Real-time evaluation of the effects of Covid-19 and policy responses on consumer and small business finances
Lead Research Organisation:
University of Warwick
Department Name: Warwick Business School
Abstract
The Covid-19 pandemic together with the unprecedented and radical economic policy response on the part of government has resulted in severe disruption to consumer finances and small business finances. There is an urgent and timely need to evaluate the extent of disruption and the effectiveness of recent policy innovations. This project will use a new and unique set of real-time, high frequency data available to evalute these far faster can be achieved with traditional ONS data
sources.
The project involves the creation of a new real-time economic characterisation of consumer and firm behaviour from mass transaction data. Specifically, the work will evaluate impact on consumer finances (reduced incomes, non-payment of debts, patterns of saving and expenditure) and small business finances (turnover and business continuity). The research will be co-produced with four organisations.
First, working with the Financial Conduct Authority, the regulator of the consumer financial sector in the UK, to evaluate the impact on consumer indebtedness and evaluate the FCA's policy response, the Consumer Credit (Temporary Covid-19 Support Measures) Order 2020 (CCO220) and
the 3 month mortgage forbearnce scheme.
Second, working with the National Employee Savings Trust, the largest provider of pensions to low income workers in the UK, to understand the effects
on incomes and short-term and long-term saving behaviour.
Third, working with the UK's largest financial aggregator app, Moneydashboard, to model the impact of 'lockdown' measures on consumer spending and business survival across sectors.
Fourth, working with Natwest to evaluate the impact of the government's Coronavirus Business Interruption Loan Scheme (CBILS).
Findings will be presented to policymaker sponsors the researchers will continue to work with policymakers in real-time policy design.
sources.
The project involves the creation of a new real-time economic characterisation of consumer and firm behaviour from mass transaction data. Specifically, the work will evaluate impact on consumer finances (reduced incomes, non-payment of debts, patterns of saving and expenditure) and small business finances (turnover and business continuity). The research will be co-produced with four organisations.
First, working with the Financial Conduct Authority, the regulator of the consumer financial sector in the UK, to evaluate the impact on consumer indebtedness and evaluate the FCA's policy response, the Consumer Credit (Temporary Covid-19 Support Measures) Order 2020 (CCO220) and
the 3 month mortgage forbearnce scheme.
Second, working with the National Employee Savings Trust, the largest provider of pensions to low income workers in the UK, to understand the effects
on incomes and short-term and long-term saving behaviour.
Third, working with the UK's largest financial aggregator app, Moneydashboard, to model the impact of 'lockdown' measures on consumer spending and business survival across sectors.
Fourth, working with Natwest to evaluate the impact of the government's Coronavirus Business Interruption Loan Scheme (CBILS).
Findings will be presented to policymaker sponsors the researchers will continue to work with policymakers in real-time policy design.
Publications
Adams P
(2022)
Do Nudges Reduce Borrowing and Consumer Confusion in the Credit Card Market?
in Economica
Antoniou C
(2021)
It Depends Who you Ask: Context Effects in the Perception of Stock Returns
in SSRN Electronic Journal
Antoniou C
(2021)
Behaviour and biases of retail investors: Task or trait?
in SSRN Electronic Journal
Cumming D
(2023)
Work-from-home and the risk of securities misconduct
in European Financial Management
Edmunds C
(2020)
Accumulation is late and brief in preferential choice
Firth C
(2023)
The effects of personality and IQ on portfolio outcomes
in Finance Research Letters
Gathergood J
(2021)
Levelling Down and the COVID-19 Lockdowns: Uneven Regional Recovery in UK Consumer Spending
in SSRN Electronic Journal
Gathergood J
(2021)
How Do Consumers Avoid Penalty Fees? Evidence from Credit Cards
in Management Science
GATHERGOOD J
(2023)
Naïve Buying Diversification and Narrow Framing by Individual Investors
in The Journal of Finance
Guttman-Kenney B
(2022)
Buy Now, Pay Later (BNPL)...On Your Credit Card
in SSRN Electronic Journal
Guttman-Kenney B
(2022)
Buy Now, Pay Later (BNPL)...On Your Credit Card
Guttman-Kenney B
(2023)
Buy now, pay later (BNPL) ...on your credit card
in Journal of Behavioral and Experimental Finance
Muggleton N
(2022)
Workplace inequality is associated with status-signaling expenditure.
in Proceedings of the National Academy of Sciences of the United States of America
Quispe-Torreblanca E
(2024)
Investor Logins and the Disposition Effect
in Management Science
Sakaguchi H
(2022)
Default Effects of Credit Card Minimum Payments
in Journal of Marketing Research
Sakaguchi H
(2020)
How Preferences for Round Numbers Affect Choices: Stickiness and Jumpiness in Credit Card Payments
in SSRN Electronic Journal
Trendl A
(2022)
Estimating carbon footprints from large scale financial transaction data
in Journal of Industrial Ecology
Vomfell L
(2021)
Officer bias, over-patrolling and ethnic disparities in stop and search.
in Nature human behaviour
Walasek L
(2021)
Acceptance of mixed gambles is sensitive to the range of gains and losses experienced, and estimates of lambda (?) are not a reliable measure of loss aversion: Reply to André and de Langhe (2020).
in Journal of experimental psychology. General
Description | We have discovered how consumer spending changed over time throughout lockdown. We have discovered how this spending change interacted with the existing economic differences that levelling up was designed to address. |
Exploitation Route | This work provides the basis for real-time economic indicators that can be used for public policy. |
Sectors | Financial Services and Management Consultancy Government Democracy and Justice |
URL | https://www.tracktheeconomy.ac.uk/ |
Description | Our findings have been used by the Bank of England and the Treasury |
First Year Of Impact | 2021 |
Sector | Financial Services, and Management Consultancy |
Impact Types | Economic Policy & public services |