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When looking at how “rich” a state is, economists look at something known as gross domestic product, or GDP. It’s one of those terms you may only vaguely remember learning about in high school Economics class. GDP refers to the total value of goods and services within a country over a set time period, according to Investopedia.
According to the U.S. Department of Commerce’s Bureau of Economic Analysis, GDP can’t be measured in the same way by state as it is in countries, because state GDP involves a wide variety of goods and services. Thus, the main method is to measure it by total expenditures, or the number of incomes earned.
Thus, GOBankingRates looked at the relationship between median incomes, poverty rate and state GDP to determine which ones are the top 20 “richest” states. See if your state made the list.
20. North Dakota
- Median income:$68,131
- Gross state product:$73.3 billion
- Poverty rate: 10.7%
19. Alaska
- Median income: $80,287
- Gross state product: $63.6 billion
- Poverty rate: 10.4%
18. Delaware
- Median income: $72,724
- Gross state product: $87.5 billion
- Poverty rate: 11.4%
17. Oregon
- Median income: $70,084
- Gross state product: $299.1 trillion
- Poverty rate: 12.1%
16. Rhode Island
- Median income: $74,489
- Gross state product: $71.4 billion
- Poverty rate: 11.3%
15. Illinois
- Median income: $72,563
- Gross state product: $1.03 trillion
- Poverty rate: 11.8%
14. Utah
- Median income: $79,133
- Gross state product: $248.2 billion
- Poverty rate: 8.8%
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13. Minnesota
- Median income: $77,706
- Gross state product: $446.5 billion
- Poverty rate: 9.2%
12. New Hampshire
- Median income: $83,449
- Gross state product: $104.4 billion
- Poverty rate: 7.4%
11. Texas
- Median income: $67,321
- Gross state product: $2.4 trillion
- Poverty rate: 14.0%
10. Virginia
- Median income: $80,615
- Gross state product: $649.4 billion
- Poverty rate: 9.9%
9. Colorado
- Median income: $80,184.00
- Gross state product: $484.4
- Poverty rate: 9.6%
8. Connecticut
- Median income: $83,572
- Gross state product: $322 billion
- Poverty rate: 10.0%
7. Maryland
- Median income: $91,431.00
- Gross state product: $470.2 billion
- Poverty rate: 9.2%
6. Washington
- Median income: $82,400
- Gross state product: $726 billion
- Poverty rate: 10.0%
5. New Jersey
- Median income: $89,703
- Gross state product: $745.4
- Poverty rate: 9.8%
4. Massachusetts
- Median income: $89,026
- Gross state product: $688.3 billion
- Poverty rate: 9.9%
3. New York
- Median income: $75,157
- Gross state product: $2.53 trillion
- Poverty rate: 13.5%
2. Hawaii
- Median income: $88,005
- Gross state product: $98.2 billion
- Poverty rate: 9.5%
1. California
- Median income: $84,097
- Gross state product: $3.6 trillion
- Poverty rate: 12.3%
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Gabrielle Olya contributed to the reporting for this article.
Methodology: To find the Richest States in America, GoBankingRates gathered data on each state to make the calculations. The factors gathered for each state are; [1] State’s GDP sourced from the 2022 Regional GDP in the US Census, [2] Zillow Home Value Index’s 2023 Average home value for single family homes sourced from Zillow, [3] median household income sourced from the American Community Survey in the US Census, [4] State Tax Revenue per Capita sourced from the Tax Policy Center, and [5] Poverty percentage sourced from the American Community Survey in the US Census. All data was scored and the scores were combined to give a total score that ranked each states showing the Richest States in America. All data is up-to-date as-of June 6th, 2023.
As someone deeply immersed in economics and finance, I've got a solid grasp of GDP (Gross Domestic Product) and its significance in assessing a region's economic health. GDP measures the total value of goods and services produced within a given area during a specified time. It's a critical metric used by economists and policymakers worldwide. In the context of the article about the richest states in America, it's apparent that GDP is a primary factor in determining a state's economic standing.
The U.S. Department of Commerce's Bureau of Economic Analysis, as mentioned in the article, highlights the complexity of measuring state GDP due to the wide array of goods and services involved. Consequently, the approach involves evaluating total expenditures or income numbers within the state. This method, as indicated by GOBankingRates, is utilized to analyze the relationship between median incomes, poverty rates, and state GDP to rank the top 20 richest states.
The article presents a list of states, detailing their median incomes, gross state products, and poverty rates. Notably, figures like median income indicate the midpoint of household incomes in a state, while the gross state product represents the total economic output. Poverty rates, on the other hand, reflect the percentage of individuals living below the poverty line in each state.
The methodology employed by GOBankingRates to determine the richest states involves multiple factors beyond GDP, such as Zillow Home Value Index, median household income, state tax revenue per capita, and poverty percentage. This comprehensive approach provides a broader view of economic prosperity beyond GDP alone.
The data presented in the article, sourced from various credible outlets like the U.S. Census, Zillow, and the Tax Policy Center, is up-to-date as of June 6th, 2023, ensuring the relevancy and accuracy of the rankings. This methodology amalgamates different economic indicators to generate a comprehensive score, enabling the ranking of states based on their overall economic wealth.
Understanding the intricacies of GDP, median income, poverty rates, and the methodology behind ranking states based on economic factors, provides a clearer picture of how economists and financial analysts assess and compare the wealth of different regions. This analysis contributes to a broader comprehension of economic disparities and growth patterns across states in the United States.
