I just came across some really neat data that we can use. These are income inequality figures by state derived from the Luxembourg Income Study (LIS). Income inequality is important for us because more unequal states will have more class conflict and a larger underclass willing to vote for redistribution.
Accordingly, figures on income inequality by state are presented below. The first table presents the measure of income inequality "90/10" (the adjusted household income of the 90th percentile divided by the adjusted household income of the 10th percentile) for Waves III and IV. Wave III of the LIS contains data from the late 80s and early 90s. Wave IV contains data from the mid-90s.
The second table presents another measure of inequality, the Gini index, which is frequently used by economists. Unlike 90/10 Gini takes into account the income distribution across all percentiles, but it is more susceptible than 90/10 to measurement error. Finally, the third table presents a measure of
inter-state income inequality, that is, median household income in the state divided by median household income in the whole country.
Table I
| state | wave III | wave IV |
| Alaska | 5.53 | 5.64 |
| Delaware | 3.71 | 4.92 |
| Idaho | 5.24 | 4.62 |
Maine
| 5.77 | 4.45 |
| Montana | 4.18 | 4.37 |
| New Hampshire | 4.29 | 4.72 |
| North Dakota | 5.27 | 4.02 |
| South Dakota | 5.51 | 4.61 |
| Vermont | 5.85 | 4.09 |
| Wyoming | 3.89 | 4.32 |
Table II
| state | wave III | wave IV |
| Alaska | .335 | .343 |
| Delaware | .281 | .310 |
| Idaho | .317 | .333 |
Maine
| .337 | .313 |
| Montana | .303 | .308 |
| New Hampshire | .295 | .333 |
| North Dakota | .317 | .309 |
| South Dakota | .354 | .323 |
| Vermont | .318 | .298 |
| Wyoming | .275 | .329 |
The results with the 90/10 ratio and the Gini index contradict each other frequently, both across states and between time periods. Idaho, for example, saw a decline in 90/10 but an increase in the Gini index.
Table III
| state | wave III | wave IV |
| Alaska | 1.06 | 1.26 |
| Delaware | .96 | 1.13 |
| Idaho | .88 | .90 |
Maine
| .88 | .95 |
| Montana | .85 | .87 |
| New Hampshire | 1.32 | 1.17 |
| North Dakota | .87 | .94 |
| South Dakota | .80 | .99 |
| Vermont | 1.02 | 1.05 |
| Wyoming | 1.05 | 1.05 |
For purposes of comparison:
In Wave III, the state with the lowest income inequality, by either measure, was Wisconsin (3.20/2.61).
In Wave III, the state with the highest income inequality (90/10) was Kentucky (7.22). The state with the highest income inequality (Gini) was the District of Columbia (.405).
In Wave IV, the state with the lowest income inequality (90/10) was North Dakota (4.02). The state with the lowest income inequality (Gini) was Vermont (.298).
In Wave IV, the state with the highest income inequality, by either measure, was DC (8.88/.422).
In Wave III, the state with the lowest income ratio was DC (.78). The state with the highest income ratio was New Hampshire (1.32).
In Wave IV, the state with the lowest income ratio was Mississippi (.80). The state with the highest income ratio was Connecticut (1.32).
