Is Kalamazoo the Best or Worst? The Problems with Ranking Where You Live

By Michael Horrigan

March 16, 2021

It’s only March and already this year Kalamazoo, Michigan – home of the Upjohn Institute – has been named both number one and dead last on national “places to live” lists. In January, an article from Bloomberg ranked Kalamazoo as the “Worst Spot for U.S. Brain Drain …” noting, however, that our “old factory” town might just get a boost from becoming the center for COVID-19 vaccine manufacturing.[1] And I suppose our turnaround was quicker than we may have thought. In February, the fashion website PureWow.com ranked Kalamazoo number one on their list of coolest cities with the lowest cost of living in the U.S.

At the Institute, we spend a lot of time thinking about, researching, and exploring what helps communities thrive – and what opportunities within those communities help individuals thrive, as well. Like everyone else, we feel particularly protective of our home and this drastic change in rankings so close together seemed to present an opportunity to dig into the making of these lists. Here’s what I found:

To create their list, PureWow.com combines cost of living data from the Council for Community and Economic Research with “some qualitative analyses.”[2] The authors say we have the “lowest cost of living composite” on their list and cite our chili cook offs, farmers markets, and arts scenes as evidence that Kalamazoo is a “mid-sized city that packs both a small-town and big-city punch.”[3] There’s lot of subjective judgement on the ‘cool’ factors for their top 10 picks, of course. Being a ‘cool’ town is really in the eye of the beholder and hard to quantify with an index. (Kalamazoo may be cool, but if you don’t like lake effect snows, then …)

But I can comment a little more on the quantitative factors of the PureWow.com list. The cost of living calculations come from the Council for Community and Economic Research (C2ER) which is part of the Labor Market Information (LMI) Institute (Full disclosure: I am on the LMI Institute Board of Directors.) The calculation is based on the simple concept of taking the same basket of goods and services and pricing it in different metro areas of the country to compare the cost of living across areas. This has been sometimes nicknamed the McDonald’s type index that measures the price of a Big Mac at McDonalds across the world.  In the case of this list, you are pricing a much wider array of items (grocery, housing, medical, gasoline, etc.). For example, the same tube of Colgate toothpaste is priced at several locations within an area and then across areas as input to the index.

However, comparing costs of living across areas is a very hard lift. I used to run the cost of living or inflation programs at the Bureau of Labor Statistics. During my tenure, we often discussed the idea of using the same basket across areas for this purpose. Our hesitation was based on the alternative idea that the basket that is most relevant for Bangor, Maine, which naturally would include winter jackets, is not the same as the most relevant basket for San Diego CA, with very different winter outwear to achieve the same level of consumer utility.

The US Bureau of Economic Analysis (BEA), the agency that produces the estimates of Gross Domestic Product (GDP) for the country, also produces cost of living indexes for metropolitan areas. They use BLS price data and their method creates baskets that are relevant for each area.  Of the top 10 cities listed in the PureWow article, Kalamazoo  ranks 5^th lowest, not the lowest – but still a relatively low cost of living city across metro areas.

Now, on to the our “Brain Drain” ranking. It turns out the Bloomberg authors made a critical data misstep that invalidates their comparison. They used American Community Survey to compare data from 2015 to 2019. The problem is that the ACS included both Kalamazoo and Van Buren counties in their 2015 counts and only Kalamazoo county for 2019. When you eliminate an entire county from the comparisons, it is no wonder that the ACS shows a 21 percent population decline between the two years! That certainly sounds like brain drain. However, if you look only at Kalamazoo county between the two years, the population grew by 2 percent. Bloomberg does use other variables in their calculation, but they are all affected by the fact that the source data included Van Buren county in 2015 and excluded it in 2019.[4]

So you might be wondering, what’s the conclusion here? Based on their apple to oranges comparisons, I would ask you to dispel the Bloomberg belief that Kalamazoo is a brain drain city. I do believe there is ample evidence that Kalamazoo is a lower cost city, as PureWow.com suggests.

But are we the “coolest” low-cost city?

As a recent transplant to Michigan, I have come to appreciate the hard-to-measure amenities that contribute to Kalamazoo’s uniqueness and quality of life. We are home to Western Michigan University and Kalamazoo College, a center of research and production in pharmaceuticals, and the Kalamazoo Promise that guarantees paid tuition to attend Michigan colleges and universities for graduates of Kalamazoo public schools.

In addition, we also rank fifth per capita in breweries in the U.S. and first in Michigan. Once you have lived here a bit, you realize that somewhat odd bragging point reflects a vibrant small business scene with great restaurants that is also minutes away from countless rivers and lakes for kayaking, and only an hour from a Great Lake whose beaches rival any ocean city’s.

And as I write this a year into the pandemic, it would be hard not to address the very real point made by Bloomberg about our starring role in putting an end to the COVID-19 virus. This very ‘cool’ low cost-of-living town is indeed extremely proud of the role that Kalamazoo, suburban Portage and the Pfizer corporation have played in the manufacturing and distribution of a critical vaccine. 

At the end of day, I suggest taking all of these lists with a grain of salt.  And from my perspective, there’s no doubt Kalamazoo is a great place to live, and I am sure your town is too.