I have lived in Johnson County (JoCo for locals) Kansas for about a year now. For our out of State readers, Johnson county is considered the most affluent county in Kansas by a fairly wide margin, and is located on the Missouri border. It is home to many of the Kansas-side Kansas City suburbs, and some of the largest corporations in Kansas City (notably Sprint and Garmin).
I live in the eastern half of Johnson County, about ten miles to Missouri. Since most of Kansas City is in Missouri, you might think that I cross the state line pretty often. But that's not true. Actually, in the last year, I've crossed the line only five times I can remember:
- 2 - Kansas City Royals Games.
- 1 - To see David Sedaris at the Kaufman Center.
- 1 - To see a college basketball game at the Sprint Center.
- 1 - Some dog festival my wife wanted to go to.
Ok, this may just mean I'm lame (which I am), but it points something: while Missouri is relatively close to most of Johnson County, it's not like I live "half" my life in Missouri. Ten miles, is still ten miles, and it takes quite an incentive for me to drive that far, especially with the amenities already close.
WHY THIS MATTERS
So why does this matter? My previous analysis looked at changes in Kansas tax policy, specifically looking at food taxes. Basically, things are going to be more expensive for Kansas consumers this year. Then yesterday I see this tweet:
1 in 5 KSans live in #JoCo. A family of 4 could save over $670/year by grocery shopping in MO http://t.co/swGNt6FyXk pic.twitter.com/I61GLAIog8— Nathan Madden (@KCEGNate) June 25, 2015
Which can really be taken no other way than the 20% of Kansans living in JoCo could save money by buying groceries in Missouri. My thought: no way that I'm driving to freaking Missouri every time I need to buy groceries. My actual thoughts were along the lines of ...
But it's not like me to base my decisions on grandmothers from old westerns, so I ran some numbers.
Ok, we'll use the initial numbers from the tweet, and assume a family of four would spend about $670 less based sales tax differentials (thought this appears to "miss" the way pricing works). That's the savings amount, but the analysis didn't account for the cost of doing business across the border, what are those costs?
- Physical cost of driving (wear/tear on car;gas). We'll use federal mileage rate.
- Cost of time to drive. We'll use a few estimates here hourly ($10,$25,$50)
- Assuming once-weekly grocery shopping.
The following chart accounts for the cost of time and driving over a year, and reduces the $670 by those actual costs the horizontal (X) axis is number of miles to Missouri.
You see that the cost savings reduces quickly as your distance to Missouri increases. Where each line crosses the $0 axis is the break even point. Which means just to break even, here are the maximum miles to drive:
Note: the value of time here may sound high, but keep in mind that Johnson County is the richest in Kansas, a lot of highly paid corporate employees here, and sometimes more than one person in a family goes shopping. Also, pay for convenience is a huge thing in the JoCo; many people have cleaning people, where they pay these types of rates to save their own time.
Based on the numbers from above, we can map the break-even points for each group. Keep in mind that even though these are break-even points, the amount of savings after accounting for costs is still very low. The red sections areas are within the break-even points. Green areas are outside of the break-even driving distance.
The 4 mile limit (this includes 29% of Johnson County residents)(I think this is the most likely scenario, when you include potential multiple shopping trips per week, and people's value for time on the weekends):
The 6 mile limit (this includes 48% of Johnson County residents):
Finally the 9 mile limit (this includes 70% of Johnson County residents):
Though I may consider making larger purchases on the Missouri side, I doubt that I will be driving to Missouri for groceries. Also, with the focus on convenience, and relative affluence of Johnson County, I doubt many other Johnson County residents will be driving for groceries, either.