This a million times over. I've tried to explain this so many times to my friends who insist on making sub $80k in backwater places citing cost of living "advantages". Uh, no. A BMW or iPhone will cost about the same in Tulsa as it does in New York City.
As much as I love New York, this isn't true, at least for the car. The base payment on the BMW will be the same (call it $600 if you buy) but your insurance will be higher in urban areas, you may pay as much as $300-400 a month for parking in Manhattan, and gas is probably higher as well.
So that car ends up being 20-30% more expensive in NY vs. a rural area, or even vs. say Los Angeles, where a parking space runs about $100 a month. This is why so few people living in Manhattan have cars - the net cost is well over $1,000 a month and you might as well just rent all the time.
Actually, insurance is not the killer in Manhattan. Parking is. Insurance is a very flexible cost.
Although I always assumed that living in NYC, I wouldn't have a car. Take the car insurance, gas, and depreciation costs of the car and put it towards rent and call it even.
For people in typical earnings ranges, the majority of your income is spent on location-dependent costs: taxes, rent, insurance, food, entertainment, etc, not on discretionary spending like BMWs* or iPhones.
*) Also, BMW's only cost you the same everywhere if you pay sticker for a new car. Used cars have significantly different prices in different zip codes.
