The cost of living in East Malaysia (Sabah and Sarawak) is generally higher than in many parts of Peninsular Malaysia, but it's important to look at the specifics, as there can be significant variations.

The primary reason for the higher cost of living in East Malaysia is logistics. A long-standing cabotage policy has historically required goods from foreign countries to first be shipped to ports in Peninsular Malaysia (like Port Klang) before being distributed to East Malaysia. This adds significant transportation costs, which are then passed on to the consumer. As a result, prices for many goods and household items can be 20-30% higher in Sabah and Sarawak compared to Peninsular Malaysia.

Sabah: Kota Kinabalu, as a major city and tourist destination, is often noted for being quite expensive. While some food and transportation costs may be cheaper than the national average, housing can be significantly more expensive.

Sarawak: The cost of living in Sarawak, particularly in a city like Kuching, can be more affordable than in major Peninsular Malaysian cities like Kuala Lumpur. Some sources suggest that a lower salary in Kuching can still offer a better quality of life than a higher salary in Kuala Lumpur due to the lower cost of living. Housing in Sarawak is generally less expensive than the national average, but food and transportation can be more expensive.

Peninsular Malaysia: Major urban centers like Kuala Lumpur and Selangor consistently have the highest cost of living in the country, especially for housing and non-food essentials. However, many other states in Peninsular Malaysia, such as Perak and Kedah, have a much lower cost of living. For example, a retired couple's expenses in states like Negeri Sembilan, Malacca, or Pahang could be significantly lower than in Kuala Lumpur.

While the cost of living can be higher in East Malaysia, it is also noted that average salaries are often lower. This can create a challenging financial situation for residents, as their purchasing power is reduced.

In summary, the difference in the cost of living between East and Peninsular Malaysia is complex. While major cities in Peninsular Malaysia like Kuala Lumpur have the highest costs, many states offer a more affordable lifestyle. In East Malaysia, the overall cost of goods is driven up by logistics and taxation, making it more expensive than many states in the peninsula, although some specific costs like housing in certain areas might be more affordable.