GOoPers, Oh So "Generous"

Peter Brown, the Orlando Sentinel's resident wingnut, cites the so-called "Generosity Index" today as some sort of evidence that red state residents are more charitable than blue staters, and the proposition that Dems are less "generous" than GOoPers:

In fact, the study by the Catalogue of Philanthropy ranked the 50 states on a "generosity index" that measured charitable giving in comparison to state wealth.

Given that they also rank high on measurements of church attendance -- which correlates with charitable giving -- states in the South, Midwest and Rockies, which President Bush carried against Kerry, would seem likely to rank high on that index. And, in fact, the 25 most generous states in that index all voted for Bush.

This "index", trumpeted by wingers across the net (e.g., Malkin, Freepers, and that ilk) - which explains how Brown discovered it - is of course entirely flawed.

As a preliminary matter, consider the methodology:

Using published data of individual tax returns from the Internal Revenue Service, we compare the rank of each state's average adjusted gross income (AAGI) to the rank of each state's average itemized charitable deductions (AICD). The arithmetical differences between these two rankings are then themselves ranked, resulting in the Generosity Index rank

More precisely,

First, the total AGI (Adjusted Gross Income) for all the returns from each state is divided by the total number of returns from that state to get the average AGI. The states are then ranked from the highest to the lowest average AGI to give a "Having Rank" from the best (1) to the worst (50).

Secondly, the total charitable contributions claimed via itemizing are divided by the total number of returns that itemized such deductions for each state. The states are then ranked from the highest to the lowerst average deduction to give a "Giving Rank" from the best (1) to the worst (50).

Finally, the "Giving Rank" is subtracted from the "Having Rank" to give the "Rank Relation". The states are then ranked from the highest to the lowest "Rank Relation" to give a "Generosity Index" from the best (1) to the worst (50). For example, Mississippi had the lowest average AGI ("Having Index" of 50) but the sixth highest average deduction ("Giving Index" of 6), giving it a "Rank Relation" of 44 (50 minus 6). This was the largest "Rank Relation" giving it the best "Generosity Index" of 1.

(See also "Generosity Index: Technical Notes".) Now we can consider the considerable flaws in the index, which have been noted elsewhere.

First, the "index" is based upon "the federal government's definitions of what charitable giving is, and that includes giving to religious groups, churches and many other institutions." Red state folks might well be expected to donate more money to religious organizations than do blue staters.

Equally important, the "index" does not include the higher cost of living in blue states. Hence, "[t]aking living expenses into account 'certainly. . . would lead you to a different result than if you look at just income,' says Patrick Rooney, an economics professor at Indiana University. 'These things all matter.'" Of course they matter, and failure to account for it necessarily skews results.

Yet another flaw is that the "index" doesn't actually tell us how much people contribute to "charity", but rather which states have more folks that itemize their charitable contributions on their tax returns. Consider, that "[a]n estimated 70 percent of taxpayers don't itemize, so what most of the population gives to charity is unknown." So, all we really are getting is an index showing who itemizes the most - and it is no stretch to guess who those folks are.

More detail of the defects in the "index" are described here:

[T]he first major flaw with this method is that it is comparing apples and oranges. It is comparing the average AGI [Adjusted Gross Income] of all taxpayers in a state to the average charitable deductions claimed by only those who itemized such deductions. This favors states that have a large number of taxpayers with low AGIs who do not itemize. Such taxpayers will pull down the average AGI (and the "Having Rank") but will have absolutely no effect on the charitable deductions claimed (and the "Giving Rank"). The aforementioned xls file shows the percentage of the total number of taxpayers in each state who claimed charitable deductions. As can be seen, of the twenty states with the best generosity indices, all but 4 had LESS than 30% of all taxpayers claim such deductions. Of the twenty states with the worst generosity indices, however, all but 3 had MORE than 30% of all taxpayers claim such deductions. Coincidence?

The second major flaw in this method is subtracting the "Giving Rank" from the "Having Rank" to get the "Ranks Relation". This favors the states with low average AGIs. For example, suppose that all taxpayers in the state with the highest AGI gave all of their money to charity. They would likely earn a "Giving Rank" of 1. Subtracting that from their "Having Rank" of 1, however, would give them a "Ranks Relation" of 0. This would give them a mere average Generosity Index despite the fact that they had given all of their money away. Likwise, suppose that Mississippi had given nothing to charity. That would have earned them a "Giving Rank" of 50 which, subtracted from their "Having Rank of 50, would give the same Generosity Index of 0. In short, the Generosity Index penalizes "rich" states. It's likewise no coincidence that, of the twenty states with the best generosity indices, all but 4 have "Having Ranks" LARGER than 25. Of the twenty states with the worst generosity indices, however, all but 3 have "Having Ranks" SMALLER than 25.

So much for Mr. Brown's assertions about the "generosity" of red staters.