It is difficult to use rates as a proxy for discounts when comparing among carriers, since adjustments have to be made for benefit differentials
, underwriting practices and carrier risk-tolerance.
They first adjust the variation in benefits for interstate differences in the value of Food Stamps and the cost of living, a common approach in analyzing welfare benefit differentials
. Arguing that recipients are more sensitive to differences in the prices of items that take a large share of their income, namely housing, they then adjust the variation in benefits for differences in rents.
I regard it necessary to explain, in other than conventional microeconomic terms, the large wage rate and fringe benefit differentials
that persist for a given job classification in a locality.
The expectation is that the greater the benefit differential
between divisions A and B, the larger will be the share of welfare recipients among total B-to-A migrants.