Last month we released our report, Affordability Eroded: Changes to the Cost of Living in New Hampshire, and held our 10th annual conference, Working Hard and Falling Behind: The High Cost of Living in New Hampshire, which highlighted key data from the report in addition to spotlighting Granite State experts to discuss solutions.
From our social media channels to the halls and rooms of the Grappone Conference Center, we received your questions about the report and wanted to provide answers in this blog.
How is it possible that food and gas prices went DOWN between 2015 and 2024?
There are several reasons why gas and food prices went down in inflation-adjusted dollars between 2015 and 2024. Food and gas prices are more volatile than other expenses due to a variety of factors beyond just the production of these goods and the demand or need for them, including geopolitical conflicts, extreme weather events, and animal disease outbreaks. These events can unexpectedly and quickly reduce the supply of products, which can cause prices to swing dramatically compared to other products that are typically more consistently priced over time.
Due to volatility, the timeframes in which price changes for these products are measured can impact relative cost changes. For example, food prices mostly tracked with the cost of all other consumer products from 2005 to 2019, but around 2019, food prices began to grow faster than the average of all other consumer products. If food price increases were only measured since 2019, the cost of a healthy diet for a family would have likely shown a higher cost; however, because we focused on prices across the whole decade between 2015 and 2024, the cost changes are not as dramatic, and in fact, are lower in 2024 compared to 2015 when adjusting to 2024 dollars. Prices for 2025 overall could be higher, especially for imported foods, once the data are available for the entire year.
We also sought to measure typical costs faced by a household, which means that changes in household behavior over time also mattered in the measurement. For example, the cost of gasoline to a household is not just based on the price of gasoline itself. The average number of miles driven per car dropped between 2005 and 2023, and average vehicle fuel economy increased from about 20 miles per gallon to 27 miles per gallon during the twenty-year period in our analysis. As a result, even as gas prices fluctuated, a household driving the average number of miles in average cars used less gasoline in the most recent data than in 2005.
But didn’t people make less in 2015 than in 2024? How could the 2015 family have so much more money for other expenses than the family in 2024?
New Hampshire’s median household income in 2015 was $70,303. When adjusted for inflation, $70,303 in 2015 dollars becomes $90,434 in 2024 dollars, about $9,000 less than the median household income in 2024. The family in 2015 had so much more money for other expenses than the 2024 family mostly because the median priced single-family house ($241,500) and average interest rate (3.6 percent) were much lower in 2015 than in 2024 ($514,000, 6.2 percent), even when adjusted for inflation to 2024 dollars. The result is that families purchasing a median-priced house in 2024 had an annual mortgage payment that was over $24,000 higher in adjusted dollars than the family in 2015.
Why didn’t you include ______ in the basic costs table?
Our basic costs table was meant to capture essentials that most families with children must pay to survive. While many households experience additional costs, some costs can be skipped or reduced if finances are limited. For example, while not advised, car maintenance can often be delayed, but gas must be purchased to utilize a vehicle. Additionally, while some families may have car loans to pay for every month, other families own their cars outright and do not have payments. Due to that variability among families, we chose not to include car payments in the table.
Another example is clothing. While clothing is an essential need, the cost of clothing can be reduced by thrifting, purchasing on sale or with coupons, receiving hand-me-downs, or repairing damaged items. To align with aspects of as many family budgets as possible, we chose to focus on the most basic necessities in our analysis.
It’s 2025. Why does your report only address costs through 2024?
Several data points for our analysis were derived from the U.S. Census Bureau’s American Community Survey (ACS). The ACS is typically updated annually, with one-year data being released in September and five-year data in December.
Collecting and collating survey data takes time, and as a result, the most recent data from the ACS is always from the previous calendar year. These data provide a “snapshot” for a particular time point and are the most up-to-date and extensive data researchers have to report on trends on a variety of topics, including household income and demographics.
This is all so depressing. What can we do?
The data and policy challenges we presented in our report are complex and multifaceted. Policy solutions to these challenges will be equally complex and multifaceted, and as such, should come from many people and organizations, not just ours. We sought to bring together those voices at our October conference, Working Hard and Falling Behind: The High Cost of Living in New Hampshire.
To read the full report and review a sample of proposed solutions from expert panelists, please visit our conference website.