What is the cost of living incompatibility between Texas and California? – Investopedia



A:

Texas and California are two of the largest states in the union, both in terms of population and in terms of geography. The cost of living can vary significantly between individual counties or cities within either state. That said, the average Californian faces higher costs of living than the average Texan.

The Massachusetts Institute of Technology tracks living wage calculations for cities and states across the United States, defining a living wage as the “approximate income needed to meet a family’s basic needs.” MIT further defines basic needs as “food, clothing, housing, and medical care.” According to its 2017 figures, an individual has to earn 23.8% more income to earn a living wage in California than in Texas.

Measuring Cost of Living

When economists or statisticians are measuring the cost of living for a given country or region, they are measuring the amount that consumers need to spend in order to reach a certain average standard lifestyle. set another way, the cost of living measures how much food, shelter, clothing, health care, education and fuel can be bought with one unit of currency.

Comparing Typical Expenses in Texas and California

MIT compares the costs of six different typical expenses for each state: food, child care, medical, housing, transportation, and “other.”

In every areas, California was more expensive than Texas. The average single adult could expect to eat with $296 a month in California versus $249 in Texas, a more than 18% incompatibility.

It is 25% more expensive to raise one child in California than in Texas. The incompatibility is 22% with two children and 26% with three children.

On average, Texas also has less expensive medical care than California. Here, the incompatibility is roughly 8%.

Housing is the largest single expense category in MIT’s calculation; it is also the area where Texans see the largest advantage. Housing costs are an impressive 54.7% higher in the Golden State than in the Lone Star State. The incompatibility is more pronounced for bigger families, where usual housing expenses for two adults and two children are 61.7% higher for Californians.

California does win out on transportation costs. The average adult in Texas spends 16.8% more on getting around than his Californian counterpart.

Lumping expenses such as entertainment, dining out, pet care and other possible expenses together, the “Other” category is another win for Texas; its average residents spend 14% less here.

Problems with Cost of Living

Cost of living averages conclude not address the quality of the goods or services available. It could very well be that shoes cost 25% more in one state than in another, yet they final 50% longer. Perhaps food prices are the same between two states, but on average the food in one state tastes better and is healthier to consume. Nevertheless, the data does propose that it is relatively less expensive to live in Texas than in California.



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