[Vision2020] The Value of a Dollar in Every State

[Kenneth Marcy]

The Value of a Dollar in Every State

http://247wallst.com/special-report/2016/05/13/the-value-of-a-dollar-in-every-state/ 


While a dollar bill looks and feels the same all over the United States, 
its value is often very different depending on where it is used.

The prices of housing, food, and services, vary considerably across the 
country. To highlight these differences, which reflect the relative 
purchasing power of Americans, 24/7 Wall St. calculated the value of a 
dollar in each state based on data from the Bureau of Economic Analysis. 
Compared to the national average cost of goods and services, a single 
dollar goes the furthest in Mississippi, where the cost of living is the 
lowest of any state. A dollar in Mississippi is effectively worth $1.15. 
By contrast, in Hawaii, the most expensive state, a dollar is worth the 
least — only $0.86.

Income levels differ far more than costs of living between states. In 
states with high incomes, a single dollar tends to be worth less because 
of the often higher costs of living in those states. In the 15 states 
where the dollar is worth the least — that is, with the highest costs of 
living — the median annual household income exceeds the national median 
of $53,657. In low-income states, by contrast, a single dollar tends to 
go relatively far. Mississippi, the state where a dollar goes the 
furthest, has the highest poverty rate and lowest household median 
income in the nation.

*Click here to see the value of a dollar in every state. 
<http://247wallst.com/special-report/2016/05/13/the-value-of-a-dollar-in-every-state/2/>*

In the five years through 2013, the value of a dollar increased in every 
state — and nationwide. While this may sound positive, the reasons for 
the higher dollar value were mostly related to the housing crash. The 
states with the largest increases in the value of a dollar also had 
among the largest median home price drops between 2008 and 2013. 
California for example, where one dollar is worth just $0.89, the median 
home value dropped by more than 20% over that period. Because Americans 
spend far more on housing than on goods and services, the housing market 
collapse meant that component declined considerably, leaving room for 
more purchases. While one dollar could therefore buy more than it did 
before the housing collapse, a number of Americans lost significant 
amounts of money through the depreciation of their homes.

North Dakota is the only state that had a major increase in the cost of 
housing, with median home prices rising by 38.1% between 2008 and 2013, 
likely caused by the state’s oil industry-related economic boom. The 
housing cost increase in North Dakota bucked the broader trend, and the 
value of one dollar in North Dakota increased less than in any other 
state as a result.

To identify the states where a dollar is worth the most, 24/7 Wall St. 
calculated the relative price of a single dollar using regional price 
parities (RPPs) in each state in both 2008 and 2013 — the latest year 
for which data are available — from the Bureau of Economic Analysis. 
RPPs are expressed as an index of the national average price level (100) 
for goods and services. We also reviewed socioeconomic data, including 
median household income, and poverty rates from the U.S. Census Bureau’s 
2014 American Community Survey.

These are the states with the highest value of one dollar.


*20. Idaho
 > Value of a dollar:* $1.08
*> Chg. in value of dollar 2008-2013:* +10.3% (3rd largest)
*> Median household income:* $47,861 (14th lowest)
*> Poverty rate:* 14.8% (25th highest)



Ken


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