The dark side of individual blockholder philanthropy

We examine the market reaction to charitable pledges by individual blockholders of public firms. As this philanthropy may signal a weakening preference for wealth maximization and may be indicative of distraction or relaxed monitoring, these agency costs may overwhelm any reputation benefits. We find decreased firm value and lower pay-for-performance sensitivity, the effects of which are most severe where monitoring needs are high, the blockholder is a director, or when the firm has ex ante high corporate social responsibility ratings. Our results are robust to controlling for prior charitable foundation involvement, busy director–blockholders, dual-class share structures, blockholder exit, and pre-pledge firm sentiment.     

The angel investment decision: insights from Australian business angels

While much has been written about the investment criteria of business angels, few studies explore why these particular criteria are important to them. The Australian context has a diverse range of actors along with complex jurisdictional arrangements, making for an interesting background for investigation of the angel finance phenomenon. We examine 12 business angels in the rapidly changing Australian context and use nine corroborating participants to validate responses and identify four key drivers – personal experience, trust, the need to contribute and realistic expectations – that influence business angels during the initial investment process.     

Why Regenerative Agriculture?

Regenerative agriculture is both an attitude and a suite of practices that restores and maintains soil health and fertility, supports biodiversity, protects watersheds, and improves ecological and economic resilience. It focuses on creating the conditions for life above and below ground and takes its cues from nature, which has a very long track record of successfully growing things. By re-carbonizing soils via photosynthesis and biology, particularly on degraded land, regenerative agriculture can also sequester increasing quantities of atmospheric carbon (CO₂) underground, making it a low-cost “shovel-ready” solution to climate change. Its multiple co-benefits, including the production of healthy, nutritious food, means it will be a critical component of our response to rising climate instability.     

The SEC and Improving Sustainability Reporting

In this discussion that took place at the SASB 2016 Symposium, the former Chair of the Securities and Exchange Commission explores recent developments in corporate sustainability reporting with three Directors—two past and one current—of the SEC's Division of Corporation Finance (or “CorpFin”). The consensus of the panelists was that investors want companies to provide more and better disclosure of their ESG exposures, particularly climate change, and their plans to manage those exposures. According to the current director of CorpFin, the most common demand expressed in the thousands of “comment letters” elicited by the SEC's recent concept release was for more and better sustainability information. And among the many issues cited by investors in those letters, including economic inequality, corruption, indigenous rights, and community relations, the subject of greatest interest by far was climate change. While none of the panelists claimed to see private‐sector demand for SEC action and a new set of mandatory requirements, all seemed to agree that many companies would welcome the establishment of voluntary guidelines and standards for providing ESG information—and that the guidelines recently developed by the Sustainability Accounting Standards Board are a promising model. For companies in each of 79 different industries, the SASB has identified a specific set of “material” concerns along with metrics or KPIs that can be used to evaluate corporate performance in responding to those concerns. Perhaps the most important advantage of this approach is that, by limiting such reporting to material exposures (and so adhering to a principle that has long informed SEC requirements), the SASB guidelines should significantly increase the relevance and value to investors—while possibly holding down the costs—of the sustainability reports that large companies in the U.S. and abroad have been producing for decades. But, as the former SEC Chair also notes in closing, the adoption of such guidelines by companies should be viewed as just a first step toward improving disclosure. To help companies develop the most useful and cost‐effective disclosure practices, investors themselves will have to become more active in communicating their own demands and preferences for information.     

Unions and the economic basis of attitudes

Unions make differences to employee satisfaction that correspond to their effects on individual economic advantage. Panel data reveal how changes in economic circumstance and changes in job satisfaction are linked to changes in union coverage. When individuals move into a union covered job they receive a wage mark‐up and express enhanced pay satisfaction. Conversely, those moving from a union covered job on average lose any mark‐up and have significantly reduced satisfaction. Similar findings emerge for working hours. On average individuals prefer shorter hours, something they tend (not) to achieve on moving (out of) into a unionised job, resulting in higher (lower) satisfaction. Switching into union coverage lowers satisfaction with job security, even though coverage has no effect on the risk of unemployment. This is because covered employees suffer greater costs of re‐employment for a given level of unemployment risk, partly because of loss of the union mark‐up.     

Towards a New Austrian Macroeconomics

Austrian macroeconomists of the interwar period saw the economy as a complex adaptive system, in which macroeconomic variables emerge from the interaction between millions of purposefully acting agents. Recent advances in computation technology allow us to build empirically salient synthetic economies in silico, and thereby formalize many Austrian insights. We present a workhorse model with firms on an input-output network. Macroeconomic variables evolve through the interaction between micro-economic decisions. We use the model to explain an effect of monetary shocks on the price distribution and provide a sketch of other potential applications.     

Economic burden of sarcoidosis in a commercially-insured population in the United States

Background: Sarcoidosis is a multi-system inflammatory disorder characterized by the presence of non-caseating granulomas in involved organs. Patients with sarcoidosis have a reduced quality-of-life and are at an increased risk for several comorbidities. Little is known about the direct and indirect cost of sarcoidosis following the initial diagnosis.

Aims: To provide an estimate of the healthcare resource utilization (HCRU) and costs borne by commercial payers for sarcoidosis patients in the US.

Methods: Patients with a first diagnosis of sarcoidosis between January 1, 1998 and March 31, 2015 (“index date”) were selected from a de-identified privately-insured administrative claims database. Sarcoidosis patients were required to have continuous health plan enrollment 12 months prior to and following their index dates. Propensity-score (1:1) matching of sarcoidosis patients with non-sarcoidosis controls was carried out based on a logistic regression of baseline characteristics. Burden of HCRU and work loss (disability days and medically-related absenteeism) were compared between the matched groups over the 12-month period following the index date (“outcome period”).

Results: A total of 7,119 sarcoidosis patients who met the selection criteria were matched with a control. Overall, commercial payers incurred $19,714 in mean total annual healthcare costs per sarcoidosis patient. The principle cost drivers were outpatient visits ($9,050 2015 USD, 46%) and inpatient admissions ($6,398, 32%). Relative to controls, sarcoidosis patients had $5,190 (36%) higher total healthcare costs ($19,714 vs $14,524; p?p?p?Background: Sarcoidosis is a multi-system inflammatory disorder characterized by the presence of non-caseating granulomas in involved organs. Patients with sarcoidosis have a reduced quality-of-life and are at an increased risk for several comorbidities. Little is known about the direct and indirect cost of sarcoidosis following the initial diagnosis.

Aims: To provide an estimate of the healthcare resource utilization (HCRU) and costs borne by commercial payers for sarcoidosis patients in the US.

Methods: Patients with a first diagnosis of sarcoidosis between January 1, 1998 and March 31, 2015 (“index date”) were selected from a de-identified privately-insured administrative claims database. Sarcoidosis patients were required to have continuous health plan enrollment 12 months prior to and following their index dates. Propensity-score (1:1) matching of sarcoidosis patients with non-sarcoidosis controls was carried out based on a logistic regression of baseline characteristics. Burden of HCRU and work loss (disability days and medically-related absenteeism) were compared between the matched groups over the 12-month period following the index date (“outcome period”).

Results: A total of 7,119 sarcoidosis patients who met the selection criteria were matched with a control. Overall, commercial payers incurred $19,714 in mean total annual healthcare costs per sarcoidosis patient. The principle cost drivers were outpatient visits ($9,050 2015 USD, 46%) and inpatient admissions ($6,398, 32%). Relative to controls, sarcoidosis patients had $5,190 (36%) higher total healthcare costs ($19,714 vs $14,524; p?<?0.001). Sarcoidosis patients also had significantly more work loss days (15.9 vs 11.3; p?<?0.001) and work loss costs ($3,288 vs $2,527; p?<?0.001) than matched controls. Sarcoidosis imposes an estimated total direct medical cost of $1.3–$8.7 billion to commercial payers, and an indirect cost of $0.2–$1.5 billion to commercial payers in work loss.

Conclusions: Sarcoidosis imposes a significant economic burden to payers in the first year following diagnosis.