Income in Each State, Adjusted for Cost of Living

Even if people tend to make more in one state than another, it might not compensate for a higher cost of living. A dollar might not buy you as much. Or it might buy you more.

As we saw with minimum wage, the Bureau of Economic Analysis produces an estimate for this called Regional Price Parity. It estimates how much more or less things cost compared to the national average.

The chart below uses RPP to show income distributions for each state, unadjusted and adjusted. For example, New York has a relatively high median income, but when you adjust for cost of living, its rank goes down significantly. In contrast, South Dakota ranks in the middle for income, but then rises with adjustment.

Notes

The income data is based on estimates from the 2020 Current Population Survey. I downloaded the data via IPUMS. Regional Price Parity comes from the Bureau of Economic Analysis. I used 2019 estimates for the adjustments.

I processed and analyzed the data in R, and I made the chart above with D3.

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