The Ohio Munch-a-Burger Index
Or, Data Normalization Using Indices for Fun and Profit
One time a big outdoor sports retailer asked me to analyze their online and catalog sales data in one region of the country, and then use that analysis to try to estimate sales in future brick-and-mortar locations in the same region.
So I did the analysis. Based on my results, I confidently figured they’d probably sell more stuff in Atlanta than they would in Siler City, North Carolina. Wow, what a blinding glimpse of the obvious. The right thing to do would be to compare data between the two places on more of an even footing. There are many ways to do that, but one of my favorites is to use indices. Indexing is meaningful, easy to understand, easy to calculate, and fun. So naturally, I charge a fortune for it (just kidding).
To demonstrate, I took two of my favorite things, 1) anything to do with Ohio and 2) cheeseburgers. Then I calculated indices on based on some real retail sales data from last year.
Fact 1: People in Ohio Love Cheeseburgers. Or Big Macs, or Frosties, or Whoppers. Ohioans consumed 68% more of these types of fast foods, on average, than US consumers in general.
Fact 2: People in Warren have a higher Munch-a-Burger Index than do people in Youngstown. Folks in both cities spend more than the US average on this food, but less than others in Ohio (note the Bonus Facts below).
Fact 3: 26% of people nationally spent some amount > $0 at one of these restaurants in the past 6 months. But that’s true of 34% of Ohioans! It’s 30% in Youngstown, and 29% in Warren. Now there’s an interesting little data point. About the same percentage of the population frequent one of those restaurants between Youngstown and Warren, yet those hungry Warrenites spend oh so much more: $102.28 in the past 6 months versus $74.31 among Youngstowners.
Bonus Fact: Among largish Ohio cities, here are the indices of the Top 5 towns at these restaurants relative to others in the state:
5. West Chester 149
4. Hamilton 163
3. Loveland 187
2. Hilliard 198
1. Grove City 204 (!!!)
So people in Grove City spend twice as much as other Ohioans at these restaurants.
Bonus Fact #2: Here are the cheapest—er, lowest spending—cities in the state on this food:
5. Mentor 79
4. Massillon 76
3. Youngstown 73
2. Canton 64
1. Mansfield 49
People in Mansfield spend about half as much as other Ohioans.