Vermont was the only state to register an increase in median household income during 2011, according to the U.S. Census Bureau’s most recent figures. But before hailing the state as a paragon of economic growth, Vermont economists say it is important to look at margins of error in the results.
The 2011 American Community Survey, released by the Census Bureau last week, showed a 4 percent increase in Vermont’s median household income bringing the number up by about $2,000 to $52,776. The Green Mountain State ranked 20th nationally. The margin of error, however, is also 4%, meaning it’s possible median income didn’t rise at all.
Richard Heaps, an economist at Northern Economic Consulting, Inc. and Tom Kavet, State Economist and Principal Economic Advisor to the Vermont Legislature, were hesitant to draw conclusions from the Census Bureau data, pointing out that sample sizes for small states during national level surveys are often too small to be error proof.
“The error terms for small states can be horrendous,” according to Kavet.
Richard Heaps said he wasn’t surprised to see Vermont at the top of household income growth, but he noted, “They U aren’t going to spend as much time on states like Rhode Island, Wyoming and Vermont. They’ll apply the same technique to Vermont that they will to bigger states, and it may not work.”
The poverty and health insurance components of the survey showed similarly rosy stats for Vermont. Both the percentage and overall number of Vermonters living in poverty declined during the past year, but again, the margin of error is equivalent to the percentage of decline (1.6%). Vermont did claim the highest increase in health insurance coverage for young adults — the percentage of covered 19- to 25-year-olds rose from 75.2 percent in 2009 to 89.1 percent in 2011.