Categories: Best & Worst States for Business

Best/Worst States for Business Survey Methodology

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 research@chiefexecutive.net.

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.