Blooming Nonsense: Experiment Reveals Louisiana’s Florist Licensing Scheme as Pointless and...

8/7/2019 Blooming Nonsense: Experiment Reveals Louisianas Florist Licensing Scheme as Pointless and Anti-Competitive

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LOOMINGONSENSLOOMINONSENSExpErIMENt rEvEaLS LOuISIaNaS FLOrISt LIcENSINGSchEME aS pOINtLESS aNd aNtI-cOMpEtItIvE

By dIck M. carpENtEr II, p.d.

March 2010


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For more than a decade, Monique Chauvin has owned and operated one o the most popular and

recognized oral shops in all o New Orleans. Her work is regularly eatured in magazines, andher store has been repeatedly voted as Tops o the Town in New Orleansmagazine by residents

o the Big Easy. Yet Monique aces the real possibility o losing her businessnot or economicreasons, but because Louisiana is the only state in the nation that requires orists to hold a license

to work.

To earn that license, aspiring orists must pass both a written and a practical test, the latter graded

by already-licensed oristsin other words, competitors. Monique does not hold a orist license.Despite all o her recognition and success, she ailed the exam, as have thousands o other orists

over the years. Louisiana only allows her to operate her store as long as she employs a licensed

orist and displays the employees license in the shop. But the licensed orist Monique employedpassed away in February 2010. Monique must fnd another licensed orist to put on the payrollwithin 90 days or take and pass the test hersel. Otherwise, she will have to close the shop, puttingMonique and her fve employees out o work.

Why does Louisiana impose such regulatory burdens on orists? Protecting public health and

saety cannot be the reason; in 49 other states, orists operate ree o such regulations with noharm to consumers. The work o economists and sociologists who study occupational licensing

suggests another possible purpose or Louisianas law: Already-licensed orists reap fnancialrewards rom encing out competition.1

Given the size o the oral industry, this beneft is quite real. According to the Economic Census,

there are 22,750 retail oral stores in the United States with annual revenues o $6.6 billion. InLouisiana alone, 332 oral retailers generate $76.8 million in annual revenues.2 Licensure enablesstate-licensed Louisiana orists to enjoy a greater share o that revenue.

Deenders o Louisianas licensing regime, however, point to another justifcation or the law:

maintaining proessional standards and thereby ensuring better-quality oral arrangements orconsumers.3 But an experiment I conducted contradicts this claim.

I asked practicing orists to judge a random line-up o oral arrangements rom shops inregulated Louisiana and unregulated Texas. In judging those arrangements, not even licensed

Louisiana orists identifed any dierence in quality that could be attributed to licensure. Floralarrangements rom Texas, with no licensing regime, were rated essentially the same as those

rom Louisiana. This suggests that Louisianas licensing scheme does nothing but protect existing

license-holders rom air competition.

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In the oral design experiment, judges were 18 randomly chosen oristseight rom Texas and 10rom Louisiana. All o the Louisiana orist-judges were licensed. Fity oral arrangements were

purchased rom randomly selected retail oral stores. The retailers had no idea that their designswould be judged by other orists, which means the arrangements represented typical productspurchased by consumers on any given day. Hal o the arrangements came rom Louisiana stores,

and the other hal were purchased rom Texas shops. All orists were given a theme or thearrangementssympathyand some general parameters in which to work: Arrangements

were to be within $50 to $75; the arrangements were to be in a basket, vase or bowl; and thearrangements were all to be dierent. Otherwise they were ree to be creative in designing the

arrangements.

The experiment looked much like a oral design competition. The 50 arrangements were randomly

ordered on tables in a hotel conerence room with identifcation numbers. Florist-judges weregiven rating sheets and asked to score all 50 arrangements based on the printed criteria, such

as proportion, balance, color, orm and workmanship. Judges did not know any arrangementsstate o origin or even that arrangements had come rom dierent states. Possible total scores or

each arrangement ranged rom 10 to 50. When all judges fnished rating all arrangements, theyparticipated in a 30-minute ocus group and answered questions about their perceptions o thearrangements, opinions o quality based on state o origin, and attitudes about licensure.

The judges ratings o oral arrangements were essentially the same no matter which statethe arrangements came rom, regulated Louisiana or unregulated Texas. Data were analyzed

using multiple regression, a orm o statistical analysis that tests the relationship between twovariableshere, judges scores and whether arrangements came rom Louisiana or Texaswhile

controlling or the eects o other variables. This analysis controlled or the state o origin o thejudge, the reshness o the arrangement and the cost o the arrangements. Controlling or thesevariables removes the muddying eects they may have on the relationship between arrangement

state and ratings. For example, i Louisiana arrangements were more costly (because, orinstance, they used more or better owers or other materials), they might be judged better

primarily or that reason rather than any dierences in quality o design or workmanship that might(or might not) have resulted rom licensure.4

Ater controlling or cost, the scores o the arrangements were essentially the same no matter

where they came rom. As Figure 1 indicates, Texas arrangements, on average, received arating o 25 out o a possible 50, while Louisiana arrangements scored an average o 24.05.5 Thedierence between the two average scores is not statistically signifcant; in other words, they are

essentially the same.6


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Figure 1: Louisiana and Texas Ratings Are Statistically Equivalent

Not only does statistical analysis o judges scores show no dierence in quality o oralarrangements as a result o Louisianas licensing law, it also shows no dierence among the

orists themselves. That is, Louisiana judges tended to rate each oral arrangement about thesame as Texas judges. One might imagine that Louisianas licensing test weeds out less-capable

would-be orists, so that those who do pass are better oristsand thus better judges o oralarrangementsthan people in other states who have not jumped similar hurdles. When it cameto judging the arrangements in this experiment, however, unlicensed Texas orists were no less

discerning than licensed Louisiana orists.

This result came rom a orm o analysisIntra-Class Correlation (ICC)that examines theconsistency o multiple judges across items. This analysis could be used, or example, to

determine the consistency o judges at a fgure skating competition. A signifcant lack oconsistency in ratings could indicate bias, as in fgure skating judges giving preerence tocompetitors rom their own country, or, in the oral design experiment, a systematic dierence in

perceptions that might result rom some judges having licenses and others not.

Results illustrated in Figure 2 indicate that consistency was strong regardless o whether it wasall judges rating all arrangements, Louisiana judges rating Louisiana arrangements, Texas judges

rating Texas arrangements, Louisiana judges rating Texas arrangements, and so orth.

In this fgure, taller bars indicate more consistency. Perect consistency would result in a bar

reaching the top o the graph. For the ICC numbers, results o .70 and greater typically indicatestrong consistency; the closer to 1.00 the results, the stronger the consistency.

As indicated, all bars are near the top, indicating high levels o consistency. Moreover, all ICC

numbers are greater than .70, and all but one exceed .80. O particular interest is the frst baralljudges across all arrangements. These results show consistency that is quite strong, greater than.90. This means that whether the judges were licensed or not, they gave the arrangements very

similar scores.7 It appears that Louisianas licensing law does not produce more discriminatingorists.

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25tx24.05La


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1 2 3

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JudGE FOr yOurSELFWhIch OF thESE arraNGEMENtS arE FrOM a ShOp WIth

a LOuISIaNa-LIcENSEd FLOrISt?

ANSWERS:3,5,7


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Figure 2: Consistency o Judges Ratings Is Strong

Such fndings were consonant with comments the orist-judges made during the ocus groups.When it was revealed to the judges that arrangements came rom dierent states, they were not

at all surprised that the ratings did not dier based on state o origin. They commented that goodorists could be ound anywhere, not just in a particular location. Moreover, they agreed thatquality o oral design depends on the person rather than the state or region.

This view held even ater it was pointed out that Louisiana requires a license and Texas does

not. Again, almost all o the judgesincluding the licensed orists rom Louisianaexpected nodierence in the quality o arrangements because o Louisianas licensing law. They noted that

quality o work was a unction o the standards set by individual businesses rather than a licensingregime, and those standards themselves were a unction o consumer demand and marketcompetition. As one orist commented, I you dont do good work, youre not going to have any

business.

Most Louisiana orists in particular thought little o the value o the license due to the requiredtesting regime. All o them derided the test as outdated and irrelevant. Aspiring orists are tested

on skills and knowledge that bear no resemblance to contemporary oristry, requiring test-takersto demonstrate profciency with techniques that were abandoned decades ago. Moreover, theLouisiana orists dismissed the oral designs required on the test as old school and ugly

nothing a contemporary consumer would ever demand or want.

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Many in the ocus groups thought that instead o producing quality orists, the licensing scheme

served two purposesraising money or the state and shutting out competition. The licensegenerates revenue rom orists or aspiring orists through testing ees and annual licensure

renewal. Test-takers pay the state o Louisiana $150 each time they take the ull test and $100 eachtime they re-take the design portion. Annual licensure renewals cost orists $75.8

The second purpose, shutting out competition, was requently mentioned by ocus groupparticipants. Most reerred to it negatively, but a ew supported the idea o a license excluding

competition rom amateursthose who work out o their homesor reelancerspeoplewho buy owers rom the same wholesalers but then create and sell arrangements through means

other than a traditional orist shop or store.9

Despite these ew, however, most spoke disparagingly o the anti-competitive eects o licensure.One even shared how a competing oral shop across the street rom her store repeatedly calledthe Louisiana Horticulture Commission, the agency responsible or administering the orist license

regime, with trumped up complaints as a way to harass and damage her business.

Finally, the suggestion that the purported gate-keeping eects o licensure might be benefcialas a way to protect the public rom poor quality or unsae orists or oral products drew skeptical

laughter rom orists in the ocus groups. As one Louisiana judge concluded, You really cant hurtanybody with a ower.

Harm rom a ower might be laughable, but harm rom the regulation o orists is not. As those in

our ocus groups recognized, licensure accomplishes precisely what it is intended to dokeepingpeople out o the industry. Unortunately, this occupational ence erected by Louisiana bars people

rom entering an occupation to which they may be well suited. As the Bureau o Labor Statisticsdescribes, being a orist does not require ormal postsecondary training; most simply learn their

skills on the job. Employers generally look or high-school graduates who have creativity, aair or arranging owers and a desire to learn.10 Working as a orist is an ideal occupation orthose just entering or re-entering the job market or people making mid-career transitions. Rather

than encouraging such positive economic activity, however, Louisiana discourages it through apointless licensure ence with an outdated test as its gate.

Not surprisingly, there is a complete dearth o evidence or the laws beneft to anyone other than

already-licensed orists and the states revenue stream. This experiment ound no dierence inquality o arrangements between those created in Louisiana and those rom Texas, a neighboringnonlicensing state. Further, the judgments made by licensed Louisiana orists were no dierent

than those made by unlicensed orists just across the state line. And the derisive laughter and

comments made by the licensed Louisiana oristsin our ocus groups suggest that licensure is notneeded to protect public health and saety rom any supposed dangers associated with unlicensedoristry.

The ultimate and most important measure o quality and accountability remains the customer.Leslie Massony, a oral designer in Moniques store, took and ailed Louisianas test twice; yet she

has been published in oral design books and boasts a list o celebrity clients. The customers arethe people that really count, she says. They are the ones who pay the bills and who I really have

to keep happy.


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1 See, or example, Cox, C., & Foster, S. (1990). The costs and benefts o occupational

regulation. Washington, DC: Federal Trade Commission; Haas-Wilson, D. (1986). The eect ocommercial practice restrictions: The case o optometry. Journal o Law and Economics, 29(1),

165-186; Harrington, D. E., & Treber, J. (2009). Designed to exclude. Arlington, VA: Institute orJustice; Kleiner, M. M. (2000). Occupational licensing. Journal o Economic Perspectives, 14(4),

189-202; Kleiner, M. M. (2006). Licensing occupations: Ensuring quality or restricting competition.Kalamazoo, MI: Upjohn Institute; Rottenberg, S. (1980). Introduction. In S. Rottenberg (Ed.),Occupational licensure and regulation(pp. 1-10). Washington, DC: American Enterprise Institute;

Shepard, L. (1978). Licensing restrictions and the cost o dental care. Journal o Law and

Economics, 21(1), 187-201; Timmermans, S. (2008). Proessions and their work: Do market shelters

protect proessional interests? Work and Occupations, 35(2), 164-188.2 These data come rom the 2002 Economic Census, the latest year or which such data are

available in Louisiana. Louisianas 332 retailers employ 1,437 people and report an annual payrollo $17.8 million. Nationwide, 22,750 retailers employ 114,186 employees or an annual payroll o $1.5

billion.3 Finch, S. (2004, January 5). Florist licensing under attack; Lawsuit says test is unconstitutional,

Times-Picayune, p. 1.

4 In act, the Louisiana arrangements in this experiment cost, on average, $14 more than thoserom Texas. Even though the oral shops were asked to provide arrangements within the $50 to $75

range, some o the Texas arrangements cost less than $50. I also controlled or reshness becausethe experiment took place over two days, so later judges scores may have been inuenced by lessresh owers.

5 These are the adjusted averages ater controlling or cost and the other covariates listedabove.

6 The precise regression results are included in the table below. Cost and reshness werecentered; dichotomous variables (arrangement state, judge state and their interaction) were coded

using eect coding.

se t p

(Constant) 24.57 1.30 18.97 0.00

Cost 0.27 0.08 3.57 0.00

Arrangement state -0.48 0.62 -0.76 0.45

Judge state -0.44 0.68 -0.64 0.52

Judge X arrangement interaction -0.07 0.32 -0.23 0.82

Freshness o arrangement at judging 0.68 0.86 0.79 0.43

R2=.04; F=8.49, p=.000

7 These results were consistent with the aorementioned regression analysis, which includeda variable that measured the judges state o origin. As the table in endnote 6 indicates, the

dierence in ratings based on judge state was not statistically signifcant.8 Louisiana Department o Agriculture and Forestry. (2010). Agricultural & environmental

sciences-horticulture & quarantine programs. Retrieved February 5, 2010, rom http://www.lda.state.la.us/portal/Ofces/AgriculturalEnvironmentalSciences/HorticultureQuarantinePrograms/

HorticultureNurseryApiaryLicensesPermits/tabid/414/Deault.aspx.9 Floral stores in Louisiana are regularly inspected by the Louisiana Horticulture Commission.

Such inspections include an examination o ower coolers, equipment and orists licenses.10 Bureau o Labor Statistics. (2010). Floral designers. Retrieved February 5, 2010, rom http://www.bls.gov/oco/ocos292.htm.


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Dick M. Carpenter II, Ph.D., serves as director o

strategic research or the Institute or Justice.

He works with IJ sta and attorneys to defne,implement and manage social science researchrelated to the Institutes mission. Results o his workhave appeared in academic journals such as Urban

Studies, Regulation and Governance, IndependentReview, Journal o Advanced Academics, Journal oSpecial Education, The Forum, Education and Urban

Society, Journal o School Choice and Leadership,

as well as magazines including Regulation, Phi Delta

Kappanand the American School Board Journal.

The results o his research are used by stateeducation ofcials in accountability reporting, have been inuential in crating

policy in state legislatures, and have been cited in bries to state and ederalcourts, including the U.S. Supreme Court. Dr. Carpenter has served as an expert

witness in several ederal lawsuits and has been quoted in newspapers such asThe Wall Street Journal, New York Sun, Denver Post, Atlanta Journal-Constitution,Chronicle o Higher Education, Dallas Morning News, Education Weekand the

Washington Times.

Beore working with IJ, Dick worked as a high school teacher, elementary schoolprincipal, public policy analyst and university proessor. He holds a Ph.D. rom the

University o Colorado.

aBOut thE authOr

aBOut thE INStItutE FOr JuStIcEThe Institute or Justice is a nonproft, public interest law frm that litigates to

secure economic liberty, school choice, private property rights, reedom o speechand other vital individual liberties and to restore constitutional limits on the power

o government. Founded in 1991, IJ is the nations only libertarian public interestlaw frm, pursuing cutting-edge litigation in the courts o law and in the court o

public opinion on behal o individuals whose most basic rights are denied by thegovernment.

Institute for Justice901 N. Glebe RoadSuite 900

Arlington, VA 22203

www.ij.org

p 703.682.9320f 703.682.9321

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