If preferences or budgets are heterogeneous across people (as they clearly are), then individual cost-of-living indexes are also heterogeneous. Thus, any social cost-of-living index faces an aggregation problem. In this article, we provide a solution to this problem that we call a "common-scaling" social cost-of-living index (CS-SCOLI). In addition, we describe nonparametric methods for estimating such social cost-of-living indexes. As an application, we consider changes in the social cost-of-living in the U.S. between 1988 and 2000.
Authors
Research Fellow Simon Fraser University
Krishna is a Research Fellow at the IFS, a Professor at Simon Fraser University and has an Economics Endowed Professorship at Simon Fraser University.
Research Fellow University of Michigan
Tom is a Research Fellow at IFS, a Research Professor for the Institute for Social Research at the University of Michigan.
Journal article details
- Publisher
- American Statistical Association
- Issue
- October 2010
Suggested citation
Crossley, T and Pendakur, K. (2010). 'The common-scaling social cost-of-living index' (2010)
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