Why are Los Angeles, Orange County Economies Together So Often?

Published on May 20, 2022


(Orange County Register)

Jonathan Lansner of the Orange County Register addresses a common question: “Just curious. Why do you always lump Orange County and Los Angeles together in your analysis and articles? Living in O.C., it would be preferable to see the data separated. For example, in homeownership, I would assume that O.C.’s rate of ownership is much higher than L.A.’s.”

Lansner's Answer: That’s a good and common question I’ve received over the years.

The column in question looked at “real-time” homeownership data from the U.S. Census Bureau that estimates 45% of households in the L.A.-O.C. region lived in a home they owned in 2022’s first three months.

Similar data for the individual counties shows us the reader’s hunch was correct: Orange County ownership is 57% compared with L.A. County’s 49%.

Sadly, that measurement — the newest numbers by individual county from the bureau — is for a five-year average ending in 2020.

Some readers think my use of the merged region is part of a grand conspiracy, like an attempt to muddy the attributes of either county. Or the combined area reveals some bias, somehow favoring one of the counties.

However, the truth is that economic data analysis is frequently at the mercy of government geographical boundaries, some more real than others.

For example, when we track state economies, does Wyoming — with a 580,000 population, not much larger than the city of Long Beach — really matter?

When we dig below the state level — especially for the most current data — we are frequently stuck with data parsed for the 384 officially designated “metropolitan statistical areas”.

By this federal geographic demarcation, Los Angeles and Orange counties are one place — the nation’s second-most populous metro area. The region is second to an even murkier melding of entities in and around New York City that covers 23 counties, including one in Pennsylvania.

It adds up to this: No state has more metropolitan areas than California’s 26. Try to remember that geographical nugget when you read some study stating California is home to the “most metro areas” with some statistical nuance.

Moving Targets
Geographically speaking, these boundary definitions are the byproduct of continual research by the federal Office of Management and Budget.

This mapping dates to the 1950 census and has lots of science behind it. Statistics gauge how intertwined are the commerce and social fabric of neighboring counties.

Then there are the seemingly odd names given to these districts, monickers tied to the largest communities within the regions.

If this isn’t confusing enough, a “metro” is by no means a static geographic metric.

These definitions are routinely given a thorough update after every 10-year census. And minor tweaks are made in between.

The economic applications of metro areas vary widely. Some federal government reports, such as quarterly homeownership, track the 75 biggest metros. Monthly employment stats can be found for 345 metros. And annual population tallies track all 384.

Or look at the Consumer Price Index. Residents of Riverside and San Bernardino counties in 2018 became the 23rd metro area with its own inflation measurement.

More importantly, this work is influential. Many private data collectors will frequently slice their economic and geographic research by these government-created statistical maps.

However, these geographic concepts can lead to confusion, too.

Numerous studies will cite shortened names of metro areas and/or call these often far-flung regions “cities”. Ponder certain rankings that suggest housing in “Los Angeles” is far pricier than “New York” living.

It’s a good bet these results for “Los Angeles” pricing are boosted by Orange County’s expensive housing. Meanwhile, the financial pain of New York City life is statistically eased by the addition of that metro area’s more affordable real estate far from the city borders.

It’s Splitsville
Southern California’s statistical marriage of two of the nation’s most populous, economically different and diverse counties hasn’t always been this way.

According to a government history of metropolitan areas, the Los Angeles metro included Los Angeles and Orange counties after the 1950 census.

The federally dubbed Anaheim-Santa Ana-Garden Grove metro — yes, Orange County — was split out of the Los Angeles-Long Beach metro in 1963.

Then in 1983, the Anaheim-Santa Ana-Garden Grove metro was folded back into the Los Angeles-Long Beach statistical bucket.

At that time, the counties of Riverside, San Bernardino, and Ventura were also lumped into what was called the “Los Angeles-Anaheim-Riverside” metro.

In 1992, the name — not boundaries — switched to Los Angeles-Riverside-Orange County metro.

And in 2003, this region was split into three metros.

The Riverside-San Bernardino-Ontario metro took Riverside and San Bernardino counties — or what many of us call the Inland Empire — while the Oxnard-Thousand Oaks-Ventura metro got Ventura County.

And the L.A.-O.C. marriage was renamed Los Angeles-Long Beach-Anaheim.

Just ponder how strange this grouping of metros is on a statewide level.

L.A.-O.C.’s 13 million residents surpass the combined populations of the 24 smallest California metro areas. The six least-populated California metro areas — Napa, Hanford-Corcoran, Madera, El Centro, Redding and Yuba City — individually have fewer residents than cities of Fontana, Glendale or Huntington Beach.

Bottom Line
Metro math is not just numerology trivia compiled by data crunchers.

Many federal government benefits flow to regions based on whether or not they’re an “official” metro area.

In 2021, a proposal was floated that would have upped the minimum population of a metro area to 100,000 from 50,000 — a threshold that dated to 1950.

What might seem like a logical call by government demographers became a political hot potato. Why?

According to the Brookings Institution analysis, 142 metro areas with 19 million residents would have been lumped into “non-metro” status.

The switch would have qualified these regions — a largely wealthier collection of communities — for many federal safety net cash programs for “rural” regions. Putting more strain on already overstretched aid for some of the nation’s poorest neighborhoods ultimately killed that plan.

Still, it’s a good chance there will be different “fireworks” when another retooling of metro areas is announced as soon as next year.

PS: This too-long review of metro areas does not even touch the federal geographic statistical concepts of smaller statistical “divisions” such as Los Angeles-Long Beach-Glendale for L.A. County and Anaheim-Santa Ana-Irvine for O.C. Or the giant Los Angeles-Long Beach combined statistical area that mashes together the region’s three metros areas containing the five local counties.