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[quote=Anonymous]Housing is the biggest ticket item so it's the one that makes the biggest impact, yes. Childcare is also a major expense for families and costs tend to be closely linked to the housing market because the biggest overhead costs for childcare facilities are rent/real estate costs (commercial real estate, obviously, but it tracks with housing costs often) and labor. You have to pay people enough to live, and if housing is expensive, then labor costs go up. Even if there is cheaper housing further away, then you have to compensate people enough to afford to travel to work, and most places in the US don't have adequate public transit for workers, so they need enough for cars and gas. But it's all linked to housing which drives where people live and what they can afford.

But this then impacts most other consumer items, too. Cheerios isn't a good example because people are most likely to buy Cheerios from a chain store (with supply chain efficiencies even in high COL areas) and because as a major brand name, stores are sometimes restricted in how much they can charge -- General Mills might cap a box of cereal at a certain amount as a form of brand protection, and they can enforce it because no one wants to be the grocery store without Cheerios. Issues like this are one reason why grocery stores operate on very thin margins.

But restaurants and entertainment are more reflective of COL issues. It's why even if you are used to DC prices (pretty high) you will still get sticker shock in, say, London or San Francisco. [/quote]

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