Economic Freedom Index for U.S. Metropolitan Areas

[Keith and stuff]

Dean B. Stansel had An Economic Freedom Index for U.S. Metropolitan Areas (http://www.jrap-journal.org/pastvolumes/2010/v43/v43_n1_a2_stansel.pdf) published in the Journal of Regional Analysis and Policy (http://www.jrap-journal.org/). The article ranks 384 U.S. metros by a variety of economic factors combined into 3 main categories (size of government, takings and discriminatory taxation and labor market freedoms).

http://nhfreedom.files.wordpress.com/2013/07/jrap_web.gif

Here are some of the details.

Top 10 Metros for economic freedom:
1. Naples-Marco Island, FL
2. Fort Walton Beach-Crestview-Destin, FL
3. Manchester-Nashua, NH
4. West Palm Beach-Boca Raton-Boynton Beach, FL
5. Bradenton-Sarasota-Venice, FL
6. Sebastian-Vero Beach, FL
7. Rockingham County-Strafford County, NH
8. Palm Bay-Melbourne-Titusville, FL
9. Sioux Falls, SD
10. Tampa-St. Petersburg-Clearwater, FL

Breakdown of the top 20 Metros by the 3 main categories.
Size of Government:
1. Naples-Marco Island, FL
2. Rockingham County-Strafford County, NH
3. Manchester-Nashua, NH
4. Sebastian-Vero Beach, FL
5. West Palm Beach-Boca Raton-Boynton Beach, FL

Takings and Discriminatory Taxation:
1. Manchester-Nashua, NH
2. Fort Walton Beach-Crestview-Destin, FL
3. Nashville-Davidson-Murfreesboro-Franklin, TN
4. Lakeland-Winter Haven, FL
5. Tyler, TX

Labor Market Freedoms:
1. Naples-Marco Island, FL
2. West Palm Beach-Boca Raton-Boynton Beach, FL
3. Sebastian-Vero Beach, FL
4. Boulder, CO
5. Sioux Falls, SD

Top States for economic freedom is you average metro rankings:
1. NH (average metro ranking of #5)
2. SD (average metro ranking of #15)
The the average metro ranking drops off a cliff.

Bottom 10 Metros for economic freedom:
1. El Centro, CA
2. Visalia-Porterville, CA
3. Merced, CA
4. Kingston, NY
5. Glens Falls, NY
6. Bakersfield, CA
7. New York-White Plains-Wayne, NY-NJ
8. Modesto, CA
9. Fresno, CA
10. Wenatchee-East Wenatchee, WA

Divide of the bottom 20 metros by state:
CA 10
NY 5
WA 2
AK 2
WV 1

Ranking for the 3 highest populated metros:
New York City #378
Los Angeles #361
Chicago #276


Appendix
Table A1. Data sources.
Area 1: Size of Government
1A: General Consumption Expenditures by State and Local Government as a Percentage of Personal Income
Total Expenditures MINUS: Total Assistance and Subsidies, Total Intergovernmental
Expenditure to State Government, Total Intergovernmental Expenditure to Federal
Government, and Total Interest on Debt
1B: Transfers and Subsidies by State and Local Government as a Percentage of Personal Income
Total Assistance and Subsidies
1C: Social Security Payments by State and Local Government as a Percentage of Personal Income
The sum of: Total Expenditures on Unemployment Compensation and Total
Expenditures on Employee Retirement
Sources: State Fiscal: U.S. Census Bureau, State Government Finances.
Local Fiscal: U.S. Census Bureau, Census of Governments, County Area Finances dataset.
State and Local Personal Income: U.S. Department of Commerce, Bureau of Economic Analysis.
Area 2: Takings and Discriminatory Taxation
2A: Total Tax Revenue as a Percentage of Personal Income
2B: Total Income Tax Revenue as a Percentage of Personal Income
2C: Indirect Tax Revenue as a Percentage of Personal Income
Total Tax Revenue MINUS: Total Income Tax Revenue and Total Sales Tax Revenue
2D: Sales Taxes Collected as a Percentage of Personal Income
Total Sales Tax Revenue
Sources: State Fiscal: U.S. Census Bureau, State Government Finances.
Local Fiscal: U.S. Census Bureau, Census of Governments, County Area Finances dataset.
State and Local Personal Income: U.S. Department of Commerce, Bureau of Economic Analysis.
Area 3: Labor Market Freedom
3A: Minimum Wage Annual Income as a Percentage of Metro Area Per Capita Personal Income
Sources: State Minimum Wage: U.S. Department of Labor, www.dol.gov/whd/state/stateMinWageHis.htm
Local Minimum Wage: Sonn, Paul. 2006. “Citywide Minimum Wage Laws: A New Policy Tool for
Local Governments,” Economic Policy Brief, No. 1 May 2006, (New York: Brennan Center for Justice).
U.S. Department of Labor, www.dol.gov/whd/state/stateMinWageHis.htm
Local Personal Income: U.S. Department of Commerce, Bureau of Economic Analysis.
Local Population: U.S. Department of Commerce, Bureau of Economic Analysis.
3B: State and Local Government Employment as a Percentage of Total Employment
Sources: State Government: U.S. Census Bureau, Public Employment.
Local Government: U.S. Census Bureau, Census of Governments, County Area Employment data set.
Total: U.S. Department of Commerce, Bureau of Economic Analysis.
3C: State Union Density
Source: Hirsch, Barry T., and David A. Macpherson. 2012. Union Membership and Coverage Database.
www.unionstats.com/ (This data is based on data from the Current Population Survey. It refers to the
percentage of total employed workers in each state who were union members.)

[Keith and stuff]

Does anyone live in any of these metro areas? What's your take on it?

Someone pointed out to me that even though New Hampshire stands out as the leader in economic freedom, followed by South Dakota, a lot of the top metros are in Florida where the author lived. I looked it up. The article was written in Ft. Myers. That metro is ranked #41.

It's possible there was at least some hidden reason for selecting the variables that were selected to put together the article. That said, a lot of it seems to make sense. Without going through all of the data, the single thing that stands out to me as strange is
Labor Market Freedoms: 4. Boulder, CO, everything else seems at least like it would be possible.

It is a pretty ground breaking report and it would be awesome if there were updated editions.

[ronpaulfollower999]

West Palm Beach????

ROFLMAO

[ronpaulfollower999]

I guess it is by metro area. Boca Raton does have quite a few businesses (and is a nice looking town), but West Palm Beach......meh outside of City Place (which has its own problems). Boynton Beach is mostly old people, so I guess Boca must be extremely "free".

[Keith and stuff]

I guess it is by metro area. Boca Raton does have quite a few businesses (and is a nice looking town), but West Palm Beach......meh outside of City Place (which has its own problems). Boynton Beach is mostly old people, so I guess Boca must be extremely "free".

Based on the some of the factors listed. If the old people weren't unemployment, weren't in a union, weren't on food stamps, weren't poor and so on, PLUS lived in an area with an income tax, lived in an area with right to work laws, lived in an area without a state minimum wage above the federal level and so on, than it might be considered free. I posted the titles of the factors above. You can follow the link to the article for more details, if desired.

Thanks for the feedback. I'm glad that area stood out to you.