In Ohio, $100 will buy you what it would cost $111.61 in a state closer to the national average,
Got $100? Best get yourself to Mississippi; it’ll last longer.
The Tax Foundation released a study Monday mapping which of the 50 United States where that $100 will go furthest. Created in 1937, the organization bills itself as “the nation’s leading tax policy research organization.”
It is not a surprise that the same goods can be priced differently from state-to-state or region-to-region (or, as anyone who buys gas will tell you, even city-to-city in the same state). The Tax Foundation study is based on data compiled by the Bureau of Economic Analysis that examines this phenomenon.
Bottom line: That $100 will go further in a low-price state, such as Ohio, where $100 will buy you what it would cost $111.61 in a state closer to the national average, the Tax Foundation finds.
The top five states where $100 is worth the most are:
- Mississippi ($115.21)
- Arkansas ($114.29)
- South Dakota ($114.16)
- Alabama ($114.03)
- West Virginia ($113.12)
In comparison, here is where $100 doesn’t buy you even $90 worth of stuff:
- The District of Columbia ($84.96)
- Hawaii ($86.06)
- New York ($86.73)
- New Jersey ($87.34)
- California ($89.05)
Regionally, price differences are “strikingly large,” the Tax Foundation notes. Real purchasing power is 36 percent greater in Mississippi than it is in the District of Columbia. That means that if you have $50,000 in after-tax income in Mississippi, you would need to have after-tax income earnings of $68,000 to afford the same overall standard of living in the District of Columbia.
It is generally the case that states with higher nominal incomes also have higher price levels, the study observes: “In places with higher incomes, the prices of finite resources like land get bid up. But the causation also runs in the opposite direction. Places with high costs of living pay higher salaries for the same jobs. This is what labor economists call a compensating differential; the higher pay is offered in order to make up for the low purchasing power.”
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.