Best/Worst States for Business Survey Methodology
May 1 2011 by ChiefExecutive.net
Chief Executive‘s Best & Worst States for Business ratings and rankings measure CEO perceptions of how conducive each state is to successfully conducting business. We asked CEOs to consider three criteria: Taxes & Regulation, Workforce Quality and Living Environment. In most companies, the CEO makes the ultimate decisions about where to locate and/or expand the business, making his or her perceptions of each state critically important.
556 CEOs completed our detailed survey, which was conducted between Jan. 14 and Feb. 1, 2011. They were each asked to provide their selections for the 4 best states for doing business and the 4 worst states for doing business. We assigned points to each state each time they were cited as a top 4 state based on the following weighting:
- For each #1 rating, 10 points
- For each #2 rating, 8.33 points
- For each #3 rating, 6.66 points
- For each #4 rating, 5 points
Conversely, each time a state was rated as one of the 4 worst states for business, we deducted points from their total as follows:
- For each #50 rating (#1 worst state), -10 points
- For each #49 rating, -8.33 points
- For each #48 rating, -6.66 points
- For each #47 rating, -5 points
Chief Executive then tallied up all the positive points minus the negative points to come up with total points for each state, and then listed the states in order of points earned for our rankings.
Chief Executive also asked CEOs to provide ratings for the states that they ranked, as well as other states for which they had opinions, along 3 key criteria: 1) taxes and regulations, 2) workforce quality and 3) living environment. They were asked to rate the states on these criteria using a 1-10 scale, with 10 = outstanding, 5= average and 1= poor.
Each of these criteria incorporates multiple variables.
Taxation and Regulations
- State income tax and corporate tax rates
- Perceived attitude of government to business
- Degree of employment compliance regulations
- Degree of environmental compliance regulations
- Tax incentives for locating in this state
- Cooperative employee-management relationship
- Employee work ethic
- General education level of workforce
- Competitiveness of wage rates
- Availability of workforce with specialized experience/education
- Crime rate
- Quality of public education
- Public health and hospitals
- Real estate costs
- Transportation access
- Arts & cultural institutions
We took the average (mean) of the responses for each category to get each state’s ratings. The ratings of states on these criteria can be found by clicking here.
If you have additional questions regarding our methodology, you can contact our research director via email at firstname.lastname@example.org.