The Cost of Living – Where Your Dollar Goes Farthest

Here’s an interesting post that tries to compare the cost of living in different parts of the U.S. The basis of the article is data from the government’s Bureau of Economic Analysis and a report using that data from the Tax Foundation. Not surprisingly, it indicates that the cost of living, or the value of your dollar, varies greatly around the country. It has several interesting ways of looking at the data. Click through the article to the Tax Foundation report for even more detail.

The differences from one place to another are even more striking if you look at the cost of living in different metropolitan areas. In New York City, for instance, $100 will buy just $81.83 worth of goods and services, even less than the already-skimpy statewide average of $86.66. The Tax Foundation report notes that, adjusted for prices, real incomes are higher in Kansas than in New York or San Jose, despite those cities’ far higher nominal salaries.

“A person who makes $40,000 a year after taxes in Kentucky would need to have after-tax earnings of $53,000 in Washington, D.C. just to have an equal standard of living, let alone feel richer,” notes the report—and Washington doesn’t even make the Tax Foundation’s list of the five metro areas where $100 buys the least: Honolulu; New York/Newark/Jersey City; San Jose/Sunnyvale/Santa Clara; Bridgeport/Stamford/Norwalk (CT); and San Francisco/Oakland/Hayward.