Insights from the Digital Advancement Muni Index
Updated: May 18, 2022
What’s in a number? Your city’s score will tell you a lot. The average score is 100. So if your city is at 110 and you’d like to be closer to 135, let’s say, the four categories can help you see where your relative weakness might be. It might be tempting to throw more tech at the problem, e.g., find ways to get more people online with broadband and more computers. Yet, the index may show your city is above-average in technology metrics, but below-average in housing. Easing housing costs might be the place to start to improve your city’s overall score.
For additional background on how scores are calculated, please refer to the Muni Index Methodology, or feel free to send us your questions in the chat box in the bottom right.
In other words, it’s not just one thing that matters to a city, it’s a range of factors. The Digital Advancement Municipal Index (Muni Index) is based on the following premise: Expansion in the availability, adoption, and quality of digital tools is the foundation for a vibrant and growing city, but digital access and affordability works jointly with other factors that influence quality of life.
This means that a city’s efforts to improve various tech metrics, while necessary, are not sufficient to foster social and economic growth. For this index, the choice of metrics is designed to capture an appropriate range of items that matter to a city’s prosperity. Statistical analysis shows that the 16 Digital Advancement indicators do a fairly good job of explaining the variation in median household income across the cities included – about 80%*. In other words, if the question at hand is to explain the gap in median household income between Cambridge, MA (nearly $120,000 in 2019), and Austin, TX (about $75,000 in 2019), the indicators in the Muni Index explain a great deal of it – nearly 80%. But we want more from the Muni Index than just what explains variation in median income.
A key question is: To what extent do the indicators represent levers to pull to change a city’s prospects, and which matter more? By design, all indicators chosen for the Muni Index influence a city’s overall score. None of the indicators are weighted. However, some metrics exert more influence than others.
For example, let’s look at the relationships between the Muni Index’s metrics and its overall scores. Analysis of the data suggests the following about what matters to scores:
Cultivate youth: Ensuring children have health insurance and that teens have constructive ways to occupy their time (i.e., reduce the number of teens not working or not in school) both have strong impacts on a city’s index value. Encouraging college students to major in STEM fields also helps a city’s score, but it is not nearly as important as ensuring that children have health insurance and that teens have something to constructively occupy their time.
Invest in better networks, but also prioritize digital inclusion: Cities with above-average network speeds are also cities that attract other kinds of investment. Faster networks, along with higher rates of home broadband and computer adoption, yield higher scores. It is worth noting the measure of the “cell only” population in a city captures digital inequality. But the share of households with “cell only” access has a much greater negative impact on a city’s score than greater speeds have a positive impact. In other words, prioritize reducing digital inequality to better your score.
Emphasize diversity: Cities with lower rates of residential segregation and a higher share of foreign-born residents have significantly higher-than-average scores. Residential segregation, which inhibits wealth creation, is an “add on” effect that works jointly with poverty to attenuate digital advancement. Foreign-born residents often have high demand for communications services to keep in touch with their country of origin.
Ease housing costs: Cities with a high share of “rent burdened” households (i.e., they pay more than 30% of their income for rent) have lower scores. Conversely, places with high “home value to income” ratios (which suggests a population accumulating wealth) have higher scores.
From a policy perspective, there is nothing controversial about paying attention to any of these areas. The contribution of the Muni Index, though, is to capture how the indicators work together in helping to define a city’s prosperity and how cities compare to one another across metrics.
*This figure comes from an ordinary least squares regression analysis that regresses median household income on DA Muni Index indicators, excluding the “home value to income ratio” variable.
John B. Horrigan, PhD, is a senior fellow at the Benton Institute on Broadband & Society, an expert on the digital divide and former director of research at the Federal Communications Commission for the National Broadband Plan. He is the principal researcher of the Digital Advancement Muni Index.