The Price is Right
Student Researchers Measure Humboldt’s Economy
INFLATION—IT BECOMES A POPULAR EPITHET during economic downturns or election years. But in remote areas like Humboldt County, economic microclimates can develop, making it hard for locals to have an accurate assessment of the cost of living.
HSU economics students have stepped in to help. A recent report developed by the students identified Eureka’s inflation rate for the first time. It joins other ongoing HSU projects, including an economic index and business confidence report that allow students, professors, and local residents to understand the state of the local economy and Humboldt County’s business climate.
Humboldt State students Luis Ceballos, Eric Diaz, and Connor Hoffman produced this year’s local Consumer Price Index (CPI) as part of the Department of Economics’ required “capstone”—the project that acts as a student’s culminating undergraduate experience. Students have produced the index each year since 2013, using the same weights and methodologies as the U.S. Bureau of Labor Statistics, providing enough data for this year’s team to calculate Eureka’s inflation rate.
Department of Economics Professor Steve Hackett says the goal is to continue the CPI each year, allowing students, faculty, and the community to identify trends over time.
The index tracks the prices of commodities in the area and this year Hackett asked the students to do an in-depth analysis of several sectors of the economy, including food and beverages, housing, and some consumer goods.
The takeaways? Some fluctuations occur—eggs have doubled in price since HSU’s first CPI report (due to national disease problems in egg-laying hens, Hackett says), but the local costs of recreation have gone down. Eureka’s inflation rate is low and it roughly matches the national CPI. “Overall the message is that consumer price inflation is very moderate—at the national level and in our local area,” Hackett says.
Hackett hopes the CPI project will join the department’s Humboldt Economic Index as an institutionalized program. The Economic Index is a monthly report generated since 1994 that tracks retail sales, building permit issuances, unemployment claims, and other details across a variety of local economic sectors.
The Humboldt Business Confidence Report is another recent contribution to understanding the local economy. A partnership with the Humboldt County Workforce Development Board, the August 2015 survey showed 78 percent of local business owners expressed moderately high confidence in the overall health and performance of their businesses.
“We felt there was a need to provide a resource of hard data and survey data so business leaders can make better decisions about different kinds of issues given the context of how things are changing,” says School of Business Chair Hari Singh, who co-authored the study with Jacqueline Debets of the Workforce Development Board and Denise VandenBos, Director of Project Development for HSU’s College of Professional Studies.
Making the CPI as successful as the Economic Index will require dedication on the part of capstone students as well as financial support. The CPI project was funded by the Dr. Ted Ruprecht Research Assistantship. Established with a $25,000 gift commitment from HSU alumnus Don Lewis, the assistantship provides capstone project students a stipend during the school year.
The projects are valuable for the community, and an important part of the students’ educations. “We’re looking for more and more hands-on training, rather than having students squirrel away knowledge they get from a textbook or online,” Hackett says.