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The Ogden Independent
Living Standard
2016
i
By Jennifer Gnagey, Ph.D.
Weber State University, Assistant Professor of Economics
Daniel Brinkerhoff, B.S.
Weber State University Graduate, B.S in Business Economics
Michael Rodgers
Weber State University Graduate, B.S in Quantitative Economics
Title picture courtesy of Ogden City.
https://visit-ogden.s3.amazonaws.com/pages/3/25th_high_res_file___hero.jpg
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Prepared for Cottages of Hope
Cottages of Hope, an Ogden Utah based nonprofit, exists to inspire individuals and households to realize their potential by providing meaningful programs and services, at no cost, that empower them to achieve greater levels of financial stability. Since 2008, we have offered programs and services that focus on helping households increase income, decrease monthly expenses, improve credit, and learn basic money management skills. Our services include career and financial coaching, as well as free tax preparation, matched savings programs, expungement assistance, computer access, connections to local community resources. For more information on our organization, please visit www.cottagesofhope.org. In 2014 we studied and then implemented the evidence based “SparkPoint” model of service delivery used by multiple community partners in the San Francisco Bay Area (www.uwba.org/sparkpoint). This one stop shop approach involves bundling strategic services by multiple community partners in one physical location. Studies show that when two or more key services are bundled, the client is 3-4 times more likely to achieve a financial goal. The ultimate goal of the model is to help individuals end poverty for their household. SparkPoint Centers focus primarily on helping households achieve four main objectives.
1) Achieve a Livable Wage 2) Decrease Debt-To-Income Ratio below 40% 3) Obtain a 650+ Credit Score 4) Reach 3 to 6 Months of Personal Savings.
The last three objectives are straight forward calculations that can easily be derived for each household. The Livable Wage objective is a little more difficult, especially since it is tied to the make up their household budgets. A Livable Wage standard implies that a household has enough income to pay monthly bills without assistance from outside resources. We also feel that this standard should include an allowance for entertainment and personal savings for households with a reasonably thrifty budget of basic needs. To determine an objective standard that we can use as a guide and benchmark for our clients, we requested the assistance of Dr. Jennifer Gnagey of the Economic Department at Weber State University to study the significant cost structure of the typical household here in the Ogden area. Cottages of Hope is pleased with the results of the study and we are extremely grateful for Dr. Gnagey, her staff, and Weber State University for their support of our efforts to help households achieve greater levels of financial stability.
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Acknowledgements
The realization of this report would not have been possible without the help of many hands. First and
foremost, I would like to thank my coauthors and former students, Daniel Brinkerhoff and Michael Rodgers. Their
impressive and largely independent work has been invaluable for the completion of this project.
Second, I would like to thank the funders who generously paid for the hard work of my coauthors. The
largest source of funding was provided by the Alan E. and Jeanne N. Hall Endowment for Community Outreach
administered by the Weber State University Center for Community Engaged Learning (CCEL). Additional funding
was provided by the Weber State Center for the Study of Poverty and Inequality directed by Dr. Mike Vaughan, and
the Weber State Economics Department.
Third, I would like thank the Executive Directors of Cottages of Hope, Jeremy Botelho and Chris Swaner.
They gave the spark to start this project, and they provided encouragement and guidance at every step of the way.
Thank you for the thought you have given this project, and thank you for making time for meetings and discussions.
A big thanks for coming out to Weber State to speak with my Labor Economics class and listen to my students’
presentations. This type of learning experience is priceless. I would also like to thank Debbie Sheldon at the
Department of Workforce Services for her input and feedback as well.
Fourth, I would like to thank all of the students in my 2016 spring semester ECON 3400 Labor Economics
class. Their efforts to create the first draft of this report from scratch are appreciated by my coauthors and me, and
will be appreciated by many future ECON 3400 classes. A special thanks to Jacob Hatch for inventing the title
“Ogden Independent Living Standard.”
Finally, we have created this report by standing on the shoulders of two giants who have pioneered the self-
sufficiency approach to measuring poverty. First, this report borrows heavily from the methods and structure of the
Self-Sufficiency Standard reports produced by Dr. Diane Pearce and her colleagues at the University of Washington’s
Center for Women’s Welfare. We also acknowledge the pioneering work in this field of the MIT Living Wage
project led by Dr. Amy K. Glasmeier.
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Executive Summary
The Ogden Independent Living Standard is part of a movement to find a more accurate measure for
poverty. The main goal of this report is to answer the question “With careful planning and a modest budget,
what does a family living in Ogden City need to earn so that they can live without government or private
assistance?”
The Ogden Independent Living Standard adjusts for different family sizes ranging from a single
adult to a two adult five children family and five different family age compositions including infants to adults
totaling at 74 different family types.
For each of these family types, the Independent Living Standard researched typical costs in the
following categories:
1. Housing
2. Childcare
3. Food
4. Transportation
5. Healthcare
6. Entertainment
7. Miscellaneous
8. Savings
Taxes and credits are utilized to better estimate the gross income needed to allow net income to
cover all expenses. Many households may qualify for lower taxes or additional credits based on the specifics
of their family. To make the Independent living standard a general document, only the widely accessible
credits and tax reductions were used.
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Taxes were calculated using the most favorable filing status, taking advantage of increased
exemptions with increased family size, and using the following state and federal credits when applicable:
1. Child Care Tax Credit
2. Child Tax Credit
3. Additional Child Tax Credit
4. Earned Income Tax Credit
5. Utah Taxpayer Tax Credit
The Independent Living Standard focuses on the Ogden City area, using data that is as specific as
possible. This allows the estimates to be specifically useful as an upper bound on poverty levels that is a
better representation than current federal poverty standards. The purpose of the Independent Living
Standard is to provide a stationary goalpost that can be used by struggling families to help them get out of
poverty and act as an example for families to determine which costs could be lowered using a budget.
Below is an example of a few representative family types:
Family Type Gross Income
1 Adult $21,999
1 Adult 1 Preschooler $31,688
1 Adult 1 Preschooler 1 Schoolager $43,121
2 Adult 1 Preschooler 1 Schoolager $51,993
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Table of Contents Prepared for Cottages of Hope. ....................................................................................................... ii
Acknowledgements ..................................................................................................................... iii
Executive Summary ..................................................................................................................... iv
Introduction .............................................................................................................................. 3
Section 1: Cost Categories ............................................................................................................. 4
Cost Overview ....................................................................................................................... 4
Housing ................................................................................................................................ 4
Childcare .............................................................................................................................. 4
Food .................................................................................................................................... 5
Transportation ........................................................................................................................ 5
Healthcare ............................................................................................................................. 6
Entertainment ........................................................................................................................ 6
Miscellaneous ......................................................................................................................... 6
Savings ................................................................................................................................. 7
Section 2: Taxes ......................................................................................................................... 8
Tax Overview ........................................................................................................................ 8
Taxes and Credits .................................................................................................................... 8
FICA ................................................................................................................................... 9
Utah Tax .............................................................................................................................. 9
Section 3: Comparison to The Colorado Self Sufficiency Standard ............................................................ 10
Conclusion .............................................................................................................................. 10
Section 4: Methodology ............................................................................................................... 12
Overview ............................................................................................................................. 12
Housing ............................................................................................................................... 12
Childcare ............................................................................................................................. 13
Food ................................................................................................................................... 13
Car Insurance ........................................................................................................................ 15
Car Ownership ...................................................................................................................... 15
Employer Sponsored Health Insurance .......................................................................................... 17
Out of Pocket Healthcare Costs .................................................................................................. 17
Entertainment ....................................................................................................................... 18
Miscellaneous ........................................................................................................................ 19
Savings ................................................................................................................................ 19
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Taxes .................................................................................................................................. 20
References ............................................................................................................................... 21
Appendices .............................................................................................................................. 23
Appendix I: Assumptions .......................................................................................................... 23
Appendix II: Marketplace ......................................................................................................... 28
Appendix III: Public Transportation Data ...................................................................................... 29
Appendix IV: Other Benchmarks ................................................................................................ 30
Appendix V: Maps .................................................................................................................. 34
Appendix VI: Future Work and Expansions .................................................................................... 37
Appendix VII: Data Table ......................................................................................................... 39
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Introduction
The Ogden Independent Living Standard is part of a movement to find a more accurate measure for
poverty. The main goal of this report is to answer the question “With careful planning and a modest budget,
what does a family living in Ogden City need to earn so that they can live without government or private
assistance?”
To achieve this goal, the Independent Living Standard researched Ogden City residents’ spending
on housing, childcare, food, transportation, healthcare, entertainment, miscellaneous expenses, and savings
using local data when possible. For maps of the various data regions, see Appendix V. Then, the gross
income necessary to bring their after tax income high enough to cover all of their costs was calculated.
Taxes are minimized using all credits and deductions available to the standard household. However,
individual households may qualify for additional tax benefits. Examples include benefits for energy
efficiency credits, education credits, itemized deductions, and adoptions/foster care, as well as reduced
taxes on income gained from investments.
The Independent Living Standard was developed using 74 different family types and compositions.
It ranges from a single adult living alone to a two adult household with 5 children of various ages. It includes
4 different age categories for children ranging from infant to teenager and adjusts the total costs for each
child’s age. For example, an infant has to go to a child care center while a teenager is capable of taking care
of themselves while the parent is at work.
Every family is unique and no possible combination of adults and children will ever paint a full
picture, but the Independent Living Standard acts as a framework that can be used to gauge financial well-
being.
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Section 1: Cost Categories
Cost Overview
The basis of the Ogden Independent Living Standard is that an individual needs to be able to live in
Ogden City without government assistance. To accomplish this, the cost of living in Ogden needed to be
determined. Below are the eight categories of spending: housing, childcare, food, transportation, healthcare
costs, entertainment, miscellaneous, and savings. The Independent Living Standard prioritized local data
when it was available.
Housing
Housing cost is the average rent and basic utilities a person or family will have to spend on an
apartment in Ogden according to the U.S. Department of Housing and Urban Development’s Fair Market
Rents Report, which are set at the 40th percentile. This report did not examine the costs of owning a home,
however, individuals who do own a home can compare their mortgage payments to the rental costs.
Though there is a miscellaneous cost category in this report, it may not be large enough to cover the
maintenance costs of a house.
Lastly, as a family grows larger, they require more space. This report assumes that parents and
children do not share bedrooms, but two children will share a bedroom when possible.
Childcare
This section addresses the cost of sending a child younger than thirteen to center care. Center care
is a non-residential childcare facility that is licensed and state regulated. Cost estimates are averages
reported by Weber State University’s Care About ChildCare.
The cost has been adjusted for differing hours of childcare needed during the school year and during
the summer. Teenagers are not counted as needing any center care services and do not take care of younger
siblings. As such, their costs are calculated as zero for this report and they do not lower the center care
price for younger siblings. Individual families may reduce childcare costs by using grandparents as
babysitters, having a stay-at-home parent, or some other method. These methods are not addressed because
they are specific to each family.
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Food
The Ogden Independent Living Standard uses the U.S. Department of Agriculture's Low-Cost Food
Plan as a basis for its food costs. The Low-Cost Food Plan estimates the national food consumption cost for
varying ages and is adjusted for different family sizes. It assumes a healthy and nutritious diet which means
the cost estimates include higher consumption of vegetables, fruits, milk products, and contains less fats,
oils, sweets and other such products as compared to average consumption that was actually observed.
According to Feeding America’s Map the Meal Gap, Ogden’s food prices are approximately 7%
cheaper than the national average. This ratio was used to adjust the Food Plans from national levels to the
Weber County level.
The Low-Cost Food Plan is the second to lowest plan which covers the 25th to 50th percentile of
the population. This plan represents costs that would be incurred by a family who are actively paying
attention to their food costs while not forcing them to purchase the cheapest available foods. It does not
include eating out, as those expenses are better attributed to the entertainment category.
Transportation
Transportation costs are divided into three categories: purchasing a car, car maintenance, and
insurance. Public transportation is not considered here because there is low usage among Ogden Residents.
The data collected on public transportation costs can be found in Appendix III.
The cost of purchasing a car were calculated using averages of several of the most popular used
passenger cars sold in Ogden as reported by the Utah State Tax Commission, the typical car is a 2007 sedan
with basic features and costs $5,341, which is financed over 36 months. Additionally, the car is driven
14,716 miles annually based on the National Household Travel Survey and will last 6 years after it is purchased.
Each adult is assumed to have their own car.
The maintenance cost is derived from an estimated cost of gasoline, estimated registration per year,
and a general maintenance average from the Bureau of Labor Statistics for a car of the appropriate age.
Lastly, car insurance. It is assumed that there is no reduction in premiums for an additional car and
that the driver has liability insurance and a personal injury protection, which is the minimal required by law.
Estimates are from the National Association of Insurance Commissioners.
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Healthcare
Health care costs include employer sponsored health insurance and out of pocket costs. For health
insurance, it is assumed that there is no interruption in coverage and that a family has only one plan. The
insurance premium estimates are averages of the Ogden-Clearfield metropolitan area collected by the
Medical Expenditure Survey.
Individuals who purchased health insurance from the Healthcare Marketplace are considered in
more detail in Appendix II.
Out of pocket costs are healthcare related expenses such as deductibles, copayments, and any other
cost not covered by insurance. Estimates are based on median expenditures as reported by the Medical
Expenditure Survey. The median was chosen over the average because the median eliminates high costs
incurred through disabilities and major diseases.
This estimate has the widest variance of all of the categories. Many people spend nothing on out of
pocket health care, most people spend some on out of pocket healthcare, and a few spend a very large
amount on out of pocket health care. Additionally, it was found that the median women costs 28% more
than the overall median and the median man costs 25% less than the overall median. This is another example
of how wide the variance tends to be.
Entertainment
The goal of the Independent Living Standard is to provide a comfortable living standard. As such, it
was necessary to include an entertainment category because it is unrealistic to expect a family to forgo all
entertainment indefinitely. The Consumer Expenditure Survey collects data on entertainment spending based
on household size and income levels at the national level. This data was utilized to create a suggested
entertainment expense.
Miscellaneous
As a final catch all, the Independent Living Standard contains a Miscellaneous Category. It consists
of clothing, personal care products (shampoo, toothpaste, etc.), housekeeping supplies, and all other not-
included items. The Consumer Expenditure Survey collects data on these categories of spending based on
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household size and income levels at the national level. This data was utilized to create an approximate
miscellaneous expense.
Savings
Savings are a crucial part of being independent because they smooth out fluctuations in costs and
income and prevent the need to use government assistance. More importantly it prevents the need to get a
loan from friends and family, and eliminates the need for any payday loans or other extremely expensive
short-term loans.
1% of gross income has been chosen as a starting point to start accumulating savings, but this level
should be increased when possible. Additionally, many of the costs in the other categories are yearly costs
regardless of how often they need to be paid. This means that if a year goes by and there are no required
maintenance costs for a car, then those costs are saved because maintenance costs in the following year will
likely be higher than average.
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Section 2: Taxes
Tax Overview
To make the most of one’s financial resources, it is important to take all tax credits and benefits
into account. The following is a detailed description of how taxes work and the various credits necessary to
live by the Ogden Independent Living Standard.
Taxes and Credits
Typically households with earned income have some tax liability. However, there are deductions,
exemptions, and credits that can be used to reduce or eliminate taxes owed. In some cases, these tax
benefits offset the entire amount of taxes owed and could even lead to a refund for the taxpayer, giving a
household additional income.
Households gain exemptions and deductions based on occupancy and filing status. The more people
in a household, the more exemptions they gain. Exemptions and deductions reduce taxable income.
After taxes are calculated, credits can be used to reduce the amount of taxes owed by a household.
Most credits are non-refundable, meaning that they can reduce taxes owed to zero but not below. Some
taxes are refundable, meaning that the household can actually receive a tax refund without having to
actually pay any taxes at all. Examples of refundable credits are the Additional Child Tax Credit and the
Earned Income Tax Credit.
The Ogden Independent Living Standard uses the following credits:
Child Care Tax Credit: Households that earn below a specific threshold can gain a non-refundable tax
credit for some of their childcare costs. In this report, it applies to a portion of the day care costs, and as
such, does not apply to households without children or to households with only teenagers.
The Child Tax Credit (CTC): This non-refundable credit applies to households with dependent children
under the age of 17, and could be as high as $1,000 per qualifying child.
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The Additional Child Tax Credit: This refundable tax credit is based on the Child Tax Credit. It is
applicable to families with a low enough tax liability that they could not utilize the full amount of the CTC.
The Additional Child Tax Credit can be as high as the entire unused CTC amount.
The Earned Income Tax Credit (EITC): This refundable tax credit starts at zero, increases as the
household income increases to a point, then decreases at higher levels of income. It positively adjusts its
payout based on increased family size and filing status up to three children.
The Premium Tax Credit: This only applies to households that purchased health insurance from the
Health Insurance Marketplace. A description and explanation can be found in the Appendix II.
FICA
The Federal Insurance Contributions Act (FICA) is a federal payroll tax that removes a flat
percentage of one's income. This tax is collected by the employer and shows up on pay stubs in the form of
Social Security (6.2% of income) and Medicare (1.45% of income). FICA is different from the other taxes
in that there are no deductions, exemptions, or credits that can be applied to reduce the tax owed. Taxes
are calculated based solely on gross income without regard to family composition.
Utah Tax
The Independent Living Standard accounts for Utah income tax and sales tax. Sales tax is included
in the relevant categories. On the state income tax form, an individual may be able to claim the Taxpayer
Tax Credit as well as the Health Benefit Plan Credit. The latter will be discussed in Appendix II. The
Taxpayer Tax Credit essentially creates a progressive tax system. Meaning that there is a phase out period
where an individual may no longer utilize the credit if they are making more than a certain amount.
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Section 3: Comparison to The Colorado Self
Sufficiency Standard
The Ogden Independent Living Standard borrows heavily from the methods, assumptions, and
formatting of the Colorado Self Sufficiency Standard (Pearce 2015). However, The Independent Living
Standard found it necessary to deviate for various reasons at various points.
First, a few differences in assumptions. The Independent Living Standard includes the cost of
acquiring a vehicle. This means that there is an additional car payment and sales tax paid. The difference
being that the Colorado Report assumes an individual or family already owns a vehicle. In the Colorado
Report, childcare is comprised of center care and family care. Due to a low utilization of family care in
Ogden city, the Independent Living Standard uses center care costs only.
Second, notable calculation differences. The Colorado Report uses metropolitan area fair market
rents and then adjusts them using median gross rents for towns from the American Community Survey. The
Independent Living Standard uses small area fair market rents which are calculated based on zip codes.
Then, instead of using state level employer sponsored healthcare data like the Colorado Report, the
Independent Living Standard uses metropolitan area data. Finally, The Independent Living Standard’s
miscellaneous cost category is based on the Consumer Expenditure Survey rather than ten percent of the
total cost category.
Third, changes to categories. The Colorado Report does not include an entertainment cost
category, while the Independent Living Standard does.
Conclusion
The Ogden Independent Living Standard’s goal is to create a modest, well-planned budget that
allows individuals and households to be independent of government and private assistance without being
stringent. To create the budget, eight cost categories were computed to give a general idea of the cost of
living in Ogden City. Then, taxes were minimized using the deductions and credits typically available.
Lastly, the Independent Living Standard is a benchmark as it is impossible to adequately represent every
family type. Below is the Ogden Living Standard broken-down for four representative family types. The
standard for all 74 family types can be found in Appendix VII.
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One Adult One Adult, One Preschooler
One Adult, One Preschooler, One Schoolager
Two Adults, One Preschooler, One Schoolager
Monthly Costs Costs % of total Costs
Costs % of total Costs
Costs % of total Costs
Costs % of total Costs
Housing
$7,104 39.1% $9,096 30.7% $9,096 23.4% $9,096 19.5%
Childcare
$0 0.0% $6,105 20.6% $11,549 29.7% $11,549
24.7%
Food
$3,028 16.7% $4,425 14.9% $6,660 17.1% $8,867 19.0%
Car Insurance
$466 2.6% $466 1.6% $466 1.2% $931 2.0%
Car Maintenance
$3,290 18.1% $3,290 11.1% $3,290 8.5% $6,579 14.1%
Health Insurance $1,406
7.7% $2,592
8.8% $3,412
8.8% $3,412
7.3%
Out of Pocket Costs
$108
0.6% $139
0.5% $232
0.6% $340
0.7%
Entertainment
$1,139 6.3% $1,496 5.1% $1,650 4.2% $2,379 5.1%
Miscellaneous
$1,614 8.9% $1,991 6.7% $2,541 6.5% $3,516 7.5%
Total Expenses
$18,154 $29,599 $38,895 $46,669
Savings $220 $317 $431 $520
Federal and State Credits and Total Taxes
Taxes Before Credits
$3,656 $5,517 $8078 $9,164
Earned Income Tax Credit
($0)
($1,192)
($280)
($0)
Child and Additional Child Tax Credit
($0)
($1,000)
($2,000)
($2,000)
Child Care Tax Credit
($0)
($780)
($1,200)
($1,200)
Utah Tax Credit ($471) ($772) ($804) ($1,159)
Total Taxes After Credits
$3,185
$1,773 $3,794 4,805
Independent Living Wage
Hourly*
$10.58 $15.23 $20.73 $25.00**
Monthly**
$1,833.25 $2,640.67 $3,593.42 $4,332.75
Annual $21,999 $31,688 $43,121 $51,993
* Hourly wage is annual wage divided by 2080, or 40 hours a week. ** Two adult households can reduce hours worked or hourly wage by splitting work between both adults *** Monthly wage is annual wage divided by 12.
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Section 4: Methodology
Overview
The purpose of the methodology section is to supply the reader with enough information to
recreate the estimates found in this report or act as a guideline to create a similar report for other areas or
update existing ones.
These sections will contain all data methods, citations, and assumptions used in the Ogden
Independent Living Standard. Appendix I also contains a full list of itemized assumptions.
Age Categories:
1. Infants 0-2 years old
2. Preschoolers 3-5 years old
3. Schoolagers 6-12 years old
4. Teenagers 13-18 years old
5. Adult 19+ years old
Housing
Housing costs are calculated based on number of bedrooms using U.S. Department of Housing and
Urban Development’s Fair Market Rents Report, which are set at the 40th percentile1. Number of Bedrooms
required was based on the following Assumptions:
1. Parents and children do not share a bedroom
2. Two children to a bedroom
3. Single adults and a married couple without children are single bedroom families
4. Families with one or two children have two bedrooms
5. Families with three or four children require three bedrooms
6. Families with five or six children require four bedrooms
1 U.S. Department of Housing and Urban Development. (2016). FY2016 Hypothetical Small Area FMR. Retrieved from huduser.gov:
https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html
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Values were found for Zip Codes that contain parts of Ogden City and were averaged without
weighting in any way. The Zip Codes used are: 84401, 84403, 84404, 84405, 84408.
Childcare
Center child care costs in Ogden were calculated using data from Care About Childcare at Weber
State University for both family care and center care2. Within Utah, center child care has a higher usage3, so
the Independent Living Standard does not take family care costs into consideration. The difference being
that center child care facilities tend to be larger and more resemble preschools while family child care
centers are based out of a person’s home. The costs were calculated based on the following assumptions:
1. Teenagers are able to take care of themselves (and are not included in the costs.)
2. Teenagers will not take care of younger siblings.
3. When costs were reported for age groups that were narrower than those used for the Independent
Living Standard, costs were averaged within the age group.
4. The average cost was weighted according to the child being in school (75% of the year) and out of
school (25% of the year).
5. School age has been modified to include five year olds that are in kindergarten. As such, the costs
are weighted with kindergarten getting 1/7 because it is 1/7 of an elementary school.
Food
Household food expenditure is based on the USDA’s Low-Cost Food Plan4, which is based on food
expenditures by the 25th to 50th percentile of the population, and data is retrieved from USDA Food Plans:
Cost of Food5. Reports from November 2015 to April 2016 were averaged to limit random variation.
Original data was categorized by age and after 12 years old it also separates genders. Genders were
2 Care About ChildCare-Weber State University. (2015). Average Cost in Center Child Care. Ogden: Weber State University. Retrieved from
Programs.weber.edu/cac 3 Health Indicator Report of Child Care Numbers of Facilities. (2015, October 15). Retrieved July 11, 2016, from
https://ibis.health.utah.gov/indicator/view/ChiCarFacCap.html 4 Carlson, A., Lino, M., & Fungwe, T. (2007). The Low-Cost, Moderate-Cost, and Liberal Food Plans, 2007 (CNPP-20). U.S. Department of Agriculture, Center for
Nutrition Policy and Promotion. 5 United States Department of Agriculture, Center for Nutrition Policy and Promotion. (2016). USDA Food Plans: Cost of Food, November 2015-April 2016.
Retrieved from http://www.cnpp.usda.gov/USDAFoodPlansCostofFood/reports
14
averaged together, and ages were made to fit the age categories as closely as possible. The age categories
actually used in this section are as follows:
1. Infant: 0-1 years old
2. Preschooler: 2-5 years old
3. School-age: 6-13 years old
4. Teenager: 14-18 years old
5. Adult: 19-50 years old
Family costs comprise of the individual cost of each person summed together and adjusted for
family size using the methods in Economies of Scale in the Food Stamp Program6 where the larger families spend
less per person on food costs in the following way:
1. 1-person families cost 20 percent more
2. 2-person families cost 10 percent more
3. 3-person families cost 5 percent more
4. 4-person families have no adjustment
5. in 5 or 6-person families cost 5 percent less
6. 7 (or more)-person families cost 10 percent less
This creates a national average which is then adjusted to local levels using Map the Meal Gap’s7 index.
Map the Meal Gap creates an index for Weber County that takes local food prices and tax rates into
consideration and compares them to national food costs. The Weber County Index is .93 which represents
Weber County food costs approximately 7% less than the national average.
Due to the cost of food index being originally created using the USDA’s Thrifty Food Plan instead
of the Low-Cost Food Plan, we must assume that on the local level relative costs do not differ between the
Thrifty Food plan and the Low Cost Food Plan.
6 Nelson, Lyle. Beebout, Harold. Skidmore, Felicity. United States Department of Agriculture (1985) “Economies of Scale in the Food Stamp Program” 7 Dewey, A., Engelhard, E., Gundersen, C., Kato, M., Satoh, A. (2015). Map the Meal Gap 2015: Technical Brief. Feeding America.
15
Car Insurance
Average costs for liability Insurance in Utah are given by the National Association of Insurance
Commissioners in the Auto Insurance Database Report 2012/20138. Liability insurance was chosen as it is the
lowest cost insurance available. The given liability insurance estimates for Utah include personal injury
protection as required by state law.
To calculate car insurance, it was assumed that:
1. One car per adult.
2. No reduction for additional cars.
Car Ownership
In order to create the basic car, a make, model, year, and features were needed. To avoid an
arbitrary decision, three of the cheapest makes and models of the five most commonly sold used passenger
cars in Utah9, along with the most registered year statewide10, were averaged to create a purchase price as
given by the Kelley Blue Book11. For a car of that year, Kelley Blue Book estimates that the car will have
104,000 miles on it, which is lower than the Independent Living Standard’s estimated 14,716 miles a
year12.
The following is the arrived upon assumption for the basic car:
1. Year, 2007
2. Miles, 104,000
3. Basic Features
4. Price. $5,341
8 Auto Insurance Database Report 2012/2013 (Rep.). (2015). Retrieved July 11, 2016, from National Association of Insurance Comissioners website:
http://www.naic.org/documents/prod_serv_statistical_aut_pb.pdf 9 Utah State Tax Commission. (2016). Passenger and Light Truck [Data File]. Retrieved from http://tax.utah.gov/econstats/mv/used-sales 10 Utah State Tax Commission. (2016). Current Registration [Data File]. Retrieved from http://tax.utah.gov/econstats/mv/registrations-2010 11 Kelley Blue Book - New and Used Car Price Values, Expert Car Reviews, Kbb.com. http://www.kbb.com/ 12 U.S. Department of Transportation:Bureau of Transportation Statistics. Vehicle miles traveled and vehicle trips by State (2009). [Data File]. Retrieved from
http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/subject_areas/national_household_travel_survey/vehicle
16
5. MPG, 26
The price of the car is based off of the suggested retail price for a used car dealership. The car is
purchased using finance estimates from Kelley Blue Book13. It was financed for 3 years at 4.44% APR which
amounts to $373.64 of finance costs. Sales tax is paid by the purchaser when the car is first titled and
registered at the local sales tax rate14. The Weber County sales tax rate is 7.1%15 and the tax expense was
averaged across the life of the vehicle. The monthly payments were annualized and averaged across the life
of the vehicle (6 years). The life of the vehicle was assumed to be approximately 200,000 miles which
amounts to approximately a 6 year life.
The estimated 14,716 miles driven per year is calculated from the 2009 National Household Travel
Survey’s Vehicle miles traveled and vehicle trips by State16 table by averaging the urban and suburban miles
driven per weekday and multiplying that average by 313 days, which represents driving the average 6 days a
week. The assumption being that over the course of two weekend days, the miles driven is equal to one
weekday’s miles driven. In equation form,
[ { (Daily Suburban miles traveled)+(Daily Urban miles traveled) }/2 ]*(313)
The price of gasoline was set at $2.75 due to high fluctuations in price. Registration prices come
from a DMV employee but change based on year of car and may change year to year. Safety and emissions
are not required all years and change based on specific car type. As such, a simplifying assumption that
emissions were needed every year, but safety was never needed, was used. Price of an emissions test was
found by calling local businesses that provide this service; all businesses quoted the same price of $23.
Maintenance cost estimates from Americans’ Aging Autos17 based on age of vehicle and averaged throughout
the vehicle's life.
Finally, one adult families use one car and two adult families use two cars. As a simplification, the
second car is not treated any differently in miles driven or cost than the first car. Public transportation was
13 Car Loans & Financing - Kelley Blue Book. (2016). Retrieved July 18, 2016, from http://www.kbb.com/car-loans-and-financing/?anchor=calculator 14 Utah DMV, Responsibilities of Buyer and Seller. Retrieved from http://dmv.utah.gov/buying-selling/responsibilities#salestax 15 Weber County, UT Sales Tax Rate. Retrieved from http://www.sale-tax.com/WeberCountyUT 16 U.S. Department of Transportation:Bureau of Transportation Statistics (2009). Vehicle miles traveled and vehicle trips by State [Data File]. Retrieved from
http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/subject_areas/national_household_travel_survey/vehicle 17 Pfirrmann-Powell, Ryan. (2014). Americans’ Aging Autos. Bureau of Labor Statistics, Beyond The Numbers, May 2014 Vol.3 No.9. Retrieved from
http://www.bls.gov/opub/btn/volume-3/americans-aging-autos.htm
17
not used because of its low utilization in the Ogden City area as a means to commute to work18. However,
Appendix III looks into the costs of public transportation as an alternative to car ownership.
Employer Sponsored Health Insurance
The assumptions:
1. There is no interruption in coverage.
2. A single adult gets the ‘Single Plan,’ two person household gets the ‘employee-plus-one’ plan, and
all others get the ‘family plan.’
3. Each family has only one plan.
Employer sponsored health insurance premiums are from the Medical Expenditure Survey’s Table
IX.A.2(2014): Average Total Premiums and Employee Contributions19. This table gives data specific to the
Clearfield-Ogden Metropolitan area and is from 2014.
Out of Pocket Healthcare Costs
Out of Pocket Healthcare costs include deductibles, copayments, and any other cost not covered by
insurance. Because local level data is unavailable, the median national expenditure reported by the Medical
Expenditure Survey20 was used. The median was chosen as it represented the best measure of central tendency
because it excluded the higher outliers that substantially increase the averages to above what a typical family
would expect to spend.
The Medical Expenditure Survey provided data on median overall costs for the population who had an
expense as well as the percentage with an expense. The Independent Living Standard reintroduced the part
of the population without an expense in the following way:
18 U.S Census Bureau. (2014). Commuting Characteristics by Sex 2010-2014, American Community Survey 5-Year Estimates [Table]. Retrieved from
https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_14_5YR_S0801&prodType=table 19 Agency for Healthcare Research and Quality: Medical Expenditure Survey. (2016). Table IX.A.2(2014): Average total premiums and employee contributions
(in dollars) for private-sector establishments for areas within States: United States, 2014 [Data Table]. Retrieved from https://meps.ahrq.gov/mepsweb/data_stats/quick_tables_results.jsp?component=2&subcomponent=2&year=-1&tableSeries=9&searchText=&SearchMethod=1&Action=Search 20 Agency for Healthcare Research and Quality: Medical Expenditure Survey. (2016). Table 1: Total Health Services-Median and Mean Expenses per Person
With Expense and Distribution of Expenses by Source of Payment: United States, 2013 [Data Table]. Retrieved from https://meps.ahrq.gov/mepsweb/data_stats/quick_tables_results.jsp?component=1&subcomponent=0&year=2013&tableSeries=-1&searchText=&searchMethod=1&Action=Search
18
(Median Overall Costs)*(percent of population with an expense) +
(0)*(percent of population without an expense) =
(Adjusted Overall Costs)
This new estimate is for all individuals instead of only individuals with an expense. The data was
broken down into age ranges (Under 5, 5-17, 18-44), which allowed the costs to be adjusted accordingly.
The Medical Expenditure Survey also has data on the source of payments for the overall costs. The following
calculation was used to find the out of pocket costs:
(Adjusted Overall Costs)*(Percentage of costs paid by Out of Pocket source) =
(Median Yearly out of pocket costs)
This final estimate represents the annual median out of pocket expense for an individual. Then, to
create the household estimates the individuals were aggregated based on their composition.
Entertainment
The Consumer Expenditure Survey21 collects data on household size and entertainment expenditure at
the national level and categorizes based on income before taxes. Gross income was decided for each family
size using the Independent Living Standard and the entertainment expense was pulled directly from the
Consumer Expenditure Survey without any adjustments for location or family composition.
The chosen gross income by family size:
1 person families used the 15,000 to 19,999 range
2 person families used the 20,000 to 29,999 range
3 person families used the 30,000 to 39,999 range
21 Bureau of Labor Statistics (2014). Table: 3403, 3423, 3433, 3443, and 3453.Size of Consumer Unit by income before taxes: Average annual expenditures and
characteristics, Consumer Expenditure Survey, 2013-2014 [Data Table]. Retrieved from http://www.bls.gov/cex/tables.htm
19
4 person families used the 50,000 to 69,999 range
5+ person families used the 50,000 to 69,999 range
Miscellaneous
The Consumer Expenditure Survey22 collects data on household spending on apparel, personal care
products (shampoo, toothpaste, etc.), housekeeping supplies, and miscellaneous expenses. This data is
collected at the national level and by household size and gross income before taxes. Gross income was
decided for each family size using the Independent Living Standard and the Miscellaneous Cost Category is
the sum of the 4 areas of spending listed above without adjustments for location or family composition.
The chosen gross income by family size:
1 person families used the 15,000 to 19,999 range
2 person families used the 20,000 to 29,999 range
3 person families used the 30,000 to 39,999 range
4 person families used the 50,000 to 69,999 range
5+ person families used the 50,000 to 69,999 range
5+ person families that have a calculated gross income of 70,000+ used the 70,000+ range
Savings
Savings are calculated as 1% of an individual's or family’s gross income. The percentage was chosen
as a starting point to saving and was suggested by Cottages of Hope as a reasonable rate for the clients they
serve.
22 Bureau of Labor Statistics (2014). Table: 3403, 3423, 3433, 3443, and 3453.Size of Consumer Unit by income before taxes: Average annual expenditures and
characteristics, Consumer Expenditure Survey, 2013-2014 [Data Table]. Retrieved from http://www.bls.gov/cex/tables.htm
20
Taxes
Taxes were calculated by filling out the appropriate form23 for state and federal income taxes and
the applicable credits. Then, formulas were created in Excel to replicate the forms. Below is a list of the
required tax forms. FICA taxes are calculated as 7.65% of gross income.
Income Tax Forms:
1. Federal 1040 Form
2. Utah Income Tax TC-40
Federal Credits used:
1. Child Care Tax Credit, Form 2441
2. Child Tax Credit, Schedule 8812
3. Additional Child Tax Credit, Schedule 8812
4. Earned Income Tax Credit, Schedule EIC
5. Premium Tax Credit, Form 8962
State Credits Used:
1. Taxpayer Tax Credit, included in the TC-4024
2. Health Benefit Plan Credit, no additional form required25
23 At the time of writing, 2015 forms were the latest available. 24 http://www.incometax.utah.gov/credits/taxpayer-tax-credit 25 http://www.incometax.utah.gov/credits/health-benefit-plans-credit
21
References
Auto Insurance Database Report 2012/2013 (Rep.). (2015). Retrieved July 11, 2016, from National Association of
Insurance Comissioners website: http://www.naic.org/documents/prod_serv_statistical_aut_pb.pdf
Agency for Healthcare Research and Quality: Medical Expenditure Survey. (2016). Table IX.A.2(2014): Average
total premiums and employee contributions (in dollars) for private-sector establishments for areas within
States: United States, 2014 [Data Table]. Retrieved from
https://meps.ahrq.gov/mepsweb/data_stats/quick_tables_results.jsp?component=2&subcomponent=2&y
ear=-1&tableSeries=9&searchText=&SearchMethod=1&Action=Search
Bureau of Labor Statistics (2014). Table: 3403, 3423, 3433, 3443, and 3453. Size of Consumer Unit by income
before taxes: Average annual expenditures and characteristics, Consumer Expenditure Survey, 2013-
2014 [Data Table]. Retrieved from http://www.bls.gov/cex/tables.htm
Bureau of Transportation Statistics. (n.d.). Local Area Transportation Characteristics for Households. Retrieved
from
http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/subject_areas/national_household_travel_surve
y/about
Car Loans & Financing - Kelley Blue Book. (2016). Retrieved July 18, 2016, from http://www.kbb.com/car-
loans-and-financing/?anchor=calculator
Care About ChildCare-Weber State University. (2015). Average Cost in Center Child Care. Ogden: Weber State
University. Retrieved from Programs.weber.edu/cac
Carlson, A., Lino, M., & Fungwe, T. (2007). The Low-Cost, Moderate-Cost, and Liberal Food Plans, 2007 (CNPP-20).
U.S. Department of Agriculture, Center for Nutrition Policy and Promotion.
Carlson, A., Lino, M., Juan, W-Y., Hanson, K., & Basiotis, P.P. (2007). Thrifty Food Plan, 2006. (CNPP-19). U.S.
Department of Agriculture, Center for Nutrition Policy and Promotion
Dewey, A., Engelhard, E., Gundersen, C., Kato, M., Satoh, A. (2015). Map the Meal Gap 2015: Technical Brief.
Feeding America.
Health Indicator Report of Child Care Numbers of Facilities. (2015, October 15). Retrieved July 11, 2016, from
https://ibis.health.utah.gov/indicator/view/ChiCarFacCap.html
Kathleen, S. S. (2014). The Supplemental Poverty Measure: 2014. Retrieved from
https://www.census.gov/hhes/povmeas/methodology/supplemental/overview.html
Kelley Blue Book - New and Used Car Price Values, Expert Car Reviews, Kbb.com. http://www.kbb.com/
Nelson, Lyle. Beebout, Harold. Skidmore, Felicity. United States Department of Agriculture (1985) “Economies of
Scale in the Food Stamp Program”
22
Ogden, UT. (18 July 2016). Weber County Interactive Map. Weber County. Retrieved from
http://www.co.weber.ut.us/gis/maps/gizmo/
Pearce, Diana. (2015). The Self-Sufficiency Standard for Colorado. University of Washington. Retrieved from
http://selfsufficiencystandard.org/node/4
Pfirrmann-Powell, Ryan. (2014). Americans’ Aging Autos. Bureau of Labor Statistics, Beyond The Numbers, May
2014 Vol.3 No.9. Retrieved from http://www.bls.gov/opub/btn/volume-3/americans-aging-autos.htm
The Premium Tax Credit. (2016, March 14). Retrieved July 25, 2016, from https://www.irs.gov/affordable-care-
act/individuals-and-families/the-premium-tax-credit
Utah DMV, Responsibilities of Buyer and Seller. Retrieved from http://dmv.utah.gov/buying-
selling/responsibilities#salestax
Utah Counties. (18 July 2016). Google Fusion Tables. Google. Retrieved from
https://support.google.com/fusiontables/answer/1182141?hl=en
U. S. Department of Agriculture, Center for Nutrition Policy and Promotion. (2016). USDA Food Plans: Cost of Food,
November 2015 to April 2016. Retrieved from
http://www.cnpp.usda.gov/USDAFoodPlansCostofFood/reports
U.S Census Bureau. (2014). Commuting Characteristics by Sex 2010-2014, American Community Survey 5-Year
Estimates [Table]. Retrieved from
https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_14_5YR_S080
1&prodType=table
U.S. Department of Housing and Urban Development. (2016). FY2016 Hypothetical Small Area FMR. Retrieved from
huduser.gov: https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html
Utah State Tax Commission. (2016). Current Registration [Data File]. Retrieved from
http://tax.utah.gov/econstats/mv/registrations-2010
Utah State Tax Commission. (2016). Passenger and Light Truck [Data File]. Retrieved from
http://tax.utah.gov/econstats/mv/used-sales
Utah Transit Authority. (n.d.). Buy a Pass. Retrieved from http://www.rideuta.com/Fares-And-Passes/Buy-A-
Pass
U.S. Department of Transportation:Bureau of Transportation Statistics (2009). Vehicle miles traveled and vehicle
trips by State [Data File]. Retrieved from
http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/subject_areas/national_household_travel_surve
y/vehicle
Weber County, UT Sales Tax Rate. Retrieved from http://www.sale-tax.com/WeberCountyUT
23
Appendices
Appendix I: Assumptions
1. General
1. Infants: 0-2 years old
2. Preschoolers: 3-5 years old
3. Schoolagers: 6-12 years old
4. Teenagers: 13-18 years old
2. Housing
1. Parents and children do not share a bedroom
2. Two children to a bedroom
3. Single adults and a married couple without children are single bedroom families
4. Families with one or two children have two bedrooms
5. Families with three or four children require three bedrooms
6. Families with five or six children require four bedrooms
7. Data is from the U.S. Department of Housing and Urban Development’s Fair Market Rents report,
which is based on the American Community Survey and updated using the CPI. The data is
reported by zip code.
8. Housing costs are categorized by bedrooms sizes, which are then averaged across Ogden’s zip codes
and then annualized.
3. Childcare
1. Teenagers are able to take care of themselves (and are not included in the costs.)
2. Teenagers will not take care of younger siblings.
3. The average cost was weighted according to the child being in school and out of school.
4. School age has been modified to include five year olds that are in kindergarten. As such, the costs
are weighted with kindergarten getting 1/7 because it is 1/7 of an elementary school.
5. When costs were reported for age groups that were more narrow than those used for the
Independent Living Standard, costs were averaged within the age group.
24
6. Data from Care About Childcare at Weber State University’s average cost in Family Child care and
average cost in center child care reports.
4. Food
1. Data was averaged between November 2015 to April 2016 to limit random variation.
2. Relative costs do not differ between the Thrifty Food plan and the Low Cost Food Plan. Needed
because the cost of food multiplier from the Cost of Food Index used the Thrifty Plan as the data
set.
3. Averaged the consumption between genders
4. Larger households spend less on food per person than smaller households due to the ability to
purchase in bulk and avoid some food waste. Household per person cost adjustments are as follows:
a. 1-person families cost 20 percent more
b. 2-person families cost 10 percent more
c. 3-person families cost 5 percent more
d. 4-person families have no adjustment
e. in 5 or 6-person families cost 5 percent less
f. 7 (or more)-person families cost 10 percent less
5. Car Insurance
1. One car per adult.
2. No reduction for additional cars.
3. Car insurance is calculated using the 2012/2013 Auto Insurance Database Report from the National
Association of Insurance Commissioners.
a. Note: Data is on Liability Insurance only, and averaged for the state of Utah.
6. Car Ownership
1. Condition and price of car.
a. Year, 2007.
b. Miles at purchase, 104,000.
c. Basic Features.
25
d. Price. $5,341.
e. The above is averaged from the three cheapest of the five most purchased used passenger
cars in Utah. The year was selected from the mostly commonly registered vehicle in Utah.
Data from the Utah State Tax Commission’s Used Motor Vehicle Sales Table and
Registrations 2010 & Newer Table.
f. Price of car comes from Kelley Blue Book values. Financed for 36 months for 4.44%
interest
g. Yearly Maintenance cost data from BLS.gov ‘Americas Aging Autos’
h. Registration price comes from a DMV employee.
2. Two Adult Families use two cars.
3. Car will last 6 years because it will reach approximately 200,000 miles at that point.
4. Car is driven 14,716 miles a year based on the National Household Travel Survey.
5. The miles driven per weekend equal to the number of miles driven for one weekday.
6. MPG 26, Gas price $2.75 a Gallon.
7. Public Transportation was not used due to low utilization.
7. Health Insurance, Employer Supplied.
1. There is no interruption in coverage.
2. A single adult gets the ‘Single Plan,’ two person household gets the ‘employee-plus-one’ plan, and
all others get the ‘family plan.’
3. Each family has only one plan.
7.5 Health Insurance, Marketplace
1. Data from Healthcare.gov
2. First adult is 30 year, female. Second adult is 30 year male.
3. Households with two adults are married.
4. Children are dependents.
5. Children alternate genders, starting with the oldest as male.
6. Infants = 1 year old, preschooler = 4, schoolager = 9, teenager = 15.
7. No tax credits are applied during registration.
8. Healthcare premiums are from the lowest cost Silver Plan.
26
8. Health care Costs, Out of Pocket.
1. Infant and preschool children are similar cost wise.
2. Schoolagers and teenagers are similar cost wise.
3. The median, rather than the average, costs were used as the estimator because it was a better
measure of central tendency. We assume that the higher cost conditions are accounted for through
the use of the median.
4. Data from Table 1: Total Health Services-Median and Mean Expenses per Person With Expense
and Distribution of Expenses by Source of Payment: United States, 2013 from MEPS. Data based
on national averages.
9. Entertainment
1. Based on the Consumer Expenditure Survey (2014), Size of Consumer Unit by income before
taxes, tables.
2. Household income before taxes were estimated by the Ogden Independent Living Standard for each
of the family sizes. The income ranges used are as follows:
a. 1 person families used the 15,000 to 19,999 range
b. 2 person families used the 20,000 to 29,999 range
c. 3 person families used the 30,000 to 39,999 range
d. 4 person families used the 50,000 to 69,999 range
e. 5+ person families used the 50,000 to 69,999 range
3. No adjustments were used to adjust for location or family age composition.
10. Miscellaneous
1. Based on the Consumer Expenditure Survey (2014), Size of Consumer Unit by income before
taxes, tables.
2. Contains the sum of apparel, housekeeping supplies, personal care products, and miscellaneous.
3. Household income before taxes were estimated by the Ogden Independent Living Standard for each
of the family sizes. The income ranges used are as follows:
a. 1 person families used the 15,000 to 19,999 range
b. 2 person families used the 20,000 to 29,999 range
27
c. 3 person families used the 30,000 to 39,999 range
d. 4 person families used the 50,000 to 69,999 range
e. 5 person families used the 50,000 to 69,999 range
f. 5+ person families that have a calculated gross income of 70,000+ used the 70,000+ range
4. No adjustments were used to adjust for location or family age composition.
11. Federal Income Taxes and Credits.
1. Single adult files as ‘single,’ two adult household files as ‘married,’ and single adult home with
children would file as ‘Head of Household.’
2. All Children are qualifying children and dependents.
3. All tax information is from tax year 2015.
4. Credits Used:
a. Child Care Tax Credit
b. Child Tax Credit
c. Additional Child Tax Credit
d. EITC
e. Premium Tax Credit (Marketplace Health Insurance Only)
i.Data for the benchmark plan was collected from healthcare.gov to calculate the Premium Tax Credit.
12. Utah Taxes
1) Single adult files as ‘single,’ two adult household files as ‘married,’ and single adult home with
children would file as ‘Head of Household.’
2) All tax information is from tax year 2015.
3) Credits Used:
a) Utah Tax Credit
b) Utah’s Health Benefit Plan Credit (Marketplace Health Insurance Only)
13. FICA
1. There were no additional assumptions made.
28
Appendix II: Marketplace
The Affordable Care Act created a central marketplace for individuals and households to purchase
health insurance. For some families, it is cheaper to use the marketplace; however, they assume higher
risks. This is due to the actuarial value being lower, which leads to higher out of pocket expenses. The
caveat is that the marketplace insurance is only cheaper when the Premium Tax Credit and the Utah Health
Benefit Plan Credit are utilized. Those credits are based on gross income meaning that as the level of
income increases, the benefits decrease.
Below is a cost comparison between Marketplace Health Insurance and Employer sponsored health
insurance, without consideration of the Premium Tax Credit.
Family Type Marketplace Premiums
Marketplace Out of Pocket Costs
Employer sponsored premium
Employer sponsored Out of Pocket
1 Adult $2,536.00 $161.00 $1,406.00 $108.00
1 Adult 1 Preschooler
$3,983.00 $208.00 $2,592.00 $139.00
1 Adult 1 Preschooler 1 Schoolager
$5,430.00 $348.00 $3,412.00 $232.00
2 Adult 1 Preschooler 1 Schoolager
$7,966.00 $509.00 $3,412.00 $340.00
Marketplace Assumptions
1. Data from Healthcare.gov
2. First adult is 30 year, female. Second adult is 30 year male.
3. Households with two adults are married.
4. Children are dependents.
5. Children alternate genders, starting with the oldest as male.
6. Infants = 1 year old, preschooler = 4, schoolager = 9, teenager = 15.
7. No tax credits are applied.
29
8. Healthcare premiums are from the lowest cost Silver Plan.
Marketplace Healthcare Credits
Premium Tax Credit: This refundable credit is designed to make health insurance purchased
through the health insurance marketplace more affordable. In order to qualify26, a household or individual
must have purchased health insurance through the marketplace, no member of the family may qualify for
employer or government health insurance, the filer cannot be claimed as a dependent and cannot file
married filing separately, and all premiums must have been paid27.
Health Benefit Plan Credit: This nonrefundable tax credit is available to Utah taxpayers who
purchased their own health insurance. The credit reduces taxes based on the amount of premiums paid. To
qualify, individuals and households cannot qualify for employer or government healthcare, and who
purchased their own health insurance.
Appendix III: Public Transportation Data
Public transportation is calculated based on one of two cases. Case one, a family has only one car and one of
the adults takes the bus. Case two, the whole family takes the bus. All family members over the age of six
are required to have a pass28. Because there are buses that go to Davis and Salt Lake Counties, the Front
Runner (the local train system) is not included in the calculations.
Below is a table of the four representative family types comparing the cost of owning a car against the cost
of the appropriate bus passes:
26 There are exceptions to married filing separately and household income cut off ranges. 27 The Premium Tax Credit. (2016, March 14). Retrieved July 25, 2016, from https://www.irs.gov/affordable-care-act/individuals-and-families/the-
premium-tax-credit 28 Utah Transit Authority. (n.d.). Buy a Pass. Retrieved from http://www.rideuta.com/Fares-And-Passes/Buy-A-Pass
30
Family Type Owning a car Riding the Bus Owning a car and riding the bus
1 Adult $3,756.00 $1,005.00 -
1 Adult 1 Preschooler
$3,756.00 $1,005.00 -
1 Adult 1 Preschooler 1 Schoolager
$3,756.00 $1,758.00 -
2 Adult 1 Preschooler 1 Schoolager
$7,512.00 $2,763.00 $4,761.00
Appendix IV: Other Benchmarks
One of the main purposes of the Ogden Independent Living Standard is to create a more accurate
poverty benchmark when compared to federal poverty standards. The Independent Living Standard is an
upper bound above which one could not be considered in poverty given they have typical expenses. As
such, the Independent Living Standard should be higher than most other benchmarks.
The most widely used benchmark is the Federal Poverty Line. The Federal Poverty Line is
measured as the 1965 cost of food times three, adjusted for inflation. This measure no longer relates to
actual expenses and as such, is better used as a “yardstick” rather than an accurate measure of household
costs.
To correct for the lack of a benchmark, an Interagency Technical Working Group (which included
representatives from the Bureau of Labor Statistics, the Census Bureau, the Economics and Statistics
Administration, the Council of Economic Advisers, the U.S. Department of Health and Human Services,
and Office of Management and Budget) has started creating an experimental Supplemental Poverty
Measure29 that attempts to capture actual living expenses. Instead of simply changing based on inflation, the
Supplemental Poverty Measure adjusts with changes to the cost of food, shelter, clothing, utilities,
transportation, child care, out of pocket medical costs, and miscellaneous costs.
The main point of difference between the Supplemental Poverty Measure and the Ogden
Independent Living Standard is that the Supplemental Poverty Measure makes use of government funded
29 Kathleen, S. S. (2014). The Supplemental Poverty Measure: 2014. Retrieved from
https://www.census.gov/hhes/povmeas/methodology/supplemental/overview.html
31
assistance programs. The anti-poverty programs used are SNAP, WIC, National School Lunch Program,
Low-Income Home Energy Assistance Program (LIHEAP), and Housing Assistance. The Independent
Living Standard avoids using these programs because the main goal is for a person to be able to live
independent of government assistance.
Benchmark Comparison Tables
The following graphs compare the Ogden Independent Living Standard to the minimum wage,
SNAP, and Federal Poverty Level. A one adult, two children household30 and a two adult, two children
household are used as the comparison family types. The graphs show gross annual income as well as hourly
wage.
Because the Ogden Independent Living Standard is not a stringent budget and requires that a
household use no government aid, the Independent Living Standard’s annual gross income for a one adult,
two child household is $16,913 higher than SNAP, $22,961 higher than the Federal Poverty Level, and
$28,041 more than full time minimum wage.
Another point of interest is that working full time while earning minimum wage gives a yearly
annual income that is $5,080 less than the Federal Poverty Level and is $11,128 less than SNAP. Meaning
that individuals who earn only minimum wage would be considered impoverished by federal definition.
Additionally, a two adult household family earning minimum wage earns $5,860 more than the
Federal Poverty Level, but $1,430 less than SNAP.
30 The other benchmarks do not separate families by composition. For the Ogden Independent Living Standard, the families are comprised of one or two adults, a
preschooler, and schoolager.
32
*Assumes full time employment of 2080 hours of pay received.
$43,121
$15,080
$26,208
$20,160
$19.59
$7.25
$12.60
$9.69
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
$20.00
$22.00
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
Independent LivingStandard
Full Time MinimumWage
SNAP Federal Poverty Level
Hou
rly
inco
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Benchmark Program
Benchmark Comparison: Annual Income/Hourly Wage* Needed for One Adult, Two Kids
Gross Yearly Income Hourly Income
33
$51,993
$30,160$31,590
$24,300
$12.50
$7.25 $7.59
$5.84
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
Independent LivingStandard
Full Time MinimumWage
SNAP Federal Poverty Level
Hou
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Inco
me
per
Adu
lt
Gro
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com
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Benchmark Program
Benchmark Comparison: Annual Income/Hourly Wage* Needed for Two Adults, Two Kids
Gross Yearly Income Hourly Income
* Hourly income is divided between two full time working adults. Full time is assumed to be 2080 hours of pay received.
34
Appendix V: Maps
35
36
37
Appendix VI: Future Work and Expansions
This report tries to be as exhaustive as reasonably possible. However, due to various constraints,
there are still areas that could be improved or expanded. Here is a list of the various areas for improvement.
First, the most obvious route for expansion is to increase the age range and the number of family
types. This would allow the standard to be used by a wider range of individuals and families.
Second, instead of having just sedans, it would be prudent to expand the category to include
different vehicle types such as trucks, vans, mopeds, and motorcycles. Additionally, the two car cost is
simply double the cost of one car, so in the future that should be adjust to reflect differing miles driven and
any change in the insurance premium. Lastly, it would be interesting if an adjustment could be made to
miles driven depending on family size.
Third, should the use of public transportation increase then a separate category should be created
instead of an appendix.
Fourth, the zip codes that were used to create the rent costs could be better adjusted. Some zip
codes include more of the Ogden area than others. It may be appropriate to create a form of weighting, for
example based on population size, that would give better estimates.
38
Fifth and last, to improve the accuracy of the out of pocket cost estimates. In the future, it may be
possible to use local area data instead of national level data or if time permits, to do some type of surveying.
39
Appendix VII: Data Table
Family Type Family Size
Gross Income
Family Type Family Size
Gross Income
1 Adult 1 $21,999 2 Adult 2 $30,547
1 Adult 1 Infant 2 $34,013
2 Adult 1 Infant 3
$43,759
1 Adult 1 Preschooler 2 $31,688
2 Adult 1 Preschooler 3
$41,569
1 Adult 1 Schoolager 2 $32,261
2 Adult 1 Schoolager 3
$42,016
1 Adult 1 Teen 2 $24,563
2 Adult 1 Teen 3
$34,209
1 Adult 2 Infant 3 $46,645
2 Adult 2 Infant 4 $55,187
1 Adult 1 Infant 1 Preschooler 3 $44,894
2 Adult 1 Infant 1 Preschooler 4 $53,431
1 Adult 1 Infant 1 Schoolager 3 $45,271
2 Adult 1 Infant 1 Schoolager 4 $53,749
1 Adult 1 Infant 1 Teen 3 $35,908
2 Adult 1 Infant 1 Teen 4 $45,981
1 Adult 2 Preschooler 3 $42,463
2 Adult 2 Preschooler 4 $51,675
1 Adult 1 Preschooler 1 Schoolager
3 $43,121
2 Adult 1 Preschooler 1 Schoolager 4 $51,993
1 Adult 1 Preschooler 1 Teen
3 $33,431
2 Adult 1 Preschooler 1 Teen 4 $43,711
1 Adult 2 Schoolager
3 $43,663 2 Adult
2 Schoolager 4 $52,312
1 Adult 1 Schoolager 1 Teen
3 $33,924
2 Adult 1 Schoolager 1 Teen 4 $44,120
1 Adult 2 Teen
3 $25,607 2 Adult
2 Teen 4 $35,507
1 Adult 3 Infant 4 $64,427
2 Adult 3 Infant 5 $71,324
1 Adult 2 Infant 1 Preschooler 4 $62,671
2 Adult 2 Infant 1 Preschooler 5 $69,562
1 Adult 2 Infant 1 Schoolager 4 $62,989
2 Adult 2 Infant 1 Schoolager 5 $69,822
40
1 Adult 2 Infant 1 Teen 4 $55,490
2 Adult 2 Infant 1 Teen 5 $62,309
1 Adult 1 Infant 2 Preschooler 4 $60,915
2 Adult 1 Infant 2 Preschooler 5 $67,801
1 Adult 1 Infant 1 Preschooler 1 Schoolager 4 $61,233
2 Adult 1 Infant 1 Preschooler 1 Schoolager 5 $68,061
1 Adult 1 Infant 1 Preschooler 1 Teen 4 $53,734
2 Adult 1 Infant 1 Preschooler 1 Teen 5 $60,548
1 Adult 1 Infant 2 Schoolager 4 $61,552
2 Adult 1 Infant 2 Schoolager 5 $68,321
1 Adult 1 Infant 1 Schoolager 1 Teen 4 $54,053
2 Adult 1 Infant 1 Schoolager 1 Teen 5 $60,808
1 Adult 1 Infant 2 Teen 4 $47,269
2 Adult 1 Infant 2 Teen 5 $54,152
1 Adult 3 Preschooler 4 $59,159
2 Adult 3 Preschooler 5 $66,040
1 Adult 2 Preschooler 1 Schoolager 4 $59,477
2 Adult 2 Preschooler 1 Schoolager 5 $66,300
1 Adult 2 Preschooler 1 Teen 4 $51,978
2 Adult 2 Preschooler 1 Teen 5 $58,787
1 Adult 1 Preschooler 2 Schoolager 4 $59,796
2 Adult 1 Preschooler 2 Schoolager 5 $66,559
1 Adult 1 Preschooler 1 Schoolager 1 Teen 4 $52,297
2 Adult 1 Preschooler 1 Schoolager 1 Teen 5 $59,047
1 Adult 1 Preschooler 2 Teen 4 $44,761
2 Adult 1 Preschooler 2 Teen 5 $52,017
1 Adult 3 Schoolager 4 $60,114
2 Adult 3 Schoolager 5 $66,819
41
1 Adult 2 Schoolager 1 Teen
4 $52,615 2 Adult 2 Schoolager 1 Teen
5 $59,306
1 Adult 1 Schoolager 2 Teen 4 $45,215
2 Adult 1 Schoolager 2 Teen 5 $52,382
1 Adult 3 Teen 4 $35,965
2 Adult 3 Teen 5 $43,625
1 Adult 1 Infant 1 Preschooler 1 Schoolager 1 Teen
5 $62,746 2 Adult 1 Infant 1 Preschooler 1 Schoolager 1 Teen
6 $69,059
1 Adult 1 Infant 1 Preschooler 2 Schoolager 1 Teen
6 $78,502 2 Adult 1 Infant 1 Preschooler 2 Schoolager 1 Teen
7 $82,022
Infants 0-2 years old Preschoolers 3-5 years old Schoolagers 6-12 years old Teenagers 13-18 years old
