Last week we posted an update on the median household income by the 50 states and DC based on the Current Population Survey, a joint undertaking of the Census Bureau and Bureau of Labor Statistics, which includes annual data from 1984 to 2014. Let’s now look at the actual purchasing power of those median incomes. For this adjustment we’re using the “C2ER Cost of Living Index” produced by C2ER, the Council for Community and Economic Research.

The median US income in 2014 was $53,657 (more here). The median incomes by state, rounded to the nearest $100, ranged from $76.2K high in Maryland to $35.5K low in Mississippi. Here is an alphabetically sorted table showing the median data for the 50 states and DC along with the purchasing power of those dollars based on the C2ER Cost of Living Index.

The alphabetical listing above makes it easy to find individual states, but for some additional insight, let’s sort the table by the purchasing power column. A quick look at this table shows the huge spread between $67.1K in Maryland and $35.6K in New York. We’ve calculated the difference between the actual median and its purchasing power in the column labeled “Difference”.

The negative skew of the purchasing power is quite obvious. Only nine states have an adjusted purchasing power greater than the actual dollars. the skew results from the predominantly higher incomes in major metropolitan areas of most states.

For an idea of the geographical distribution of purchasing power, here is a map that color codes the states based on a quintile breakdown.

Here is the same map that color codes the states based on median incomes quintile breakdown.

In a follow-up commentary, we’ll offer some speculation on how the states stack up against each other on the hypothetical “Happiness Threshold” developed a few years ago by psychologist Daniel Kahneman and economist Angus Deaton. Stay tuned!