Geographical Price Variation, Housing Assistance and Poverty

THE OXFORD HANDBOOK OF THE ECONOMICS OF POVERTY, Philip M. Jefferson, ed., Oxford University Press, 2011

56 Pages Posted: 26 Jul 2011

See all articles by Dirk W. Early

Dirk W. Early

Southwestern University - Department of Economics and Business

Edgar O. Olsen

University of Virginia - Department of Economics

Date Written: July 17, 2011

Abstract

Two important shortcomings of the official measure of poverty are its failure to account for noncash benefits (including the benefits of low-income housing programs) when calculating resources and differences in the cost-of-living across geographic areas when setting poverty thresholds. Alternative estimates of poverty rates that account for the variation in the cost-of-living across areas when setting thresholds and the value of rental housing subsidies when measuring household resources have been produced. One purpose of this chapter is to better account for these factors in poverty measurement using a much improved consumer price index for each metropolitan area and the nonmetropolitan part of each state and better estimates of the value of existing rental housing subsidies based on data from the American Housing Survey. A second purpose is to estimate the effect on poverty rates of people of various types of replacing the current system of low-income housing assistance with an equally costly entitlement housing voucher program that would offer assistance to all of the poorest people in the United States. The current system fails to offer assistance to many of the poorest people while serving many people with much higher incomes.

Keywords: Poverty measurement, housing assistance, housing policy

JEL Classification: I32, I38, R38

Suggested Citation

Early, Dirk W. and Olsen, Edgar O., Geographical Price Variation, Housing Assistance and Poverty (July 17, 2011). THE OXFORD HANDBOOK OF THE ECONOMICS OF POVERTY, Philip M. Jefferson, ed., Oxford University Press, 2011, Available at SSRN: https://ssrn.com/abstract=1895417

Dirk W. Early

Southwestern University - Department of Economics and Business ( email )

1001 East University Avenue
Georgetown, TX 78626
United States
513-863-1592 (Phone)

Edgar O. Olsen (Contact Author)

University of Virginia - Department of Economics ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States
434-924-3443 (Phone)
434-924-2904 (Fax)

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