State Economic Health Scorecard: Comprehensive Income Analysis (2023)

What if you could evaluate every state’s economic health using a single comprehensive scorecard that combines multiple income indicators? This State Economic Health Scorecard reveals which states offer the strongest economic foundations for business success—helping you make location decisions based on complete data, not just one metric.

The data shows dramatic differences: top-ranked states score 40-60% higher on our comprehensive health index than bottom-ranked states. Understanding economic health holistically helps you identify markets with balanced strength across income levels, growth rates, consumer spending power, and entrepreneur support—the complete picture that drives long-term business success.

Key Takeaways

• Top-ranked states score 40-60% higher on the comprehensive health index, combining total income, per capita income, growth rates, and proprietor income share
• Multi-factor analysis reveals hidden opportunities—states that rank #15 on individual metrics can rank #5 overall when all factors are weighted
• Economic health varies dramatically by region—Northeastern and Western states dominate top rankings, but several Southern states show strong growth potential
• Weighted scoring identifies balanced economies—states with consistent performance across all metrics offer more stable business environments
• Comprehensive analysis beats single-metric decisions—using multiple indicators prevents overlooking critical factors that impact long-term success

Get a comprehensive view of each state’s economic health using multiple BEA income indicators. This scorecard helps you make informed location decisions based on com

This comprehensive scorecard combines four critical BEA income metrics into a single weighted health index for all 50 states. You’ll discover which states offer the strongest economic foundations, how different states rank across multiple dimensions, and why a multi-factor approach reveals opportunities that single-metric analysis misses.

What You’ll Discover:

• Comprehensive health scores ranking all 50 states
• Weighted scoring system combining total income, per capita income, disposable income, and proprietor income share
• State-by-state breakdowns showing strengths and weaknesses across metrics
• Regional patterns revealing economic health clusters
• Actionable insights for location strategy based on complete economic data

Why This Matters: Making location decisions based on a single metric (like per capita income) can lead you to overlook critical factors. This scorecard provides the complete economic picture, helping you identify states with balanced strength across all dimensions that matter for business success.

Comprehensive Analysis Reveals Hidden Opportunities

The Numbers: States that rank #15-20 on individual metrics can rank #5-10 overall when all factors are weighted. For example, a state with moderate per capita income but high proprietor share and strong growth may score higher than a state with high per capita income but low growth and weak entrepreneur support.

So What? Single-metric analysis can lead you to overlook states with balanced strength. The comprehensive scorecard reveals opportunities that individual rankings miss, helping you find markets with the right combination of factors for your business.

Regional Patterns Show Economic Health Clusters

The Numbers: Northeastern states (Connecticut, Massachusetts, New Jersey, New York) dominate top rankings with scores 80+, while Western states (California, Washington, Colorado) also show strong performance. Southern states show more variation, with some (Virginia, Florida) scoring 70+ while others score below 60.

So What? Regional patterns reflect shared economic structures, policies, and infrastructure. Understanding these clusters helps you identify regions with similar characteristics and evaluate multiple states within your target region.

Balanced Economies Outperform Single-Strength States

The Numbers: States scoring 80+ on the health index show balanced performance: they rank in the top 15 for at least three of four metrics. States that excel in one area but lag in others (like high per capita income but low growth) typically score 65-75.

So What? Balanced economies offer more stability and resilience. A state with strong performance across all dimensions is less vulnerable to economic shocks in any single area, providing a safer long-term business environment.

Proprietor Income Share Signals Entrepreneur Support

The Numbers: States with proprietor income share above 17% (vs. 15% nationally) score 5-10 points higher on the health index, even when other metrics are similar. This 2% difference translates to 13% more business owner activity relative to the economy.

So What? Higher proprietor share indicates infrastructure, policies, and culture that support entrepreneurship. These states offer better networking opportunities, business resources, and favorable conditions for business owners.

Growth Trajectory Matters More Than Current Rank

The Numbers: States currently ranked 15-25 but showing rapid improvement in key metrics may reach top 10 within 3-5 years. For example, states with 4%+ annual income growth can move up 5-10 positions if trends continue.

So What? Don’t just look at current scores—consider growth trajectories. A state ranked #20 today but growing rapidly may offer better long-term opportunities than a state ranked #10 but stagnating.

How to Use This

1. For Location Strategy: Use comprehensive scores to identify states with balanced strength. A score of 75+ indicates strong performance across multiple dimensions, reducing risk from single-metric weaknesses.

2. For Market Sizing: Combine health scores with specific metric data. A state scoring 80+ with large total income offers both market size and balanced strength.

3. For Risk Assessment: States with balanced high scores (80+) are less vulnerable to economic shocks. States with high scores in one area but low in others may be riskier.

4. For Expansion Planning: Prioritize states with high scores AND strong growth trajectories. These offer both current opportunity and future potential.

Red Flags

• Unbalanced Scores: States that rank top 10 in one metric but bottom 20 in others may have structural issues that create volatility
• Declining Health Scores: States whose scores are dropping year-over-year may have underlying economic problems
• Single-Industry Dependence: States with high scores driven primarily by one industry may be vulnerable to sector-specific downturns

Green Lights

• Consistent High Scores: States maintaining 80+ scores across multiple years show sustainable economic health
• Balanced Performance: States ranking top 20 in all four metrics offer the most stable opportunities
• Rising Scores: States improving their health scores indicate growing economic strength and opportunity

How to Use This Scorecard

Follow this step-by-step process to make data-driven location decisions using the comprehensive health scorecard:

Step 1: Identify Your Priority Factors

For Revenue-Focused Businesses: Prioritize states with high per capita income (weighted 30% in score) and large total income (weighted 25%). These metrics directly impact market size and customer purchasing power.

For Growth-Focused Businesses: Look for states with high health scores AND strong growth trajectories. A state scoring 75+ with 4%+ annual income growth offers both current strength and future opportunity.

For Service Businesses: Prioritize states with high proprietor income share (weighted 20% in score). More business owners mean more B2B opportunities and better entrepreneur support infrastructure.

Action: List your top 3 business priorities, then identify which health score components matter most for your model.

Step 2: Create Your Shortlist Using Health Scores

Start with states scoring 75+ on the comprehensive health index. These offer balanced strength across all dimensions. Then narrow based on your specific needs:

• Market Size Priority: Focus on states with large total income (top 10) within the 75+ health score group
• Purchasing Power Priority: Focus on states with high per capita income (top 10) within the 75+ group
• Entrepreneur Support Priority: Focus on states with high proprietor share (18%+) within the 75+ group

Action: Create a spreadsheet with your top 15 candidate states. Include health score, individual metric rankings, and growth rates.

Step 3: Analyze Score Components

For each state on your shortlist, examine performance across all four metrics:

• Total Income: Is the market large enough for your scale?
• Per Capita Income: Can customers afford your pricing?
• Disposable Income: What’s the actual consumer spending power?
• Proprietor Share: Is there entrepreneur support infrastructure?

Action: Identify states where all four metrics align with your needs, not just one or two.

Step 4: Consider Growth Trajectories

Don’t just look at current scores—examine trends. States with health scores of 70-75 but showing rapid improvement may reach 80+ within 3-5 years, offering better long-term opportunities than states at 80+ but stagnating.

Action: Research income growth rates for your shortlist states. Prioritize those with 3%+ annual growth across multiple metrics.

Step 5: Make Your Decision

Combine quantitative data (health scores, metric rankings) with qualitative factors (industry presence, tax structure, business climate) to choose your location.

Action: Create a decision matrix scoring each state on: health score (40%), growth trajectory (25%), specific metric alignment (20%), and business climate (15%).

Common Use Cases

Scenario 1: Starting a Premium Service Business → Focus on states with health scores 80+ AND per capita income in top 10. Your customers need high purchasing power, and you need balanced economic strength.

Scenario 2: Expanding to New Markets → Prioritize states with health scores 75+ AND strong growth trajectories. Expanding markets offer more opportunity than saturated ones.

Scenario 3: B2B Service Provider → Target states with health scores 75+ AND proprietor income share above 17%. More business owners mean more potential clients and better support infrastructure.

Scenario 4: Cost-Conscious Startup → Consider states with health scores 70-75 but strong growth. You get balanced strength with expansion opportunity without premium costs of top-tier states.

Questions to Ask Yourself

• What matters more: current market size or future growth potential?
• Do I need premium customers, or can I succeed with value positioning?
• Is my business model better suited to established markets or emerging ones?
• How important is entrepreneur community and support infrastructure?
• What’s my risk tolerance: proven markets or growth opportunities?

Action Items Checklist

• Review top 15 state health scores and identify which align with your business model
• Examine individual metric rankings for your shortlist states
• Research income growth rates to identify states with strong trajectories
• Compare health scores with cost of living to understand real purchasing power
• Identify regional patterns that match your business needs
• Create a decision matrix combining health scores with qualitative factors
• Research business climate and tax structures for top candidates
• Consult with Business Initiative for state registration guidance based on health scores

Industry-Specific Recommendations

Technology & Software: Target states with health scores 80+ AND high per capita income (top 10). Tech customers have purchasing power, and balanced economic strength supports long-term growth. Examples: California (86), Massachusetts (90), Washington (78).

Professional Services: Focus on states with health scores 75+ AND high proprietor income share (18%+). More business owners mean more B2B opportunities. Examples: Connecticut (92), New York (87), New Jersey (88).

Retail & Consumer Goods: Balance health scores (70+) with total income size. High scores ensure purchasing power, while large total income ensures market scale. Examples: California (86), Texas (73), Florida (72).

Healthcare Services: Look for states with health scores 75+ AND high disposable income. Higher disposable income means better insurance coverage and ability to pay for services. Examples: Massachusetts (90), Connecticut (92), Maryland (85).

Financial Services: Prioritize states with health scores 80+ AND high per capita income. Premium markets support premium services. Examples: Connecticut (92), New York (87), Massachusetts (90).

Common Mistakes to Avoid

Mistake 1: Ignoring Score Components Focusing only on overall health scores without examining individual metrics can lead you to states that don’t align with your specific needs. A state scoring 80+ with low proprietor share may not work for B2B services.

Mistake 2: Overlooking Growth Trajectories Current scores don’t tell the whole story. A state ranked #20 today but growing rapidly may offer better long-term opportunities than a state ranked #10 but stagnating.

Mistake 3: One-Size-Fits-All Thinking What works for a tech startup may not work for a retail business. Match state characteristics (reflected in score components) to your specific business model.

Mistake 4: Ignoring Regional Context A state ranked #15 nationally might be #1 in its region, offering regional advantages even if not nationally top-ranked. Consider both national and regional positioning.

Mistake 5: Not Considering Cost of Living High health scores don’t always mean high real purchasing power if costs are also high. Always adjust for cost of living to see real economic advantage.

Optimization Strategies

For Maximum Economic Health: Target states with health scores 85+. These markets offer the strongest balanced performance across all dimensions, providing multiple advantages: large markets, high purchasing power, strong consumer spending, and entrepreneur support.

For Growth Opportunities: Focus on states with health scores 70-80 AND strong growth trajectories (3%+ annual income growth). These offer balanced strength with expansion opportunity, often at lower costs than top-tier states.

For Entrepreneur Support: Prioritize states with health scores 75+ AND proprietor income share above 17%. These states have infrastructure, culture, and policies that support business owners.

For Balanced Approach: Choose states ranked 10-20 overall but top 10 in growth rate AND scoring 70+. You get proven markets with expansion opportunity without premium costs of top-tier states.

Timing Considerations

Best Time to Enter High-Score States (80+): When you have a premium product/service ready and can compete in established markets. These states reward quality and can support higher prices.

Best Time to Enter Growth States (70-75 with strong growth): Early in the growth cycle. You establish presence before markets become saturated and competition intensifies.

When to Reassess: Review health scores annually. State positions change, and what was optimal 3 years ago may not be today. States with declining scores may signal underlying issues.

Resource Recommendations

For State Research:

• BEA Regional Economic Accounts (official data source for all four metrics)
• State economic development websites for qualitative factors
• Cost of living calculators to adjust health scores for real purchasing power
• Business climate rankings to supplement quantitative health scores

For Registration Support:

• Business Initiative state registration services with expertise in high-scoring states
• State Secretary of State websites for registration requirements
• Local business development centers in target states

For Market Validation:

• Combine health scores with industry-specific statistics
• Research local competition and market saturation in high-scoring states
• Consult with Business Initiative for personalized guidance based on comprehensive health analysis

FAQs - Frequently Asked Questions About State Economic Health Scorecard: Comprehensive

In Summary

This comprehensive State Economic Health Scorecard combines four critical BEA income metrics into a single weighted health index, revealing which states offer the strongest economic foundations for business success.

Key Findings:

• Top-ranked states score 40-60% higher on the comprehensive health index than bottom-ranked states, combining total income, per capita income, disposable income, and proprietor income share
• Multi-factor analysis reveals hidden opportunities—states ranking #15-20 on individual metrics can rank #5-10 overall when all factors are weighted, showing the value of comprehensive analysis
• Economic health varies dramatically by region—Northeastern and Western states dominate top rankings with scores 80+, while Southern states show more variation with scores ranging from 50-75
• Balanced economies outperform single-strength states—states scoring 80+ rank in the top 15 for at least three of four metrics, offering more stability and resilience
• Proprietor income share signals entrepreneur support—states with 17%+ proprietor share score 5-10 points higher, indicating better infrastructure and policies for business owners

What This Means for Your Business:

Understanding comprehensive economic health helps you make location decisions based on complete data, not just one metric. States with high health scores (75+) offer balanced strength across market size, purchasing power, consumer spending, and entrepreneur support—the complete picture that drives long-term business success. This multi-factor approach prevents you from overlooking critical factors that impact your business.

Practical Applications:

• Location Strategy: Use health scores to identify states with balanced strength across all dimensions, reducing risk from single-metric weaknesses
• Market Sizing: Combine health scores with specific metric data to find states offering both market size and balanced economic strength
• Risk Assessment: States with balanced high scores (80+) are less vulnerable to economic shocks, providing safer long-term business environments
• Expansion Planning: Prioritize states with high scores AND strong growth trajectories for both current opportunity and future potential

Next Steps:

1. Review the top 15 state health scores and identify which align with your business model and priorities
2. Examine individual metric rankings for your shortlist to ensure all four dimensions support your needs
3. Research income growth rates to identify states with strong trajectories that may improve their scores
4. Compare health scores with cost of living to understand real purchasing power and economic advantage
5. Consult with Business Initiative for expert guidance on state registration in high-scoring states that match your business needs

By leveraging this comprehensive economic health analysis, you can position your business in markets that offer balanced strength across all dimensions that matter for long-term success.

Ready to take action based on this comprehensive analysis?

Now that you understand which states offer the strongest overall economic health, it’s time to make data-driven location decisions based on complete economic data.

Next Steps:

1. Research Your Top States: Dive deeper into states that scored 75+ on the health index. Review their individual metric rankings, growth trajectories, and business climate.

2. Compare State Statistics: Use our state-specific business formation statistics to understand entrepreneurial activity levels in high-scoring states:
   • State Statistics Overview
   • Explore business formation data by state to see where entrepreneurs are most active

3. Plan Your Registration: Once you’ve identified states with high health scores that align with your business model, Business Initiative can help you register your business with expert guidance on state requirements, tax optimization, and compliance.

4. Validate Your Market: Combine this comprehensive health scorecard data with industry-specific statistics to validate market opportunity before committing to a location.

Business Initiative offers expert services to help you leverage this comprehensive analysis:

• State Registration Services: Get expert guidance on registering in states with high economic health scores that maximize your business potential
• Tax Optimization: Understand how state selection based on comprehensive health scores impacts your tax obligations
• Market Analysis: Combine health scorecard data with industry statistics for comprehensive market validation
• Strategic Planning: Work with our team to develop a location strategy based on multi-factor economic health analysis

For personalized advice, schedule a consultation with Business Initiative or reach out through our contact form.

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