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Differences in the cost of living and the general attractiveness of communities lead to significant, regional differences in the prices school districts must pay for their most important resource – people. According to the most recent data from the National Center for Education Statistics, labor costs differ by more than 50% from the lowest-cost district to the highest-cost district within California, Florida, New York, Texas, and West Virginia. Furthermore, all states but Hawaii and Rhode Island face at least a 7.7% internal differential in labor cost. Most states fail to account for such cost differences in their school finance formulas, leading to inequitable differences in school district purchasing power. This chapter compares and contrasts the various strategies states use to make geographic cost adjustments to their school funding formula, describes the implications of geographic adjustment for interstate and intrastate measures of school finance equity (and corresponding litigation), and discusses the impact that such adjustments could have on the distribution of federal aid for economically disadvantaged students under Title 1 of the Elementary and Secondary Education Act.

This study presents estimates of the effect of changes in the real minimum wage on the employment ratio of three groups believed to be most vulnerable to changes in the minimum wage: teenagers, young adults, and adult high-school dropouts. It also examines the effect of the minimum wage on three sub-groups within each of these larger groups: males, females, and nonwhites. The data set was obtained from the monthly outgoing rotation groups of the Current Population Survey (CPS), Three Budgets for Urban Families, and the CPI-W for various urban areas. The sample period is 1979–1999.

The chapter reviews and extends the theory of exact and superlative index numbers. Exact index numbers are empirical index number formula that are equal to an underlying theoretical index, provided that the consumer has preferences that can be represented by certain functional forms. These exact indexes can be used to measure changes in a consumer's cost of living or welfare. Two cases are considered: the case of homothetic preferences and the case of nonhomothetic preferences. In the homothetic case, exact index numbers are obtained for square root quadratic preferences, quadratic mean of order r preferences, and normalized quadratic preferences. In the nonhomothetic case, exact indexes are obtained for various translog preferences.

The Minimum Income Standard (MIS) research gives an insight into living standards in the United Kingdom, and provides a way of tracking the adequacy of incomes over time. As such it offers useful context for discussions of inequality. At the core of the research are deliberative groups held with members of the public who identify and discuss the goods and services that are considered necessary for a living standard that provides a socially acceptable minimum. Groups decide not only what is enough to maintain health and well-being, but also what is needed for social inclusion. This chapter begins with an outline of MIS before exploring what the qualitative data from the research tell us about how people conceptualise socially acceptable living standards. These data also reveal how particular items, opportunities and choices are considered important in enabling individuals to feel socially included and how that has changed over time. The chapter then looks at how this living standard relates to UK household incomes and at the adequacy of income relative to MIS, in the years following the recession. We identify the groups at greatest risk of having inadequate incomes and explore how this risk has changed during a period in which there has been a sustained decline in living standards. In combining qualitative and quantitative findings from a decade of research, this chapter provides rich insight into living standards and their relation to income within the United Kingdom.

The chapter estimates the cost of maintaining a child, at different ages, the cost of being single, and the cost of additional adults present in a family, with the aim of making comparable the income levels of different households. The study investigates the issue of econometric identification of equivalence scales within a demand system modified to include demographic characteristics consistently with economic theory. It shows that a robust estimation of equivalence scales must take into formal consideration the problem of econometric identification. The estimate also puts forward all-encompassing demographic specifications to identify costs due to differences in needs, household lifestyles, and economies of scale.

Concern with the size of poverty in any nation leads to a broader question: What does it mean to be poor in a rich society? More specifically, what does it mean for a family, and particularly its children, to live in a state of poverty within a prosperous society? To begin to answer these questions, we must look at poverty in the context of its opposite, plenty. As members of modern societies, we use a wide range of goods and services to effect our participation in social relations and to create and sustain our sense of social identity. The mainstream standard of living defines the average American's family resources that fall sufficiently short of the mainstream as deprivation, precarious subsistence, exclusion – in short, poverty. Our common cultural understanding is that we cannot play our social roles or participate meaningfully in our communities without the basic material resources necessary to carry out our activities. One way or another, each of us has to “make a living” in order to “have a life.” The roles and activities that define participation are age-graded – child, teenager, young adult, mature adult, senior citizen. For any one age, these common cultural understandings allow people to pass judgment on their own rank and that of others in a continuum from destitution to unseemly affluence, based on what kind of participation they can effect.

The paper published below was prepared by Taylor Ostrander for Frank Knight’s course, Economic Theory, Economics 301, during the Fall 1933 quarter.

This paper discusses the American debate over price controls and economic stabilization after World War II, when the transition from a war economy to a peace economy was characterized by bottlenecks in the productive system and shortages of food and other basic consumer goods, directly affecting the living standard of the population, the public opinion, and political discourse. Specifically, we will focus on the economist Franco Modigliani and his proposal for a “Plan to meet the problem of rising meat and other food prices without bureaucratic controls.” The plan prepared by Modigliani in October 1947 was based on a system of taxes and subsidies to foster a proper distribution of disposable income and warrant a minimum meat consumption for each individual without encroaching market mechanisms and consumers’ freedom. We will discuss the contents of the plan and its further refinements, and the reactions it prompted from fellow economists, the public opinion, and the political world. Although the Plan was not eventually implemented, it was an important initiative for several reasons: first, it showed the increasing importance of fiscal policy among postwar government tools of intervention in the economic sphere; second, it showed a third way between direct government intervention and full-fledged laissez faire, in tune with the postwar political climate; third, it proposed a Keynesian macroeconomic approach to price and income stabilization, strongly based on econometric and microeconomic foundations. The Meat Plan was thus a fundamental step in Modigliani’s effort to build the “neoclassical synthesis” between Keynesian and Neoclassical economics, which would deeply influence his own career and the evolution of academic studies and government practices in the United States.