Nevada fact of the day

by on March 6, 2017 at 1:59 pm in Current Affairs, Data Source, Economics | Permalink

Adjusting for changes in population, Nevada’s real output is a staggering 21 per cent below its 2006 peak, and more than 10 per cent below its level from two decades ago — a performance only comparable to Greece

That is from Matthew C. Klein at FTAlphaville.

1 gab March 6, 2017 at 2:10 pm

“Nevada continues to be one of the most popular places for Americans to move. It also has a relatively high birth rate.”

So you’ve got a whole bunch of retirees moving to Nevada because there is no state income tax, and a whole lot of babies being born, neither of those two groups work, so the GDP to population ratio is declining. When those kids are old enough to work, the ratio will sort itself out.
It may be a while…

2 gab March 6, 2017 at 2:11 pm

Or the old people die, that’ll work too. Forgot about that in my original post.

3 Joël March 6, 2017 at 2:14 pm

Isn’t that explanation excluded by “Adjusting for changes in population”? Need to read the paper at FTAlphaville to know that, no time now…

4 gab March 6, 2017 at 3:07 pm

I’m pretty sure what they’re saying is, GDP/population, not GDP per person adjusted for the increase.

5 Jason Bayz March 6, 2017 at 2:16 pm

As far as the over-65 population share, Nevada ranks 44th:

6 gab March 6, 2017 at 3:10 pm

That was 6 years ago. And if they started at 50th…

Also, there is a group of Californians (I don’t know how big a group) who claim Nevada as their place of residence who don’t really live and spend money there, thus increasing the population and doing nothing for GDP.

7 albatross March 6, 2017 at 5:06 pm

On the positive side, the fake NV residents probably don’t consume a whole lot of services in the state, either.

8 Don Reba March 6, 2017 at 2:42 pm

Don’t know what they mean by “relatively high”, since Nevada has the same birth rate as the national average. Which, by the way, is also about 21% below its 2006 performance.

9 Art Deco March 6, 2017 at 2:49 pm

The total fertility rate in 2012 stood at 1.88 children per woman per lifetime. That in 1992 was 2.05. That’s an 8% decline, not a 21% decline. While we’re at it, the 2012 rate is higher than any rate measured during the period running from 1973 to 1987.

10 Don Reba March 6, 2017 at 3:08 pm

Well, Nevada’s fertility rate fell from 2.42 in 2007 to 1.86 in 2015, according to NVSR. That’s 23%.

11 Art Deco March 6, 2017 at 3:38 pm

You said the ‘national’ birth rate had fallen by 21% since 2006. The salient statistic is the national total fertility rate, which has not fallen by 21% since 2006 or since any other time in the last 40-odd years.

12 spencer March 6, 2017 at 2:57 pm

I went to BEA and got their data for real per capita income for Nevada.

Their data only goes back to 2008, but from 2008 to 2014 they show that real per capita income fell -1.5%. The big drop was in 2009, when it fell -6.4%.

The BEA shows that from 2006 to 2015 nominal per capita income in Nevada rose 4.9%.

I find this data to be inconsistent with the claim that real per capita income fell 21% since 2006.

Given that housing was the sector that drove Nevada’s strong growth before the recession I do not doubt that real income fell significantly. But I am curious about what he used to deflate the pre-2008 data.

13 Art Deco March 6, 2017 at 3:47 pm

He’s referring not to personal income figures but gross domestic product.

14 mulp March 6, 2017 at 4:40 pm

So, production in Nevada that generates revenue flows to Wall Street is Nevada production???

Why is Nevada paying a huge tax to the unelected Wall Street?

What value is Wall Street providing to Nevada?

Or do you believe that money is no longer a proxy for labor, and that workers can be eliminated from economies and still have a functioning economy?

Ie, if labor is not the source of all production, then labor is at the limit irrelevant to the economy. Ie, replace labor with capital and land and eliminate all people – robots mine the land to generate resources sold to robots producing robots that mine the land and produce robots to be bought by robots to mine resources to produce robots producing robots. Obviously, the corporations owning the robots are traded on Wall Street by robots.

15 prior_test2 March 6, 2017 at 3:01 pm

Clearly, it is time for Nevada to leave the dollar zone.

16 Art Deco March 6, 2017 at 3:40 pm

Nevada has perfectly ordinary unemployment rates and experienced nearly all of its income decline during the period running from 2006 to 2009.

17 Art Deco March 6, 2017 at 3:46 pm

Nevada’s per capita state debt in 2014 was 65% below national means.

18 prior_test2 March 6, 2017 at 3:48 pm

So, clearly, Nevada should leave the dollar zone because it is being held back.

19 Gerber Baby March 6, 2017 at 4:00 pm

Well prior, maybe that means Greece should leave after all, imagine how great they’d do with debt at 300% of GDP.

20 Art Deco March 6, 2017 at 4:08 pm

They’re doing badly because they cannot devalue (among other things). That’s not Nevada’s situation.

21 Thor March 6, 2017 at 8:33 pm

You may not have known Prior long, but you will soon learn that he never ever takes something back.

22 James Murphy March 6, 2017 at 3:17 pm

As an off and on resident of the Silver State for well over a decade my first reaction was that Nevada’s ‘underground economy’ can’t be overestimated. I’m not talking escorts and wanna-be poker pros–the size of people doing everything off the books is downright impossible to fathom (and probably equally impossible to quantify). I even know a guy that is technically ‘unemployed’ but pulls in $75k a year making cannoli. Just looking through my contact list if I needed just about anything done short of medical treatment the person that I’d call is most likely working ‘off the books’. No clue how Nevada’s ‘underground economy’ relates to the rest of the nation but it has to be significantly higher than anywhere else I’ve lived. I live in South Carolina now and everyone ‘knows a guy’ that does something or another but nothing like it was in Nevada. Anecdotally, it sure seems that its become all the more prevalent since the housing bust.

The fundamental point that the article is making–Nevada’s slow climb out of the housing maelstrom–is accurate but there’s a lot going on unique to the state that makes it a poor choice for comparison against the other 49 states. I’ll look more into the study and see if anything else strikes me.

23 Brian Donohue March 6, 2017 at 3:25 pm

That DOES sound a bit like Greece.

24 Art Deco March 6, 2017 at 3:34 pm

The employment-to-population ratio for Nevada in 2014 was 0.582. That’s a shade below the national mean, which was around 0.59 at that time.

The current unemployment rate for Nevada is 5.1%, which does not resemble that of Greece at all. .

25 msgkings March 6, 2017 at 4:41 pm

Another point missed by our resident hypocrite.

26 Thor March 6, 2017 at 8:34 pm

Which one was that again? Lol

27 Art Deco March 6, 2017 at 3:26 pm

The Bureau of Economic Analysis figures for real personal income per capita in Nevada record a 1.75% decline over the period running from 2008 to 2014, with declines experienced (year-over-year) in 2008-09 and 2012-13. Net over the period 2009 to 2014 was +5.2%. They do not calculate regional price indices for periods prior to 2008.

Nominal declines in per capital personal income were registered (year-over-year) in 2001-02 (-0.35%) and 2007-09 (-9.4%), but not in other years. Increases in nominal personal income per capita in Nevada were over the period extending from 1995 to 2008 running behind increases in national price indices for personal consumption expenditures only during the period from 2001-02 and 2006-08, for what that’s worth.

It looks like you had an abrupt drop in real personal income per capita during the period running from 2006-09 on the order of roughly 14%.

28 celestus March 6, 2017 at 4:56 pm

The Euro and the British pound are down significantly since the housing bubble (I’ve been told about 60% of the customer base for Las Vegas helicopter tours is from Europe, that’s not representative of overall tourism but it indicates that it’s a notable factor), and the Asian middle class is just not wealthy enough to pick up the slack.

A lot of the things that people went to Las Vegas for in the early to mid 2000s they can find more acceptable substitutes for on the Internet.

The city of Las Vegas/state of Nevada made a conscious decision to clean up its image in order to market itself as a family destination. Didn’t work.

Hard to get good data on it, but maybe gold mining? It looks like Nevada is the overwhelming majority of US production, which is down, but I would think high prices would compensate for that.

29 gab March 6, 2017 at 5:12 pm

“In 2016, 42.94 million people visited the city of Las Vegas – the highest visitor numbers on this timeframe (2000 – 2016). Visitor numbers dipped slightly in 2001 and 2002, most likely due to the early 2000s recession which affected the European Union in 2000/2001 and the United States in 2002/2003. A further decline around 2009 was, again, probably due to economic climate as the global recession hit that year. Visitor numbers have since recovered well.”

30 celestus March 6, 2017 at 5:45 pm

Fair. That probably translates into similarly higher visitor spending (though not 100% sure, and looks to be about flat adjusted for population growth).

31 Mark Thorson March 6, 2017 at 6:44 pm

I don’t know if they’d be spending as much. The proliferation of casinos all over the country has probably sucked up a lot of the gambling money that Las Vegas was collecting. A lot of those visitors may just be coming for restaurants and shows.

32 Art Deco March 6, 2017 at 6:38 pm

Since 2010, population growth rates in Nevada have been adequate and have outstripped national means. Whatever attracts people to Nevada is still attracting them.

33 Art Deco March 6, 2017 at 6:41 pm

Demographic growth rates in Clark County, Nev. differ only slightly from statewide means. About 94% of Clark County’s population consists of tract development in and around Las Vegas, so I don’t think mine shafts account for this.

34 albatross March 6, 2017 at 5:08 pm

In Las Vegas, I guess the main instruments of oppression are casinos and prostitutes.

35 Scott Mauldin March 6, 2017 at 5:43 pm

Some repression requires sticks, some just requires carrots.

36 Thiago Ribeiro March 6, 2017 at 6:56 pm

It is more than that – it is the oppression of the lack of goals and hope.

37 albatross March 6, 2017 at 5:10 pm

Every time I see this kind of shitposting under someone else’s nym, I wonder how much longer MR’s comment threads will be worth participating in. It truly only takes one idiot with a lot of time on his hands to mess up a conversation, if there’s not effective moderation.

38 msgkings March 6, 2017 at 5:13 pm

Obviously the mods are betting it won’t matter much.

39 Hoosier March 6, 2017 at 5:32 pm

Maybe he’ll leave now! TC’s one move ahead of everyone as usual.

40 Art Deco March 6, 2017 at 6:43 pm

You’re assuming the posters in question aren’t the moderators or interns in their employ.

41 gabab March 6, 2017 at 11:04 pm

A big hot arid desert state isn’t thriving?


42 thfmr March 7, 2017 at 1:15 am

I’d give you ten reasons why it’s wonderful to live in Nevada but I’d prefer you all stay where you are.

43 Dan Lavatan-Jeltz March 7, 2017 at 1:33 am

It is all mark to market accounting for real estate. In 2006 Cesar’s Palace had to be worth Infinity+1 to finance to buyout, but since it is bankrupt and they don’t want to pay the junior bondholders the state had to take an impairment charge to GDP even though the building is identical to itself in all respects.

44 steveslr March 7, 2017 at 2:17 am

The poker boom of the 2000s was intimately related to the Sand State housing bubble. Lots of people were using their homes as their ATMs and taking the cash to Las Vegas.

The funny thing is that Nate Silver should have noticed the end of the housing bubble when, as a professional poker player in Las Vegas, suddenly all the fish dried up, he recounts, in December 2006. He quit being a poker player four months later because there were no more dumb tourists left in Las Vegas to fleece, just gimlet-eyed pros like himself.

If he’d connected the dots, he could have gotten in on the Big Short, but he totally missed it, and I don’t know if he has figured it out yet.

45 GU March 10, 2017 at 8:10 pm

Nevada just enacted a gross receipts tax on businesses. Interpret as you’d like. Gross receipts taxes are pretty much the worst tax a state can enact.

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