Semoon Says...
USA professor Chang paints area's economic portrait by numbers
Mobile Register
12/10/00
By ANGIE DROBNIC
Business Reporter

When Semoon Chang wanted to calculate the economic impact of Biloxi's casino gambling on Mobile, he decided to visit each casino.  He visited their parking lots, to be exact.

Chang walked up and down the lines of cars, counting how many Alabama license plates.  And going by the numbers on license plates, he recorded how many came from Mobile County.

His findings:  about 14 percent of the cars were from Alabama, about half of them from Mobile.

If those cars contribute about 14 percent to the $1 billion in annual revenues that Gulf Coast casinos pull in, then Alabama residents hand over $140 million to the casinos each year.

Those kind of hard numbers are a hallmark of Chang's work.

"There's no question that tens of millions of dollars from Mobile County are flowing into Mississippi casinos," Chang concluded.  "Alabama decided that even if we lose money, we'd rather not have casinos or a lottery."

The professor of economics heads up the Center for Business and Economic Research at the University of South Alabama's Mitchell College of Business.  Chang's monthly publication of economic indicators is in its 14th year of publication.

"The information is important to help the people of Alabama make decisions," he said.  "It informs people to make better decisions."

Chang received his bachelor's degree from the Seoul National University in Korea and his doctorate from Florida State University.  His first job after winning his Ph.D. was at USA, and he's been in Mobile ever since, raising two children, now grown, with wife Youngshin.

Chang, however, declined to discuss his personal background, such as his age, his family background or even why he became interested in economic news.

"The public isn't interested in that," said Chang.  "They're interested in economic news.  They need it to plan their businesses.  I know that, because they call me all the time, and I help them all I can."

The center Chang runs regularly does work for area groups and businesses that contract with the University of South Alabama for studies and forecasts.

"He does most of these projects himself," said Dr. Carl Moore, dean of USA's Mitchell College of Business.  "He does not have a large staff as many of these other university professors have.  He uses students to help him, and he does it out of interest in this kind of work."

Chang and the students at the center have completed studies on the economic impact of the Alabama State Docks, the Mobile County School System's building programs, and the Gulf Coast Boat and Sportsman's Show, to name a few.

Chang raves about his students' work, singling out his assistants Shelia Canode and Megan Farrell:  "They're super girls.  They do excellent work."

Chang teaches two courses at USA:  one for MBA candidates and the one for undergraduates, on the topic of managerial economics.  The classes emphasizes practical economic principles for businesses, such as how to calculate prices and inventory.

"All my research is applied research, and that's what I teach," he said.

Chang has published widely, writing articles for scholarly journals about the impact of casinos, plant closings, natural gas production and the lottery, among other things.

In 1999, he was president of the Korea-American Economic Association, and he is immediate past president of Association for University Business and Economic Research, a national consortium of economics professors.

"It's quite an honor," Moore said of Chang's AUBER presidency.  "This is a well-known national organization of some 100 universities."

Brenda Scott, president and CEO of the Mobile Convention and Visitors Corp., said Chang's monthly reports are invaluable to people who work in the tourism industry.  Chang tracks hotel occupancy rates in a variety of ways, including by area, by the number of visitors at 10 different tourist attractions and by convention attendance.

"Every reporting mechanism needs that neutral entity you can report to.  He does a good job of it," Scott said.

Chang said the hotels that report their occupancy rates are honest with him because they know he won't reveal their individual statistics.

Asked whether he ever feels pressure from civic groups to make his reports paint a rosy picture, Chang said no.

"There's no way can make it look better or worse," he said.  "They're just numbers--actual numbers."

The chamber has contracted with Chang to develop statistical models that project the economic impact of new development won through tax incentives, said Jim Apple, vice president of economic development.

"We're very comfortable with Dr. Chang's analysis as a conservative look at the impact of service and manufacturing projects," Apple said.  "it's terrifically important for any financial decision that's going to be made, be it public or private money, that a cost analysis be done."

Outside of the economics world, Chang has been active with the Homeless Coalition of Mobile, serving on its board for the past six years.  This week, he will step down as the coalition's president, after a contentious year in which the group struggled to find a location for a downtown day center, a goal it has yet to fulfill.

Chang's group was criticized for trying to open a project that downtown merchants felt would hurt their business.

But there is no conflict between his professional and volunteer work, Chang said.

"I'm a firm believer in competition," he said.  "The market has to work on its own.  But I also firmly believe that the rich people have to help the poor people."

Slumping tax revenues could spur recession
Mobile Register
12/10/00
By ANGIE DROBNIC
Business Reporter

Declines in sales taxes – indicative of less consumer spending – could mean a slowdown or even a recession in the Mobile area that will last until spring, said Semoon Chang, professor of economics at the University of South Alabama.

“This is causing all kinds of problems right now,” Chang said of the lower tax revenues in Mobile County as well as in the city of Mobile.

In the city, sales tax revenues dropped in July, August, and September compared to the same months in 1999 before picking up slightly in October.

The year-to-date totals for sales taxes are down in the city and flat in the county, so Chang is predicting that holiday spending will be about the same as last year, at a time when the local economy could use a good push.

“The slow growth will continue through the first quarter of this year, but it will probably pick up in the second quarter of next year,” he said.

Chang blamed the slowdown on three factors: the slowing of the national economy, International Paper Co.’s closing of its Mobile mill, and more retail development in Baldwin County.

Among other economic indicators:

From January to October last year, slightly more than 4,000 homes were sold. About 3,800 homes were sold during the same period this year.

But Chang said the real estate industry should not be disheartened: “this is not bad news at all. Even if it’s a little lower, its much higher than it was in the past.”

The number of homes sold in Mobile County has more than doubled in the past ten years from 2,257 in 1990 to 4,682 in 1999.

And what does Chang see in his crystal ball of business activity? Next, he said, several projects likely will goose Mobile’s economy.

Massive upgrades at the Alabama State Docks, the result of voters approving a constitutional amendment to divert some offshore natural gas and oil royalties for the purpose, will be a tremendous boost. The upgrades could end up totaling $250 million, Docks officials have said.

Cruise ships landing at Mobile’s port could also spur Mobiles growth, Chang said. Any improvements in the national economy would help as well.

As do business owners, Chang said he is sympathetic to anyone facing problems right now.

“It’s a countywide slowdown,” he said. “If they stay patient for three to five months, they should see a turnaround.”