Cost of Living
The amount of money needed to maintain a specific standard of living in a given location, covering housing, food, transportation, healthcare, and other essentials.
What is Cost of Living?
Cost of living measures the expense required to sustain a defined standard of living in a particular city, region, or country. It encompasses housing costs (rent or mortgage), food, transportation, healthcare, utilities, and taxes. Cost of living varies dramatically across locations — Manhattan and San Francisco are among the most expensive US cities, while cities in the Midwest and South are considerably cheaper. The Consumer Price Index (CPI) tracks national cost-of-living changes over time, while indices such as the Council for Community and Economic Research (C2ER) Cost of Living Index compare costs across US cities. Cost of living is critical for salary negotiations, retirement planning location decisions, and understanding real wage differences.
Example
According to the C2ER Cost of Living Index, Manhattan's overall cost of living is roughly 130% above the national average, driven primarily by housing costs over 400% above average. A salary of $100,000 in a mid-cost city such as Columbus, Ohio, would need to be approximately $230,000 in Manhattan to maintain the same standard of living. This dramatic gap explains why remote-work flexibility has prompted significant migration from high-cost coastal cities.
Source: Council for Community and Economic Research — Cost of Living Index