The cost of living differential between urban and rural Alaska has increased since 1985 - an important reason is the introduction of "big box stores" in urban Alaska.
Pat Forgery has a nice piece in today's Alaska Empire summarizing testimony to the Alaska House Finance Committee by McDowell Group economist Jim Calvin: Urban, rural cost divide widens. The McDowell Group was hired by the state to look at regional cost-of-living differentials. This study will be used in labor negotiations.
In some rural areas living costs are 50% greater than in Anchorage. This differential has grown since the last similar study was done in 1985.
Calvin attributed much of the increase in the differential to the introduction of discount and big-box stores in Anchorage
Access to road system (or in Southeast Alaska, the ferry system) is an important factor in determining cost of living differentials.Housing costs are also a factor . That's the case for Juneau where the 11 percent price differential is associated with a 15 percent housing price differential. In some smaller Southeast Alaska communities, the cost of living was only two percent greater than in Anchorage, because the cost of housing was significantly less than in Juneau. Sitka and Ketchikan are very similar cities, but the cost of living (and housing) was significantly higher in Sitka. Calvin attributed that to the demand for housing in Sitka by Californians!
The study itself is here: Alaska Geographic Differential Study .