Economic Health Indicators
View Indicators and Index for:
|Kansas or Kansas Counties||Other states|
BackgroundWe set out to develop an index of economic health for Kansas counties that incorporates national measures to gauge performance/health with other U.S. counties not just other Kansas counties as we have done in the past.
We started from the EDA and U.S. Economic Distress 1965–2000 report from July 2004 which details an alternative way to measure economic distress. Based on this report we looked at 4 measures; per capita market income, unemployment rate, labor force, and per capita transfer payments. After discussion and analysis, we decided to add a fifth measure incorporating a measure of population change. Each measure, as detailed below, was normalized to the U.S. value and then weighted equally and averaged to create an Index of Economic Health.
We have also calculated the index for individual states and the District of Columbia in the U.S. in order to measure the economic health of the State of Kansas.
AdjustmentsThe EDA report used a scale where high values indicated distress which when graphed over time seemed counter-intuitive so while we have retained the U.S. normalization of each measure we have calculated each such that high values (>100) indicate performance above the U.S. average and low values (<100) indicate a lag behind the U.S. average.
We have classified each indicator and the aggregate index into 5 groups around the U.S. norm such that areas within 5% of the U.S. average are considered average, between 5 and 15% moderately well or distressed, and more than 15% from the norm are very well or very distressed.
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Indicator 1: Per Capita Market Income Index
Market Income (MI) is defined as total personal income minus personal current transfer receipts. This indicator compares a state or county’s per capita market income to that of the U.S. as a whole. The U.S. per capita market income is in the denominator and state/county PCMI in the numerator such that a county with a higher PCMI than the U.S. average has a higher indicator value.
|PCMI =||(Total Personal Income – Transfer Receipts)|
Indicator 1 = PCMI for county or state / U.S. PCMI * 100
Source(s) of data: Bureau of Economic Analysis (BEA), Personal income and employment summary (Tables SA04, CA04) and U.S. Census Bureau, Population Estimates.
This indicator compares a local unemployment rate to that of the nation. Thus an area with a lower rate of unemployment than the U.S. average will have a high score to indicate economic well-being.
|UNEMPRAT Ratio =||U.S. Unemployment Rate|
|Local Unemployment Rate|
Indicator 2 = UNEMPRAT Ratio * 100
Source: Bureau of Labor Statistics (BLS), Local Area Unemployment Statistics (LAUS) program, Annual Average Unemployment Rate.
This indicator is meant to measure the dependant population or in other words, the share of the population that depends on the labor of others. To do so, we compute the percent of an area's population that are not in the labor force and compare this to the national average.
|LFTP =||(Total Population - Civilian Labor Force)|
Indicator 3 = U.S. LFTP / State or County LFTP * 100
Source: Bureau of Labor Statistics (BLS), Local Area Unemployment Statistics (LAUS) program, Annual Average Labor Force (not seasonally adjusted).
Indicator 4 measures the extent to which the population depends on external sources of unearned income (e.g., transfer payments). Assuming high amounts of unearned income are an indicator of economic distress, the result is a lower score.
|TPMI Ratio =||Per Capita Transfer Payments|
|Per Capita Market Income |
(as calculated in Index 1)
Indicator 4 = U.S. TPMI Ratio / State or County TPMI Ratio * 100
Source: Bureau of Economic Analysis (BEA), Personal income and employment summary (Tables SA04, CA04) and U.S. Census Bureau, Population Estimates.
Population change varies greatly; areas which have reached a certain density grow much faster than rural, sparsely-populated areas. To account for this disparity, we have created 10 classes of population density for counties and 5 classes for states and gauge an area's population change as compared to the average change for peer areas.
|PCI =||(Local Percent Population Change - Average Percent Population Change for Peer Group)*100|
|Average Percent Population Change for Peer Group|
Indicator 5 is calculated using the PCI as follows:
Local Percent Population Change
Average Percent Population Change for Peer Group
|positive||= 100 + PCI||= PCI|
|negative||= | PCI |||=100-PCI|
Indicator 5 is bottom coded to zero to prevent a negative value.
Peer areas are determined by population density in the most recent decennial census using the following classes of persons per square mile:
|County Peer Groups||State Peer Groups|
|less than 5||less than 10|
|5 to 10||10 to 40|
|10 to 20||40 to 160|
|20 to 40||160 to 640|
|40 to 80||equal or greater than 640|
|80 to 160|
|160 to 320|
|320 to 640|
|640 to 1280|
|equal or greater than 1280|
Source(s): U.S. Census Bureau, 2000 Census, 2010 Census, and Population Estimates.
The overall Economic Health Index is the average of the five indicators giving each equal weight.
less than 85
|Very Poor Economic Health|
|Poor Economic Health|
|Average Economic Health|
|Good Economic Health|
greater than 115
|Very Good Economic Health|