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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 proposing a reflection about the development of a pricing method for this kind of financial assets in an uncertain environment. After having defined SIBs and presenting their intrinsic uncertainty 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 investigates a specific way of integrating the uncertainty in related the valuation of SIBs.

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  • Schinckus, Christophe, 2018. "The valuation of social impact bonds: An introductory perspective with the Peterborough SIB," Research in International Business and Finance, Elsevier, vol. 45(C), pages 1-6.
    • Handle: RePEc:eee:riibaf:v:45:y:2018:i:c:p:1-6
    DOI: 10.1016/j.ribaf.2017.07.126
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    References listed on IDEAS

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    2. Roland Benedikter, 2011. "Social Banking and Social Finance," SpringerBriefs in Business, Springer, number 978-1-4419-7774-8, October.
    3. Mark Reesor & Don McLeish, 2002. "Risk, Entropy, and the Transformation of Distributions," Staff Working Papers 02-11, Bank of Canada.
    4. Allen Fleishman, 1978. "A method for simulating non-normal distributions," Psychometrika, Springer;The Psychometric Society, vol. 43(4), pages 521-532, December.
    5. Roland Benedikter, 2011. "Social Banking and Social Finance," SpringerBriefs in Business, in: Social Banking and Social Finance, pages 1-128, Springer.
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    Cited by:

    1. Francesco Rania & Annarita Trotta & Rosella Carè & Maria Cristina Migliazza & Abdellah Kabli, 2020. "Social Uncertainty Evaluation of Social Impact Bonds: A Model and Practical Application," Sustainability, MDPI, vol. 12(9), pages 1-34, May.
    2. Alessandro Rizzello & Abdellah Kabli, 2020. "Sustainable Financial Partnerships for the SDGs: The Case of Social Impact Bonds," Sustainability, MDPI, vol. 12(13), pages 1-22, July.
    3. Scognamiglio, Elisabetta & Di Lorenzo, Emilia & Sibillo, Marilena & Trotta, Annarita, 2019. "Social uncertainty evaluation in Social Impact Bonds: Review and framework," Research in International Business and Finance, Elsevier, vol. 47(C), pages 40-56.
    4. Rosella Carè & Riccardo De Lisa, 2019. "Social Impact Bonds for a Sustainable Welfare State: The Role of Enabling Factors," Sustainability, MDPI, vol. 11(10), pages 1-23, May.
    5. Rosella Carè & Stella Carè & Nathalie Lévy & Rabia Fatima, 2023. "Missing finance in social impact bond research? A bibliometric overview between past and future research," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2101-2120, September.

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