The Midwest is also significant for another reason. In Chapter 4, when Gatsby and Nick are having lunch, Gatsby reveals some of his “background” information to Nick. During this conversation, Gatsby tells Nick that he is from the Midwest but when Nick asks him where in the Midwest he is from, Gatsby responds by telling him “San Francisco” which is clearly not in the Midwest. This is one of the first clues that Nick gets that tells him that Gatsby is a liar and is trying to hide his past.
The Midwest is an important setting in this novel because it sets up the contrast to the rich who live in East Egg. Those in the East Egg are so destructive and self-involved that they leave everything behind them whenever it suits their needs.
Nick, the narrator of the novel, is from the Midwest. He has the morals and values of those who work for their money and live well, but he has a conservative side about his. Nick is a fair man, he is for the most part an innocent person, and he doesn't have the sophistication of those in the East Egg. His values are understood through his narration. He witnesses how Daisy treats others. She uses people, then discards them when she's done. Without his contrasting morals, the reader wouldn't be able to see how corrupt the East Egg people really are. So, yes, Fitzgerald put the Midwest in there for a reason. It's very essential to the story line. It's also where the "hero" of the story is from. Jay Gatsby is from the Midwest, even though he ends up in the category of the West Egg people. He began in the Midwest.
The midwest plays the role of being what Nick Carroway compares New York to. We are told in chapter one that Nick moved away from the midwest for three primary reasons: he wanted to enter the bond business, he didn't want to be married off to a girl he'd been seeing and who people had started linking him to permanently, and he was bored with the life in the midwest after the excitement of the war. In the end we are told he returned to the midwest after his summer spent in West Egg and New York City because of all that happened there. He longed for the peacefulness and morality of the midwest after having witnessed the great immorality he saw in New York. In that respect, as a comparison point, the midwest is important to the story.