How do I Adjust for Differences in Costs of Living?

One user emailed us about possibly moving to the Virgin Islands where the cost of living is, he said, some 20 percent higher than in the U.S. To compare living standards staying in the U.S. with moving to the Virgin Islands he need only divide the living standard generated by the Virgin Islands profile by 1.20 and then compare the value with the unadjusted living standard generated by the profile in which he stays in the U.S.

This is the general adjustment one also needs to make for considering moving from one state or city within the U.S. to another. Costs of living can differ by state and city due to sales taxes and higher prices for food, clothing, etc. Housing costs also clearly differ by location, but you can enter the different housing costs directly when you enter your primary and vacation homes. So the cost of living adjustment needs to be made with with respect to non-housing costs.