This blog post explores the relationship between urban and rural economies in the U.S. by analyzing GDP per capita data from 2023. It reveals surprising insights about which counties contribute most to the economy, highlighting the complexities of urbanization, resource extraction, and the unique cases of counties like Teton and Eureka.
In a recent discussion, the topic of how rural lifestyles are supported by the wealth generated in urban centers was explored. This raises an important question: Is this phenomenon universally true across the United States? To investigate this, I analyzed the 2023 Gross Domestic Product (GDP) by county data from the U.S. Bureau of Economic Analysis (BEA) to calculate GDP per capita and identify which counties contribute more than their fair share to the economy.
GDP per capita is calculated as the value of goods and services produced by a county's economy, minus the value of goods and services used in their production. This metric helps us understand the economic output relative to the population size. The BEA provides various ways to analyze this data, but for this analysis, I focused on county-level data to compare urban and rural counties.
To conduct this analysis, I aimed to find the highest GDP per capita county in each state and see if the results aligned with the assumption that urbanized counties are the economic powerhouses of the U.S. However, the findings revealed a more diverse range of counties than expected.
The first category examined includes high population urban counties, typically the most densely populated areas within a state's largest metropolitan region. Here, I compared the GDP per capita of these counties against the statewide average to illustrate the magnitude of their economic output.
Urban areas benefit from economies of scale, which allow for more efficient transportation, utilities, and telecommunications. Additionally, cities foster powerful network effects, where businesses and institutions cluster together, enhancing productivity and innovation. For instance, New York County (Manhattan) has a GDP per capita that is significantly higher than the surrounding boroughs, illustrating the economic concentration in urban centers.
Interestingly, cities like St. Louis and Baltimore, despite facing challenges such as disinvestment and population decline, rank as the highest GDP per capita counties in their respective states. This raises questions about the correlation between population density and economic output, suggesting that cities must overcome inherent disadvantages to thrive economically.
Contrary to expectations, Cook County, Illinois, known for its dense urban population, does not lead in GDP per capita. Instead, DuPage County, a suburban area, takes the top spot due to its significant contributions from the Illinois technology and research corridor, including notable institutions like Fermilab.
Another category worth exploring is college towns, which often host major research institutions and medical centers. These areas typically have highly educated populations and benefit from industry clustering around university research specialties. For example, Durham, North Carolina, home to Duke University, exemplifies how educational institutions can drive local economic growth.
Counties like Los Alamos in New Mexico and Butte County in Idaho also demonstrate high GDP per capita due to their association with significant government research facilities. Los Alamos National Laboratory, for instance, has contributed to the county's economic success while maintaining low child poverty rates.
Teton County, Wyoming, presents a unique case where high GDP per capita is attributed to the wealth of its residents, many of whom are affluent individuals with second homes in the area. This influx of wealth supports a robust tourism and service economy. Similarly, Eureka County, Nevada, boasts a high GDP per capita due to its resource extraction activities, particularly from gold mining.
The analysis culminates in revealing that the top ten counties for GDP per capita in the U.S. are predominantly located in Texas and are not urban counties. These counties, characterized by low population density and abundant natural resources, generate substantial GDP per capita figures. For instance, Levelland County, Texas, stands out with an astonishing GDP per capita nearing $200 million, although it has a very small population.
The exploration of GDP per capita across U.S. counties reveals a complex relationship between urban and rural economies. While urban areas often generate significant economic output, rural counties with unique characteristics, such as resource extraction or affluent populations, can also contribute substantially to the national economy. This analysis challenges the simplistic notion that urbanization is the sole driver of economic success, highlighting the diverse factors that influence GDP across different regions.
Thanks for joining this exploration of economic dynamics across U.S. counties. Stay tuned for more insights and analyses in future discussions.
