Unexpectedly Intriguing!
August 24, 2005

The Milken Institute recently released its 2005 Cost-of-Doing-Business Index (available online as a 43KB PDF document), which provides a frame of reference for finding out the relative costs of different basic components of business expenses throughout the United States. (HT: Division of Labour.)

Now, the Milken Institute's table is a nice, static display of the relative costs of doing business in the United States, at least as compared to the U.S. national average in each of it's categories. But is that good enough in this day and age? Political Calculations(TM) believes that data in tables presented online should dance on command, rearranging itself to show the relative rankings of each state for each category listed! We also think that indices built on cost data should include the raw cost information, in case the reader might want to crunch some cost numbers of their own.

That's why Political Calculations has mined the data behind the Milken Institute's 2005 Cost-of-Doing-Business Index (available as a 33KB PDF document) to provide the following dynamic table, in which you may click any of the column headings to rearrange the data in the table according to its ranking within that category (details about each of the categories is provided below the table):

2005 U.S. Cost of Doing Business Index
State Wage per Employee Tax Burden Electricity (cents/kWh) Industrial Sq. Ft. Cost ($) Office Sq. Ft. Cost ($) Overall Index
Alaska 37851 57.0 9.18 12.7 15.0 101.9
Alabama 31561 55.7 5.42 4.0 18.2 85.0
Arkansas 28335 78.8 4.79 3.0 16.1 76.3
Arizona 34738 58.8 6.23 4.1 20.1 93.5
California 41811 68.2 11.02 6.6 25.9 112.5
Colorado 38378 42.5 5.85 4.3 18.1 103.3
Connecticut 47262 64.7 8.96 5.6 22.7 127.2
Delaware 40044 79.8 6.23 4.8 21.1 107.8
Florida 33221 56.2 6.27 5.8 21.7 89.4
Georgia 36160 54.9 5.34 3.7 19.7 97.3
Hawaii 34135 94.8 13.61 13.8 24.8 91.9
Iowa 29922 56.9 5.20 2.8 14.4 80.5
Idaho 28243 70.1 4.86 3.7 14.0 76.0
Illinois 39925 58.4 6.07 5.0 25.5 107.5
Indiana 32735 63.7 5.02 3.9 17.1 88.1
Kansas 31028 62.7 5.52 4.4 18.6 83.5
Kentucky 31382 73.7 4.29 3.3 16.1 84.5
Louisiana 30219 64.4 6.49 3.9 16.9 81.4
Massachusetts 45179 62.3 9.80 6.7 30.7 121.6
Maryland 40110 56.5 5.92 4.8 22.0 107.9
Maine 30267 71.9 8.35 4.0 16.8 81.5
Michigan 38664 74.5 6.26 5.1 18.6 104.1
Minnesota 37797 80.6 5.24 6.4 20.9 101.8
Missouri 33284 51.8 5.14 4.1 18.7 89.6
Mississippi 27078 71.6 5.87 3.5 13.9 72.9
Montana 26830 65.3 5.55 3.4 13.3 72.2
North Carolina 33180 66.4 5.72 3.7 17.6 89.3
North Dakota 27370 61.7 4.80 2.7 12.5 73.7
Nebraska 30456 66.5 4.99 3.6 19.0 82.0
New Hampshire 36519 41.7 9.91 6.0 15.4 98.3
New Jersey 45545 58.4 8.36 7.3 23.4 122.6
New Mexico 30467 80.3 6.15 5.0 15.3 82.0
Nevada 35852 60.8 8.04 5.2 25.0 96.5
New York 46577 62.4 10.03 7.5 34.7 125.4
Ohio 34476 62.6 6.19 3.7 18.0 92.8
Oklahoma 29414 64.9 5.49 3.7 14.7 79.2
Oregon 33844 56.7 5.51 5.1 20.5 91.1
Pennsylvania 36157 61.3 7.10 4.7 21.2 97.3
Rhode Island 35555 66.1 9.53 3.3 19.4 95.7
South Carolina 30325 59.6 5.40 3.2 18.7 81.6
South Dakota 26877 44.7 5.27 2.6 13.8 72.3
Tennessee 32868 53.9 5.48 3.5 17.4 88.5
Texas 36421 45.2 6.56 4.5 18.2 98.0
Utah 30829 65.9 4.69 3.9 19.2 83.0
Virginia 38152 53.8 4.99 4.6 18.7 102.7
Vermont 31166 86.8 9.67 4.8 14.3 83.9
Washington 39283 63.5 5.42 5.3 24.8 105.7
Wisconsin 32779 70.7 5.84 4.8 18.4 88.2
West Virginia 28688 79.8 4.63 3.0 17.5 77.2
Wyoming 29772 86.6 4.70 6.1 11.6 80.2
US Average 37154 61.4 6.56 4.8 19.0 100.0

Definitions of the Categories

Here are the definitions of the various categories, along with their relative weighting in creating the Milken Institute's overall index:

Wage per Employee
Measures the average annual wage per employee in all industries (receives 50% weight).
Tax Burden
Measures the annual state and local tax revenue as a share of personal income as of 2004 (receives 20% weight).
Electricity Cost
Measures the 2003 cost of commercial and industrial electricity cost in cents per kilowatt-hour (receives 15% weight).
Industrial Square Footage Cost
Measures the 2005 cost of renting industrial (warehouse) space on a per square foot basis (receives 10% weight).
Office Square Footage Cost
Measures the 2005 cost of renting office space on a per square foot basis (receives 5% weight).

The overall index applies the weightings for each of the categories above, and measures it against the U.S. average. An index score of 100 indicates that the state is at the U.S. average for the overall cost of doing business. An index score of 125 indicates that the cost of doing business in the state is 25% above the U.S. average. Likewise, a state with an index score of 75 is 25% below the U.S. average.

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