Official HBS Directory Listing
Harvard Innovation Lab
Research and Teaching
Financial Innovation and Risk Management
MBA Teaching Materials
Charities to Consider
NEW DEAN OF
UNIVERSITY OF OXFORD'S SA¤D BUSINESS SCHOOL
On December 7, 2010, Prof. Andrew Hamilton, Vice Chancellor of the
University of Oxford, announced that Tufano would become the Peter Moores
Dean of the Sa´d Business School as of
July 1, 2011.
Tufano is the Founding Co-Chair of the Harvard Innovation Lab, a new
facility in Allston that will serve as the nexus for entrepreneurial
activity for students across Harvard University and will support small
business development in Boston.
Consumer finance is an
important field that studies the markets, institutions, products and services
that deliver financial services to households. Tufano's work involves a
combination of empirical research, field-based research, and course development. Working with a nonprofit he cofounded, he also is engaged in the development and testing of financial products and services to better serve low and moderate income consumers.
Consumer Finance - Harvard MBA/JD Elective:
In January 2009, Howell Jackson of Harvard Law School (HLS) and Tufano launched a
new course on Consumer Finance. This course is jointly listed at HBS
and HLS. For a course description, click
here. The course also is discussed in the September 2009 Alumni Bulletin as well as in a November 2009 Forbes article entitled "Harvard Business School's New Curriculum: Everyday Finance."
Consumer Financial Services - HBS Executive Education: HBS will be offering an executive education
program entitled "Consumer Financial Services: New Models for Success" again in
2011. Check back for dates and details.
NBER Household Finance Working Group: Nick Souleles (Wharton),
Brigitte Madrian and Tufano co-organize a
working group at
the NBER to study issues of household finance.
Boston Area Consumer Finance Workshop:
Researchers from the Boston
Federal Reserve Bank and Harvard University have created a periodic seminar series in the
Boston area for researchers interested in consumer finance. If you
are interested in attending, click here.
SSRN Household Finance e-journal: In 2010,
Nick Souleles and Tufano launched a new
SSRN e-journal on Household Finance.
Doorways to Dreams Fund (D2D Fund):
D2D Fund is a nonprofit
whose mission is to use financial innovation to help low-income families
build assets and successfully engage the financial service sector in
these projects. Tufano co-founded D2D Fund and serves as its
Chairman. Some of the links below are to
research done by Tufano's colleagues at D2D.
Research and Course Development
Consumer Finance Businesses
Survey of Americans'
Attitudes Toward Regulation of Consumer Finance Businesses.
In October 2010, in conjunction with the global market research firm
TNS, Tufano conducted a
nationwide survey of Americans regarding their judgment of how well
financial regulations protected their interests and which business
practices might deserve more scrutiny by regulators or improvement by
businesses. The results will be forthcoming in late fall 2010.
“The Regulation of Consumer Financial Products: An Introductory Essay
with Four Case Studies” with John Campbell, Howell Jackson and
Brigitte Madrian (February 2010). A condensed version of
this piece, entitled “The Regulation of Consumer Financial Products: An
Introductory Essay with a Case Study on Payday Lending. ” is
forthcoming in Joint Center on Housing Studies/Brookings Volume 2011.
General Savings and
"Consumer Finance," in
the inaugural volume of the Annual Review of Financial Economics
1 (December 2009), 227-247. This article is a review of the academic literature in the field of
"Postwar History of US Consumer Finance," with Andrea Ryan and Gunnar
Innovation to Support Savers: From Coercion to Excitement," with
Daniel Schneider, in Insufficient
Funds: Savings, Assets, Credit and Banking Among Low-Income Households ed. Rebecca Blank and Michael Barr (Russell Sage, 2008). Also published condensed
summaries in Communities &
Banking, Federal Reserve Bank
of Boston (2009); and
National Poverty Center, Policy Brief #14,(Gerald R Ford School of Public Policy,
University of Michigan 2009).
Savings from Old Innovations:
Asset Building for the Less Affluent," with Daniel Schneider. Pre-press
version, published in Financing Low-Income Communities, ed. Julia S. Rubin (Russell
our work on savings programs, we have been investigating how the US
Savings Bond program could be reinvigorated to support savings by low-income
families. The papers below represent some of these findings.
We were delighted when President Obama announced on Labor Day weekend
2009 that the Administration will permit all refund recipients to elect
to receive some of their refunds in the form of savings bonds.
For President Obama's September 5, 2009 announcement of the change in policy,
For the text of his announcement,
Washington Post Op-Ed piece (Oct. 20, 2008) on savings bonds.
"Just Keep My Money: Supporting Tax-Time Savings with US Savings Bonds" (Oct. 2008). The findings of a 2007 experiment at H&R Block
sites to test the impact of savings bonds on savings activity.
My Money, Part I." Rev. April 2007. The findings of a pre-pilot
program to offer U.S. Savings Bonds to tax recipients to stimulate savings.
D2D Fund, in conjunction with members of the
Savings Bond Working Group, tested the appeal of savings bond at tax time
and has documented their work with VITA sites. For details, click here.
Savings Bonds," with Daniel Schneider (HBS). Published in Tax
Notes, October 31, 2005, 1-20.
An extended version entitled
Savings Bonds: Policy Changes to Increase Public Savings" was published as a New America Issue Brief (April
Prize-linked savings programs give depositors the opportunity to win
prizes in lieu of earning interest. These programs have been used since
1694 and are used around the world, but have only recently been
Story on Prize Linked Savings (November 2010) in two parts.
Winners: An Overview of Prize-Linked Savings Products” with Melissa S.
Kearney, Jonathan Guryan, and Erik Hurst. Forthcoming in Pension
Research Council book, 2010.
- "Saving Whilst Gambling: An Empirical Analysis of U.K. Premium Bonds,"
American Economic Review Papers and Proceedings 98,2 (May 2008.)321-326.
Demand for Prize-linked Savings: A Preliminary Analysis,"
Maynard and Jan-Emmanuel De Neve. This paper details the results of market research done in conjunction with Centra Credit Union in Indiana to explore the
likely American demand for prize linked savings.
- "First National Bank's Golden Opportunity,"
with Shawn Cole, Daryl Collins and Daniel Schneider. This HBS case study
details the decision facing FNB bank as it was deciding whether to launch a
prize-linked savings program in South Africa.
- D2D Fund, in conjunction with a coalition of partners, has helped to
launch Save-to-Win, a prize-linked savings program offered by eight
credit unions in Michigan in 2009. (For a preliminary report on the
program to date,
This is expanding to many more Michigan credit unions in 2010, and a
number of states have adopted the Michigan laws that permit credit
unions to adopt this product.
Splitting Tax Refunds
For low-income American families, tax refunds (often made possible by the
Earned Income Tax Credit) can be an important source of saving.
The work Tufano and his partners have done has demonstrated that the savings potential of refunds can be
enhanced with changes in IRS practices. We are pleased that this work informed the policy debate and the IRS's subsequent adoption
of Form 8888, which allows for the splitting of refunds to multiple destinations.
Household Risk and Financial Fragility
Working with Annamaria Lusardi, Daniel Schneider and the market
research firm TNS, we have conducted a multi-country study in the
summer/fall of 2009 measuring the extent to which households perceive
themselves to be exposed to small financial shocks, their ability to
cope with these shocks, and the coping mechanisms used.
Financial Attitudes and Skills of Consumers
"Leveraging Admissions Tests to Increase Financial Savvy"
Chronicle of Higher Education, October 31, 2010.
This piece proposes a simple way to make financial education much more
salient to high schoolers, their parents and their schools: Make
financial problems the context for the math and analytical reasoning
sections of college admissions tests.
- "Debt Literacy, Financial Experiences, and Indebtedness" with
Annamaria Lusardi. A new study, done in conjunction with the market
research firm TNS, that looks at the relationship between peoples' understanding of debt, how they transact, and their self-assessed ability to
handle their current levels of debt. (Rev. May 2008)
- "Teach Workers about the Perils of Debt." with Annamaria Lusardi,
Harvard Business Review 87, no. 11 (November 2009). This short
article discusses the state of household debt literacy and actions that
can be taken to enhance consumers' financial skills.
on Savings. ZMET (the Zalman Metaphor Elicitation Technique) is an innovative
market research technique designed to uncover consumers' thoughts and
feelings using visual images. This report, prepared in conjunction with
the Filene Research Institute, examines how low to moderate income families
think and feel about savings.
- D2D has been working to advance the concept of "Financial
Entertainment," which embeds financial skill development into
commercial-quality media. The first experiment is
Celebrity Calamity, a
videogame in which the player takes on the role of the financial manager for
a financially-challenged celebrity. For information on this project
and preliminary results on its efficacy,
Other D2D titles, such as Groove Nation, the first dance budgeting game, can
be found at
"An Introduction to Consumer Credit" with Andrea Ryan and Daniel
Schneider (HBS Note 209-107).
does it go? Spending by the Financially Constrained" with Shawn A. Cole
and John Thompson.in Borrowing to live: Consumer and Mortgage Credit
Revised, ed, Nicolas P. Retsinas, Eric S. Belsky
(Brookings, 2008) 65-91.
“Lending Club” 2010 (210-052), with Howell Jackson and Andrea Ryan.
"H& R Block 2006," 2007 (307-091), with Arijit Roy and Emily McClintock Ekins.
- "EDuction," 2005 (206-006), with Daniel Schneider.
- "Circle Lending," 2006 (206-137), with Nabil El Hage and Daniel Schneider.
- "H&R Block's Refund Anticipation Loan: A Paradox of Profitability?" with David Rose and Daniel Schneider (HBS), Rev. Nov 2005. A
condensed version entitled "H&R
Block’s Refund Anticipation Loans: Perilous Profits at the Bottom of the
Pyramid?" appears in Business Solutions for
Reaching the Poor, ed. Kash Rangen and John Quelch (Josey Bass
Selected Consumer Finance Research
stream of work in the consumer finance field has been directed at understanding
one of the most popular tools for household savings and investing: mutual funds.
- "Mutual Fund
Fees Around the World," with Ajay Khorana (Georgia Tech) and
Henri Servaes (London Business School). Rev. May 2007. This paper looks
at the fees charged in a number of developing countries in 2002. This
work has received substantial attention in Canada, which we find to have the
highest fees, even after controlling for various fund and family
characteristics. The Canadian fund trade association, the Investment Funds Institute
of Canada (IFIC), has objected to our findings. The authors' response
to their critique can be found here.
Some commentators in Canada have raised other questions about the report,
and the authors' responses (May 2008) are available
here. Published in Review of Financial Studies 22 (March 2009).
Prices and Stale Quantities: T+1 Accounting and Mutual Fund Mispricing,"
with Michael Quinn (Analysis Group) and Ryan Taliaferro (HBS). Rev.
the Size of the Mutual Fund Industry Around the World," with Ajay Khorana
(Georgia Tech) and Henri Servaes (London Business School). Journal of
Financial Economics 78,1 (Oct 2005). This is the pre-press version
Costs and Benefits of Brokers in the Mutual Fund Industry," with Dan
Bergstresser (HBS) and John Chalmers (U. Oregon), Working Paper. Updated
Structure, Mergers and Shareholder Wealth: A Study of the Mutual Fund
Industry," with Ajay Khorana (Georgia Tech) and Lei Wedge (Georgia Tech).
Rev. May 2006. Journal of Financial
Economics 85, 2 (Aug 2007).
FINANCIAL ENGINEERING, FINANCIAL INNOVATION AND RISK MANAGEMENT
Another stream of Tufano's work deals with corporate
applications of financial engineering in the form of security design, risk
management and real options.
“The Consequences of
Financial Innovation: A Counterfactual Research Agenda” with Josh Lerner
(September 2010), forthcoming in NBER Rate and Direction of Inventive
Activity Volume, 20111.
World Food Programme during the Global Food Crisis (A)."
2009 (709-024), with Anette Mikes, Eric D. Werker, and Jan-Emmanuel De Neve.
"The World Food
Programme during the Global Food Crisis (B)." 2009 (709-052), with Anette
Mikes, Eric D. Werker, and Jan-Emmanuel De Neve.
- Global Survey of Corporate
Finance: In 2005, Tufano and Henri Servaes (London Business School)
conducted a survey of CFOs around the world concerning the corporate finance
function, including details on the firm's capital structure, liability
management, liquidity management, dividend/repurchase, and risk management
programs. This survey was sponsored by DeutscheBank.
- Risk management has broad applicability. For a new case study on
risk management at the UN, see:
Innovation," in The Handbook of the Economics of Finance, ed.
George Constantinides, Milton Harris and Rene Stulz (2004).
- "When are real options
exercised? An empirical study of mine closings," with Alberto
Moel. Published in Review
of Financial Studies 15 (2002), 35-64.
- "Cephalon, Inc.: Taking risk
management theory seriously," with George Chacko and Geoff Verter. Published
in the Journal of Financial Economics 60 (May/June 2001), 449-486.
Abridged version in the Journal of Applied Corporate
Finance. Technical appendix
- The Corporate Financial Engineering Course at HBS focuses on how corporations can use
financial engineering to advance their goals and strategies. The course
studies the use of financial engineering to structure financing vehicles, implement risk management strategies and carry out strategic
transactions. Tufano developed this course and taught it in the MBA
program at HBS for many years. Some of these materials are included in the book, Cases
in Financial Engineering.
- The Global Association of Risk
is a professional organization of more than 50,000 risk professionals
worldwide. Tufano serves as a Trustee of GARP, sits on its
Executive Committee, and is the Chair of the Editorial Board of Risk Professional Magazine.
- Correction to "A Real World Way to Manage Real
Options" with Tom Copeland, Harvard Business Review, March 2004. There
is a graphic on page 95, which is the binomial tree for the project. The
leftmost node reads "77>321-400." The number "321" should read
"371." For those of you working through the math, sorry for this typo.
OTHER MBA TEACHING MATERIALS
- Finance2: Beginning in 2000, HBS launched a new year-long required finance
course for all of its MBA students. This new course was an area-wide
effort coordinated by Rick Ruback and Peter Tufano, and it created a large
number of new case materials. Many of the case materials designed for
the inaugural launch of the course are available in Case
Problems in Finance (McGraw Hill, 2004).
CHARITIES TO CONSIDER
There are many wonderful nonprofits and charities that deserve your
support. If you are interested in advancing D2D Fund's agenda,
In each of the summers of 2007 through 2010, Tufano rode the
Pan-Mass Challenge, a 163 mile bike ride to raise money for the Jimmy Fund,
which supports cancer research. 100% of all donations go to the Jimmy
Fund. If you would like to support the Jimmy Fund through the PMC,