UA Little Rock Graduate Publishes Research on Economic Impact on Towns Featured in ‘Small Business Revolution’
UA Little Rock alumnus Josiah Johnson’s academic research into the impact of small towns that were featured on a reality television show have come full circle.
The research project that Johnson, a Sherwood native, completed for his final project for the Donaghey Scholars Honors Program ahead of his December 2021 graduation has been published in the Journal of Economic Behavior and Organization. Johnson now works as a data analyst at Apptegy, a successful education-technology company based in Little Rock.
The article, “Main street business initiatives and crime in small towns,” is Johnson’s first published academic article. Johnson and his co-author, Dr. Rhet Smith, a former UA Little Rock professor, explored how a television show contest among small towns for a $500,000 revitalization award could support economic policies for crime reduction.
When he was a senior finance and economics major at UA Little Rock, Johnson researched the impact on small towns that have been nominated for and featured on the TV show “Small Business Revolution (SBR).” In the TV show, an ultimate prize of $500,000 is awarded to a small town for revitalization efforts. The prize is allocated primarily to six business ventures in each winning town to renovate stores and storefronts, improve marketing strategies, and establish a brand for each small business and town. “Small Business Revolution” became well known in Arkansas when Searcy was selected as the season four winner of the Small Business Revolution Main Street Competition in 2019.
According to Johnson and Smith, the success of small businesses is a vital component of small towns, since local businesses provide employment opportunities and generate revenue for the local economy. This article compares and quantifies the impact of the award on various economic outcomes of three winning towns relative to 45 non-winning nominees. The results of his project can help investors and policy makers looking into developing small business initiatives and programs in the future.
Johnson and Smith observed the changes in three of the show’s winning towns: Wabash, Indiana; Bristol Borough, Pennsylvania; and Searcy, Arkansas. Using police agency-level data from the FBI’s Uniform Crime Reports, the authors found that property crimes declined following the SBR investment in two of the three winning tons. After the initial year of investment from SBR, Wabash experienced an estimated 59 percent decline in property crime while Bristol Borough experienced an estimated 55 percent fewer property crimes.
They estimated that the declines in larceny and burglary following the towns’ participation in SBR resulted in an average annual savings of around $100,000 for Wabash and $83,000 for Bristol Borough. While the $500,000 SBR prize is mainly awarded to six small businesses, the economic benefits of a revitalized main street and crime reduction is a benefit to the whole town.
No change in crime rate was found for Searcy, but the authors caution that they were only able to study one year of crime statistics for the town during their involvement in the TV show and that effects of being on SBR may yet be seen.
“While the effects of the investment in Searcy may materialize after our sample period, we note that 2 of the 6 businesses that SBR assisted in this town were not operating as of 2022,” the study said. “The lack of first stage evidence and high business failure rate suggest the Season 4 investment in Searcy was not as impactful as the previous seasons and may be the reason we do not observe a second order effect on crime in this town.”
Johnson said they hoped for more definitive findings from Searcy, but the positive effects of being involved in SBR may have been minimized by the onset of COVID-19 in 2020.
“Searcy was different from the other two winning towns we studied,” Johnson said. “We only had one year to observe the crime stats, so we didn’t get to see the long-term effects of airing on ‘Small Business Revolution.’ We didn’t see any change in the crime statistics in Searcy, but I think that could be due to COVID-19 occurring only a year after they won ‘Small Business Revolution.’”
The research earned Johnson several accolades during his senior year. He was awarded a UA Little Rock Signature Experience grant to help fund his research and received first place in the Economics Division at the 2021 Student Research and Creative Works Expo. Additionally, Johnson also received the 2021 Karen M. Russ Memorial Award for Excellence in Research and a $500 scholarship.
“I am definitely happy that I did this study,” Johnson said. “I think it turned out really well, I learned a lot, and I am appreciative of Dr. Smith. I am grateful for the experience, and it’s been a lot of fun to explore the economic impacts of small towns supporting small business.”
