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On The Empirical Finding Of A Higher Risk Of Poverty In Rural Areas: Is Rural Residence Endogenous To Poverty?

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  • Fisher, Monica G.

Abstract

Research shows households are more likely to be poor in rural versus urban America. Does this phenomenon partly reflect that people who choose rural residence have unmeasured attributes related to human impoverishment? To address this, two models are estimated using Panel Study of Income Dynamics data. A single equation Probit model of household poverty replicates the well-documented finding of higher poverty risk in rural places. However, a two-stage instrumental variables approach accounting for residential choice finds no measured effect of rural location on poverty. Results suggest failure to correct for endogenous rural residence leads to over-estimation of the "rural effect".

Suggested Citation

  • Fisher, Monica G., 2004. "On The Empirical Finding Of A Higher Risk Of Poverty In Rural Areas: Is Rural Residence Endogenous To Poverty?," Working Papers 18917, Oregon State University, Rural Poverty Research Center (RPRC).
    • Handle: RePEc:ags:osruwp:18917
    DOI: 10.22004/ag.econ.18917
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    Cited by:

    1. Fisher, Monica G., 2005. "Why Is U.S. Poverty Higher In Nonmetropolitan Than Metropolitan Areas? Evidence From The Panel Study Of Income Dynamics," Working Papers 18904, Oregon State University, Rural Poverty Research Center (RPRC).

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    Keywords

    Food Security and Poverty;

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