Indicator Series Methodology: The Cost of Doing-Business Index, released annually by the Milken Institute, measures wage costs, taxes, electricity costs and real estate costs for industrial and office space. Each state is measured on the five individual categories, and those weighted scores are compiled to make the overall index. Higher index scores indicate higher relative costs; 100 equals the national average.

Wage cost measures the average annual wage per employee in all industries (receives 50 percent weight). Tax Burden measures the annual state and local tax revenue as a share of personal income (receives 20 percent weight). Electricity costs measures the cost of commercial and industrial electricity cost in cents per kilowatt-hour (receives 15 percent weight). Industrial space rents measures the cost of renting industrial (warehouse) space on a per square foot basis (receives 10 percent weight). Office space rents measures the cost of renting office space on a per square foot basis (receives 5 percent weight).