Are People Leaving Hawaiʻi Because of High Prices, or Low Incomes?

by Steven Bond-Smith and Erich Schwartz, UHERO, March 19, 2026

This post focuses on a key theme from our comprehensive report, “Beyond the Price of Paradise: Is Hawaiʻi being left behind?”

For 23 of the past 25 years, more residents have left Hawaiʻi for the continent than have arrived. The most commonly cited reason for leaving Hawaiʻi is the cost of living. Similar patterns appear in other high-cost US cities, where living costs have become unsustainable for many people. Yet Hawaiʻi’s dominant industry, tourism, has stagnated for decades, a phenomenon more akin to “left-behind” regions where people depart not because life is costly, but because economic opportunities are limited.

So, are Hawaiʻi residents being priced out of paradise like those in high-cost coastal cities? Or is Hawaiʻi more like the left-behind places, where a stagnant economy is pushing people to leave in search of opportunity? To shed light on this, we look at how prices, incomes, and migration interact across U.S. states. We then use a larger dataset of US metropolitan areas to gauge how strongly domestic migration relates to prices versus incomes. Finally, we apply those results to Hawaiʻi’s conditions.

What drives migration at the state level?

Statewide data shows a clear pattern: people generally move toward places with lower costs or higher incomes. For most states, the two pressures push in opposite directions, so it is clear which factor dominates by the direction of migration. As a result, most states fall into easily identifiable groups in which one of these factors clearly shows the stronger association with in- or out-migration (see Figure below):

Thriving: High-income states attracting residents despite high prices—places where strong economies draw people in.

Priced Out: High-income, high-cost states losing residents as affordability pressures push people out, despite higher incomes.

Left behind: Low-income states with outmigration, reflecting limited economic opportunity.

Priced In: Low-cost states gaining residents, where affordability outweighs lower incomes.

A few exceptions stand out. A small set of states combine high incomes with relatively low prices, attracting new residents through both opportunity and affordability; we label these Thriving and priced In. Minnesota and Nebraska lose residents despite high incomes and relative affordability, indicating that non-economic factors (such as climate, quality-of-life preferences, or fewer lifestyle amenities) may play a larger role; we label this group Non-economic Outmigration. Arizona, Delaware, Florida, and Nevada attract newcomers even though they have higher-than-average prices and below-average incomes, but because these states sit close to the national average on both measures, we label them Marginal, as neither factor shows a clear association with domestic migration.

For the handful of states where these factors push in the same direction, most are close to the national average prices or incomes or both. Hawaiʻi stands out as the most extreme case with strong elements of being both priced out and left behind, but it’s difficult to disentangle whether outmigration is driven more by affordability pressures or by weak economic performance.

State Incomes and Prices (2023) and Domestic Migration (2008–2023)

Hawaiʻi stands out for its high prices, modest incomes, and persistent outmigration.  Source: BEA data

The chart also enables meaningful visual comparisons across states, even when they have very different costs of living. The dotted diagonal line represents equal real incomes, and the distance above or below that line shows how far a state is from the average. Hawaiʻi sits roughly as far below the line as New Mexico or Louisiana. Likewise, several low-cost states, such as North Dakota, South Dakota, and Wyoming, sit well above the line, with real incomes comparable to those in high-cost states such as Connecticut and Massachusetts.

What drives migration across U.S. cities? A closer test

To separate the effects of prices and incomes, we use a simple regression to examine domestic migration across 384 U.S. metropolitan areas. Cities allow us to examine more data points than states, and also allow us to see cities within each state that might have opposing forces. The regression doesn’t tell us whether prices or incomes cause migration, but links each city’s domestic migration rate to its local price level (regional price parity) and its per capita income. We use income values from the previous year to reduce feedback from migration itself, and we use city and year fixed effects to control for stable geography, climate, and long-term industry mix, as well as national trends.

The results show that a 10% higher price level predicts about 0.21 percentage points more net outmigration, and a 10% higher income level predicts about 0.16 percentage points more net in-migration. Prices and incomes both matter, and both have statistically strong associations with migration. But most cities have one dominant force because the two forces push in opposite directions: high prices push people out, or high incomes pull people in. Whichever measure has the wider gap with the national average has the greater effect on predicted domestic migration.

Applying the results

The table below summarizes how much of Hawaiʻi’s outmigration is associated with prices, incomes, and persistent local factors, compared with several other cities.

Predicted migration rate flows in 2023 by component, selected cities

Note: Predicted flows based on regression results and income differences with the US per capita income. The “Time” effect reflects the national average shift (−0.34 % in 2023), capturing broader migration trends between urban and rural areas and between cities of different sizes, leading to an average migration rate across all cities of -0.34%.

Three conclusions emerge:

1. High prices explain a large share of outmigration. Both Honolulu and Kahului–Wailuku–Lahaina show significant price-related migration pressure.

2. Low incomes also predict outmigration, and increasingly so. As Hawaiʻi’s incomes fall relative to the U.S. average, income-driven outmigration grows. In Kahului, the income effect is often as strong as or stronger than prices. In Honolulu, incomes used to attract residents (often from the neighbor islands), but that trend has reversed.

3. Honolulu shows a large “local” component of outmigration. Even after adjusting for prices and incomes, Honolulu’s predicted outmigration remains elevated. This reflects persistent factors such as geographic isolation, limited housing supply, congestion and long commutes, industry concentration, and limited local job availability. These factors push migration predictions even lower than what actually occurs, implying that many residents stay despite challenging economic tradeoffs.

The figure below illustrates how these forces evolve over time.

Estimated domestic migration rate components in Honolulu and Kahului–Wailuku–Lahaina, 2011-2023

Both prices and incomes are associated with outmigration in Kahului, while income pressures are becoming more evident over time in Honolulu.

Note: Predicted flows based on regression results and income differences with the US per capita income.

For Honolulu, prices have been the dominant factor. Income effects turn negative only in 2022–2023, when per capita incomes fell below the U.S. average, but have otherwise been positive. But their negative trend is concerning. However, in Honolulu, local factors remain the largest driver of predicted outmigration.

For Kahului–Wailuku–Lahaina, prices and incomes contribute similarly. Income effects reduced since COVID-19 when federal stimulus temporarily raised Maui’s relative incomes, making it easier to stay during the pandemic years. The stimulus doesn’t generally appear because the stimulus occurred everywhere, but it was especially supportive on Maui because it’s tourism industry was hit so hard. The 2023 wildfires will likely intensify both pressures.

While Hawaiʻi Island and Kauaʻi are excluded from the city dataset, their probable patterns are consistent. A combination of price and income pressures on Kauaʻi and in Kona. Hilo, with its much lower cost of housing, is probably the only place where income pressures dominate.

These differences show how migration pressures vary across Hawaiʻi.

A combined view: Real income and migration

To capture purchasing power directly, we also examine migration responses to income adjusted for local prices. This blends opportunity and affordability into a single measure of real economic wellbeing.

The results show that 10% lower price-adjusted income (via the combination of prices and incomes) predicts about 0.17 percentage points more out-migration.

Using this result, we compare Hawaiʻi’s metros with “priced-out” and “left-behind” cities. The chart below shows that high-priced cities such as San Francisco, San Jose, Boston, and Seattle often retain real income levels high enough to offset much of their cost pressure. In contrast, lagging cities such as Detroit, MI, Flint, MI, Charleston WV, and Scranton, PA show persistent outmigration tied to low real incomes. Both charts also plot Honolulu and Kahului, but the two Hawaiʻi metros track closely with the left-behind group, not the priced-out metros.

Estimated price-adjusted-income component of domestic migration rate, Honolulu and Kahului–Wailuku–Lahaina vs selected priced-out and left-behind cities, 2011-2023

Both Honolulu and Kahului show a price-adjusted income pattern more similar to the left-behind group.

Note: Predicted flows based on regression results and income differences with the US per capita income.

Put simply, while prices probably predict a larger share of predicted outmigration from Hawaiʻi than nominal incomes, the experience of residents in terms of prices and incomes combined aligns more with economically distressed regions than with the classic cases of being “priced out.”

So which matters more—prices or incomes?

The answer is both, but in a specific way. Prices push people out of Hawaiʻi. Low and slow-growing incomes pull people away from Hawaiʻi. But many persistent local constraints probably matter too, especially in Honolulu.

The bottom line, Hawaiʻi’s outmigration is not just a story of high prices, nor is it simply about stagnant wages, but the unique combination makes Hawaiʻi resemble the left behind places more than the priced out places.

This combination places Hawaiʻi in one of the rarest and most concerning categories in the national data: simultaneously priced out and left behind. Residents are not leaving for a single reason. They are responding to a structure of economic pressures that makes staying difficult and makes opportunity elsewhere increasingly attractive.

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KHON: 'Priced out, left behind': UHERO reveals persistent population loss