Local housing costs and basic household needs

Aaron Yelowitz

Empirical Economics, 2017, vol. 52, issue 3, No 2, 923 pages

Abstract: Abstract The supplemental poverty measure (SPM)—which serves as an indicator of economic well-being in addition to the official poverty rate—was introduced in 2010 and explicitly adjusts for geographic differences in the cost of housing. By embedding housing costs, the SPM diverges from official measures in some instances, offering a conflicting view on family well-being. However, there is limited direct evidence of the impact of housing costs on household well-being, and virtually all of it focuses on food insecurity. This study examines the impact of local housing costs on household well-being using the “basic needs” data from the Survey of Income and Program Participation. Across a wide variety of specifications, no evidence is found that housing costs impact well-being. In contrast, local labor market conditions do impact the well-being measures in many specifications. The findings call into question one of the key motivations for the SPM—that geographic cost differences are a major factor for household well-being.

Keywords: Housing costs; Labor market conditions; Material hardship; Poverty (search for similar items in EconPapers)
JEL-codes: I32 I38 J38 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s00181-016-1185-2

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