When you compare the cost of living between two states, you need a single, consistent yardstick. The cleanest one is the Regional Price Parity (RPP), published by the U.S. Bureau of Economic Analysis.
The one-sentence definition
An RPP measures how expensive a place is relative to the US as a whole, with the national average set to 100.
| RPP value | What it means |
|---|---|
| 112 | About 12% more expensive than the US average |
| 100 | Exactly the US average |
| 90 | About 10% cheaper than the US average |
So California at ~112.5 is roughly 12.5% pricier than the country; Arkansas at ~86.6 is about 13% cheaper.
What it includes
The all-items RPP — the one we use as our headline figure — blends the price levels of:
- Housing (rents) — the biggest source of variation between states
- Goods — groceries, fuel, clothing, electronics
- Other services — everything from haircuts to healthcare
Because housing varies so much more than goods, expensive states are almost always expensive-housing states.
RPP is not inflation
This trips people up. Inflation is change over time. RPP is difference across place at one point in time. A state can be expensive (high RPP) yet have slow inflation, or cheap yet see prices rising fast.
How to use it
The most practical use is converting a salary between states. Because RPP is a clean ratio, the math is simple (see our methodology):
equivalent salary = current salary × (RPP of destination ÷ RPP of origin)
That’s exactly what the cost-of-living calculator does. You can also browse every state’s RPP in the state index or see the most expensive and cheapest rankings.
The limits
RPP is a statewide average and updates about once a year, so a specific city can differ a lot from its state’s number, and the figure may lag the present. Treat it as a reliable guide to relative prices, not a precise current cost.
Sources
BEA Regional Price Parities by State and Metro Area, all items, US = 100, public domain. See our methodology for vintages and assumptions.