The Cheapest State In America

By Douglas A. McIntyre Published Nov 26, 7:37AM EST

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As measured by the CPI, the cost of living soared just under two years ago by 8% a month, year over the previous year. Almost certainly, the process of the Fed raising rates took that down sharply. In October, the CPI was flat with September. Lost in this analysis is that the cost of living, regardless of inflation, is much less expensive in some states than others.

The state with the lowest cost of living is West Virginia, according to the Missouri Economic Research and Information Center, a division of the Missouri state government. The Council for Community & Economic Research (C2ER) collects the data from cities that provide it on a volunteer basis. That city data is then aggregated to produce state figures. The most recent figures are for the third quarter of this year. The national average is indexed at 100.

West Virginia’s index was lowest at 85.2 last quarter. Only a few states were under 90. These were Mississippi (87.6), Oklahoma (86.8), Kansas (87.4), Alabama (88.2), Missouri (88.3), Arkansas (88.5), Iowa (88.9). Several factors can affect these numbers, including housing costs, transportation, groceries, utility, and healthcare costs. The cheapest city to live in is located in Illinois.

At the far end of the spectrum, Hawaii has an index of 179.2. No other state has an index above 150. The most expensive city to live in is located in Florida.

A low cost of living is almost always married to a low household income. West Virginia ranks next to last based on this yardstick at $51,248. Mississippi ranks at the bottom among all states at $48,716. Hawaii ranks sixth in terms of highest household incomes at $84,957.

What’s the lesson? The cost of living by state cannot be viewed in a vacuum.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.