Should intrastate funding formulae for the Older Americans Act include a rural factor?

Most states maintain an Intrastate Funding Formula (IFF) to allocate Older Americans Act funds to planning and service areas within their state. The intention of these formulae is to target resources to those elders in the greatest economic and social need. To achieve this objective, the vast majority of states include measures of age, income, and race in their IFFs. In contrast, the inclusion of a geographic or rural factor is much more controversial. This research was initiated to determine if there was empirical support for the argument that residence influences the need for services after controlling for those factors commonly used by most states in their IFFs. Using data from the Supplement on Aging to the 1984 National Health Interview Survey, the results demonstrate that residing in a nonmetropolitan area increases the likelihood of poor health and the need for services after controlling for age, income, and race. Results also indicate that collectively the four predictor variables account for a very small proportion of the variance in need.