American Dream of Homeownership: Alive in Red States, Dead in Blue States
Null Hypotheses
1. There is no statistically significant correlation between Red States and homeownership rates.
2. There is no statistically significant correlation between Blue States and homeownership rates.
Alternative Hypotheses
1. There is a statistically significant correlation between Red States and homeownership rates.
2. There is a statistically significant correlation between Blue States and homeownership rates.
Statistical Correlation Measure
The statistical correlation measure used herein is the Pearson product-moment correlation coefficient (denoted by r) which measures the linear correlation between two variables X and Y, giving a value between -1 and +1. The closer the r statistic is to +1, the greater the positive correlation between two variables. The closer the r statistic is to -1, the greater the negative correlation between two variables.
For purposes of this study, an r statistic of +1 would indicate a perfect positive correlation between strongly partisan Republican or Democratic states and homeownership rates. Alternatively, an r statistic of -1 would indicate a perfect negative correlation between strongly partisan Republican or Democratic states and homeownership rates.
An r statistic of 0 indicates no statistical correlation between partisanship and homeownership rates.
Data
X variables are the Cook Partisan Voting Index (CPVI) measurements of how strongly a U.S. state leans toward one political party compared to the nation as a whole. Y variables are homeownership rates in each U.S. state (the percentage of owner-occupied homes per state).
Critical Value Range
-.28 to .28 (49 degrees of freedom at an alpha of .05; two-tailed test)*
*Explanation: In order to reject either null hypothesis and accept the corresponding alternative hypothesis, the r statistic for X and Y must be < -.28 or > .28. In such a case, there is a 95% probability that the correlation did not simply occur by mere chance. Any r statistic between -.28 and .28 indicates no statistically significant correlation between X and Y.
Findings
Red States r = .55
Blue States r = -.55
Conclusions
The alternative hypotheses are accepted because the respective r statistics of -.55 and .55 are substantially outside of the critical value range of -.28 to .28.
The more Republican a state, the higher its homeownership rate, and the more Democratic a state, the lower its homeownership rate.
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Source(s):
"Cook Partisan Voter Index by State," The Cook Political Report
"Homeownership Rates, 2007" U.S. Census Bureau
Published by J.C. Grant
A writer interested in education, finance, health, history, law, music, polemics, politics, satire, sports, statistics, travel, and trivia. View profile
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9 Comments
Post a CommentWhile I would expect this to be the case, I've yet to figure out this correlation business. Looking at that US Census data, I'm surprised at the amount of homeowners. Then I remember that they aren't technically homeowners, since the majority of them are surely still paying off that mortgage. Funny how we call them owners when the bank in fact, owns their home.
Amazing work you put together JC!
Very nice, great job.... :o)
Keep up these great pieces JC. Your research and statistical info are invaluable,
This makes sense, J.C., for a number of reasons. Analysts, I think, have known with some certainty for a time that red-staters are more prosperous than the blue-staters. Look at it this way. Blue states: generally more urban with more population, which means increased crime rates and home prices due to bigger population (CA, NY, especially), which in turn means less affordability. Red states, for the most part: lower crime (perhaps due to gun ownership?), lower population equals less demand so prices are more affordable.
Fascinating. Think of all those unhappy blue staters in rentals, with higher crime rates, weaker job markets, etc. Great report.
These relationships are so fascinating! Personally, I don't really understand the preoccupation some have with owning a home; I can understand having a financial desire, but the whole idea of there existing an intangible satisfaction derived from being a homeowner is lost on me. Great report, nevertheless! :)
Tennessee is ranked 31 out of 50. Homeownership rate 70.2%.
I think there are a lot more renters in this republican state than the stats show.