GDP overachievers

Yesterday Karl Fisch and I were e-mailed a link to a video from Shocking Economics. Although I'm neither a demographer nor an economist, the video got me thinking... (bear with me here; there's a point at the end of all of this!)

As you can see in the spreadheet I made [.xls or .pdf], there is an extremely strong positive correlation (cell E2) between a state's overall population rank (column D) and its overall GDP rank (column F). In other words, the more people in the state, the bigger GDP it has. California has the most people and it has the biggest GDP. This makes sense.

However, some states seem to be more GDP-efficient than others. For example, Connecticut is ranked 29th in overall population and 23rd in overall GDP, but is the 4th-ranked state when it comes to GDP per capita (column G). In contrast, Alabama is ranked 23rd in overall population and 25th in overall GDP, but is the 45th-ranked state in terms of GDP per capita. Connecticut's GDP over/under (column H) is +19 (23 minus 4). Alabama's is -20 (25 minus 45). Connecticut appears to be a GDP overachiever, while Alabama seems to be an underachiever. Dollar for dollar, person for person, Connecticuters are contributing more to the overall national economy than Alabamans.

As the spreadsheet shows (cells K26:K29), states in the Northeast and Pacific regions (as defined by the U.S. Census) are, on average, more GDP-efficient than states in the Midwest or South. There are moderately strong correlations between states' over/under ratio and their overall population rank (cell E4), overall GDP rank (cell H5), and GDP per capita rank (cell H6). States with smaller populations are moderately more likely to have a higher GDP per capita rank and a better GDP over/under ratio.

So here are 10 select states [click on image for larger version or download the PDF]:

While some of the states (Montana, Maine, New Jersey, and Maryland) have overall GDP ranks and GDP per capita ranks that are congruent, you can see that there are large discrepancies in GDP over/under between the lowest states (Florida, Michigan, Ohio, and Arizona) and the highest states (Wyoming, Alaska, Delaware, and Rhode Island). Florida is #4 in overall GDP but #34 in GDP per capita. Wyoming is #48 in overall GDP but #5 in GDP per capita. The lower states seem to be under-contributing to the national economy.

So how does a state like Michigan or Arizona increase its GDP per capita? Well, in today's day and age, I think these states need to follow the lead of West Virginia (over/under of -9). West Virginia is making strategic, long-term investments in 21st century skills initiatives for its schools. To its credit, it sees that a focus on digital technologies and preparation of a globally-competitive workforce is the best solution for an anemic state economy. It's probably no coincidence that five of the first six states to join up with the Partnership for 21st Century Skills (in red on the spreadsheet) have neutral or negative GDP over/under ratios.

I don't know if all of this would make sense to an economist, much less a 'shocking' one, but it sits well intuitively with me. Although the video points out that our system has worked well for us to date, it also is true that our world is transforming itself in revolutionary ways. Don't we want our state educational systems to be proactive rather than resting on their laurels and one day waking up to find that their economic models no longer work?

LinkedIn meets Tinder in this mindful networking app

Swipe right to make the connections that could change your career.

Getty Images
Swipe right. Match. Meet over coffee or set up a call.

No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.

Keep reading Show less

Space toilets: How astronauts boldly go where few have gone before

A NASA astronomer explains how astronauts dispose of their, uh, dark matter.

  • When nature calls in micro-gravity, astronauts must answer. Space agencies have developed suction-based toilets – with a camera built in to ensure all the waste is contained before "flushing".
  • Yes, there have been floaters in space. The early days of space exploration were a learning curve!
  • Amazingly, you don't need gravity to digest food. Peristalsis, the process by which your throat and intestines squeeze themselves, actually moves food and water through your digestive system without gravity at all.
Keep reading Show less

Steven Pinker's 13 rules for writing better

The Harvard psychologist loves reading authors' rules for writing. Here are his own.

NEW YORK, NY - JULY 21: Steven Pinker speaks onstage during OZY Fest 2018 at Rumsey Playfield, Central Park on July 21, 2018 in New York City. (Photo by Brad Barket/Getty Images for Ozy Media)
Personal Growth
  • Steven Pinker is many things: linguist, psychologist, optimist, Harvard professor, and author.
  • When it comes to writing, he's a student and a teacher.
  • Here's are his 13 rules for writing better, more simply, and more clearly.
Keep reading Show less

Can the keto diet help treat depression? Here’s what the science says so far

A growing body of research shows promising signs that the keto diet might be able to improve mental health.

Photo: Public Domain
Mind & Brain
  • The keto diet is known to be an effective tool for weight loss, however its effects on mental health remain largely unclear.
  • Recent studies suggests that the keto diet might be an effective tool for treating depression, and clearing up so-called "brain fog," though scientists caution more research is necessary before it can be recommended as a treatment.
  • Any experiments with the keto diet are best done in conjunction with a doctor, considering some people face problems when transitioning to the low-carb diet.
Keep reading Show less