How Massachusetts’ Cost of Living Compares with National Averages

It’s no secret that the Bay State is an expensive place to live. So how, exactly, do we stack up against the rest of the country?
massachusetts vs national cost of living

Photo via iStock.com/CasarsaGuru

Expense: Healthcare, +6.5%

What we pay vs. the national average:
Massachusetts is the sixth-most-expensive state when it comes to employer-based health insurance, according to an analysis by the Kaiser Family Foundation, which noted that in 2015, the average family premium was $18,454 here (with an average employee contribution of $4,487).

Why the difference:
Our high concentration of academic medical centers, health plans that cover comparatively more services, and demographics that skew a bit older all add up to higher premiums, explains Gary Young, of the Northeastern University Center for Health Policy and Healthcare Research.

Expense: Housing, +24%

What we pay vs. the national average:
The average Boston-area household shelled out $22,048 per year on housing in 2013–2014, according to the U.S. Bureau of Labor Statistics; by contrast, the average U.S. household spent $17,798 in 2014.

Why the difference:
It’s no secret that this is an expensive place to live, and the average cost of housing doesn’t even begin to tell the whole story. Rapid development is driving up the cost to buy and rent in Boston, and low-income families are getting squeezed. Looking for a luxury condo, though? You’re in all kinds of luck.

Expense: Taxes, 0%

What we pay vs. the national average:
Taxachusetts? Not quite. The Bay State is actually in the middle of the pack when it comes to taxes. According to the Massachusetts Budget and Policy Center, the average homeowner handed over about 10.4 percent of their income to state and local taxes in 2014, exactly the national average.

Why the difference:
Since 1980, a state policy called Proposition 2½ has limited tax increases in cities and towns to 2.5 percent a year (absent an override). And taxes are on the way down. The state income tax, at 5.1 percent, has been slowly working its way to 5 percent, a rate approved by voters in 2000.

Expense: Electricity, +57%

What we pay vs. the national average:
The average Massachusetts residential electric bill cost about 19.83 cents per kilowatt-hour in 2015, according to the U.S. Energy Information Administration (EIA), well above the national average of 12.65 cents.

Why the difference:
We’re using more natural gas than ever to power our state, and the plants that turn it into electricity are expensive to operate, explains Francis O’Sullivan, of the MIT Energy Initiative. Powering homes through aging infrastructure in a dense urban environment also adds to the cost.

Expense: Gasoline, –1%

What we pay vs. the national average:
Gas prices were a bit lower here in 2016 than they were elsewhere in the country. It cost an average of $2.22 a gallon to fill up in Massachusetts last year, compared with $2.25 nationally, according to the EIA.

Why the difference:
At 24 cents per gallon, our state gas tax isn’t all that high compared with others, O’Sullivan says. And the cost of transporting fuel to gas stations from storage facilities tends to be lower in heavy populated areas than in rural ones, where it has to be trucked longer distances.

Expense: Red Sox Tickets, +77%

What we pay vs. the national average:
At an average of $54.79, according to the 2016 Team Marketing Report, Red Sox tickets are the priciest in the MLB, a few dollars ahead of the Yankees’ $51.55. The major league average is $31.

Why the difference:
We’re a city where champions play and history is made, and you pay for a luxury like that. And it’s not just Sox fans shouldering the cost of all that glory. Tickets to see the Bruins, Patriots, and Celtics are the second, third, and fifth most expensive in their respective leagues.

Expense: Wages, +27%

What we pay vs. the national average:
The median household income in Massachusetts was $70,628 in 2015, according to the U.S. Census Bureau’s American Community Survey, while the national median was just $55,775.

Why the difference:
From medicine and academia to biotechnology, ours is a high-wage economy. That isn’t the case for everyone, though. The Brookings Institution in 2016 named Boston the nation’s top city for income inequality, meaning the gulf between the haves and have-nots here is wider than it is anywhere else. America.


Spencer Buell Staff Writer at Boston Magazine sbuell@bostonmagazine.com