Rural Americans aren't included in inflation figures – and for them, the cost of living may be rising faster

Stephan Weiler, Professor of Economics, Colorado State University and Tessa Conroy, Economic Development Specialist, University of Wisconsin-Madison, The Conversation on Jan 27, 2023

Published in News & Features

Rural Americans aren’t always the losers when it comes to the inflation gap. One item in rural areas that favors them is housing.

Outside cities, housing costs are generally lower, because of more limited demand. More rural Americans own their homes than city dwellers. Since owning a home is generally cheaper than renting during a time of rising housing costs, this helps insulate homeowners from inflation, especially as housing prices soared in 2021.

But even renters in rural America spend proportionately less. With housing making up around a third of the consumer price index, these cost advantages work in favor of rural residents.

However, poorer-quality housing leaves rural homeowners and renters vulnerable to rising heating and cooling costs, as well as additional maintenance costs.

While there is no conclusive official quantitative data that shows an urban-rural inflation gap, a review of rural life and consumption habits suggests that rural Americans suffer more as the cost of living goes up.

Indeed, rural inflation may be more pernicious than urban inflation, with price increases likely lingering longer than in cities.

This article is republished from The Conversation, an independent nonprofit news site dedicated to sharing ideas from academic experts. Like this article? Subscribe to our weekly newsletter.

Stephan Weiler receives funding from the US Economic Development Administration. He is affiliated with the Regional Economic Development Institute (REDI@CSU).

Tessa Conroy receives funding from the United States Department of Commerce Economic Development Administration in support of Economic Development Authority University Center (Award No. ED21CHI3030029 and CARES Act award no. ED20CHI30700477). Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the U.S. Department of Commerce Economic Development Administration.