Food is cheaper in large cities

Eliminating heterogeneity bias causes 97 percent of the variance in the price level of food products across cities to disappear relative to a conventional index. Eliminating both biases reverses the common finding that prices tend to be higher in larger cities. Instead, we find that price level for food products falls with city size.

That is part of an abstract and new paper from Jessie Handbury and David E. Weinstein, via Kevin Lewis.  They have two additional interesting papers on the cost of living here.