Question

The data table below provides the same line item data from state budgets in North Dakota; however, now the data has been adjusted for inflation. All of the data is given in terms of 2003 dollars. Calculate the inflation adjusted per capita expenditure (amount paid per state resident in terms of 2003 dollars) for each of the three given line items (higher education, transportation, and total budget) both in 2003 and again in 2014. Record your answers in the table at the bottom of the page (or in some similar table) using correct units of measure. Write a few sentences that interpret these results and compare and contrast the changes in inflation-adjusted per capita spending in these line items over this time period.

State of North Dakota
Year	inflation adjusted budget line items			Population of the State
	Higher Education (in millions of 2003 dollars)	Transportation (in millions of 2003 dollars)	Total Budget (in millions of 2003 dollars)
2003	230	385	2496	631,680
2004	234	387	2495	635,480
2005	256	425	2644	634,528
2006	266	457	2687	636,019
2007	270	395	2731	637,534
2008	311	384	2871	640,525
2009	334	508	3459	645,903
2010	342	551	4047	674,526
2011	308	691	4284	685,476
2012	311	728	4352	702,087
2013	398	1169	5108	724,019
2014	439	1469	5625	739,904

State of North Dakota
Year	budget line items			Population of the State
	Higher Education (in millions of dollars)	Transportation (in millions of dollars)	Total Budget (in millions of dollars)
2003	230	385	2496	631,680
2014	439	1469	5625	739,904
Year	Inflation Adjusted Per Capita Expenditure			Population of the State
	Higher Education	Transportation	Total Budget
2003				631,680
2014				739,904

Answer 1

Year	Inflation Adjusted Per Capital Expenditure			Population of the State
	Higher Education	Transportatioon	Total Budget
2003	364.11	609.49	3951.37	631,680
2014	593.32	1985.39	7602.34	739,904

To arrive at the per capita numbers, we have simply divided each of the item (which are in millions) by the population number.

• All three items show growth over the 10 year period however the expenditure on Transportation almost tripled which could reflect the investments in improving infrastructure as well as relative importance of improved transportation among the general public
• The share of higher education has dropped from 9.21% in 2003 to 7.80% in 2014
• At the same time, the share of Transportation has increased from 15.42% to 26.12%
• The cagr of transportation in these 11 years has been 11.33% p.a. and for higher education it was 4.54% and for per capita budget overall it was 6.12%. Hence the share of transportation grew faster than the growth in the per capita budget. This could also reflect the changing demographics of the state where the number of people in higher education age group may be less (reduced demand) compared to older population who will require and demand better transportation