Freedom in the 50 States: Index of Personal and Economic Freedom

William P. Ruger and Jason Sorens

Abstract

This paper presents the first-ever comprehensive ranking of the American states on their public policies affecting individual freedoms in the economic, social, and personal spheres. We develop and justify our ratings and aggregation procedure on explicitly normative criteria, defining individual freedom as the ability to dispose of one’s own life, liberty, and justly acquired property however one sees fit, so long as one does not coercively infringe on other individuals’ ability to do the same.

This study improves on prior attempts to score economic freedom for American states in three primary ways: 1) it includes measures of social and personal freedoms such as peaceable citizens’ rights to educate their own children, own and carry firearms, and be free from unreasonable search and seizure; 2) it includes far more variables, even on economic policies alone, than prior studies, and there are no missing data on any variable; 3) we adopt new, more accurate measurements of key variables, particularly state fiscal policies.

We find that the freest states in the country are New Hampshire, Colorado, and South Dakota, which together achieve a virtual tie for first place. All three states feature low taxes and government spending and middling levels of regulation and paternalism. New York is the least free by a considerable margin, followed by New Jersey, Rhode Island, California and Maryland. On personal freedom alone, Alaska is the clear winner, while Maryland brings up the rear. As for freedom in the different regions of the country, the Mountain and West North Central regions are the freest overall while the Middle Atlantic lags far behind on both economic and personal freedom. Regression analysis demonstrates that states enjoying more economic and personal freedom tend to attract substantially higher rates of internal net migration.

The data used to create the rankings are publicly available online at www.statepolicyindex.com, and we invite others to adopt their own weights to see how the overall state freedom rankings change.

Download study here (PDF)

Data

We provide here the data we used to generate the state rankings. Feel free to adjust the variable weights as you see fit, or to add new variables that we excluded from our study of freedom (such as abortion, the death penalty, and incarceration rates). Please contact us if you have any questions about how to use the spreadsheet.

Download replication data for Freedom in the 50 States here.

Note: We are updating the fiscal data for 2006 all the time as government agencies correct errors in their time series. Since we went to press with our study, some revised data for 2006 have been released. Accordingly, the latest fiscal data on the Data page do not exactly match the data used in our study for some variables, but the implications for the results are extremely minor. (3/3/09: We discovered that the 2007 Department of Labor website had outdated information on Michigan’s minimum wage law as of year-end 2006. That error has now been corrected in our data, dropping Michigan from #1 to #2 on Regulatory Policy and from #15 to #20 on Economic Freedom.) Here is an updated version of the state rankings spreadsheet using the latest data:

Download updated data on state-level freedom here.

Brief Guide to Re-Weighting Variables

The easiest way to create your own state ranking is to use this nifty, interactive website created by a reader. This site is independent of statepolicyindex.com, so we don’t make any guarantees, but we have found it useful. The rest of this section deals with how to use the spreadsheet directly to create your own ranking.

To create your own “freedom ranking,” download the updated spreadsheet above. Variables are represented in columns, states in rows. Each column labeled “Adj.” gives the adjusted, re-scaled values of the raw variable to its immediate left. You don’t need to touch these formulas. However, at the bottom of the column, in bold, is the weight of that variable, displayed as a decimal but expressed more intuitively in the Excel formula as a fraction. To create a new weight for the variable, enter a new decimal or fraction. Note that you will then have to re-weight other variables as desired to make the weights add up to 100%. To make this easier for you, there are values at the bottom of the very last column in the spreadsheet showing the summed weights for the Fiscal, Regulatory, and Paternalism categories.

If you wish to add variables excluded from the study, such as abortion laws, existence of the death penalty, and incarceration rates, you should download the relevant spreadsheets from the “Data” section of our spreadsheet and then add them in new columns in the comprehensive spreadsheet. You will need to create adjusted columns for the variables with the appropriate formulas, which will depend on whether you see laws in these areas as anti-freedom or pro-freedom. The adjusted columns report the number of standard deviations “freer” than the mean for each state. Then give the new variables the desired weights, and finally adjust the formulas in the “Total Freedom” column to include the new values in the total freedom ranking. You can also do this for the Fiscal Freedom, Regulatory Freedom, Economic Freedom, and/or Personal Freedom columns if you wish.

Figures

We present here some of the key figures from our study (click each for a full image).