I made you some more graphs.
I was originally going to use La Griffe du Lion’s Smart Fraction Theory to calculate this, but then I discovered that it doesn’t make any practical difference, so went with the simpler metric of IQ.
We have a correlation, but it’s not huge. There are a few states that seem like obvious outliers–the two states with the highest GDP per cap were Alaska (oil) and Delaware (tax haven of some sort.) Among under-performers, I speculate that Maine is being held back by geography (it’s really cold.) California has a low average IQ, but an abnormally wide IQ range, due to the presence of Stanford and Silicon Valley and the like, while West Virginia may have the opposite problem of an unusually narrow IQ range (it also has the problem of being in the mountains.) In these two cases, if I could actually calculate the smart fraction instead of using Griffe’s assumption of Gaussian distribution around the average, I’d probably get a more accurate result.
I decided to try running the regression again without the states with obvious external factors–California, Hawaii, Nevada, Alaska, West Virginia, Delaware, Maine, and Vermont–like tourism, climate, gambling, or oil. I did not eliminate outliers that did not have (potentially) clear reasons for their under- or over- performance (for example, I have no idea why Idaho should do worse than Wyoming. I also left in Louisiana, whose over-performance may be due to having a significant port and/or tourism.)
- Random chance matters. An oil boom in your area, nice beaches, or a long, harsh winter can push a state (or country) into wealth or poverty.
- I suspect that redistribution strategies (ie, welfare) prevent states from dropping below a certain level, hence the near-flat line around $32,000. (Outliers at Mississippi and W. Virginia.)
- All else held equal, IQ matters.