Geographic Differences in Income and Cost of Living: Do Location and Policy Matter?

Authors: Ryan James*, Northern Illinois University
Topics: Economic Geography, Urban Geography, Urban and Regional Planning
Keywords: Spatial Inequality, Uneven Development, Cost of Living
Session Type: Poster
Day: 4/6/2019
Start / End Time: 8:00 AM / 9:40 AM
Room: Lincoln 2, Marriott, Exhibition Level
Presentation File: No File Uploaded

Neoclassical theory has long posited income convergence among regions. Since high (low) income regions also tend to be high (low) cost areas, by similar logic cost-of-living indices should also converge over time. In this paper we compare variables associated with income and cost of living across 123 metro areas over the 1990-2012 period. Our results indicate that income and cost of living are indeed related. However, the relationship varies by region. Further, the factors explaining per capita income, cost of living, and their convergence are less consistent than expected. The impact of right to work legislation, labor force, household structure and, to some extent, fiscal variables are especially noteworthy.

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