Cost of Living Variation, Nonmetropolitan 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 in nonmetropolitan 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 nonmetropolitan 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 that median rent is likely an appropriate basis for geographic adjustment. However, by demonstrating the wide variability between median rents of nonmetropolitan counties within the same state, we show that the current operationalization of this geographic adjustment could be improved through the use of more-specific categories such as metropolitan adjacency or Rural Urban Continuum Codes.