This was in Model Railroad Planning 2004 in an article about how big your layout should be. The article starts on page 35 and the section on cost is on page 37. This cost was only for benchwork, track, scenery, and a control system. This means locomotives and rollingstock are not included. However, as previously stated, these costs are spread out over time.
One thing I keep seeing in these price estimates are “labor costs.” If you’re building a layout for someone else, I can see including them–but on your own layout, “labor” is otherwise known as “fun.” (Well, frankly, it’s fun even if you’re building someone else’s layout–getting paid for it is doubly fun!) Just like tinkering on cars, reloading, gardening, or other hobbies that sometimes involve lots of knuckle-banging and working on things. I think people are way too used to the idea that an activity isn’t “fun” or “leisure” unless it involves sitting on one’s tuchus watching things happen.
Probably the most important cost of model railroading, especially in a place like California, is the cost of the real estate needed for a layout! My house cost about $150 per square foot to buy, but in today’s market more like $300-350 per square foot would be closer–which is why I built a shelf layout with storage above and below the layout, in my garage! A spare 10x10 foot bedroom dedicated to a layout (which I don’t have, I live in a 1 bedroom house) would cost about $30,000, and that’s without buying a single piece of rolling stock or track to run it on…