Federal Regulations and State Enterprise (FRASE)

Click here to go to our interactive downloader to pull specific FRASE data by state, or click here to go to our bulk downloads page to download a bulk file of all FRASE data

Regulations do not affect everyone equally. A city ordinance that requires all residents to mow their lawns every week, for example, would be far more onerous for those who possessed only push mowers than those who possessed riding mowers. Recent research not only supports this intuition that regulations have an unequal impact on individual people, but it also supports the associated intuition that regulations have an unequal impact on differing jurisdictions and local economies.

The Federal Regulation and State Enterprise (FRASE) index is a way to quantify the unequal impact of federal regulations across the 50 states plus DC. At the federal level, some industries - like Chemical Manufacturing - are highly regulated, while other industries - such as Personal and Laundry Services – are relatively lightly regulated. The stringency and applicability of federal regulations does not typically change from state to state, but the total impact of federal regulations does. All else equal, federal regulations will have a much greater impact on a state with a relatively high proportion of Chemical Manufacturing activity than a state where barely any Chemical Manufacturing activity occurs at all.

The FRASE index measures this aggregate differential impact of federal regulation on state economies by combining federal regulation data with state economic data. Specifically, the relative number of regulatory restrictions imposed by the federal government on each industry (as defined by NAICS 3-figit codes) is indexed to BEA data on the relative proportion of each state’s economy that each industry makes up, and this is aggregated across state economies to quantitatively rank states by how much they are affected by federal regulation.

On this page you will find a selection of resources and information related to FRASE, including:

1) Our FRASE interactive, which links to each of the specific FRASE reports and statistics for each state
2) A sample API call with a brief tutorial on how to use the Python regcensus library to pull data from the API
3) A table with links to various research projects and academic papers that have made use of FRASE data

If you want to learn more about the FRASE index and how the state rankings compare, please click here to visit our FRASE documentation, and here to read the introductory chapter of the full FRASE booklet.

 
 

Journal Articles and Working Papers:

+ The Impact of Federal Regulation on the 50 States

BY: Patrick A. McLaughlin, Oliver Sherouse
DATE: April 2, 2016

Abstract: “The federal regulation and state enterprise (“FRASE”) index ranks the 50 states and the District of Columbia according to how federal regulations affect each state’s economy. Over the past 80 years, the federal government has increasingly relied on regulations as its primary legal output. Although federal regulation applies in the same way in all states, each state’s economy includes a unique mix of industries. As a result, federal policies that target specific sectors of the economy will affect states in different ways.”
+ Regulation and Income Inequality in the United States

BY: Dustin Chambers, Colin O'Reilly
DATE: June 17, 2020

Abstract: “Income inequality in the United States has risen over the past several decades. Over the same period, federal regulatory restrictions have increased. An emerging literature shows that regulations can have regressive effects on the distribution of income, exacerbating inequality. The Federal Regulation and State Enterprise (FRASE) index quantifies the regulatory restrictions that apply to each US state by industrial composition. We construct a panel of 50 US states from 1997 to 2015 to test whether states exposed to more federal regulatory restrictions have higher levels of income inequality. The results indicate that a 10 percent increase in federal regulation is associated with an approximate 0.5 percent increase in income inequality as measured by the Gini coefficient. When states are rank-ordered by average Gini coefficient, a 0.5 percent increase in income inequality will typically result in a two-position decline in state ranking.”
+ Regulation and Poverty: An Empirical Examination of the Relationship Between the Incidence of Federal Regulation and the Occurrence of Poverty Across the US States

BY: Dustin Chambers, Patrick McLaughlin, Laura Stanley
DATE: 24 September 2018

Abstract: “We estimate the impact of federal regulations on poverty rates in the 50 US states using the recently created Federal Regulation and State Enterprise (FRASE) index, which is an industry-weighted measure of the burden of federal regulations at the state level. Controlling for many other factors known to influence poverty rates, we find a robust, positive and statistically significant relationship between the FRASE index and poverty rates across states. Specifically, we find that a 10% increase in the effective federal regulatory burden on a state is associated with an approximate 2.5% increase in the poverty rate. This paper fills an important gap in both the poverty and the regulation literatures because it is the first one to estimate the relationship between the two variables. Moreover, our results have practical implications for federal policymakers and regulators because the greater poverty that results from additional regulations should be considered when weighing the costs and benefits of additional regulations.”
+ Examining the Moderating Effect of Location on Small Business Gross Domestic Product

BY: Susan K Haney
DATE: December 2020

Abstract: “The effect of regulation on business is a frequent subject of business publications and academic studies. Prior studies were limited to a single business or industry, a single aspect of the business, or a single type of regulation. What is not well reported is economic activity using the micropolitan statistical area, specifically, the effect of regulation on small businesses. The present study was designed to address the gap in the literature…The MMR results failed to reject the primary null hypothesis by finding that location (metropolitan or micropolitan) did not moderate the relationship between the regulatory environment and small business GDP. The statistical test results did not find any significant influences of the moderating variable on the relationship between the independent variable, regulation, and dependent variable. Location was a significant positive predictor of GDP (B= 1.92, p< .001), which indicated that metropolitan areas tended to have higher GDP than micropolitan areas.”
+ Individualism, formal institutional environment and bank capital decisions

BY: Mohammad Bitar, Amine Tarazi
DATE: September 15, 2020

Abstract: “We examine the effect of informal institutional environment on bank capital decisions worldwide as well as within the United States at the state level. Specifically, we focus on individualism and based on a sample of 7,034 banks in 68 countries, we establish three major findings: First, individualism is negatively and significantly associated with bank regulatory capital, an association which is independent of the influence of formal institutional environment per se. Second, effective legal enforcement magnifies the negative effect of individualism on bank regulatory capital. Finally, focusing on a single country, the United States, we also find that banks in individualistic states hold less regulatory capital than banks in collectivist states and the effect of individualism is magnified with effective legal enforcement at the state level. Our findings suggest that individualism serves as a constraint on regulators, as any given regulatory guidelines or formal institutional factors will operate very differently depending on the informal institutional environment.”
+ The effects of federal regulations on corruption in U.S. States

BY: Oguzhan Dincera, Burak Gunalpb
DATE: July 25, 2020

Abstract: “Using the newly constructed Federal Regulation and State Enterprise Index (FRASE Index) to measure the federal regulations and the existing Corruption Convictions Index (CCI), we investigate the effects of federal regulations on corruption in U.S. states. Controlling for several demographic and economic variables including the Fraser Institute’s Economic Freedom Index (EFI), which measures the size and scope of government in U.S. states, we find a positive and statistically significant relationship between federal regulations and corruption. Our findings have important policy implications. A 1 standard deviation increase in FRASE Index causes CCI to increase by approximately 0.5 standard deviations. Standardized coefficient of EFI is also approximately equal to 0.5. In other words, it is possible to mitigate the effects of regulations at the federal level by reducing the size and the scope of the government at the state level.”
+ Political Connections and Industry-Level Regulation

BY: Marika Carboni
DATE: September 6, 2017

Abstract: “Industry-level regulation is a main concern for firms. Normally, companies oppose regulation, since they view it as costly and an impediment to business activities. Hence, firms in highly regulated industries should be more interested in being connected with politicians. By exploiting a unique database, this chapter investigates whether listed firms of the most regulated industries in the United States are more likely to be politically connected. Furthermore, it investigates whether listed firms of the most regulated industries are more likely to be politically connected when a recession occurs. To the author’s knowledge, no studies exhaustively investigate the probability of a firm to be politically connected depending on its industry-level regulation. Furthermore, the long period of time (1999–2014) allows to take into account recessions, and hence analyze if this probability changes depending on the phases of economic cycles. The results show that industry-level regulation matters in establishing political connections.”
+ Development of the Fatigue Risk Assessment and Management in High-Risk Environments (FRAME) Survey: A Participatory Approach

BY: Ashley E. Shortz, Ranjana K. Mehta, S. Camille Peres, Mark E. Benden, Qi Zheng
DATE: February 13, 2019

Abstract: “Existing risk assessment tools are not effective or sustainable in identifying Oil and Gas Extraction (OGE) workers at high risk of fatigue-related injuries or incidents. We developed a comprehensive Fatigue Risk Assessment and Management in high-risk Environments (FRAME) survey through an industry-academic participatory approach. The FRAME survey was developed through: (1) systematic gathering of existing fatigue scales; (2) refining the inventory using the Delphi Consensus technique; and (3) further refinement through employee/worker focus groups. The participatory approach resulted in a final FRAME survey across four fatigue dimensions—sleep, shiftwork, physical, and mental fatigue, and was composed of 26 items. The FRAME survey was founded on occupational fatigue science and refined and tailored to the OGE industry, through rigorous industry stakeholder input, for safer, effective, practical, and sustainable fatigue assessment and management efforts.”