October 21, 2003


It's Arnold v. the 'U-Haul indicator' Popular economics (Jason Chow, , October 21, 2003, Financial Post)

The cost of renting a 26-foot U- Haul moving truck for a one-way trip from Los Angeles to Las Vegas is US$1,080. The same move in the opposite direction costs only US$133.

To economist Brian Wesbury, the difference in cost is an accurate snapshot of the economic climate in California: People are moving out of the state as opportunity diminishes and few want to move into a slumping economy.

A one-way U-Haul move from Los Angeles to Phoenix costs US$837 while the return costs US$116. San Francisco to Boise: US$2,024. Return trip: US$310.

Compare those rates to what U-Haul charges for the same truck between two Midwestern cities. A U-Haul rental from Chicago and Detroit costs US$419. The return rental is almost identical in price at US$449.

"Obviously, California is having a hard time keeping U-Haul trucks in the state," wrote Mr. Wesbury, in a note to clients.

Quite possibly the first economic indicator in the history of mankind that makes any intuitive sense.

Posted by Orrin Judd at October 21, 2003 9:25 AM

That's a good one. I think you can also make a good intuitive case for the Economist's Big Mac Index.

Posted by: Mike Earl at October 21, 2003 12:48 PM

Oh, I get it: Orrin Judd is allowed to speak in mysterious code ("3B8-A38C-E2982A3B3533"), but the rest of us are not?


Posted by: John Smith at October 21, 2003 5:40 PM

Sorry, Mr. Smith. We've had problems with spam comments. Yours appeared one. You're right though, I biffed the post. Should be fixed now.

Posted by: O at October 21, 2003 5:59 PM

I use those kinds of indicators all the time, since only one company that I cover is SEC-regulated and has to publish its financial data.

I had one called the Azeka Barbecue Rib Index.

There was a brass-polishing index.

One I still use a lot is the Used Pickup Index. Most of my competitors make a big deal about the rise and fall (lately, mostly rise) in the number of bankruptcy filings in the state.

But from the raw total, I subtract all those where the gap between assets and debts was less than the price of a used pickup, on the theory that those people weren't really participating in the economy anyway.

Posted by: Harry Eagar at October 24, 2003 4:11 PM