If you’ve lived in the same place for several years, this question may seem a bit silly. However, $100 in certain regions goes quite a bit further than it does in other parts of the country. Factors like the cost of goods, land, and the income of residents all contribute to the disparity between the purchasing power of the dollar.
For instance, in Michigan, $100 will get you about $106 worth of goods or services. In California, you may pay $100, but you’ll only get about $88 worth of goods or services.
The reasons for the regional differences are varied and interconnected. States with higher incomes typically have higher price levels for things like real estate, since the neighborhoods tend to be desirable and land is a finite resource. However, in areas where costs are high, wages tend to be higher to compensate for the high cost of living – so a person making $100,000 per year in California may take home significantly less pay than a person making $100,000 per year in Michigan, simply because of the differences in pricing for housing, transportation, and goods.
What do you think about the state-by-state variations in purchasing power? Does any of this surprise you?
Find out what $100 is worth in other states in the infographic below.