Kentucky Economics Association October 2014 Paul Coomes, Ph.D. Emeritus Professor of Economics

1. Nine Economic Regions of Kentucky provocative facts, policy challenges for future Kentucky Economics Association October 2014 Paul Coomes, Ph.D. Emeritus Professor of Economics University of Louisville

2. What was Kentucky’s 1958 rank among states in terms of earned per capita income? • 32nd • 38th  • 46th • 50th

3. Kentucky’s rank among 50 states Personal income minus transfer payments, per capita 1958: 46th 2013: 46th Thank goodness for West Virginia, Mississippi, South Carolina, and Arkansas.

5. Regional Economic Development in Kentucky Where are we? Where have we been? Where are we going? Talking about the per capita income of Kentuckians is like talking about the average elevation of Colorado. It is the variation around the average that is interesting. The State of Kentucky is not an economy in any meaningful sense – not a labor market, not a housing market, not a retail market, not a media market. States, counties, municipalities are political and administrative entities. While a county is closer than a state to a market boundary, most markets encompass many counties. Consider television market areas (the ABC, CBS, NBC network broadcast territories).

6. Television Market Boundaries KY is somewhere in here. TV stations don’t care. The maps linked below were retrieved from the U.S. Census Bureau web site (http://quickfacts.census.gov/qfd/) and altered to show TV markets by county. The TV Market information was derived from pictures once available on the now defunct www.echostarmerger.com, select TV station web sites and other sources on the web.  At no time was the Nielsen Media Research Co. web site nor any other material directly attached to same ever consulted The TV Market borders change slightly every September.  The most if not all the maps linked below are current as of the 2006-2007 season. The map above is derived from information retrieved in the 2002-2003 season and is there for historical purposes. If you have any questions, comments or corrections, please e-mail me at tvmarkets@echostaruser.com

7. 10 Television Market Boundaries around Kentucky all except Lexington and Bowling Green stations are multi-state Bowling Green: CBS broadcast is from WTVF in Nashville TN Somerset: cable provides WBIR-NBC from Knoxville TN http://dishuser.org/TVMarkets/Maps/kentucky.gif 9  Available on Dish Network:Bristol (TN/VA)Cincinnati (OH), Charleston/Huntington (WV), Evansville (IN), Knoxville (TN), Lexington, Louisville, Nashville (TN), Paducah 1 Not Available on Dish Network:Bowling Green

8. A Google Map View Cincinnati- Northern Kentucky Stylized economic regions based on major cities, TV markets, and terrain. Louisville-Elizabethtown-Southern Indiana Ashland-Huntington-Charleston Lexington Evansville-Owensboro-Henderson Mountain Bowling Green-Hopkinsville-Nashville Somerset-Cumberland-Knoxville Paducah-Purchase

9. Developing Useful Economic Development Geographies Detailed County Assignments to Nine Regions Thankfully, the Census Bureau gives us a good start by defining metropolitan, micropolitan, and combined statistical areas based on employment interchanges between counties. For example, the Frankfort, Mt. Sterling, and Richmond micropolitan areas are part of the Lexington Consolidated Statistical Area. Using these definitions, we can assign 48 of Kentucky’s 120 counties to one of the nine economic regions.

10. The hard part is looking at counties at the margins of the major market areas, and assigning them to one economic region. I look at television markets and commuting patterns from the Census Bureau’s American Community Survey 2006-2010. For example, where to assign Danville and its two micropolitan counties – Boyle and Lincoln? Both counties receive television from the Lexington market. Top external destinations for work of Boyle + Lincoln residents: Mercer (1,056 + 372) = 1,428 Fayette (811 + 429) = 1,240 Jessamine (368 + 457) = 825 Pulaski ( 54 + 517) = 571 Garrard (257 + 250) = 507 Franklin (187 + 155) = 342 Mercer, the top destination, and Garrard are also served by the Lexington TV market. Fayette, Jessamine and Franklin are in the Lexington CSA. So, assign Boyle, Lincoln, Mercer and Garrard to the Lexington region. Note there is a pull towards Pulaski County from Lincoln County. So, assignment is not perfect.

12. Cincinnati Louisville New York Destin Naples

13. Which of the nine regions is the most densely populated? • Louisville  • Northern Kentucky • Mountain • Lexington

14. Northern Kentucky and Louisville regions three times more dense than five most sparse regions: economies of scale in cost of delivering public services (e.g., schools, safety, roads, health care).

15. Top three counties over 30 times more dense than sparsest counties.

16. Which of the nine regions has the least population growth this decade?  • Mountain • Cumberland • Paducah - Purchase • Louisville

17. This decade so far declining population at tails of state

18. This decade so far

19. This decade so far more deaths than births

20. Mountain region was third most populated; now is fifth, and heading towards seventh. Regions contain 28 counties, with combined population less than that of Jefferson County

21. Peak: 408,000 in 1983 Net loss of 76,000 since 1983

22. Net loss of 76,000 since 1983 Net gain of 49,000 since 1983

23. Which region has the highest income from farming? • Owensboro-Henderson • Bowling Green - Hopkinsville • Cumberland  • Lexington

24. Equine… Grain, poultry, livestock

25. Which region has the highest income from mining? • Owensboro-Henderson • Paducah - Purchase  • Mountain • Lexington

26. Mountain and Owensboro-Henderson regions ($1.7 billion) account for 75% of Kentucky total

27. Which region has the highest income from manufacturing?  • Louisville • Ashland • Lexington • Northern Kentucky

28. Louisville and Lexington regions ($9 billion) account for 58% of Kentucky total

29. Louisville accounts for 44% of state total. Louisville, NKy, Lexington regions combined account for 66% of Kentucky total

30. Louisville region accounts for 46% of state total. Louisville, Lexington, Nky regions combined account for 79% of Kentucky total

31. Which region has had the strongest job growth since the bottom of the 2008-09 recession?  • Lexington • Bowling Green - Hopkinsville • Paducah - Purchase • Ashland

34. Which region has had the highest ratio of employed persons to population? • Lexington • Bowling Green - Hopkinsville  • Northern Kentucky • Louisville

35. urban, dense rural, sparse

36. Less than one-third employed

37. Which region accounts for the largest share of private industry payrolls in Kentucky?  • Louisville • Bowling Green - Hopkinsville • Lexington • Northern Kentucky

38. 70% of private payrolls in Kentucky from three of the nine regions: your tax base.

39. urban, dense rural, sparse

40. Four counties account for one-half of Kentucky total private sector income Note: all top counties are urban, except Scott (Toyota)

41. Which of the nine regions has the highest government payroll per capita? • Lexington  • Bowling Green - Hopkinsville • Louisville • Mountain

42. Fort Campbell Frankfort Fort Knox

43. In twelve counties, over 40% of earnings from government employment. Two counties – Christian and Hardin – dominated by military. Franklin is home state government. Lyon County: KY State Penitentiary at Eddyville. Other eight are all in eastern Kentucky.

44. Which region has the highest transfer payments per capita? • Lexington • Paducah - Purchase • Ashland  • Mountain

45. Mountain: $3.9 billion total, or 40% of personal income Cumberland: $3.2 billion total, or 38% of personal income NKY: $3.1 billion total, or 17%of personal income

47. Mountain and Cumberland regions much more dependent in 2012 than in 1969.

48. 3 counties above 50% 28 counties 40% or higher National average is 18%

50. Top 18 counties are in eastern Kentucky