Best/Worst States for Business Survey Methodology

Chief Executive's Best & Worst States for Business is an annual rating and ranking which measures CEO perceptions of how conducive each state is to successfully conducting business.

In our survey, we ask CEOs to consider three criteria: Taxes and Regulations, 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.

More than 500 CEOs complete our detailed survey every year during the first quarter. CEOs are asked to provide their selections for the 4 best states for doing business and the 4 worst states for doing business. We assign points to each state each time they are 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 is rated as one of the 4 worst states for business, we deduct 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 tallies up all the positive points minus the negative points to come up with total points for each state, and then ranks the states in order of points, with the state with the most points being first.

Chief Executive also asks CEOs to provide ratings for the states they rank, as well as for other states for which they have opinions, along 3 key criteria: 1) taxes and regulations, 2) workforce quality and 3) living environment. They are 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 and cultural institutions

We take the average (mean) of the responses for each category to get each state’s ratings. The latest 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 [email protected].

 


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