Move from Jackson, Mississippi to Honolulu, Hawaii and the same $60,000 salary stretches very differently. According to the Missouri Economic Research and Information Center (MERIC), a quart of milk, a tank of gas, a one-bedroom apartment and a doctor's visit can cost nearly twice as much in the most expensive states as in the cheapest. This guide ranks all 50 states using two of the most widely cited public datasets: the MERIC Cost of Living Index (consumer prices) and the Bureau of Economic Analysis Regional Price Parities (overall price level). Both set the US national average to 100, so anything below 100 is cheaper than average and anything above is pricier.
How the cost of living is measured
There is no single "cost of living" number. Different agencies publish different indexes, each built from a different basket of goods and services. The three most cited public sources are:
- MERIC Cost of Living Index, published quarterly by Missouri's economic research center, using underlying data from the Council for Community and Economic Research (C2ER). It tracks six categories: grocery, housing, utilities, transportation, healthcare, and miscellaneous goods and services.
- BEA Regional Price Parities (RPP), published annually by the US Bureau of Economic Analysis. RPPs measure differences in the average price level for a fixed basket across states and metro areas, and feed directly into "real" personal income calculations.
- BLS Consumer Price Index (CPI), the Bureau of Labor Statistics tracks inflation for selected metro areas, useful for changes over time but not for direct state-to-state comparison.
The two indexes broadly agree on the ranking, even when their headline numbers differ by a few points. Hawaii is always the most expensive. Mississippi, West Virginia and Oklahoma are always at the bottom.
The 10 cheapest states to live in
The cheapest states cluster in the South and lower Midwest, a band that runs from West Virginia and Tennessee across to Kansas and Oklahoma. Housing is the dominant reason: median home values in Mississippi and West Virginia are less than half of the national median. Groceries and utilities also run several points below average.
| # | State | MERIC index (approx.) | Why it's cheap |
|---|---|---|---|
| 1 | Mississippi | ~85 | Lowest housing costs in the country; rural population. |
| 2 | West Virginia | ~85 | Very low housing and utilities; small metros. |
| 3 | Oklahoma | ~86 | Cheap energy, modest housing, low groceries. |
| 4 | Kansas | ~87 | Low housing; competitive grocery prices. |
| 5 | Alabama | ~88 | Low housing and transportation. |
| 6 | Tennessee | ~89 | No state income tax; affordable housing outside Nashville. |
| 7 | Arkansas | ~89 | Among the lowest grocery and housing costs. |
| 8 | Missouri | ~89 | Low housing, balanced overall. |
| 9 | Iowa | ~90 | Cheap housing; very low groceries. |
| 10 | Indiana | ~91 | Inexpensive housing across Indianapolis and smaller cities. |
The BEA Regional Price Parities tell a very similar story. In recent RPP releases, Mississippi, Arkansas, West Virginia, Kentucky and Alabama have all posted overall price levels around 86,89% of the US average. The lower price level partly offsets lower median wages, but only partly. The BEA's "real personal income" series still ranks several of these states near the bottom on adjusted purchasing power.
The 10 most expensive states to live in
The other end of the table is dominated by island, coastal and high-density states. Hawaii's index sits well above any mainland state, every truckload of groceries and every gallon of gasoline arrives by ship. California and Massachusetts pay for their cost of living through housing: in coastal metros like San Francisco, San Jose and Boston, the housing component of the MERIC index runs 200+ (more than double the national average).
| # | State | MERIC index (approx.) | Why it's expensive |
|---|---|---|---|
| 1 | Hawaii | ~184 | Imported groceries; constrained housing supply. |
| 2 | Massachusetts | ~146 | Boston metro housing; healthcare costs. |
| 3 | California | ~138 | Coastal housing; high utilities and gasoline. |
| 4 | New York | ~135 | NYC metro housing; transportation in the city. |
| 5 | Alaska | ~129 | Shipping, fuel and groceries. |
| 6 | Maryland | ~118 | DC-suburb housing; high property taxes. |
| 7 | Oregon | ~115 | Portland housing; transportation costs. |
| 8 | Connecticut | ~114 | Housing along the NYC commuter belt. |
| 9 | New Hampshire | ~113 | Housing near the Boston commuter shed. |
| 10 | Washington | ~112 | Seattle metro housing; high gasoline taxes. |
Within these states the variation between metros is huge. The San Francisco Bay Area and Manhattan post overall RPPs above 120, while the Central Valley or upstate New York can be near the national average. The state-level number always hides this dispersion.
Breakdown by category
The headline index is a weighted average. The category-by-category numbers tell you why a state is cheap or expensive, and which category will hit you the hardest.
Housing
Housing is by far the most variable category. The MERIC housing sub-index ranges from roughly 72 in West Virginia and Mississippi to over 300 in Hawaii and parts of urban California. According to the US Census Bureau's American Community Survey, the median value of an owner-occupied home varies from about $145,000 in West Virginia to over $700,000 in Hawaii and over $650,000 in California. Rents follow the same pattern: HUD's Fair Market Rents for a two-bedroom apartment can be three or four times higher in coastal metros than in rural counties.
Groceries
The grocery sub-index has a narrower spread but it matters for low-income households. Hawaii and Alaska post grocery indexes around 120,155 because most food is imported. The cheapest grocery states sit near 92,95, Texas, Missouri, Iowa, Tennessee, Kansas. The difference between the cheapest and most expensive states is roughly 60 cents on every grocery dollar.
Utilities
Utilities reflect electricity prices, heating fuel and water. The Energy Information Administration (EIA) publishes monthly state-level electricity prices. Hawaii's residential rate is consistently the highest in the country, more than three times the rate in low-cost Washington, Louisiana or Idaho, which benefit from hydropower or low-cost natural gas. Connecticut, Massachusetts and California also post high utility indexes due to expensive electricity and winter heating.
Transportation
Transportation costs depend on gasoline prices, vehicle insurance and commute distance. California consistently has the highest gasoline prices in the country thanks to its specialized fuel blend and state taxes. Hawaii is close behind. The cheapest transportation states, Mississippi, Missouri, Oklahoma, combine low gas taxes with short commutes.
Healthcare
The healthcare sub-index varies less between states than housing, but it still moves the headline number. Alaska's healthcare index is among the highest in the country because of remote-area pricing; Tennessee, Arkansas and Mississippi tend to post the lowest healthcare indexes.
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Play today's puzzle →What the indexes do not tell you
The MERIC index and the BEA RPP both have limits worth knowing before you make a decision:
- Taxes are excluded. The indexes track consumer prices, not state or local tax burdens. Tennessee and Florida look very cheap in part because they have no state income tax, but Tennessee makes some of that back through high sales taxes. Compare with the Tax Foundation's annual State Tax Burden report for the tax picture.
- State averages hide metro variation. California's headline number is around 138, but Fresno is near 105 and San Francisco is well above 170. Always check the metro-level data for the city you actually plan to live in.
- Wages move with prices. Hawaii's median household income is well above the US median, partly because employers have to pay for the higher prices. The BEA's real personal income series adjusts for this.
- Climate-driven costs. Heating fuel costs in Maine and Minnesota show up in the utilities line, but air-conditioning costs in Arizona or Florida do too. Disasters add another layer: FEMA disaster declarations correlate with higher insurance premiums in coastal Florida, Louisiana and parts of California.
Cost of living vs. quality of life
A low cost of living is not the same as a high standard of living. The cheapest states often score lower on the US Census Bureau's measures of educational attainment and median household income, and the BEA's real personal income series shows that the gap in adjusted purchasing power is much smaller than the gap in raw cost of living. The most expensive states tend to concentrate the highest-paid jobs in finance, tech and biotech, which is partly what pushes their housing markets up in the first place.
For most households the practical question is not "where is it cheapest?" but "where does my income go furthest given the work I do?" A software engineer earning a coastal salary while working remotely from West Virginia is taking maximum advantage of the gap. A retiree drawing the same Social Security check anywhere in the country faces a very different math problem.
Frequently asked questions
Why is Hawaii so expensive?
Hawaii is roughly 2,400 miles from the US mainland. Almost every consumer good arrives by container ship, which adds shipping costs to nearly every line item. Housing is also constrained by limited buildable land and strong demand from out-of-state buyers.
Why is Mississippi the cheapest state?
Mississippi has the lowest median home value of any state, low utility prices, and grocery and transportation costs below the national average. Its population is small and largely rural, which keeps housing demand modest in most counties.
How often is the MERIC index updated?
Quarterly. The underlying C2ER data is collected from participating cities and counties, and MERIC publishes the state rollup each quarter.
Does the index include rent or only home purchase prices?
Both. The C2ER methodology blends rental costs for a representative apartment with mortgage costs for a representative home. The BEA RPP uses CPI rent data plus owners' equivalent rent.
Where can I get the raw data?
MERIC's quarterly tables are at meric.mo.gov. The BEA Regional Price Parities are at bea.gov under "Regional Economic Accounts". The US Census Bureau publishes housing values in the American Community Survey, and the EIA publishes electricity prices monthly.