In April of 2015 the city of Seattle enacted an unprecedentedly large increase to the city’s minimum wage and as an empirical analyst in the general vicinity I couldn’t help but go out and make some data driven predictions regarding some of the effects of this groundbreaking bit of public policy. The results of said research are of course published on this site for any who are interested.

Today, after roughly a year and a half it seems almost overdue time for me to take a look at what has actually taken place since then and evaluate both the preliminary effects of the policy and also the accuracy of my own predictions. While the total effects of the new policy won’t be completely measurable for several years to come thanks to the 3 year phase in of the total wage increase, a preliminary look will provide policymakers and the generally curious both with at least some indication of the potential effectiveness of enacting significant upward increases in wages.

In order to properly evaluate the effectiveness of the change to wage policy I take a look at a number of different statistics that would potentially be influenced by the dramatically higher wages in an attempt to get a holistic look at the effects of the policy. Continue reading →

Today I bring you the results of a research project that I have been excited to do for some time now, as the question is one that I find personally interesting and  has plagued me for almost as long as I’ve been a sports fan. Specifically this issue is the return on the ownership of naming rights of professional sports stadiums. More and more it seems like pro sports stadiums are named after businesses rather than either sports teams or the region that the team represents. I first remember noticing this trend as a kid growing up in the Seattle area when the Seattle Mariners’ Kingdome was replaced with a new park named Safeco Field. The average annual cost of retaining the naming rights to a pro sports stadium in North America is roughly $2.7 million and can range from $600 thousand to $10 million. This is no small amount, and brings the value of the benefits of owning these rights into question. A question punctuated by instances such as that of Portland Trail Blazers’ Moda Center. The Center was renamed from the Rose Garden back in 2013 at a cost of $40 million for 10 years, or $4 million annually, by a local insurance company that is now in financial trouble, and being forced to pull out of business in two states to cut operating costs.

With such a high cost to retain the naming rights of major league sports venues my questions are these: does the added name exposure add enough sales revenue to at least cover the cost to the firm of renting the naming rights, and in the case of publicly traded firms, does this expensive advertising practice have a noticeable effect on a firms bottom line therefore making a difference to investors? A third question that I found it necessary to ask in order to fully explore the issue is what effect does the addition of payments for naming rights have on a companies expenses? Or do firms that spend money on naming rights spend more on advertising or just shift away from other forms of advertisement expenses? Continue reading →

About a month ago I talked about a study I conducted to estimate the effect that Seattle’s new minimum wage laws will have on the local unemployment rate, and today I take that analysis one step further and use what I gleaned from that study to estimate a couple of figures that might be more useful in interpreting the impact of the new policy. The first figure I estimate today is the amount of income redistribution that will take place once the new policy has been fully phased in; income redistribution from business owners to low wage workers being the intended effect of the new policy. I then estimate the unintended effect of the policy, the size of the deadweight welfare loss to society created by the policy through the resulting loss of jobs. In order to estimate these two amounts I combine my estimates regarding decrease in employment with demographic data provided by the University of Washington study “Who Would be Affected by an Increase in Seattle’s Minimum Wage?” that I referenced in my previous post. The UW study does attempt to estimate how much income will be redistributed to low wage workers, but explicitly assumes that there is no change in employment within the city due to the new policy, an assumption it strongly cautions will not hold in the real world. Continue reading →