GW Work


Economic Wellbeing and Where We Live: Accounting for Geographic Cost-of-Living Differences, Working Paper 018 Open Access

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. We evaluate seven alternative inter-regional cost-of-living measures based on four criteria: (1) their data collection methodologies, (2) the variables included in cost-of living measurement, (3) their accuracy in measuring the cost-of-living experiences of high-, low and moderate-income populations, and (4) the measures' availability and affordability. We then applied one of the indices for illustrative purposes to various metropolitan area data sets, 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 programs to illustrate some of the policy impacts of adjusting economic indicators of wellbeing for geographic cost-of-living differentials.

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