Challenge accepted: Getting down to business
Researching the economic impacts of the COVID-19 lockdown.
The economic shock caused by the coronavirus lockdown is expected to dwarf the impact of the global financial crisis, with 1 million people losing their jobs since mid-March, and economic activity falling sharply over that period.
As it became clear that reopening the economy was crucial to Australia’s recovery, Professor of Quantitative Finance, Eckhard Platen, applied mathematical models normally reserved for the world of finance to accurately predict the spread of COVID-19.
“The models hold clues that can be used to understand the timing of lifting control measures.
“The study provides a pathway to maximise levels of tolerable rates of infection while also maximising economic and social activities, within limits.”
In practice, this means social distancing and ongoing vigilance and surveillance of the population to rapidly identify growth areas of infections, and to vigorously act to isolate these sources of infections, according to Professor Platen’s study.
Even with staggering job losses and reduced economic activity, there was a surge in retail investor trading in stock markets during the COVID-19 pandemic.
Using unique global data on gambling, UTS Finance Professor Talis Putnins and colleagues found that the dollar volume of gambling on stock markets was at least 3.5 times to combined volume of ‘traditional’ gambling such as casinos and lotteries.
“Restrictions on traditional forms of gambling due to shutdowns of casinos, pokies and sporting events did indeed lead to spillovers of gambling into stock markets.
“Lockdowns further exacerbated the surge in retail trading, as boredom, isolation and anxiety are well-known triggers for gambling,” says Professor Putnins.
While investors were being drawn to the markets, many ASX listed companies were announcing that their CEOs and other executives would take pay cuts during the COVID-19 crisis.
Approximately $25 million dollars has been cut in pay so far from high profile companies such as Qantas, Westpac, Flight Centre and Myer, however it’s possible these pay cuts are offset by other remuneration components, such as shares and options.
Professor of Accounting Martin Bugeja, and colleagues Dr Anna Loyeung, Dr Samir Ghannam, Dr Nelson Ma and Davina Jeganathan, are researching the market reaction to the pay cuts, and whether the timing of CEO pay cuts was associated with the amount of negative media attention on the company.
Corporations might like to talk up their social credibility and political righteousness, but when times get tough they lack both the will and ability to do what needs to be done.
Deputy Dean, UTS Business School
As the pandemic took hold, the UTS Business Intelligence and Data Analytics (BIDA) Research Centre turned its focus to finding ways to best inform the Commonwealth and state governments’ response.
Surveying more than 2000 residents from across all states and territories, researchers asked about feelings and perceptions of COVID-19, including how aware they were of the virus, and whether they considered it a serious threat.
“The survey showed differing perceptions across age groups, employment status, location and gender,” says Dr Antonio Borriello.
“We believe the policies adopted by the federal and state governments to address the pandemic can be more effective when backed up with measures targeted to these different population categories,” he says.
The results are now available via an open access dashboard, developed by Dr Borriello, where the public can explore the responses in detail.
For UTS Business School Deputy Dean Carl Rhodes, the coronavirus shutdown left him grappling with a problem faced by many researchers – whether work could continue business as usual.
While initially continuing to conduct interviews for a project investigating how the relationships between staff are affected by different forms of workplace diversity, albeit remotely, the research team he was on with Dr Celina McEwen and Professor Alison Pullen discovered a new level of gratitude for research participants.
“Realising that our research could be adding pressure to people’s lives at this time led us to pause our fieldwork.
“There are researchers whose human-centred fieldwork does need to be undertaken during times of rapid change and crisis, however I think this is a time for some to carefully consider what it means to accept the generosity of others.”
Professor Rhodes was also busy writing a book on “woke capitalism” when COVID-19 disrupted the world, leading him to update his text to reflect the way corporations were forced to make decisions on economic rather than social grounds.
“Corporations might like to talk up their social credibility and political righteousness, but when times get tough they lack both the will and ability to do what needs to be done,” he says.
“When you have the RBA spending billions to address this problem, it reinforces the importance of the different roles of the state and companies.”