Augusta ranked 57th out of 76 Metropolitan Statistical Areas for economic well-being in 2012, according to a new index of well-being I have just published in Social Indicators Research. This rank is an increase from 74th in 2007 and represents the second-largest improvement in well-being between 2007 and 2012. Bridgeport-Stamford-Norwalk, Conn., was the top ranked MSA in the country in 2012 out of these 76 metro areas.
Increasingly, economists and policy makers are interested in different ways of measuring well-being and quality of life. Traditionally economists have used gross domestic product, which measures the final value of all goods and services produced in a country in a period of time, usually a year.
However, it is well recognized that GDP may not be a good measure of the quality of life in a country. For example, higher crime rates will reduce well-being, but the extra spending on police and new jails increases GDP. Internationally, new economic research is looking at better ways of measuring economic well-being.
We can also measure GDP for MSAs such as Augusta. In 2012, Augusta had a real GDP per capita of $34,075, which ranked it 67th out of the 76 MSAs in the study. Given the problems of using GDP to measure well-being, maybe Augusta is a better place to live than the GDP number suggests.
There are many factors that affect economic well-being and quality of life or place. Some factors are subjective: Some people prefer mild winters and hot summers, while others prefer milder summers and colder winters. The variables chosen therefore should be unambiguous – everyone agrees that more education and less crime is better. Data availability at the MSA level also is more limited than national data.
My index of economic well-being includes measures of crime, pollution, education, health and income to provide a more comprehensive picture of economic well-being in a metro area.
Augusta was able to increase its ranking and well-being by reducing violent crime and improving health indicators. In 2012, Augusta’s violent crime rank was 28th out of 76, up 12 places. The percentage of Augusta’s population that reported excellent health in response to a Centers for Disease Control and Prevention survey increased dramatically between 2007 and 2012 and ranked Augusta 7th for that indicator. Obviously, Augusta may improve again when the new data is released for 2017. It still has low rankings for income, poverty, education and property crime. People looking to move to the area consider many indicators of economic well-being. They want cities with low crime rates, an educated population and low pollution, amongst other things.
This index allows us to evaluate our city in relation to others and to identify areas that will attract a new generation of people who will call Augusta home.
Simon Medcalfe associate professor of finance at the James M. Hull College of Business, at Augusta University.