KRUGMAN, RIGOROUS ECONOMIST
Ok, I realize his blog is not a serious academic paper but really. He got the nobel prize for Gods sake.
Matthew Yglesias notes that Tom DeLay is under the strange misapprehension that Texas is rich thanks to its low taxes and lack of regulation.
Just one minor issue: you really shouldn’t use median income, which can be distorted to the extent that inequality differs across states. You should instead use income per capita. As it happens, the comparison is even more striking. Texas, with its glorious free market regime and deeply incentive-creating 25 percent rate of health uninsurance, has a per capita income of $37,187; nanny-state New Jersey, with its oppressive taxes and regulation of everything (what it takes to get permission to cut down a dying tree … ), has a per capita income of $49,194.
Ah, so cost of living isn’t important? Based on this quick comparison with data from this site I come up with this result.
The cost of living in Texas is about 70% that of New Jersey. The income (per capita) is 75%. I’m sure there are more pertinent facts to bring to bear but calling out simple income as a measure of wealth is ridiculous. But what do I know? I don’t have a nobel.