How do “universally” priced items work into cost of living?



Example: I live in Oklahoma and lets say I have a friend who work in San Francisco. We both order the same thing on Amazon that costs $300. Does that $300 work to out to mean the same amount for us somehow? PSA: I say “universally” to mean across a country/region, where you can have many different costs of living, but things bought online would cost the same.

In: Economics

I think you’re asking why “cost of living” is higher in some states despite the fact that many products are priced identically in all states.

The reason is that the really expensive stuff isn’t the same price. Your $300 monitor may cost the same in OK and SF. But the SF house costs $2m while the OK house costs $200k. Since a greater portion of income covers housing, the fact that housing is so much more in SF more than makes up for the fact that lots of stuff costs the same.

But things online are not priced the same across the board.

Prices are set regionally, typically.

Buying something used is different. Used items are worth what someone will pay. Some things are just $300.

When I was pregnant you could set your store to a different store on buybuybaby and then have it shipped anywhere. Somewhere in Kansas had a crazy diaper sale matching a local competitor; someone in my mom’s group shared the deal and how to get it. I changed my store to the Kansas store and ordered $400 worth of diapers for $285. They shipped to me in Kentucky for free.