I have written a column for The New York Times Magazine about the cost of living in New York, which is actually relatively cheap if you’re wealthy and have standard wealthy-person tastes. It was based largely on research by Jessie Handbury, an economics professor at the Wharton School at the University of Pennsylvania, which looked at the groceries that rich versus poor people buy, and how much those different bundles of groceries cost in rich versus poor cities.

In a high-income city like New York, grocery costs are 20 percent lower for high-income people than they are in a low-income city like New Orleans (whereas costs are about 20 percent higher for low-income people in the rich city than the poor city). That’s because there’s a very high concentration of highly skilled people here, so there are a lot of vendors competing for the business of those high-income people, effectively lowering costs and increasing the variety of products that appeal to this consumer group.
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Restaurants might be a bit more expensive here, but they offer more variety, are open much later, and nearly all of them deliver. And more highly skilled people consume those varied, late-night deliveries, which they could not get at any price in a lower-skill city like Detroit. Similarly, people in New York have the choice to get a pedicure at noon, but often enough they choose the 9 p.m. one — hence we assume they prefer it (maybe because they want to work late, get drinks with friends, or some other reason). Let’s say we moved a customer who usually gets her pedicures at 9 p.m. from New York to Houston, where just 0.2 percent of salons are open at 9 p.m. In her new locale, she wouldn’t be able to get her desired service at the time she wants it, even if she were willing to pay a lot more for it, since there aren’t currently enough customers like her in Houston to support staying open that late.