1、Order Code RS20942Updated August 20, 2007Adjusting Federal Benefits for GeographicDifferences in the Cost of LivingBrian W. CashellSpecialist in Macroeconomic PolicyGovernment and Finance DivisionSummaryBy indexing various benefits and transfer payments to the consumer price index(CPI), policymakers
2、 intended that the real value, or purchasing power, of thosepayments not be eroded by increases in the general level of prices. Although suchindexing provisions may compensate for changing economic conditions over time, thereis no allowance for substantial geographic differences in the cost of livin
3、g. A separateCPI is published for each of a number of metropolitan areas, but those figures allow onlya comparison of inflation rates experienced by residents of those areas. The CPI doesnot allow interarea cost of living comparisons. The federal government does notcurrently publish any statistics a
4、llowing comparison of differences in the overall cost ofliving in different areas of the country. The most widely used data to estimategeographic cost of living differences are the ACCRA indexes, published by the Councilfor Community and Economic Research. An examination of ACCRA data for the firstq
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