Silicon Valley plus the New York City, Boston and the DC metro areas are some of the obvious regions, notorious for their out-of-sight housing and real estate prices.
But there are other factors at work as well in these high-cost areas, such as the cost of delivering goods to certain areas well-removed from the nation’s major trunk transportation arteries (think Alaska, Hawaii, Washington State and Minnesota).
And then there are state and local taxes. There appears to be a direct relationship between higher costs of living and higher taxation, too.
It’s one thing to go on hunches. But helpfully, all of these perceptions have been confirmed by the Bureau of Economic Analysis, using Personal Consumption Expenditure and American Community Survey data to do so. Rolling the data up, the BEA has published comparative figures for all 50 states plus DC pertaining to the relative cost of living.
The approach was simple: consolidate the data to come up with a dollar figure in each state that represents how much $100 can purchase locally compared to the national average. To get there, average price levels in each state have been calculated for household consumption, including rental housing costs.
Based on 2014 data, the figures have been mapped and are shown below:
So, just how far does $100 go?
The answer to that question is this: quite a bit further if you live in the mid-Continent region of the country compared to the Pacific Coast or the Northeast U.S.
In fact, $100 will get you upwards of 15% more goods and services in quite a few states. Here are the Top 10 states how much $100 will actually buy there:
- Mississippi: $115.74 worth of goods and services
- Arkansas: $114.16
- Alabama: $113.51
- Missouri: $113.51
- South Dakota: $113.38
- West Virginia: $112.87
- Ohio: $112.11
- Iowa: $111.73
- Kansas: $111.23
- Oklahoma: $111.23
At the other end of the scale, $100 is only going to buy about 20% to 30% fewer goods and services in the “Bottom 10” states compared to the “Top 10.” Here’s how it looks state-by-state:
- DC: $84.60
- Hawaii: $85.32
- New York: $86.66
- New Jersey: $87.64
- California: $88.57
- Maryland: $89.85
- Connecticut: $91.41
- Massachusetts: $93.28
- Alaska: $93.37
- New Hampshire: $94.16
Which states are closest to the $100 reference figure? Those would be Illinois at $99.40, and Oregon at $101.21.
I must say that those last two figures surprised me a bit … as I would have expected $100 to go less far in Illinois and Oregon.
Which of the state results surprise you? If any of them do, please share your observations with other readers.