2016 Utah City

Benchmarking Analysis

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FORWARD

We are pleased to share with you this analysis conducted by five graduate students at
Brigham Young University’s MPA program: Haley Beckstrand, Meiyi Chen, Lauren Flores,
Travis Lish, and Luke Webster. This analysis was completed using data collected as part of
the ongoing Benchmarking effort initiated by the Utah City Managers Association.

Over the years we have provided analytical reports as well as software templates to assist
local government in understanding the data that is collected. This report continues in that
tradition.

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EXECUTIVE SUMMARY

This benchmarking report was assembled to identify and analyze economic and revenue
factors that influence overall city growth and development. The key questions asked in this
analysis seek to describe which factors influence economic growth the most in order to
identify fiscal performance cluster by cluster.

DATA AND METHODS

The data for this analysis comes from the Utah Benchmarking Project’s Utah City Data. The
data was analyzed using bivariate and multivariate linear regression because each dependent
variable of interest was interval level data. The key variables examined were people per
housing unit, non-residential building permits, growth in residential housing, centrally
assessed property value, and median household income. These dependent variables were
analyzed using several independent and control variables such as population, cluster, year,
and taxes.

FINDINGS

Many significant relationships were identified after running several bivariate and multivariate
linear regressions. Our first test found that income and new residential growth, affect the
average number of persons per housing unit. Another test found that high growth cities,
percentage of new residential dwellings, year; and Salt Lake City, are the factors that
influence business growth the most. Another test found that commercial centers, high
growth cities, and year influence percentage change in dwelling units the most. Our last test
found that population and new non-residential construction value influence median income
the most.

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CONTENTS

FORWARD ...........................................................................................................i

EXECUTIVE SUMMARY....................................................................................ii

DATA AND METHODS ..................................................................................ii

FINDINGS........................................................................................................ii

INTRODUCTION: A TALE OF UTAH CITIES .................................................. 1

DATA ............................................................................................................... 1

SAMPLE AND SAMPLING METHODOLOGY .......................................... 2

DATA CLEANING PROCEDURES ............................................................. 2

1. DOES THE NUMBER OF PEOPLE PER HOUSING UNIT (HOUSEHOLD

SIZE) IMPACT ECONOMIC CHARACTERISTICS? .......................................... 3

IT STARTS AT HOME ..................................................................................... 3

SEARCHING FOR SIGNIFICANT DEPENDENT VARIABLES ................ 4

HOUSEHOLD SIZE’S AFFECT ON OTHER VARIABLES ............................. 4

HOUSEHOLD SIZE’S AFFECT ON INCOME ............................................ 5

HOUSEHOLD SIZE’S AFFECT ON RESIDENTIAL HOUSING ................ 5

SUMMARY OF FINDINGS ............................................................................. 5

2. WHAT FACTOR INFLUENCES COMMERCIALIZATION THE MOST? ..... 6

NON-RESIDENTIAL BUILDING PERMITS .................................................. 6

CONTROL VARIABLES .............................................................................. 6

RESULTS OF MULTIVARIATE TEST ........................................................ 6

SUMMARY OF FINDINGS ............................................................................. 7

3. WHAT FACTOR INFLUENCES RESIDENTIAL GROWTH THE MOST? .... 8

PERCENT CHANGE IN NEW DWELLINGS ................................................. 8

CONTROL VARIABLES .............................................................................. 8

RESULTS OF MULTIVARIATE TEST ........................................................ 8

SUMMARY OF FINDINGS ............................................................................. 9

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4. WHAT FACTOR INFLUENCES CENTRALLY ASSESSED VALUE THE
MOST?.................................................................................................................. 9

CENTRALLY ASSESSED VALUE ................................................................ 10

CONTROL VARIABLES ............................................................................ 10

RESULTS OF MULTIVARIATE TEST ...................................................... 10

SUMMARY OF FINDINGS ........................................................................... 11

5. WHAT FACTOR INFLUENCES MEDIAN HOUSEHOLD INCOME THE

MOST?................................................................................................................ 11

MEDIAN HOUSEHOLD INCOME ............................................................... 12

RESULTS OF MULTIVARIATE TEST ...................................................... 12

SUMMARY OF FINDINGS ........................................................................... 13

CONCLUSION .................................................................................................. 14

OVERALL SUMMARY OF FINDINGS ........................................................ 14

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INTRODUCTION: A TALE OF UTAH CITIES

The main purpose of our analysis was to discover interesting relationships within the data
relating to demographics and financial outcomes. Our team focused on discovering factors
that influenced

Households Size
Non-Residential Growth
Residential Housing
Centrally Assessed Value Property
Median Income

DATA

The unit of analysis for this study is a given city plus an accompanying year. Each city plus
year is also sorted into a cluster in which it sits with other similarly sized cities. Overall, there
are a total of twenty-three clusters. Relatively all of our data is numerical. Meaning that our
data is interval and appropriate for linear regression.

In order to have consistency within our findings, we used Cluster “M” as a reference
category. Cluster M contains cities that are relatively new. In order to make interpretation of
our findings easier, we have included a chart of all the clusters along with various cities that
are representative of the clusters.

Cluster A Major Cities Draper, Layton, Murray, Ogden

Cluster B Commercial Centers American Fork, Bountiful, Brigham City, Cedar City
Cluster C High Growth Bluffdale, Eagle Mountain, Heber City, Herriman, Lehi
Cluster D Residential Transitioning Ballard, Bear River, Charleston, Daniel
Cluster E High Income Residential Alpine, Cedar Hills, Centerville, Elk Ridge
Cluster F Urban Edge Cities Clinton, Farr West, Harrisville, Marriott-Slaterville
Cluster G Resort Communities Alta, Brian Head, Bryce Canyon, Garden City
Cluster H Natural Resource Based Blanding, Castle Dale, Cleveland, Duchesne
Cluster I Old Established Annabella, Aurora, Ceterfield, Clarkston
Cluster J Traditional Agricultural Beaver, Coalville, Corinne, Delta
Cluster K Small Towns Altamont, Alton, Amalga, Antimony
Cluster L Capital City Salt Lake City
Cluster M “New Cities” Black Rock, Plain, Spring, Sunnyside

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SAMPLE AND SAMPLING METHODOLOGY

Utah City Data is collected in order to provide local governments with a “benchmarking
system” to help local governments make strategic planning, performance improvement, and
service delivery related decisions. This database comes as a result of a joint effort between
the Utah City Managers Association (UCMA), Utah League of Cities and Towns (ULCT),
the University of Utah’s Center for Public Policy & Administration, and Brigham Young
University’s Romney Institute of Public Management.

Data is gathered from multiple databases such as the United States Census, Bureau of
Economic and Business Research database, Property Tax Division, and a Utah city data
survey. The data was organized into several comma separated value sheets labeled with data
concerning water, taxes, roads, police services, parks, fire services, etc.

DATA CLEANING PROCEDURES

In order to keep as many observations as possible, we selected variables from the city data
database that ultimately had the most responses. We also omitted a number of cities from
our data, mostly smaller cities, which did not have complete reporting for the various
variables analyzed. We were not able to make assumptions based on the cities with missing
data. However, we ultimately feel that the approach we took left us with the highest amount
of observations we could have.

Following data cleaning, there were 1035 observations (cities by year) in this dataset. Each
city-year combination is also sorted into a cluster in which it sits with other similar cities.
The cluster designation was provided by the Utah League of Cities. Overall, there are a total
of twenty-three clusters. Relatively all of our data is numerical. In this analysis, we have a
number of five key variables: people per housing unit (household size), non-residential
building permits (commercial growth), growth in residential housing, centrally assessed
property value (infrastructure), and median household income. We test these dependent
variables against key independent variables such as number of housing units, population
estimates, and median household income.

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1. DOES THE NUMBER OF PEOPLE PER HOUSING UNIT (HOUSEHOLD
SIZE) IMPACT ECONOMIC CHARACTERISTICS?

In this section, we focus on housing units, population, and specifically, the average number
of persons per housing unit for each observation (i.e. city and year). By using the average
number of persons per housing unit (household size) as an independent variable in multiple
tests, we seek to discover how impactful this variable is on economic factors.

IT STARTS AT HOME

We began our study keeping in mind that generally, family structures, living arrangements,
and relationships often play critical roles in child development and are sometimes consistent
across socioeconomic classes. If we are able to identify which external characteristics of a
city’s household size affects, those findings may be relevant to city decision makers. That is,
household size may become something that cities are interested in supporting or influencing
because of its impact on other economic factors.

An indicative impact correlated to the number of people per housing unit may hold the key
to better understanding the impact that neighborhoods and communities have on economic
development. This theory provides the leap from a single housing unit to a city’s full
financial footprint and the interplay that is potentially present. Substantiating such a leap
would provide definite proof that there is an impact. Furthermore, such a finding would
create the necessity to conduct more narrowed studies on the “how” and “why” the impact
occurs. By running multiple bivariate linear regressions, we seek to discover if any
correlations exist within our data.

The data for this section does not differ; however, the added variable of ‘the average number
of persons per housing unit average’ was created from two existing independent variables:
Population and Number of Housing Units. This new variable was created by dividing the
variable ‘Population’ in each observation by the variable ‘Number of Housing Units.' For
this sub-section analysis, we use the newly created independent variable, for our multiple
bivariate linear regression tests. This test determines whether Household size significantly
affects each dependent variable.

We used bivariate linear regressions to determine which, if any, dependent variables were
significantly impacted by the average number of persons per housing unit. By singling out
each dependent variable, we in essence identify affected factors, which create opportunities
to explore further how Household size affects them.
SEARCHING FOR SIGNIFICANT DEPENDENT VARIABLES

We were interested in determining which dependent variables in our data set were impacted
by Household size. To do this, we ran thirty-five individual bivariate linear regression tests.
The table below displays the variables that were identified as having a significant relationship
with Household size.

adjusted
Variable t-value p-value Relationship
R-squared
C: High Growth Cities 0.035 6.165 0.000 POSITIVE
E: High Income Cities 0.014 3.896 0.000 POSITIVE
K: Small Towns 0.01 -3.411 0.000 NEGATIVE
Median Household Income 0.044 6.98 0.000 POSITIVE
New Residences 0.044 6.993 0.000 POSITIVE
Residential Construction Value 0.024 5.152 0.000 POSITIVE
Total Construction Value 0.004 2.287 0.022 POSITIVE
Year 0.006 -2.734 0.006 NEGATIVE
¹35 Bivariate linear regressions were conducted, 8 were shown to have significance.
²Number of observations: 1034

HOUSEHOLD SIZE’S AFFECT ON OTHER VARIABLES

After narrowing the field down to only variables with individual bivariate tests, we next ran
regressions for each of the variables that were identified as significant from our bivariate
tests, controlling for all other variables in our data set. The results of those tests are below.

t-value p-value Relationship

C: High Growth Cities 2.522 0.000 POSITIVE
E: High Income Cities 1.019 0.308 NONE
K: Small Towns -0.084 0.933 NONE
Median Household Income 2.859 0.004 POSITIVE
New Residences 3.045 0.002 POSITIVE
Residential Construction Value -1.444 0.149 NONE
Total Construction Value 0.269 0.788 NONE
Year -1.371 0.171 NONE

¹8 individual Multivariate linear regression tests were conducted, controlling for all other variable in the
data set.
²Number of observations: 1034

Although three variable were shown to correlate significantly with household size, we focus
on the number of new residences and average median income. Cluster C, High Growth, was

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also identified in our multivariate linear regression testing as having a positive significant
relationship with Household size; however, the cluster variables relevant to our particular
inquiry because the clusters represent groupings based on multiple contributing factors and
measurements. To simplify any conclusions, we hope to draw we chose to set aside Cluster
C in our overall analysis of results.

HOUSEHOLD SIZE’S AFFECT ON INCOME

Median Household Income is a measure of the average total income per household within a
city for a given year. Household size’s positive correlation with income is interesting because
it suggests that for every one unit increase in Household size, Income increases by 643.86
units (t=2.859, p=0.004). What is also interesting is that the R-squared value of the
multivariate linear regression tests is 0.639 with an adjusted R-squared = 0.627. This
indicates that about 62.7 percent of the variation in Income is due in part to Household size.

What this means is that if a city has on average more people living in each house/housing
unit, i.e. bigger families, multi-generational families, or other co-habitation configurations,
then that city is likely to also have a higher median household income. This is interesting
because it supports the suggestion that larger families raise influence higher income or it
could suggest that groups of people cohabitating are doing so to pool resources.

Overall, we believe it is fair to say that high occupancy within housing is likely to suggest
higher income. Perhaps this is less interesting if we consider the reasonable assumption that
heads of households that have more children are motivated to achieve a higher income, or
that multiple people living together are likely to have multiple contributing incomes.

HOUSEHOLD SIZE’S AFFECT ON RESIDENTIAL HOUSING

We also examined the effect of household size on the total number of new residential units
created within a city within a year. Holding all other variables constant, Household size has a
statistically significant positive relationship with the creation of new residential units. For a
one-unit increase in Household size, the number of new residential units increases by 3.241
units, (t=3.045, p=0.002). The suggestion here is that where there is a higher average of
people per housing unit there is also more new residential housing. The R-squared value was
0.878 and adjusted R-squared was 0.873, which indicates that about 87.8 percent of the
variation in residential growth was due to Household size.

This correlation is not sufficient to draw a line of causation between Household size and
residential housing growth, but merely suggests that both are indicative of population growth.
Further testing would need to be accomplished to establish causality and a more strongly
supported correlation that could actually be explained. Nevertheless, the directional
correlation is interesting.

SUMMARY OF FINDINGS

Although the tests we ran did not lend themselves to establishing a definitive explanation of
causality, the positive correlations between our independent variable, Household size and
our dependent variables, Income and residential growth, does provide a starting point for

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further investigation. The effect on Household size is significant because it backs up the
starting point for studying the economic viability of cities all the way back to the individual
housing unit. By identifying the fact that the average number of people living in a single
housing unit does appear to impact new residential growth and the median income, a city
can seek to influence Household size, if possible to garner positive results for communities.

2. WHAT FACTOR INFLUENCES COMMERCIALIZATION THE MOST?

In this section, we focus on economic development and business and industrial growth. It is
important for cities to identify the factors that may lead to increased commercialization and
growth. We thought that commercialization would be an interesting measure to analyze
business growth at the state level and compare growth among individual cities. The variable
for development we examined is the number of non-residential building permits issued
annually.

NON-RESIDENTIAL BUILDING PERMITS

We are interested in the factors that increase the number of non-residential permits in a city
as a measure of commercialization. We are particularly interested in whether the character of
a city (i.e. its cluster classification) or other factors like population, median household
income, or residential growth has a greater effect on commercial growth as measured by
building permit activity.

New non-residential building permits issued was likely a count of the number of permits
issued that year, and then reported to the state auditor. The mean number of permits is 27.34,
with a median of 9 and a mode of zero. Based on our sample, we expect the actual average
number of permits to be somewhere between 24.67 and 30.01 (95 percent confidence
interval). These results suggest that most cities in Utah are commercially growing gradually
but probably not rapidly. The mode of zero suggests that many cities, especially smaller cities,
issued no permits in a given year.

CONTROL VARIABLES
The first independent variable selected was population because we wanted to see if larger
cities had an advantage in non-residential growth. Then we controlled for median household
income to see whether or not wealthier cities are growing commercially at a faster rate than
less wealth cities. We also included values for commercial and industrial land in order to
determine if cities with more and higher value would influence non-residential growth. We
also controlled for residential growth, using the variable percentage of new dwelling units, to
see if it affects commercialization. We also included year and clusters to see if there was any
correlation among certain types over certain periods of time.

RESULTS OF MULTIVARIATE TEST

Four main variables correlate with non-residential permits: Capital City (L), year, High
Growth Cities (C), and Percentage of New-Dwelling Units.

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Variable Correlation Results
Capital City (L) Negative t= 3.082
p= 0.002
Year Negative t= -7.322
p<0.0001
High Growth Cities (C) Positive t=2.591,
p=0.01
Percentage of New Dwelling Units Positive t=2.972,
p=0.003
*One multivariate linear regression was used
**Control variables include: Cluster, Building primary residential, Centrally Assessed Value,
Income, Land (Commercial & Industrial), Population, and Total Construction Value.
***Number of observations: 1034

The R-squared value was 0.5213, which means that about 52% of the variability is explained
by this model. There are other factors and variables that need to be controlled for in order to
explain the other half of the variability.

Holding all other variables constant, Capital City (L) has a statistically significant negative
relationship with non-residential permits. For a one-unit increase in L, non-residential
permits decreased by 96.485 units (t=3.083, p=0.002). Capital City (L) only includes Salt
Lake City. Since cluster L is a binary variable, the results suggest that being a part of cluster L,
or being Salt Lake, greatly decreases the number of non-residential permits issued. This tells
us that perhaps because Salt Lake is so large already, its commercial growth does not come
as heavily from non-residential construction.

Holding all variables constant, year has a statistically significant negative relationship with
non-residential permits. For a one-unit increase in year, permits decrease by 3.238 units (t-
7.322, p<0.0001). Years include 2006-2014. This result suggests that overall; cities in Utah
are not growing commercially in more recent years compared to the past. The result might
also suggest that the economic downturn may have stalled non-residential growth in the state.

Holding all variables constant, Percentage of New Dwelling Units has a statistically
significant positive relationship with non-residential permits. For every increased percentage
point in new dwelling units, non-residential permits increase by 0.021 (t-2.972, p=0.003).
Although this number is quite small, it indicates that residential growth and
commercialization are tied together. It would be interesting to look further into this
connection to determine which of the two variables leads the other and how significantly
permit policies could influence commercial growth over time.

SUMMARY OF FINDINGS

This analysis demonstrates that although many variables correlate with non-residential
permits, Cluster C, year, and Cluster L are the factors with great influence. High growth
cities and percentage of new dwelling units correlate positively with permits and year and
Salt Lake negative correlate.

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There are a few variables that would have improved this analysis and helped to explain more
variability in commercialization. One variable that was part of the original data set was
expenditures for housing and community development. We had to remove this variable
because there were too many blanks, but controlling for community development may have
impacted the analysis.

Another variable that was deleted in the original data due to missing data, was building
permit fees revenue. That variable may have been able to inform our analysis on whether the
cost of fees impacts non-residential growth over time and compared cluster to cluster.

Similarly, we deleted business license fees revenue because of the presence of missing data.
This variable may have been a good control variable for this analysis of commercialization.
For future analyses, this may be an area to focus on collecting more data to see if business
license fees impact business growth in a particular area.

Overall, it would be interesting to have some qualitative data on city council policies or
information on local laws dealing with commercial licenses and permits. Knowing if certain
clusters or cities limit or expand permits would help to explain the statistical results.

3. WHAT FACTOR INFLUENCES RESIDENTIAL GROWTH THE MOST?

In this section, we are interested in the impact of economic development on residential

growth in a city. The variable that we examine here is the percentage change in new
residential dwellings. In order to analyze the data we conducted a multivariate linear
regression because our dependent variable is interval.

PERCENT CHANGE IN NEW DWELLINGS

We are interested in the percent change of new dwelling units in cities across Utah. The data
is reported by calendar year as opposed to fiscal year.

CONTROL VARIABLES
We wanted to test which factors have the greatest influence on the percent change of new
dwelling units and selected median household income as a variable that we thought might
correlate. We chose median household income as an independent variable because we
wanted to see if more affluent areas perhaps were building dwellings at a greater rate than
those that were less affluent. We then controlled for total property taxes because we wanted
to see if there was perhaps less growth in areas where residents paid higher total taxes. We
also included primary residential taxes to account for high tax payments in relation to growth
rate of dwellings. We also included year and clusters to see if there was correlation among
certain types of cities over the years of 2006-2014. In order to control for commercialization
construction, we included non-residential permits in our model.

RESULTS OF MULTIVARIATE TEST

The three main variables that correlate with non-residential permits are year, High Growth
Cities (C), and Non-Residential Permits.

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Variable Correlation Results
Year Positive t= 4.175
p= 0
Non Residential Permits Positive t= 2.76
p=0.006
High Growth Cities (C) Positive t=2.283,
p=0.023
*One multivariate linear regression was used
**Control variables include: Cluster, Median Income, Year, Non-Residential
Permits, Property Tax, and Land Primary Residential.
***Number of observations: 1034

Holding all other variables constant, High Growth Cities (C) has a statistically significant
positive relationship with percent change of new dwelling units. For a one-unit increase in C,
percent change of new dwellings increased by 88.221 percent (t=2.283, p=0.023). Cluster C
is described as “high growth” cities in Utah including Lehi, Eagle Mountain, South Jordan,
and Heber City. This positive relationship follows logically because a high growth area would
certainly attract a growing percentage of new dwelling units.

Holding all variables constant, year has a statistically significant positive relationship with
percent change of new dwelling units. For a one-unit increase in year, permits increase by
8.294 units (t=4.175, p=0). The years analyzed in this data set are 2006-2014. This result
suggests that over this period of time, as the years progress, Utah is increasing in growth of
number of dwelling units built across the state. This is a very positive finding, especially after
the downturn of the great recession.

Holding all variables constant, Non-Residential Permits issued has a statistically significant
positive relationship with percent change of dwellings. For a one-unit increase in non-
residential permits, the percent change of new dwellings increase by 0.368 units (t=2.76,
p=0.006). Although this number is quite small, it indicates that there is some connection
between commercialization and residential growth.

SUMMARY OF FINDINGS

There are a number of limitations to this model. We would have liked to explore variables
such as land available in each cluster for development. We have also not been able to
account for zoning ordinances or other municipal policies that make it difficult for
developers to build dwellings within city boundaries. We propose that these variables be
included into the next phase of the Utah City Data Project collection.

4. WHAT FACTOR INFLUENCES CENTRALLY ASSESSED VALUE THE

MOST?

In this section, we focus on Centrally Assessed Value (CAV) and how it correlates with
other economic development variables. We ran a multivariate linear regression model

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because the independent and dependent variables are interval data. We are interested in
being able to better predict which cities are more likely to have high CAV’s as well as the
cities where CAV is likely on the rise.

CENTRALLY ASSESSED VALUE

We are interested in understanding which variables most highly contribute to having a high
Centrally Assessed Value. CAVs consist of telephone wiring, gas lines, airports, railways, and
other infrastructure developments. We are particularly interested in finding which variables
will most correlate with CAV.

The mean for this variable is $40,248,786.74, with a median of $6,895,393. Based on these
numbers alone, we know that there are a few cities that are significantly increasing the mean
CAV, but that the majority of cities have much lower CAVs. The city with the highest CAV
(Salt Lake) has a value of $2,147,483,647.00 while the city with the lowest CAV (Central
Valley) has a value of $89,242.00

CONTROL VARIABLES
We wanted to control for all other variables to be sure which variable was having the biggest
impact on CAV. Our independent variables are total construction value, new residential
permits, new total construction, year. We also included a series of variables representing
residential housing, commercial business, industrial taxes, and clusters (A-L). By controlling
for all variables, we are able to account for a higher percent of the variation.

RESULTS OF MULTIVARIATE TEST

Controlling for many different variables, we are able to get a good idea of what is most
highly correlating with CAV. The following table shows the results as given in R:

Variable Correlation Results

Total Construction Value Positive (t=3.401, p=.001)
Property Tax Positive (t=7.526, p=0)
Land Commercial, Industrial Positive (t=2.15, p=.032)
Tax
Building Primary Residential Positive (t=2.448, p=0.015)
Tax
Cluster L Positive (t=11.566, p=0)
New Residential Value Negative (t=-3.144, p=.002)
Residential Construction Negative (t=-2.476, p=.013)
Value

*There was no correlation found with the following variables: Population, Percent Total
Construction, Percent Total Construction, Percent New Residential Construction, Percent
New Dwelling Units, Housing, New Residential, Land Total Residential, Land Secondary

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 Residential Tax, Land Primary Residential Tax, Year, Building Secondary Residential Tax,
Building Total Residential Tax, Income, Building Commercial, Industrial Tax, Clusters (A-H).

Holding all other variables constant, Salt Lake City (L) has a statistically significant positive
relationship with CAV. For being Salt Lake City, CAV increases by $1, 283,044,957.25
(t=10.103, p=0). Total Construction Value also has a statistically significant positive
relationship with CAV and for a one dollar increase in Total Construction Value, CAV
increases by $1,217.62 (t=3.403, p=.001). Property Tax also has a statistically significant
positive relationship with CAV and each unit increase in Building Primary Residential Tax
increases the CAV by .095 units (t=3.724, p=0). A Commercial/Industrial) land taxes
increase CAV also increases by .133 units.

Residential Construction Value has a statistically significant negative relationship with CAV.
For each unit increase in Residential Construction Value, CAV decreases by $182.65 (t=-
2.48, p=.01). New Residential Value also has a statistically significant negative relationship
and each unit of New Residential Value decreases CAV by $1,255.12 (t=-3.144, p=.002).
The final value that has a significant negative relationship with CAV is Building
(commercial/industrial) Tax and for a one unit increase in Building (commercial/industrial)
Tax, CAV decreases by .081 units (-3.276, p=.001).

These results lead us to believe that areas that are well established are more likely to have
high CAVs. Cities that have high values of new residential growth have negative
relationships with CAV. Salt Lake City (Cluster L) was the first city that was established in
Utah and became the crossroads of the west. Because of its age and established nature, more
public services, railroad companies, airline, and car companies have been established to meet
the needs of the area.

SUMMARY OF FINDINGS

There are four variables that would have enhanced this study. We would have liked to look
at Total Roads (Expenses & Total Value), Total Railways (Expenses & Total Value), Total
Airports (Expenses & Total Value), and Total Expenses of Maintaining Centrally Assessed
Property. These variables would have been interesting in order to see where Cities were
spending the majority of their funds and how expensive it is to maintain the infrastructure
that they are investing in. It would also be interesting to see what types of infrastructure are
attracting more businesses and also which types of infrastructure is being built first in
response to population and city growth.

5. WHAT FACTOR INFLUENCES MEDIAN HOUSEHOLD INCOME THE

MOST?

In this analysis, we are interested in how economic development changes exert impact on
personal fiscal performance, comparing cluster by cluster. We focused on Median Housing
Income and tried to identify how other economic development variables impact it. We ran a
multivariate linear regression model because the dependent variable consisted of interval

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data. We are interested in discovering whether the increase of the Residential Construction
Value and Non Residential Value will ultimately lead to a higher Median Housing Income.

MEDIAN HOUSEHOLD INCOME

The median household income can be one of the indicators of fiscal performance of a given
area. We are interested in finding which variables of economic development (here defined as
New Residential Construction Value, New Non-residential Construction Value, and
Population) exert huge impact on personal fiscal performance.

RESULTS OF MULTIVARIATE TEST

Major Population Centers (A) No relationship

Commercial Centers (B) Negative t=-2.927, p=0.003
High Growth (C) No relationship
Residential Transitioning (D) No relationship
High Income (E) Positive t=5.596, p=0.000
Urban Edge Cities (F) No relationship
Resort Communities (G) Negative t=-4.336, p=0.000
NR/Mining Based (H) Negative t=-7.088, p=0.000
Old Established (I) Negative t=-6.664, p=0.000
Traditional Aged (J) Negative t=-7.453, p=0.000
Small Town (K) Negative t=-7.823, p=0.000
Capital City (L) Positive t=2.685, p=0.007
Year Positive t=4.634, p=0.000
Population Positive t=3.998, p=0.000
Housing Units Negative t=-5.69, p=0.000
New Non Residential Construction Value Positive t=2.539, p=0.011
New Residential Construction Value Positive t=3.69, p=0.000

Holding all other variables constant, commercial centers (B) have a statistically significant
negative relationship with Income. Being a commercial center city decreases income by
$9,054.25.(t=-2.927, p=0.003). Holding all other variables constant, high-income cities (E)
has a statistically significant positive relationship with income. Being a high-income city
increases income by $16,993.66 (t=5.596, p=0.000).

Holding all other variables constant, resort communities (G) has a statistically significant
negative relationship with income. Being a resort community decreases income by
$14,893.76 units (t=-4.336, p=0.000). Holding all other variables constant, N/R mining
based cities (H) has a statistically significant negative relationship with income. Being a
minding city decreases income by $21,876.84 units (t=-7.088, p=0.000).

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Holding all other variables constant, old established cities (I) has a statistically significant
negative relationship with income. Being an old established city decreases income by
$20,526.20 (t=-6.664, p=0.000).

Holding all other variables constant, traditional-aged cities (J) has a statistically significant
negative relationship with Income. Being in Cluster J decreases income by $23,133.48 (t=-
7.453, p=0.000).

Holding all other variables constant, small towns (K) has a statistically significant negative
relationship with Income. Being a small-town decreases income $23,242.97 (t=-7.823,
p=0.000).

Holding all other variables constant, capital city (L) has a statistically significant positive
relationship with income. Being Salt Lake City increases income by $31,810.49 (t=2.685,
p=0.007).

Holding all other variables constant, year has a statistically significant positive relationship
with Income. For every progressive year, income increases by 773.35 units. (t=4.634,
p=0.000).

Holding all other variables constant, population has a statistically significant positive
relationship with Income. For a every additional person, income increases by $0.44 (t=3.998,
p=0.000).

Holding all other variables constant, housing units has a statistically significant negative
relationship with income. For every additional housing unit, income decreases by $2.12 (t=-
5.69, p=0.000).

Holding all other variables constant, New Non Residential Construction Value has a
statistically significant positive relationship with Income. For every dollar increase in New
Non Residential Construction Value, income increases by $0.10 (t=3.69, p=0.000).

SUMMARY OF FINDINGS

The analysis shows that the larger the population, the higher the median household income.
The more people in the city, the higher salaries median households make.

The variable “New Non-Residential Construction Value” has a significant positive impact on
Median Household Income. New Residential Construction Value has a positive impact on
the Median Household Income as well.

The tests show that high-income cities (Cluster E) and the Capital City (Cluster L) have a
positive correlation with Median Household Income. This finding is not surprising, but what
is surprising is that the test also shows that commercial centers (B), Resort Communities (G),
Natural Resourced Based (H), Old Established (I), Traditional Aged (J), and Small Towns
(K) have significant negative correlations with Median Household Income.

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CONCLUSION

This analysis explored several variables from the Utah Cities Benchmark data. Overall, cities
should explore the data to understand its true useful of the data for guiding municipal
management and policy decisions.

OVERALL SUMMARY OF FINDINGS

Many significant correlating relationships were identified after running several bivariate and
multivariate linear regressions. The first test found that income and new residential growth,
affect the average number of persons per housing unit. The second test on
commercialization found that Cluster C: High growth cities, year; percentage of new
dwelling units; and Cluster L: Salt Lake City, are the factors that influence business growth
the most.

Our third test on residential growth found that Cluster B: Commercial centers, Cluster C:
High growth cities, and year influence percentage change in dwelling units the most. Our
fourth test on centrally assessed values found that Total construction value, capital city (L),
and residential construction value affect centrally assessed value the most. Our final test
found that population and new non-residential construction value influence median income
the most.

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