The Regional Price Parities index produced by the Bureau of Economic Analysis is defined as follows: "Regional Price Parities (RPPs) measure the differences in price levels across states and metropolitan areas for a given year and are expressed as a percentage of the overall national price level. All items RPPs cover all consumption goods and services, including rents. Areas with high/low all items RPPs typically correspond to areas with high/low price levels for rents.
Regional price parities (RPPs) are regional price levels expressed as a percentage of the overall national price level for a given year. The price level is determined by the average prices paid by consumers for the mix of goods and services consumed in each region.
For example, if the RPP for area A is 120 and for area B is 90, then on average, prices are 20 percent higher and 10 percent lower than the U.S. average for A and B, respectively. If the personal income for area A is $12,000 and for area B is $9,000, then RPP-adjusted incomes are $10,000 (or $12,000/1.20) and $10,000 (or $9,000/0.90), respectively. In other words, the purchasing power of the two incomes is equivalent when adjusted by their respective RPPs."
Source: U.S. Bureau of Economic Analysis, Regional Price Parities, Last updated: December 15, 2022-- new statistics for 2021; revised statistics for 2017-2020