Texas vs. California

Tino Sanandaji has a great post where he demolishes Paul Krugman's argument that Texas really isn't doing any good.

He points out that not only has Texas had higher population growth, but has had stronger growth in employment relative to population and has also had higher per capita growth.

It could be added that while per capita income is still seemingly higher in California than in Texas if you compare nominal income levels, this probably simply reflect a higher cost of living in California and not a higher real income.

The cost of housing in particular is a lot higher in California. In its biggest city, Los Angeles, an average house was priced at $629,000, compared to $198,000 in Houston, the biggest city in Texas. The difference in median rent was a lot smaller, but still quite big, with the median rent being $1,094 in Los Angeles and $809 in Houston.

If you take the lower cost of living in general and lower cost of housing in particular into account, real income is probably higher or at least very similar in Texas compared to California.