New Census data on income inequality by state, metro areas

Based on American Community Survey data from 2005 and 2009 and working on the assumption that “Spatial income inequality is neither intrinsically bad nor good,” the Census has a new report on income inequality. Here are some of the findings:

The report, by Daniel H. Weinberg, analyzed income data at various geographical levels and found that the region encompassing New York, northern New Jersey, Long Island and parts of Pennsylvania had the highest income inequality of any large metro area.

New York State also has the highest income inequality of all 50 states (although Washington, D.C., was worse).

Below is a map showing three measures of income inequality for each state: the Gini index (which ranges from 0.0, when all households have equal shares of income, to 1.0, when one household has all the income and the rest has none); a ratio of household income at the 90th percentile to that at the 10th percentile; and a ratio of household income at the 95th percentile to that at the 20th…

After New York, Connecticut, Louisiana, Mississippi and Texas have among the most unequal income distributions. At the low end are New Hampshire, Alaska and Utah, which is the most economically homogenous state in the nation.

The states that are above the US averages are an interesting group: Texas, New York, and California (tied to larger populations?) but also Louisiana, Mississippi, Alabama, Connecticut, Massachusetts, and Washington D.C. Table 8 and 9 of the report have correlations and regression coefficients to look at the relationship of inequality measures to demographic characteristics. (Intriguingly, the regression is a stepwise regression analysis.)

Of more local interest: Illinois is lower than the US averages on two of the three measures and Chicago has a very similar Gini Index to the US average. And of places with more than 100,000 people, Elgin, Illinois has the lowest Gini Index value.

Here is part of the conclusion of the report:

This paper has shown that low income inequality at the neighborhood level is most likely a result of income sorting. In other words, it may be that higher-income households, when they can, choose to live away from lower-income ones, sometimes forming “enclaves” with little income variation. Alternatively, it may be that developers concentrate higher-end houses in certain tracts and those can be afforded only by households of higher incomes.

This uses more neutral language of sorting but we could probably tie this to larger processes of residential segregation: those with money (with wealth related to race) have the opportunity to live in their own communities and leave everyone else behind.

It will be interesting to see how this report gets spun by Occupy Wall Street supporters and those opposed and in the ongoing presidential race.

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