Expensive Here, Cheap There

Think your last grocery bill seemed pricey? Be happy that you don't live in Sacramento, where a half-gallon of milk costs $2.97 on average. In fact, Sacramento's milk prices rank the highest of any major metropolitan city in the country.

New York City is another pricey spot. Not only are the city's average monthly mortgage, rent and energy bills the highest of any major city in the country, iceberg lettuce rings in at $2 per head, on average--double the price found in other cities. Sure, $2 isn't going to bankrupt you, but as prices of everyday goods continue to rise and the economy continues to tank, seemingly small costs such as these begin to add up.

Click here to learn more about the different prices in differen cities at our partner site, Forbes.com.

And things aren't getting any better. Just last week, the government announced unemployment was at 6.5%. It hasn't been this high in 14 years. No wonder consumer spending was down 0.3% in September, according to the Commerce Department.

As the economy continues its decline, those in San Antonio are far less likely to feel the pinch--at least when it comes to food prices. Residents there pay just $3.08 for an 11.5 oz. can of freeze-dried coffee, compared to $5.91 in San Francisco. And when it comes to bread, San Antonians win again: The average cost of a loaf of white bread is just $.79. In Manhattan, bread costs over three times that amount, at $2.68 per loaf.

Behind The Numbers

To determine the cities where everyday costs are the cheapest and most expensive, we turned to Council for Community and Economic Research (C2ER), an Arlington, Va.-based organization that works with local government and research groups to determine the costs of common goods in metropolitan statistical areas (MSAs) across the country. C2ER provided the average price of 10 different everyday costs in the urban areas of the top 40 largest MSAs in the third quarter of 2008.

An urban area is defined as an area of 50,000 or more people within an MSA. That means "satellite cities"--smaller cities within the MSA--are separated from the larger cities in this survey. Take Boston. Although a small city like Quincy, Mass. is a part of Boston's MSA, it was considered a separate city when compiling this research. Only Boston proper--which boasts an estimated 2008 population of 616,535--was included in the information offered about "Boston." Places like Brookline and Cambridge, which are also part of the overall Boston MSA, were not included.

But why are there such huge disparities across the country when it comes to everyday items? Sure, with its overpopulation and disproportionately high incomes, it makes sense that New York has the highest per-month mortgage rate, on average, or that Seattle--with its government-run energy supply--boasts the lowest monthly energy costs.

But what is it about San Antonio that keeps its food prices so low? Or New York's energy costs so high?

Erol Yildirim, director of data products at C2ER, says that in the simplest terms, it has to do with supply and demand. In San Antonio, for example, the median household income was $36,214, according to the U.S. Census Bureau. In Manhattan, the median income per household is $47,030. "People who make less money demand less, which means suppliers can't afford to charge more," says Yildirim.

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