How Were the States Determined to Be Least Expensive and Why Are They That Way?
Why is the cost of living less in some states than others?
Besides the overall cost of living for 2010, other areas were studied in the CNBC study that could have helped make the cost of living lower. The criteria studied included the workforce, quality of life, whether the economy is strong in a state, the infrastructure and transportation in a state, the cost of doing business, education, whether a state is friendly to businesses, access to capital, and innovation and technology.
As an example of how such factors could have helped make a state an inexpensive place to live, Oklahoma had the third lowest cost of doing business, and businesses may have passed that savings to customers. It also had the third best economy. Tennessee had the fifth best workforce, was the sixth most friendly to businesses, and was the fourth best state for transportation. Transportation costs are among some of the most important individuals and businesses pay for, so a lower transportation cost may mean a lower overall cost of living.
Factors considered in determining the states with the lowest cost of living for the first quarter of 2011 included grocery costs, housing, transportation, utilities, health care, and miscellaneous goods.
Michigan had slightly lower grocery costs than average, greatly lower costs for miscellaneous items, lower costs for transportation, and utilities. Because the costs were lower for so many things, the state still had the lowest overall costs for living, despite higher housing and health care costs.