Do Kentucky Counties Support Their Entrepreneurs?

By James Allen IV and Shaheer Burney

Economic development often focuses on recruiting large companies that bring a lot of jobs all at once, so it is sometimes easy to forget that the vast majority of businesses in Kentucky are microenterprises with less than 5 employees (see CEDIK’s Small Business County Profiles for specific stats on your county). Given the significant role of small businesses in employment, it is important that we understand reasons for and challenges to entrepreneurship.

For this reason, CEDIK led the implementation of a USDA-funded Kentucky Entrepreneurship Survey, which collected data from over 1,400 Kentuckians on what makes an entrepreneur successful. The survey asked a series of questions to gauge individual’s perception of entrepreneurship in their county. In the sample, about 72% of respondents agreed that their county is generally supportive of entrepreneurs. The map below shows how this perception varied across Kentucky; Southwest Kentucky respondents mostly believe that their county is supportive of entrepreneurs, while many Eastern Kentucky respondents were less optimistic.


What might cause a person to think that their county is or is not supportive of entrepreneurs? Follow-up questions about the political culture of a county provide some valuable insight. In the figure below, we look at statements agreed to by each group. Overall, responses suggest that supportive counties have strong Chambers of Commerce and civic groups, while unsupportive counties struggle with local governments that are fixated on economic development strategies to prioritize large companies over entrepreneurs. Additionally, of those respondents who are or had been entrepreneurs, about 35% of respondents indicated that dealing with government regulations was very or somewhat problematic—a higher percentage than those who said that acquiring startup funds was problematic.


These results call for local governments to reassess their policies toward entrepreneurs in order to help facilitate growth in the local businesses. Already, CEDIK has founded Grow Kentucky (in partnership with Kentucky’s Small Business Development Centers), an Economic Gardening network that prioritizes “growing our own” businesses in Kentucky. Since July 2014, we have worked one-on-one with 15 Kentucky companies and provided resources and expertise customized to their respective industries. With these new results from the Kentucky Entrepreneurship Survey, CEDIK plans to also focus on identifying which local policies can best support entrepreneurs.


Burney, Shaheer, and Alison F Davis. 2015. Determinants of Entrepreneurship from the Kentucky Entrepreneurship Survey. CEDIK working paper. University of Kentucky.

What’s valued in a rural health care facility?

By James Allen IV, CEDIK Research Director

This year, members of our CEDIK Research Team published a thought-provoking article in the The Journal of Rural Health: Residents’ Willingness-to-Pay for Attributes of Rural Health Care Facilities. Here is a short preview of our results:

“Table 5 displays the willingness-to-pay (labeled as WTP) associated with each attribute. The willingness-to-pay represents the estimated fee that the average rural household is willing to pay annually in order to maintain the presence of that attribute in their county health care facility relative to the baseline option. The columns presenting low and high willingness-to-pay (labeled Low WTP and High WTP, respectively) are the willingness-to-pay estimate’s 2.5% and 97.5% quantiles … Below, we discuss how the willingness-to-pay estimates reveal which attributes are the most valued by the respondents. Then, we combine attributes and their willingness-to-pay estimates into attribute bundles resembling rural health care facilities in order to discuss which types of facilities are most valued by the respondents.”


Interested? Want more information? Click here to go to the full article or read the abstract below:


Context: As today’s rural hospitals have struggled with financial sustainability for the past 2 decades, it is critical to understand their value relative to alternatives, such as rural health clinics and private practices.

Purpose: To estimate the willingness-to-pay for specific attributes of rural health care facilities in rural Kentucky in order to determine which services and operational characteristics are most valued by rural residents.

Methodology: We fitted choice experiment data from 769 respondents in 10 rural Kentucky counties to a conditional logit model and used the results to estimate willingness-to-pay for attributes in several categories, including hours open, types of insurance accepted, and availability of health care professionals and specialized care.

Findings: Acceptance of Medicaid/Medicare with use of a sliding fee scale versus acceptance of only private insurance was the most valued attribute. Presence of full diagnostic services, an emergency room, and 24-hour / 7-day-per-week access were also highly valued. Conversely, the presence of specialized care, such as physical therapy, cancer care, or dialysis, is not valued. In total, respondents were willing to pay $225 more annually to support a hospital relative to a rural health clinic.

Conclusion: Rural Kentuckians value the services, convenience, and security that rural hospitals offer, though they are not willing to pay more for specialized care that may be available in larger medical treatment centers. The results also inform which attributes might be added to existing rural health facilities to make them more valuable to local residents.

Thanks to the Kentucky Hospital Association for funding this study and to The Journal of Rural Health for permission to disseminate these findings.


Allen, J. E., Davis, A. F., Hu, W. and Owusu-Amankwah, E. (2015), Residents’ Willingness-to-Pay for Attributes of Rural Health Care Facilities. The Journal of Rural Health, 31: 7–18. doi: 10.1111/jrh.12080

Education: Where does Kentucky rank & why does it matter?

By Simona Balazs, CEDIK Research Associate

September is the time of year when our children sharpen their pencils, throw on their backpacks, and run to catch the bus that takes them back to school. Staying in school is important not only for your child’s personal development, but also for fostering economic growth within your community. To see how your county compares, check out CEDIK’s new Education County Data Profiles!

Having a higher educated work force is important for states because it will improve productivity, raise the quality of jobs and increase economic growth. But not all states are on equal footing. Some have higher educational attainment than others. Data from Census/American Consumer Survey (ACS) 2009-2013 survey shows that Kentucky ranks 47th among US states in educational attainment. The graph below shows the educational attainment for adults (age 25 and over) in the US. The states are ranked based on the percent of adults with a Bachelor’s degree. Unfortunately, Kentucky ranks among the last by that criterion. While 83% of Kentucky adults have a high school diploma (or equivalent), only 22% have a Bachelor’s degree.


Although Kentucky ranks 47th among US states in educational attainment, studies show that Kentucky’s educational and economic status has improved in the last decade (UK/CBER, 2015). Data also show that Kentucky’s total population with Bachelor’s degree or higher has increased by 20% over the last decade, and that overall per capita income has increased by 34% (EMSI, 2015). The following table shows education level, unemployment rate and average annual earnings for the state of Kentucky. Overall, the average annual earnings increase and the unemployment rate decreases as one increases their educational attainment.


The map below illustrates the geographic distribution of Bachelor’s degree attainment and per capita income at the county level. On the map, darker shades of blue mean that the percent of adults with at least a Bachelor’s degree is higher in that county, and the larger the bubble’s size, the higher per capita income in that county.

educblog_fig3Though this map suggests a link between educational attainment and income, it does not mean that a county’s education level is the only factor impacting per capita income. But in general, research (referenced below) suggests higher educational achievement leads to an increase in earnings and employment, better health and lower public assistance. Individuals are willing to achieve higher levels of education because, on average, they can earn more and get higher quality jobs. For many, additional schooling can also be a source of social mobility. One study looking at the impact of education on economic growth stated that a “more educated labor force is more mobile and adaptable, can learn new tasks and new skills more easily, and can use a wider range of technologies and sophisticated equipment” (Dickens, 2006).

Educational attainment is important to the economy. The fact that Kentucky ranks 47th in Bachelor’s degree attainment should motivate state policymakers to improve access to college education in order to keep Kentucky’s economy competitive and growing. Interested individuals can also see how education impacts your local economy by checking out CEDIK’s new Education County Data Profiles!


Aghion, P. & all (2009). The Causal Impact of Education on Economic Growth: Evidence from U.S.. Brookings Papers on Economic Activity.

Dickens, W. T. & all (2006). The Effects of Investing in Early Education on Economic Growth. Washington: The Brookings Institution.

Economic Modeling Specialists Intl. (EMSI), 2015.

Hanushek, E.A. & L. Woessmann. (2010). Education and Economic Growth. International Encyclopedia of Education. Vol. 2, pp. 245-252.

OECD. (2012). Education at a Glance: Highlights. OECD.

University of Kentucky/CBER (2015). Kentucky Annual Economic Report. UK/CBER.

U.S. Census/American Consumer Survey (ACS), 2009-2013.

CEDIK Evaluates 6 Years of ARC’s Diverse Health Programs

By Karen Fawcett, CEDIK Program Associate, and James Allen IV

Recently, the Appalachian Regional Commission (ARC) released an evaluative report of their 202 health projects funded over a six year period. The Community and Economic Development Initiative of Kentucky (CEDIK), together with UK College of Pharmacy, and UK Center for Business and Economic Research (CBER) assessed and provided recommendations for enhancing ARC’s health programming by analyzing past programming and conducting case studies. In addition, suggestions were presented to help guide future ARC funding strategies and priorities.

ARC invested over $30.9 million into health projects between the years 2004-2010. In this report, projects were grouped into three primary project types: Healthcare Access, Clinical Services and Health Promotion. The 90 Healthcare Access projects focused on expanding accessibility to healthcare providers by supporting the training of healthcare professionals or by directly increasing access to healthcare providers via telehealth or a new facility. The 45 Clinical Services projects sought to improve the quality of healthcare by improving or adding to the services that a healthcare facility offered. Finally, the 67 Health Promotion projects attempted to educate the public about healthy behaviors and encourage their participation. CEDIK used these categories, and others, to compare funding and impacts across different types of projects.ARCtable

Appalachia is a diverse region made up of 420 counties and 13 states extending more than 1,000 miles, from southern New York to northeastern Mississippi, and is home to more than 25 million people. About 42% of the Appalachian Region’s population is rural, compared with 20% of the national population. The goal of ARC’s health projects are to improve health status throughout the region while providing extra support to particular areas of need. This large CEDIK evaluation of the health projects funded by the ARC contributes significant data, critiques and recommendations useful not only to ARC but to other Appalachian health care programs as well.


An online survey was utilized to help obtain updated project performance data and summarized results. Key findings from the online survey include:

  • Over 60% of surveyed projects claimed that their work would not have been undertaken if not for ARC funding and over 95% of respondents claimed that, without ARC funding, the project would have been canceled, downsized, or delayed by more than a year.
  • About 38% of surveyed projects created and/or retained jobs in the local economy, and employment of healthcare professionals in grantee organizations today is higher, on average, than before ARC funding.
  • Almost 50% of surveyed projects claimed that the ARC project funding helped to attract additional government or philanthropic funding.
  • About 92% of medical and other equipment purchased with ARC funding is still in good condition and has significant impacts on program participants and medical patients throughout Appalachia.

Additionally, 13 case studies relied on interviews and personal correspondence to explore the unique aspects of particular programs and view some reoccurring points pertaining to ARC’s health programming. Key findings from the case studies include:

  • Sharing of best practices or technical expertise across similar project could improve cost efficiency and program effectiveness.
  • Evidence of community support prior to funding was a clear indicator of a project’s success, large impacts and sustainability.
  • Case studies reinforced that ARC is viewed as an important and helpful regional partner, especially due to their presence in each state.

Qualitative and observational data make valuable contributions to evaluations of any kind, and especially for a group of projects as diverse as those in ARC’s health programming. Throughout the evaluation, two themes emerged that may influence the discussion for the strategic direction for ARC’s health programming: 1) Large projects that create something new make it easier to attribute future outputs, and 2) Seed money for innovative but complex projects are essential because of the lack of initial support from other funding sources. Both themes suggest a strategic direction for ARC health projects that involves investing in a large or small new projects because it can simplify output and outcome tracking as well as attribution to the original investment.

For other organizations working in Appalachia, our findings suggest that evidence of community support is often linked with increased community awareness and likelihood of success for small projects. While for large projects, involvement of institutional leadership in the planning and implementation of the project is associated with an increased likelihood of success. Useful data for other groups interested in health programming within the Appalachian Region can be found in the ARC County Profiles created for this evaluation. All counties in the Appalachian Region are available to view by clicking on this link

Aging in Kentucky, part 2

By Lucia Ona, CEDIK Research Associate

In the previous blogpost (Aging in Kentucky, part 1), we discussed and showed evidence that Kentucky’s rural communities—much like the rest of the country—are, in fact, aging. In this post, we go one step further and ask: why is Kentucky’s population aging? There are three causes of changes in population: fertility, mortality, and migration. At the national level, the process of population aging is due primarily to long-term declines in the fertility rate and to improvements in mortality, especially among older people (Haaga, 2004).

During the last decade, population losses and slow growth were prevalent throughout the mountain communities of Eastern Kentucky and the river communities of Western Kentucky. In these areas, negative population momentum has been building for decades. Out-migration over generations has reduced the youth population and suppressed natural increase through fertility (Price, 2011). Out-migration has also resulted in brain drain for rural areas because newcomers to the rural areas of the state have been traditionally less educated than the ones leaving (Price, 1996).

The map below shows projection of net migration for the counties of Kentucky for the period 2010-2015. Net migration for a given geographic area is the difference between in-migration and out-migration during a specified time frame. The red-orange counties are experiencing negative migration. It can be seen that several counties both in the Eastern and the Western parts of the state show negative migration patterns—meaning that more people have migrated out of the area than have migrated into it. NetMigrationBlueOrangeGoing further, the map below shows net migration patterns at the county level for the Kentucky counties in the period 2000-2010 by age groups. The red counties have lost both the populations 19 and younger and 65 to 79, the yellow counties that have lost population 19 and younger but have gained population between 65 and 79, the blue counties have gained 19 and younger but lost population between 65 and 79, and the green counties gained both the youngest group of population and the population between 65 and 79. It is interesting to see that there are several rural counties that are attracting population 65 to 79 years old back to their communities. This may be because elders return to their place of origin to be among family and friends or enjoy living in a centrally located state with balanced weather and amenities.


Fertility, mortality and migration have each contributed to the aging population nationwide and within Kentucky communities. While the challenges of supporting an aging population are immense—including the access to financial security, social security, health, and an enabling and supportive environment—it is important to remember that the presence of a growing older population is also an opportunity. For example, older populations are associated with reduced crime and in many cases with a more environmentally friendly lifestyle. According to the Kentucky Elder Readiness Initiative of Kentucky (KERI) elders should not be viewed as dependents but community resources (KERI, 2009). Crucial priority actions involving all actors in society will need to be taken to maximize the opportunity of the aging population.

“Trees grow stronger over the years, rivers wider. Likewise, with age, human beings gain immeasurable depth and breadth of experience and wisdom. That is why older persons should be not only respected and revered; they should be utilized as the rich resource to society that they are.” Former United Nations Secretary-General Kofi Annan


Haaga, J. 2004. The Aging of Appalachia. Demographic and Socioeconomic Change in Appalachia. Population Reference Bureau, Kentucky.

Elder Readiness Initiative (KERI). 2009. Anticipating the gifts and needs of older Kentuckians in

Price, M. 1996. Migration in Kentucky: Will the Circle Be Unbroken? In Exploring the Frontier of the Future: How Kentucky Will Live, Learn and Work.

Price, M. 2011. Kentucky Population Growth: What Did the 2010 Census Tell Us? Kentucky State Data Center.

Aging in Kentucky, part 1

By Lucia Ona, CEDIK Research Associate

The issue of aging in the rural communities of Kentucky has profound social and economic implications. Within a community, an aging population can lead to both opportunities and challenges that require action from individuals, communities, governments and the private sector. In part 1 of our ‘Aging Kentucky’ series, we start by looking at the data and asking: are Kentucky’s rural communities aging and how?

Between 2000 and 2010, Kentucky mirrored the most important US trends in population growth, with one trend being that its population, on average, got older.  Additionally, the stage is set for the US population to get much older in the coming decades as the Baby Boomers generation surges into the upper age group (Price, 2011).

The aging of the Baby Boomers generation has impacted the median age[1], which has increased and will likely continue to increase. The first figure shows the estimated median age since 2000, its projection until 2030, and important differences between the rural and urban counties in Kentucky. In rural counties, the median age of the population is higher than in urban counties and the difference between rural and urban counties has grown thus far into 2015.


Looking specifically at 2013, population estimates indicate that 16.5% of residents in rural Kentucky were ages 65 and over, compared with 14.4% of all Kentucky residents and 14.1% US residents. These numbers suggest that most rural counties have higher proportions of older population relative to urban counties. Population projections also show that the percent of the population 65 and older will increase in 2030 to about 22.7% in rural Kentucky, 20.1% in Kentucky, and 20.3% in the whole United States. These numbers are reflected in the figure below, which shows the projection of the portion of population 65 and older.


Finally, the map below shows the percent of residents 65 and older at the county level in Kentucky for 2013. Of the six counties where over 20% of the population is 65 and older, five are rural counties.  At 23.2%, Hickman County the highest percentage of residents 65 and older, while Scott County has the lowest percentage of residents 65 and older at 10.3%.65PlusOverall, the first figure shows that while Kentucky’s rural communities are aging, they are not doing so at a much faster rate than the rest of Kentucky or the United States. And the second figure shows that while rural county has a higher proportion of residents 65 and older, it is only a few percentage points higher, on average, than urban Kentucky or the United States.

As the population ages, older people will increasingly play a critical role in bringing economic and social benefits to societies:

  • Through volunteer work
  • Transmitting experience and knowledge
  • Helping their families with caring responsibilities[2]
  • Increasing their participation in the paid labor force.

Given the demographic trends outlined above, rural and urban communities and their policymakers would be wise to think about how best to leverage their own aging population to foster community and economic development.


Elder Readiness Initiative (KERI). 2009. Anticipating the gifts and needs of older Kentuckians in

Price, M. 1996. Migration in Kentucky: Will the Circle Be Unbroken? In Exploring the Frontier of the Future: How Kentucky Will Live, Learn and Work.

[1] The median age of a population is that age that divides a population into two groups of the same size, such that half the total population is younger than this age, and the other half older.

[2] Older persons make major contributions to society, for example, taking care of children and sick individuals. In Kentucky there are more than 69,000 grandparents living with grandchildren, and half of those are primary-givers (KERI).

Air Quality In Kentucky: Can You Breathe Easy?

By Karyn Loughrin, CEDIK GIS Associate

Good air quality, while extremely important to people’s health, can be hard to measure. The air we walk through and breathe is full of millions of different particles, some of which are harmful. The Environmental Protection Agency (EPA) has placed regulations on several specific pollutants to protect people’s health and the environment. Particulate matter is one such pollutant. There are two categories for particulate matter: inhalable coarse particles (PM10) and fine particle matter (PM2.5). Fine particle matter can be easily inhaled and lead to aggravated asthma, nonfatal heart attacks, and premature death in people with heart or lung disease.

We looked at the fine particulate matter levels in Kentucky using the 2011 CDC Wonder data and mapped the annual average levels by county.[1] These data are a combination of levels reported at the ground by monitors and information from a satellite that measures particles in the atmosphere.[2] Using both sets of data and an algorithm, the data were compiled into one continuous map. In 2011, the EPA regulation on PM2.5 was 15.0 µg/m. We found that while all counties were compliant, there were higher particulate matter levels in the southwestern part of the state—Christian, Caldwell, and Trigg counties had the three highest levels of particulate matter (Map 1).

PMKYs2Particulate matter has several sources; major ones include agriculture, fire, dust, and fuel combustion. Fuel combustion includes electrical generation, industrial boilers, residential, and commercial/industrial uses of fossil fuels. In 2011, agriculture was the main source of particulate matter in Kentucky counties with high levels (See Figure 1).Figure 1Agricultural sources of particulate matter are crop and livestock dust, fertilizer application, and livestock waste. In Southwestern Kentucky, the source is almost exclusively crop and livestock dust. Through tillage, dust particles are aerated and released into the air. Map 2 shows that, compared to other regions, the southwestern part of the state’s primary land use is agriculture. While certain tillage practices can reduce soil erosion from air and wind, it is unclear how much either no-till or conservation tillage are practiced in this region. Additionally, Map 2 shows that southwestern Kentucky has fewer trees, which are able to help stabilize soil and trap practical pollutants.[3] Both agricultural activity and fewer trees seem to be likely causes of higher levels of particulate matter in Southwestern Kentucky.


However, across the border in Tennessee, there are a group of counties with similar levels of particulate matter, yet the main source in Tennessee for 2011 was fuel combustion. When both Tennessee and Kentucky counties are combined, fuel combustion is the largest documented source for fine particulate matter in the two-state area. Perhaps it is no surprise then that the EPA cited the Tennessee Valley Authority (TVA) in 2011 for violating the Clean Air Act at several of their fossil fuel plants.[4] Many of these plants fall in areas with high levels of particulate matter and may have contributed to these levels (See Map 3).PMTNKY

In subsequent years, the TVA has updated or scaled back production in some of their older plants. While overall emissions are being reduced, particulate levels due to fuel combustion may change little in southwestern Kentucky. The two busiest TVA power plants—which each process 20,000 tons of coal a day—are within 100 miles of each other.[5] The Cumberland Fossil Plant in Cumberland City, Tennessee resides close to the Kentucky/Tennessee border and the Paradise Fossil Plant is housed in Muhlenberg County, Kentucky.

Along with these observations, it must be noted that air quality is tricky to measure. However, it seems like the higher levels of particulate matter in the southwestern part of Kentucky are most likely a combination of the fossil fuel power plants and agricultural activities. In order to improve air quality, sources of pollution must be reduced and particle entrapment or absorption must be increased. This issue affects the health and well-being of residents in southwestern Kentucky and beyond as air pollutants can easily travel from one area to another.

[1] Data from

[2] See for more information