An increase in cost of living can be driven by a number of things. From an individual perspective, this is generally done by relocating to a place that costs more or moving to a more expensive apartment or house. From a broader locational perspective, such an increase is driven by classic economical principles like supply and demand.
It is common knowledge that different areas have varied costs of living associated with them. New York City, a notoriously expensive place, does not cost the same to live in as Landisville, Pennsylvania. There are reasons for this, however, as New Yorkers charging seven US Dollars (USD) more for a fast-food meal are not arbitrarily doing so to punish visitors.
Economics is a very complicated science, which studies the decisions people make that drive market behavior. Markets can be thought of as any medium through which a good or service can be purchased from a buyer. Cities are giant markets, for example, with many goods available to eager consumers. The supply refers to the amount of a good available, and demand describes how much is desired by people. The relationship between these two factors can dictate prices.
These two variables can cause an increase in cost of living in certain circumstances and are generally inversely related. If something is heavily desired, there is probably not much left. The need for the product also allows the seller to charge more per unit. In a city, for example, where there are many people jousting for housing in a relatively small area, property owners can charge much more because they know someone out there needs the space and is willing to hand over the money for it.
The opposite is true when a good is not wanted. If no one wants a fork that doubles as a straw, then the inventor of this "fraw" will probably have to virtually give it away at a low cost. Urban settings, due to the complexity of their markets and high demands, offer an increase in cost of living as opposed to less dense areas. This is not always true, though, as many desired rural residences can be expensive due to popularity.
A person can increase his or her own cost of living by changing his or her lifestyle. This lifestyle change may be locational or situational. A situational change that causes an increase in cost of living could be a person deciding to eat at fancier restaurants or to buy a car with higher payments. A locational example is a person deciding to move from a farm in central California to an apartment in Los Angeles.
