Contents of the volume

2017, Volume 70 - Issue 3

ISSN: 2499-8265
RSS feed citation: At RePEc
Publication date: 01 August 2017

ASYMMETRIC EFFECT OF REAL EXCHANGE RATE VOLATILITY ON AGRICULTURAL PRODUCTS EXPORT: A CASE STUDY

Otse F. Alegwu, Benjamin C. Asogwa, Goodness C. Aye

Read the article

FACTORS INFLUENCING INTER-REGIONAL LIVING-COST DIFFERENTIALS: PANEL DATA ANALYSIS FOR THE CASE OF THE U.S.

Richard Cebula, John CONNAUGHTON , Caroline SWARTZ

Read the article

HOW MUCH INEQUALITY IS HARMFUL FOR GROWTH? THE GROWTH MAXIMIZING RATE OF INEQUALITY IN THE CONTEXT OF THE MEXICAN ECONOMY

Jorge Charles-Coll, Elisabeth L. MAYER-GRANADOS

Read the article

PROCYCLICAL TENDENCIES IN A SMALL OIL EXPORTER

Roger Hosein, Isaac DIALSINGH, Jaymieon JAGESSAR

Read the article

WHEN IS LOWER INFLATION LESS STABLE? EVIDENCE FROM EIGHT DEVELOPING ECONOMIES

Georgios Karras

Read the article

INDIA'S BURGEONING FOOD SUBSIDIES: HOW MUCH CAN WE BLAME THE FOOD CORPORATION OF INDIA?

Swaha Shome, Mala Lalvani

Read the article

ACHIEVING SUSTAINABLE ECONOMIC GROWTH AND DEVELOPMENT IN COMMUNITIES ACROSS THE UNITED STATES

Oluwole Owoye, Olugbenga A. Onafowora

Read the article

Genoa Chamber of Commerce
Economia Internazionale / International Economics

< Back

Corresponding author

Richard CEBULA, Davis College of Business, Jacksonville University, Jacksonville, Florida, USA

Co-authors

John CONNAUGHTON , University of North Carolina Charlotte, North Carolina, USA

Caroline SWARTZ, University of North Carolina Charlotte, North Carolina, USA

Factors Influencing Inter-regional Living-Cost Differentials: Panel Data Analysis for the Case of the U.S.

Pages

281-300

Abstract

This empirical study seeks to identify key factors that have influenced geographic (interstate) living-cost differentials in the U.S. in recent years. However, given the evolving literature on the effects of economic freedom in recent years, unlike previous related studies, there is a focus here on the impact of market freedom, in particular, overall labor market freedom. This study effectively differs from previous related studies in a number of ways, including: (a) the adoption of a state-level panel dataset for estimation purposes that represents the period 2000-2012; (b) studying domestic geographic living-cost differentials through Cross Section Random Effects and other estimations; and (c) formally inquiring expressly whether a higher level of labor market freedom (a factor heretofore effectively ignored in the literature on inter-regional living-cost differentials), by increasing the efficiency of labor market transactions so as to reduce the overall cost of production and/or distribution of goods and services within the state, acts to reduce the overall cost of living in the state. Among other things, the estimations all provide compelling evidence that states with higher levels of overall labor market freedom do have a lower overall cost of living. 

JEL classification

R11, R20, R22, R29

Keywords

Interstate Living-Cost Differentials, Labor Market Freedom, Income, Population Size, Demographic Traits, Climate

Index

  1. Introduction
  2. The basic framework
  3. Cross section random effects estimation results
  4. Panel GMM results
  5. Conclusion

Bibliography

Anderson, T.W. and C. Hsiao (1981), “Estimation of Dynamic Models with Error Components”, Journal of the American Statistical Association 76 (375), 598-606.
Arellano, M. and S. Bond (1991), “Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations”, Review of Economic Studies, 58(2), 277-297.
Blundell, R. and S. Bond (1998), “Initial Conditions and Moment Conditions in Dynamic Panel-  Data Models”, Journal of Econometrics, 87(1), 115-143.
Cebula, R.J. (1978), “An Empirical Note on the Tiebout-Tullock Hypothesis”, Quarterly Journal of Economics, 92(4), 705-711.
Cebula, R.J. (1980), “Determinants of Geographic Living-Cost Differentials in the United States: An Empirical Note”, Land Economics, 56(4), 477-481.
Cebula, R.J. (1986), “A Living-cost Index for SMSAs”, Social Science Quarterly, 67(4), 887-891.
Cebula, R.J. (1989), “The Analysis of Geographic Living-Cost Differentials: A Brief Empirical Note”, Land Economics, 65(1), 64-67.
Cebula, R.J. and G.M. Alexander (2006), “Determinants of Net Interstate Migration, 2000-2004”, Journal of Regional Analysis and Policy, 36(2), 116-123.
Cebula, R.J. and S. Todd (2004), “An Empirical Note on Determinants of Geographic Living-Cost Differentials for Counties in the State of Florida, 2003”, Review of Regional Studies 34(1), 112-119.
Cebula, R.J. and M. Toma (2008), “An Empirical Analysis of Determinants of Interstate Living-Cost Differentials, 2005”, Journal of Regional Analysis and Policy, 38(3), 222-228.
Cebula, R.J., and A.J. Van Rensburg (2016), “Does Greater Labor Market Freedom Lead to Lower New Home Prices in the U.S.? An Exploratory Inquiry”, Applied Economics Letters, 23(6), 415-419.
Cobas, J.A. (1978), “A Method to Estimate the Bureau of Labor Statistics Family Budgets for All Standard Metropolitan Statistical Areas”, Social Science Quarterly, 59(3), 546-552.
C2ER (2014), “Cost of Living by State”, Council for Community and Economic Research, at: <www.c2er.org> or <www.missourieconomy.org/indicators/cost_of_living/index.stm> or <http://www.top50states.com/>.
Council of Economic Advisers (2016), Economic Report of the President, 2016, U.S. Government Printing Office: Washington, DC.
Curran, L.B., H. Wolman, , E.W. Hill and K. Furdell (2006), “Economic Well-being and Where We Live: Accounting for Geographical Cost-of-living Differences in the U.S.”, Urban Studies, 43(13), 2443-2466.
Foley, M. and F. Angjellari-Dajci (2015), “Net Migration Determinants”, Journal of Regional Analysis and Policy, 45(1), 30-35.
Gunderson, R.J. and D.J. Sorenson (2010), “An Examination of Domestic Migration from California Counties”, Journal of Regional Analysis and Policy, 40(1), 34-52.
Gwartney, J., R.A. Lawson and J. Hall (2012), Economic Freedom of the World: 2012 Annual Report, Fraser Institute, at: <http://www.freetheworld.com/datasets_efw.html>
Hausman, J.A. (1978), “Specification Tests in Econometrics”, Econometrica, 46(6), 1251-1271.
Heritage Foundation (2013), “Index of Economic Freedom: Explore the Data”, At: <http://www.heritage.org/Index/Explore.aspx>.
Hogan, T.D. (1984), “Determinants of Geographic Living-Cost Differentials in the United States: Comment”, Land Economics, 60(1), 115-119.
Kirk, R.J. (1982), “Differentials in the Cost of Living”, Growth and Change, 13(2), 24-30.
Kurre, J.A. (1993), “Using Spatial Cost of Living Differences as a Teaching Tool”, Journal of Regional Analysis and Policy, 23(1), 101-120.
Kurre, J.A. (2003), “Is the Cost of Living Less in Rural Areas”? International Regional Science Review, 26(1), 86-116.
McMahon, W.W. (1991), “Geographic Cost of Living Differences: An Update”, Real Estate Economics, 19(3), 426-450.
McMahon, W.W., and C. Melton (1978), “Measuring Cost of Living Variation”, Industrial Relations, 17(3), 324-332.
Nord, M. (2000), “Does It Cost Less to Live in Rural Areas? Evidence from New Data on Food Security and Hunger”, Rural Sociology, 65(1), 104-125.
Ostrosky, A.L. (1983), “Determinants of Geographic Living-Cost Differentials in the United States: Comment”, Land Economics, 59(3), 350-352.
Ostrosky, A.L. (1986), “A Further Note on the Urban Family Budget”, Social Science Quarterly, 67(1), 212-213.                          
Raper, M. (1999), “Self-Selection Bias and Cost-of-Living Estimates, Journal of Economics and Finance, 23(1), 64-77.
Renas, S.M. and R. Kumar (1978), “The Cost of Living, Labor Market Opportunities, and the Migration Decision: A Case of Misspecification?”, The Annals of Regional Science, 12(2), 95-104.
Renas, S.M. (1980), “An Empirical Note on the Tiebout-Tullock Hypothesis: Comment”,   Quarterly Journal of Economics, 94(3), 619-623.
Renas, S.M. and R. Kumar (1983), “The Cost of Living, Labor Market Opportunities, and the Migration Decision: More on the Problems of Misspecification and Aggregation Bias”, The Annals of Regional Science, 17(1), 98-110.
Riew, J. (1973), “Migration and Public Policy”, Journal of Regional Science, 13(1), 65-76.
Short, K. (2014), “The Supplemental Poverty Measure: 2013”, U.S. Department of Commerce, U.S. Government Printing Office: Washington, DC.
Stansel, D., J. Torra and F. McMahon (2014), Economic Freedom of North America, 2014 Annual Report, Fraser Institute,  at: <www.freetheworld.com/2014/efna/economic-freedom-of-north-america-2014.pdf>.
Stansel, D., J. Torra and F. McMahon (2015), Economic Freedom of North America, 2015 Annual Report, Fraser Institute,  at:  <www.freetheworld.com/2015/efna/economic-freedom-of-north-america-2015.pdf>.
U.S. Census Bureau (2002), American Community Survey Briefs, Household Income: 2002, U.S. Government Printing Office: Washington, DC.
U.S. Census Bureau (2006), Statistical Abstract of the United States, 2006, U.S. Government Printing Office: Washington, DC.
U.S. Census Bureau (2009), Statistical Abstract of the United States, 2009, U.S. Government Printing Office: Washington, DC.
U.S. Census Bureau (2010), Statistical Abstract of the United States, 2010, U.S. Government Printing Office: Washington, DC.
U.S. Census Bureau (2012), Statistical Abstract of the United States, 2012, U.S. Government Printing Office: Washington, DC.
Zimmerman, J.N., S. Ham and S.M. Frank (2008), “Does It or Doesn’t It? Geographic Differences and the Cost of Living”, Rural Sociology, 73(3), 463-486.