Tag: Faculty



The economy and coronavirus pandemic were two of the top issues for voters in the 2020 election, according to exit poll surveys. Notably, 52% of voters said controlling the pandemic was more important, even if it hurts the economy. But what if we didn’t have to choose?

In communities where masks were mandated, consumer spending increased by 5% on average, showing that a safety rule can stimulate economic growth as well, according to a new study from the Olin Business School.

Researchers found the effect was greatest among non-essential businesses, including those in the retail and entertainment industries—such as restaurants and bars—that were hit hard by the pandemic.

​Thomadsen

“The findings exceeded our expectations and show that we can have a strong economy with strong, commonsense public-health measures. Mask mandates are a win-win,” said Raphael Thomadsen, professor of marketing and study co-author.

Thomadsen, along with Olin’s Song YaoNan Zhao and Chong Bo Wang, analyzed the impact of social distancing and mask mandates on both the spread of COVID-19 and consumer spending. They used cellphone location data to track the degree of social distancing in nearly every county in the U.S. and compared that with community voting patterns, coronavirus infection rates and consumer spending rates.

The researchers found social distancing has a large impact on reducing COVID-19 spread, while the evidence on mask mandates is mixed. But while social distancing reduces consumer spending, mask mandates has the opposite effect. They also found that social distancing decreased in communities with mask mandates, magnifying the positive effect on spending.

Feeling safer to spend

Yao

“Preventive measures such as social distancing and facial masks should be considered as pro-business,” said Yao, associate professor of marketing. “When people feel safer to spend, or more importantly, when the pandemic is kept at bay, the economy is more likely to have a quick recovery. Not to mention the lives that will be saved.”

Perhaps not surprising given the political lines drawn over masks, they also observed that political affiliation had a significant impact on social distancing. Even after controlling for local characteristics such as the population density, income and other demographics, counties that voted for President Donald Trump in 2016 engaged in significantly less social distancing than counties that voted for Hillary Clinton.

“If the entire country had followed low levels of social distancing seen in Trump-supporting areas, we estimate there would have been 83,000 more American deaths from COVID to date, which represents a 36% increase over the current death count of 225,000 Americans,” Thomadsen said.

They estimate the tradeoff would have been a relatively small boost in the economy. Consumer spending dropped $605.5 billion from April to the end of July, compared with the same time last year. The country would have recovered $55.4 billion, or approximately 9%, had all counties remained as open as the most pro-Trump areas.To put it in more dramatic terms, Thomadsen said this means that opening up is only a reasonable policy if one values lost lives at roughly $670,000 each or less. This value was determined by dividing the hypothetical $55.4 billion boost to the economy by the 83,000 lives lost in this scenario.

“The calls to open up the economy come with huge costs of COVID spread and only modest benefits of increased economic activity,” Thomadsen said. “Opening the economy before getting the virus under control only makes sense if you put a very low value on life.”


A central puzzle of corporate strategy is whether headquarters can add value to their business units beyond the burden of their own overhead. The record is bleak: On average, corporations trade at a 20% discount relative to their breakup value.

“This is the problem that we want to try fix,” said Anne Marie Knott, Olin’s Robert and Barbara Frick Professor of Business.

Anne Marie Knott

She proposed and tested a theory of how corporations could overcome that record. On November 10, she presented the findings as part of the Olin Business Research Series. More than 60 people tuned in for the virtual event.

The 20% discount could mean that multibusiness firms fundamentally destroy value or that they are poorly managed. Regardless, a whopping $5 trillion economic gain could be had from a better understanding of how headquarters add value in multibusiness firms, Knott says.

Bank One and its return on assets

Bank One, a bank holding company, motivated the theory. Knott and co-author Scott Turner, of the University of South Carolina, explain how in “An Innovation Theory of Headquarters Value in Multibusiness Firms” in Organization Science.

Bank One increased the return on assets of its target banks by 40-70%.

“This would be really easy if they were purchasing underperforming banks,” Knott said. But they weren’t. They were buying well-managed banks.

The theory relies upon dynamics between business units where laggard units improve their performance by imitating leaders. In turn, this “competition from below” stimulates leaders to innovate more.

Knott polls audience members during her Business Research Series presentation.

Beyond demonstrating that headquarters can add value through innovation and growth, the theory offers prescriptions on how to do that. For instance, they can establish systems that create norms for sharing, which eases innovation. They also can offer high-powered incentives to fuel innovation.

In general, Knott’s research examines the optimal environment and policies for innovation, which she summarizes in her book, “How Innovation Really Works” (March 2017). This interest stems from issues arising during an earlier career in defense electronics at Hughes Aircraft Company.

KEY TAKEAWAYS:

  • A $5 trillion economic gain could be had from a better understanding of how headquarters add value in multibusiness firms.
  • Bank One increased the return on assets of its target banks by 40-70%.
  • The theory relies upon dynamics between business units where laggard units improve their performance by imitating leaders.
  • In turn, this “competition from below” stimulates leaders to innovate more.




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.”


When the COVID-19 pandemic and resulting economic downturn caused internship cancellations, WashU Olin and the Center for Experiential Learning stepped up to provide summer learning opportunities for students while supporting businesses, nonprofits and startups. We’ll be sharing their stories on the Olin Blog. Today, we’ll hear from Jay Li, BSBA ’16, director of marketing at Regatta Craft Mixers.

Given the pandemic, what compelled your company to get involved with this program?

Honestly, we had to scrap existing plans to bring on summer interns due to the pandemic. When I received the email from Dean Taylor about the program, we rushed to pitch a strategic project we’ve been struggling with. 

What is your project about?

Our students worked on using insights from consumer research to inform a selling strategy for the grocery channel. 

What was it like working with WashU Olin students?

The additional bandwidth and their fresh perspective was great. It was a pleasure working with our team, and they definitely challenged some assumptions we’ve held for a while. We were really impressed with the depth of thought and analysis we’ve seen from them. 

When you’re so focused on fighting daily fires, other things—like figuring out exactly who our consumers are—have to wait. The students have really helped us work on some badly-needed projects. Plus, the students’ fresh perspective has been great—they helped us find ways we were looking at the wrong hypotheses.

What advice would you give students on the cusp of graduating at this time in history?

I would encourage them to try and find silver linings. Although COVID-19 has disrupted our lives, there’s a lot of opportunity for innovation and disruption as our behaviors change. 




Seth Carnahan, Ashley Hardin and Durai Sundaramoorthi presented at a faculty idea exchange for online teaching on October 26, 2020.

One month after fall classes began, my colleagues surveyed students for their first impressions of hybrid learning—the course structure for most of our classes. With strong survey participation across all our programmes, student reaction was positive.

Nearly 99% were happy with our public health measures. Nearly 95% agreed their instructors were prepared. Nearly three-quarters said learning today was the same or better than it was in spring. “Olin has been successful in making this transition easy, and professors have been very accommodating,” one student commented.

Encouraging, indeed. I’m proud of Olin’s staff and faculty for their tireless work toward a world-class experience in the midst of world-crushing circumstances. I’m equally proud of our students, who have shown extraordinary resilience and agility—traits that will serve them well throughout their careers.

But our faculty gathering on October 26 is really what excites me. With members of Olin’s Center for Digital Education, more than 100 instructors met over Zoom to share best practices and swap ideas for teaching techniques and software tools. Everyone in the virtual meeting was determined to raise their game even higher with how they were teaching their hybrid classes.

Everyone wanted to get better.

Heading toward the third horizon

I’ve written before of the three horizons of this crisis. Today, we’re in the midst of the second horizon as we raise our game to provide the gold-standard experience everyone expects—students, staff and faculty.

Certainly, there are challenges. Keeping students in the classroom connected with students online is difficult. Students require extra time to prepare for a class period, which is extra difficult when classes run back-to-back. A student’s situation outside the classroom affects their ability to participate inside the classroom. Instructors such as Ashley Hardin are working hard to build a community among students—whether they’re online or in a classroom.

While sharing a number of concrete, group-oriented teaching techniques, Hardin also said she began the semester by asking students about their favorite musical artists. She created a Spotify playlist for the class reflecting their preferences. “It’s a fun, playful way for them to get to know each other,” said Hardin, assistant professor in organizational behavior.

She was one of three professors—with Seth Carnahan, associate professor of strategy, and Durai Sundaramoorthi, senior lecturer in management—who presented to the group of colleagues.

A robust exchange of ideas

The presenters shared their techniques for doing group work and keeping students engaged in their work. Carnahan, for example, shared how he uses PickRandom.com to “cold-call” on a student when he wants someone to engage more deeply in the discussion.

Throughout the presentations, two dozen instructors and three staffers contributed in the Zoom chatroom, answered each other’s questions, offered ideas about teaching apps and hardware solutions, and reinforced points the presenters made.

They wrote about how they’ve given space for students to confront the social isolation and inconvenience so common in our lives today, how they’ve structured classes to maintain cohesive teams and what new features Zoom has introduced.

For now, we continue to traverse the second horizon of this crisis. And here we likely will remain, at least through the spring semester, given the trajectory of the pandemic thus far.

But meetings like the one on October 26, gatherings that showcase the innovation and vision and creativity of our colleagues—this prepares us to traverse that third horizon. To cross that horizon, we must consider the definition of excellence in a post-pandemic world.

And I can see we’ve already begun that work.

Pictured at top: Seth Carnahan, Ashley Hardin and Durai Sundaramoorthi presented at a faculty idea exchange for online teaching on October 26, 2020.