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Poverty, Prices, and Place: How Sensitive is the Spatial Distribution of Poverty to Cost of Living Adjustments?

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  • Dean Jolliffe

Abstract

This article examines how accounting for cost-of-living differences across metropolitan and nonmetropolitan areas affects measured rates of poverty. The spatial price index used is based on the Fair Market Rent data and was developed by the Census Bureau for use in its experimental poverty research program. Following U.S. federal definitions, poverty in nonmetro areas has been consistently higher than it has been in metro areas. Using the Fair Market Rent index to adjust for differences in cost of living results in a complete reversal of nonmetro-metro rankings in terms of prevalence, depth, and severity of poverty for every year examined (1991 to 2002). (JEL I32, R1, C81) Copyright 2006, Oxford University Press.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 44 (2006)
Issue (Month): 2 (April)
Pages: 296-310

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Handle: RePEc:oup:ecinqu:v:44:y:2006:i:2:p:296-310

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Cited by:
  1. Andrea Brandolini, 2007. "Measurement of income distribution in supranational entities: the case of the European Union," Temi di discussione (Economic working papers) 623, Bank of Italy, Economic Research and International Relations Area.
  2. Chao Li & John Gibson, 2013. "Spatial Price Differences and Inequality in China: Housing Market Evidence," Working Papers in Economics 13/06, University of Waikato, Department of Economics.
  3. Elena Lasarte Navamuel & Dusan Paredes & Esteban Fernández Vázquez, 2012. "A true cost of living index for Spain using a microeconomic approach and censored data," Documentos de Trabajo en Economia y Ciencia Regional 26, Universidad Catolica del Norte, Chile, Department of Economics, revised Aug 2012.
  4. Edgar O. Olsen & Dirk W. Early & Paul E. Carrillo, 2010. "A Panel of Price Indices for Housing, Other Goods, and All Goods for All Areas in the United States 1982-2008," Virginia Economics Online Papers 377, University of Virginia, Department of Economics.
  5. Aaberge, Rolf & Langørgen, Audun & Mogstad, Magne & Østensen, Marit, 2008. "The Impact of Local Public Services and Geographical Cost of Living Differences on Poverty Estimates," IZA Discussion Papers 3686, Institute for the Study of Labor (IZA).
  6. Jolliffe, Dean, 2006. "The Cost of Living and the Geographic Distribution of Poverty," Economic Research Report 7254, United States Department of Agriculture, Economic Research Service.
  7. Riccardo Massari & M. Grazia Pittau & Roberto Zelli, 2010. "Does regional cost-of-living reshuffle Italian income distribution?," Working Papers 166, ECINEQ, Society for the Study of Economic Inequality.
  8. Magne Mogstad, 2007. "Measuring Income Inequality under Restricted Interpersonal Comparability," Discussion Papers 498, Research Department of Statistics Norway.

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