Economic Wellbeing and Where We Live: Accounting for Geographical Cost-of-living Differences in the US

Abstract

Summary. Regional cost-of-living differences affect the quality of life that individuals and families experience in different metropolitan areas. Yet, lack of metropolitan cost-of-living indexes has left analysts without the ability to make accurate cost-of-living adjustments to measures of economic wellbeing. This paper evaluates alternative approaches to cost-of-living measurement and then applies the ACCRA cost-of-living index to various US metropolitan area datasets, including median household income, the number of people living in poverty, and family eligibility for the Free and Reduced Price School Lunch and Head Start programmes to illustrate some of the policy impacts of adjusting economic indicators of wellbeing for geographical cost-of-living differentials.

Geographic Variations in Cost of Living: Associations With Family and Child Well‐Being

“…Low-income families living in high-cost areas might be unable to afford the high costs of housing, health care, and child care in their area, but at the same time be ineligible for assistance. One study estimated that within a sample of 98 central cities, if cost of living were considered, eligibility for Head Start would increase by 227,000 families, and eligibility for the National Lunch Program would increase by half a million (Curran, Wolman, Hill, & Furdell, 2008). Poverty measurements and eligibility cut-offs that take into account geographic variations in cost of living would do a better job of meeting the needs of low-income families living in high-cost areas.…”

Lifting Boats Without Closing Gaps: Child Health Outcomes in Distressed US Cities From 1992–2002

“…This strategy closely mirrors that of other investigators, who have constructed indices of municipal distress on the basis of similar lists of economic and demographic indicators. 14,15,47 We used the first extracted principal component as the indicator of economic distress, which accounted for 72% of the total variance among the 5 city-level measures. City rankings ranged from Detroit, MI, as the most distressed city to Huntington Beach, CA, as the least distressed.…”

“…Median incomes were adjusted for the city's cost of living using 1989 ACCRA cost of living indices. 47 Missing cost-of-living indices were imputed by regressing cost of living on census measures of population size, unemployment rate, Objectives. We compared cause-specific mortality and birth rates for children and youths aged younger than 18 years in 100 US cities from 1992 through 2002.…”

Geographic Differences in Housing Prices and the Well-Being of Children and Parents

“…Because measuring poverty is “a problematic endeavor” (Gorham, 1990), proposals to change the official poverty measure have surfaced almost from its inception in the mid 1960s. One of the most common recommendations is to account for geographic differences in the cost of living (COL), and particularly the cost of housing (Citro & Michael, 1995; Curran, Wolman, Hill, & Furdell, 2006; Ruggles, 1990). Although $625, the median rent for a two‐bedroom apartment in 2005 (United States Department of Housing and Urban Development, 2006), rents a much higher‐quality apartment in Dubuque, Iowa than in New York City, the current poverty line ignores this difference in purchasing power.…”