The sources of information for this study include the 2016 report of the U.S. Census Bureau on Poverty and Income in the United States, particularly the table of Percentage of People in Poverty by State Using 2- and 3- Year Averages from 2015-2016. The following will also be used: (1) Data from Expatistan concerning the top 10 metropolitan areas in the United States with the highest cost of living; and (2) information from Tax Foundation based on a 2016 on the value of $100 in some metropolitan cities in the United States.
The variables for this study include the percentage of people living in poverty for every state based on the 2016 U.S. Census Bureau, and the 2016 Price Index of each state in the United States based on the Expatistan site. The percentage of people living in poverty will be compared to the price index value of each state using a simple direct comparison of values vis-a-vis the ranking of the state. However, since the Price Index values show the cities and the U.S. Census Bureau present the data by state, then the average for the Price Index of the top five cities of the same state on the list will be ranked as the Average Price Index for that state. This will then be compared to the ranking based on the U.S. Census Bureau. The next step will be to arrange all the states in the specified U.S. Census Bureau table from the one with the least percentage of poverty to the one with the highest. The one with the least percentage of poverty is assumed to be the richest state. For the top 25 states on this list, their corresponding Price Index values in the Expatistan website will also be arranged from the one with the lowest Price Index value to the one with the highest, where the state with the lowest Price Index value is the most convenient to live in while the one with the highest Price Index value is the most difficult to live in and assumed to be the poorest. After which, comparisons will be made. Conclusions will be formulated based on corresponding ranking. If the ranking of the state with the least poverty rate corresponds to the state with the lowest Price Index, then it is true that that state is really rich. The hypothesis will then be rejected. However, if the state with the least poverty rate corresponds to the state with the highest Price Index, then the hypothesis is accepted and so it is true that Price Index is the true indicator of poverty.