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We employ the geographic terms and definitions used by the Office of Management and Budget. The OMB defines a metropolitan statistical area (MSA) as a region generally consisting of a large population nucleus and adjacent territory with a high degree of economic and social integration, as measured by community ties. With these parameters, the agency identifies 379 metropolitan statistical areas. County population growth accounts for the creation of new MSAs. If specific criteria are met, an MSA with a single nucleus and a population of 2.5 million or more is further divided into geographic areas called metropolitan divisions, of which there are currently 29 in the country. For example, two metropolitan divisions (Los Angeles–Long Beach–Glendale and Santa Ana–Anaheim–Irvine) make up the Los Angeles–Long Beach–Santa Ana MSA. We include the smaller MDs in the index to reflect more detailed geographic growth patterns. Table 2 shows the components and weights used to calculate our rankings. Employment growth is weighted most because of its critical importance to community vitality. Wage and salary growth measures the quality of the jobs being created and retained. Technology output growth is another key element of economic vigor. Other measures reflect the concentration and diversity of technology industries within the MSAs. High-tech location quotients (LQs), which measure the industry’s concentration in a particular metro relative to the national average, are included to gauge an area’s participation in the knowledge-based economy. We also measure the number of specific high-tech fields (out of a possible 25) whose concentrations in an MSA are higher than the national average.
Best-Performing Cities is solely an outcomes-based index. It does not incorporate input measures (business costs, cost-of-living components, and quality-of-life conditions such as commute times or crime rates). These measures, although important, are prone to wide variations and can be highly subjective, making them less meaningful than objective indicators of outcome. In addition to ranking the 200 largest U.S. metro areas, the Best-Performing Cities project includes a companion index that measures the performance of smaller cities. The 2012 index looks at 179 small metros, the same number as 2010. The highest-ranked this year have either high concentrations of public-sector employees (especially in prominent universities) or are expanding their activities in the energy sector. These locales were largely immune to the nationwide collapse of housing markets because they did not experience a bubble in the first place. |
