purchasing power index was 69.69.
Nationally the county ranked 198th out of more than 3,000 counties included in the study.
The county with the highest purchasing power index in the country was Williamson, Tenn., with 100.
The study conducted by SmartAsset, a financial planning company, compares median income and cost of living data to find counties where people hold the most purchasing power. In El Dorado County the average cost of living was $46,922, the median income was $83,377 and the purchasing power index was 65.70.
The study was based on households with one adult and no dependents. One number used in determining a county’s rank was the baseline cost of living in a location and the second was the expenditures typical of someone making the county’s median income in that location. Combining the two numbers using a weighted average based on how close each county’s median income was to the minimum livable income in that area, the study then subtracted income taxes paid in that area.
Finally, the purchasing power in each county was determined using the weighted cost of living as a percentage of median income. The top locations were those with the highest median income relative to the cost of living.
Part of the study’s calculation on cost of living included factors like housing, food, transportation and health care, among other things.
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