List of U.S. states by adjusted per capita personal income

List of states by adjusted per capita personal income estimates the per capita personal income of residents of U.S. states adjusted by differences in the cost of living, called "regional price parities" by the U.S. Bureau of Economic Analysis. The BEA defines regional price parities as an estimate of "the differences in price levels across states and metropolitan areas for a given year and are expressed as a percentage of the overall national price level."[1] The BEA defines personal income as follows:

Personal income is the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. It includes income from domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or losses. Personal income is estimated before the deduction of personal income taxes and other personal taxes and is reported in current dollars (no adjustment is made for price changes).[2]

Per Capita Personal Income (PCPI) is a more inclusive estimate of the average standard of living of citizens and residents in the U.S. than measures of per capita income. PCPI "includes wages, benefits, proprietor income, dividends, interest, rent, and transfer payments" such as Social Security, veteran's benefits, farm subsidies, welfare, and food stamps.[3]

The differences in estimates of per capita income and per capita personal income is large. In 2019, the U.S. Census Bureau calculated a per capita income of the United States as 34,103 dollars.[4] The U.S. Bureau of Economic Analysis calculated the PCPI as 56,490 dollars.[5]

A more valid accounting of the differences in the standard of living of American citizens in different states requires recognition that prices vary from state to state and community to community. In general, a dollar has more purchasing power in the poorer states than it does in the richer states. The difference in housing costs from state to state is especially important. The Bureau of Economic Analysis has calculated that the regional price parity of U.S. states ranges from 84.4 in Mississippi (the cheapest state in which to live) to Hawaii at 119.3 (the most expensive state). In other words, an income of $0.84 in Mississippi equals an income of $1.19 in Hawaii with the U.S as a whole having an average PCPI of $1.00. To put it another way, the purchasing power of a dollar is $1.18 in Mississippi and $0.84 in Hawaii. The net impact of accounting for differences in the purchasing power of a dollar in different states is to narrow the gap in the standard of living between rich and poor states. [6]

Ranking states by PCPI, adjusted by regional price parityEdit

State Per Capita Personal Income (PCPI) (2019)[2] Rank before adjustment Purchasing power of $1.00 (2019)[5] PCPI after adjustments for purchasing power of dollar Rank after adjustment
United States $56,490 $1.00 $56,490
Connecticut $77,289 2 $0.95 $73,425 1
District of Columbia $83,406 1 $0.87 $72,563 2
Massachusetts $74,187 3 $0.91 $67,510 3
Wyoming $62,189 11 $1.08 $67,164 4
North Dakota $57,232 17 $1.12 $64,100 5
Maryland $64,640 8 $0.93 $63,115 6
New York $71,717 4 $0.86 $61,677 7
South Dakota $53,962 22 $1.14 $61,517 8
Nebraska $54,515 21 $1.12 $61,057 9
New Jersey $70,471 5 $0.86 $60,605 10
Illinois $58,764 15 $1.03 $60,527 11
Minnesota $58,834 14 $1.02 $60,011 12
Colorado $61,157 12 $0.98 $59,933 13
Kansas $53,426 23 $1.12 $59,837 14
Pennsylvania $58,032 16 $1.03 $59,773 15
New Hampshire $63,502 9 $0.94 $59,692 16
Alaska $62,806 10 $0.95 $59,666 17
Washington $64,758 7 $0.92 $59,577 18
Virginia $59,657 13 $0.99 $59,060 19
Wisconsin $53,227 24 $1.09 $58,017 20
Iowa $51,865 28 $1.12 $58,008 21
California $66,619 6 $0.86 $57,292 22
Ohio $50,199 31 $1.13 $56,725 23
Rhode Island $56,361 19 $0.99 $55,797 24
Delaware $54,485 21 $1.01 $55,030 25
Indiana $48,678 36 $1.13 $55,006 26
Missouri $48,656 37 $1.13 $54,981 27
Texas $52,813 26 $1.04 $54,926 28
Oklahoma $47,341 41 $1.15 $54,442 29
Louisiana $47,460 40 $1.14 $54,104 30
Tennessee $48,684 35 $1.11 $54,039 31
Vermont $55,293 18 $0.97 $53,634 32
Montana $49,747 32 $1.07 $53,229 33
Michigan $49,228 33 $1.08 $53,166 34
Nevada $51,161 29 $1.03 $52,696 35
Arkansas $44,629 44 $1.18 $52,622 36
Oregon $53,191 25 $0.98 $52,127 37
North Carolina $47,766 39 $1.09 $52,065 38
Florida $52,426 27 $0.99 $51,902 39
Alabama $44,145 45 $1.17 $51,649 40
Georgia $48,236 38 $1.07 $51,615 41
Maine $50,634 30 $1.01 $51,140 42
Utah $48,939 34 $1.04 $50,897 43
Kentucky $43,770 48 $1.14 $49,898 44
Idaho $45,968 43 $1.08 $49,645 45
South Carolina $45,438 46 $1.09 $49,527 46
West Virginia $42,315 50 $1.15 $48,662 47
Arizona $46,058 42 $1.04 $47,900 48
Hawaii $57,015 17 $0.84 $47,893 49
New Mexico $43,326 49 $1.10 $47,659 50
Mississippi $38,914 51 $1.18 $45,919 51

ReferencesEdit

  1. ^ "Regional Price Parities by State and Metro Area". Bureau of Economic Analysis. Retrieved 25 January 2021.
  2. ^ a b "Personal Income by County and Metropolitan Area, 2019" (PDF). Bureau of Economic Analysis. Retrieved 24 January 2021.
  3. ^ "What is the difference between GDP and personal Income?". Montana.gov: Official State Website. Retrieved 24 January 2021.
  4. ^ "Quick Facts: United States Census Bureau". United States Census Bureau. Retrieved 24 January 2021.
  5. ^ a b "Press Release: Real Personal Income by State and Metro Area in 2019" (PDF). Bureau of Economic Analysis. Retrieved 24 January 2021.
  6. ^ Sauter, Michael B. (25 November 2020). "Arkansas, Mississippi are among the states where a dollar has the highest value". USA Today: Money. Retrieved 24 January 2021.