Definition: Cost-of-living index
U.S. Bureau of Labor Statistics
A cost-of-living index measures differences in the price of goods and services, and allows for substitutions to other items as prices change. A consumer price index measures a price change for a constant market basket of goods and services from one period to the next within the same city (or in the Nation). The CPIs are not true cost-of-living indexes and should not be used for place-to-place comparisons.
U.S. Bureau of Labor Statistics, Online glossary, as per September 2009