Cost of Living in Texas vs. California: What's the Difference?

Cost of Living in Texas vs. California: An Overview

Texas and California are two of the largest states in the union, both in terms of population and geography. The cost of living can vary significantly between individual counties or cities within either state. That said, the average Californian faces higher costs of living than the average Texan.

When economists or statisticians are measuring the cost of living for a given country or region, they are measuring the amount that consumers need to spend in order to reach a certain average standard lifestyle. Put another way, the cost of living measures how much food, shelter, clothing, health care, education, and fuel can be bought with one unit of currency.

The Massachusetts Institute of Technology tracks living wage calculations for cities and states across the United States, defining a living wage as the "approximate income needed to meet a family's basic needs." MIT further defines basic needs as "food, clothing, housing, and medical care." According to its 2021 figures, an individual has to have 28.5% more income to earn a living wage in California than in Texas.

Key Takeaways

  • California is one of the most expensive states to live in.
  • Texas is more affordable, almost across the board.
  • The cost of living does not necessarily capture the quality of life.

Cost of Living in California

MIT compares the costs of six different typical expenses for each state: food, child care, medical, housing, transportation, and "other."

In all areas, California was more expensive than Texas. The average single adult could expect to eat with $3,792 a year in California versus $3,177 in Texas.

MIT sets the living wage for an adult with one child in California as $83,917 before taxes compared to about $59,652 in Texas. On average, Texas also has less expensive medical care than California.

Housing is the largest single expense category in MIT's calculation; it is also the area where Texans saw the largest advantage. Housing costs are an impressive 48% higher in the Golden State than in the Lone Star State. The difference was more pronounced for bigger families.

California does win out on transportation costs; the average adult in Texas spends 9.9% more on getting around than his Californian counterpart.

Lumping expenses such as entertainment, dining out, pet care, and other possible expenses together, the "other" category is another win for Texas; its average residents spend 5.4% less here.

Cost of Living in Texas

Cost-of-living averages do not address the quality of the goods or services available. It could very well be that shoes cost 25% more in one state than in another, yet they last 50% longer. Perhaps food prices are the same between two states, but on average the food in one state tastes better and is healthier to consume. Nevertheless, the data does suggest that it is relatively less expensive to live in Texas than in California.

In fact, the Lone Star State is home to three of the most-affordable burgs in America: Harlingen, McAllen, and Amarillo all rank in the top five of Kiplinger's "Cheapest U.S. Cities to Live In 2021" survey. Another Texas town, Texarkana, made the 25-city list too. In fact, Texas is the best-represented state in the survey.

Number two on the list, Harlingen, with its population of 423,163 had a median household income of $41,123 and a median home value of $89,000, according to the list. McAllen, which ranked number three, is a bigger town but very similar, wealth-wise (population 868,707; median household income $41,800; median home value $93,400).

Both are located in southern Texas, where not only living is affordable, but the food is as well. A recent study done by Kiplinger revealed that of a few hundred grocery stores that were analyzed by affordability and pricing, only a handful had cheaper goods than the stores in Harlingen.

Both towns are also close to Mexico and, while located in a hot, dry state, both are within an hour's drive of the beach. McAllen hosts a 15-acre birding habitat, too.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. MIT. "Living Wage Calculator: California." Accessed Nov. 5, 2021.

  2. MIT. "Living Wage Calculator: Texas." Accessed Nov. 5, 2021.

  3. Kiplinger. "25 Cheapest U.S. Cities to Live In." Accessed Nov. 5, 2021.