Benchmarking a Regional Economy: Bloomington and Monroe County.

• Author: Smith, James C.
• Position: Statistical Data Included

If you receive a 5 percent pay raise, should you be pleased or disappointed? The answer depends greatly on how your peers did. If others in your department all got 3 percent, then your 5 percent sounds pretty good. If everyone else got 10 percent when you were given just 5 percent, then maybe you have a problem.

Regional economic development can be viewed in the same way. If your region grew 5 percent (by some measure), that counts as good performance only if comparable regions mainly grew less than that. The question then is: which regions are comparable to my region?

Last year, the Bloomington Economic Development Corporation (BEDC) brought that question to the Indiana Business Research Center (IBRC) at the Kelley School of Business at Indiana University. BEDC's objective was to benchmark the economic performance of the Bloomington and Monroe County metropolitan area against other metro areas in the United States that could reasonably be considered comparable. Bloomington and Monroe County leaders were not content to view their own economic data in isolation. They wanted to know how their area's performance compared to a peer group.

The Indiana Business Research Center worked with BEDC to conduct a study of all 318 metropolitan areas nationwide. The purpose of the study was to track the economic performance in Bloomington and Monroe County, Indiana over a long period of time. The goal was to use objective, numerical measures and compare Bloomington and Monroe County against other metro areas found to be comparable.

The resulting study covered a period of 29 years, beginning in 1970 and continuing through 1998, the latest year for which reliable data were available. From the pool of 318 U.S. metro areas, 10 were selected as being most like the Bloomington and Monroe County area in 1970. Then, from this more or less common starting point, the IBRC tracked the economic progress of this group of "comparables."

Comparable metro areas means:

1. Areas similar to the Bloomington and Monroe County area in terms of economic assets--population and economic structure.

2. Areas most like the Bloomington and Monroe County area in 1970, so the performance of initially comparable regions can be tracked over time.

3. Areas designated as Metropolitan Statistical Areas (MSAs), so comparable, reliable data were available:

* MSAs, also called metro areas, are defined by the U.S. Office of Management and Budget. An MSA is made up of one or more counties, centered on the main city in that geographic area.

* The U.S. Bureau of Economic Analysis (BEA) publishes a common set of economic statistics for all MSAs, so the data are as comparable as possible from one metro area to another.

* The Bloomington and Monroe County MSA is defined as all of Monroe County.

Bloomington and Monroe County Comparables

Four economic...