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University of Oregon: the Economics of Portland Food Carts

Man standing at food cart

It was his appetite for information—and, well, his appetite—that drew Jake Glicker into Portland’s thriving food cart scene.

Glicker loved to eat at places like Viking Soul Food and the Swamp Shack. And when he started poking around for data on the economics behind this industry, he stumbled across something far more valuable than finding, say, the perfect crawfish pie.

It was early 2014, and the senior in economics was sitting pretty, on track to graduate in March. He could have coasted through those last few months of school.

But Glicker was curious what data existed on Rose City’s burgeoning street-corner meal makers, so he made a call to the Multnomah County Health Department. Jackpot: the department licenses food-cart vendors and tracks them from entry into the market to exit, which meant Glicker had stumbled upon access to tidy information capturing the lifespan of more than 700 food carts.

If some aspiring economist had tapped this data goldmine previously, Glicker was unaware of it; his advisors in the department were beside themselves. “I had a usable data set on an industry that no one has studied in a serious way,” Glicker said. “We were, like, ‘Yeah, let’s do it, it’s going to be fun.’ I wanted to see how good I could get at this process of applied economics.”

Well-Behaved vs. Haphazard

Glicker sought to understand why the food cart market exploded between 2006 and 2011. The question was whether everything he’d learned in class about concepts such as “industrial organization” and “microeconomic relationships” would hold up in a real-world scenario involving haphazard, opportunistic businesses that are only as stable as the wheels carrying them throughout the city.

“Economics is full of theoretical explanations of how markets are structured, how firms behave, and what drives basic human decisions,” Glicker wrote in the introduction to his report. “But well-behaved economic ideals fly out the window as we walk out the door and toward the nearest food cart. Or do they? An in-depth analysis of this market over time affords a rare opportunity to evaluate and understand the essence of many market mechanisms.”

To determine what affects the performance of Portland’s food carts, Glicker assigned values to aspects of each business such as type, location, lifespan, local population and unemployment rates. Then, he ran a series of complicated calculations using equations from class that are meant to forecast economic outcomes.

Glicker essentially tested whether his efforts to “predict” performance based on economic principles would match what actually happened on the ground with the rise and fall of food carts over the six-year period.

One of his more interesting finds: food carts in northeast Portland were more likely to “exit the market” during that period—that is, go under—than those in the southeast. In the southeast, Glicker (above) wrote, “it is anticipated most local consumers have less disposable income and are of a lower median age than anywhere else in the city, making them ideal consumers of street food meals.” That’s a good description of the college-age Glicker himself, of course.

Ninety-Five Percent Accuracy

His conclusions for the entire project were no less insightful: Glicker correctly predicted more than 95 percent of those instances where food carts eventually went out of business. In fact, Glicker (left) found that the chance that any given outcome for a business was the result of a random event unforeseen by his model was less than 1 percent.

In other words, Glicker’s conclusion was wholly and completely predictable. Everything happened just as his model predicted it would. For an economist, this is cause for celebration.

“It turned out that all the things that I was expecting to happen were actually happening,” Glicker said. “I thought, ‘OK, cool. I can understand (these economic principles) and see them happen in the real world.’”

The paper earned Glicker an award for “outstanding work on a thesis” from the university’s Clark Honors College.

Glicker attributes his success with this study to experience gained in conducting an earlier research project through the economic department’s honors program, which gives ambitious students the opportunity to perform analyses for actual clients. Students complete a research paper, hone their skills in applied economics, and—perhaps most important—get a firsthand look at how the real world works. Meanwhile, clients ranging from local community groups to the State of Oregon get useful analysis and recommendations that influence their policies.

Business Incubator—Boom or Bust?

This earlier project earned more recognition than Glicker could have imagined. Teaming up with fellow economics student Aaron Rouza on an analysis for the Eugene Area Chamber of Commerce, he assessed the possible impact of a $7.5 million investment by the State of Oregon in creating a local “business incubator.” These programs draw off research universities, technology, and other existing resources to spark entrepreneurship and attract startups.

That exercise tested Glicker’s command of “econometrics,” which is a way to provide a quantifiable value to economic questions through mathematics, statistical methods, and computer science. Using a combination of economic theory, equations, and data from sources such as the National Business Incubation Association, the duo predicted that the expenditure would create 94 jobs at technology-focused startups, generating $23 million in annual wages and about $1.9 million in annual tax revenue to the state.

The conclusion was less surprising to Glicker than the overwhelming reaction that followed. He and Rouza won “best paper of the year” in the economics department and the chamber shared the work with partners across Lane County. In no time at all, Glicker and Rouza found themselves presenting a PowerPoint version of their report to a room of mayors and business representatives.

One of the more challenging aspects of the experience, Glicker said, was working with the chamber to shape broad questions into more narrowly defined queries that could be analyzed. He spent hours in the office of economics professor Bruce Blonigen, an associate dean in the college, working to match the chamber’s goals for the project with the data available. Blonigen said Glicker’s research for the business incubator and food-cart projects exemplified Glicker’s status as one of the best students he has ever advised.

Glicker, an aw-shucks type who is more comfortable talking “regression estimation coefficients” than personal accomplishment, credited his growth to the experience of doing real research.

“The best thing I got out of this was the process,” Glicker said. “I learned what a deliverable was and how to work with a client to get them something they can use. Meanwhile, the working world sees your ability to navigate (around obstacles) and produce something.”