Pension Funding, Share Prices, and National Saving

This paper examines empirically the effect of unfunded pension obligations on corporate share prices and discusses the implications of these estimates for national saving, the decline of the stock market in recent years, and the rationality of corporate financial behavior. The analysis uses the information on inflation-adjusted income and assets that large firms were required to provide for 1976 and subsequent years. The evidence for a sample of nearly 200 manufacturing firms is consistent with the conclusion that share prices fully reflect the value of unfunded pension obligations. Since the conventional accounting measure of the unfunded pension liability has a number of problems (which we examine in the paper), it would be more accurate to say that the data are consistent with the conclusion that shareholders accept the conventional measure as the best available information and reduce share prices by a corresponding amount. The most important implication of the share price response is that the existence of unfunded private pension liabilities does not necessarily entail a reduction in total private saving. Because the pension liability reduces the equity value of the firm, shareholders are given notice of its existence and an incentive to save more themselves. For this reason, unfunded private pensions differ fundamentally from the unfunded Social Security pension and the other unfunded federal government civilian and military pensions.

The Patient-Centric Blockchain

A revolution is brewing in the healthcare marketplace. In the early nineties, the World Wide Web initiated a new era for the use of the Internet in the consumption of healthcare services. This eventually led to the Big Data movement (Erevelles et al. 2016), which initiated a non-linear transformation in healthcare analytics and developed into a dominant paradigm in the healthcare marketplace. However, the World Wide Web architecture was never designed to support a marketplace in healthcare or, for that matter, a marketplace of any other kind. It was primarily designed for the sharing of information and was even referred to as the “information superhighway” in its early days. Despite this, over the years, the World Wide Web has evolved into a foundation (Erevelles et al. 2003) for the healthcare marketplace, widely utilized by the healthcare community. This has resulted in major breakdowns in patient trust, security, and privacy, among other problems, which additionally, have contributed to already sharply rising healthcare costs. For the first time, with the emergence of the blockchain, the healthcare community may finally have a platform specifically designed for the sharing of value (Erevelles et al. 2022). Healthcare is critical for almost everyone and faces potentially catastrophic crises. Blockchain’s value proposition is strong and distinct: greater trust, security, privacy, authenticity, and disintermediation in the healthcare marketplace. Yet, despite its potential impact, relatively little academic thought has been given to consumer-focused solutions in the healthcare marketplace. To fill this gap, the authors propose a game-theoretic framework for a patient-centric blockchain, and present an initial theoretical framework, with key foundational premises and propositions, that may help in the evolution of a blockchain-centric healthcare marketplace. This research makes multiple unique research contributions to the literature involving blockchain and healthcare consumption. First, we propose a framework for a patient-centric healthcare blockchain and present a theoretical foundation for healthcare consumption using blockchain technology. Second, we develop a set of propositions based on blockchain-centric logic that could provide theoretical guidelines that could help researchers identify potential research problems and develop solutions for these problems in the future. Third, we propose a hybrid blockchain-based healthcare framework as an initial practical step for the implementation of healthcare blockchains in the shorter term. This research is likely the first to develop a theoretical framework for blockchain-centric logic in a healthcare setting, as well as to identify related technological, behavioral, and managerial issues in the processes involved. Without a doubt, considerable further research is needed to better explore various important theoretical and behavioral questions that may arise. It would be reasonable to conclude, however, that this research provides a crucial first step for the further development of a critical technology that is expected to radically transform healthcare marketplaces and patient behavior in the future

Spatial variation in reverse mortgages usage: House price dynamics and consumer selection. The Journal of Real Estate Finance and Economics :1–26

Abstract Reverse mortgages have been obtained by nearly one million senior households. In the future, the number of eligible households will grow substantially, about 80 % are homeowners, and many of them have substantial equity in their home. We study state-level variations in rate of originations of HUD's Home Equity Conversion Mortgage (HECM) product. Our focus is on the impact of house prices on the origination rate. We test the hypothesis that in states where real house prices are volatile and the current level is above the long term norm, seniors rationally anticipate future reductions in house prices and lock-in their housing equity gains by obtaining a reverse mortgage. We test alternative hypotheses, the first being that seniors living in states with high rates of house price appreciation increase their use of HECMs as a means to convert an illiquid wealth capital gain into a more liquid asset. A second alternative hypothesis is that the intertemporal changes in originations of HECMs were a result of changes in the supply of mortgage originators. Our empirical work supports the hypothesis that seniors used HECMs to insure against house price declines, but we find no evidence in support of the alternative hypotheses