Innovation
Cost of Doing Business
Description: This indicator compares business costs in Arizona to those in other states. Five categories of costs are included: wages, taxes, electricity, industrial rent, and office rent. An overall figure is calculated as a weighted average of the five categories; the weights range from 50 percent for wages to 5 percent for office rent. All data are expressed on an index basis, with the national average equal to 100.
The earliest data from the source are for 2005. Arizona’s rank among the states and its percentage difference from the national average are presented for the cost-of-doing-business index and for each of the five categories.
Rationale: All other factors equal, lower business costs help to attract innovative firms and individuals. However, low costs in a geographic area perceived to not have a high quality of life may be a negative factor in innovation.
Data Source: Milken Institute http://www.milkeninstitute.org/research/research.taf?cat=indexe.
Comments on the Quality of the Data: Since the data used to calculate the indices are proprietary, the quality cannot be determined.
