Author: Chuck Finder

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About Chuck Finder

This long-ago graduate of the University of Missouri-Columbia returns to the state to lead a talented team of professionals in promoting the university’s efforts via media relations. I arrived here after helping to share news and information about the University of Pittsburgh Medical Center (UPMC) and Carnegie Mellon University. Before that, I spent three decades with the Atlanta Journal-Constitution, Birmingham News and Pittsburgh Post-Gazette, though also dabbled as a contributor to numerous outlets — ranging from the former St. Louis-based institution The Sporting News to The New York Times.


Liberty Vittert looks at polls and the pollsters from a data-analytics perspective, given her statistical background. She is professor of practice in data analytics at Olin.

As she wrote Nov. 5 in a New York Daily News op-ed and Nov. 7 for Fox News, using a data lens she publicly foretold of Trump’s victory before it surprised the pollsters and oddsmakers in 2016, and she predicted in October how this 2020 balloting would go.

Liberty Vittert

“The pollsters really did flub up 2016, and, unfortunately, they have not only not learned from their mistakes, but also flubbed up 2020 to an even more epic degree. While they did get it right that Biden would win, the error in their estimate of how much he would win by was off by an even bigger margin than 2016,” Vittert said. “So what happened?

“We have two main issues at play: shy/scared voters and a misunderstanding of approval ratings.

“First, pollsters greatly underestimated — and did this to a much greater extent in 2020 than in 2016 — the number of ‘shy’ voters. These are people who chose not to answer truthfully to the pollsters. I would argue that ‘shy’ is a misnomer, and the better terminology is ‘scared’ voters who are unwilling to risk the hassle, harassment and real-life, very serious downsides to admitting that they might vote for Trump.

“A study out of USC showed that if you ask voters who they think their neighbors or friends are going to vote for, instead of asking who they are going to vote for, then magically Biden’s 10-point lead shrunk by half to a 5-point lead. Now, it is clear this was a problem in 2016 and 2020 — the real question is that with President Trump headed out of office will this be a problem with the polls in 2024?

Approval ratings

“Second, there is one polling device that tends to be a very significant variable in pollster’s determination of which candidate is in the lead: approval ratings. While Trump has the lowest approval rating in history at only 41% — almost 15 percentage points below the average — we are missing two very important aspects of approval ratings.

“Approval ratings don’t compare between people, they simply ask if you approve of the president, meaning that while you may ‘disapprove’ of Trump, you could have potentially disapproved of Biden even more — meaning you would vote for Trump. More importantly, what the pollsters are missing is that it really doesn’t make sense to compare Trump’s approval ratings to past presidents because he already started off so low.

“Let me explain: Trump has the smallest difference in spread — highest and lowest — of approval ratings over time. He never varied by more than 13%; the next-lowest spread was President John F. Kennedy at 27%! This means that Trump has what is arguably the strongest base of any president since Franklin Delano Roosevelt. Furthermore, a simple analysis shows that Trump tended toward even higher approval ratings ever since he took office — a clear sign that his base wasn’t going anywhere and was, in fact, growing.

“These two issues were enough to have pollsters off by epic margins. So can we still trust them? If they finally fix their ways, we can trust them again, but they have a long way to go.”




At a time when evictions and mortgage defaults have been likened to an oncoming tsunami across America, a big-data study of loan-to-value ratios in the wake of the 2007-08 recession carries a cautionary forecast for vexing economic weather ahead:

The higher a worker’s outstanding mortgage relative to their home value, the worse their future income growth and job mobility.

Those were the key findings when four researchers, including two from Washington University in St. Louis’ Olin Business School, delved into the wage data and credit profiles encompassing 30 million Americans across 5,000 companies. They found a negative relationship between workers’ income and their home loan-to-value (LTV) ratio, especially when the home was underwater (higher principal owed than value).

For example, the scientists discovered that people with underwater mortgages earned $352 — or 5% — less monthly than workers with less mortgage debt relative to home values.

Compounded by credit and liquidity issues, these workers are virtually stuck, unable to move to a job with a better income or a new area, the researchers wrote in their study forthcoming in The Review of Financial Studies.

And it could well translate to the COVID-19 economic effects today.

Radha Gopalan

“The impact of the current crisis on local economies varies widely across the U.S.,” said Radhakrishnan Gopalan, professor of finance at Olin and study co-author. “Our study highlights the difficulties someone in a worse-affected area may face in trying to pack up and move to a less-affected region. Furthermore, our study also highlights an important cost of homeownership: For instance, buying a home will constrain your labor mobility, and in the long run that may adversely affect your labor income.”

“This is one of the first studies to tie detailed credit histories to information on worker mobility and pay increases,” added co-author Barton Hamilton, the Robert Brookings Smith Distinguished Professor of Economics, Management & Entrepreneurship and director of the Koch Center for Family Business at Washington University. “Prior work has analyzed these factors in isolation and has not made the connection between the two.”

Bart Hamilton
Bart Hamilton

Seeking ways to scrutinize the effect of home equity and labor income, in addition to the mechanisms intertwined, the researchers used Equifax information and Corelogic house-price indices to drill down to study a random sample of 300,000 workers with an active mortgage over a 72-month period earlier in this decade.

They measured home equity as LTV — the unpaid mortgage vs. the market value — on the workers’ primary residence. They additionally accounted for home-value increases/decreases using ZIP-code level price fluctuations and controlled for local economic conditions. Moreover, they contrasted the income path of homeowners versus renters who worked at the same firm, were of a similar age and job tenure, and held a similar level of income and non-mortgage debt.

What the data essentially showed: Homeowners facing high LTVs were less likely to change homes, but more likely to change jobs, if they could. And renters working at the same companies and with similar job tenure faced no such issues. Additionally, homeowners with high LTVs faced slower income growth while renters faced no such penalties.

It wasn’t as cut and dried as a rent-vs.-own debate, though. Income and mobility for homeowners could vary. A worker could face relatively smaller income declines or find greater employment opportunities if they lived in a metropolitan area with more jobs — for instance, an IT worker in San Francisco/Silicon Valley — or a state with softer non-compete laws limiting movement within an industry.

Housing prices and wages

Still, they found that declines in housing prices as a result of that 2007-08 recession suggested a 2.3% reduction in monthly wages economy-wide due to constrained mobility.

“If the adverse effects of the current pandemic on local economic conditions also spill over to house prices, then we will find ourselves with a number of underwater homeowners,” Gopalan said. “In that scenario, the effects we document will be very relevant.”

Gopalan and Hamilton were joined in the research by two former Olin PhDs, Ankit Kalda and David Sovich, who work at Indiana University and the University of Kentucky, respectively.

They wrote that a homeowner with an underwater mortgage were to face a new job offer in a different area, they were confronted with three (unappealing) prospects:

  1. Sell and swallow the shortfall — meaning they still must require some access to liquidity, despite being credit constrained.
  2. Retain the home and rent it out — meaning there will be no or negligible down payment on a new home in the new area.
  3. Walk away and default on the mortgage — meaning deeper credit issues.

In short, their mobility was as hampered as their current job situation, the co-authors said. A worker may not seek out better opportunities in the first place and, consequently, feel adverse effects on income because of an undermined bargaining power at the current workplace.

For the record, the median individual in their study group was 41 years old with an annual $41,015 salary; comparatively, the median person in the U.S. workforce overall in that time window was 41.9 with an annual $41,392 income, the co-authors wrote. The median loan: $192,400.

“Our study highlights an important cost of home ownership,” Gopalan said. “While the ‘American dream’ is usually defined in terms of building wealth through home ownership, the financial crisis has revealed a few glaring holes in this story. Our study formally quantifies one important cost of following the ‘American Dream.’ A relatively safe way to own a house is to make sure one has sufficient down payment or home equity so that even if house prices fall, one is not stuck with an underwater mortgage. To this extent, our study recommends caution in pushing mortgages with less down payment.”

Hamilton added: “Our study highlights that policies affecting financial markets can directly impact the labor market as well. Businesses also need to be aware of the indirect costs that credit markets and home ownership may impose on mobility and the optimal allocation of their workforces.”




Amid a pandemic when limitations on disinfecting wipes, toilet paper and drugs brought attention — and disruption — to supply chains, new research involving Washington University in St. Louis delivers something of an answer to improving these lines of business:

Work with who you know.

While most of the business world builds success from existing relationships, four scientists including Xiumin Martin from the Olin Business School crunched data to find that personal connections between suppliers and vendors particularly improves the efficiency of the supply chain. To be precise, such rapport results in better overall performance, less restrictive and longer-lasting contract terms, and crystallized communication.

Martin

“Recent years witnessed significant increase in the complexity of supply-chain relationship due to outsourcing,” said Martin, professor of accounting. “Such increased complexity pushes my co-authors and me to think about how some fundamental issues concerning information asymmetry are addressed in this new regime. We examined this question by focusing on personal connections because the world has also become increasingly connected.”

The research team — Martin along with Ting Chen of the University of Massachusetts Boston, Hagit Levy of the City University of New York and Ron Shalev of the University of Toronto — studied 2000-11 data from public companies, though private businesses may even more keenly rely on personal, existing relationships.

College and work connections

In their paper, forthcoming in The Review of Accounting Studies, the researchers focused on previous education and work connections between suppliers and vendors. They showed such a personal relationship proved a successful way to select suppliers in a chain that has become more complex amid outsourcing and this global economy/information age.

In compiling their 12-year-long data set, they used a database called BoardEx — listing universities, employment histories, charitable involvements and board memberships — to try to find supplier-customer connections. Through another database, Compustat Segment, they were able to determine long-running business relationships between 1,430 suppliers and 2,630 customers.

Ultimately, they focused on just two relationships: university and work connections. They found 7.4% of the sample had educational connections and 21% had either educational or past-work relationships. Looking at the organizational charts, they discovered 0.5% connections between CEOs and 15.2% between non-C-level executives.

Such personal connections increased the likelihood a vendor will select a supplier by 60% over baseline probability, the scientists learned. Connections between C-Level executives show statistically stronger effects than those between lower-level executives, though the COO — who oversees most firms’ supply chain — has a more pronounced effect on supplier selection than a CEO or CFO.

They also studied when that connection was broken — say, one of the parties in the relationship leaves their employer or retires. There, they found that the supplier-customer relationship ended earlier after a departure of a connected executive than after a departure of an unconnected executive.

Boiled down, these prior college or work connections:

  • increased a vendor’s chance of being selected as a supplier;
  • relaxed procurement-contract terms;
  • improved firms’ operating efficiency;
  • expanded geographical areas to choose supplier-chain partners when there are limited choices nearby; and
  • smoothed out exchanges of information.

Simply put, these businesses know one another. And that enabled them to make more accurate assessment of supply-chain risks, helped to reduce costs, facilitated more timely updates and improved the effectiveness of monitoring the supplier along the chain.

Longer-lasting contracts

They found the utility of the relationship by breaking down such factors as: product quality and reputation; delivery reliability/on-time delivery; competitiveness of cost; manufacturing capability; management leadership; technical capability; research and development; financial risk; and production flexibility to customer requests.

The data showed that 27% — or one in four — contracts were between connected parties, and on average, the contracts lasted six months longer (48 months vs. 42 months) in duration than two parties with no connection. The less restrictive contract terms translated into product warranties, the ability to inspect supplier’s plants, supplier-paid liability or property insurance, and pre-scheduled periodic meetings often used to address risk and moral-hazard issues.

“The COVID-19 crisis has significantly disrupted supply chains,” Martin wrote in the paper. “It will be interesting and important to examine whether personal connections have an influence in counteracting such disruptions and fostering a more resilient and robust supply chain network.”




To lure customers, online retailer Alibaba often targeted existing customers when marketing resources were limited. Then along came a research project with a novel question: What if you pursued prospective customers, and then tracked their offline and online spending habits compared to frequent customers?

That’s how two Olin Business School researchers, along with a former fellow Olin faculty member and Alibaba officials, flipped the pop-up business model, and possibly more. The co-authors found that inviting potential customers via text message could increase buying with both a pop-up shop retailer and similar product vendors online.

In fact, that online shopping hangover — which they labeled a “spillover effect” — spread over far more retailers than the original participants and lasted as long as six weeks to three months after the initial text/pop-up lure.

Their paper, “The Value of Pop-Up Stores on Retailing Platforms: Evidence from a Field Experiment with Alibaba,” was published online Sept. 5 and is forthcoming in the journal Management Science.

Zhang

“Pop-up stores have become an increasingly popular channel for online retailers to reach offline customers,” said co-author Dennis Zhang, assistant professor of operations and manufacturing management at Olin. “Pop-up stores are cheap and fast to build, which means that those internet-based retailers can test building them in many different locations and find the best strategies.”

All this increased spending starts with a pop-up shop and a cellphone invite.

Pop-up week of jeans sales

Co-authors Zhang and Lingxiu Dong, professor of operations and manufacturing management, worked on the huge project wiith former Olin colleague Hengchen Dai of UCLA and Alibaba’s Qian Wu, Lifan Guo and Xiaofei Liu. The group conducted the experiment tracking some 799,904 Alibaba-app customers during a pop-up week of jeans sales in October 2017 in Hangzhou, China, southwest of Shanghai. Next, they followed those customers’ habits online for six- and 12-week periods to follow.

Dong

They randomly split the customers into two sets living within 6.2 miles of the pop-up: those who received a text-message invite — making no mention of brands, coupons or participant retailers — and control-group members who didn’t get an invite.

Using a type of “Internet of Things” (IoT) technology and the customers’ Alibaba apps, they were able to track customers even when the customers bought nothing in the pop-up, which mostly was an online portal that allowed them to use a virtual fitting-room function to “try on” jeans on a screen. (Customers also found coupons once they arrived at the physical store.)

Building trust with platform itself

Some of the findings:

  • Foot traffic increased by 76.19% because of the text invites; using the tracking information to determine frequent/existing from infrequent/prospective customers, the researchers found that the text invites increased foot traffic among the former by 200% and the sought-after second group by 69%.
  • Invitees spent 39.51% more money on participating retailers online long after the original pop-up visit. They also spent 17.17% more on non-participating retailers, defined as those beyond the pop-up vendors and carrying at least 10 jeans products on their online stores.
  • The buzz continued for those non-participating retailers deep into the New Year, some 12 weeks after the October pop-up week. Their sales saw a 14.89% increase while participating retailers experienced no lingering effect, at least not one that was statistically significant either way.

“This suggests that customers are not only building trust with specific retailers on the platform but also with the platform itself.” Zhang said.

The researchers found that the text invites increased foot traffic among existing customers by 200% and the sought-after prospective customers group by 69%.

“The experiment offers insights into the relationship and dynamics of online and offline shopping behaviors, which can be very helpful for retailers to devise omni-channel strategies,” Dong said.

The co-authors surmised that the pop-up visits served as a “transient billboard”: The shop advertised the presence, and thereby increased awareness, of these retailers — existing, frequent customers were already under the tent, but the prospective customers could be won over a fiscal quarter at a time. The visits also provided “experiential learning” so customers could assess these retailers’ products.

They also realize this experiment centered on jeans, a product requiring a good fit, feel. Commodity products — entertainment devices, food, etc. — could be evaluated more easily “without touching or trying on.”

Then again, it revolved around the online retailer Alibaba rather than a line of physical stores/chains. The study suggests positives for both types via pop-ups and invites, though the next step in research is to study pop-up store effects for traditional, omni-channel retailers. Using data correctly, the co-authors said, many retailers could be able to create personalized shopping experiences for both offline and online sales.

“As we have shown, pop-up stores are very efficient in reaching offline customers and attracting them online. This will be a good strategy for retailers who face online growth pressure in certain areas.” Zhang said.




Consider the parent playing the role of air traffic controller with his or her child’s busy schedule. First, there is homework for the kid to finish in the next hour. Then comes soccer practice followed by a piano lesson for the ensuing two hours.

“If the parent knows the deadlines and the kid just does their work, it’s the best of both worlds,” said co-author Stephen Nowlis, the August A. Busch Jr. Distinguished Professor of Marketing at Olin Business School at Washington University in St. Louis. “But if the parent is trying to get work done on their time …

“The big picture is, setting all these deadlines seems like a good idea. But too many deadlines makes you use your time less efficiently.”

Nowlis

That was the central finding of an eight-test study published May 15 in the Journal of Consumer Research titled, “When an Hour Feels Shorter: Future Boundary Tasks Alter Consumption by Contracting Time.” The boundaries in question are upcoming appointments, meetings, tasks, etc. And the researchers found that people facing them: (a) perceive they have less time than in reality; (b) perform fewer tasks as a result; and (c) are less likely to attempt extended-time tasks that can be feasibly accomplished or more lucrative.

When up against such an upcoming appointment, people tended to procrastinate on the long-time chore such as writing that report and reverted to working on shorter-time tasks, as in making a work call or typing up a quick synopsis. Or they’d skip both entirely to focus on the simplest of work forms, like answering emails …  or scheduling more boundaries.

“It’s something we can all relate to,” said Nowlis, who started this project when co-author Gabriela N. Tonietto of Rutgers was a PhD candidate at Olin and co-author Selin A. Malkoc of Ohio State was an Olin colleague. “It could be anything. You have a deadline, and what do you do with your time? We don’t think about it as much from the perspective of consuming it, but, realistically, time is something we probably consume as much if not more than any other resource. So how are we consuming our time?”

The researchers conducted more than eight tests over a two-year period beginning in 2015 involving 2,300-plus participants to see how people in various situations arrived at budgeting scheduled and unscheduled windows of time. Among the tests included in the Journal of Consumer Research study were:

  • Using the Amazon Mechanical Turk (MTurk) survey platform, 200 participants — split evenly between those with an upcoming appointment and those with a free schedule — were asked to pick between a 30-minute chore paying $2.50 and a 45-minute chore paying $5. They had an hour’s time. But the participants with an upcoming appointment felt they had 7.82 fewer minutes in their hour to commit to their chore than the people with an open schedule.
  • At Chicago’s O’Hare International Airport, 134 passengers were asked to take a 15-minute survey — about half of the passengers had 30 minutes before boarding, the rest had one hour. Some 26 percent of the people facing a shorter window agreed to participate, compared to 46 percent of the passengers with four times the allotted survey window.
  • At Washington University, 158 undergraduates were told they had either a strict, five-minute window until their appointment or an implied boundary with “about five minutes to do whatever you want.” In the same five-minute period, the latter group accomplished 2.38 tasks compared to 1.86 tasks by the hard-timeline group.

“How do you best manage your time? How much scheduling do you need?” Nowlis said. “These are interesting questions.”

Their study provided some answers for trying to prevent issues. Basically, it counsels people to schedule wisely: Maybe leave a chunk of the work day open to accomplish extended-time tasks.

“If you have some big tasks, too many scheduled things will affect your productivity,” Nowlis said. “A lot of scheduling is fine for shorter tasks.

“So find the environment that works for you.”

This piece ran originally in The Source from WashU public affairs.