Munich Personal RePEc Archive

An Empirical Analysis of Determinants of Interstate Living-Cost Differentials, 2005

Cebula, Richard and Toma, Michael (2007): An Empirical Analysis of Determinants of Interstate Living-Cost Differentials, 2005. Published in: Journal of Regional Analysis and Policy , Vol. 38, No. 3 (30. December 2008): pp. 222-228.

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Abstract

This empirical study investigates determinants of interstate living-cost differentials for the year 2005. It seeks to supplement existing related studies, most of which have investigated such differentials at the metropolitan area or county levels and for earlier time periods. OLS and two-stage least squares (2SLS) results imply that the overall cost of living in a state is positively a function of per capita income and the relative amount of shoreline on major bodies of water, and negatively a function of the presence of right-to-work laws, heating degree days, and toxic chemical releases. Interestingly, the 2SLS estimate adopts two additional amenity/dis-amenity variables (population density and crime rate) as instrumental variables.

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