A study recently published in Nursing Economics. 24(3): 131-134 addresses the issue of salary in relation to cost of living. The article is called "Which Pasture is Really Greener? A Reserach Note on Salary Studies" by Linda M. Lacey and Jennifer G. Nooney.
Anyway ... the article ranks the 50 US states by salary, but then also ranks them again taking cost-of-living )COL) into consideration. Looking at salary alone, California ranks #1 on the list. However, when you take cost-of-living into consideration, California ranks only #44 on the list. That's quite a dramatic example of why we all need to take COL into account when we think about compensation.
FYI ... Looking at salary alone, the top 10 states were: California, Maryland, Hawaii, Massachusetts, New York, New Jersey, Connecticut Alaska, Washington, and Minnesota.
Taking COL into consideration, the top 10 states were: Texas, Minnesota, Washington, Wisconsin, Utah, Delaware, Tennessee, Arkansas, Georgia, and Michigan.