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An Empirical Analysis of Determinants of Interstate Living-Cost Differentials, 2005

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  • Cebula, Richard
  • Toma, Michael

Abstract

This empirical study investigates determinants of interstate living-cost differentials for the year 2005. It seeks to supplement existing related studies, most of which have investigated such differentials at the metropolitan area or county levels and for earlier time periods. OLS and two-stage least squares (2SLS) results imply that the overall cost of living in a state is positively a function of per capita income and the relative amount of shoreline on major bodies of water, and negatively a function of the presence of right-to-work laws, heating degree days, and toxic chemical releases. Interestingly, the 2SLS estimate adopts two additional amenity/dis-amenity variables (population density and crime rate) as instrumental variables.

Suggested Citation

  • Cebula, Richard & Toma, Michael, 2007. "An Empirical Analysis of Determinants of Interstate Living-Cost Differentials, 2005," MPRA Paper 52430, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:52430
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    References listed on IDEAS

    as
    1. Cebula, Richard J., 1993. "The impact of living costs on geographic mobility," The Quarterly Review of Economics and Finance, Elsevier, vol. 33(1), pages 101-105.
    2. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    3. repec:rre:publsh:v:34:y:2004:i:1:p:112-19 is not listed on IDEAS
    4. Clark, David E. & Herrin, William E. & Knapp, Thomas A. & White, Nancy E., 2006. "Incomplete Compensation and Migration Behavior: Has Anything Changed Between 1990 and 2000?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 36(2), pages 1-13.
    5. Richard J. Cebula, 1978. "An Empirical Note on the Tiebout-Tullock Hypothesis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 92(4), pages 705-711.
    6. Blomquist, Glenn C & Berger, Mark C & Hoehn, John P, 1988. "New Estimates of Quality of Life in Urban Areas," American Economic Review, American Economic Association, vol. 78(1), pages 89-107, March.
    7. James A. Kurre, 2003. "Is The Cost Of Living Less In Rural Areas?," International Regional Science Review, , vol. 26(1), pages 86-116, January.
    8. Cebula, Richard J. & Alexander, Gigi M., 2006. "Determinants of Net Interstate Migration, 2000-2004," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 36(2), pages 1-8.
    9. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    10. Walter W. McMahon, 1991. "Geographical Cost of Living Differences: An Update," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 426-450, September.
    11. Richard J. Cebula, 1989. "The Analysis of Geographic Living-Cost Differentials: A Brief Empirical Note," Land Economics, University of Wisconsin Press, vol. 65(1), pages 64-67.
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    Cited by:

    1. Harrison S. Campbell, 2021. "Income and cost of living: Are less equal places more costly?," Social Science Quarterly, Southwestern Social Science Association, vol. 102(6), pages 2689-2705, November.
    2. James, Ryan D. & Campbell Jr., Harrison S., 2016. "Exploring the Role of Unearned and Non-Wage Income on Regional Income Convergence," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 46(2), December.
    3. Bose, Srimoyee, 2015. "Determinants of Per Capita State-Level Health Expenditures in the United States: A Spatial Panel Analysis," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 45(1).
    4. Latimaha, Rusli & Ismail, Nor Asmat & Bahari, Zakaria, 2020. "Cost of Living and Standard of Living Nexus: The Determinants of Cost of Living," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 54(3), pages 1-14.

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    More about this item

    Keywords

    interstate living-cost differentials; per capita income; right-to-work laws; heating degree days;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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