Why Is Alaska So Expensive? (6 Major Reasons)

If you have ever visited Alaska, then you probably have wondered, “Why is Alaska so expensive?” For that reason, this article will explore Alaska and dig deep to identify the causes of high cost of living in this state.

To begin with, Alaska is the largest state in the United States and is known for its unique and breathtaking landscapes. But, if you’re planning a visit to Alaska, you have to be prepared for high prices. From food, housing, healthcare, transport, to other utility bills, Alaska has some of the highest costs compared to other states in the US. Keep reading to know more!

Why Is Alaska So Expensive?

1. High Housing cost

The average two-bedroom apartment in Anchorage, Alaska’s most populous city, costs more than $1,300 a month. This is much higher than in other states across the country. Additionally, because the population of Alaska is concentrated mainly in low-population-density urban areas like Anchorage and Fairbanks, there are limited housing to accommodate demand which keeps prices high as well.

2. High cost of food

Food prices in Alaska are among the highest rates in the country due to its isolated nature. The state’s lack of access to roads and railroads combined with a short growing season means that products must be shipped from out-of-state suppliers. This adds an extra layer of cost for Alaskans who must cover shipping fees on top of already high retail prices for food items.

3. High cost of utilities

Everything from electricity, heating and cooling, water usage, and more are all much more costly in Alaska than in other places around the country. Not only does the cold climate require more energy for warmth, but location plays a major part in it too.

With much of Alaska’s energy needs supplied by diesel fuel or coal, these prices fluctuate greatly with market trends. This causes an increase in cost that can be felt across households throughout the state. To make matters worse, there is limited access to natural gas which contributes to higher costs as well.

4. High transportation expenses

Alaska has more rural land than any other state and it’s spread across several cities. This means that goods must travel long distances to reach their destination, resulting in higher shipping fees for Alaskans than those who live in states with more concentrated populations.

Additionally, most roads are unpaved and difficult to drive on due to snow and ice during winter months; this contributes to the high cost of fuel which further increases transportation expenses for those who need to get from place to place.

5. Expensive Health services

Health services in Alaska can be very costly compared to other states due to the high cost of living and lack of competition among providers. This makes even basic healthcare services like check-ups, immunizations, and prescriptions very pricey.  In addition, medical conditions may require special treatments or procedures that are only available at certain facilities. These treatments often require long drives and expensive overnight stays which can easily add up when considering travel expenses.

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Things Alaska is known for

(a) Denali National Park

Photo credit: National Park service

The park is located in central Alaska and spans over six million acres of wild land. Denali National Park was designated as an International Biosphere Reserve by UNESCO in 1976 and features some of the most spectacular scenery on Earth.

Visitors to the park will find towering mountains, lush forests, crystal clear rivers, wide meadows filled with wildflowers and abundant wildlife. The centerpiece of the park is Mt. McKinley (also known as Denali), North America’s tallest peak at 20,310 feet above sea level.

(b) Northern Lights

Photo credit: AWOL

One of the most amazing aspects of this northern state are the beautiful Northern Lights. A natural phenomenon that occurs year-round in Alaska’s northern skies, the Aurora Borealis is a mesmerizing light show that’s been capturing people’s attention since ancient times. From dazzling greens and purples to streaks of red and blue, these vibrant lights put on a stunning display as they dance across the night sky.

The best time to view the Northern Lights in Alaska is during the winter months when temperatures drop and darkness blankets the land longer each day. However, with plenty of activities such as skiing, snowshoeing, dog sledding or snowmobiling available during this time of year, visitors can make their trip an unforgettable experience.

(c) The Midnight Sun

During the summer months, those living in Alaska are treated to up to 24 hours of daylight each day. This phenomenon occurs when the sun dips just below the horizon but never fully sets, meaning that it still shines during what would otherwise be nighttime hours. It’s an amazing sight to behold and something that brings tourists flocking from all over the world to experience.

It also has a significant impact on Alaskan culture, with outdoor activities such as fishing and hiking taking place at all times of night, not just during daylight hours.

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(d) Kodiak Island

Photo credit: Temblor.net

Kodiak Island is known for its breathtaking views and abundant wildlife, including brown bears, sea otters and bald eagles. It also boasts some incredible fishing opportunities – from salmon to cod – as well as spectacular hiking trails through old-growth forests.

And if you’re looking for something truly unique, the island’s remote location means you have plenty of chances to spot whales from shore or go on kayaking tours with local experts.

(e) Dutch Harbor

Dutch Harbor is located on Unalaska Island in the Aleutian archipelago chain of islands, Dutch Harbor has a long history that began with Russian fur traders who settled there in 1788. The harbor was then taken over by U.S. forces during World War II and continues to be an important port today.

It was also featured on the popular Discovery Channel show “Deadliest Catch”. Dutch Harbor offers breathtaking views of rugged landscapes and abundant marine life while also serving as an important fishing spot due to its abundance of codfish, salmon and other species found in the Bering Sea.


In conclusion, Alaska is a relatively expensive place to live due to its sparse population, remote location, need for imported goods, and limited resources. All these factors combined make life in Alaska more costly compared to other places in the United States.

Even though this is the case, many people choose to live in Alaska for its untouched beauty, unique culture, and once-in-a-lifetime experiences that come from living in such a wild and rugged place.

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