June 1, 2020
Interesting data is everywhere, one just has to pay attention to find it. I came across some while moving some furniture from New Jersey to Maryland. I was searching the U-Haul website for the cost of renting a trailer in NJ and dropping it off in Maryland. In the past, my experience was that the cost was not very different if one dropped the trailer off in a different location compared to renting and picking it up in the same location. When I did a search this time, the cost came in at over $300. At that cost, I figured I might as well hire someone to do the move for me. I placed an order with U-ship, a website where one can have movers bid on a shipping. I got a few competitive bids and selected one of them. To my surprise the mover showed up with a rented U-Haul trailer, so I started to wonder about their profit margin.
After the move was done, I went back to the U-Haul website and realized my mistake. U-Haul adjusts their pricing to control their supply at different locations. Had I selected to both pick up and drop off the trailer in Maryland, the cost would have been much lower.
This experience gave me the idea that U-Haul’s pricing might work as an indicator of in what direction people are moving. If a lot of people are moving away from a location, U-Haul would end up with a shortage of trailers in that location unless they take on the cost to bring the trailers back after they have been rented.
To test my hypothesis, I started to pull prices for a 6x12 trailer to move between different locations. I selected five cities for this analysis: Columbia, MD, Newark, NJ, New York City, NY, Boston, MA, and Ocean City, NJ. Columbia and Newark were included as those were the cities that I was moving things between. I then added New York City and Boston since they were two major cities that had been impacted very differently by the Coronavirus. Finally, I added Ocean City since an article identified it as one of the cities whose labor market will take the largest hit from the Corona virus. (source: https://www.businessinsider.com/us-cities-highest-share-of-at-risk-jobs-coronavirus-2020-3)
U-Haul assumes moves to take 1, 2, or 3 days depending on the distance between the locations, so all prices were normalized to a per day cost.
The results are shown in table below. As I experienced initially, picking the trailer up in Newark was shown to be a pricey proposition. However, the price had dropped a few dollars compared to when I was getting my original quote. The exceptions to the high price for picking up the trailer in Newark were if it was dropped off in NYC or Ocean city, 2 cities that have been heavily impacted by the Coronavirus. Overall, Ocean City was the most expensive city to pick up a trailer and the least expensive to drop one off. Columbia and Boston are on the other side of the spectrum. In these cities, it was inexpensive to pick up a trailer but expensive to drop it off. Although there was a limited amount of data points, it matches what one would expect the pattern to be if the Coronavirus is causing people to move away from specific locations(at least temporarily). I plan to update this on a regular basis to see if the pattern changes as the impact of Coronavirus changes over time.
If this turns out to track the impact of economic conditions, it could be expanded to more locations and used to identify geographic patterns in how people move and in local economic conditions. Stay tuned for an update in a few months to see if there have been any changes in the pricing patterns, and if so, how the changes align with local economic conditions.