Cost of Living (CoL) differs among 25 districts in Sri Lanka. The objective of the study is to classify the districts of Sri Lanka based on the CoL. To achieve this, districts were ranked and were clustered. This will support the relevant officials and decision makers in the country when district-wise infra-structure development planning taking place. In the data, two types of variables were considered, one as food items and the other as non-food items. Descriptive statistics such as variances and correlations were used to observe the variance of variables and to check the associations among variables respectively. Principle Component Analysis was employed to rank the districts. Cluster Analysis was used to group the districts. This study revealed that the average expenditure at a district was 41,444 LKR per month in which only about 37.76% of total average expenditure was for food items. Also the results indicated that, CoL mainly depends on the non- food items and the expenditure on food items had less variation among districts. Thus it can be stated that the non-food items were the most influential factor in terms of CoL. It can be concluded that, the most expensive three districts were Colombo, Gampaha and Kalutara while Moneragala and Mullaitivu were the two least expensive districts. Further, it concluded that, Colombo was isolated from all other districts while only Gampaha and Kalutara formed a single group when three and four cluster classifications were considered.
