In my recent op-ed entitled “Gone to Texas,” I discuss possible reasons for the large number of people who are migrating from California to Texas and why these numbers should be adjusted for population differences.
This complements a recent Forbes.com article discussing how the high cost of living, high taxes, and few jobs in California incentivize people to flock to Texas.
In my piece, I note that Atlas Van Lines’ 2013 Migration Patterns report shows that 6 percent more people moved across the U.S. in 2013.
This report provides valuable information for states with more than 55 percent of total shipments moving out of a state (i.e. outbound states) or moving into a state (i.e. inbound states) and states with 55 percent or less of inbound or outbound shipments (i.e. balanced states).
Depending on the job market, cost of living, and other factors, in-migration from other states to a particular state can tell us much about their economic condition and the underlying policies that enhance or hinder economic prosperity.
Texas is one inbound state where many people across the U.S. continue to migrate. With 13,503 total moves to and from the Lone Star State, Texas is second to only California in total moves.
However, Texas’ status of being an inbound state with 7,856 inbound shipments is not true for California, which is a balanced state with 7,716 inbound moves of 14,505 total shipments.
Although Texas has been an inbound state and California has been a balanced state since 2005, this does not account entirely for the remarkable migration to Texas.
To appropriately account for the movement, the data should account for California’s much larger population. In particular, California’s estimated population of 38 million was 45 percent larger than the 26 million estimated Texans in 2013 and was 60 percent larger in 2004.
While there are a number of ways to adjust California’s shipments to compare them with Texas’ moves, I calculate the adjustment by dividing California’s population by Texas’ population over the 2004 to 2013 period. I then divide California’s inbound and outbound shipments by this adjustment to provide an adjusted level of inbound and outbound moves.
This adjusted level of shipments allows a comparison of the product of shipments and Texas’ population per person in California with the product of shipments and Texas’ population per person in Texas, which the latter is simply the number of inbound and outbound shipments in Texas.
To compare variables, per capita adjustments happen often in economics. For example, in most cases it is inappropriate to compare California’s income with Texas’ income because their populations are different.
Since California’s larger population works and earns income, it should be no surprise that it has more total income. To adjust for this population difference, it is necessary to divide each state’s income by its population to provide each state’s income per capita.
Regarding inbound shipments in 2013, California’s adjusted inbound shipments of 5,336 is far below the 7,856 inbound shipments to Texas. There is a similar trend of proportionally more people moving to Texas than to California since at least 2004 (see figure below).
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This is another example of how the Texas model of low taxes, modest government spending, and stable regulation provides a pro-growth environment that attracts entrepreneurs and workers who want to improve their lives.
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