The wide range between states is in part due to the number of large cities in each state.
"As people gather into densely-packed cities, the price of real estate in those cities rises as people and businesses compete for ownership of scarce land," Alan M. Cole, an economist at the Tax Foundation, wrote in an email to The Huffington Post.
States on the Gulf Coast or the Mississippi River tend to be cheaper places to live because it's easy to ship goods there, Cole said. States that are more isolated from transportation networks, like Alaska and Hawaii, have to pay more to import goods, so things generally cost more.
Cole argues that the U.S. often overlooks these regional differences in purchasing power when designing tax and welfare policy.
"This data highlights the problems of basing federal policy on nominal income data alone," Cole said. "Income data without context is a poor measure of people’s well-being."
source: huffingtonpost.com By Kevin Short