2017

Stories related to "Inquiry Required".

conversations

Where’s the Optimal Place to Park a Food Truck?

Pursuing a love of food and cooking, I completed the basic pastry certificate at Le Cordon Bleu in Paris the summer before starting the PhD program. So I was thrilled to see a crêpe truck, Paris Ouh La La, serving lunch during the school year. After several good meals at the food trucks on Ellis Avenue, and observing the variation in the trucks parked each day, I started thinking about how the trucks decide where to park. Where you choose to locate a business is a fundamental economic question—one that food trucks must re-answer every day. The classic location choice model was offered by the mathematician and economist Harold Hotelling in 1929. Consider two ice cream vendors who parked their carts on a one-mile stretch of beach. Assuming the venders offer roughly the same treats, beachgoers will naturally choose to walk to the closest cart. The vendor on the left will serve all the beachgoers to its left, and the vendor on the right will serve all the beachgoers to its right.

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Why Is Productivity Stuck in Neutral?

When we talk about the global economy, we tend to turn to automotive metaphors. A recession brings things to a “screeching halt.” Boom times are said to be “in overdrive,” to have “found a higher gear.” And since the recession, one of the major components of the economy has been stuck in neutral. According to the Conference Board, productivity has barely budged since 2007, was flat in 2014 and 2015, and fell last year. We asked professor Chad Syverson, alumnus Matt Tracey, and Executive MBA student Crystal Lam to tell us why it’s stuck and what might kick it into gear. Chad Syverson, J. Baum Harris Professor of Economics, is the author of “Challenges to Mismeasurement Explanations for the US Productivity Slowdown,” published in the spring 2017 issue of the Journal of Economic Perspectives: Is productivity stuck in neutral? The short answer is yes. It’s been slow for the last decade—truly slow, not mismeasuredly slow or illusorily slow. The mismeasurement hypothesis says that although productivity has been slow since the mid-2000s, that isn’t real. The hypothesis argues that what’s actually going on is that our ability to measure economic growth has gotten worse. New things that people like and use a lot—Google, Facebook, Snapchat—are all free. We calculate GDP by adding up what people spend money on. Those things don’t show up because they’re free, so it looks like output per worker hour isn’t going up much. In my recent paper I asked, if that’s true, what else would it be true of? The patterns I found were consistent with an actual productivity slowdown rather than with mismeasurement.

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How Do You Avoid Paralysis by Analysis?

Knowing when to stop looking at data comes up constantly in my Algorithmic Marketing class. In this class, one of the main goals is to be able to develop tools that would help someone make better decisions. Building these tools relies on knowing what exactly the decision is or what the question is. Very often people don’t specify their question in a precise enough form. You need to write down a specific question—it can’t be a vague goal or a vague statement. It’s important to thoroughly articulate your question and your research plan. The more precise your question, the easier time you will have looking for an answer. The question in itself isn’t enough, though. We also need to specify the exact parameters of an acceptable answer. It doesn’t occur to people to write down specs of an answer, but that’s another thing that needs to be done before you get started. You need to give yourself some set of parameters to help you understand when you’re going to stop even before you start. These parameters could be a set of rules you have to satisfy. For example, if I’m looking at how advertising impacts sales, it might be that I am looking for a set of parameters in the context of a particular model. Knowing that helps you look in the right direction. You have to chart out what the ideal answer would be, and you have to chart out what you’re going to be satisfied with in the findings<br/>