WNC breweries seeing impact of can shortage
A perfect storm is brewing for beer producers in the form of short supply vs. high demand when it comes to packaging their products.
Manufacturers of aluminum cans used for canning beer and soft drinks are in overdrive trying to keep pace with increased demand. A combination of factors has sent the demand for cans soaring. A major factor is increased beverage consumption at home, rather than at restaurants which are causing a back up for breweries.
In the past, a larger portion of beer and beverage sales went into kegs for distribution, now with changes forced upon the supply chain by COVID-19, breweries are having to find ways to quickly adapt to the changing market.
In a recent story on WMYA MyTV40, Center for the Study of Free Enterprise Director Edward Lopez said that although aluminum is not in short supply, the can manufacturing process has been impacted, causing the supply-chain backup.
“Markets are trying to re-allocate supplies of goods and services where they’re in the highest demand. So, just like we saw with previous shortages in the pandemic, this one’s likely to be a short-run disruption.”
Lopez said with demand up, aluminum prices are up. He said that puts pressure on breweries to decide which beers to can and pressures consumers, who may make other choices if prices of canned beverages increase.
Waynesville’s Frog Level Brewing is one of those feeling the pinch, with can supplies taking about twice as long as usual to arrive.
Read the full story here: http://my40.tv/news/local/aluminum-can-shortage-due-to-covid-impacting-local-breweries
Why are recoveries increasing in the Sunbelt, especially in North Carolina?
In a new study as part of CSFE’s COVID-19 research initiative, with co-authors Stephen Miller and Craig Richardson, we find that surging cases in Sunbelt states are not leading to surging hospitalizations or deaths. If anything, the growth rate of deaths is declining.
One possible reason can be detected in reported recoveries. All but three of our study’s 10 comparison states provide data on recoveries. And while reporting criteria do vary by state, comparing the ratios of recoveries to deaths can still shed some light on why this round might be different. In some states, a recovery is counted as a hospital discharge. Other states count an infected person as recovered if they are symptom-free for a period of time or have two consecutive negative tests. Texas clearly measures recoveries differently, where an infected person is “recovered” 32 days after hospitalization if the patient survived or 14 days after being recorded as a case if hospitalization was not required. In this sense, recoveries are a conservative metric because many survivors are not tracked or recorded, which could artificially inflate the presumed number of active cases. Figure 5 from the new study is reproduced here; it reports the ratio of recoveries to deaths for six of our comparison states starting in late March through late June.
As Figure 5 shows, the ratio of recoveries to deaths portrays an improving trend in North Carolina. By the end of June, the state’s ratio of reported recoveries to reported deaths was 12.6, meaning that for every 100 hospitalizations an average of 7.4 cases would lead to deaths while the remaining 92.6 cases would become recoveries. The good news for North Carolina is, this ratio has been steadily increasing throughout the duration of available data, beginning about May 10.
Figure 5 also shows North Carolina in a relatively good position compared to all but one of the other states. New Jersey and New York flat-lined early on, and have shown no improvement in recoveries to deaths. Meanwhile, North Carolina is not only improving but by the end of June has more than five times the recovery rate as New York / New Jersey.
We want to stress that this is relatively good news. Every increase in cases warrants the utmost concern. But it is important to understand where progress is being made, and why. If we can better understand why hospitalizations and especially deaths are not following new cases in the same large numbers as they did earlier in the pandemic, perhaps we can do more in those directions, to improve the situation even more, and eventually to bring all these numbers down as close to zero as humanly possible.
Do spikes in COVID-19 cases lead to spikes in deaths?
One crucial question is whether spikes in new daily cases are followed by later spikes in hospitalizations and deaths. Many have expressed grave concern about this possibility. Former FDA commissioner Scott Gottlieb told Face the Nation last Sunday, “We’re right back where we were at the peak of the epidemic during the New York outbreak.” State and Buncombe County officials have followed suit, yesterday describing recent spikes in confirmed cases as “rising at an alarming rate.”
In a forthcoming CSFE study, co-authored with economists Craig Richardson and Stephen Miller, we compare five hot zone states from Round 1 (Massachusetts, Michigan, New Jersey, New York, and Pennsylvania) to five counterpart states in Round 2 (Arizona, Florida, Georgia, North Carolina, and Texas). We find no correlation between deaths on any given day and lagged measures of cases. Furthermore, even though confirmed cases spiked for over a month in both rounds, the trends in Round 2 states on hospitalizations, deaths, and recoveries are markedly different from those in Round 1 states. We find that measured on a seven-day moving average, daily Deaths are not increasing in Round 2 states, and if anything they are decreasing. Meanwhile, hospitalizations have been increasing over this period in Round 2 states, but gradually so, and they still remain at relatively low levels compared to Round 1 states.
Figure 3 from the forthcoming study, focusing on North Carolina, is reproduced below. This chart reports the seven-day moving average of new daily cases on a benchmark lag period of 14 days. There seems to be no connection between deaths on any given day and cases two weeks prior. For example, compare the two dates May 2nd and June 6th. On May 2nd, the seven-day moving average of deaths came in at 17.9, and this corresponded to 261 new cases two weeks prior. More than a month later on June 6th, deaths had declined to 14 even though corresponding cases two weeks prior had spiked to 517. Over this interval, the empirical relationship is actually negative. By June 20th, confirmed cases two weeks prior had skyrocketed to 989, yet thankfully the increase in deaths was far less than proportional, from 14 to 21 on the seven-day moving average. By June 27th, cases two weeks prior had spiked to 1,161, yet deaths had thankfully decreased to 12. Again, spikes in cases may be cause for concern, but that need not include the concern that deaths will soon spike later. If anything, the relationship could be negative.
As for hospitalizations, Round 2 states show a gradual and relatively predictable increase over time, not the rapid and chaotic increase, followed by a plummet, that Round 1 states experienced. For context, Figure 4 from the forthcoming study compares daily hospitalizations for North Carolina (population is 10.5 million) and New Jersey (8.9 million). As one can easily see, the two profiles are entirely different. New Jersey, saw hospitalizations rise dramatically to over 8,000 on a single day in mid-April, before declining gradually since then. By comparison, North Carolina has seen only the slightest gradual upward drift in hospitalizations. Even at the end of June, New Jersey still had a more elevated number of current hospitalizations. If ever there were evidence of flattening the curve—i.e., keeping it flat in the first place—it could be North Carolina’s trend line of hospitalizations.
Local businesses and chains are feeling the effects of economic rebalancing
Several local and chain businesses in Western North Carolina have announced permanent closures in recent weeks as the economy continues to struggle with the impact of the pandemic.
In its recent coverage, WLOS News 13 reached out to Center For the Study of Free Enterprise Director Edward Lopez for insight into what these closures mean, now and in the long term.
“I think what we’re seeing is just this rebalancing of the economy as we recover from the pandemic,” Western Carolina University economics professor Edward Lopez said.
“I think your older restaurant brands are scaling back because they just don’t have that sustainable long tail of demand to see them through these major hits they’re taking,” he said.
WLOS noted that patrons of several restaurants slated to close expressed their dismay over the announcements in various online forums.
Lopez, however, noted that this situation differs from the Great Recession because the effects are mostly seen in businesses already on rocky financial ground.
“This round is different because it’s the economically-vulnerable that are getting hit. Last round, it was the over-leveraged that were getting hit,” Lopez said.
Read the full coverage here:
https://wlos.com/news/local/4-asheville-chain-restaurants-close-for-good
Center For the Study of Free Enterprise will continue to examine the economic impact as the pandemic unfolds. Watch this space for our ongoing research.
Dr. Edward Lopez on the impact of COVID-19 on WNC small businesses
Small businesses are bearing the brunt of the economic shut-down as a result of COVID-19. In a recent interview on WLOS News 13, Center for the Study of Free Enterprise Director Dr. Edward Lopez spoke about the conditions affecting small business owners.
Recent reports such as this one by McKinsey Institute have focused attention on COVID-19’s impact on small business.
The authors combine four prominent surveys of business sentiment among the nation’s small and medium enterprises. Because these are each long-running surveys, we can compare results before COVID and since, sector by sector, and in this way get a feel for the still-emerging impact.
The small businesses getting pinched the hardest are those with some combination of: 1) they were already in poor condition or close to it before the pandemic; 2) they rely on foot traffic especially retail, accommodations, and food services; 3) they have limited options for adapting to changing consumer patterns and government restrictions.
McKinsey Institute estimates that 1.7 million small businesses employing 20 million people are highly vulnerable and at risk for permanent closure due to the pandemic.
Yet not all sectors are being hit hard, and some are relatively unaffected. The McKinsey study shows things to be relatively stable and potentially improving in sectors like finance and insurance, professional services, construction, and to some extent also real estate, administrative support, and manufacturing jobs.
That 1.7 million estimate does not account for the temporary safety net provided by the Paycheck Protection Program, either, troubled as it has been.
So the outlook on small business in the short term is mixed. There will be lots of pain with every small business closure that happens as a result of the pandemic and lockdowns. Yet small businesses in America are also resilient. And small business has a way of re-emerging and adapting itself after a crisis, and shaping itself to changing lifestyles. So the outlook on small business in the long term can be positive.
People might not know it, but in Western North Carolina manufacturing accounts for about 20 percent of the economy’s production. And professional services employment had been on a positive trend before the pandemic. We also have a long-term advantage insofar as consumer habits are shifting permanently toward more outdoor activities.
You can check out detailed info about the WNC economy at our North Carolina Data Dashboard. Soon we will be sharing results of our studies as part of our COVID-19 Research Initiative, including a study on the county-by-industry impact of COVID and Governor Cooper’s executive orders.
What does a dip in positive cases mean for North Carolina?
Confirmed cases have plummeted in North Carolina in the past four days, down from a record high of 1,768 on 6/12 to well below trend at 751 today 6/16. Does this mean the actual threat of the disease is also plummeting? It could instead reflect that testing also declined sharply over that interval, from a high of 21,822 on 6/12 to 12,942 today.
I made this same point in the opposite direction almost two weeks ago (see my post here). Taking a look at case trends in May and early June up to that time, it is very interesting that North Carolina experienced five consecutive record high case numbers on five consecutive Saturdays starting May 16. Why Saturdays?
Well, turns out, North Carolina had spikes in completed tests on five the preceding Thursdays and Fridays prior. That late-week pattern of more tests and more cases became even bigger starting with Saturday May 30th spike. The two time series dip and spike almost in lock step.
Here we are on a Tuesday, however, and we’ve had a 40% drop in testing and a 60% drop in cases in just four days. Does this mean the threat of coronavirus is down by the same amount? Almost certainly not. Instead, it means that the factors determining testing are down. Some of those factors do correlate with the seriousness of the disease, because when more people are symptomatic then more people will be getting tested.
However, so much of the variation in test and case numbers fails to measure variation in the actual threat of the disease, but instead picks up lots of variation in human behavior and official decisions. For example, the state’s testing guidelines were initially written when test supplies were pretty tight. As more became available, the guidelines expanded. As weeks went on, more recently the guidelines were expanded again to include testing on marginalized populations disproportionately harmed by the virus, regardless of symptoms.
There is much more to the story that tells the tale of testing. For the moment, it’s important to recognize that the sharp dip in cases in recent days has been caused at least in part by the sharp dip in testing that preceded it.
To their credit, the Governor and NCDHHS place more weight on hospitalizations than they do on cases. However, there is room for improvement because with last weekend’s case spike, Newsweek quoted Governor Cooper as saying, “These [spiking case] numbers show the disease is spreading, and that more people need hospital care.” Meanwhile hospitalizations are almost level between 6/12 and 6/16.
If the pattern holds, expect testing and cases to spike again late this week, followed by alarming headlines, followed by officials having to gently talk it down and focus the public’s attention instead on the counts that matter more, namely hospitalizations and fatalities.
Introducing CSFE COVID-19 Research Project
The COVID-19 pandemic is having profound consequences on the well-being of North Carolinians. Many of these consequences are difficult to anticipate and understand.
Our team of researchers here at CSFE has been busy at work. As we move forward with our new CSFE COVID-19 Research Project, we’ll be working on three main areas:
1. COVID-19 Impact Analyses
2. Evidence-Based Policy Analyses
3. Free Enterprise Rules for Bottom-Up Recovery
Currently, we’re working on a study to calculate the economic impact of WCU’s partial closure on the WNC region, led by CSFE Faculty Affiliate and WCU economics professor Steve Ha. Another study, by CSFE Associate Director and also WCU economics professor Sean Mulholland, finds that colleges are taking a bigger enrollment hit in the counties most affected by the pandemic.
We are also working with granular data to discover the incidence of the pandemic. Incidence is a term that economists use to talk about the distributional effects of a shock or a policy. We’re hoping to build models that show the social, economic, and geographic patterns of the disease, and of the policy responses to it. Our goal is to provide the public with an evidence-based perspective on policy.
We also want to emphasize the need to facilitate bottom-up forces of recovery, and we hope to show how free enterprise principles can be helpful guides to policy. Price and entry regulations, for example, when they primarily serve private interests while erecting roadblocks to ordinary people’s economic opportunity, will hold back bottom-up recovery.
Over the coming weeks, we will be releasing research findings and policy analyses on this blog, in our social media channels, and through publications in scholarly and popular outlets. Please check back regularly. And join our list to receive email updates.
COVID-19 and Empty College Seats: Interview with Sean Mulholland
Our Associate Director Sean Mulholland has a new study on the college enrollment effects of COVID-19. He spoke recently with Shannon Watkins of The James G. Martin Center for Academic Renewal about the new research paper, “COVID-19 Prevalence and Empty College Seats.”
Sean’s study measures the prevalence of the pandemic using confirmed cases and COVID-related deaths. He then compares the prevalence of COVID-19 in the vicinity of colleges against the probability that those schools will have empty seats coming into fall 2020.
More empty seats are created when students are changing their minds about where to attend college. Sean found that according to surveys conducted in April 2020 as many as 25 percent of high school students were reconsidering their university decision options due to the uncertainty that COVID-19 has created in the world.
He found that several factors came into play, including distance from home to school, economic uncertainty and concern over contracting the virus itself. What he sought to understand was how these factors, specifically the likelihood of infection, were influencing incoming freshmen’s decisions.
Using data from the National Association of College Admission Councilors he was able to demonstrate an early link between the prevalence of COVID-19 in the county where the college was located and the availability of open freshmen seats for the fall 2020 semester, possibly indicating that fear of contraction of the virus is a deciding factor in enrollment decision.
The impact of COVID-19 on higher education is still unfolding, and Sean’s research continues to tackle the ongoing problem. Watch the full video here, and keep an eye out for more information on his work.
Watch Sean’s interview with The James G. Martin Center for Academic Renewal
What does a spike in positive COVID cases mean for NC?
North Carolina’s test numbers spike on Thursdays. The reasons are complicated, but many of those reasons reflect variations in human behavior that do not necessarily correlate with the threat that COVID-19 actually presents.
However, soon after we see these spikes on Thursdays, we also see a subsequent spike in confirmed cases. (The past three weeks have also seen level shifts starting on Thursdays leading into the following Mondays & Tuesdays, but this only strengthens my point here so let’s ignore it for simplicity.)
North Carolina has been grabbing national headlines when it reports a new high in daily confirmed cases. And each time, these case spikes are roundly described as a surge in coronavirus. But does a surge in confirmed cases alone mean that more people are getting sick? It could instead reflect the fact that more tests are being completed. Therefore more cases are being confirmed. Turns out, right before North Carolina grabbed headlines on May 30 for reporting its highest daily case count, completed tests had been increasing by more than a third starting that Thursday before. While this pushed up the total number of cases in the coming days, the percentage of cases remained fairly level over that period.
The testing strategy in NC is improving. This week on Wednesday (19 days after its last formal expansion) the state rolled out an expansion of its testing strategy, adding marginalized populations to the priority list. This is an important step, because testing in broader populations, not just people who we know are sick or at risk, provides crucial early detection.
Still, a clear and impartial look at these numbers is not always what we hear reported. Prepare for expressions of concern and caution about North Carolina’s confirmed case count. Sunday if the pattern holds. And it could be a big spike, too, because as of yesterday June 4 we were already leveled above the past week’s Sunday spike.
The good news includes, among other items, that even with the welcome and overdue increase in testing, current number of COVID hospitalizations remains flat, right where its been since about May 25th.
Catching up with Ann Bennett
We occasionally use this blog to catch up with our former students who are now onto great things. In this installment, we are “Catching up with Ann Bennett.”
Ann is a 2018 graduate of WCU with an interdisciplinary degree in Spanish, Japanese, and economics. For the past two years, she has been working in the D.C. area while pursuing a master’s degree in economics. Her adventures have taken her from corners of campus libraries on three continents to the very heart of economic policy analysis at Washington’s Council of Economic Advisers. Here is a bit of her story.
Q1: Welcome back, Ann! So, you took an interesting route as an undergrad with us. Tell us about that. How did it set you up for what you’re doing now?
I transferred to Western from Brevard College in my sophomore year. I was searching for more opportunities, and I found them: both in Cullowhee and in my studies abroad. I initially wanted to focus on international relations, business, and language studies. Under the business curriculum, I took microeconomics with Dr. Ullmer, and in his class, I found out about CSFE BB&T scholarships to pursue workshops in different universities. These scholarships allowed me to travel to several states including Florida, South Carolina, and Washington D.C. in pursuit of extracurricular education relating to economics. Meanwhile, I expanded my language studies to include Japanese in addition to Spanish.
At that time, WCU students were allotted three semesters of study abroad. Through the UNC consortium program, I studied in Spain during fall 2016 and in 2017 I completed two semesters at Chukyo University in Japan. In Japan, I decided to pursue economics at the graduate level because economics would allow me to funnel my various experiences into a common framework of analysis, capable of answering all my questions about how the world works.
While at WCU I also competed on the track and field team and volunteered with Bridge Church (formerly Campus Church). I graduated from the Honor’s College Magna Cum Laude with a B.A. in Economics and Language Studies (Spanish and Japanese) in May of 2018. However, honestly, I was ready for bigger challenges. Graduate school excited me. In retrospect, I was super fortunate during my time at WCU. I cannot imagine making it this far without all the incredible professors, advisors, and community support I found in my time there.
Q2. So what’s been going on since then?
I was graciously offered the MA Fellowship from the Mercatus Center at George Mason University. The fellowship provides an incredible opportunity to pursue graduate studies while building research skills through working with Mercatus scholars on a variety of topics. In my time at Mercatus, I had the opportunity to work with the Trade and Immigration, Urbanity, and Regdata teams. Through my work, I discovered my passion for urban economics. Mercatus’ urbanity team mainly researches topics involving housing development and regulation. This work prepared me to intern with the Municipality of Guatemala City over summer 2019 working with the planning department, local mayor, and private developers to discuss strategies to promote development in the city.
Q3. You’ve described the specific interests you had when finishing undergrad. Did your first year of graduate work broaden and/or deepen your research interests?
The first year was a heavy dose of reality. Suddenly, things aren’t a breeze, and you have to work harder than you ever have just to barely make it. This is the wonderful thing about graduate school though; it brings out the best in you and humbles you. In my case, it also showed me how lucky I was to have the fellowship and be at GMU. Graduate school is hypercompetitive because many people have very different backgrounds and strengths and weaknesses. To contrast, within the fellowship, you automatically receive a community of students and advisors to support you and guide you through. Many other graduate programs have an “every man for himself” mentality, but GMU is the complete opposite. GMU and especially Mercatus provide a uniquely collaborative environment. I feel very fortunate that my connections at WCU led me to study at GMU. Additionally, as everyone will tell you, the first year is the most difficult, so it’s really important to hunker down and do your best to make it through.
In the process, I gradually realized that my interests in international issues have a lot in common with pressing issues in urban economics. I am from the Chicagoland area, and I have always been fascinated by the problems that confront cities, so working on the development of cities and housing and zoning really piqued my interest. Through contacts made at a FEE event and Mercatus, I was able to secure an internship in the planning department of the Municipality of Guatemala City for the summer of 2019: truly a transformative experience. Working with local governments shows you the constraints faced by policy-makers on the ground.
-
- Attending summit on clean water initiatives with the former president and minister of the environment.
-
- Presenting to Guatemala City Land Registry Bureau about policies which promote affordable housing (Spanish)
Q4. You’ve been able to catapult that even further. Tell us about your internship at the Council of Economic Advisers, and what do you see coming next for you?
I really enjoyed my time at the Council. My intern class was full of incredible, talented students from all over the country who inspired me to be the best version of myself. Although I did my tenure as a Master’s student, I highly recommend the program for undergraduate students as well. They pair you with a junior economist to do research, which I really appreciated because it builds accountability and you know who to ask if you have questions or doubts about anything. It is also an incredible opportunity to get up close and personal with understanding the Executive branch which works a bit differently from Capitol Hill. Finally, there’s the wow-factor. I am very thankful for every morning I was able to work so close to the White House, pass important people on the way to coffee, and be mentored by and collaborate with leading economists from across the country.
CEA East Wing tour
This summer I will participate in the American Economic Association Summer program which gives students an opportunity to bolster their qualitative and quantitative skills in Economics. I am very excited to take part in this program which provides a taste of PhD life while building your network with top economics/policy students and faculty from around the country. From July, I will be joining the Young Voices Contributors program which provides training and mentorship opportunities to young writers. In the fall, I wish to work as a research analyst in housing and urban development policy, and start applications for PhD programs in Economics.