Adjusting welfare benefits for geographic variations in the cost of living not only would help people in high-cost areas but also provide recipients in all areas with similar real benefits. However, there are technical problems and expenses involved in developing a cost of living index with adequate geographic detail. Simulations examined in this study indicate that providing adjusted rather than uniform benefits could slightly reduce total benefits paid. Cost of living adjustments would reduce benefits in southern and nonmetropolitan areas and increase benefits in metropolitan areas.
