Geographic Cost of Living Differences: In Brief

Cost of living is generally important to the standard of living of individuals across the United States. Changes to cost of living over time measure how quickly prices increase in a given area compared to past prices in that same area. However, such measures (such as inflation measures for specific areas produced by the Bureau of Labor Statistics) do not express how cost of living differs from place to place. Geographic cost of living differences may be important for certain public policies, particularly when not accounting for these differences cause distortionary effects. The main publicly available source of data for geographic cost of living differences is the relative price parity index produced by the Bureau of Economic Analysis. This series measures differences in cost of living between and within states compared to a national average price level index.