Two key features of food assistance programs’ ability to meet local food needs are food access and cost. The familiar assumption is that it costs less to live in a rural area. However, research indicates that food prices can be higher in rural areas. Absent a national database containing rural prices, experiments to adjust the poverty threshold rely on housing costs to account for geographic differences in the cost of living. The resulting measures would lower poverty rates for rural areas and for the South. If housing cost differences do not accurately reflect all geographic differences in costs of living, adjustments to the current poverty threshold would disproportionately affect rural areas and the families living there, especially in the South.
This research examines the question: If a person made the same purchases in an urban and a rural area, would they encounter the same prices? Replicating the same methods used in a national study, local prices were collected from eight rural counties in Kentucky and compared with urban counties participating in the national project. As price data alone do not capture externalities, such as distance and availability, contextual data on these factors were also collected.
No consistent pattern of lower prices across all rural places was discovered.
The research found that, given the diversity of rural places, although prices for some items were higher prices in urban areas, prices for other items were lower. Likewise, although some rural counties had lower prices overall, others had higher prices than urban areas. Furthermore, the eight rural counties had other costs in addition to prices that the urban areas did not. If the study had the ability to include these costs, prices associated with living in the rural counties would have increased.
While the popular perception is that it costs less to live in a rural area, a much more complex picture emerged. Instead, the diversity of rural areas means that there is no simple answer to the general question of whether it costs less to live in a rural area. While high-priced urban places, such as San Francisco, Los Angeles, or New York City, are not representative of all urban areas, likewise, neither are all rural areas the same. Consequently, although it may cost less to live in some rural areas, this could not be generalized to all of the rural areas in this study.