As the Coronavirus continues to affect the American economy, the value of the country’s currency has taken a hit in international markets. Even so, the U.S. dollar remains one of the most widely-traded and powerful currencies in the world. Within the United States, the purchasing power of a dollar fluctuates greatly, as the price of housing, food, products, and services vary considerably across the country.
To shed light on these differences that reflect how far a dollar can stretch in every state, 24/7 Wall St. calculated the purchasing power of a dollar in each state using data from the Bureau of Economic Analysis.
We reviewed the BEA’s estimates for regional price parity in 2018 — 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 regional price parity figure. We also reviewed the BEA’s per capita personal income and real per capita personal income data for all states in 2018. Median home values came from the 2018 U.S. Census Bureau’s American Consumer Survey.
A dollar goes the furthest in America’s poorest states. Goods and services tend to be less expensive in lower-income areas, more closely reflecting what residents can afford. A large share of cities with relatively large lower-income and poor populations are located in Southern states.
Conversely, the most expensive states — where the dollar has the least purchasing power — are home to some of the nation’s most affluent cities and towns.