I think it is generally understood that red states outperform blue states by any possible measure. The Committee to Unleash Prosperity offers a new analysis that reaches that conclusion. This approach is unique because it tries to eliminate other variables, and isolate the importance of political philosophy:
[W]e needed to use more sophisticated statistical analysis to account for these other, non-political factors. We want to be able to say with a high degree of certainty that “Other things else equal Red States have higher rates of economic growth.” Specifically, in order to more confidently examine the issue we needed to use modern multivariate techniques such as regression analysis to isolate from other explanatory factors. After better controlling for such non-political factors as temperature or the presence of oil or gas deposits, does being a Red State still mean that the welfare-enhancing growth in incomes exist? Do politics really matter?
The answer is a resounding “yes,” as the report below indicates.
I suspect that this analysis actually understates the red state advantage. The chart above relates to personal income, which I assume is taken from Census Bureau numbers. The issue here is that conventional personal income data include income from three sources: wages and salaries, return on capital, and government transfer payments. In some blue states, nearly all personal income growth in recent years has come from government transfer payments.
By including welfare and other such payments in personal income, the personal income data systematically put a finger on the scale in favor of blue states. Welfare payments are not only counted as income, they are in effect double counted, because the numbers for wages and salaries and return on capital are pre-tax. So your wage is counted once when you earn it, and counted again when your state’s government gives it to someone else as a welfare benefit. If this bias were corrected, the red state advantage would be even greater.
In any event, people know where to go for opportunity, and it isn’t to blue states:
