Indiana HEALTHY, WEALTHY, WISE · 2019-05-15 · reserve infantryman. Silvey Shamsi, MS, is a research graduate assistant at the Center for Business and Economic Research at Ball

© Center for Business and Economic Research, Ball State University • 1 • www.bsu.edu/cber • www.cberdata.org

CENTER FOR BUSINESS AND ECONOMIC RESEARCH

DECEMBER 8, 2016

Prepared by the Center for Business and Economic Research, Ball State University

• Srikant Devaraj, PhD, research assistant professor, CBER

• Michael J. Hicks, PhD, director, CBER George & Frances Ball distinguished professor of economics, Miller College of Business

• Silvey Shamsi, graduate research assistant, CBER

Tags: #HumanCapital #Indiana #Health

Prepared for the

Indiana Chamber of Commerce,

Indiana Chamber Foundation, and

Wellness Council of Indiana

Indiana HEALTHY, WEALTHY, WISE

Index


About the Indiana ChamberThe mission of the Indiana Chamber of Commerce is to cultivate a world-class environment which provides economic opportunity and prosperity for the people of Indiana and their enterprises. The Chamber partners with 24,000 members and investors, representing over four million Hoosiers.

The Indiana Chamber Foundation provides leadership through practical policy research to improve Indiana’s economic climate. Since 1981, its studies and results - including the current Indiana Vision 2025 long range economic development action plan - have helped move Indiana forward.

The Wellness Council of Indiana has been a wholly-owned subsidiary of the Indiana Chamber since 2011. It is the only statewide not-for-profit dedicated to worksite wellness and community well-being in Indiana. It has assisted thousands of organizations with implementing and managing workplace wellness initiatives. Its new Indiana Healthy Community Initiative assists community leaders in evaluating and improving well-being of its residents.

Indiana Chamber of Commerce 115 West Washington St., Suite 850 S Indianapolis, IN 46204317-264-3110www.indianachamber.com

About Ball State CBERThe Center for Business and Economic Research (CBER) conducts timely economic policy research, analysis, and forecasting for a public audience. We share our insight with the community through the Indiana Economic Outlook and the Ball State Business Roundtable. The CBER Data Center offers primary data sets, data resources for grant writers & economic developers, and a projects & publications library at www.cberdata.org.

Center for Business and Economic Research Ball State University2000 W. University Ave. (WB 149) Muncie, IN 47306765-285-5926 • [email protected]/cber • www.cberdata.org

© 2016 Center for Business and Economic Research, Ball State University

Srikant Devaraj, PhD, is a research assistant professor at Ball State CBER. His research interests lie in the areas of applied econometrics, health economics, and health informatics.

Devaraj earned a doctorate in economics from IUPUI and holds master’s degrees information and communication sciences and business administration from Ball State University. His bachelor’s degree is in mechanical engineering from the University of Madras (India). He is also a PMI-certified project management professional (PMP).

Michael J. Hicks, PhD, is director of Ball State CBER and the George & Frances Ball distinguished professor of economics in the Miller College of Business. His research interest is in state and local public finance and the effect of public policy on the location, composition, and size of economic activity.

Hicks earned doctoral and master’s degrees in economics from the University of Tennessee and a bachelor’s degree in economics from Virginia Military Institute. He is a retired army reserve infantryman.

Silvey Shamsi, MS, is a research graduate assistant at the Center for Business and Economic Research at Ball State University. She is pursuing a master’s in business administration in the Miller College of Business. She holds bachelor’s and master’s degrees in economics from Jahangirnagar University (Bangladesh).

About the Authors


IntroductionThe Indiana Chamber of Commerce’s Indiana Vision 2025 plan

includes economic development strategies and leadership objectives to improve the quality of place in the state. This plan outlines four important drivers that create a better place to work, to live, and to raise a family. They are 1) outstanding talent; 2) attractive business climate; 3) superior infrastructure, and 4) dynamic & creative culture. Improved community wellness plays a major role in achieving some of the Indiana Vision 2025 goals. Wellness has become fundamental to the bottom line of businesses and to the economic development prospects of our regions. It has been a key ingredient of the Wellness Council of Indiana’s Indiana Healthy Community initiative and is also important for all stakeholders – businesses, policymakers, and individuals. A healthier workforce tends to be more productive and spurs economic growth in a region. Investing in employee wellness has resulted in a reduction in medical costs and decreases in workplace absenteeism (Baicker, Cutler, and Song 2010).

In this study, we build a Healthy, Wealthy, Wise Index to give businesses, non-profits, and local government leaders the data needed to assess wellness within counties in Indiana. This index

reduces the costs of a community self-assessment and, when combined with other information, may help community leaders better explain how investments in wellness matter to the future prosperity of their cities and towns. Figure 1 shows the conceptual framework of the importance of the Healthy, Wealthy, Wise Index for the quality of place and the quality of life.

Data and Methods The indexing methodology improves the ability to analyze

changes in various types of data over a specified time period. We form three broad indices – Healthy, Wealthy, and Wise – to help assess wellness in communities. The indices are developed to compare the relative ranking of Indiana counties. We use multiple indicators for each indices and normalize them on a common scale. For the individual indicators within an index, we have followed the Anand and Sen (1993) method of normalizing the indexes as:

...where i is the individual indicator and j is the county. These indicators are individually normalized and re-scaled as

necessary across 92 Indiana counties on a scale of 0 to 100, with 100 being the county with best index and 0 being the county with the worst index for that indicator. We then take the geometric mean of all the respective normalized indicators to form the broad indices – Healthy, Wealthy, and Wise.

We now detail variables that are used in each index.

We form three broad indices – Healthy, Wealthy, and Wise – to help assess wellness incommunities.

Indicator Indexij =

× 100 (1)Xij - min(of 92) { Xi }

max(of 92) { Xi } - min(of 92) { Xi }

Figure 1. Conceptual FrameworkSource: Author calculations

Outstanding talent

Attractive business climate

Superior infrastructure

Dynamic & creative

culture

Indiana Chamber’s Indiana Vision 2025 drivers

Healthy

Wealthy

Wise

Wellness of communities

Positive impacts for employers,

households, & government

Primacy of place/ quality

of place

Population


Health IndexThe Health Index is constructed using 15 indicators, as shown in

Table 1. These indicators come from literature focusing on health effects. Pagan and Davila (1997) find that employee obesity negatively affects productivity. Smoking adversely affects health and leads to a higher prevalence of cardiovascular diseases and Type 2 diabetes (Ryo 2001; Carole 2007). Several research studies have found negative associations between low birth weight and long-term outcomes such as educational attainment, mobility, and self-care (Saroj et al. 2006; Sandra et al. 2005). Unemployment rates (both short-term and long-term) have an adverse effect on health and productivity (Benzavel et al. 2001). Other indicators were carefully chosen to reflect their close association with the health of individuals and communities.

Wealth IndexThe Wealth Index is constructed using six variable, as shown

in Table 2. These indicators come from literature focusing on the effects of wealth. Median household income and per-capita personal

income are closely related to wealth of the community because income increases utility of families and is associated with better education and health (Glick and Sahn 2000; Caroll 1994; Phipps and Burton 1998). Studies have shown that income inequality of a community is associated with lower productivity and welfare (Bloom 1999; Pfeffer and Langton 1993; Bloom and Michel 2002; Henderson and Fredrickson 2001; Marmot 2002).

Wise IndexThe Wise Index is constructed with nine indicators, as shown in

Table 3. We include education variables, job types, voting share, share of women, and share of Hispanics to reflect diversity. Several studies have found a high correlation between an individual’s education level

Indicator Definition Source

Obesity (%) Percentage of adults who report Body Mass Index (BMI) >- 30

County Health Rankings (2016)

Smoking (%) Percentage of adults who report being a current smoker


Premature death (rate)

Years of potential life lost before age 75 per 100,000 population (age-adjusted)


Low birth weight (%)

Percentage of live births with low birth weight (<2500 grams)


Poor mental health days (number)

Average number of reported mentally unhealthy days per month


Poor physical health days

Average number of reported physically unhealthy days per month


Preventable hospital stays (%)

Number of hospital stays for ambulatory-care sensitive conditions per 1,000 Medicare enrollees


Physical inactivity (%)

Percentage of adults aged 20 and older reporting no leisure-time physical activity

County Health Ranking (2016)

Alcohol-impaired driving deaths (%)

Percentage of driving deaths with alcohol involvement


Poor or fair health (%)

Percentage of adults reporting fair or poor health (age-adjusted)


Child mortality (rate)

Number of deaths among children under age 18 per 100,000 population


Uninsured (%)(proxies)

Percentage of people under age 65 without insurance


Unemployment (%)Percentage of population ages 16 and older unemployed but seeking work


Exercise (%) (proxies by access to exercise opportunities)

Percentage of population with adequate access to locations for physical activity


Primary care physician

Number of primary care physicians (PCP) in patient care


Table 1. Health Index Indicators | Source: Author research


Median HH income Median household income County Health Rankings (2016)

Income inequality ratio

Ratio of household income at the 80th percentile to income at the 20th percentile


Per capita personal income (%)

The personal income of a given area divided by the resident population of the area

Bureau of Economic Analysis (2014)

All age poverty (%) Poverty rates of all ages SAIPE (2014)

Under 18 poverty (%) Poverty rates of population under 18 SAIPE (2014)

Average household size

Average of household size of owner-occupied and renter-occupied unit

American Fact Finder (2014)

Table 2. Wealth Index Indicators | Source: Author research


High school graduation (%)

Percentage of ninth-grade cohort that graduates in four years


College education (%)

Percentage of adults ages 25-44 years with some post-secondary education


Social association rate

Number of membership associations per 10,000 population


Total employment

A count of jobs, both full-time and part-time. It includes wage and salary jobs, sole proprietorships, and individual general partners, but neither unpaid family workers nor volunteers

Bureau of Economic Analysis (2014)

White collar jobs

Workers perform highly skilled job duties in an office setting: Management, business, science, arts, service, sales, and office occupations


Blue collar jobs

Workers perform labor jobs with their hands: Natural resources, construction, maintenance, production, transportation, and material moving occupations


Share of people who voted (%)

Percentage of population who voted during the presidential election in 2012

American Fact Finder (2012) and US Election Atlas (2012)

Share of women (%) Total women in a county divided by total county population


Table 3. Wise Index Indicators | Source: Author research


and health, resulting in an increase in productivity (Mirowsky and Ross 2003; Hout 2012; Ross and Wu 1995). Other studies have found income as the mediator between education and health (Ross and Wu 1995; Schnittker 2004). Communities with more white collar jobs are associated with a higher standard of living (Dong 1999).

Studies have shown a positive association of income of women in a family and spending on child care (Phipps and Burton 1998; Quisumbing and Maluccio 2000). Further, an increase in a mother’s education positively affects the health of her children and helps to build a wise society (Glewwe 1999; Christiaensen and Alderman 2004 and Glick and Sahn 2000).

ResultsFigure 2 shows the Healthy, Wealthy, and Wise Index at the

Indiana county level. The lightest color represents weak performance (first quartile). The darkest color represents ideal performance (fourth quartile). Index scores for each county are available online in an appendix at http://projects.cberdata.org/117/hww .

Performance in Region 1 was very diverse, with no emerging patterns. Porter County (Valparaiso) had the best overall performance in the region. Region 2 performed above the median, but has room for improvement. Kosciusko County (Warsaw) performed well in all three indices. Region 3 overall performance was above average, with Allen County (Fort Wayne) doing notably well in the Healthy and Wise categories. Although LaGrange and Noble counties were statistically below median in Wise rankings,

these counties have a large Amish population that is skilled through apprenticeship rather than conventional schooling.

Region 4 counties have a lot of variation in rankings. No significant patterns emerge, but the counties of Tippecanoe (Lafayette) and Howard (Kokomo) did well in Healthy and Wise indices. Region 5 counties (the central ring surrounding but excluding Indianapolis) have high performances in all three indices. Region 6 has low to mid-range performances. Delaware County (Muncie) has a high Wise ranking in part due to a university campus.

Region 7 has varied performances, but no significant patterns. Region 8 includes Monroe County (Bloomington), which did well in Healthy and Wise indices. Rural counties performed below the median. Region 9 counties had median performance, but Bartholomew (Columbus) and Dearborn counties performed well in all three indices.

Region 10 counties have better rankings near the Louisville KY metropolitan area and mid-range performance in more rural counties. Region 11 has above median performance in most of its counties. Vanderburgh County (Evansville) ranked high in the Wise index, and Dubois County (Jasper, Huntingburg) ranked high across the board. Region 12 is Marion County (Indianapolis), which performed below the median in Healthy and Wealthy, but above the median in the Wise category.

In general, few patterns emerge. Rural areas appear to have worse health and wealth indices, as anticipated from earlier research (e.g. the Human Development Index, http://projects.cberdata.org/104/hdi). Communities that host large universities also do better in the Wise category, though it is not clear that this

Figure 2. Indiana Results | Source: Author calculations using Tables 1-3. Index scores available at http://projects.cberdata.org

1 23

4

5 6

7

8 9

1011

12

Lafayette

Hammond

South Bend

Fort Wayne

Muncie

Anderson

Indianapolis

Terre Haute

Columbus

Evansville

Kokomo

Bloomington

Fishers

Figure 2A. Healthy

1 23

4

5 6

7

8 9

1011

12

Lafayette

Hammond

South Bend

Fort Wayne

Muncie

Anderson

Indianapolis

Terre Haute

Columbus

Evansville

Kokomo

Bloomington

Fishers

Figure 2B. Wealthy

1 23

4

5 6

7

8 9

1011

12

KokomoLafayette

Hammond

South Bend

Fort Wayne

Muncie

Anderson

Indianapolis

Terre Haute

Bloomington Columbus

Evansville

Fishers

Figure 2C. Wise

First Quartile (weak)

Second Quartile

Third Quartile

Fourth Quartile (ideal)

Index Performance


spreads broadly outside the university community. Indiana has high performers and low performers in very close proximity to each other.

Figure 3 shows the Healthy, Wealthy, Wise index of all 50 states. Index scores for each state are available online in an appendix at http://projects.cberdata.org/117/hww .

Most states in New England, the Great Plains, and the Mountain West had higher Healthy rankings. Low performances in Healthy and Wealthy categories were widespread across the South. States such as Alaska, Hawaii, Virginia, and Maryland had the highest Wealthy index, whereas Mississippi, Louisiana, and West Virginia were the lowest in this category. The states with the highest Wise index include Texas, Washington, and Florida; those with the lowest Wise index include West Virginia, Oregon, and Vermont (see Figure 3 footnote). Indiana ranked below the median in the Healthy index, and ranked above the median in the Wealthy and Wise indices.

Policy ImpactThe policymakers also have a role in wellness and thoughtful

economic development. First, over the past few decades, the United States economy has shifted from a condition where a higher share of migration was employment related. As late as the 1970s, about one-third of household incomes and half of household spending were related to goods that could be produced anywhere. The businesses were footloose and families had to follow the jobs. However, in the recent decade (especially in Indiana), there appears to be a reversal in the trend. Households now choose where they would like to live and businesses move to these workers (Hicks and Faulk 2016). The study also finds a strong correlation between the built environment and the places where people are moving, implying that households put more value on the recreational amenities. Therefore, infrastructure related to traditional wellness activities (such as trails, playgrounds, parks, and open green space) matter more than ever in where people and subsequent businesses relocate.

Second, there is a huge disparity in health and health care costs associated with preventable diseases within a state (County Health Rankings 2016). The premiums set by insurers of the Affordable Care Act (ACA) federal exchanges are determined by age, location, tobacco use, individual vs. family enrollment, and plan categories.

A policy study has found an association of diabetes incidence rate and an increase in ACA premiums for Indiana (Lewis, Hicks, and Devaraj 2014). There is a compelling argument for local governments to partner with businesses and non-profits to figure out how wellness can be more effectively spread throughout our communities. Local governments that can provide some of the public infrastructure and facilities that encourage local employers and families to participate in the wellness programs create a substantial cost advantage for businesses in their regions. ♦

Figure 3. United States Healthy Wealthy Wise IndexSource: Author calculations using Tables 1-3, see footnote below

Figure 3A. Healthy

Figure 3B. Wealthy

Figure 3C. Wise

First Quartile (weak)

Healthy Wealthy Wise

Second Quartile

Third Quartile

Fourth Quartile (ideal)

Index Performance ScaleNote: The Wise Index for

states also includes data on property tax, individual income tax, and corporate income tax from Tax Foundation (2013).


CreditsReferencesAnand, S., And Sen, A. 1993. “Human

Development Index: Methodology and Measurement.” United Nations Development Programme 8.

Angus Deaton, Christina Paxson. 1998. “Economies of Scale, Household Size, and the Demand for Food.” Journal of Political Economy 106(5): 897-930.

Baicker, Katherine, Cutler, David and Song, Zirui. 2010. “Workplace Wellness Programs Can Generate Savings.” Health Affairs 29(2): 1-8.

Benzeval, Michaela, Ken Judge. 2001. “Income and Health: the Time Dimension.” Social Science & Medicine 52: 1371-1390.

Berger et al. 2001. “Alternative Valuations of Work Loss and Productivity.” Journal of Occupational and Environmental Medicine 43: 18-24.

Black, Sandra E., J. Devereux, Paul and Salvanes, Kjell G. 2007. “From the Cradle to the Labor Market? The Effect of Birth Weight on Adult Outcomes.” The Quarterly Journal of Economics 122(1): 409-439.

Bloom, Matt, John G. Michel. 2002. “The Relationships among Organizational Context, Pay Dispersion, and Managerial Turnover.” Academy of Management Journal 45(1): 33-42.

Bloom, Matt. 1999. “The Performance Effects of Pay Dispersion on Individuals and Organizations.” Academy of Management Journal 42: 25-40.

Carroll, Christopher D. 1994. “How Does Future Income Affect Current Consumption.” The Quarterly Journal of Economics 109(1): 111-147.

Christiansen Luc, Harold Alderman. 2004. “Child Malnutrition in Ethiopia: Can Maternal Knowledge Augment the Role of Income.” Economic Development and Cultural Change 52(2): 287-312.

County Health Rankings. 2016. “County Health Rankings and Roadmaps.” University of Wisconsin, Population Health Institute, School of Medicine and Public Health. ** This is a secondary source. Primary sources used by County Health Rankings can be found on page 6 of the following document: http://www.countyhealthrankings.org/sites/default/files/state/downloads/CHR2016_IN_1.pdf

Dong, Tran Duy. 1999. “Micro-determinants of Household Welfare, Social Welfare, and Inequality in Vietnam.” National Graduate Institute for Policy Studies, pp 151-160.

Glewwe, Paul. 1999. “Why Does Mother’s Schooling Raise Child Health in Developing Countries? Evidence from Morocco.” The Journal of Human Resources 34(1): 124-159.

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Henderson, Andrew D., James W. Fredrickson. 2001. “Top Management

Team Coordination Needs and the CEO Pay Gap: A Competitive Test of Economic and Behavioral Views.” Academy of Management Journal 44(1): 96-117.

Hicks, Michael J. and Faulk, Dagney. 2016. “What Comes First, People or Jobs: Evidence and Lessons for Indiana” Center for Business and Economic Research, Ball State University – Policy Brief.

Hout, Michael. 2012. “Social and Economic Returns to College Education in the United States.” Annual Review of Sociology 38: 379–400.

Lewis, Morgan, Hicks, Michael and Devaraj, Srikant. 2014. “Individual Market Premium Variation under the Patient Protection and Affordable Care Act: Evidence from Indiana.” Center for Business and Economic Research, Ball State University - Policy Brief.

Marmot, Michael. 2002. “The Influence of Income on Health: Views of an Epidemiologist.” Health Affairs, 21(2): 31-46.

Mirowsky, John, Catherine E. Ross. 2003. “Education, Social Status, and Health.” Canadian Journal of Sociology Online, pp 242.

Otsuka, Ryo et al. 2001. “Acute Effects of Passive Smoking on the Coronary Circulation in Healthy Young Adults.” Journal of the American Medical Association 286(4): 436-441.


Center for Business and Economic Research2000 W. University Ave. (WB 149)Muncie, IN 47306765-285-5926 • [email protected]/cber • www.cberdata.orgfacebook.com/BallStateCBERtwitter.com/BallStateCBER

BALL STATE UNIVERSITY CENTER FOR BUSINESS AND ECONOMIC RESEARCHThe Center for Business and Economic Research (CBER) is an economic policy and forecasting research center at Ball State University in Muncie, Indiana.

The CBER Data Center (www.cberdata.org) offers a projects & publications library, primary-sourced economic data sets, weekly business commentary, and data resources for grant writers & economic developers.

In addition to research and data delivery, CBER facilitates community business discussions in Indiana’s east cen-tral region—holding the annual Indiana Economic Outlook and quarterly meetings of the Ball State University Business Roundtable.

CBER connects with its peers across the nation through memberships with the Association for University Busi-ness and Economic Research and the University Economic Development Association.

Pagan, Jose A, Alberto Davila. 1997. “Obesity, Occupational Attainment and Earnings.” Social Science Quarterly 78(3): 756-770.

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Phipps, Shelley A., Peter S. Burton. 1998. “What’s Mine is Yours? The Influence of Male and Female Incomes on Patterns of Household Expenditure.” Economica, New Series 65(260):599-613.

Quisumbing, Agnes R. and Maluccio, John A. 2000. “Intra-Household Allocation and Gender Relations: New Empirical Evidence from Four Developing Countries.” International Food Policy Research Institute. 84.

Ross, E. Catherine, Wu, Chia-ling. 1995. “The Links between Education and Health.” American Sociological Review 60(5): 719-745.

Saigal, Saroj et al. 2006. “Self-Perceived Health-Related Quality of Life of Former Extremely Low Birth Weight Infants at Young Adulthood.” Pediatrics 118.

Schnittker, Jason. 2004. “Education and the Changing Shape of the Income Gradient in Health.” Journal of Health and Social Behavior 45: 286–305.

Willi, Carole et al. 2007. Active Smoking and the Risk of Type 2 Diabetes: A Systematic Review and meta- analysis. Journal of American Medical Association 298(22): 2654-2664.

Woolf, Steven H., Robert E. Johnson, Robert L. Phillips, and Maike Philipsen. 2007. “Giving Everyone the Health of the Educated: An Examination of Whether Social Change Would Save More Lives Than Medical Advances.” American Journal of Public Health 97(4): 679-683.

Photo CreditsAll photos from Flickr unless otherwise

noted. Benjamin (Bill) Planche (pg. 1), 401(K) 2012 (pg. 1), John Walker (pg. 1), Ciara Karagianni (pg. 2), Benjamin (Bill) Planche (pg. 3), 401(K) 2012 (pg. 4), John Walker (pg. 5), Pictures of Money (pg. 6), Houry Najjarian (pg. 7), Esperanza Mansion (pg. 7), Steven S. (pg. 7), and Valore Books (pg 8).

Production Credits© Center for Business and Economic

Research, Ball State University.

AuthorsSrikant Devaraj, PhD, research assistant

professor, Center for Business and Economic Research, Ball State University.

Michael J. Hicks, PhD, director, Center for Business and Economic Research, Ball

State University. George & Frances Ball distinguished professor of economics, Miller College of Business, Ball State University.

Silvey Shamsi, MS, research graduate assistant, Center for Business and Economic Research, Ball State University.

GraphicsKaylie McKee, undergraduate design

assistant, Center for Business and Economic Research, Ball State University.

Victoria Meldrum, manager of publications and web services, Center for Business and Economic Research, Ball State University.

Want more? Visit our Projects & Publications Library at http://projects.cberdata.org.

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Indiana HEALTHY, WEALTHY, WISE · 2019-05-15 · reserve infantryman. Silvey Shamsi, MS, is a research graduate assistant at the Center for Business and Economic Research at Ball