Relationship between Income and Cost of Living in US Cities

Abstract

This paper examines the relationship between the cost of living and median household income. The hypothesis is that there is a positive correlation between the two variables, where the median income is higher in areas with a higher cost of living. Variables such as water, electricity, energy, and rent were utilized in order to obtain a well-rounded cost of living factor and then compared to the median household income. Evidence suggests this hypothesis to a certain extent. While there is a positive correlation, the increases are not simultaneous.