Sunday, September 19, 2010

Correlations in Metro Area Income Inequality

I've taken a look at social statistics to try and find correlating data to income ineqaulity. Having reviewed metro areas with low vs. high inequality, it seemed that marriage and family may be a correlating factor. For one, all of Utah's metro areas are more equal than similar areas of the same size. Second, other places with low ineqaulity are located in the Northern Plains, Rockies, and Great Lakes where traditional families are more common. Once I observed marriage and family data by itself, namely what % of people live in married couple households, I determined a few obvious exceptions. First, heavy Latino areas such as the Rio Grande Valley and low-income white areas such as Appalachia have higher % of people in married family households, yet these areas have high inequaity. So I screened for education level.

Regression shows that there is clear correlation with both variables and income ineqaulity in a metro area. The Excel P-values are 1.76E-67 for the married family stat and 1.53E-35 for % over 25 who finished high school but who do not have graduate degrees. Note I tried other education parameters, but this was the most significant. High proportions of college dropouts or graduate degree holders apparently reduces an area's income equality.

The coefficient based on marriage in slightly higher and more significant than the education item.

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