What it costs to live in Kentucky
Price levels against the national average
Prices overall
-9.53%
below average
Housing
-37.11%
ranks 47 for shelter
A hundred dollars of shopping
$90
costs this here
Price rank
38
1 is the most expensive
What that actually means in Kentucky
- Kentucky is cheaper than the country as a whole, ranking 38 nationally on price. Prices sit about 9.53% below average, so a hundred dollars of shopping costs $90. Small on any one purchase. Considerable across a year of them.
- Housing is what makes Kentucky affordable. Prices overall sit about 9.53% from the national average, but housing is about 37.11% from it — much further. The things you buy in a store here cost close to what they cost anywhere. It is the roof that is cheap, and the roof is most people's largest bill.
- What does that do to a salary? Seventy-five thousand dollars, earned and spent in Kentucky, goes as far as $82,902 would at average American prices. Tax is a separate subject and comes out on top of this.
- Prices in Kentucky run about 9.53% below the national level, placing it 38 nationally. The one-hundred-dollar national-average basket costs $90 in-state. The parity is a fixed-basket price comparison, so the gap represents genuine purchasing power rather than a difference in what residents choose to buy.
- Kentucky's housing component sits about 37.11% below the national level against an all-items figure of about 9.53%, a divergence of about 27.58% and a housing rank of 47 nationally. Goods parities vary little between states because tradeable items arbitrage; shelter cannot, so it carries most of the observed dispersion. The consequence is that this state's affordability advantage accrues disproportionately to renters and buyers rather than to consumers generally.
- Adjusting seventy-five thousand dollars for Kentucky's all-items parity yields $82,902 in constant national purchasing power. ⚠️ The figure is pre-tax and price-only; income, sales and local taxes are additional and independent of the parity. Nominal wage levels also correlate with parities in practice, so a full comparison of two states requires the local salary for the same role alongside this adjustment.
What the money buys here
A $75,000 salary
| Take-home, actual dollars | $59,085 |
|---|---|
| Price level, all itemsUS average = 100 | 90.468 |
| HousingUS average = 100 | 62.885 |
| Cheapest place to live | 14th of 51 |
Housing is where places differ most. Everything else moves far less than people expect.
Price parities are an index where the US average is 100 — a comparison between places, not a price.
The same pay, somewhere else
A $75,000 salary
| Take-home in Kentucky | $59,085 |
|---|---|
| Take-home in Texas | $61,593 |
| Once local prices are leveledBEA price parity | −$1,927 |
The raise and the real gain point in opposite directions here.
State income tax and state price levels only. No city income tax, and no housing market.
What is expensive here
A $75,000 salary
- Housing62.885
- Goods95.059
- Services98.372
| Housing | 62.885 |
|---|---|
| Goods | 95.059 |
| Services | 98.372 |
| All items | 90.468 |
An index where 100 is the national average. Housing moves far more than anything else.
Housing, against the country
A $75,000 salary
| Cheapest housing | MS · 55 |
|---|---|
| Dearest housing | DC · 169 |
| This state, cheapest first | 5th of 51 |
A BEA index where 100 is the national average, not a house price.
Where the ranking flips
A $75,000 salary
| Kentucky on take-home | 21st |
|---|---|
| Once prices are leveled | 13th |
| Places moved | 8 |
Left is rank on take-home. Right is rank once local prices are leveled by BEA parities.
Kentucky against Texas
A $75,000 salary
| Measure | Kentucky | Texas |
|---|---|---|
| Take-home pay | $59,085 | $61,593 |
| Worth after local prices | $65,311 | $63,383 |
| Share of pay taxed | 21.22% | 17.88% |
| State sales tax | 6% | 6.25% |
| Groceries exempt here | Yes | Yes |
| Clothing exempt at $100 | No | No |
| Property tax rate | 0.75% | 1.49% |
| Price level | 90.5 | 97.2 |
| Housing prices | 62.9 | 97.4 |
| Fuel tax | 25¢ | 20¢ |
| Tobacco tax | $1.10 | $1.41 |
City income tax excluded. Sales-tax row: state-only. Exemptions: Kentucky, Statewide average; Texas, Harris County (Houston). Clothing: one $100 item; higher prices can change tax.
What you would need there
A $75,000 salary
| To match take-home only | $71,436 |
|---|---|
| Raise you would need | +$2,662 |
| Prices in Texas | 97 vs 90 |
State taxes and state price levels only. No city tax, and no housing market.
Where the difference actually sits
Each line compares Kentucky with the national average for that kind of spending. The overall figure is the three above it, weighted the way a typical household spends — which is why housing can pull it a long way on its own.
| What you spend on | Against national average | Includes |
|---|---|---|
| Housing | -37.11% | Rent and owners’ equivalent rent |
| Goods | -4.94% | Groceries, fuel, clothing |
| Other services | -1.63% | Haircuts, repairs, childcare |
| All items | -9.53% | The three above, weighted |
What a salary is worth here
A salary of seventy-five thousand dollars, spent at Kentucky prices, buys what $82,902 would buy at national average prices. That is a price adjustment only. No tax of any kind has been taken off it, and tax is a separate bill on the same money.
What this page cannot tell you
- This is one number for the whole of Kentucky, and no state is one place. A big city and a rural county can sit far apart on every figure here.
- These prices were measured in 2023. Rents in particular can move a long way in a couple of years.
- And this is prices only. It says nothing about what Kentucky charges you in tax, which is a separate bill and is covered elsewhere on this site.
- These parities are state-level aggregates. BEA also publishes metropolitan-area parities, and within-state dispersion between a large metro and a rural area routinely exceeds the difference between two states — so a state figure should not be read as descriptive of any particular address in Kentucky.
- The underlying survey vintage is 2023, which is the most recent BEA publication rather than a current reading. Shelter parities are the component most exposed to drift between vintages, so recent local rent movements in Kentucky will not be reflected here.
- Price parity and tax burden are independent quantities and this page models only the first. A low-parity state with high income tax and a high-parity state with none can leave a household in the same real position; comparing Kentucky to another jurisdiction requires both figures, not either alone.
Questions people ask
What does a lower cost of living actually get me?
Room that a bigger salary elsewhere might not buy. A hundred dollars here does the work of $90 at national prices.
Is this number a percentage?
It is an index rather than a rate. One hundred is the national average by construction, so the distance from it is measured in points, not percent.
Which part of living here is actually different?
Housing, and by a long way. Goods cost broadly the same everywhere — a television is a television — but rent and house prices swing far wider than anything else, so the housing component is what pushes Kentucky away from the national average rather than the shopping.
Does the overall figure tell me what housing costs here?
Here the two come apart: 38 of 51 overall against 47 for housing. Averaging them into one figure buries the difference.
How does a below-average price level translate into real income?
Kentucky's all-items parity is at or below the national average, so nominal income understates purchasing power: one hundred dollars purchases $90 of national-average consumption. ⚠️ Parity measures prices, not availability or quality, and does not capture differences in the composition of what is bought.
How should a regional price parity be interpreted?
Regional price parities are index numbers with the national average normalized to one hundred. Differences are expressed in index points and are comparative rather than proportional to any specific price. They are estimated from a fixed national consumption basket, so they do not reflect state-specific spending patterns.
Which component drives this state's parity?
The housing parity dominates Kentucky's all-items figure, diverging from the national average by more than twice the goods component. Tradeable goods arbitrage across state lines and therefore cluster near parity; housing is non-tradeable, so its parity spans a far wider range and drives most interstate variation in the headline index.
Why does this state's housing rank diverge from its all-items rank?
Kentucky ranks 38 of 51 on all items but 47 on the housing component. Because the all-items index weights housing at its national expenditure share rather than at the household's own, the headline figure understates housing divergence for renters and recent buyers, whose shelter share exceeds the national average.