American Dream Case Study – California versus Texas

Ed Burghard

“California May Be Dreaming, But Texas is Working”*

*Quote from Chuck Devore




Case Study

This is one in a series of case studies to illustrate how you can use the 2012 American Dream State Ranking Report data to identify the comparative strengths and weaknesses of your state for use in a SWOT analysis.

Analysis Approach

I compare the two states based on the 35 dimensions captured in the 2012 American Dream State Ranking Report.  In this analysis, an advantage is defined as equal to or greater than an index of 105 for a specific dimension score.  A disadvantage is defined as equal to or less than an index of 95 for a specific dimension score.

Identified Points Of Difference

California vs Texas 10x7

Click on the image to make it larger.

Generational progress reflects the sentiment that one has about their life relative to his/her parents.

Destination in life is the sentiment that one has about their ability to choose their destinations (i.e. job, housing, travel, etc.)

Melting pot – Personal and Social Identity is the sentiment one has about different personal and social identities (e.g. sexual orientation and religious practice)

Additional Perspective

The ADCI data reflect the outlook of people living in each state.  Reasons why people responded as they did cannot be determined from these data.  However, understanding the why behind the what is important to being able to define strategies that can better enable people living in your state to achieve the American Dream.

To that end, I did a Google search to find some clues to shed light on the why.  This is not intended to be a complete, nor balanced comparison between the two states.  It is simply intended to suggest there may be an underlying reason why people living in each state responded as they did.  The next step for local economic development professionals would be to conduct market research with people living in their state to better understand the true drivers of why they are feeling the way they do.  The research could be qualitative, quantitative or a combination of both.

Google Search Findings

“While California has more bureaucrats, Texas has 17 percent more teachers, with 295 education employees per 10,000 people, compared to California’s 252.

The two states’ educational outcomes reflect this disparity. If we compare national test scores in math, science, and reading for the fourth and eighth grades among four basic ethnic and racial categories — all students, whites, Hispanics, and African-Americans — Texas beats California in every category, and by a substantial margin. In fact, Texas schools perform consistently above the national average across categories of age, race, and subject matter, while California schools perform well below the national average.”

“Californians make more money, but they need to spend more on basic necessities such as food and housing.”

“California’s model of government-led prosperity, aided by the nation’s best weather, appears to be in serious jeopardy. Texas’s model of freeing jobs creators to do what they do best through low taxes, less regulation, and a better lawsuit climate is looking stronger by the month.”

Home ownership rates in Texas are 63.6% versus California at 55.6%.

People are leaving California for Texas

California Can’t Compete With Texas (published in 2010)

In contrast to these results, the 2012 Gallup-Healthways Well-Being Index rates California slightly ahead of Texas on their happiness measure.

ALEC-Laffer State Economic Outlook Ranking – 2012 rates Texas #16 and California #38.  This ranking evaluates policy variables that are directly influenced by state lawmakers through the legislative process.  The executive Summary concludes – “California is not living up to its reputation as the country’s economic leader.”  “If California wants to get back on the path to prosperity, then it needs to look to Texas.”


Remember, the American Dream Composite Index™ is a measure of sentiment.  It reveals what people living in a state 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.

The survey conducted by Xavier University contains 139 statements pertaining to various aspects of the American Dream.  Responses comprise the 35 dimensions that ultimately make-up the ADCI.  The survey instrument has been statistically validated.

The ADCI data reveal HOW people living in a state feel about their personal well-being and environment.  However, the data do not explain WHY people feel the way they do.  The ADCI allows economic developers to better understand opportunities for improving their state’s ability to enable the American Dream.  It also helps them identify potential competitive advantages and vulnerabilities versus other states.

Interpret the survey data as “This is the way people living in my state feel about their ability to achieve their definition of the American Dream”.


The intent behind sharing the study results is to raise important questions that are beyond the scope of these data to answer.  The kind of questions that, when answered, will provide you insight into which barriers to achieving the American Dream you should be working to remove.

I have no doubt some economic development professionals will be dissatisfied with their state’s rank.  This is totally understandable.  I am actually not thrilled with where my state  ended up in the ranking.

But, please don’t ignore the ranking.  Instead, use it to encourage local work in answering the WHY question.  Why do people living in your state feel the way they do?  Answering this question will provide valuable insights to use in your state’s economic development strategic planning process.

So, which states offer their residents the greatest chance of achieving the American Dream, and which states are lagging behind?

To view the complete set of State rankings based on the ADCI and five explanatory sub-indexes, simply click this button

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For additional information on the ADCI click HERE.

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