Here’s an update of our Top 25 Cities for College Graduates which ran earlier this week at The Daily Beast. Since my MPI team did the analysis for all 350-plus U.S. metros, we decided to break out the rankings by metro size. Below you’ll find the top 25 rankings for metros in three size groups – large metros (1 million and above), medium-size metros (between 250,000 and 1 million people), and small metros (those with under 250,000 people).

As we’ve said before, this is a data-driven analysis and small shifts in the weighting can make a significant difference in the final rankings. So treat these rankings as a broad guide to interesting places and try not get too bogged down by the specific ranks.

And do have a look at our Place-Finder tool to help find the place that’s best for you. Enjoy!

Large Metros (over 1 million people)

1. Austin-Round Rock, TX

2. Washington-Arlington-Alexandria, DC-VA-MD-WV

3. Boston-Cambridge-Quincy, MA-NH

4. New York-Northern New Jersey-Long Island, NY-NJ-PA

5. San Francisco-Oakland-Fremont, CA

6. San Diego-Carlsbad-San Marcos, CA

7. Los Angeles-Long Beach-Santa Ana, CA

8. San Jose-Sunnyvale-Santa Clara, CA

9. Seattle-Tacoma-Bellevue, WA

10. Baltimore-Towson, MD

11. Dallas-Fort Worth-Arlington, TX

12. Columbus, OH

13. Rochester, NY

14. Raleigh-Cary, NC

15. Denver-Aurora, CO

16. Milwaukee-Waukesha-West Allis, WI

17. Sacramento-Arden-Arcade-Roseville, CA

18. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

19. Minneapolis-St. Paul-Bloomington, MN-WI

20. Houston-Sugar Land-Baytown, TX

21. Atlanta-Sandy Springs-Marietta, GA

22. Portland-Vancouver-Beaverton, OR-WA

23. Chicago-Naperville-Joliet, IL-IN-WI

24. New Orleans-Metairie-Kenner, LA

25. Bridgeport-Stamford-Norwalk, CT

Medium-Size Metros (250,000 to 1 million people)

1. Madison, WI

2. Ann Arbor, MI

3. Durham, NC

4. Boulder, CO

5. Lincoln, NE

6. Tallahassee, FL

7. Trenton-Ewing, NJ

8. Santa Barbara-Santa Maria, CA

9. Albany-Schenectady-Troy, NY

10. Santa Cruz-Watsonville, CA

11. Fort Collins-Loveland, CO

12. Honolulu, HI

13. Lexington-Fayette, KY

14. Eugene-Springfield, OR

15. Anchorage, AK

16. Lansing-East Lansing, MI

17. Santa Rosa-Petaluma, CA

18. San Luis Obispo-Paso Robles, CA

19. Tucson, AZ

20. Poughkeepsie-Newburgh-Middletown, NY

21. Oxnard-Thousand Oaks-Ventura, CA

22. Fresno, CA

23. Baton Rouge, LA

24. Jackson, MS

25. Albuquerque, NM

Small Metros (fewer than 250,000 people)

1. Ithaca, NY

2. Iowa City, IA

3. Charlottesville, VA

4. College Station-Bryan, TX

5. Lawrence, KS

6. Columbia, MO

7. State College, PA

8. Olympia, WA

9. Bloomington, IN

10. Missoula, MT

10. Athens-Clarke County, GA

12. Champaign-Urbana, IL

13. Fargo, ND-MN

14. Bloomington-Normal, IL

15. Waco, TX

16. Lafayette, IN

17. Bellingham, WA

18. Kingston, NY

19. Blacksburg-Christiansburg-Radford, VA

20. Flagstaff, AZ

21. Santa Fe, NM

22. Logan, UT-ID

23. Chico, CA

24. Harrisonburg, VA

25. Auburn-Opelika, AL

The core measures used to develop the ranking are:

• Presence of 20-somethings (20-24-year-olds) in the population.
• Singles – measured as the share of unmarried people.
• Earnings potential – measured as average salary.
• Unemployment rate.
• College-educated workforce – the share of the workforce with a bachelor’s degree or higher.
• Rental housing – Having an abundant, available stock of rental housing is key. We measured this as the share of all housing made up of rental units.
• Youth-oriented amenities – like bars, restaurants, cafes, sports facilities, and entertainment venues.
• Creative capital – we use this to capture the creative energy of a place. It’s measured as the share of employed artists, musicians, actors, dancers, writers, designers, and entertainers in the workforce.
• Openness – a region’s openness to new and different kinds of people reflects a lack of barriers and willingness to let newcomers, including young people, have a go. Our measure is the share of gays and lesbians and foreign-born residents in a community.

For more on the methodology behind the analysis, visit the full article at The Daily Beast.

A new study by University of Michigan economist and MPI associate David Albouy, published in the Journal of Political Economy, finds that workers in expensive cities – including those in the Rustbelt and even hard-hit Detroit – pay a disproportionate share of federal taxes. Overall, urbanites pay 27 percent more in federal income taxes than workers with similar skills in a small city or rural area. Here’s a summary of the study.

“Workers in cities are generally paid higher wages than similarly skilled workers in smaller towns, so they’re taxed at higher rates. That may sound fair, until one considers the higher cost of living in cities, which means those higher wages don’t provide any extra buying power. The federal income tax system doesn’t account for cost of living. So the effect is that workers in expensive cities like New York, Los Angeles and Chicago pay more in taxes even though their real income is essentially the same as workers in smaller, cheaper places.

“The extra burden wouldn’t be so excessive if more federal tax dollars were returned to urban areas in the form of higher federal spending. But according to Albouy’s research, that’s not the case. His data show that more federal dollars are actually spent in rural areas, despite the fact that cities send far more cash to Washington. The net effect of all this is a transfer of $269 million from workers in high-cost areas to workers in lower cost rural areas in 2008 alone.

“Over the long haul, Albouy says, the larger tax burden causes workers to flee large urban centers in the Northeast and settle in less expensive places in the South. So to some extent, it may have been the federal tax system that put the rust on the rust belt.

“Detroit is a perfect example of a city that gets the short end of the stick.

“With its high wage levels, Detroit was, until recently, contributing far more in federal revenues per capita than most other places for over one hundred years,” Albouy said. The recent federal bailout to Detroit automakers “is peanuts relative to the extra billions the city has poured into Washington over the 20th Century.”

“Albouy says that city folk shouldn’t expect relief from this system anytime soon.

“Highly taxed areas tend to be in large cities inside of populous states, which have low Congressional representation per capita, making the prospect of reform daunting,” he writes.

The full study is here (PDF).

Dutch start-up SellaBand has built a platform that allows artists to crowd-source funding from music-lovers around the world. Established in 2006 by two Sony-BMG music executives, it provides a Bowie-bond like process for up-and-coming bands to raise $50,000 to record their album by selling ten-dollar “parts” to online “believers.”

Economist Ajay Agrawal has been studying SellaBand’s business model as part of a new MPI program on Innovation and Creativity. He recently hosted an evening featuring a performance from the first Canadian to record with SellaBand, Angie Arsenault.

We’ve already got a name for conventional infrastructure projects that are ready to go: shovel-ready. But what do we call ready-to-fund projects that might be part of a needed creativity stimulus?

Here’s a list our gang at the MPI came up with:

• Production Ready
• Neuron Ready
• Spotlight Ready
• Camera Ready
• YouTube Ready
• Synapse Ready
• Cortex Ready
• Imagination Ready
• Log-in Ready
• Google Ready
• Performer Ready
• Web 2.0 Ready
• Stage Ready
• Performance Ready
• Canvas Ready
• Realization Ready
• Communication Ready
• Pen-stroke Ready
• Roll-out Ready

Vote for your favorites and feel free to suggest more.

So the past couple of days at the MPI – under the ever-watchful analytical eye of Charlotta Mellander – we took the Gallup happy states data and compared it to various measures of state economies. This is a first cut analysis and it’s dealing only with correlation or association and not causation, but the relationships are nonetheless interesting. Here’s a quick rundown.

Our analysis is in sync with what Will Wikinson already has pointed to: State happiness is associated with income (a correlation of .33 with our measure of average income), as well as housing prices (.49). Makes sense: People are willing to pay to live in happy places, and people with more income have more choices. And it’s even more closely associated with levels of human capital (that is, share of adults with a bachelor’s degree or above – it’s . 77)

And what about the creative class? Happy states appear to be creative states – at least as measured by the share of people employed in creative class jobs (with a correlation of .48). The correlations are even higher for the the super-creative core and the the overall creativity index (.53).

Makes you wonder: Are creatives more likely to live in happy places or are they more likely to be happy people? Well… psychologists have identified a powerful relationship between creativity and happiness. Mihaly Csikszentmihalyi finds that engaging in creative activities like writing, playing music, computer programming, mountain climbing, or chess is a major source of happiness. But in her workplace studies, Teresa Amabile of Harvard Business School says it works the other way around: She finds that it’s happiness – or should I say happy workplaces – that generate creative thinking and workplace innovation as opposed to vice versa. Psychologist Barbara Fredricksons suggests that “positive” people are more open-minded, less racially biased, more likely to see the bigger picture, and ultimately more creative. So maybe this kind of thing scales up from who we are and what we do to where we live.

On that score, yes, happy states are also apparently those greater concentrations bohemians (.43), immigrants (.36 ), and gays (.32), as well as states with higher levels of high-tech industry (.22) or those with more innovative potential.

One worrying finding: States with a large concentration of the working class are far less happy – with a negative correlation of (-.51). That’s downright unhappy. Perhaps Marx was right after all about the alienation that comes from industrial work – or in this case the unhappiness found in working class locations. We’ll be doing more on the connection between economic structure and state happiness in the future.

Is there any connection between between happy states and the personality types that live there? Using data provided by Cambridge University psychologist Jason Rentfrow we were able to compare happy states to the concentrations of the five major personality types – extroversion, agreeableness, conscientiousness, openness-to-experience, and neuroticism. While it may not come as a big surprise, neurotic states were far less happy states – the correlation between the two being (-.62). The correlations for all four other personality types were all insignificant.

Take a look at the graphs here and let us know what you see – and think.

The new issue of our e-newsletter, Martin Prosperity Insights is out. It details the options for a truly advanced infrastructure. It also includes links to three new working papers.

My recent The Atlantic article and multiple covers, including one on my adopted hometown, pose the obvious question: What about Toronto?

Prompting me on this are stories at Torontoist and The Toronto Star. I recently had a nice dialogue on the same with David Olive as he reports, along with nice quotes from Fareed Zakaria who visited recently, in his Star column today:

Looking further ahead, Richard Florida, the urban economics guru, sees Toronto angling for the same global heft as Chicago and Tokyo. “I sense we are in great shape to move up in the global ranks,” says Florida, now based at the University of Toronto’s Rotman School of Management. Florida followed the example of his mentor, the late urbanologist Jane Jacobs, in relocating two years ago to Canada from his native U.S.

Like New York and London, Toronto is a finance, media and entertainment centre, forecast to be among the fastest-growing business sectors over the next generation. Unlike those cities, Toronto also has an abundance of technological research, and more social stability and ethnic diversity. And in recent years the city’s cultural amenities have expanded considerably.

Florida readily concedes that stubborn problems like income inequality and a deteriorating basic-industry sector have yet to be tackled. But in a cover-story essay in the current Atlantic magazine, the venerable U.S. public issues journal, Florida identifies Toronto among fast-growing “mega-regions” most ideally suited to rapid growth. Atlantic gave Florida’s article four covers, showing the skylines of North American cities with the best prospects for sustained prosperity – Toronto, New York, Chicago and San Francisco.

Yet Florida discourages U.S. comparisons. “Stop looking south for models,” says Florida, based for 17 years at Pittsburgh’s Carnegie Mellon University. “They ain’t there. The U.S. is in very deep crisis. It’s time for Toronto to break out and lead.”

The Atlantic piece was concerned with the situation in the States, especially New York, which has been hard hit by the financial crisis.

That said, I’ve been thinking a great deal in my work at the MPI about the opportunity space opened for Toronto, Ontario and Canada as a whole.

Crises are key times for nations and especially for cities and regions. They are the times when changes of position become likely and when nations, and in particular cities and mega-regions, can make their move.  My sense is that Canada as a whole and Toronto and its mega-region are as well-positioned as any place in the world to prosper and improve their relative positions in this transformative period.

First off, Canada has a substantial advantage in its stable banking system. Toronto is the center of that system. At the YPO event with Zakaria, Frank McKenna from TD Bank made a joke that went something like this: A couple months ago his bank wasn’t among, say, the top 20 largest banks, now they’re something like fifth or sixth. And then the punch line: In a couple more weeks, even if his bank would likely be, say, third or fourth, through little or no action of its own, RBC is even higher. The World Economic Forum recently ranked Canadian banks the most stable in the world. For these reasons, Toronto is well-positioned to move up in the ranks of global financial centers. No, it won’t topple NY or London, but with banks this big and this stable, it will gain ground. And with employment opportunities eroding in these centers, it can make a big move on top global talent.

Toronto has the opportunity to occupy a relatively unique space among global cities, still beneath the largest global centers, like NY and London, but gaining ground on them, and in a relatively unique and advantaged position as the most vibrant of the so-called “second cities.”

Toronto has a very advantageous economic structure, comparatively speaking. Our MPI team has been collecting, analyzing, and studying data on the industrial and occupational composition of Toronto versus other U.S. and Canadian cities and some other global cities. Led by Kevin Stolarick, our goal is to have matched data on the micro-functionings of the U.S. and Canadian cities and regions, in terms of industries and occupations for every metropolitan level jurisdiction and city across the two countries.

From what we can glean – and expect much more on this to come – Toronto has one of the very fastest metabolizing occupational and industrial metabolic structures of any city with strengths in media, entertainment, design, and creative industries as well as finance. These are the sectors that move at the highest velocity. And it has real technological capability in its orbit with Kitchener-Waterloo and RIM nearby.

Toronto is as diverse, if not more so, then NY, London, or even L.A. Plus, it has an unusually high degree of social cohesion. Add to that great universities that are moving up, great and improving music and arts scenes, and relatively affordable housing, at least by world comparative standards. And you get the picture – a city ready to move up the global ranks.

Yes, Toronto certainly has issues and problems to overcome. Inequality has grown a la David Hulchanski and company’s remarkable “Three Toronto’s” study report. Parts of the region’s older manufacturing economy is suffering and the region as a whole is more geographically segmented and spiky then before.

But the assets are considerable. Leadership “gets it” from the Premier to the Mayor, other political leaders across the region – mayors, legislators, councilors, and economic development officials, university leaders, the non-profit sector, the arts and culture community, labor, environmentalists, and key segments of the business community – all of them are literally moving in the same direction.

You can literally feel the momentum.

There’s only one thing left to do. Stop looking south for models. They ain’t there. The U.S. and its key cities are in deep crisis. Toronto has a golden opportunity to become a model and lead not just for Canada but for North America and the world.

Will we take it?

My colleagues at the Institute for Competitiveness and Prosperity (our sister institute to the MPI) take a thorough empirical look. Click here to download.

MasterCard Rankings taken from 2008 World Centers of Commerce Index. The link is here