For Immediate Release: November 16, 2004

More economic freedom means thousands of dollars to the average working American

SAN FRANCISCO – The Pacific Research Institute (PRI) today released the U.S. Economic Freedom Index: 2004 Report, a ranking of economic freedom in the 50 states. Published in association with Forbes, the index scores states based on more than 100 variables, including regulatory and fiscal obstacles imposed on residents.

Kansas, ranked tenth in 1999, has assumed the lofty spot as the nation’s most economically free state, followed closely by Colorado and Virginia. Idaho, at the top of the 1999 list, remains high at fourth. Rhode Island, Connecticut, California, and New York bring up the rear.

Authored by Ying Huang and Robert E. McCormick of Clemson University and Lawrence J. McQuillan of PRI, the report shows how economic freedom affects Americans’ bottom line. It reveals that a 10-percent improvement in a state’s economic freedom score yields, on average, about a half-percent increase in annual income per capita.

If all states ranked as free as Kansas, the annual income of an average working American would rise 4.42 percent, or $1,161, putting an additional $87,541 into his or her pocket over a 40-year working life. This would be a sizable addition to individuals’ private retirement accounts.

“The index is an important tool for policymakers and for improving public understanding of the link between economic freedom and financial prosperity,” said project director Dr. Lawrence J. McQuillan, also director of Business and Economic Studies at PRI. “It is our hope that this index will contribute to future policy reforms that will strengthen and preserve economic freedom for all Americans.”

The 2004 index updates and refines the seminal report Economic Freedom in America’s 50 States, published by the State Policy Network in 1999.

“The Pacific Research Institute is proud to publish this important study of economic freedom,” said PRI president and CEO, Sally C. Pipes. “The U.S. Economic Freedom Index complements PRI’s mission to promote individual liberty.”

The best places to start businesses and find jobs are in states with the fewest regulatory and fiscal roadblocks, everything else considered. The report confirms that the most economically free states are experiencing population growth, as Americans are moving to states that have the most business- and job-friendly climates.

The U.S. Economic Freedom Index is available at by clicking here or at amazon.com.

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About PRI For more than two decades, the Pacific Research Institute for Public Policy (PRI) has championed individual liberty through free markets. PRI is a non-profit, non-partisan organization dedicated to promoting the principles of limited government, individual freedom, and personal responsibility.