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The Cost of Living and the Geographic Distribution of Poverty

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  • Jolliffe, Dean

Abstract

The prevalence of poverty has been greater in nonmetro areas than in metro areas in every year since the 1960s when poverty rates were first officially recorded. Accordingly, Federal funds for social assistance programs and community development have favored nonmetro areas. This study suggests that adjusting poverty measures to account for cost-of-living differences between metro and nonmetro areas reverses that ranking. Once adjusted for cost-of-living differences using the Fair Market Rents index, metro poverty is greater than nonmetro poverty in terms of prevalence, depth, and severity over the entire 1991-2002 study period.

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Bibliographic Info

Paper provided by United States Department of Agriculture, Economic Research Service in its series Economic Research Report with number 7254.

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Date of creation: 2006
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Handle: RePEc:ags:uersrr:7254

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Keywords: Poverty; cost-of-living adjustments; Fair Market Rents data; urban-rural comparison; sample design; Current Population Survey; Food Security and Poverty;

References

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  1. Ravallion, Martin & Bidani, Benu, 1993. "How robust is a poverty profile?," Policy Research Working Paper Series 1223, The World Bank.
  2. Nord, Mark & Leibtag, Ephraim, 2005. "Is the 'Cost of Enough Food' Lower in Rural Areas?," The Review of Regional Studies, Southern Regional Science Association, vol. 35(3), pages 291-310.
  3. Dumond, J Michael & Hirsch, Barry T & Macpherson, David A, 1999. "Wage Differentials across Labor Markets and Workers: Does Cost of Living Matter?," Economic Inquiry, Western Economic Association International, vol. 37(4), pages 577-98, October.
  4. Kakwani, Nanak, 1993. "Statistical Inference in the Measurement of Poverty," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 632-39, November.
  5. Jahyeong Koo & Keith Phillips & Fiona Sigalla, 1997. "Measuring regional cost of living," Working Papers 9713, Federal Reserve Bank of Dallas.
  6. Dean Jolliffe, 2001. "Estimating Sampling Variance from the Current Population Survey: A Synthetic Design Approach to Correcting Standard Errors," Econometrics 0110006, EconWPA, revised 20 Oct 2001.
  7. Howes, Stephen & Lanjouw, Jean Olson, 1998. "Does Sample Design Matter for Poverty Rate Comparisons?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(1), pages 99-109, March.
  8. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  9. Foster, James E & Shorrocks, Anthony F, 1991. "Subgroup Consistent Poverty Indices," Econometrica, Econometric Society, vol. 59(3), pages 687-709, May.
  10. Dean Jolliffe & Anastassia Semykina, 2000. "Robust standard errors for the Foster-Greer-Thorbecke class of poverty indices," Stata Technical Bulletin, StataCorp LP, vol. 9(51).
  11. Dean Jolliffe, 2006. "Poverty, Prices, and Place: How Sensitive is the Spatial Distribution of Poverty to Cost of Living Adjustments?," Economic Inquiry, Western Economic Association International, vol. 44(2), pages 296-310, April.
  12. Dean Jolliffe & Gaurav Datt & Manohar Sharma, 2004. "Robust Poverty and Inequality Measurement in Egypt: Correcting for Spatial-price Variation and Sample Design Effects," Review of Development Economics, Wiley Blackwell, vol. 8(4), pages 557-572, November.
  13. Reeder, Richard J., 1996. "How Would Rural Areas Fare Under Block Grants?," Agricultural Information Bulletins 33609, United States Department of Agriculture, Economic Research Service.
  14. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
  15. Dean Jolliffe, 2003. "On the Relative Well-Being of the Nonmetropolitan Poor: An Examination of Alternate Definitions of Poverty during the 1990s," Southern Economic Journal, Southern Economic Association, vol. 70(2), pages 295-311, October.
  16. Ravallion, M., 1998. "Poverty Lines in Theory and Practice," Papers 133, World Bank - Living Standards Measurement.
  17. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
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Citations

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Cited by:
  1. Tiehen, Laura & Jolliffe, Dean & Gundersen, Craig, 2012. "How State Policies Influence the Efficacy of the Supplemental Nutrition Assistance Program in Reducing Poverty," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124937, Agricultural and Applied Economics Association.
  2. Angle, John & Nielsen, Francois & Scalas, Enrico, 2009. "The Kuznets Curve and the Inequality Process," MPRA Paper 16058, University Library of Munich, Germany, revised 29 Jun 2009.

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