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AMERICAN DREAM COMPOSITE INDEX
From Site Selection magazine, January 2017
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The American Dream Reimagined

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The American Dream Composite Index lays out a better blueprint for measuring economic development achievement.

by ED BURGHARD

The American dream is often associated with home ownership, financial opportunity and economic prowess, but are these narrow definitions still valid today? Maybe environmental responsibility, religious equality, neighborhood diversity and social status are what matter most to you. Over the years, your American Dream may have changed as your family grew and your career path changed. Perhaps speaking about the American Dream as a single dream really is not appropriate at all.

Researchers at Xavier University recognize that the American Dream is not just one dream. Instead, the American Dream is a collection of millions of individual dreams across the nation.

The Xavier University American Dream Composite Index™ (ADCI) is the first statistically validated measurement that quantifies the American Dream in its entirety. It is a comprehensive and robust measure that gauges the country’s current and collective sentiment regarding the extent to which people living in the United States are achieving their individual American Dream. The ADCI measures 35 distinct areas of the American Dream across five broad categories: Economics, Health and Well-Being, Large-Scale and Long-Term Societal Issues, Diversity, and the Physical Environment. As a result, the ADCI is the most valid and all-inclusive measure of the nation’s present-day quality of life. 

Taking the Pulse of a Nation

Top Dream States

Rank State Index
1 South Dakota 105.9
2 Hawaii 105.4
3 Oregon 105
4 New Jersey 104.6
5 Nevada 104.2
6 Arizona 103.7
7 Utah 103.5
T8 California 102.9
T8 Washington 102.9
T8 Louisiana 102.9
11 Texas 102.5
12 Minnesota 101.9
13 Indiana 101.6
14 Illinois 101
Source: ADCI/Xavier University

Based on information gathered monthly for five years from over 1,000 people currently residing in the United States, the ADCI score, as well as the scores on the various sub-dimensions, represent how close we are as a nation to fully achieving the American Dream. While the index is scored between zero and 100, where 100 represents the American dream being completely achieved, we also report separate scores intended to reveal which states and MSAs are best achieving the American Dream compared to the national average. These scores are reported indexed to the national average, where 100 is the average national score, and positive scores represent locations where individuals are achieving the American Dream to a greater degree.

Why the ADCI Now?

With an uncertain economy and the oftentimes-narrow perspectives offered by existing indices, there is a need for a stable, valid and reliable tool to help reduce the unpredictable nature of our nation and economy. The ADCI and its accompanying sub-indices provide the most comprehensive measure of current-day sentiment regarding all significant aspects of life. As such, the ADCI data is useful in understanding many areas of our present-day society including politics, employment and the financial, retail, realty and technology sectors. The breadth and depth of the ADCI make it an invaluable resource for anyone wishing to understand and predict trends in our society. At Xavier University, researchers use the ADCI data to predict the country’s GDP growth, unemployment, retail sales and home sales as well as employee and consumer sentiment. Perhaps even more importantly, the ADCI provides insight into the societal trends happening in your market, which can predict a future opportunity or threat. 

The ADCI data provide a more holistic view of economic development and quality of life than any other currently available source of information.

How to Use the ADCI

In collaboration with The Burghard Group, researchers at Xavier posit that the ADCI may have application potential in the field of economic development. With the help of ADCI data, you will quickly identify that the people in some states and MSAs are doing a better job of achieving the American Dream. As leaders in your respective business and economic development fields, we encourage you to explore your state or MSA’s ranking and learn what it is that puts you ahead of the pack, or perhaps where to improve. You can use the ADCI as a tool to provide a unique understanding of your community’s achievements and shortcomings. 

Why Not Just Focus on Job Growth?

For years, economic development organizations have invested time and money against the objective of job attraction, expansion and retention in the belief that it would lead to sustained economic prosperity for their community. If the year-over-year job creation, capital investment, changes in tax base and personal income numbers were positive, EDOs were judged successful. But, if the trend was negative for any of these metrics, EDOs were viewed as ineffective. 

Typical organizational scorecards tracked output measures — like the number of company contacts made, the number of face-to-face meetings held, the number of information packets or brochures distributed, the number of trade shows attended, the number of website visits, the number of email opens and other similar activity measures. The generally accepted management belief was positive trends for these in-process measures would deliver the desired results (prosperity for the community).

From an historical perspective, this is considered a first-wave approach to economic development. It is also known pejoratively as “smokestack chasing.” One characteristic of this approach is the use of financial incentives to offset deficiencies in the community’s value proposition and attract company capital investment.

Increased global competition brought about the second wave of economic development. It shifted the economic development profession’s focus to creating strategies aimed at retaining and expanding companies already doing business in the community as the driving strategy. This approach gave rise to increased interest in supporting small business growth through low-interest loans and enterprise zones.

Top Dream Cities

Rank MSA Index
1 Oxnard-Thousand Oaks-Ventura, CA 110.2
2 Trenton-Ewing, NJ 107.3
3 San Jose-Sunnyvale-Santa Clara, CA 106.2
4 Las Vegas-Paradise, NV 105.7
5 Port St. Lucie, FL 105.5
6 Lexington-Fayette, KY 105.4
7 Houston-Sugar Land-Baytown, TX 105.1
8 Seattle-Tacoma-Bellevue, WA 103.9
9 Dallas-Fort Worth-Arlington, TX 103.5
10 Portland-Vancouver-Beaverton, OR-WA 103.4
11 San Francisco-Oakland-Fremont, CA 103.3
T12 Los Angeles-Long Beach-Santa Ana, CA 103.1
T12 Phoenix-Mesa-Scottsdale, AZ 103.1
14 Chicago-Naperville-Joliet, IL-IN-WI 102.6

Clearly the Economic Development Game Is Ever Changing

With each of the three waves of economic development, the profession’s approach has had to adapt in order to ensure competitiveness. The two big trends underpinning the need to change are:

1. Market proximity is no longer the primary driver of location choice. It is no longer true that a company needs to physically locate an operation in the US to serve the US market. Advances in logistics and telecommunications enable companies to locate almost anywhere in the world and adequately serve US consumers. It has been supplanted by access to skilled labor. 

2. The ability to find or attract skilled labor is getting more challenging. Companies operating in the US are struggling to backfill positions vacated by retiring baby boomers, entrepreneurial start-ups are looking for skilled labor to help them scale up, and executives looking to expand business operations need access to a sustainable pool of qualified candidates to interview and hire. Communities unable to attract top talent are quickly finding they cannot win in the global competition for capital investment. 

Clearly, job growth is a necessary, but not sufficient, success measure, as it fails to capture the real impact of an EDO’s role. 

The New Success Measure for the Fourth Wave

For the United States to be more competitive going forward, EDOs must ensure communities better enable residents to achieve their American Dream. Qualitative research conducted by The Burghard Group suggests this is an inspirational and unifying goal every organization involved in either community or economic development can rally behind. And, it provides an overarching platform for comprehensive community strategic planning that can synergize the various organizational activities (and budgets) to a common end.  

To date, the historical limiter has been the lack of a quantitative success measure. But thanks to the Xavier University research, that limit is removed. There is no better way to measure local “prosperity” than to measure the degree to which residents perceive they are achieving their American Dream. Therefore, the new fourth-wave success measure is year-over-year improvement in the American Dream Composite Index (ADCI). This metric provides insight into overall goal success, and impacts on a wide range of dimensions that address the concept of “community” described by Edward Jepson and Anna Haines.

2016 American Dream Locations

Each year, The Burghard Group reviews the ADCI data to identify locations that are doing an outstanding job in enabling residents to achieve their American Dream.

The designation of “American Dream” location is based on earning a resident overall rating (ADCI score) that is statistically superior to national average. The data set used in the 2016 assessment reflects resident questionnaire responses for calendar years 2013, 2014 and 2015. Only locations with a projectable number of questionnaire responses are considered for the designation.

The intent of identifying “American Dream” locations is to encourage local EDOs to benchmark their community (or state) performance against these best-in-class enablers. The key question to be considered is: “Why do residents in these select locations feel they are achieving their American Dream to a greater degree than residents in our location?” The answers are expected to lead to subsequent local leadership discussions around strategies designed to improve the location’s ADCI score going forward and ideally achieve “American Dream” performance status.

Best in Class Performers

Dimension State
Entrepreneurial Spirit OR, NV, AZ
Freedom of Expression NH, ME, MA
Family Support OR, IN, LA
Generational Progress ND, NV, LA
Job Environment AK, OR, HI
Material Prosperity NV, HI, NJ
Exposure to Diverse Cultural Experiences WA, OR, CA
Optimism HI, NV, OR
Trust in Government HI, AK, OR
Social Status AK, HI, OR
Safety in Travel ID, SD, OR
Trust in Business HI, AK, WA
Education Quality HI, WA, IL
Environment SD, VA, NH
Freedom of Choice NV, AZ, NJ
Support of Friends SD, AZ, OR
Fruits of My Labor SD, LA, AZ
Support of Someone Special ND, SC, NJ
Happiness OR, NJ, NV
Personal Health SD, NJ, OR
Civic Participation AK, HI, OR
Trust in People AK, HI, OR
Job Benefits AK, HI, SD
Healthcare SD, NV, NJ
Home Ownership UT, SD, SC
Satisfaction with Residence AK, SD, UT
Just Society AK, HI, WA
Neighborhood Acceptance of Diversity NH, MA, VA
Acceptance of Different Social Ideates CT, MA, NY
Self-Determination (Destinations in Life) AZ, NV, NJ
Safety in Community SD, NJ, MN
Political Freedom VT, NH, VA
Access to Education NJ, LA, KS

Note, while all states are included in the analysis, not all communities are. Also, communities are defined by their federal MSA classification. Often, on a stand-alone basis small communities do not have a sufficient number of questionnaire responses for the ADCI to be reliably projected, but can be projected as part of a broader MSA designation.

You will see for the purposes of this report all data is presented as an index to national performance. The reason is the absolute number is not actionable. A location’s relative performance provides the insight required for a strategic discussion. But, to satisfy your curiosity, in the absolute, residents of the United States perceive 65.6 percent of their American Dream is being achieved. The resultant implication is there are barriers in place preventing residents from achieving the remaining 34.4 percent of the American Dream. At the national level, the strategic conversation to be had is around what those barriers are and how they can be reduced (or removed).

It is also important to note American Dream locations are ordinally ranked based on their ADCI index to national average. 

American Dream States

These are states where residents perceive they are achieving their American Dream to a meaningfully higher degree than the nation (statistically significant ADCI score). The displayed Index scores have been rounded to the nearest 1/10th. As you might expect, not every state meets this rigorous criteria.

Undoubtedly, you may be surprised by some of the states that are on the list because they are not states you have seen on traditional ranking. This is because the ADCI measures resident perception. For example, it reflects the degree to which residents in South Dakota (No. 1) feel they are achieving their American Dream. According to Xavier University: 

“The American Dream Composite Index™ (ADCI) is a unique and robust measure of American sentiment that values the American Dream. The notion of the American Dream encompasses our behaviors, attitudes and satisfaction with economic conditions, personal well-being, societal and political institutions, cultural diversity, and the physical environment. 

“The ADCI reveals what people living in the United States do, strive for, work for, wish for, and ultimately, hope for as they assume multiple roles, including but not limited to, consumers, parents, children, students, employees, employers, parishioners, voters, etc.” 

To more fully understand the American Dream, the ADCI is actually comprised of resident perceptions on 35 unique and statistically validated dimensions. Most of the traditional rankings are not based on perceptual data, nor are they as comprehensive. Most traditional rankings look at one or only a few objective metrics.

American Dream Cities

State assets, public policies, public programs and infrastructure all have an impact on a resident’s ability to achieve their American Dream. But cities uniquely exert impact on residents’ ability to achieve their American Dream. Resident perception of the degree to which they are achieving their American Dream can vary across the state.

These are MSAs where residents perceive they are achieving their American Dream to a meaningfully higher degree than the nation (statistically significant ADCI score). As noted for the state list, the displayed Index scores have been rounded to the nearest 1/10th. 

Ed Burghard

What if your MSA is not on the list of American Dream Cities? Simply send an email to eburghard@mac.com to find out if there is reliably projectable data for your MSA.

ABOUT THE AUTHOR

Ed Burghard is a retired Procter & Gamble marketing expert, former executive director of the Ohio Business Development Coalition, and the creator of the Strengthening Brand America project (strengthening brandamerica.com), a community of practice that provides knowledge and tools to help economic development professionals manage the place-branding process. He is a periodic contributing writer to Site Selection and other publications.

Dimension MSA
Entrepreneurial Spirit Little Rock-North Little Rock-Conway, AR
Tucson, AZ
Oxnard-Thousand Oaks-Ventura, CA
Freedom of Expression Erie, PA
El Paso, TX
Toledo, OH
Family Support Oxnard-Thousand Oaks-Ventura, CA
Bakersfield, CA
Toledo, OH
Generational Progress Augusta-Richmond County, GA-SC
Little Rock-North Little Rock-Conway, AR
Trenton-Ewing, NJ
Leisure Activities Port St. Lucie, FL
Tucson, AZ
Toledo, OH
Job Environment Oxnard-Thousand Oaks-Ventura, CA
Honolulu, HI
Lakeland, FL
Material Prosperity Las Vegas-Paradise, NV
Trenton-Ewing, NJ
Honolulu, HI
Exposure to Diverse Cultural Experiences Bakersfield, CA
Trenton-Ewing, NJ
Port St. Lucie, FL
Optimism San Jose-Sunnyvale-Santa Clara, CA
Honolulu, HI
Las Vegas-Paradise, NV
Trust in Government Honolulu, HI
Oxnard-Thousand Oaks-Ventura, CA
San Jose-Sunnyvale-Santa Clara, CA
Social Status Oxnard-Thousand Oaks-Ventura, CA
Trenton-Ewing, NJ
Portland-Vancouver-Beaverton, OR-WA
Safety in Travel Oxnard-Thousand Oaks-Ventura, CA
Bakersfield, CA
San Jose-Sunnyvale-Santa Clara, CA
Trust in Business Honolulu, HI
Oxnard-Thousand Oaks-Ventura, CA
San Jose-Sunnyvale-Santa Clara, CA
Education Quality Oxnard-Thousand Oaks-Ventura, CA
Honolulu, HI
San Jose-Sunnyvale-Santa Clara, CA
Environment Lancaster, PA
Youngstown-Warren-Boardman, OH-PA
Poughkeepsie-Newburgh-Middletown, NY
Freedom of Choice Trenton-Ewing, NJ
Oxnard-Thousand Oaks-Ventura, CA
Las Vegas-Paradise, NV
Support of Friends Oxnard-Thousand Oaks-Ventura, CA
Toledo, OH
Houston-Sugar Land-Baytown, TX
Fruits of My Labor Trenton-Ewing, NJ
Oxnard-Thousand Oaks-Ventura, CA
Lakeland, FL
Support of Someone Special Oxnard-Thousand Oaks-Ventura, CA
Toledo, OH
Houston-Sugar Land-Baytown, TX
Happiness Oxnard-Thousand Oaks-Ventura, CA
Port St. Lucie, FL
Trenton-Ewing, NJ
Personal Health Port St. Lucie, FL
Oxnard-Thousand Oaks-Ventura, CA
Augusta-Richmond County, GA-SC
Civic Participation Lexington-Fayette, KY
Oxnard-Thousand Oaks-Ventura, CA
Little Rock-North Little Rock-Conway, AR
Trust in People Honolulu, HI
Bakersfield, CA
Oxnard-Thousand Oaks-Ventura, CA
Job Benefits Oxnard-Thousand Oaks-Ventura, CA
Honolulu, HI
Little Rock-North Little Rock-Conway, AR
Health Care Las Vegas-Paradise, NV
Akron, OH
Oxnard-Thousand Oaks-Ventura, CA
Home Ownership Lakeland, FL
Houston-Sugar Land-Baytown, TX
Phoenix-Mesa-Scottsdale, AZ
Satisfaction With Residence Lexington-Fayette, KY
Minneapolis-St. Paul-Bloomington, MN-WI
Houston-Sugar Land-Baytown, TX
Just Society Oxnard-Thousand Oaks-Ventura, CA
San Jose-Sunnyvale-Santa Clara, CA
Honolulu, HI
Neighborhood Acceptance of Diversity El Paso, TX
Poughkeepsie-Newburgh-Middletown, NY
Colorado Springs, CO
Acceptance of Different Social Ideates Youngstown-Warren-Boardman, OH-PA
Trenton-Ewing, NJ
Madison, WI
Self-Determination (Destinations in Life) Trenton-Ewing, NJ
Phoenix-Mesa-Scottsdale, AZ
Las Vegas-Paradise, NV
Safety in Community Des Moines-West Des Moines, IA
Harrisburg-Carlisle, PA
Madison, WI
Political Freedom Toledo, OH
Buffalo-Niagara Falls, NY
Richmond, VA
Access to Education Trenton-Ewing, NJ
Oxnard-Thousand Oaks-Ventura, CA
Little Rock-North Little Rock-Conway, AR
Financial Freedom San Jose-Sunnyvale-Santa Clara, CA
Honolulu, HI
Las Vegas-Paradise, NV
The above table shares the top three MSA performers for each of the 35 dimensions that make up the ADCI. In each MSA listed, residents report a statistically significantly higher perception of achievement for the dimension.

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