Short answer: yes — and the difference is significant.
Alicante is cheaper than Madrid, cheaper than Barcelona, and cheaper than Valencia too. When it comes to rent and property prices in decent, reasonably safe neighbourhoods, the gap is at least double — and in most cases more than that.
Day-to-day services follow the same pattern. Dentistry, driving school fees, private school tuition — all noticeably lower in Alicante than in the major cities.
What you give up in exchange is the scale. Madrid and Barcelona are large, beautiful cities with alternatives for everything — more job opportunities, more cultural options, more of everything. But they also come with everything that goes with a big city: complicated traffic, higher crime rates, and the general intensity that wears people down over time.
Alicante is quieter. For a family that doesn't need to be in a capital city, that's not a compromise — it's the point.
On safety: crime and personal security in Alicante is a subject worth understanding properly before you move. I've covered it in detail separately —
Is Alicante Safe? A Local's Honest Answer.