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June 17, 2014

BOHANON: Do Hoosiers want to be Hoosiers?

— A basic assumption of economics is the “axiom of revealed preference.” This is fundamental to economic analysis and distinguishes it from other branches of the social sciences.

In a nutshell, the axiom says: “What someone does tells us more about what they value than what they say.” Interesting, it is similar to what I learned in Sunday School back in Oklahoma — talk is cheap, actions are what matter.

For a mundane example, suppose a friend tells you he really prefers black coffee to coffee with cream. OK, but you observe at coffee break he always adds creamer to his coffee. What are you to conclude about his “true” preferences?

Economists argue he reveals by his actions his preference for cream in his coffee.

Recently the venerable Gallup organization asked residents of each of the 50 states “... if you had the opportunity, would you like to move to another state.” A full 50 percent of Illinois residents indicated a desire to move, making it first in the nation for dissatisfaction, followed by Connecticut, Maryland and Nevada that came in at 49 percent, 47 percent and 43 percent.

The Hoosier state came in 13th, tied with Arizona and Georgia at 38 percent. Maine, Hawaii and Montana all tied for last place at 23 percent. Looks like our fair state is filled with a lot of dissatisfied folks.

But Gallup followed up with a second question: “Looking ahead, how likely is it you will move to a different state in the next 12 months.” In this reckoning, the rubber hits the road — and although not quite to the point of actually revealing the residents’ actual preferences — the question is tied with more concrete action.

The survey indicates that 20 percent of Nevada residents say they are extremely, very or somewhat likely to move in the next 12 months, making it first in the nation for those who indicate they actually have plans to move from the state.

Where did we end up? Indiana tied for 47th along with Minnesota, Texas, West Virginia and Pennsylvania with only 9 percent of residents indicating a likely move in the next year. So the Hoosier gap is huge; many complain about Indiana but a remarkably small number say they plan to move. Of course, actual migration data will fully reveal preferences, but we will not know these numbers until several years in the future.

One of my students calculated the ratio of percentage indicating a desire to leave to the percentage indicating they are extremely, very or somewhat likely to leave in the next 12 months for each state in the Gallup survey. By this metric, Indiana ranks No. 1 at 4.22. That is, for every Hoosier with a rather concrete plan to leave, there are 4-plus who say they want to leave. The national average is 2.54.

Is that a good or bad reflection on our state? On one hand, it looks like we are an unhappy, frustrated and whiny lot. On the other hand, we stay put.

Perhaps a new definition of a Hoosier: A loyal but complaining fellow?  

— Cecil Bohanon, Ph.D., an adjunct scholar with the Indiana Policy Review Foundation, is a professor of economics at Ball State University.

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