As we emerge from the Great Recession and its historically-sluggish recovery, cities will start setting economic goals based on some perspective of current performance. The process of economic benchmarking to nearby cities is a fairly straightforward exercise in most places. Not Boise. The closest major metropolitan area to Boise, Salt Lake City, is more than 250 miles away. And the cities closest to Boise are irrelevant for benchmarking because they are either too big or too small or because they have a very different industrial mix. The U.S. Metro average isn't particularly useful either because it includes powerhouses like New York City and Los Angeles.
So how do you benchmark economic performance for a city like Boise?
To answer the question ECONorthwest examined U.S. cities of similar size and capability. The authors began with a list of cities comparable to Boise in terms of "knowledge traits," as defined by a study from the Federal Reserve Bank of New York. The Fed study grouped cities according to the predominant types of knowledge used in the workforce, also known as human capital. For example, cities in the Making Region are characterized by knowledge about manufacturing and cities in the Enterprising Region, including Boise, have a deeper knowledge about commerce.
Using those lists, ECONorthwest honed in on four cities in the Enterprising Region with roughly the same number of residents as Boise. Those were: Des Moines, Iowa; Provo, Utah; Sarasota, Florida; and Chattanooga, Tennessee.
Wait. Really? Chattanooga?
"As it turns out, Boise looks a lot like Chattanooga," says Dr. Cahill. "Economically, that is."
All four of these cities have metropolitan areas with populations between 526,000 and 703,000, GMP between $14 and $40 billion, and annual per capita personal income between $25,000 and $46,000. These four cities represent Boise's comparators and economic peers. Boise fell in the middle of the pack--with a personal income lower than Des Moines and Sarasota, but higher than Provo. With Chattanooga, Boise was about even.
"If Boise were playing a game of golf, it would be hitting par," says Dr. Cahill. "Boise is not under-performing, nor is Boise over-performing."
There are advantages to knowing Boise is hitting par. For one, we know that Boise can do better at harnessing its human capital, like Sarasota and Des Moines. "And if we do better,” says Dr. Cahill, “that will mean more resources for everyone - - families, businesses, and the public sector alike."
Dr. Cahill also assures us that the "goal of this exercise is not to say that Boise should be like this city or that city." Boise has a thriving, unique local culture and is within a 20-minute drive of some of the most beautiful, rugged outdoors areas on Earth. We wouldn't want anything about that to change.
"The goal of this report was to provide Boise with an economic benchmark," explains Dr. Cahill. "Coming out of the Great Recession many cities, including Boise, will start goal setting. But before you can set a goal, you need to have some perspective about where you stand."
Download the ECONorthwest Issue Brief Is Boise Over- or Underperforming Economically?
Dr. Kevin E. Cahill is a senior economist and the managing director of ECONorthwest's new office in Boise, Idaho. He is experienced in labor and health economics, public policy, and commercial litigation and antitrust matters. Read more about ECONorthwest's expanding presence in Idaho. Other contributors to the issue brief include John Tapogna, President of ECONorthwest, who specializes in education, healthcare, human service, and tax policy; Paul Thoma, economic analyst; and Dr. Bryce Ward, senior economist.