Metropolitan Statistical Area (MSA): Definition and Uses
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Summary:
Metropolitan statistical areas (MSA) are geographical regions delineated by the U.S. Office of Management and Budget (OMB) that encompass a city and its surrounding communities, linked by social and economic factors. MSAs serve crucial roles in data collection, policy formulation, and economic analysis, with over 392 such regions in the U.S. and Puerto Rico as of the latest data. This article explores the definition, uses, and significance of MSAs in various fields, from labor market analysis to real estate and social services. Learn about their role and impact in shaping economic landscapes.
Understanding metropolitan statistical areas (MSA)
A metropolitan statistical area (MSA), formerly known as a standard metropolitan statistical area (SMSA), is the formal definition of a region that consists of a city and surrounding communities that are linked by social and economic factors, as established by the U.S. Office of Management and Budget (OMB).
Metropolitan statistical areas serve to group counties and cities into specific geographic areas for population censuses and compilations of related statistical data. Modern MSAs are configured to represent contiguous geographic areas with a relatively high density of human population.
Metropolitan statistical areas usually consist of a core city with a large population and its surrounding region, which may include several adjacent counties. The area defined by the MSA is typically marked by significant social and economic interaction. People living in outlying rural areas, for example, may commute considerable distances to work, shop, or attend social activities in the urban center.
As of March 6, 2020 (latest information), per the OMB BULLETIN NO. 20-1, there are 392 regions that meet the requirements to be designated as metropolitan statistical areas (MSA) in the U.S. and Puerto Rico (384 in the United States and eight in Puerto Rico).
In contrast to micropolitan statistical areas, which center on towns and smaller communities with populations between 10,000–50,000, MSAs must include a city with a population of at least 50,000.
Some MSAs, such as Dallas-Fort Worth-Arlington, contain multiple cities with populations exceeding 50,000. The most populous MSA in the country, New York-Newark-Jersey City, spans portions of three adjacent states, New York, New Jersey, and Pennsylvania.
MSA data uses
The Bureau of Labor Statistics (BLS) uses MSA data to analyze labor market conditions within a geographical area. Within a metropolitan statistical area, workers can presumably change jobs without having to move to a new location, creating a relatively stable labor force.
Statistical data about MSAs also helps government officials and businesses review information about per capita income, spending patterns, and unemployment rates. The resulting data can be used to formulate policies designed to stimulate economic growth in the region.
For example, the Atlanta-Sandy Springs-Alpharetta metropolitan statistical area exerts a significant influence on the economic health of the region. It is the most populous area of Georgia. Companies seeking to relocate or establish new companies in the Atlanta-Sandy Springs-Alpharetta region can use statistical data about the area to project the viability of their intended business.
Real estate investors also use MSA data to study housing trends and population movement. In addition, applicants for certain social services may need to prove income levels below a fixed percentage of the median gross income in their metropolitan statistical area to qualify for help, including low-income housing and other forms of support.
What size is a metropolitan statistical area?
A metropolitan statistical area consists of a location that has at least one urbanized area and a population of at least 50,000 people.
What is the difference between MSA and CSA?
A metropolitan statistical area (MSA) is an area with at least one urbanized area and a population of at least 50,000 people. This includes the core jurisdiction plus adjacent counties that have a high degree of social and economic relations with the core county. A combined statistical area (CSA) is two or more MSAs or micropolitan statistical areas with employment interchange measures of at least 15. “Employment interchange measures” means “the sum of the percentage of workers living in the smaller entity who work in the larger entity and the percentage of employment in the smaller entity that is accounted for by workers who reside in the larger entity.”
What is the largest metro area in the world?
Tokyo is the largest metro area in the world with a total metropolitan population of 36.5 million.
The bottom line
A metropolitan statistical area (MSA) is determined by the U.S. Office of Management and Budget (OMB) as a location with at least one urbanized area and at least 50,000 people. MSAs are typically cities and their linked surrounding areas. MSAs help to group counties and cities into geographic areas for consensus purposes.
Frequently asked questions about MSA meaning
What does MSA stand for?
MSA stands for Metropolitan Statistical Area.
How are MSAs defined?
Metropolitan Statistical Areas (MSAs) are defined by the U.S. Office of Management and Budget (OMB) as regions that consist of a city and its surrounding communities linked by social and economic factors.
What is the minimum population requirement for an area to be designated as an MSA?
An area must have at least one urbanized area with a minimum population of 50,000 to be designated as an MSA.
What is the purpose of defining MSAs?
MSAs are defined to group counties and cities into specific geographic areas for population censuses and compilations of related statistical data, facilitating data collection and analysis.
How do MSAs differ from micropolitan statistical areas?
While MSAs are centered around cities with populations of at least 50,000, micropolitan statistical areas focus on towns and smaller communities with populations ranging from 10,000 to 50,000.
What role do MSAs play in economic analysis?
MSAs serve as crucial tools for labor market analysis, helping the Bureau of Labor Statistics (BLS) and other entities assess labor market conditions within specific geographical areas, which aids in policy formulation and economic growth strategies.
Can MSA data be used in real estate analysis?
Yes, real estate investors commonly use MSA data to study housing trends and population movements, which informs investment decisions in the property market.
Are there specific criteria for an area to be designated as a Combined Statistical Area (CSA)?
Yes, a CSA comprises two or more MSAs or micropolitan statistical areas with employment interchange measures of at least 15, indicating a high degree of social and economic relations between these areas.
Key takeaways
- Metropolitan Statistical Areas (MSAs) are crucial geographic regions defined by the U.S. Office of Management and Budget (OMB) that encompass cities and their surrounding communities linked by social and economic factors.
- MSAs play vital roles in data collection, labor market analysis, and policy formulation, aiding in economic growth and decision-making.
- There are specific population requirements for an area to be designated as an MSA, with a minimum population of 50,000 for urbanized areas being a key criterion.
- MSAs differ from micropolitan statistical areas in terms of population size and focus, with MSAs centered around larger cities.
- Investors, government officials, and businesses use MSA data for various purposes, including real estate analysis, economic planning, and social services.
- Combined Statistical Areas (CSAs) consist of multiple MSAs or micropolitan statistical areas with significant social and economic relations, as measured by employment interchange measures.
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