Cost of living variation, non-metropolitan America, and implications for the Supplemental Poverty Measure

Abstract

Poverty scholarship in the United States is increasingly reliant upon the Supplemental Poverty Measure (SPM) as opposed to the Official Poverty Measure of the United States for research and policy analysis. However, the SPM still faces several critiques from scholars focused on poverty of non-metropolitan areas. Key among these critiques is the geographic adjustment for cost of living employed in the SPM, which is based solely upon median rental costs and pools together all non-metropolitan counties within each state. Here, we evaluate the current geographic adjustment of the SPM using both microdata and aggregate data from the American Community Survey for 2014-2018. By comparing housing costs, tenure, and commuting, we determine median rent is likely an appropriate basis for geographic adjustment. However, by demonstrating the wide variability between median rents of non-metropolitan counties within the same state, we show that the current operationalization of this geographic adjustment is sorely lacking.

The Changing Landscape of Affordable Housing in the Rural and Urban United States, 1990–2016*

“…Declining affordability is a problem shared between metros of all sizes and nonmetro areas both near and far from metro areas. This study builds upon past work that documents that cost of living varies less between urban and rural areas than what is generally perceived (Mueller et al 2021;Nord 2009). While the general decline in affordability is shared between different types of counties; the reasons as to why are not.…”

“…This switch in disparity is attributable to the SPM's adjustment for geographic variation in cost of living (i.e., median rent)-benefiting rural areas. This geographic adjustment has been critiqued in that it masks variation in cost of living within rural areas, and as such it is likely that even when accounting for rural-urban variation in cost of living a rural disadvantage remains (Mueller et al 2021;Pacas and Rothwell 2020). These rural disadvantages suggest that shifts in income and housing costs are more likely to be unequal in rural areas-resulting in significant changes in affordability-and that the potential effects of demographic and economic change may be smaller in urban areas than in rural areas.…”