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The valuation of social impact bonds: An introductory perspective with the Peterborough SIB

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  • Schinckus, Christophe

Abstract

Social impact bonds (SIBs) are financial assets whose objective is to attract investors to fund social programs by providing them an incentive if the project meets its predefined targets. This article aimed at initiating a reflection on the development of a pricing method for this kind of financial assets. After having defined SIBs in the first section, I will present, in the second one, an existing SIB (called Peterborough SIB) in financial terms. Afterwards, the last section offered an introductory perspective on the potential development of a Wang transformation based pricing method applied to this Peterborough SIB. By using this statistical operator as a statistical technique for converting objective probabilities (past observations) into subjective estimates of these probabilities, this paper offers the first conceptual framework integrating the uncertainty related to the feasibility of SIBS.

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  • Schinckus, Christophe, 2015. "The valuation of social impact bonds: An introductory perspective with the Peterborough SIB," Research in International Business and Finance, Elsevier, vol. 35(C), pages 104-110.
    • Handle: RePEc:eee:riibaf:v:35:y:2015:i:c:p:104-110
    DOI: 10.1016/j.ribaf.2015.04.001
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    2. Wang, Shaun, 1996. "Premium Calculation by Transforming the Layer Premium Density," ASTIN Bulletin, Cambridge University Press, vol. 26(1), pages 71-92, May.
    3. Roland Benedikter, 2011. "Social Banking and Social Finance," SpringerBriefs in Business, in: Social Banking and Social Finance, pages 1-128, Springer.
    4. Roland Benedikter, 2011. "Social Banking and Social Finance," SpringerBriefs in Business, Springer, number 978-1-4419-7774-8, July.
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    Cited by:

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    2. Antonio Minguzzi & Michele Modina & Carmen Gallucci, 2019. "Foundations of Banking Origin and Social Rating Philosophy—A New Proposal for an Evaluation System," Sustainability, MDPI, vol. 11(13), pages 1-16, June.
    3. Gasparin, Marta & Green, William & Lilley, Simon & Quinn, Martin & Saren, Mike & Schinckus, Christophe, 2021. "Business as unusual: A business model for social innovation," Journal of Business Research, Elsevier, vol. 125(C), pages 698-709.
    4. Schinckus, Christophe, 2017. "Financial innovation as a potential force for a positive social change: The challenging future of social impact bonds," Research in International Business and Finance, Elsevier, vol. 39(PB), pages 727-736.

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