A chat with ChatGPT about the economy of the Inland Empire – Daily Bulletin

By Manfred Keil and Sasha Rothstein | Inland Empire Economic Partnership

It’s been just three months since OpenAI, the artificial intelligence company, released ChatGPT, the chatbot so powerful it’s already replacing human workers. The AI ​​has caused panic in schools and universities over new fraud methods and, when it was added to Microsoft’s Bing search earlier this month, started sending crazy messages to users. Regardless of whether you think ChatGPT is a harbinger of doom, there is no doubt that it is powerful. Need an original 50-page term paper on Shakespeare in seconds? ChatGPT is your new best friend.

Of course, we decided to test his knowledge of the economy of the Inland Empire. ChatGPT can write what experts call “fluent BS,” which might allow you to fly through the literature course you’re taking with 400 students. But can it replace economic analysts? To find out, we asked ChatGPT to “write a 500-word economic analysis of the current state of the economy in the Inland Empire 2023.” Here’s his answer in italics (and of course our comments below).

“The Inland Empire region of Southern California has experienced significant economic growth in recent years. In 2023, however, the region faces a number of economic challenges. This economic analysis will examine the current economic situation in the Inland Empire and discuss the key factors driving the region’s economic performance.”

A clean start, but not very original. Just like a high schooler repeating our prompt in the opening lines.

“The Inland Empire region consists of two counties: Riverside and San Bernardino. The region has a population of over 4 million people and is the 13th largest metropolitan area in the United States. The region has a diverse economy with significant contributions from industries such as logistics, healthcare, manufacturing and hospitality.”

In fact, the Inland Empire just became the 12th largest statistical metropolitan area in the US (get that, SF!). Since this only happened last year, we’re willing to give him a margin pass. That being said, it looks like our AI friend just wrote down some random industries and called them significant. Manufacturing generates only 6.7% of Inland Empire employment; Retail sales and professional and business services are both larger employers than leisure and hospitality. Then there is the government sector, the second largest employer in the Inland Empire. Perhaps ChatGPT thinks that the actual government contribution to the output is negligible. Some readers may agree.

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Verdict: mostly false, with a few correct stats pulled directly from Wikipedia.

“One of the biggest challenges facing the Inland Empire in 2023 is the job market. The region has an unemployment rate of 7.4%, which is higher than the national average of 4.2%. The pandemic has had a significant impact on the Inland Empire job market, with many companies struggling to find workers. The hospitality sector in particular has been hit hard, with many hotels and restaurants struggling to fill vacancies. This has led to wage inflation as companies offer higher wages to attract workers.”

An unemployment rate of 7.4%? Perhaps one of ChatGPT’s programmers is called Rip Van Winkle and fell asleep in August 2021. The US at 4.2%? Maybe in a parallel universe. The correct numbers are 3.6% for the Inland Empire and 3.4% for the nation. In the real economy you might have trouble finding workers, but the AI ​​says there’s a tight job market with 7.4% unemployment – sorry, huh?

The AI ​​concludes this section by claiming that wage inflation is increasing. Perhaps nominal wages are meant, because if you look at wage increases and inflation together, wage inflation is not our issue. The program suffers from money illusion and we personally find it difficult to model insanity, but the AI ​​programmers found a way.

Verdict: This paragraph? 100% liquid BS.

“Another challenge for the Inland Empire is housing affordability. The region has seen significant population growth in recent years, which has put pressure on the housing market. The average home price in the Inland Empire is $450,000, which is significantly lower than neighboring Los Angeles County but still high for many residents. This has led to a housing crisis, with many families struggling to afford rent or buy a home. The lack of affordable housing is also having an impact on the labor market as workers struggle to find accommodation close to where they work.”

Someone read the letters to the editor of the LA Times. Yes, housing affordability is an issue throughout California, but less so here in the Inland Empire. However, we pay for it in our two hour morning drives from Upland to Downtown LA and add another two hours in the afternoon when we come back. Points given here for content and a fairly accurate median house price.

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Verdict: A bit obvious to talk about California living, but overall spot on.

“Despite these challenges, the Inland Empire has experienced significant economic growth in recent years. The logistics sector in particular is an important motor for economic growth in the region. The Inland Empire is home to the largest distribution center in the world, which has attracted many businesses to the region. The proximity to the ports of Los Angeles and Long Beach has also made the region an attractive location for logistics companies.”

all true However, we humans would be careful to mention the environmental concerns surrounding the Inland Empire’s logistics industry that have brought our region to the international headlines (see NY Times and The Economist for more); There is also an important new development as Gov. Gavin Newsom receives a report from environmental groups calling for a two-year moratorium on warehouse construction in the region.

Conclusion: truthful choice of words, but missing important current events that should be included.

“In addition to logistics, the healthcare industry also makes an important contribution to the economy of the Inland Empire. The region is home to several large hospitals and medical centers employing thousands of people. The pandemic has also highlighted the importance of the healthcare industry as many hospitals and medical centers are seeing increased demand for their services.”

We wish the healthcare industry was as important to the Inland Empire as ChatGPT makes it sound. The government employs 7,200 more workers than the healthcare industry, and even more if we exclude home care services from healthcare. Even more blatantly false is the claim that the healthcare industry has seen increased demand for its services during the pandemic. Instead, it suffered the second-highest drop in employment (down 8%) during the early stages of COVID-19. Surprised? Yes, but people stayed away from medical facilities unless it was an emergency. Do you remember the number of your dental visits in 2020?

Verdict: We wish it were true, but that’s dead wrong.

“Manufacturing is another important industry in the Inland Empire. The region has a long tradition of manufacturing, with industries such as aerospace, automotive and electronics playing a significant role in the local economy. The pandemic is having a significant impact on the manufacturing industry, as many companies are struggling to find workers and cope with supply chain disruptions. However, the industry has proven resilient as many companies have adapted to the new economic environment.”

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Double the production, huh? Maybe if President Joe Biden’s reshoring plan works. As we have said, manufacturing generates less than 0.7% of private sector employment in the Inland Empire. As for the aerospace, automotive and electronics companies playing a “significant” role – we need to see some receipts, ChatGPT.

Verdict: Completely wrong, and erases some doubts we previously gave.

“In conclusion, the Inland Empire faces significant economic challenges in 2023, including a tight labor market and housing affordability issues. However, the region has a diverse economy with significant contributions from industries such as logistics, healthcare and manufacturing. These industries have proven resilient in the face of the pandemic and are likely to continue to drive economic growth in the Inland Empire for years to come.”

Most of what ChatGPT told us was trivial or wrong – wrong numbers, wrong interpretations, wrong industries (manufacturing industry again?). At this point it seems that ChatGPT might be helpful for wording but still muddles factual statements.

We hope that nobody would pay for what the AI ​​got right, because important topics have been left out completely. Why don’t you talk about why 35% of the Inland Empire’s workforce commutes, or why we have the economic prosperity (GDP per capita) of Waco, Texas? For now, it seems that ChatGPT could potentially be a helpful tool, but economists’ work requires real creativity and they seem safe from artificial intelligence for now.

Final verdict: grade failed. Time for GPT-4.

Manfred Keil is Chief Economist, Inland Empire Economic Partnership, Associate Director, Lowe Institute of Political Economy, Robert Day School of Economics and Finance, Claremont McKenna College.

Sasha Rothstein is Harvey Mudd College, Senior Research Analyst at the Lowe Institute of Political Economy.

The mission of the Inland Empire Economic Partnership is to help create a regional voice for business and quality of life in Riverside and San Bernardino counties. Its members include both private and public sector organizations.