Does the cost of living vary?
Date posted: December 2, 2013
Economic statistics showed that the cost of living typically rises over time. A big family challenge is to earn enough to keep up with rising prices. But do the cost of living and how much it changes vary in different parts of the country? N.C. State University economist Mike Walden responds.
“The best information we have an looking at how the cost of living varies is by states. The latest data that we have from North Carolina shows that our state is about in the middle the pack in terms of cost of living among all 50 states. And the estimates show that in the last decade, actually, the change in our cost of living — that is, the inflation rate — has been a little lower than the national average.
“So I think that’s good news for us of those of us who live here in North Carolina. Now, a major determining factor of differences in cost of living is really land and housing prices, and that should be logical, because land and houses are limited in supply — particularly land prices filter in housing prices, and so you tend to see cost of living higher in big cities, because there are more people there wanting to crowd into a limited amount of space, and in resort areas, where whatever is attracting people to those resort areas — whether it be ocean, lakes, or mountains — again, those sites are limited in supply.
“So what this means … is that if you have a choice, you can really determine, in part, your cost of living — that is, if you want a low cost of living, what you probably should do is would move to a small town or move to a rural area. Now the problem there is oftentimes job opportunities are limited — meaning you may have to commute a farther distance.”
Category: Economic Perspective