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Best/Worst States for Business Survey Methodology

Chief Executive‘s Best & Worst States for Business ratings and rankings measure CEO perceptions of how conducive each state is …

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

Workforce Quality

  • Cooperative employee-management relationship
  • Employee work ethic
  • General education level of workforce
  • Competitiveness of wage rates
  • Availability of workforce with specialized experience/education

Living Environment

  • 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 research@chiefexecutive.net.

 

About Chief Executive

Chief Executive magazine (published since 1977) is the definitive source that CEOs turn to for insight and ideas that help increase their effectiveness and grow their business. Chief Executive Group also produces e-newsletters and online content at chiefexecutive.net and manages Chief Executive Network and other executive peer groups, as well as conferences and roundtables that enable top corporate officers to discuss key subjects and share their experiences within a community of peers. Chief Executive facilitates the annual “CEO of the Year,” a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of peers, and is known throughout the U.S. and elsewhere for its annual ranking of Best & Worst States for Business. Visit www.chiefexecutive.net for more information.