Price index tracks cost of living as a student in Ellensburg

Editor's note: This story appears in the latest edition of Voyage Magazine, produced by the CWU College of Business.

Cost-of-living increases affect everyone and can have an especially significant impact on students. The Consumer Price Index (CPI) provided by the U.S. Bureau of Labor Statistics measures the average change in prices paid by consumers for a variety of goods and services. It does not account for the unique costs and services that students experience. To address this gap, the Student Price Index (SPI) project was born.

CWU's College of Business has seen a number of students and faculty participate in the project since it began. Currently, Dr. Yurim Lee, assistant professor of economics, is heading up the team, which includes students Mia Young, Landen Hashimura, and Caden McNair.

To develop the SPI, CWU students were surveyed to collect information about their typical expenditures and spending habits. Costs were determined by visiting businesses in Ellensburg where students would be making the purchases. Costs were used as the baseline to assess future increases or decreases. The initial measurement taken in February 2021 found that while the SPI had actually decreased by 0.2% compared to the month prior, students' housing costs accounted for approximately 42% of their expenditures as compared to 33% for the average U.S. consumer.

We spoke with the SPI team about the project's history, outcomes, and future.

Caden McNair: We have found that the Student Price Index generally tracks similar changes each month as the CPI. The big difference comes from the magnitude of the changes. The CPI in recent months has begun falling, likely due to the Federal Reserve raising interest rates. The SPI has seen similar results however, because the SPI focuses on a basket of goods that are consumed by students. Changing prices in goods such as coffee and take-out food impact students much more than the average American.

Landen Hashimura: I believe that the comparisons of living expenditures for CWU students relative to the nationwide averages highlight the unique needs of students and their financial pressures. For example, the fact that CWU students spend a higher proportion of income on housing compared to the national average while being located in a relatively affordable geographic area shows that students are being financially restricted by cost-of-living expenses.

Mia Young: SPI results highlight the issues that college students have been facing for years. Certain items are inflated in Ellensburg, which can be due to the high demand for certain items such as coffee, beer, and groceries. I believe our results further illuminate the financial struggle college students may face in Ellensburg.

Dr. Yurim Lee: The SPI offers crucial insights into the cost of living for CWU students at the local level, which cannot be captured by the Consumer Price Index. By analyzing the actual expenses that CWU students incur, we can determine the real wage of students working on campus and accurately calculate the real cost of university-related expenses. This information is essential for our purposes, as it provides valuable details about the financial realities that students face.

This project is not only important as a tool to provide information on student expenses specific to CWU, but the faculty involved are also teaching valuable skills to the students who keep the project going.

McNair: For me to participate in the SPI project, I had to learn how to analyze the data we gathered and format it into the monthly reports in a concise and understandable manner.

Hashimura: When I first started working on the SPI project, I was still in the first year of my economics coursework, and seeing the formulas and datasets used for the SPI project intimidated me. Fortunately, the former president of the Econ Club Kaylee Cooper, as well as one of my professors, Dr. Tennecia Dacass, were there to explain in simplified terms what each component of the project was, making it more digestible and less intimidating. I have been fortunate to have mentors such as Dr. Lee who have been able to guide this project during uncertain times (particularly when supply shocks were happening, and we didn't know how to approach incorporating that into the project). Throughout the process of working on the SPI, I have become confident in my ability to use excel for data analysis and explain the quantitative logic for our project.

Young: SPI has provided me with 1:1 mentoring with the best faculty. Although there is a lot of information introduced with SPI, the mentors are there to help break down the complexities of our research.

As the group continues to monitor and make adjustments to the SPI on a monthly basis, the interest in their results increases both on- and off-campus. They believe that there are a number of ways in which the data provided by the SPI could be used for the benefit of not only CWU students, but could also help inform policies at the university-level, and local, state, and national levels.

McNair: The SPI reports could be used by the university to have a better understanding of the cost of living within Ellensburg for a student. This may help to adapt budget decisions within the university as well as help the university understand what kind of aid may be most beneficial to a student's long-term success.

Hashimura: I believe that the SPI can be a blueprint that other schools follow, eventually leading to the nationwide tracking of college cost of living and hopefully result in policies designed to alleviate college financial pressures (room and board standardizations, tuition changes etc.). The data from the SPI can also be used by college towns to better plan their economic activities to best meet the demands of the local population.

Young: Our SPI findings have been available for the Kittitas County Chamber of Commerce to help make policy decisions. I believe that our results can be used in the legislative decision process in Washington state. It is important that those decision-makers are aware how price changes and rent caps can positively impact college students in college towns.

The SPI began as a student project idea and has grown into a valuable tool providing data that can support the improvement of the student experience at CWU and beyond. It has provided a hands-on experience for business students to learn about data collection and analysis, price index and inflation rate calculation, and several other real-world skills that they can apply as they continue their educational journey and when they enter the workforce.