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Is The Cost Of Living Less In Rural Areas?

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  • James A. Kurre

    (School of Business, Pennsylvania State University–Erie)

Abstract

There seems to be a general presumption that rural areas benefit from lower costs of living than urban areas. However, there is relatively little systematic data, other than anecdotal evidence, to support this. To test this presumption, this study develops spatial cost of living estimates for each of the sixty-seven counties of Pennsylvania. In addition to the overall cost of living, it generates indexes for each of six component subindexes: groceries, housing, utilities, transportation, health care, and miscellaneous goods and services. These estimates find that the average urban resident of Pennsylvania pays about 6 percent more than rural residents for a broad basket of goods and services. Moreover, urban residents pay more on average for all six major categories of goods, with the greatest difference (12.7 percent) occurring for housing costs. Interestingly, the article also finds that the efficiency of the local public sector can affect local cost of living. The article also identifies policy implications of these differences for economic development and other purposes.

Suggested Citation

  • James A. Kurre, 2003. "Is The Cost Of Living Less In Rural Areas?," International Regional Science Review, , vol. 26(1), pages 86-116, January.
    • Handle: RePEc:sae:inrsre:v:26:y:2003:i:1:p:86-116
    DOI: 10.1177/0160017602238987
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    References listed on IDEAS

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    3. Elena Lasarte Navamuel & Esteban Fernández Vázquez & Fernando Rubiera Morollón, 2017. "Higher cost of living in urban areas? An AIDS-based analysis of food in Spain," Regional Studies, Taylor & Francis Journals, vol. 51(11), pages 1665-1677, November.
    4. Cebula, Richard J. & Toma, Michael, 2008. "An Empirical Analysis of Determinants of Interstate Living-Cost Differentials, 2005," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 38(3), pages 1-7.
    5. Richard J. Cebula & Michael Toma, 2010. "Determinants of interstate differentials in the cost of housing, 2006," Applied Economics Letters, Taylor & Francis Journals, vol. 17(2), pages 153-157, January.
    6. Jolliffe, Dean, 2006. "The Cost of Living and the Geographic Distribution of Poverty," Economic Research Report 7254, United States Department of Agriculture, Economic Research Service.
    7. Richard J. Cebula & Andre J. Van Rensburg, 2016. "Does greater labour market freedom lead to lower new home prices in the US? An exploratory inquiry," Applied Economics Letters, Taylor & Francis Journals, vol. 23(6), pages 415-419, April.
    8. Cebula, Richard & Toma, Michael, 2006. "Determinants of Interstate Differentials in the Real Median Price of Single Family Homes," MPRA Paper 61410, University Library of Munich, Germany.
    9. Goldhaber-Fiebert, Jeremy D. & Babiarz, Kimberly S. & Garfield, Rachel L. & Wulczyn, Fred & Landsverk, John & Horwitz, Sarah M., 2014. "Explaining variations in state foster care maintenance rates and the implications for implementing new evidence-based programs," Children and Youth Services Review, Elsevier, vol. 39(C), pages 183-206.
    10. Richard J. Cebula & John Connaughton & Caroline Swartz, 2018. "An Empirical Analysis of the Impact of the Three Labor Market Freedom Indices and Occupational Licensing on Interstate Living-Cost Differentials," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 33(Fall 2018), pages 49-62.
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