Virginia residents have a lower purchasing power than many states due to higher consumer goods prices, a study found.
Virginia is for lovers, but it certainly isn’t cheap.
In Virginia, $100 doesn’t stretch as far in comparison to the
rest of the nation, a study by the Tax Foundation found. In fact, the value of
$100 in Virginia is just $97.09 because of higher prices for
By comparison, $100 is more valuable in neighboring West
Virginia, where low prices mean residents actually have a value of $113.12, the
fifth-highest purchasing power in the country.
While regional price disparities are not surprising, the
difference between the highest- and lowest-price states was 36 percent. Those
in the District of Columbia get the least bang for their buck with only an
actual value of $84.96 for $100. The same $100 was worth the most in
Mississippi, where residents can get $115.21 worth of consumer goods.
Virginia is one of just 15 states where $100 doesn’t actually
get you that amount in consumer goods, according to the Tax Foundation.
Virginians have to earn more to have the same purchasing power as low-price
The study also found that for states with higher prices,
residents usually had higher incomes. The relationship also worked the other
way: in places with higher incomes, prices generally went up.
“This is what labor economists call a compensating
differential; the higher pay is offered in order to make up for the low
purchasing power,” the Tax Foundation said in the study.
Overall, Virginia has an improving economy that has struggled
since the recession. Gov. Terry McAuliffe announced that the state’s General Fund budget
has a surplus from an increase in tax revenues. In a high-price state,
Virginians might feel the pinch of rising taxes more than other states where
the value of $100 is worth more.