Food Insecurity

North Dakota most food s ecure, Mississippi is least secure

Results America seeks to use data and logical research to help educate states about their triumphs and challenges. Often in this process, we discover that high-profile issues are far less of an issue, while other problems are far more severe and demand greater policy attention. Food insecurity is one of the latter issues.

Top-10-States-(Food-Secure)Strong public health is a goal of every party and government; the ability for a citizen to have enough safe food for their household is part of this goal. Using data from the latest survey by the Food and Drug Administrat ion, we can see that not only is food insecurity an issue, but many states struggle with the matter. The 2012 data gives the percentage of a state’s population that were categorized as having “low” or “very low” food security.

First, of those states in the top 10, North Dakota, Virginia, and New Hampshire are the most food secure. Interesting to note is that the states with the top rankings are also those states with some of the lowest unemployment rates in 2012. This lends to an obvious conclusion that job security yields food security. However, it should be noted that all states have seen food insecurity increase from 2010, due in large part to continued economic troubles.

““Mississippi is currently in the midst of some of the worst food insecurity issues on record, with over 20% of the population reporting low or very low food security and access.””

Mississippi, Arkansas, and Texas are the three most food insecure states. Mississippi is currently in the midst of some of the worst food insecurity issues on record, with over 20% of the population reporting low or very low food security and access. This during a time when the state faced a 9.2% unemployment rate. This is also not merely a regional (specifically Southern) issue, as states such as Nevada and Ohio also fall into the bottom 10 rankings. Also interesting, and will be explored in later white papers, is the relationship with obesity. Many of the most obese states are also the most food insecure states.

Bottom-10-States-(Food-Insecure)Beside economic concerns, there are interesting demographic and population relationships with food security. African-American and Latino communities, as well as rural areas and senior citizens, are some of the most likely to suffer from food insecurity. It is also not just relegated to the unemployed and uneducated. 23% of the participants in the FDA survey who responded with “low” and “very low” had attended college. This data suggests not a lack of food, but rather a lack of access to food, what are called “food deserts.” Advance techniques such as geospatial data analysis (which would map areas of greatest food security risk) would serve well those states that are interested in reducing their own food security and access issues.

Business & Entepreuership

Number of new businesses falling in all except four states

Results America has analyzed the key goals shared by all 50 states. One of these key goals is economic prosperity. Democrats, Republicans, and Independents all agree that a strong economy is desirable, even if they don’t always agree on how to reach that goal. However, one thing that politicians always agree on is the importance of the small business owner. The entrepreneur is one of the iconic American figures, and so Results America asks, which state is the most entrepreneurial?

top-10-most-Entrepreneurial-StatesThe data we relied on comes from the North American Industrial Classification Survey through the US Census Bureau from the most recent year of 2011. Since it is logical that the most populace states would almost always have the highest number of entrepreneurs, we examined the per capita changes in number of businesses per state. Entirely new businesses are differentiated from franchises and additional branch establishments. We also assume that a single owner existed for each new business.

Among the top ten most entrepreneurial states, we see a variety of small and large states, many of which are world renown as places for business savvy citizens. Additionally, many of the top 10 states appeared in the top rankings for economic diversity and venture capital investment. North Dakota is at number one for much the same reason because it holds the top position in economic diversity due to its recent economic boom in oil and natural gas extraction. New York and Texas are in top positions as well. New York has a long history of being a center for business and commerce and of course is the location of Wall Street and has begun a program to create special, tax-free economic zones. Texas, under Governor Rick Perry, boasted the largest amount of business incentives of any state in the union, according to the New York Times.

“Economic boom, culture, and financial incentives are major factors in the growth of new business in the top states.”

The overall state of the U.S. economy is particularly grim when you look at the list below. Those states marked with an asterisk are the only states during the period from 2010 to 2011 (the year of the most recent data) that had a positive growth in new businesses. North Dakota boasted 6.56 new businesses for every 10,000 citizens. The national average the same year was a loss of 2.19 businesses per 10,000.

bottom-10-most-Entrepreneurial-StatesAmong states that are the least entrepreneurial, we see states that are not only less economically diverse, but also fall low on the list for venture capital investments. Idaho, Missouri, and Vermont land at the bottom of this list. Remember that this measure tracks the number of new businesses created in the year. Between 2010 and 2011, Idaho lost 6.17 businesses per 10,000 residents, nearly three times the losses of the national average. This is a major fall from their number one position in 2005, during which Idaho created almost 15 new businesses per 10,000.

Looking at the overall national trend, we see that the country as of the beginning of 2011 was not out of the woods. More updated reports from the Census Bureau and Bureau of Labor Statistics will shed light onto whether or not the U.S. has recovered as well as the states of New York and North Dakota have.

Economic boom, culture, and financial incentives are major factors in the growth of new business in the top states. Unlike venture capital or economic diversity, the measure of entrepreneurship is a volatile one. For example, if you had looked at the data from 2000, you would have found that Utah was the most entrepreneurial state. Many of these states in the top 10 also were the first and hardest hit by the recession of the last few years. The numbers here would indicate they were also the first to bounce back, raising public policy questions about what to do and not to do to encourage innovation in business when times are tough.

Venture Capital Invesment

California is undefeated in venture capital dollars

Investment by companies and wealthy citizens can often transform a dream and innovation into a revolutionary new product or service. One of Results America’s values is to encourage competition amongst the states in a variety of fields. Venture capital investment is one measure of this competition. However, it is only a cursory indicator, as venture capital tends to favor certain industries and businesses.

top-10-state-for-venture-capitalVenture capital investments are made by investment firms and wealthy benefactors to high risk ideas and organizations where the profit potential is high. Often these ideas are in burgeoning fields that have lacked investor interest in the past. This is why areas such as information, biotechnology, sustainable energy, and software development are common markets for venture capital seed funding.

Venture capital is also an indicator of a state’s economic development, potential rising prosperity, and friendliness toward innovation. Using data from PricewaterhouseCoopers LLP and the National Venture Capital Association, we have compiled the ranking of venture capital investments in total dollars for 2012. Although the data is available for 2013 and early 2014, we have decided to use 2012 as most other indicators having data only up to that year.

bottom-10-state-for-venture-capitalDespite a drastic decline in venture capital after the early 2000 Dotcom bubble, California never lost it’s position as the top state for venture capital investment. Even if we measured based on total deals and not on total dollars invested, California is still the uncontested best state in venture capital. Much of this is due to the presence of Silicon Valley and a well-developed policy infrastructure to encourage technology and information companies in the state. Massachusetts also hold a perennial position in the second place. New York is third in venture capital for 2012, but often changes position with fourth place Texas.

Wyoming, South Dakota, and Alaska are the least favored states by venture capital firms. This is most likely due to the lack of information and professional technology industries in these states. In fact these bottom three states had no major venture capital deals in 2012. Arkansas, Iowa, Vermont, North Dakota, and Hawaii had only one deal each, the largest of which was $5 million dollars. This is in contrast to California’s $14.4 billion total deals in 2012.

It should also be noted that the top states are some of the largest economies. This indicates that something like venture capital develops, or is more attracted to, states with large complex, and highly specialized economies. Further, states with high percentages of GDP from information technology tend to be wellsprings for venture capital. Among the top 10 states for IT, 7 of them (California, New York, Texas, Washington, Pennsylvania, Illinois, Colorado) are on this top 10 lists.

California rides high in the rankings here due to an established venture capital structure, strong support from their state government, and sheer economic size. Venture capital investment may simply be a substitution indicator of state wealth, in the same way that boat purchases can often act as a substitution indicator of family wealth. However, much like boat ownership, venture capital measures are only a portion of the story. In later white papers, we will add depth to the study of economic prosperity by examining entrepreneurship and the top state for new firms.

Student Test Scores

Idaho top in overall SAT & AC T test scores, Iowa the lowest

Results America’s goal is to provide practical measures of performance in a variety of areas. One of the most important to study is education. A prosperous economy relies on a quality education for as many citizens as possible. Not only should policy makers measure the quantity of education (i.e., number of Bachelor degrees attained), but also the quality of the student’s education.

This measure focuses on the average performance of state SAT and ACT scores. In some states one test is more common than another, which is often a product of history and sometimes mandatory testing. As a result, average test scores have been weighted based on the rate of participation for graduating seniors. Additionally, the ACT and SAT are scored with very different totals. SAT is out of 2,400 (previously 1,600) and ACT has a maximum
score of 36. To allow for comparison between the two, state score averages are calculated as a percentage of the total possible points.

This creates an equation that looks like this:

state-test-score-index

This equation controls for states with mandated testing as well as those where a privileged few take the test and excel. In this equation, if a state has average score of 100% on SAT, but only 10% of students take the test, they are scored the same as a state in which 100% of the students are tested and the average is only 10%.

top-10-states-for-SATIn 2013, Idaho, Florida and Georgia were the top testing states for college bound seniors. While many states traditionally considered high performers in education, such as Massachusetts and Connecticut populate the top 10 as well, it’s the presence of Idaho that may surprise some. The bottom 10 states are just as fascinating. Iowa, Arizona, and Missouri are the lowest testing states.

bottom-10-states-for-SATWith Idaho and Iowa on opposing sides of our ranking, it begs comparison of these states’ economies, demographics, cultures, and of course education policies. Demographically, Idaho and Iowa are predominately non-Hispanic white (83.5% and 88.5% respectively) as well as similar in prosperity and educational attainment. Median income for Idaho is $47,015 and Iowa is $51,000. The fact that the state with a less affluent population tests higher in college preparatory testing is counterintuitive. Both Idaho and Iowa are right to work states, indicating that teacher unionization is also not a factor.

It is also not a matter of school funding. An examination of per capita education spending for state and local government shows the top 10 states average $2,780.37 annually in 2012. The bottom 10 states were nearly identical, at $2,764.37. However, it should be noted that in 2012, Idaho spent the least per capita in this category.

The only other potential factors relating to this are difference could be regulation on education. Iowa boasts robust regulations on alternatives to public education including licensure for private schools, homeschooling and curriculum notices. Additionally, Idaho has no mandated student testing, where Iowa has annual testing requirements. However, this data may be a result of confounding factors and should be further explored.

Education is a field of policy that should be constantly studied and evaluated to ensure the best quality education for children and adults alike. Further study is needed on these results measures before a state could take any definite policy action. However, these kinds of measures should not be set aside just because the answers are not what we expected. Instead, it should insight curiosity and excitement into discovering why measures change, and how a state can improve their own.

Results Champions

States that have pioneered state level performance measures

Results America launched at a time when many states and agencies have discovered the use of performance measures to improve government efficiency and efficacy. Important to the success of these measures at the state-level is the support and often the direct involvement of the governor. Results America tracks the states that have adopted performance measures and monitor the governor’s policy goals measures through scorecards and dashboards.
Below are listed 12 states that have adopted state performance measures. Since performance measure adoption is rising in popularity, Results America has named these states “Results Champions” because they are at the forefront of this revolution. The states listed are those that have scorecards for their state, not just a single agency, and have updated their measures during the term of office of the presiding governor.

“While the earliest states were from the Pacific Northwest, the idea has diffused to a number of states.”

While these performance measurement efforts are often suspended or revised due to budget and/or administrative concerns, these 12 states have some form of performance goal measures during the time of the current governor. The results revolution is picking up steam in recent years, with the overwhelming majority of the Result Champions getting on board in the last 7 years. In addition, several other states are developing their own state-level scorecards for the upcoming year so the 2015 version of this white paper should contain even more Results Champions.

results_championWhat is also interesting to note is the lack of regional or political similarities in the states. While the earliest states were from the Pacific Northwest, the idea has diffused to a number of states in the Plains, Midwest, New England, and the South. This indicates the results revolution is not just an innovation for a certain region or political culture.

Additionally, the governors that championed this system are Democrat and Republican. Two states whose scorecard has received significant attention include Washington created under Governor Jay Inslee and Maryland as first pioneered by Governor Martin O’Malley. While both these governors are Democrats, Republcian governors such as Governor Rick Snyder in Michigan and Governor Bill Haslam of Tennessee have also adopted the system.

It is important for any state interested in creating their own performance measures system is to communicate with other states and understand best practices. States such as Oregon and Washington have gone through several iterations of measures over the last two decades and have insight into the kinds of pitfalls to avoid. Additionally, understanding what is important to your state and citizens is essential in determining what to measure. Finally, it is important to institute sustainable practices and use other tools such as Lean management systems to better improve the quality of measures and their efficacy.

Economic Diversity

North Dakota the most diverse, Delaware the least

top_10_most-economically_diverse_statesMuch in the same way that personal portfolios are diversified, states that foster diverse economies are far less likely to suffer burden when one industry or market falters. This includes economic risk, which comes from an overreliance on one sector for jobs and state revenue. Many in the real estate market can easily sympathize with this level of diversity of assets, and it is true also of government.

Economic diversity is calculated using the Simpson Index. This formula is used often in ecology to measure interconnected species and ecosystem diversity. This research uses the North American Industrial Classification System (NAICS), and the state GDP of each sector as diversity information. Diversity in this index is measured from 0 to 100, with 0 being the least diverse.

“States that foster diverse economies are far less likely to suffer burden when one industry or market falters.”

North Dakota, Pennsylvania, and Colorado have the most diverse economies in the United States. However, it should be noted that the average diversity throughout the country was 90.97. Based on the standard deviation of 1.79, only North Dakota is statistically significant among the top 10.

Delaware, Wyoming, and Oregon are the three least economically diverse states in the union. This is made more important because of the statistically significant difference each of these states has from the national diversity average. Among these three states, a single industrial sector produces a large proportion of the state’s GDP:

  • Oregon: Manufacturing 28%
  • Wyoming: Mining, Quarrying, Oil & Gas Extraction 28%
  • Delaware: Financing & Insurance 37%

This compared to North Dakota, in which the largest industry is Government and Public Administration with only 11% of GDP.

bottom_10_least-economically_diverse_statesStates with less diversity are more prone to risk from shocks to the economy. For example, in 2007, 18% of California’s GDP came from real estate rental and property leasing. This was by far California’s largest industry, totaling over $300 billion. Despite its economic diversity, which would have put it in 17th place that year, the housing bubble and subsequent recession affected California more than most states. In contrast, a state like North Dakota was measured by the Economic Security Index for 2008-2010 as one of the most economically secure.

State governments obviously cannot decide on a portfolio of industries in the same way an investor picks stocks for their retirement plan. However, diversity of an economy is important to understand when placing incentives and disincentives on industry. States that are heavily reliant on one or two sectors should either hedge their bets or save for a rainy day.

State Debt & Credit

Wyoming has least the debt, New York the most

Results America is dedicated to presenting information about the states and their policies in the context of their peers. With that in mind this white paper examines the state of state finances, measuring debt (i.e. total state and local debt compared as a percentage of that state’s economy or GDP) and the state government’s credit rating as measured by Standard’s & Poor’s. Results-driven government is about recognizing and measuring where a government is and where it’s going. Fiscal solvency measures play into that. At a time when the public debt of the federal government has topped 100% of GDP, it is important to understand that this kind of financial situation is not shared by the states. Even the most indebted states do not exceed 30% of debt to GDP.

“Wyoming’s debt to GDP ratio is less than 6% of their $39 billion economy”

Wyoming, North Dakota, and Idaho hold the coveted positions of being the least indebted states in the union. Wyoming’s debt to GDP ratio of less than 6% of their $39 billion economy. This proportion of debt has remained relatively stable for the previous decade. North Dakota and Idaho have debt to GDP ratios in the 10% range. North Dakota has declined steadily in recent years, primarily due to recent oil and natural gas discoveries increasing the state’s revenue stream. Among the top 10 states, six garner the AAA or Prime credit rating from S&P. This is the highest credit worthiness a government can hold.

Screen Shot 2014-03-07 at 12.44.23 PMNew York, Kentucky and South Carolina have the dubious distinction of being the three state’s most in debt. Among these bottom states, only Alaska hold a prime credit rating, due in part to their reduction in debt over the years from 29% in 2003 to just shy of 20% in 2013. Most of the states in the bottom 10 hold the AA rating, the notable exception being California with an A- rating. California holds the distinction as the state with lowest credit score and has been featured in the media in recent years for this reason and the state’s difficulty securing a balanced budget.

Despite these levels of debt to GDP, this is far less than the amount of debt accrued by the federal government. Despite these lower debt ratios, the states should not become over confident in their fiscal situation. The federal government maintains its credit worthiness despite such high levels of debt due to its ability to issue reserve currency and the overall economic strength of the US on the global stage. The states do not have this envious position and as a result, economic shifts and short-term fiscal decisions can significantly alter a state debt and credit. However, it is important to always be aware of a state’s credit when discussing the overall fiscal health of a state government. A state may be in debt, but so long as a financial institution is willing to lend credit, this problem is somewhat less severe.

Screen Shot 2014-03-07 at 12.44.46 PMCredit rating is about more than debt and debt is about more than government spending. It is often a product of economic conditions, tax structure, and decisions made at all levels of government. So to say a state’s financial position is a result of one variable is naive at best and ignorant at worst. Still, it important to look at a state’s decisions at they compare to their sister states in the hopes that the states can learn from each other to improve the lives of their citizens. Results America purpose is to present objective facts for this very reason.

References & Data Sources
US Census Bureau
Bureau of Economic Analysis

Results America is a non-partisan, non-profit organization that exists to inspire and enable the spread of results-driven government. Its’ sole purpose is to demonstrate how focusing government on results is key to fulfilling the promise of America