kalshiMarch 10, 202616d agoU.S. state population decrease of 10%+ by 2035
Will any U.S. state experience a population decrease of at least 10% between 2025 and 2035?
Signal
BUY
Probability
8%
Confidence
MEDIUM
75%
Summary.
The market prices a 10%+ state population decline by 2035 at 15.5%, but my analysis estimates only 8% probability—a significant 7.5 percentage point edge favoring NO. Historical precedent strongly supports this lower estimate: no U.S. state has lost 10% in a decade since the 1880s, even during the Dust Bowl (max 5-6% decline). Current Census data (January 2026) shows the most vulnerable state, West Virginia, projected to decline only 4-5.5% by 2035—less than half the threshold needed. New York and Illinois, previously concerning candidates, have stabilized due to international migration. To reach -10% requires sustained ~1.05% annual compounding loss, yet no state currently tracks this trajectory. The market's 15.5% appears to overprice tail risks (climate-driven migration, catastrophic earthquakes, economic collapse) by approximately 2x. While these scenarios are plausible, the 10-year window is insufficient for even aggressive climate scenarios to compound to 10%, and historical disaster patterns show temporary displacement rather than permanent state abandonment. The market may be exhibiting availability bias from climate headlines and recency bias from 2020-2023 pandemic migration, underweighting the structural difficulty of achieving 10% decline in modern America's interconnected economy with international migration buffers.
Reasoning.
Step-by-Step Analysis
Base Rate Assessment: Historical evidence is extremely strong against a 10% state-level population decline:
- No U.S. state lost 10% during the 2010-2020 decade (largest: West Virginia -3.2%)
- Even during the 1930s Dust Bowl, maximum decline was 5-6% (Dakotas)
- Last 10% decade decline: Nevada in the 1880s post-silver rush
- This suggests a near-zero base rate under normal conditions
Current Demographic Trends (as of March 2026):
- Only 5 states losing population in 2024-2025: CA, HI, NM, VT, WV
- New York and Illinois have stabilized after 2020-2023 losses due to net international migration
- Most vulnerable state (West Virginia): projected 4-5.5% decline over next decade, less than half the 10% threshold
- New York: projected 4-5% decline by 2035 (would need to accelerate 2-3x)
- Illinois: only 3.1% decline projected 2020-2040
Required Trajectory: To reach -10% by 2035 from 2025 baseline requires ~1.05% compounding annual loss. No state is currently on this trajectory based on January 2026 Census data.
Tail Risk Valuation: The market's 15.5% pricing appears to reflect catastrophic scenarios rather than demographic trends:
- Climate/Uninsurability (3-4%): Florida/Louisiana property insurance collapse, Arizona/Nevada water crisis forcing rapid migration
- Catastrophic Disaster (2-3%): Cascadia subduction zone earthquake (WA/OR), major California fault rupture, catastrophic hurricane season
- Economic Collapse (1-2%): Small state (VT, WV, WY) loses major employer/industry, accelerating existing decline
- Black Swan Events (<1%): Pandemic worse than COVID-19, nuclear incident, etc.
My Estimate: 8%
I assess tail risks lower than the market's 15.5%:
- Climate migration timing: While plausible by 2040s-2050s, insufficient time by 2035 for 10% threshold even in vulnerable states
- Disaster probability: Major earthquakes/hurricanes could displace populations temporarily, but historically Americans rebuild rather than permanently abandon states (see: Louisiana post-Katrina, New Jersey post-Sandy)
- Economic resilience: Even struggling states like West Virginia show deceleration of decline, not acceleration
- International migration buffer: Post-pandemic international migration surge (noted in Census data) provides demographic stabilization for states that would otherwise be most at risk
The market may be overpricing because:
- 10-year windows feel shorter than they are (recency bias from dramatic 2020-2023 pandemic migration)
- Climate headlines create availability bias
- Linear extrapolation of worst-case states (WV losing 0.5%/year → could reach 5% by 2035, but 10% requires doubling current rate)
Edge Assessment: Market: 15.5% | My estimate: 8% | Edge: ~7.5 percentage points
At current 16¢ pricing, betting NO offers meaningful value. The market is pricing catastrophic tail risks approximately 2x higher than warranted by historical precedent and current demographic trajectories.
Key Factors.
Historical precedent: No state has lost 10% in a decade since 1880s; even Dust Bowl caused only 5-6% max decline
West Virginia trajectory: Most vulnerable state projects 4-5.5% decline, less than half the threshold needed
International migration stabilization: Post-pandemic surge in immigration has reversed decline trends in formerly vulnerable states (NY, IL)
Timing constraint: Only 10 years (2025-2035) requires ~1.05% compounding annual loss; no state currently on this trajectory
Climate risk timing: While plausible long-term, insufficient runway by 2035 for property insurance collapse to drive 10% exodus
American rebuilding tendency: Historical pattern shows temporary displacement after disasters, not permanent 10% abandonment of states
Small state math: Vermont/Wyoming theoretically vulnerable to smaller absolute losses, but show no acceleration in current data
Scenarios.
Base Case: Normal Demographic Trends (NO resolution)
88%West Virginia experiences the steepest decline at 4-5.5%, falling short of the 10% threshold. Other declining states (CA, HI, NM, VT) decline 1-3%. International migration continues to stabilize formerly declining states like NY and IL. No catastrophic events occur.
Trigger: Census Bureau 2027-2033 annual estimates show continuation of current trends; West Virginia stays on 0.4-0.5% annual decline trajectory; no major natural disasters or climate tipping points
Moderate Climate/Economic Stress (NO resolution, but close)
8%One or more states face accelerated decline due to moderate climate stress (property insurance crisis in FL/LA, water restrictions in AZ/NV) or economic shocks (major employer leaves small state). Decline approaches but doesn't reach 10% threshold, ending 2025-2035 at 7-9%.
Trigger: Major insurers exit Florida/Louisiana markets 2027-2029; Arizona/Nevada face sustained drought and population stabilization turns to 0.5-0.8% annual decline; still insufficient time to compound to 10%
Catastrophic Event (YES resolution)
4%A catastrophic event triggers rapid, sustained out-migration from a state: Cascadia megaquake devastates Pacific Northwest infrastructure; major California fault rupture; Florida/Louisiana become effectively uninsurable after multiple Cat-5 hurricanes; or small state suffers complete economic collapse.
Trigger: Magnitude 9.0+ Cascadia earthquake 2026-2032 with prolonged rebuilding; 3+ major hurricanes hit same state 2026-2030 causing permanent insurance market collapse; federal disaster aid insufficient to retain population; out-migration exceeds 1.5%/year for 5+ consecutive years
Risks.
Cascadia megaquake (9.0+) hits 2026-2032: Could devastate Washington/Oregon infrastructure so severely that rebuilding takes decade+, triggering sustained out-migration beyond historical disaster patterns
Accelerating climate tipping point: Property insurance market collapse in Florida/Louisiana occurs faster than expected (2027-2029), combined with multiple catastrophic hurricane seasons, creating permanent uninsurability
West Virginia decline acceleration: Current 0.5%/year decline doubles to 1.1%+/year due to combined factors (opioid crisis worsening, coal industry final collapse, healthcare desert formation)
Black swan pandemic or nuclear event: COVID-scale or worse event concentrated regionally rather than nationally, triggering state-specific exodus
Model risk: I may be anchoring too heavily on historical precedent; modern interconnected economy could enable faster migration than 1930s-era populations experienced
Water crisis severity: Colorado River collapse forces Phoenix/Las Vegas depopulation faster than projections suggest; Arizona loses 1.5%+/year starting 2028
Informed trader signal: Market has been stable at 14-16¢ for past week; if sophisticated traders have analyzed catastrophic risk models unavailable to me, 15.5% may be correctly calibrated
Edge Assessment.
EDGE IDENTIFIED: Bet NO
Market probability: 15.5% | My estimate: 8% | Edge: ~7.5 percentage points
Value Assessment: At 16¢ (implying 15.5% YES probability), betting NO offers significant value. The market appears to be overpricing tail risk scenarios by approximately 2x.
Reasoning for Edge:
-
Historical anchor mismatch: Market may be underweighting the fact that no modern state has approached 10% decline in a decade, even during major crises (Dust Bowl, Rust Belt decline, Hurricane Katrina)
-
Timing constraint: The 10-year window (2025-2035) is insufficient for even worst-case climate scenarios to compound to 10%. Florida property insurance collapse might drive 0.8-1.0%/year out-migration starting 2028-2029, reaching only 5-7% by 2035.
-
Recent stabilization ignored: Market pricing may not fully incorporate the January 2026 Census data showing NY/IL stabilization via international migration—this removes two of the most plausible candidates.
-
Disaster recovery patterns: Historical evidence shows Americans rebuild after catastrophes (LA post-Katrina lost 5% but recovered; NJ post-Sandy stabilized). Market may be overestimating permanent displacement probability.
Market Psychology:
- Climate change salience creates availability bias
- 10-year windows feel shorter than they are
- Recency bias from dramatic 2020-2023 pandemic migration patterns
Confidence in Edge: Moderate-high (0.75). I'm confident baseline demographics strongly favor NO, but acknowledge tail risk quantification is inherently speculative. The stable 14-16¢ range over past week suggests market consensus, not informed trading pushing price toward my estimate.
Position Sizing: This is a good NO bet, but tail risks are real. Kelly criterion with 8% true probability vs 15.5% market → suggests ~7% bankroll allocation. The 10-year timeline and genuine catastrophic scenarios warrant conservative sizing despite clear edge.
What Would Change Our Mind.
Census Bureau 2027-2028 data shows West Virginia or another state accelerating to 1.0%+ annual decline (double current rates), establishing trajectory toward 10% threshold
Major property insurers announce complete market exit from Florida or Louisiana by 2027-2028, coupled with multiple Category 4-5 hurricanes creating permanent uninsurability crisis
Cascadia subduction zone earthquake (magnitude 9.0+) occurs before 2030, with federal damage assessments indicating decade-plus rebuilding timeline for Washington/Oregon
Arizona/Nevada water crisis escalates with Colorado River allocation cuts exceeding 40% by 2028, triggering sustained 1.5%+ annual out-migration from Phoenix/Las Vegas metros
International migration reverses sharply (e.g., federal policy changes, global recession) removing the stabilization buffer currently protecting New York, Illinois, and California
Market price moves to 25%+ on significantly increased volume, suggesting informed traders have access to catastrophic risk models or government projections not publicly available
Any state shows 3-4% population loss in a single year (2026-2028), indicating acceleration beyond all current demographic projections
Sources.
- U.S. Census Bureau Vintage 2025 Population Estimates (Released January 27, 2026)
- Cornell University Program on Applied Demographics Report (November 2024): New York Population Projections
- Weldon Cooper Center for Public Service & Illinois Department of Public Health: Illinois Population Projections (2020-2040)
- Historical U.S. State Population Decline Analysis (2010-2020 Census Data)
- West Virginia Demographic Projections (State Health Department)
- Prediction Market Pricing Analysis (March 2026)
Market History.
Market has been relatively stable in the last 24 hours (currently 16¢). 7-day range: 14¢ – 16¢.
Get This Via API.
Access real-time prediction market analysis programmatically. Every analysis on this page is available through our REST API.
curl -X POST https://api.rekko.ai/v1/analyze \
-H "Authorization: Bearer YOUR_API_KEY" \
-H "Content-Type: application/json" \
-d '{"category": "economics", "platform": "kalshi"}'Related Analysis.
Bitcoin reaches $90,000 in March 2026
Based on temporal grounding as of March 20, 2026, this bet has an estimated probability of approximately 2% compared to any market pricing above 5% representing significant mispricing. Bitcoin currently trades at $70,650 and requires a 27% gain to reach $90,000 within just 11 remaining days—a historically rare move that becomes virtually unprecedented given the hostile current environment. Bitcoin already failed to breach $90,000 during March, with the monthly high reaching only $76,000 before the March 18 Fed meeting triggered a 4% selloff. The macro backdrop has severely deteriorated: the Fed maintained hawkish policy at 3.50%-3.75% with sticky inflation (Core PCE 2.8%, February PPI +0.7%), Iran strikes sent oil to $119/barrel adding inflationary pressure, and $158 million in leveraged longs were liquidated. Derivatives positioning is overwhelmingly defensive (put-call ratio at 0.77, highest since mid-2021; funding rates collapsed from 4.1% to 2.7%). No identifiable catalyst exists to drive the required breakout within 11 days. While ETF inflows of $1.3 billion showed some institutional interest, this proved insufficient to break the established $60K-$72K range. The confluence of severe time constraint, hawkish monetary policy, geopolitical energy shocks, bearish market structure, and absence of positive catalysts makes a 27% rally extraordinarily unlikely, justifying the low 2% probability estimate with high confidence (92%).
Bitcoin to reach $90,000 in March 2026
Based on analysis as of March 20, 2026, I estimate an 8% probability that Bitcoin will reach $90,000 before March 31, 2026 (confidence level: 82%). This is a low-probability tail event requiring a 22-29% price surge in just 11 days from the current $70,000-$74,000 trading range. Bitcoin's March 17 peak of $76,000 fell $14,000 short of target and has since consolidated lower, signaling momentum weakness. The March 17-18 FOMC delivered a hawkish shock—cutting 2026 rate expectations to just one cut and raising inflation forecasts to 2.7%—creating a hostile macro environment for speculative assets. Multiple technical resistance levels ($75k-$78.9k, then $83k) must be breached in rapid succession without time for consolidation. Historically, 25%+ Bitcoin moves in 11-day periods are extremely rare outside peak bull euphoria or major catalytic events, neither of which are currently present. While $700M in ETF inflows and MicroStrategy's $1.6B purchase demonstrate strong institutional demand, this pace is insufficient to drive the required parabolic move. The primary risk to this assessment is a black swan positive catalyst (major institutional adoption announcement, regulatory breakthrough, or geopolitical de-escalation) that could trigger FOMO-driven momentum. Without market odds provided, I cannot determine if an exploitable edge exists, but probabilities above 15% would likely represent overvaluation.
Fed interest rate decrease at next meeting
The market-implied probability of a Fed rate cut at the March 18, 2026 meeting is 3-4% across multiple sources (CME FedWatch >90% no change, Investing.com 97% no change, Polymarket 96% no change). My estimated probability of 4% is essentially identical to market consensus. This alignment reflects appropriate assessment of current conditions: PCE inflation remains elevated at 2.9% (well above the Fed's 2% target), the labor market is strong with 4.3% unemployment, the Fed characterized economic activity as "expanding at solid pace" in January, and only 2 of 12 FOMC members dissented in favor of cuts. While Q4 GDP slowed to 1.4% and inflation trends are improving (CPI at 2.4%), these factors are insufficient to justify immediate action with only 3-4 weeks until the meeting. The Fed is highly predictable at this short horizon, and the overwhelming market consensus reflects proper calibration rather than mispricing. No meaningful edge exists at current odds.