economics

Same Question, Different Answers: How It Happens

How can two studies researching the same question come up with two different answers? That was the dilemma that several media outlets recently had to confront, with the release of the results of two studies looking at the impact of the city of Seattle’s minimum wage ordinance, which raised the minimum wage rate for workers in that city. Even though the studies were looking at the same issue, they came up with results that contradicted each other.

The results of the first study indicated that the wage increase didn’t reduce overall job numbers or hours of work. Media: “Yay! Minimum wage increases are a good thing.” But then the results of the second study indicated that the wage increase caused declines in both numbers of jobs and amounts of work. Media: “Um…okay, maybe minimum wage increases aren’t that great.”

The fact that these studies had different results doesn’t mean that one study is right and the other is wrong, or that both studies are wrong and nobody really knows what happened. The studies are admittedly not easy reading – both use complex forms of economic analysis that, frankly, I wouldn’t try to explain because I would probably get them wrong. But we can still look at how the studies were designed and carried out to see if there are reasons why their results might differ.

Here’s a table that (more…)

Ask Not What Amazon Can Do For You

The mighty Amazon has announced that it is looking for a city in which to locate a second North American headquarters (“HQ2” in Amazon-speak), to supplement its operations in its home base of Seattle.  It’s also released a set of specifications describing what it’s looking for in a new location. The reaction to this announcement has resembled the 1960s TV game show The Dating Game, in which a single man or woman would ask questions to three blushing men or women on the other side of a wall. Based on the answers, the questioner would choose which of the three they wanted to go on a date with, and then the lucky couple would finally get to see each other and go on a fabulous night out.

So Amazon has asked its questions, and 238 cities and regions throughout North America have answered, with (more…)