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The economic stat junkie's guide to where you should live

Let's say you wanted to determine the part of the US with the highest standard of living. A logical place to start would be to look at how much typical families make in various parts of the country. As this map of US metropolitan areas by median household income (as of 2012*) shows, the richest metro regions are clustered along the coasts. The darker the area, the higher the median income:

median income household map metro area

(Census Bureau)

Here's the top five:

  1. San Jose (which includes much of Silicon Valley) — $90,737
  2. Washington, DC and suburbs — $88,233
  3. Fairfield County, CT (including Bridgeport and Stamford) — $79,841
  4. San Francisco — $74,922
  5. Greater Boston — $71,738

New York is far behind in 20th place, with a median household income of $63,982.

But income is only half the equation. You also have to look at cost of living. The typical DC metro resident might make a lot compared to the rest of the country, but housing and other necessities are more expensive in the DC area than in most places. Indeed, a look at the Tax Foundation's map of metro areas by cost of living looks very similar to the above map, suggesting that areas with high median incomes also face disproportionately high costs of living:

cost living metro tax foundation

(Alan Cole, Lyman Stone, Tom VanAntwerp, Richard Borean / Tax Foundation)

To figure out what parts of the country are best off even after you adjust for differentials in prices, I cross-referenced Census Bureau data on median household income with the Bureau of Economic Analysis's regional price parities data, and then ranked metro areas by their price-adjusted median household incomes (click here for all the data). Here's the full top ten, with the 2012 price-adjusted median income in each:

  1. San Jose-Sunnyvale-Santa Clara, CA — $74,374.59
  2. Washington-Arlington-Alexandria, DC-VA-MD-WV — $73,283.22
  3. Rochester, MN — $68,018.14
  4. Hartford-West Hartford-East Hartford, CT — $66,136.77
  5. Bismarck, ND — $65,987.23
  6. Norwich-New London, CT — $65,748.27
  7. Fairfield County, CT — $65,712.76
  8. Bloomington, IL — $65,662.79
  9. Appleton, WI — $64,486.6
  10. Anchorage, AK — $64,467.09

Silicon Valley and DC are rich enough that they still top the adjusted list. But some surprising places make in there too, like Rochester, a city of about 110,000 in southern Minnesota, and Appleton, a Wisconsin city of around 73,000 located 100 miles north of Milwaukee. Rochester is probably explained by the presence of the Mayo Clinic, which provides a significant number of well-compensated jobs, but Appleton lacks a single major employer, and no industry accounts for more than about 15 percent of its jobs, making its remarkable success here a bit harder to explain.

New York, for the record, comes in 145th place.

* There's 2013 data but the price data is from 2012, so I used that year for maximum comparability. Thanks to Jed Kolko for assistance in interpreting the ACS results.

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