About This Graph

This chart displays the total value of a state’s economy.

About Economy

This section presents economic indicators for all 50 states. Economic growth is the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross state product, or real GSP. In economics, "economic growth" typically refers to growth of potential output, i.e., production at "full employment," which is caused by growth in aggregate demand or observed output. We also track indicators relating to housing in this section as well as data on state government spending and revenue.

The conversion from nominal to real GSP is done using a quantity index that measures the change in the level of a quantity from a base year, apart from any changes in relative prices. The BEA uses chain-type annual weighted indexes, also known as Fisher indexes, as its measure of real output and prices. These measures allow for the effects of changes in relative prices and in the composition of output over time, thereby eliminated a major source of bias inherent in fixed-weight indexes (BEA, 2012). Per capita RGSP is in chained 1997 dollars from 1990-1997 and in chained 2005 dollars from 1997-2010, as calculated by the BEA. This is because in 1997 GSP calculations were changed from being consistent with National Gross Domestic Income (GDI) to being consistent with National Gross Domestic Product (GDP). Data for the year 1997 are calculated using both methods. However, because the 1997 data are available both ways, the annual growth rate can still be calculated for the entire period, although it should be recognized that the price index changes. The growth rate is calculated as:

growth_s,y = {(PC RGSP_s,y - PC RGSP_s,y-1)/PC RGSP_s,y-1}x100

in state s and year y, where PC RGSP is per capita real GSP. The implied long-term growth rates were computed by averaging one-year growth rates from the equation above, and then accumulating the implied growth from 1990-2011, as in:

{[growth_s,y]^(2011-1990)-1}x100.

Each bar represents the long-term growth in the specified state. States are ordered from lowest growth rate to highest growth rate, with California highlighted in red.