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

15 Pages Posted: 5 Jun 2006

See all articles by Dean Jolliffe

Dean Jolliffe

World Bank; IZA Institute of Labor Economics

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).

Suggested Citation

Jolliffe, Dean Mitchell, Poverty, Prices, and Place: How Sensitive is the Spatial Distribution of Poverty to Cost of Living Adjustments?. Economic Inquiry, Vol. 44, No. 2, pp. 296-310, April 2006. Available at SSRN: https://ssrn.com/abstract=906379

Dean Mitchell Jolliffe (Contact Author)

World Bank ( email )

1818 H. Street, N.W.
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Washington, DC 20433
United States

HOME PAGE: http://www.deanjolliffe.net

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/webcontent/index_html

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