People Voting With Their One-Way U-Haul Rentals

Carpe Diem ^ | 10/8/2009 | Mark J. Perry

[SeekAndFind]

Forbes magazine just released its fourth annual ranking of the best states for business (see full article here and full data set here). According to Forbes:

Our Best States ranking measures six vital categories for businesses: costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life. We factor in 33 different points of data to determine the ranks in the six main areas. Business costs, which include labor, energy and taxes are weighted the most heavily.

Virginia nabbed the top spot with the best business climate in the country for the fourth straight year. Relative to the rest of the country, Virginia is booming. Its 6.5% unemployment rate is fifth lowest in the country with the four states ahead of it all having dramatically smaller economies and employment bases. Virginia is the only state ranked in the top 20 in each of the six broad categories we examined. The state finished in the top three in half of those categories (labor supply, regulatory environment and quality of life).

The two worst states for business this year were Rhode Island, which dropped five full places from last year to finish in last place in 2009, and second-to-last place Michigan, falling from 47th in 2008. Other highlights of the Forbes study include Texas ranking first for “economic climate,” Virginia ranking first for “quality of life,” and some states, such as North Dakota, Oregon, Montana, and Iowa, gaining six places or more from last year’s rankings.

One outcome of the huge differences in business climate among states documented in the Forbes study is that we should expect to see a movement of business, employment and people away from the worst states such as Rhode Island and Michigan to business-friendly states like Virginia, Texas, and North Dakota. Interestingly, one-way truck rental rates from U-Haul confirm this exact movement—see the chart above.

Each of the six paired quotes in the table shows the one-way rental rate for a 26-foot truck from cities in the two worst-ranked states (Detroit, Michigan and Providence, Rhode Island) to cities in some of the highest ranked states (Fairfax, VA; Fargo, ND; and Houston, TX), and rental rates in the opposite direction: from the cities in the business-friendly states to the cities in the business-unfriendly states.

In each of the six city pairs, the one-way truck rental rates going to cities in the business-friendly states are much higher than the rental rates in the opposite direction, by a factor of about 2 to 1 on average. Since the equipment is exactly the same for a one-way rental in either direction (a 26-foot truck), and since the distance is exactly the same, we can assume that U-Haul dynamically prices its one-way rentals based largely on the relative demand for trucks in each direction. If there are about 360 people moving and renting one-way trucks from Detroit to Houston for every 100 people moving from Houston to Detroit, we could then explain a pricing differential of $2,215 for a truck from Detroit to Houston (high demand) that is about 3.6 times higher than the $617 to rent a truck going in the reverse direction (low demand). The other pricing differences in the chart would explain differences in relative demand for the other city pairs.

Therefore, the significant differences in U-Haul one-way truck rental rates complements the Forbes rankings, by suggesting an outmigration of trucks and people from the lowest ranked states, with those people and trucks heading towards the most business-friendly states. Fortunately, the American people and businesses can vote with their feet, and with their one-way truck rentals, and that is apparently what the U-Haul data show they are doing—moving away from places like Detroit and Providence with high unemployment and business-unfriendly environments, to cities like Fairfax, Fargo, and Houston that rank high for business climate in the Forbes study.

[EDINVA]

Heck .. last year ACORN came in an registered college students who do NOT live in VA, no way they should have been allowed to vote here. They aren’t residents any way you look at it. But register and vote they did.

[Vigilanteman]

Fargo is a very nice town, except for the harsh climate. On the other hand, the harsh climate is part of the reason it is such a nice town. As we used to say there, 40 below keeps out the riff-raff. We rented a U-Haul from California (LA area) to North Dakota (Fargo area) back when Mrs. Vigilanteman and I were married a quarter century ago.

At the time, California was a hot spot and North Dakota was shedding population, so we got a great rate. How times have changed!

[OCC]

Driving U-Hauls and rental cars from undesirable to desirable cities has been an economical way for college students to travel for decades!

[XenaLee]

Uh...yeah. We’re ‘gettin it’ from both ends, too.

Swell.

[XenaLee]

Is there a vaccine against liberalism and leftist stupidity yet? Loooong overdue.

[Erasmus]

A couple hundred thou, all expenses paid, and an occaisonal bonus of 1.4 mil.

[Salvey]

They maintain their same old voting patterns to our detriment.

Ironic, isn't it? They leave their liberal hellholes and move to a conservative refuge, and then proceed to bring their old, liberal proclivities into the ballot box, thereby contributing to the process that ultimately converts the new place into another liberal cesspool.

[Oatka]

It would have been interesting to see the data sorted and ranked according to the state government’s ruling political party.

[ThomasThomas]

When I moved to Forth Worth it was cheaper to drive the truck to Oklahoman just across the boarder and fly back to Dallas,

[b359]

“The problem is that those fleeing the crime, corruption, and high taxes in Detroit et al bring it to thei destination states. They do not understand they are fleeing the attitudes that created the cess pits from which they flê. They get to Texas and think it is so much better there but Texas just needs better welfare and more services. Then they vote.”

Exactly, I pity the states that are getting folks with the southeastern michigan union attitude. IMO, it’s the worst part about michigan, of the many things that are wrong. I’m not anti-union. There are union shops in other parts of the state that are outstanding to work with.

[businessprofessor]

You are mistaken. Your comparison of government workers to the Walton heirs is absurd.

While it is true that top talent can make more money in the private sector, very few are top talent. Government employees enjoy above market compensation for all but top talent. You need to include all compensation, especially health care and retirement benefits. The comparison does not even consider the far superior job security in the public sector. Have you ever seen a federal government salary decrease? In this economy, job security is highly valued. In most areas, government will not have any trouble hiring.

[EDINVA]

The disconnect in the ‘minds’ of those people makes me absolutely crazy! And it happens over and over and over again. I expect VA to elect an R gov again this year, but no thanks to the transplants.

[goat granny]

The governor said if she got reelected she would “blow us away” with her leadership....she just blew us up more than we were before....I don’t know why anyone in this state would vote democrat.....we suffer for their stupidity....

[jessduntno]

Over the last 12 years, Massachusetts,
on net, lost 79,031 people to the other New
England states.

The majority of that loss is to New Hampshire, to
which 78,201 former Massachusetts residents, on net,
fled between 1990 and 2002. The fact that Massachusetts
is losing people to New Hampshire is not new,
although the size of the loss has been increasing over
the last five years.