NOVEL CORONAVIRUS (COVID-19) UPDATES

Masks are required as the campus is at red status.

Marketing Professor Susan Myers Wins Award for Paper on Instagram Engagement During Pandemic

Susan Myers, Ph.D., associate professor of marketing

Susan Myers, Ph.D., associate professor of marketing, won Best Paper: Digital & Social Media from the Society for Marketing Advances for her work regarding increased Instagram use during this year’s pandemic.

Myers received the award Nov. 6 during SMA’s virtual 2020 conference.

Her paper looked at how COVID-19 restrictions and social distancing guidelines impacted consumer use of Instagram by looking at engagement rates with the top brands on the platform. The study compared engagement rates in the two months prior to the first regulations put in place for COVID-19 and the two months following it.

“The research indicated the engagement rate per post was higher during the pandemic than before despite the fact there was not a significant difference in the quantity of posts made by the brands,” Myers said.

Myers also found that consumers were generally looking for content unrelated to the pandemic as posts with COVID-related hashtags did not have a higher rate of engagement.

While some of these changes in social media use may be temporary, Myers said corporations will likely continue to invest more as consumers develop new routines in the pandemic.

“It seems doubtful that consumers will return completely to the old ways of operating as customer expectations for digital alternatives have grown,” Myers said. “Customer reliance on digital consumption continues to grow as will their expectations for brands’ digital experiences.”

Centennial Bank Gives $25,000 to UCA College of Business Enhancement Fund, Names Student Commons Area

Centennial Bank has given $25,000 to the University of Central Arkansas College of Business’ Enhancement Fund.

The enhancement fund supports student programming, enhanced learning opportunities, as well as professional development opportunities for students, faculty, and staff in the College of Business. As part of the gift, Centennial Bank has also named the Student Commons area on the second floor of the College of Business building as the Centennial Bank Student Commons.

“Centennial Bank is one of our college’s most involved partners and supporters,” said Michael Hargis, dean of the UCA College of Business. “Their consistent support and partnership enables our college to provide important learning opportunities for our faculty, staff and students.”

More than 40 UCA alumni and current students are employed by Centennial Bank, making it one of the university’s largest corporate partners.

The bank is the wholly owned subsidiary of Home BancShares, co-founded by Johnny Allison and Robert H. “Bunny” Adcock, member of the University of Central Arkansas Board of Trustees. It has locations in Arkansas, Florida, Alabama and New York.

In 2019, Centennial Bank became the first bank to establish an endowed scholarship in the college.

In 2006, the bank established the Johnny Allison Entrepreneurship Speaker Series, which has brought more than 20 speakers to the college to talk with students. Past speakers include Bunny Adcock, Marshall Stewart, Karen Garrett, Rush Harding, Rick Massey, Steve Strange, and former Govs. Mike Beebe and Mike Huckabee.

Additionally, the bank created the John. W. Allison Entrepreneur Endowed Professorship Fund which supports faculty within the Innovation & Entrepreneurship program. The program began in 2012 with a cohort of 40 students which has nearly doubled since.

The UCA College of Business has more than 1,600 undergraduate and graduate students. It offers 14 baccalaureate degrees, two master’s and one graduate certificate and one technical certificate across four academic departments and houses the state’s only insurance and risk management program. The UCA College of Business is accredited by the Association to Advance Collegiate Schools of Business (AACSB). Visit uca.edu/business for more.

Three Alumni Make 20 In Their 20s List

Three UCA College of Business alumni were recently named to Arkansas Business’ 20 In Their 20s List. Corey Parks (BBA ’16, MBA ’18), Christopher Diaz (BBA ’14), and William Jones (BBA ’12).

Each year, the list recognizes young, talented leaders in Arkansas’ business and nonprofit community.

Parks earned his bachelor’s in Insurance & Risk Management in 2016, and his master’s in Business Administration in 2018. He serves as vice president of economic development for the Conway Chamber of Commerce & Conway Development Corp.

CLICK HERE: Corey Parks Profile

Christopher Diaz earned his bachelor’s in Business Administration with an emphasis in Innovation & Entrepreneurship in 2014. He serves as a commercial loan officer at First Security Bank in Benton.

William Jones earned his bachelor’s in Finance in 2012. He is vice president of operations at Sissy’s Log Cabin in Pine Bluff.

College of Business Gets $100k Gift from Acxiom

Acxiom Gives $120,000 to UCA

Acxiom’s most recent gift to the College of Business and College of Natural Sciences and Mathematics pushes the company’s total support provided to UCA past $1 million.

The University of Central Arkansas College of Business has received a $100,000 gift from Acxiom to support several initiatives.

The gift is part of a larger $120,000 gift from Acxiom to UCA to support the College of Natural Sciences and Mathematics and College of Business. The gift takes Acxiom’s support of UCA to $1.1 million across a 30-year partnership.

In the College of Business, Acxiom’s gift will support the Acxiom IT Careers Camp, a yearly, two-day camp held on UCA’s campus for high school students interested in careers in information technology. The camp began in 2007 and has welcomed more than 400 students to UCA.

The gift will also support the Acxiom Scholarship, open to qualifying juniors and seniors majoring in Management Information Systems, and the Acxiom Information Systems Student Award, given each year to the top Information Systems major.

“Acxiom has played a vital role to our college, especially in our Department of Management Information Systems, where IT and analytics education is the primary focus,” said UCA College of Business Dean Michael Hargis. “Acxiom has provided more internships for MIS and other business students than any other company, more full-time positions for our MIS graduates than any other company, and has been crucial to curriculum enhancements we have made to keep our courses relevant and current.”

“Central Arkansas is home for Acxiom, and we’re delighted to continue to support our community,” said Acxiom’s Chief Customer Officer Drew May, who also serves on the UCA College of Business Advisory Board. “Investment in education and in future talent is so important, both in good and in challenging times, as it ultimately benefits everyone.”

For more information on the impact Acxiom’s gift will have on the entire UCA campus, click here.

UCA College of Business Hires 2 Accounting Faculty

The University of Central Arkansas College of Business has hired two faculty members in its Department of Accounting.

Mengyu Ma, Ph.D., and Qifeng Wu, Ph.D., were both hired as assistant professors of accounting.

Ma was an instructor of accounting at Florida International University. Her research interests include financial reporting quality, information environment, equity markets, debt contracting and financial analysts. She earned a bachelor’s and master’s in accounting from the Max M. Fisher College of Business at Ohio State University and a doctorate in business administration from Florida International University.

Wu was previously an assistant instructor at the University of Texas at El Paso. He conducts research on financial reporting quality, corporate governance and auditing. He earned a bachelor’s in computer information systems from Idaho State University, his master’s in accounting from the University of Idaho and a doctorate in accounting from the University of Texas at El Paso.

The UCA College of Business has more than 1,600 undergraduate and graduate students. It offers 14 baccalaureate degrees, two master’s, one graduate certificate and one technical certificate across four academic departments and houses the state’s only insurance and risk management program. The UCA College of Business is accredited by the Association to Advance Collegiate Schools of Business.

Mark McMurtrey Wins SWDSI Outstanding Educator Award

MBA Director Mark McMurtrey, Ph.D.

Mark McMurtrey, Ph.D., professor of management information systems and Master of Business Administration program director, has been awarded the Southwest Decision Sciences Institute Outstanding Educator Award.

The SWDSI is a division of the Decision Sciences Institute, a professional organization made up of those interested in sharing research on the study of decision processes and the application of quantitative and behavioral methods to the problems of society. The Outstanding Educator Award is one of the most prestigious honors presented by the Federation of Business Disciplines and SWDSI.

“Knowing that my name will be forever linked with these other winners is absolutely humbling and quite an honor. I know my family is proud of me, and my late parents as well,” McMurtrey said.

McMurtrey has served as program chair for the SWDSI’s 2017 conference and served as the organization’s president from 2019-20. He is in his 19th year as professor at UCA and fifth year as MBA director.

Read more here.

Putting the GDP Numbers in Context: What You Need to Know

By Jeremy Horpedahl, Ph.D.

Jeremy Horpedahl, Ph.D.

We all know that we are going through one of the worst economic downturns in US history. But how bad exactly is the downturn? The recently released Gross Domestic Product data for the second quarter of 2020 paint a very grim picture, with the headline number suggesting that the economy contracted by -32.9%.

GDP is a measure of all economic activity that takes place in a quarter or a year. Was there really one-third less activity in the second quarter compared with the first quarter? No there was not. The actual number is about a 7% decline. I’ll explain more how I came up with that number, but let me stress this is still a very bad number. It’s the worst we have on record, possibly the worst in US history, probably even worse than any one quarter of the Great Depression (if we had directly comparable data). Still, a number like -32.9% is not a very helpful number in the current context.

Interpreting economic data is challenging during the current economic crisis. My intent is not to downplay the harm, but to give it proper context. For example, I have previously written that the unemployment rate understates how much pain there is in the labor market right now. In contrast, the recently released GDP data overstate the economic pain.

Read more at Texas CEO Magazine.

Horpedahl also recently appeared on The Cato Institute’s Daily Podcast to give a quick rundown of the numbers. Listen here or anywhere you get podcasts.

E-Payment Use and Perceptions in Japan

Japan is one of the world’s most advanced and largest economies, yet lags behind in its use of e-payment and e-commerce.

In 2018, the Bank of Japan found only 18% of its citizens used e-payment systems. A recent study by three UCA College of Business professors and two students found that age and gender play a significant role in e-payment usage in Japan. The results, recently published in the Global Journal of Business Disciplines, showed males were more likely to use e-payment systems, as well as older residents.

Previous research has found several factors played a role in Japan’s slow adoption of e-payment, including the fact many local retailers and stores do not use or accept e-payment systems. Only 17% of Japan retail sales are made up by e-payment systems, compared to 85% in South Korea, 56% in Singapore and 35% in India.

The postponed 2020 Olympic Games, to be held in Tokyo, provide a new incentive for a faster adoption as millions will visit the country next summer and expect to be able to use e-payments to purchase goods and services. In 2017, the Tokyo Metropolitan Government estimated the games would create nearly $284 billion in economic benefits.

Three UCA College of Business professors — Alex Chen, Ph.D., professor of management; Steve Zeltmann, Ph.D., professor of management information systems; and Ken Griffin, Ph.D., former associate dean of the College of Business — and two students — Moe Ota and Risa Ozeki — examined perceptions of benefits, trust, security, ease of use, quality and competency and how they impact the use of e-payment systems in Japan.

When asked how frequently they use e-payment, 21.6% of respondents said they did not. Less than 15% used it more than 3 times a week and the average weekly use was 1.5. Incentives were shown to be most closely associated with increased e-payment use.

“One of our major findings is the relationship between gender and e-payment behavior,” Chen said. “Men were more likely to use e-payment systems than women in Japan.”

The study found older people were more likely to use e-payment than younger people.

“It is reasonable to assume older people in this group are more likely to have a full-time job and, perhaps, a higher income,” Chen said. “Since they probably spend more money and have more money to manage, e-payment is a good platform for them to use.”

Chen said the upcoming Olympics would serve as the most important marketing tool and expects to see Japanese consumers will use e-payment systems more often in its aftermath.

“People from all over the world are expected in Japan and those people will expect the availability of e-payment,” he said. “The Japanese government and banking system understand this, and e-payment systems will be promoted as necessary to attract this business to Japanese vendors.”

Hannah Robinson Receives Big I Arkansas Insurance Scholarship

Hannah Robinson, a senior Insurance & Risk Management student in the UCA College of Business, received the Independent Insurance Agents of Arkansas’ Sam Golden Memorial Scholarship on July 15.

The $1,000 scholarship honors the memory of Sam Golden who was a territory manager for Progressive Insurance and advocate of BIG I Arkansas. He also served on the Independent Insurance Agents of Arkansas Education Foundation, which awards the annual scholarship in his name.

Robinson, a White Hall native, is due to graduate in 2021. She currently interns at Union Standard Insurance Group in underwriting.

The Insurance & Risk Management program in UCA was established in 2000. It is the only four-year program of its kind in the state of Arkansas.

What’s the Real Unemployment Rate?

By Jeremy Horpedahl, Ph.D.

The latest data on the U.S. labor market was released on July 2 and saw the unemployment rate drop to 11.1% and nearly 5 million jobs were added in June. The unemployment rate aims to give a broad picture of how the labor market is performing. June’s rate is lower than 14.7% and 13.3% in April and May, respectively, but is still well above January and February when it was under 4%.

The unemployment rate has limitations in normal times, and during the current health and economic crisis it has even more limitations. To account for these limitations, it is useful to look at two broader measures of the number of people out of work. This allows us to see the percent of people out of work is higher than the official unemployment rate, but the trends are broadly the same: April was the worst month for the labor market, and there has been significant improvement in May and June.

What’s Wrong with the Unemployment Rate?

Jeremy Horpedahl, Ph.D.

There are two major problems with the official unemployment rate. First, is a current issue with the survey itself, which is administered by the Census Bureau. Survey takers were instructed to classify workers as unemployed (on temporary layoff) if they were not at their job due to COVID-19, but some survey takers classified these people as employed (but absent from work). BLS is aware of the problem and working to more accurately and consistently classify unemployed people correctly.

Thankfully, BLS also provides us with the data so we can reclassify these workers ourselves. That’s what the second, middle line does in the accompanying chart. Classifying all of those workers who aren’t at their job because of COVID-19, we see that these alternate unemployment rates are slightly higher: 12.3% vs. 11.1%. But the trend is the same as the official unemployment rate, and the classification problems are getting smaller over time (only about 1 million misclassified workers in June, compared with 7.5 million in April).

There is another, potentially bigger reason the unemployment rate undercounts the severity of the economic crisis: People who have dropped out of the labor force are not counted in the unemployment rate. If a worker has lost their job — not just on temporary layoff — and they are not currently looking for a new job, they don’t exist for purposes of calculating the official unemployment rate. And there are a lot of people in this situation: currently over 4.6 million people (though down from 8.1 million people in April).

As with the misclassified workers, BLS provides enough data that we can add these workers back in and count them as unemployed. Putting both of these groups of people into the unemployed category gives us the third highest line on the chart. This method was suggested by Michael D. Farren at the Mercatus Center, and he calls it the Pre-Pandemic Comparable Unemployment Rate. I have updated the data using his method in the accompanying chart. As we can see in the chart, this rate is higher still: 14.8% in June. But that’s a big improvement over April and May.

We don’t have similar data at the state level, so we can’t make similar adjustments to Arkansas’s unemployment rate. We do know that in May 2020, Arkansas’s unemployment rate of 9.5% was lower than the national average of 13.3%, and lower than Arkansas’s number from April, which was 10.8%.

What’s Next for the Labor Market?

Looking at the past few months of unemployment data is important for understanding how bad the pandemic has been for the U.S. labor market. But it doesn’t tell us what we really want to know: What happens next?

There is no guarantee that the unemployment rate and other alternate rates will continue to fall just because they have for two months. And I have no crystal ball to tell you what will happen next. The unemployment rate data is always a bit behind what we would like: the most recently released data was for the second week of June, and we won’t see data for the July reference week (which is July 12-18) until Aug. 7.

There are two possible scenarios for the next month in the US labor market. The first is that states continue to lift restrictions on business and personal activity, and that Americans become less concerned about the effects of COVID-19 on their own health and the health of others. People will then spend more money in the economy in general, but also more money specifically in industries that have been hit the hardest, such as leisure and hospitality. More workers will come back to their jobs, businesses will resume hiring, and the unemployment rate will continue to fall.

There is also a pessimistic scenario. The reopening of state economies appears to have led to an increase in positive COVID-19 cases in almost every state, and in a few states — such as Arkansas, Texas, and Arizona — these new cases have turned into more COVID-19 deaths. Most states have not seen a corresponding increase in deaths so far, but the next month will show whether that bad scenario will be true.

The increase in positive cases alone has caused some states to pause their reopening and a few have even gone backwards and shut down previously reopened industries, such as bars and restaurants. The increase in positive cases could also cause Americans to be more worried, and to continue to stay home and spend less money regardless of whether states impose new restrictions. Under that scenario, not only would the improvements in the labor market cease, they could go the other direction and July could see a higher unemployment rate.

What data can we look at in the meantime while we wait for the July unemployment report, which is still about a month away? One resource I recommend is the Opportunity Insights Economic Tracker, created by researchers at Harvard. This tool provides data on consumer spending, small business revenue, and several other useful resources that is continuously updated as new data becomes available.

The consumer spending data is currently updated through June 24. While it shows that consumer spending is still about 7% below its pre-pandemic levels, that’s a huge improvement from being down 30% in early April. This tool is also nice because it allows you to look at individual states. Arkansas has been back to pre-pandemic consumer spending levels for about a month, though we can also see that spending at restaurants in Arkansas is still down about 23%.

By watching the data on the Opportunity Insights tool as it comes out, we can get a better sense of where the labor market and the U.S. economy is heading. In addition to consumer spending in that tool, keep your eye on the three business indicators they track — small business revenue, small businesses open, and job postings — as well as the “time outside home” indicator to see how much people are moving around in the country and in individual states.

While these measures don’t tell us directly how many people are unemployed, they give us a sense where the economy is heading. There is also data available on the number of people filing unemployment insurance claims. It is difficult to directly translate this into how many people are unemployed, but it is worth tracking too. The Insured Unemployment Rate tells us what percent of the labor force is currently collecting unemployment insurance benefits, and it is updated weekly. The changes in this measure can give us some indication of where the labor market numbers are heading and what we might see in the next BLS monthly labor market report.

One final thing to keep in mind with unemployment insurance: As part of the CARES Act passed by Congress in March 2020, individuals who lose their job and are eligible for unemployment insurance have also been receiving an additional $600 per week on top of their normal state benefits. Unless Congress extends it, that additional $600 per week payment is set to end at the end of July.

While we don’t know if Congress will extend it, end it, or modify it in some way, we can make some predictions about what happens if the $600 per week payment does go away. One major possibility is that many workers would return to their jobs once the benefits expire. The expanded weekly benefits provide some incentive to stay home, which is part of the intuition behind providing it in this crisis, and without the payments some workers may be more willing to head back to work. But, if many businesses stay closed either due to government orders or a lack of consumer demand, those workers may have no jobs to return to, and they will now have much less money in their pockets to spend in the economy.

It’s hard to say which of these effects will dominate, but that’s another thing to watch for in the next few weeks as we move into August.

Jeremy Horpedahl is an assistant professor of economics at the UCA College of Business and research scholar at the Arkansas Center for Research in Economics.