When you live in the land of $4 cappuccinos and $1 million homes, it's easy to lose your grasp on reality.

Indeed, most people outside San Francisco spend less money on basic goods than those residing in this expensive coastal city. Of course, in San Francisco we've got the ocean, the mountains, a wealth of culture and job opportunities. Do you get what you pay for? It depends on how you look at it.

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For perspective, SFGATE compared the cost of basic goods in San Francisco to those in the "cheapest city in the U.S.," as determined by business forecaster Kiplinger.

That designation goes to McAllen, a tiny town of 142,000 on the southernmost tip of Texas.

See the price comparisons in the above gallery.







Once an agricultural and oil hub, McAllen transformed into a trading center (thanks to its close proximity to Mexico) toward the end of the last century.

According to Kiplinger, the cost of living in McAllen is 23 percent below the American average. Case in point: a standard home costs about $129,000 (compared to San Francisco's $1.3 million).

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There are other major economic differences between McAllen and San Francisco. Namely, McAllen's median household income is about half that of San Francisco's $87,000, per the most recent U.S. Census data. So too, about 25 percent of McAllen's population is living below the poverty line — in San Francisco, that figure is 12.5 percent (about equal to the national average).

Still, the cost in even the most standard of goods is shockingly different between the two cities. Everything from a pack of Marlboros to a movie ticket is cheaper in Texas.

Michelle Robertson is an SFGATE staff writer. Email her at mrobertson@sfchronicle.com or find her on Twitter at @mrobertsonsf.