A comparison between the cost of living of average wage earners in Sydney and nineteen country towns in New South Wales was carried out in 1974, assuming that expenditure on items of goods and services was distributed in the same proportion as in the Consumer Price Index in both country towns and the city. Housing, which was cheaper in the country, was the only group of major consumer expenditure where a significant difference between city and country town costs could be detected. The differences between the costs of food, clothing, services and miscellaneous items of expenditure in the city and country towns were not significant. A study using regression analysis revealed that there was a significant positive correlation between the size of country towns and the cost of services and housing. There were no significant relationships between town size and the costs of food, clothing or miscellaneous items of expenditure. Nor was a significant relationship found between the distance of country towns from Sydney and the cost of any major consumer expenditure group.