This state is the most expensive for holiday shopping

Bad news for residents of the nation’s capital: Your holiday shopping will be far more expensive than the rest of the country.

Holiday shopping in the District of Columbia costs more than in any of the 50 states, according a report from financial website Millennial Personal Finance. In D.C., shoppers pay 289% more than the national average on gifts.

To produce its ranking, Millennial Personal Finance used data from the U.S. Census Bureau cost of living index compiled by real-estate data firm Onboard Analytics. The index was based on the cost of a range of gifts including apparel, accessories, cash, recreation and household furnishings, among other items.

But you don’t need to live steps from the White House to be paying more when shopping for gifts than the national average. Alaskans pay nearly double the national average for presents. In eight other states — Hawaii, New York, Michigan, New Jersey, California, Massachusetts, Connecticut and Maryland — people will fork over upwards of 20% more to buy gifts during the holidays.

Also see: These holiday gifts could increase the value of your friend’s home

In some cities though, gifts can be even more expensive. Stony Brook, N.Y., is the worst culprit in this regard — gift shopping there will cost a consumer more than 78 times the national average. Not far behind is East Lansing, Mich., where gifts are nearly 77 times more expensive than the national average.

As for the cheapest places to shop, West Virginia and Arkansas are the best at the state-level, with gifts costing 15% less than the national average. And Playa Vista, Calif., a suburb of Los Angeles, is the cheapest metropolitan area on the ranking — gifts there will be 44% cheaper than the national average.

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So why are some places cheaper than others when it comes to holiday shopping? There’s no one reason. Some point to the Balassa-Samuelson effect, which The Atlantic nicknamed the “nanny effect.” This economic theory suggests that as wages rise in a given location (whether a city, state or country), then prices of goods will also rise.

Real estate also plays a role — if rents are more expensive, stores will need to sell more goods or sell them for a higher price to make ends meet. Similarly, if fuel prices are higher in a given place, then transporting items gets more expensive, creating a similar trickle-down effect. That’s likely the case for places like Alaska and Hawaii, which import far more than other states due to their location.

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