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Of the major costs of a typical family, which do you think differ most by geography and account for these purchasing power differences?  (e.g. home prices/rents much higher in certain states (California, New York) compared to others (Mississippi))

Of the major costs of a typical family, which do you think differ most by geography and account for these purchasing power differences?  (e.g. home prices/rents much higher in certain states (California, New York) compared to others (Mississippi))

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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1. Of the major costs of a typical family, which do you think differ most by geography and account for these purchasing power differences?  (e.g. home prices/rents much higher in certain states (California, New York) compared to others (Mississippi))

How to read this chart (from NY Times): To better understand, imagine a store offering a range of goods and services, each for sale at the national-average price for that particular item. Now, imagine a shopping cart filled with $100 worth of items from that store. In Hawaii, $100 buys about 85 percent of the goods in the cart thanks to the high prices there. In other words, $100 in Hawaii feels more like $85.60, compared to the national average. In Mississippi, the opposite is true. With $100, you would be able to buy the cart's contents and more: the equivalent of $115.30 of goods and services from the national-average store. What data is used in this analysis (from NY Times)? The Regional Price Parities are calculated using data already collected for another indicator, the Consumer Price Index, which serves as a measure of inflation. For that index, the government tracks prices of more than 200 goods and services, including men's suits, college textbooks, cereal, electricity and cars and trucks. It also tallies rents, which are particularly variable among states. The "real value" of $100 in rent can range from roughly $63 in Hawaii to $160 in Arkansas.
Transcribed Image Text:How to read this chart (from NY Times): To better understand, imagine a store offering a range of goods and services, each for sale at the national-average price for that particular item. Now, imagine a shopping cart filled with $100 worth of items from that store. In Hawaii, $100 buys about 85 percent of the goods in the cart thanks to the high prices there. In other words, $100 in Hawaii feels more like $85.60, compared to the national average. In Mississippi, the opposite is true. With $100, you would be able to buy the cart's contents and more: the equivalent of $115.30 of goods and services from the national-average store. What data is used in this analysis (from NY Times)? The Regional Price Parities are calculated using data already collected for another indicator, the Consumer Price Index, which serves as a measure of inflation. For that index, the government tracks prices of more than 200 goods and services, including men's suits, college textbooks, cereal, electricity and cars and trucks. It also tallies rents, which are particularly variable among states. The "real value" of $100 in rent can range from roughly $63 in Hawaii to $160 in Arkansas.
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