Growth and Prosperity: A Cautionary Tale
Over the last few decades, select areas have experienced massive population increases and building booms while other previously dominant regions have fallen behind. Though weather conditions and taxes garner their own worthy discussions, one prevailing narrative has chalked this growth up to mobile, educated Americans leaving less opportune regions in search of high paying jobs in places like Silicon Valley and North Carolina’s Research Triangle. The assumption for many has been that improved economic conditions and population growth are deeply intertwined, if not components of a simple cause and effect relationship. New analysis, however, has dug deeper into these links, making some surprising discoveries and bringing to light important questions about common assumptions. A research group at the University of Virginia by the name of Statchat recently published a post warning of taking the correlation between population growth and economics too far, citing examples from within their state as well as across the country. In fact, the piece links to outside research showing that there may be no correlation at all. What the data does indicate is that some regions, mostly in the South, are growing rapidly despite declining per capita income levels. Interestingly, many of the metropolitan areas studied in the Midwest including Greater Buffalo and Detroit, report shrinking populations alongside either rising domestic product, per capita income or both. So, how should the dental industry interpret these findings? The safest and easiest conclusion is that the relationship between population growth and improved economic conditions is not as simple as it may appear on the surface. The research also creates new questions, some of which might offer potential explanations for the data. Are southern cities more likely to temporarily report declining income levels due to the migration of people from the lowest income areas in the country, many of which are rural areas in the south? Could the success of large companies like the auto industry in Detroit be pushing overall gross product higher while masking declining economic opportunity for the majority of residents? Regardless of the (still unknown) reasons, the data suggests that population growth figures don’t tell the full story of where a market is headed. And, in a broader sense, the findings demonstrate the importance of checking assumptions when presented with area-specific information. In particular, data from a local real estate agent, chamber of commerce, or even the media can be biased whether done intentionally or not.