The Economic Impact of Gay Marriage: A $2.5 Billion Question

Studies
economic impact of gay marriage

In the past month, same-sex marriage has gained momentum across the country as more federal judges reject state laws that have banned the unions. Key decisions for Kansas, Missouri, Ohio and Tennessee have all centered on the legal question of same-sex marriage.

But outside the courtrooms, one impact of expanding the definition of legal marriage is becoming clearer — its effect on local economies.

After all, the nation’s $51 billion wedding industry, which employs over 800,000 people, now has plenty of new market opportunities in 32 states, parts of Missouri and in Washington, D.C., all places that allow same-sex marriage. [Since publication, the number of states with legalized same-sex marriage has increased to 35, plus parts of Missouri and Washington, D.C.]

So NerdWallet asked: What is the economic impact if all 50 states legalized same-sex marriage? Our study found that the U.S. could see at least $2.5 billion flow into local economies.

Our analysis

  • In each state, we looked at consumer spending on weddings, the self-identified gay and lesbian population and overall marriage rates.
  • We found consumer spending on same-sex weddings could total $2,537,757,118 if the unions are legal throughout the U.S.
  • Unsurprisingly, California (the most populous state in the nation) stands to gain the most of all states — $414,343,588 — or nearly twice as much as the projected economic gains of Texas, the state with the second-highest population.

How our analysis is different

Many states where same-sex marriage is legal have seen an economic boost as couples plan their unions. But this increase doesn’t predict future spending because marriage rates for the first couple of years after legalization are inflated due to pent-up demand.

Additionally, many of the initial marriages were planned quickly and performed at a courthouse. When same-sex marriage has been legal for several years, our assumption is couples will be able to spend more time planning their weddings, and they spend more money on the ceremony.

Our analysis looks at the long-term demand and the average cost of a same-sex wedding in each state. The result is a model for states when same-sex marriage is the norm.

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Same-sex marriage and federal spending

Our analysis doesn’t factor in tax implications or the changes in federal spending with the nationwide legalization of same-sex marriage.

In 2013, the Supreme Court rejected part of the Defense of Marriage Act, or DOMA, which denied federal benefits to couples who live in states where same-sex marriage is legal. Now, many federal benefits — such as Social Security, Medicare, military, civilian and federal employee benefits — are extended to same-sex couples.

Recognition of same-sex marriages across the country would boost federal revenue through income and estate taxes. For example, legalization would slightly increase federal tax revenue, estimated to be about 0.1% of total federal revenue, according to the Congressional Budget Office.

More on our methodology

We multiplied the population of each state by the percentage that identifies as LGBT, and then multiplied that by the state’s marriage rate and the average cost of a wedding.

LGBT population by state: We assessed the LGBT population by state through Gallup’s poll of residents who self-identify as LGBT — but this identification is likely an underestimate.

Marriage rate by state: We obtained state marriage rates from the U.S. Census Bureau’s data set GCT1251. The data figures the number of marriages for 1,000 women, which is the number of marriages per 2,000 residents. We used this to calculate marriage rate as a percentage.

Cost of a wedding by state: We obtained data from The Wedding Report on average wedding costs by county. We looked at the 765 largest counties in the U.S. by population and weighted county wedding cost estimates by population to determine the estimated average cost of a wedding by state. For states that have boroughs or parishes instead of counties — Alaska and Louisiana — we used cost estimates from the largest borough in the state.

We assumed that the rate of same-sex marriage is the same as the rate for all couples in every state.

Economic impact of gay marriage

State Percentage of population that identifies as LGBT Marriage rate by state Population Estimated gay marriages in state Average cost of wedding Total added
to state economy
Alabama 2.8% 0.8% 4,833,722 1,137 $22,446 $25,518,251
Alaska 3.4% 1.0% 735,132 242 $37,021 $8,975,613
Arizona 3.9% 0.8% 6,626,624 2,119 $25,332 $53,682,762
Arkansas 3.5% 1.0% 2,959,373 1,082 $22,364 $24,206,963
California 4.0% 0.8% 38,332,521 12,420 $33,362 $414,343,588
Colorado 3.2% 1.1% 5,268,367 1,854 $27,504 $51,004,525
Connecticut 3.4% 0.7% 3,596,080 886 $35,108 $31,120,903
Delaware 3.4% 0.9% 925,749 269 $27,700 $7,454,500
Florida 3.5% 0.7% 19,552,860 4,859 $24,254 $117,848,604
Georgia 3.5% 0.9% 9,992,167 3,008 $26,007 $78,221,168
Hawaii 5.1% 1.0% 1,404,054 723 $36,802 $26,615,971
Idaho 2.7% 1.0% 1,612,136 424 $22,947 $9,738,665
Illinois 3.8% 0.7% 12,882,135 3,647 $27,834 $101,507,822
Indiana 3.7% 0.9% 6,570,902 2,225 $23,834 $53,020,197
Iowa 2.8% 0.8% 3,090,416 723 $23,618 $17,065,139
Kansas 3.7% 1.0% 2,893,957 1,071 $25,050 $26,822,402
Kentucky 3.9% 0.9% 4,395,295 1,620 $22,614 $36,631,353
Louisiana 3.2% 0.7% 4,625,470 1,081 $23,776 $25,690,201
Maine 4.8% 0.9% 1,328,302 545 $25,419 $13,857,054
Maryland 3.3% 0.8% 5,928,814 1,507 $34,995 $52,720,973
Massachusetts 4.4% 0.7% 6,692,824 2,076 $32,910 $68,325,643
Michigan 3.8% 0.7% 9,895,622 2,707 $24,688 $66,841,724
Minnesota 2.9% 0.9% 5,420,380 1,368 $28,265 $38,654,438
Mississippi 2.6% 0.9% 2,991,207 704 $22,053 $15,521,435
Missouri 3.3% 0.9% 6,044,171 1,735 $22,343 $38,770,609
Montana 2.6% 0.9% 1,015,165 240 $22,492 $5,402,357
Nebraska 2.7% 0.9% 1,868,516 462 $24,486 $11,303,318
Nevada 4.2% 0.9% 2,790,136 1,096 $26,863 $29,433,590
New Hampshire 3.7% 0.8% 1,323,459 370 $32,611 $12,056,458
New Jersey 3.7% 0.7% 8,899,339 2,190 $36,745 $80,459,374
New Mexico 2.9% 0.9% 2,085,287 541 $23,017 $12,457,797
New York 3.8% 0.7% 19,651,127 5,041 $32,421 $163,416,946
North Carolina 3.3% 0.9% 9,848,060 2,762 $24,189 $66,818,175
North Dakota 1.7% 1.2% 723,393 149 $22,709 $3,379,159
Ohio 3.6% 0.8% 11,570,808 3,207 $23,883 $76,602,435
Oklahoma 3.4% 1.1% 3,850,568 1,420 $23,112 $32,829,754
Oregon 4.9% 0.8% 3,930,065 1,550 $27,064 $41,955,325
Pennsylvania 2.7% 0.7% 12,773,801 2,500 $27,614 $69,047,046
Rhode Island 4.5% 0.7% 1,051,511 319 $28,809 $9,201,548
South Carolina 2.9% 0.8% 4,774,839 1,115 $22,869 $25,491,992
South Dakota 4.4% 1.2% 844,877 431 $22,790 $9,827,515
Tennessee 2.6% 0.9% 6,495,978 1,495 $23,202 $34,680,751
Texas 3.3% 1.0% 26,448,193 8,379 $25,972 $217,610,296
Utah 2.7% 1.3% 2,900,872 991 $25,950 $25,711,188
Vermont 4.9% 0.8% 626,630 247 $30,585 $7,559,823
Virginia 2.9% 0.9% 8,260,405 2,072 $34,990 $72,503,281
Washington 4.0% 1.0% 6,971,406 2,747 $30,076 $82,610,754
West Virginia 3.1% 0.8% 1,854,304 445 $20,960 $9,337,566
Wisconsin 2.8% 0.7% 5,742,713 1,182 $25,313 $29,915,850
Wyoming 2.9% 1.0% 582,658 164 $24,309 $3,984,315
Total economic impact $2,537,757,118

 

Wedding image via Shutterstock.