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- Title
The Analysis of Geographic Living-Cost Differentials: A Brief Empirical Note.
- Authors
Cebula, Richard J.
- Abstract
The article presents a brief empirical note on the analysis of Geographic Living Cost Differentials. In the analysis the authors have taken the year 1977 for the study; this is because 1977 affords the greatest degree of data availability of any year. The first issue the authors address is that of heteroskedasticity. Based upon the variety of models found in the literature on geographic living-cost differentials, the authors have examined numerous combinations of the variables listed in the article. In virtually every single case, tests reveal that the hypothesis of homoskedasticity must be rejected at the 5 percent level. Accordingly, for virtually every one of the models examined, a problem of heteroskedasticity exists. To illustrate the impact of this heteroskedasticity problem estimates of a variety of reduced-form equations are provided. In each case, a simple OLS estimation is provided first; then, immediately following that estimation, the same estimation with corrected standard errors is provided.
- Subjects
COST of living; ECONOMIC consumption surveys; COST-of-living adjustments; QUALITY of life; ESTIMATES; HYPOTHESIS
- Publication
Land Economics, 1989, Vol 65, Issue 1, p64
- ISSN
0023-7639
- Publication type
Article
- DOI
10.2307/3146265