scholarly journals Are Poor Cities Cheap for Everyone? Non‐Homotheticity and the Cost of Living Across U.S. Cities

Econometrica ◽  
2021 ◽  
Vol 89 (6) ◽  
pp. 2679-2715 ◽  
Author(s):  
Jessie Handbury
Keyword(s):  
Low Income ◽  
Cost Of Living ◽  
Relative Prices ◽  
Welfare Impact ◽  
Product Assortment ◽  
Poor Households ◽  
Price Indexes ◽  
Choice Sets ◽  
The Cost ◽  
Grocery Products

This paper shows that the products and prices offered in markets are correlated with local income‐specific tastes. To quantify the welfare impact of this variation, I calculate local price indexes micro‐founded by a model of non‐homothetic demand over thousands of grocery products. These indexes reveal large differences in how wealthy and poor households perceive the choice sets available in wealthy and poor cities. Relative to low‐income households, high‐income households enjoy 40 percent higher utility per dollar expenditure in wealthy cities, relative to poor cities. Similar patterns are observed across stores in different neighborhoods. Most of this variation is explained by differences in the product assortment offered, rather than the relative prices charged, by chains that operate in different markets.

scholarly journals The Distributional Consequences of Large Devaluations

2017 ◽  
Vol 107 (11) ◽  
pp. 3477-3509 ◽  
Author(s):  
Javier Cravino ◽  
Andrei A. Levchenko
Keyword(s):  
Exchange Rate ◽  
Low Income ◽  
Relative Price ◽  
Cost Of Living ◽  
Product Categories ◽  
Poor Households ◽  
Distributional Consequences ◽  
The Cost ◽  
The Impact ◽  
Income Decile

We study the impact of large exchange rate devaluations on the cost of living at different points on the income distribution. Poor households spend relatively more on tradeable product categories and consume lower-priced varieties within categories. Changes in the relative price of tradeables and of lower-priced varieties affect the cost of living of low-income relative to high-income households. We quantify these effects following the 1994 Mexican devaluation and show that they can have large distributional consequences. Two years post-devaluation, the cost of living for the bottom income decile rose 1.48 to 1.62 times more than for the top income decile. (JEL D12, D31, E31, F31, O12, O19, O24)

scholarly journals Getting Prices Right: What Should Be Done?

1998 ◽  
Vol 12 (1) ◽  
pp. 37-46 ◽  
Author(s):  
Angus Deaton
Keyword(s):  
Cost Of Living ◽  
Identification Problems ◽  
Single Index ◽  
Rate Of Increase ◽  
Price Indexes ◽  
Short Run ◽  
The Cost ◽  
Heterogeneous Consumers

Much of the profession accepts that the CPI likely overstates the rate of increase of the cost-of-living. It is less clear that there are sound and feasible steps that the BLS can adopt to improve matters in the short run. There are unresolved conceptual and identification problems in the measurement of quality. Superlative price indexes are not feasible, and feasible approximations are not superlative, and may not even be better. The need for a single index that aggregates over heterogeneous consumers with different incomes, tastes, and needs casts serious doubt on the cost-of-living approach.

scholarly journals Cost of Living Indexes for Rural Labourers in Pakistan

1974 ◽  
Vol 13 (1) ◽  
pp. 26-39
Author(s):  
M. Ghaffar Chaudhry ◽  
M. Anwar Chaudhry
Keyword(s):  
Real Income ◽  
Cost Of Living ◽  
Rural Workers ◽  
Urban Workers ◽  
Rural And Urban ◽  
Development Policies ◽  
Price Indexes ◽  
Central Statistical ◽  
Central Statistical Office ◽  
The Cost

The purpose of this paper is to provide estimates of the changes in the cost of living for rural labourers during the period 1966/67 to 1973. It is well known that throughout this period, and particularly in the recent years, prices have been rising. The Central Statistical Office (CSO) publishes consumer price indices for urban workers, but no index for rural workers is available. Thus, it is not known whether inflation has affected rural and urban workers uniformly. If changes in the cost of living have been different, then separate price indexes must be used in estimating the real income levels of the two groups. As development policies in Pakistan are increasingly aimed at alleviating poverty in the rural sector, the need for a separate price index applicable to rural labourers becomes obvious.

Evaluating the Cost- Effectiveness of In-Work Benefits: A Simulation Study for Switzerland

2007 ◽  
Vol 8 (4) ◽  
pp. 447-467 ◽  
Author(s):  
Michael Gerfin ◽  
Robert E. Leu
Keyword(s):  
Low Income ◽  
Labour Supply ◽  
Social Assistance ◽  
Cost Effective ◽  
Working Poor ◽  
Assistance System ◽  
Political Agenda ◽  
Poor Households ◽  
Low Income Families ◽  
The Cost

Abstract Income support for working low-income families (the ‘working poor’) is on top of the political agenda in Switzerland. The current social assistance system is considered inadequate to support working poor households. Several European countries have introduced in-work benefits in order to make work pay. Based on a structural labour supply model, this paper provides microsimulation results of the effects of introducing different schemes of in-work benefits. It turns out that adding a minimum hours requirement to the current social assistance system is the most cost-effective reform. Onethird of expected costs can be attributed to behavioural changes in labour supply.

Indirect Taxation and Consumption Behaviour

2021 ◽  
pp. 150-172
Author(s):  
Cathal O'Donoghue
Keyword(s):  
Low Income ◽  
Behavioural Response ◽  
Low Income Countries ◽  
Indirect Taxation ◽  
Simple Method ◽  
Relative Prices ◽  
Welfare Impact ◽  
Use Of Data ◽  
Expenditure Data ◽  
Microsimulation Models

Indirect taxation refers to taxation that is levied on expenditure rather than on income and is one of the most important sources of revenue for governments, particularly in middle- and low-income countries. As a result, indirect taxation is frequently included in microsimulation models. These models differ from those described thus far in that they involve the use of data that contains expenditures in addition to incomes. This chapter describes the theoretical structure of a number of different types of indirect taxation. A challenge to the simulation of indirect taxation arises in that the base datasets of microsimulation models typically do not include expenditure data. A relatively simple method for combining income and expenditure data is described. As changes in indirect taxation affect the relative prices of goods, there will either be a change in consumption patterns or a change in savings. A method to model behavioural response when modelling indirect taxation is discussed. These methods are then utilized to describe some descriptive measures for the distributional attributes of consumption and some directions for policy reform. The framework developed in this chapter is then used to model the welfare impact of changes to indirect taxation in an example simulation.

Differences in Regional Prices: The United States, 1851–1880

1974 ◽  
Vol 34 (3) ◽  
pp. 551-591 ◽  
Author(s):  
Philip R. P. Coelho ◽  
James F. Shepherd
Keyword(s):  
United States ◽  
Nineteenth Century ◽  
The United States ◽  
Cost Of Living ◽  
American Midwest ◽  
Price Indexes ◽  
The Cost

The purpose of this paper is to examine cost-of-living differences among the various regions of the United States during a thirty-year interval of the nineteenth century. We do this by constructing regional price indexes for the years 1851–1880 using two different base years for pur calculations, 1860 and 1880. The results indicate that the cost of living differed substantially among regions, and specifically that it was lower in the American Midwest than in the East. Although one might have expected these differences among regions to narrow as regional and national markets developed and improved, we find no evidence that they did during this thirty-year period.

scholarly journals Comparing Costs of Living across World Cities

2019 ◽  
Vol 34 (Supplement_1) ◽  
pp. S79-S88
Author(s):  
Shohei Nakamura ◽  
Rawaa Harati ◽  
Somik V Lall ◽  
Yuri M Dikhanov ◽  
Nada Hamadeh ◽  
...  
Keyword(s):  
Low Income ◽  
Purchasing Power Parity ◽  
National Level ◽  
Low Income Countries ◽  
Power Parity ◽  
Cost Of Living ◽  
World Cities ◽  
Price Data ◽  
Price Levels ◽  
The Cost

Abstract This paper compares costs of living across world cities. The International Comparison Program (ICP) reports price levels across world economies in its calculation of purchasing power parity through an extensive scale of price data collection and rigorous methodology. While the price levels are reported only at the national level, some modification makes it possible to compare the cost of living across a group of world cities. In addition, various agencies report costs of living rankings for world cities on a regular basis, and some of them, such as the Economist Intelligence Unit (EIU)’s World Cost of Living Survey, systematically collect a wide variety of items from a host of cities, even covering low-income countries. This article's application of the ICP method to the EIU price data yields an overall reasonable result: richer cities have higher price levels, and the rankings of cities based on their price levels are similar when using the ICP and EIU data. Nevertheless, the results based on the EIU data differ from the ICP data relatively widely in some nonfood items and among cities with low price levels. This result highlights important issues regarding the data and methodology required to measure costs of living for development purposes.

Demonstrating Nutrient Cost Gradients: A Brooklyn Case Study

2014 ◽  
Vol 84 (5-6) ◽  
pp. 244-251 ◽  
Author(s):  
Robert J. Karp ◽  
Gary Wong ◽  
Marguerite Orsi
Keyword(s):  
Low Income ◽  
Energy Content ◽  
Food Selection ◽  
The United States ◽  
United States Department ◽  
Micronutrient Deficiencies ◽  
Caloric Density ◽  
Low Income Families ◽  
The Cost ◽  
The Impact

Abstract. Introduction: Foods dense in micronutrients are generally more expensive than those with higher energy content. These cost-differentials may put low-income families at risk of diminished micronutrient intake. Objectives: We sought to determine differences in the cost for iron, folate, and choline in foods available for purchase in a low-income community when assessed for energy content and serving size. Methods: Sixty-nine foods listed in the menu plans provided by the United States Department of Agriculture (USDA) for low-income families were considered, in 10 domains. The cost and micronutrient content for-energy and per-serving of these foods were determined for the three micronutrients. Exact Kruskal-Wallis tests were used for comparisons of energy costs; Spearman rho tests for comparisons of micronutrient content. Ninety families were interviewed in a pediatric clinic to assess the impact of food cost on food selection. Results: Significant differences between domains were shown for energy density with both cost-for-energy (p < 0.001) and cost-per-serving (p < 0.05) comparisons. All three micronutrient contents were significantly correlated with cost-for-energy (p < 0.01). Both iron and choline contents were significantly correlated with cost-per-serving (p < 0.05). Of the 90 families, 38 (42 %) worried about food costs; 40 (44 %) had chosen foods of high caloric density in response to that fear, and 29 of 40 families experiencing both worry and making such food selection. Conclusion: Adjustments to USDA meal plans using cost-for-energy analysis showed differentials for both energy and micronutrients. These differentials were reduced using cost-per-serving analysis, but were not eliminated. A substantial proportion of low-income families are vulnerable to micronutrient deficiencies.

PREREQUISITES FOR THE FORMATION OF A MECHANISM FOR STATE REGULATION OF SOCIAL GUARANTEES IN THE REGION

2017 ◽  
Author(s):  
Vitaly Lobas ◽  
◽  
Elena Petryaeva ◽  
Keyword(s):  
Social Protection ◽  
Well Being ◽  
State Regulation ◽  
The State ◽  
Point Of View ◽  
Periodic Review ◽  
Cost Of Living ◽  
Economic Relations ◽  
State Management ◽  
The Cost

The article deals with modern mechanisms for managing social protection of the population by the state and the private sector. From the point of view of forms of state regulation of the sphere of social protection, system indicators usually include the state and dynamics of growth in the standard of living of the population, material goods, services and social guarantees for the poorly provided segments of the population. The main indicator among the above is the state of the consumer market, as one of the main factors in the development of the state. Priority areas of public administration with the use of various forms of social security have been identified. It should be emphasized that, despite the legislative conflicts that exist today in Ukraine, mandatory indexation of the cost of living is established, which is associated with inflation. Various scientists note that although the definition of the cost of living index has a well-established methodology, there are quite a lot of regional features in the structure of consumption. All this is due to restrictions that are included in the consumer basket of goods and different levels of socio-economic development of regions. The analysis of the establishment and periodic review of the minimum consumer budgets of the subsistence minimum and wages of the working population and the need to form state insurance funds for unforeseen circumstances is carried out. Considering in this context the levers of state management of social guarantees of the population, we drew attention to the crisis periods that are associated with the market transformation of the regional economy. In these conditions, there is a need to develop and implement new mechanisms and clusters in the system of socio-economic relations. The components of the mechanisms ofstate regulation ofsocial guarantees of the population are proposed. The deepening of market relations in the process of reforming the system of social protection of the population should be aimed at social well-being.

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