Wednesday, March 19, 2014

Wealth and Coastline, Part 2: The United States

Previously I showed that the average income in the set of 138 countries for which I had income data, countries that do have some saltwater coastline is $13,562, vs $9,040 for those with no coastline. This is not surprising, to the extent that you'd expect places with globally linked economies established by their historical presence on the seas to do well, as you would expect for places that were non-extractively colonized (they'll often be the same places, i.e. the U.S.) So it might be worth asking, is there a similar effect in the U.S.?

Yes. In general, the coastal states have higher per capita incomes than the landlocked states. But the scatter plot is interesting. There's a U-shaped trend to this data, of distance of each state capital from American saltwater, versus per capita income (U.S. Census). I say "American saltwater" because there are two states (New Mexico and Arizona) where it's faster to go to the Gulf of California. Even including that as the closest saltwater doesn't change much.

You notice the income minimum at 607 miles from saltwater? It's not just a curve artifact - if you look at the states with capitals 500-700 miles from saltwater, they have a lower per capita among them ($24,141) vs the country as a whole ($28,051). These 7 states with capitals 500-700 miles are the sparsely populated and therefore small service economies of the northern Rockies (Utah, Montana, Idaho), as well as part of the Bad Stripe in the Appalachians (Tennessee, Kentucky, Indiana), and post-industrial Michigan. Is there something worse about being 600 miles from the sea, as opposed 1000 or more? (6 states: Iowa, Colorado, Wyoming, Minnesota, South Dakota, and North Dakota, the latter the furthest at 1,235 miles.) But it's possible that it's just a historical accident, as with the supposed effect of rainfall at 100 degrees west longitude causing the population to drop off toward the west. In the case of 100 degrees west, Americans had settled to about that distance inland when the rail lines were completed. (Read the history of towns in western Texas and you will usually see a discussion of which rail line it was on; true for most of the Frontier Strip.)

Also of note: I used driving distance to saltwater, but this is not a great approximation. Even if we were going to use driving distance to saltwater regardless of country, you couldn't include Hudson Bay as North Dakota's closest, because you can't drive there! And just because you can drive to coastline doesn't mean there's a port there, or geography that allows ports to be built. Furthermore, the Great Lakes states are de facto on saltwater because canals and locks connect shipping all the way through to Minnesota.

If you count states in the discrete category of whether they're landlocked and how landlocked they are (1 state away from saltwater? 2 states?) it's clear that the median income of saltwater states is higher - $29,551 vs $26,073. However, among the landlocked states, the U-shaped curve appears again: for the land-locked states, there's no trend for more isolated = lower income; if anything it's the opposite (isolated means the more states you have to go through to get to saltwater from there). The only state 4 states away from Saltwater is Minnesota which at 30,656 has a higher PCI than the median of the coastal states., the better its income. (1 state away, $25,275; 2 states away, $26,695; 3 states away, $26,545.)

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