A not-so-recent Forbes article (March 2009) highlighted which American states were the best to live in based on a national survey conducted by Gallup. Do the results live up to some other measurements? Let's see...

This simple analysis is based on data from data.gov: State-to-State Migration Inflow. Please keep in mind, I have not had any time to verify the data that I'm using here, and I'm not entirely positive that I am interpreting the data fields correctly, so I wouldn't make life decisions based on this data if I were you! However, maybe we can still extract some interesting information from this data.

The final conclusion is thus:

(Of note: I live in Ohio, and Ohio was ranked 47th overall, beating only West Virginia, Kentucky, and Mississippi - that's depressing)

So, now, you may be asking yourself why in the world would New Jersey come in 2nd, or sleepy New Hampshire make it into the top 10? Great question - let me answer it.

My analysis starts with the data from the federal government and I then do a simple linear regression of the number of IRS tax returns filed, by the "AGI" number in the data set, which I believe represents the total Adjusted Gross Income of the residents of each state in which the tax returns were filed between 2007-2008. Basically, this means that we can begin to get an idea of where people are moving TO, in relation to how much money is being made.
  I have labeled those states which fell along the linear regression line at a high level. Now obviously we can make some inferences here about this simple data. First of all, the states with the greatest populations are going to have the largest Adjusted Gross Incomes in aggregate, and they will also have the most tax returns to send in each year. However, we can also see that certain states are above our linear regression line, and some states are below the line. So perhaps there is another way to look at this data, which in fact, there is:

If we now look at the ratio of AGI to Returns, we get a much different picture:
First, we can see that the average ratio of AGI to Returns filed is 57.69 with a fairly normal distribution among the different states.

Second, when we highlight those states that fall outside of our upper 95% confidence limit we get a new list of states. (as seen in the "AGI / Returns" diagnostic plot above on the right) What this means is that those states above about 75% of the normal distribution of all states are outside of 1 standard deviation, and might be special. And in fact, when viewing the table that is provided at the beginning of this article, it appears that they are since we have states like Connecticut, New Hampshire, and New Jersey now in the list.

Here's what I make of this information:

1. I believe this analysis is telling us is that the money flowing out of New York City is reaching outlying states, not just outlying suburbs of New York City. This is probably not news to anyone, but it's interesting to note.
2. I think that these objective facts, unlike the Gallup poll which was entirely subjective, tell us that the bulk of the money in America, at least from 2007 to 2008, was centered in the largest cities in the US. Again, this should not shock anyone.
3. There are possibly some very distinct cultural issues negatively affecting the reporting in the Gallup poll.
   • Utah is made up almost entirely of Mormons. Mormons tend to be the bubbliest, most friendly people you'll ever meet, and I think that's a religious facade that they feel compelled to portray to the outside world. So Utah might not actually be all that great a place to live.
   • Hawaii could be considered quite similar to Utah, in that you have a pretty distinct island culture that is completely unlike anything else you would find in the lower-48 states.
   • In areas with higher-than-average concentrations of politically, financially, or physically "the best" people in the US you may likely be encountering a culture among the general populace of feeling better about themselves because of who they are geographically closer to at any point in their daily lives. Maybe not, but I wonder if this type of bias might be influencing people more than we think.
4. Wyoming and Washington, while not showing up in the top 10 list of the Caverserv Top 10 are in fact 11th and 12th on the Caveserv list. If we decided to be pickier with our choice of where to live, it might be wise to focus on these 6 states which appear in both top 10 lists, in this order (according to my personal preferences of where I would live if given the choice): Colorado, Washington, Massachusetts, California, Wyoming, or Maryland.
5. The last, and most important finding may be that in spite of the "quality of life", there is a lot more money to be made, on average, in the biggest cities, AND... being able to remit that money just far enough outside of those cities to those areas near such cities is a person's best bet for financial stability. (Yes, this is just conjecture on my part since I don't have solid data to back it up, but I think it's a logical conjecture, none-the-less.)

Now, money is by no means a predictor of happiness - probably exactly the opposite - but money is useful. So what is a person to do? Here is my recommendation: establish a business for yourself that can cater to the largest cities: NYC, LA, Chicago, Boston,  Denver, Washington D.C., or others in the "Caveserv Top 10", and then find a way to live and play in the Gallup survey's top 10 states. (Forbes Top 10 in the table above) This may well be the best way to survive and thrive during these years of lean in America.

One last note: As I mentioned earlier in this article, I live in Ohio. In neither ranking did Ohio favor well. For those of us living in Ohio, that means that not only are we not making much money, we're miserable doing it - thanks largely to the decline of the manufacturing and auto industries in America.