Does It Cost Less to Live in Rural Areas? Evidence from New Data on Food Security and Hunger*

Abstract Rural‐urban differences in the association of food insecurity and hunger with income suggest that the cost of living is substantially lower in rural than in urban areas. This implies that the official poverty rate overstates rural economic hardship compared with that in urban areas. Geographic differences in cost of living implied by the association between food insecurity and income provide some validation of the cost of housing adjustment proposed by the National Academy of Sciences (NAS) panel on improving the measurement of poverty, but suggest that the NAS adjustment generally overcorrects for cost of living and would be seriously problematic in some regions.