Wednesday, February 20, 2008

Moving, quite moving 

This new trend using information on interstate migration and economic freedom seems to be catching. Phil Miller uses state-level data and argues that the higher your rank on state economic freedom, the more interstate shipping (using United Van Lines data, not U-Haul as I did earlier) flows into your state. Dirck the Noorman does a similar correlation pattern with states voting for Kerry and for Bush in 2004 -- the movement is from Kerry states to Bush states.

However, Charlie Quimby argues that there's a balancing problem for trucking firms to get their fleet to places they are most needed. This seems to help explain the data I saw on U-Haul to some extent. But United Van Lines (which Phil and Dirck use) would have to be explained by intra- versus inter-state shipping, which Charlie could perhaps argue for us.

Two quibbles with Phil's and Dirck's posts unrelated to Charlie's critique. First, the flow in the 1980s was almost exactly the opposite -- people moved from Flyoverland to the coasts. I don't know that the Midwest is a whole lot more economically free now than twenty years ago. You would need to do a similar study over time to demonstrate this better. Also, I really hate regressions that regress on a ranking when we don't know the degree to which the ranked states are separated. That is, states 4 through 13 might be almost identical in economic freedom but all very different from state 14, but you are asserting that state 14 is as different from 13 as 13 is from 12. I realize Phil is doing a quick-and-dirty for a blog, but we should acknowledge that is what it is. It would be fun to have a senior student write a thesis with a more careful analysis of this data.

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