The Debate Over State-Level Inequality:Transparent Method, Rules of Evidence, and Empirical Power

This article challenges the reliance on summary measures to inform trends in state level inequality. Since only a partial ordinal ranking of inequality is available to the researcher, one can never be certain if the results from a cardinal measure of inequality are unambiguous with respect to an implicit value orientation. In addition, we examine the robustness of results examining regional cost-of-living adjusted per capita income data. If cost-of-living differentials across states are substantial, then it is reasonable to expect that individuals with substantial components of unearned income most sensitive to these differentials will tend to reside in low-cost states-states which also tend to have lower incomes. Trends in the price adjusted earnings per worker series is examined to assess the power of analyses using per capita income to inform the process of regional income convergence.