The Importance of Indices in Economics

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Jeremy Horpedahl is the director of the Arkansas Center for Research in Economics and an associate professor at the University of Central Arkansas . Today we talk about American Compass’s Cost of Thriving Index (COTI), what it says and why it is wrong.

The COTI shows that Americans today have a higher cost of thriving than ever before, but in a paper with AEI’s Scott Winship, Horpedahl corrects the index and shows that the cost of thriving has instead decreased. Some of the corrections are essential to the average American’s life, for example accounting for changes in taxation in the past few decades. Listen in to hear more about the cost of thriving today, why it has decreased, and how I cannot pronounce COTI for the life of me.   

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