An Interstate Cost-of-Living Index

Nelson, F. Howard

doi:10.2307/1164460

Cited by 3 publications

(5 citation statements)

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“…First, unlike the previous literature that uses the U.S. states data and national CPI deflator (e.g., Frank, 2009; Panizza, 2002; Partridge, 2005, 1997), we use a state cost of living (COL) index as a deflator for state nominal income (measured as state personal income per capita). The empirical evidence indicates that prices are different among states (e.g., McMahon and Melton, 1978; Nelson, 1991). This evidence also points out to a large degree of variability of inflation rates among states.…”

Section: Introductionmentioning

confidence: 99%

Income Inequality, Economic Growth, and the Distribution of Income Gains: Evidence From the U.S. States*

Hasanov¹,

Izraeli²

2010

Journal of Regional Science

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This paper first investigates a relationship between economic growth and income inequality using U.S. states data, a state cost-of-living deflator, and nonlinearity. It then explores the distribution of income gains among different income groups. We find that the impact of inequality on growth is nonlinear. Lowering inequality or increasing it substantially reduces growth; thus stable inequality may be good for growth. Economic growth affects incomes of the poor, the middle-income group, and the rich similarly with the elasticity of one. Education and labor market policies become important in promoting growth and improving income gains of the poor.

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Section: Introductionmentioning

confidence: 99%

Income Inequality, Economic Growth, and the Distribution of Income Gains: Evidence From the U.S. States*

Hasanov¹,

Izraeli²

2010

Journal of Regional Science

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“…Fournier and Rasmussen (1986) also note a number of states shifting in the rankings after adjusting teacher salaries for COL, with the correlation of their two sets of rankings equal to .86. A comparable correlation of .84 likewise exists between Nelson’s (1991) unadjusted and COL-adjusted teacher salary rankings.…”

Section: Resultsmentioning

confidence: 75%

“…In addition to adjusting for teacher characteristics, Walden and Newmark (1995) demonstrate that assessments of teacher pay across states should take into account COL differences, where Fournier and Rasmussen (1986) and Nelson (1991) find a positive relationship between teacher salaries and state COL. Thus, we next further adjust characteristic-adjusted teacher salaries for COL to produce real differences in teacher salaries.…”

Section: Empirical Implementation and Datamentioning

confidence: 99%

“…They combined the metro results with housing values and taxes for nonmetropolitan areas to estimate state-level COL indices for 1980 to 1981. Nelson (1991) used price data for a sample of metropolitan areas from the American Chamber of Commerce Researchers Association (ACCRA) to produce state-level COL indices and adjust 1988 to 1989 teacher salaries for relative COL. Yet, these ignored a number of factors that can affect welfare differences across states for teachers (Stoddard 2005).…”

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confidence: 99%

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Adjusting State Public School Teacher Salaries for Interstate Comparison

Rickman

Wang

Winters

2017

Public Finance Review

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Using the three-year microdata sample of the American Community Survey for 2009 to 2011, we compute public school teacher salaries for comparison across US states. Teacher salaries are adjusted for state differences in teacher characteristics, cost of living, federal tax rates, household amenity attractiveness, and location within the metropolitan versus nonmetropolitan portions of the states. We find high persistence in the state rankings of nominal public school teacher salaries across time. Yet, we also find that the rankings significantly shift with the adjustments, suggesting they are necessary for meaningful comparisons of public teacher salaries across states. The differences in teacher pay across states also greatly narrow with the adjustments. Finally, this is the first study to show and test that teacher salary comparisons across states should be based on a comparison of public school teacher salaries with nonteacher college graduates in the states, adjusted for differences in personal characteristics and effective federal tax rates.

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“…Second, the local price index estimates will be used to calculate "real" per capita incomes for locations within the state, and these real incomes will be used to re-examine income disparities within the state. price indices among the continental states (i.e., excluding Alaska and Hawaii) of 40 percent (McMahon 1991;Nelson 1991).…”

Section: Introductionmentioning

confidence: 99%

How Much Income Variation “Really” Exists within a State?

Walden¹

1997

Review of Regional Studies

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A procedure for estimating price indices in localities within one state, North Carolina, is presented and implemented. The paper makes a number of improvements over previous work, including estimating the association between local prices and national prices, and testing the potential capitalization of local taxes and public output into local prices. Intrastate income variation is reduced when the price index estimates are applied to nominal per capita incomes. I.The Review of Regional Studies II. PREVIOUS WORKThere is now a large body of evidence which suggests substantial variation in prices between localities in the nation. First is evidence from direct surveys of prices in different locations in the country. One part of this evidence comes from the, now discontinued, surveys of family budgets conducted by the Bureau of Labor Statistics (U. S. Bureau of Labor Statistics, 1982). The final report of these budgets for autumn 1981 showed a 12 percent difference in budgets between metropolitan and nonmetropolitan areas of the country for a four person family with an intermediate standard of living. The largest difference existed for rent (27 percent), and the smallest difference was found for clothing, transportation, and food at home (each with a 2 percent difference between metropolitan and nonmetropolitan areas). Furthermore, similar differences were found between metropolitan and nonmetropolitan areas in regions of the country.Other direct evidence of locational price differences comes from the American Chamber of Commerce Researchers Association (ACCRA). Each quarter ACCRA collects price data for 61 products and services in 289 locations across the country. ACCRA forms a price index by taking a weighted average of these products and services. 1 For example, the first quarter, 1995 report showed a 166 percent difference between the highest cost of living location (Manhattan, New York City) and the lowest cost of living location (Kennett, Missouri). Again, the greatest difference existed for housing, at 526 percent (American Chamber of Commerce Researchers Association, 1995).The last set of direct evidence comes from housing costs collected by the U.S. Department of Housing and Urban Development (HUD). HUD collects rent data as part of its housing subsidy programs. The rents are for units of a certain size and certain quality. Within North Carolina, for example, the 1993 data showed a 92 percent difference between the highest rent ($545/month) and lowest rent ($284/month) for a two bedroom apartment (U. S. Government Printing Office, 1993).Other evidence comes from studies which estimate differences in price indices between locations. Most of these studies have focused on price differences between states or metropolitan areas (

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An Interstate Cost-of-Living Index

Cited by 3 publications

References 0 publications

Income Inequality, Economic Growth, and the Distribution of Income Gains: Evidence From the U.S. States*

Income Inequality, Economic Growth, and the Distribution of Income Gains: Evidence From the U.S. States*

Adjusting State Public School Teacher Salaries for Interstate Comparison

How Much Income Variation “Really” Exists within a State?

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