Wednesday, October 13, 2010

What is going on in North Carolina?

The locals here in Angusland are buzzing over how has ranked OKC as the 7th best area in some index of income growth out of 100 ranked areas.

Me being me, I was immediately attracted to the bottom 10.

Grand Rapids MI, Phoenix AZ, Toledo OH, Detroit MI, Riverside CA, sure they make sense.

But then there's Raleigh, Greensboro, & Charlotte. Three NC cities in the bottom 10?


Y'all really should have elected Mungowitz!


John Thacker said...

Their math is pretty stupid, though. From their explanation:
The formula compared each area’s growth rates against the U.S. averages for 25 different time spans, yielding an overall score for income growth. All 25 spans ended in 2009, ranging in length from 25 years (1984-2009) to a single year (2008-2009).

If I'm reading that correctly, they averaged (via some method) the one year growth rate, the two year growth rate, and so on up to the twenty-five year growth rate.

That's statistically incredibly dumb, and obviously overweights the 2008-2009. If they simply averaged them, then the 2008-2009 period accounted for over 15% of the total, 2007-2008 for over 11% of the total, 2006-2007 for over 9% of the total, and so on, down to 1986-1987 accounting for 0.5% of the total, 1985-1986 accounting for 0.33% of the total, and 1984-1985 accounting for only 0.16% of the total.

Why not just use the 25 year growth rate? That already includes information from each year.

John Thacker said...

Note that as a result, #96 Charlotte has a 25-year income growth rate of 181.9%, higher than #7 Oklahoma City's 169.9%. The entire reason why Charlotte and the other NC cities score badly is shown in their 5-year income growth, which is heavily affected by the 2008-2009 numbers.

Perhaps there's some argument for weighting recent years more heavily, but I'm pretty sure that this goes too far.