The first round of the Paycheck Protection Program infamously ran out of money in early April with multiple publically traded corporations being approved for multiple millions of dollars, specifically Shake Shack and Ruth Chris were singled out for being exceptionally greedy. A consumer advocacy group even launched a website to track all large companies that took part in this loan.
As an entrepreneur and former small business owner, it’s pretty frustrating to see my peers and clients get shut out on the first cycle of the loans. As a data scientist, my interests were piqued because a lot of the data surrounding was made publically available and we could look at it from many different perspectives.
I was curious to see if there were any political correlations. Using the 2016 Presidential Election Results to determine which way a state was leaning, we get some interesting graphics.
Percent firms funded in each State
Disparity by Actual Dollar Amounnts
By % Difference between Expected and Actual Loan Amounts
Clearly it looks like larger coastal cities were shut out of the PPP loan program more than the midwest. There does seem to be a correlation between the voting preference and PPP benefit, but with 50 samples but that hypothesis test gave us a P of 0.067 (we’re rejecting anything above 5%) so very close to being statistically significant.
Data comes from NIAICS, Department of Treasury, and 2016 Election Results combined together on an aggregated state level.
Next post, we plan to explore how upcoming elections (Senate Seats up for reelection in 2020) may have impacted how these loans were dispersed.