The U.S. dollar is one of the strongest currencies in the world, meaning its purchasing power is much greater than the currencies of nearly all other independent nations. Yet the purchasing power of a dollar fluctuates greatly within U.S. borders, as the price of housing, food, and services vary considerably across the country.
To shed light on these differences that reflect the relative purchasing power of Americans in every state, 24/7 Wall St. calculated the value of a dollar in each state using data from the Bureau of Economic Analysis.
A dollar goes the furthest in America’s poorest states. Goods and services are less expensive to accommodate the relatively low-income residents. These areas are primarily located in the South. Conversely, the most expensive states — where the dollar has the least purchasing power — are home to some of the nation’s largest and most affluent cities.
To determine the purchasing power of a dollar in every state, 24/7 Wall St. reviewed the Bureau of Economic Analysis’ estimates for regional price parity in 2016 — the most recent year for which data is available. We calculated the value of a dollar in each state by dividing 100 (which represents the base value of $1.00) by every state’s relative price parity figure. We also reviewed the BEA’s per capita personal income data for all states in 2016. To arrive at the effective personal income value for every state, we divided the 2016 per-capita-personal income figure by the 2016 regional price parity value. Median home values came from the 2016 U.S. Census Bureau’s American Consumer Survey.