Why is the cost of living considered much higher in urban areas rather than rural?

Great Debates
1

Aside from real estate, what price differences are there between rural and urban areas? Its not like an Urban McDonalds charges $5 for a big mac while a rural McDonalds charges $2.29, so why the mentality that it takes 2x as much money to live in a large city?

Automobiles, food, household goods, clothing, medical care, all of these things would be the same price no matter if you lived in a major metropolitan area or a small rural area to my knowledge. I don’t know if real estate costs drive up the price of goods & services but when i stop in Target stores or fast food restaurants in 1 million plus cities they charge the same as the 30 city charges or the 9k city charges.

Real estate, and maybe insurance (auto, health, home) are the only things i can think of that would be charged different in an urban area so why is the idea that living in a city takes much more money so prevalent.

2

Housing costs. Gas costs more in SF than even in the suburbs.

Restuarants, etc. If you live a rural lifestyle in the city (eat at home, etc.) it probably doesn’t cost much more other than rent/mortgage.

Maybe this is a GQ thread, not a GD one…?

3

Housing is definitely cheaper in the country (around here, anyway).

Plus little things like hanging your laundry outside and not having to water your front lawn all the time (keeping up with the neighborhood type thing). And eating at home as John mentioned.

4

Because it IS higher. Sometimes…

Like John (Hi John, you fellow Bay area housing price prisoner you) Mace mentioned- housing is the biggest item on the budget, and it is WAY more expensive in the city. I pay $85/mo to park- how much do suburban or rural dudes pay?

Since housing is higher- retail, etc must pay higher wages- and higher rent- thus sometimes their prices are higher. OTOH, lots of competition tends to equal that out.

5

I very well might be readign this wrong but McD’s does (almost). A Big Mac in Manhattan (IIRC - I don’t order many BMs’) goes for around $4.25 while it can be had for as little for (again IIRC) $2.50 up in VT.

Higher taxes are a factor, higher min wage, higher crime rate, higher insurance rates, higher payrole taxes. Also a very big factor is supply and demand (well that’s the whole ball of wax). Having a building in the middle of nowhere is not going to be in such demand and the rent lower then one in downtown.

6

This may be more of a social factor, but there is also a great deal more pressure to “keep up with the joneses” in an afluent city. Where I live, nobody drive cars more than three years old, and even if there are Walmarts in the neighborhood, shopping there is simply not considered kosher.

In the small towns I have lived in, there was nothing wrong with driving a ten year old car, or living in an older house, or letting your hair go two months between cuts.

7

Supply and demand. If there is a greater concentration of people, you have a higher demand for goods and the higher price follows.

A McDonald’s in a small town that has 3000 people a day pass by it needs to secure the business of as many as possible, ad lower prices helps.

A McDonald’s in Manhattan with 100s of thousands of people passing by can raise the price, because they need to secure a smaller percentage of the available business to be successful.

Apply this to any consumer goods or services…

8

That’s been my experience. I was shocked when I saw some of the prices for stuff in NYC. I’m from the largest city in Kentucky, which isn’t all that big, and stuff is definitely cheaper here. I’ve lived here, Norfolk, VA and Houston TX, and visited NYC and Toronto, Omaha, & San Francisco. As near as I can tell, it’s generally true that stuff costs more in huge urban centers. Maybe your 20 oz. coke doesn’t (I dunno, we pay $0.99) and maybe stuff like eggs and bread are comparably priced, but I pay less than $2.50 for my Big Mac, and I can get a coke and fries with that for just over three dollars. My cigarettes are less than $3 a pack, and I can still get cartons for $20.95. Also, entertainment. I can see a first run movie for $6-7 here. I wonder if the drinks are cheaper? I know I can get a six pack of Sierra Nevada beer for $5.95 and I pay $2.00 for a bottle of it my favorite bar, though I’ve been charged a bit more elsewhere (locally).

I have to wonder if energy & fuel prices contribute to the assumption/theory. I would think that, real estate, and insurance would be the big ones.

9

Businesses in urban areas tend to pay higher real estate costs. Urban taxes tend to be higher for individuals and businesses. Businesses increase the cost of their products and services to cover what they pay in taxes and real estate.

10

Rural areas? Now the ball’s in MY court!

Personally, I rarely see much a difference in the cost of most retail goods. Some foods might be somewhat cheaper, especially locally grown fruits or vegetables, or possibly meat and dairy products.

Real estate is, of course, significantly cheaper. Construction costs may be fairly comparable (or even more expensive in the case of highly specialized structures) but they depreciate quickly. Furthermore, they’re sitting on very cheap dirt. The importance of the cost of real estate cannot be understated: for many households, housing costs can approach 50% of their net income.

Utilities may also be significantly cheaper. Rural areas often form “electric cooperatives” which are frequently non-profit in nature. Water and sewer may be provided by the local municipality at a fraction of their big-city counterparts, or in many cases water and sewer services are provided by wells and septic tanks. Phone services that might otherwise be more expensive may be subsidized through the “universal service charge.”

Sales taxes, at least in Oklahoma, are typically not significantly different between large cities and small towns. Income taxes 'round these here parts are only assessed by the state government, so there’s no difference there. BUT, property taxes may be wildly lower in rural areas. Total millages between 60 and 70 mills (based on an 11% assessed to market ratio) are common in rural areas… in the Tulsa and OKC areas, it’s more like 120 to 130 (and remember that these are higher rates on higher market values!)

Some locally provided services may also be significantly cheaper, though I’m trying to think of a good example of this… maybe rural lawyers or general practicioners.

Another money saver that’s been mentioned already (I believe) is just the fact that rural lifestyles are often a lot less expensive. You may think twice about going to see a movie if the nearest movie theater is 50 miles up the road! Theater prices in rural towns are also often much cheaper to boot… I think I paid $4.50 to see a first-run movie in McAlester a little while back.

Someone mentioned gas prices… if anything, gas prices in Oklahoma are typically significantly lower in urban areas as compared with the rural ones, at least in my fairly vast experience driving through po-dunk towns in this state (Slapout, OK anyone?)

Finally, the cost of living needs to be at least a little cheaper in rural America, considering how much lower rural income levels are.

11

I’ve never noticed a difference in the prices of retail goods. The prices of Gasoline, shampoo, dental work and fast food are the same. I currenly live in bloomington (about 65k people), i sometimes visit indianapolis and i’ve lived in a town with about 9k people in it and the retail prices are the same. I guess it depends on the city.

I’d think tourism is a factor as well. Lots of people visit NYC. not too many visit indianapolis, so maybe Indy can’t get away with overcharging the same way NYC can.