The Congressional Budget Office (CBO) has released its 2015 to 2025 Budget and Economic Outlook. In this yearly publication, the CBO examines current laws (taxes and spending) and projects the outlook for the federal...
- The Real Value of $100 in Metropolitan Areas
The Real Value of $100 in Metropolitan Areas
We recently published a map showing how far $100 would take you in different states. For example, in states with low costs of living, like Arkansas, $100 had the same sort of purchasing power that $115 would have in an average state.
We got a lot of requests – particularly from upstate New Yorkers - for a map of purchasing power that separates out cities from non-metropolitan areas. Fortunately, that data is available from the BEA’s interactive tables, and we have created an interactive map of purchasing power down to the city level.
Full data for this map available on GitHub.
The orangest colors on the map, signifying the place where your $100 buys you the least, are in these five cities. One of them may surprise you.
- Honolulu ($81.37)
- New York-Newark-Jersey City ($81.83)
- San Jose-Sunnyvale-Santa Clara ($81.97)
- Bridgeport-Stamford-Norwalk ($82.31)
- San Francisco-Oakland-Hayward ($82.44)
Yes, Honolulu is the most expensive place to live! Honolulu is, in fact, quite densely populated; there isn’t much territory to work with between the mountains and the Pacific. It also relies heavily on expensive imports. People pay a heavy premium in order to enjoy its lovely weather.
With MSA-level data, we can see price differences are even larger than the ones on our previous map. We are interested in this issue because it has important implications for state tax policy, federal tax policy, and interstate migration. A lot of policies are based on income, like progressive taxes and means-tested federal benefits. A federal benefit in Mississippi could be so large as to overwhelm the returns to work, while that same benefit in New York City could be insufficient to help people get by. As we wrote in a recent report, income data alone is insufficient to tell us how well someone is doing.
It’s important to see that price differences do persist across states, even in non-metropolitan areas. $100 still doesn’t go nearly as far in rural California ($101.94) as it does in rural Texas ($113.64). It doesn’t even go as far as it does in San Antonio. ($106.50.) This suggests that policy – not just geography and urbanization – may play a role in these price differences.
Subscribe to the Tax Foundation Newsletter
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.