What is $100 Worth in Different States?
August 19, 2014
Costs of living vary across the United States, and the average price of a good in Georgia might be very different from the average price of the same good in California. As such, a person's nominal income is not necessarily reflective of his standard of living.
Economists Alan Cole, Lyman Stone and Richard Borean of the Tax Foundation have developed a map detailing what $100 is worth across the 50 states.
- $100 is worth much less in Washington, D.C. ($84.60), Hawaii ($85.32), New York ($86.66) and New Jersey ($87.64) than it is in Mississippi ($115.74), Arkansas ($114.16), Missouri ($113.51), Alabama ($113.51) and South Dakota ($113.38).
- Incredibly, money is worth 40 percent more in Mississippi than the same amount of money in Washington, D.C.
- Nominally, New Yorkers have much higher incomes than Kansans. But after adjusting for prices, Kansas residents have higher average incomes than New York residents.
- High incomes are often found in states with high prices, but not always: in North Dakota, for example, residents have high incomes but low prices.
This reality is especially significant for welfare programs, explain the authors. A poor person in a high-cost area may not qualify for a means-tested program, while a person in a low-cost area may qualify for welfare despite being in a better financial position than his income alone would indicate. Price differences could also change the impact of welfare on a person: a South Dakota resident, write the authors, may be discouraged from work after receiving welfare, while a New York resident may be little impacted by it.
Source: Alan Cole, Lyman Stone and Richard Borean, "The Real Value of $100 in Each State," August 18, 2014.
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