Monthly Archives: April 2025

UC research reveals surprising connection between police budgets and housing market trends

A new study from the University of Cincinnati has shed unexpected light on the complex relationship between police spending and housing prices—one that had eluded researchers for decades. At first glance, the findings aligned with prior studies, showing little to no relationship between law enforcement budgets and home values or sales volumes. However, a stark contrast emerged when economics professor David Brasington, PhD, disaggregated the data by income levels. The effect of police funding on property prices was not uniform across neighbourhoods but instead showed prominent, opposing trends depending on whether the community was wealthy or low-income.

Published in the Journal of Real Estate Finance and Economics, Brasington’s study, titled “The Effect of Increased Police Spending on House Prices and Sales Volume: A Tale of Two Types of Cities,” offers a fresh and nuanced view. In low-income communities, an increase in the police budget led to a roughly 13% rise in housing prices. In contrast, high-income areas experienced a minimum 14% decline in house prices following the same budgetary increase. These opposing shifts had long gone unnoticed because past studies only examined the average effect, effectively masking the divergent patterns.

According to Brasington, the issue’s core lies in how data was previously aggregated. “The small or nonexistent link between house prices and crime found by the literature really just reflects the sum of large but opposite moves in house prices in different market segments,” he wrote. It was only by splitting the sample into high- and low-income groups that the true nature of the effect became visible. Without this distinction, the opposing movements cancelled each other, creating the false impression that police funding had little impact on housing markets.

Brasington’s analysis focused on Ohio, drawing from decades of local referendums on police funding increases—typically through tax levies averaging a 15% rise in the budget. He then compared those events to housing data from 1995 to 2018. Initially, he aimed to study how police tax renewals influenced sales volumes and pricing. While there appeared to be minimal overall change in the number of transactions, the split data revealed a compelling pattern in property valuations that persisted for at least five years after the votes. The number of homes sold remained unchanged, but perceptions of value—reflected in prices—shifted substantially.

The results suggest that residents in low-income communities prioritise increased police presence, likely associating it with greater security, reduced crime, and improved neighbourhood conditions. These factors make such areas more attractive to buyers, raising demand and prices. In this context, additional police funding functions as a positive amenity, much like better schools or improved public transport might. Brasington interpreted this as evidence that increased police spending in disadvantaged areas is politically popular and economically beneficial to homeowners and residents.

Conversely, the decline in property values within high-income neighbourhoods indicates a different perception. Brasington suggests that residents may feel that law enforcement is already adequately funded or overfunded in these areas. Further budget increases—particularly through tax hikes—represent a net negative. “If you cut police taxes and services, the high-end views that as a good thing,” he said. From this perspective, reducing police levies could increase housing demand due to lower property taxes while constraining supply, thus pushing higher prices. The study challenges simplistic assumptions that policing is uniformly valued across socioeconomic strata.

Brasington advocates for a more refined approach to public policy and housing economics in light of these findings. He argues that this kind of income-based differentiation should be more commonly used in evaluating the consequences of government spending. Furthermore, he notes that other public levies—such as those for education, infrastructure, or healthcare—may produce similarly polarised effects across income brackets. Future research, he suggests, should also explore how these dynamics play out in middle-income communities, which remain an unexamined segment in this study. By highlighting the hidden complexity behind aggregate figures, Brasington’s work calls for more sophisticated policymaking that accounts for local context and varying community needs.

More information: David Brasington, The Effect of Increased Police Spending on House Prices and Sales Volume: A Tale of Two Types of Cities, The Journal of Real Estate Finance and Economics. DOI: 10.1007/s11146-025-10012-z

Journal information: The Journal of Real Estate Finance and Economics Provided by University of Cincinnati

China’s Insider Trading Crackdown Is Misfiring — Here’s What’s Going Wrong

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Stricter insider trading regulations are often touted as a solution to improving market fairness, particularly by preventing corporate executives from quietly profiting from private information before bad news becomes public. In 2017, China introduced a sell-by-plan mandate requiring executives to disclose their intentions to sell stock—a move designed to create greater transparency and curb unfair advantages. However, new research reveals a critical flaw: rather than halting insider trading, some executives have found more sophisticated ways to circumvent the rules.

A study led by Pengfei Ye of Virginia Tech, alongside colleagues from the Shanghai University of Finance and Economics, analysed trading data surrounding the implementation of China’s regulation. Published in the Journal of Accounting and Economics, their findings suggest that while the mandate reduced certain forms of opportunistic trading, it left a significant loophole open. Executives have adapted by scheduling sales weeks in advance, allowing them to offload shares before negative news hits the market – all while remaining ostensibly compliant with disclosure requirements.

The research team applied a difference-in-differences methodology to trading data spanning two years before and after the rule came into effect. They could isolate the mandate’s impact by comparing insider sales against those of unregulated relatives. The results indicated that opportunistic insider trading declined by up to 12 percentage points, signalling some regulatory success. Yet, a troubling new pattern emerged: instead of last-minute trades timed just before damaging announcements, executives began setting up sell plans well ahead of the news cycle, thus preserving their ability to profit discreetly from impending stock declines.

Ye notes that executives with early knowledge of bad news no longer need to engage in frantic, last-minute stock sales. By establishing a selling plan several weeks beforehand, they ensure they have already secured their profits by the time the broader market becomes aware of a company’s deteriorating prospects. Alarmingly, the study found that between 8.8 per cent and 28.2 per cent of these pre-disclosed sales appeared motivated by insider knowledge. Such abuses were particularly prevalent in firms with weak corporate governance structures, suggesting that effective internal oversight is essential in complementing regulatory frameworks.

An even more disquieting revelation from the study was that markets could not distinguish between routine predisclosed sales and those motivated by private information. Ye’s team discovered no meaningful difference in investor reactions to opportunistic versus legitimate sell plans. This inability of the market to detect and appropriately respond to insider exploitation implies that disclosure rules, while well-intentioned, may offer little real protection. Instead, they may unintentionally legitimise insider activity under a veneer of compliance, further eroding investor trust.

To address these vulnerabilities, Ye advocates for a more extended waiting period between the announcement of a sale and its execution. China’s cooling-off period currently stands at only 15 trading days – markedly shorter than the 90 days required under the U.S. Securities and Exchange Commission’s revised Rule 10b5-1. The research indicates that executives often become aware of adverse developments at least 25 trading days before they become public knowledge, meaning the existing cooling-off period is insufficient to prevent opportunistic trading. Extending this window would help narrow the opportunity for exploitation. However, regulators must also tread carefully to avoid imposing constraints on executives who need liquidity for legitimate personal financial reasons.

China’s experience is not unique. Other jurisdictions, including the United States, have grappled with similar issues, where rules designed to control insider trading have inadvertently created new avenues for abuse. Ye’s research contributes to a broader international conversation about how to craft effective insider trading regulations. His findings suggest that stronger corporate governance mechanisms complement statutory rules, as no carefully crafted regulation can prevent insiders from seeking ways around it.

In the end, safeguarding market integrity will likely require a two-pronged approach: more robust legal frameworks combined with enhanced internal company oversight. As financial markets continue to evolve and grow increasingly complex, the challenge for policymakers worldwide will be to stay one step ahead of those intent on exploiting systemic loopholes for personal gain.

More information: Pengfei Ye et al, Sell-by-plan mandate and opportunistic insider selling: Evidence from China, Journal of Accounting and Economics. DOI: 10.1016/j.jacceco.2024.101757

Journal information: Journal of Accounting and Economics Provided by Virginia Tech

Illinois Study Highlights Prairie Grass as a Promising Source for Sustainable Aviation Fuel

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Switchgrass has gripped the soils of the American Midwest for millions of years, but soon, this earthbound prairie grass may take to the skies. New research from the University of Illinois Urbana-Champaign has identified economic and environmental factors that position switchgrass as a promising candidate for sustainable aviation fuel (SAF). With global efforts intensifying to reduce aviation emissions, the potential role of switchgrass could prove transformational.

The Sustainable Aviation Fuel Grand Challenge, launched in 2021, aims to scale SAF production to 35 billion gallons annually by 2050, halving greenhouse gas emissions from aviation. Switchgrass, forecasted to contribute up to 230 million dry tons per year, stands among several purpose-grown bioenergy feedstocks that could help meet this ambitious target. Not only does this perennial species produce abundant biomass, but it can also be harvested annually for a decade or longer without replanting. It demands far less nitrogen fertiliser than traditional crops such as maise and delivers vital ecosystem services, making it a desirable option for sustainable agriculture.

Scientists have long recognised the bioenergy potential of switchgrass. Yet, much of the existing research relied on older, less productive cultivars and smaller experimental plots or did not fully account for necessary fertiliser inputs. Addressing these gaps, researchers at the University of Illinois conducted two new studies in which modern, high-yielding “energy” cultivars were grown at field scale across the Midwest. The research sought to identify the most profitable cultivars for different regions while simultaneously comparing their environmental impacts to those of maise, a traditional bioenergy crop.

D.K. Lee, senior author of both studies and professor in the Department of Crop Sciences within the College of Agricultural, Consumer and Environmental Sciences, explained the rationale behind the work. “All the data that helps us estimate switchgrass suitability for SAF comes from small plot research or older forage-type switchgrass cultivars. We wanted to test high-yielding switchgrass cultivars on a larger scale to provide a more accurate picture of the benefits these new cultivars provide,” Lee stated. Under the leadership of postdoctoral researcher Muhammad Umer Arshad, the team planted three newer energy-type cultivars — Independence, Liberty, and Carthage — alongside two forage types — Shawnee and Sunburst — on marginal lands in Illinois, Iowa, Nebraska, and South Dakota. They tested two fertiliser rates, 28 and 56 kilograms of nitrogen per hectare, significantly lower than the 200 kilograms typically used for maise.

The results, after five years, were compelling. Independence and Liberty cultivars consistently outperformed the forage types in profitability across all locations, although the optimal nitrogen rate varied by site. “In most cases, 56 kilograms per hectare achieved higher yields, but in some sites, 28 kilograms performed better in terms of profit,” Arshad noted. Moreover, the most profitable cultivar differed depending on hardiness zones: Independence excelled in zone 6a, Liberty in zone 5b, and Carthage in zone 4b. These findings suggest that farmers could successfully convert marginal lands into profitable bioenergy production sites within two years with strategic cultivar selection.

Beyond profitability, switchgrass also offers significant environmental benefits. In a companion study led by postdoctoral fellow Nictor Namoi, researchers assessed ecosystem services such as soil greenhouse gas emissions and nitrate leaching from switchgrass fields, comparing them directly with no-till maise fields. Results demonstrated that switchgrass dramatically reduced environmental impacts: nitrous oxide emissions and nitrate leaching were significantly lower, with nitrate leaching decreasing by 80% by the third year. Switchgrass’s reduced nitrogen fertiliser requirements explain this improvement, highlighting the environmental advantage of cultivating purpose-grown energy crops on marginal lands.

While carbon dioxide emissions from switchgrass fields were more than 50% higher than those from maise after the second year, the researchers attribute this to switchgrass’s significantly greater belowground biomass, leading to increased root respiration. However, this apparent drawback may herald long-term carbon sequestration benefits. “When we measure the total biomass of switchgrass, there’s about 10 megagrams of carbon belowground. That’s huge,” Lee emphasised. The extensive root systems of switchgrass support carbon storage and enhance soil health and resilience over time.

Although the current demand for bioenergy feedstocks remains modest, mainly due to low commodity and oil prices, the researchers are optimistic about the future. As global markets shift and renewable energy policies strengthen, switchgrass is well-positioned to enter commercial SAF production. “Our research ensures that we can feed productive cultivars into the SAF production system once the economy and the technology are ready to transition,” Namoi said. With its profitability, environmental services, and adaptability to marginal lands, switchgrass may soon find itself not just rooted in Midwestern soils but soaring through the skies.

More information: Nictor Namoi et al, Field-scale evaluation of ecosystem service benefits of bioenergy switchgrass, Journal of Environmental Quality. DOI: 10.1002/jeq2.70025

Journal information: Journal of Environmental Quality Provided by University of Illinois College of Agricultural, Consumer and Environmental Sciences

The Subtle Power of Negativity in Team Management

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In the corporate world, leaders are frequently encouraged to adopt the “Ted Lasso” approach when engaging with their employees. Ted Lasso, the fictional football coach from the popular Apple TV+ series, remains unwaveringly positive regardless of the circumstances. His style is not merely about being genial or superficially boosting morale. Extensive research spanning several decades has demonstrated that maintaining a positive outlook can enhance the individual performance of team members. This discovery has led many organisations to invest in emotional intelligence training for their managerial staff.

However, new findings from a research team in Texas suggest that incorporating a measured amount of negativity leads to even greater achievements. Crucially, it is not simply the presence of negativity that matters but the timing of its expression and the emotional groundwork laid earlier by the leader. As Constantinos Coutifaris, an assistant professor of management, explains, “When — and which — emotions are expressed by leaders matters for unlocking the potential of team members.”

Working alongside co-author Paul Green, also an assistant professor of management, Coutifaris explored how emotional expressions from leaders influence employee performance over time. While the prevailing wisdom confirms that positive emotions are beneficial, Coutifaris and Green observed that much of the previous research overlooked the importance of timing. Together with Jacob Levitt and the late Sigal Barsade of The Wharton School at the University of Pennsylvania, they conducted two major studies examining how the sequencing of positive and negative emotions influenced performance outcomes.

The first study focused on student-athletes and their coaches at an NCAA Division I sports programme, while the second analysed employees and their managers at a leading consulting firm. Both studies divided the timeline — a sports season and a corporate calendar year, respectively — into three distinct phases: beginning, middle, and end. The researchers discovered that early positive emotions expressed by leaders significantly improved individual performance. Yet, intriguingly, performance improved even more when leaders introduced occasional expressions of negativity during the middle phase.

In the athletic study, 245 varsity athletes assessed the emotional expressions of 86 coaches across a season, rating the frequency of positive and negative emotions on a scale from 1 to 5. In turn, coaches rated each athlete’s performance. The data revealed that a one-point increase in early positive expressions resulted in a 3.3% boost in performance. However, if coaches exhibited above-average negative emotions midway through the season, that increase in early positivity led to a 4.4% improvement — a substantial 33.3% amplification of the effect. In the corporate study, computational linguistics software analysed 9,968 employee reviews, measuring the proportion of positive and negative words used by managers across the year. Again, results showed that introducing occasional negativity during the middle phase enhanced the benefit of initial positivity by a striking 40.8%.

Notably, the balance remained firmly in favour of positivity. In the business study, the median percentage of positive words in early evaluations stood at 5.5%, whereas the median rate of negative words at the midpoint was only 0.5%. In other words, praise continued to outweigh criticism vastly. Nevertheless, the small injection of negativity proved decisive. As Green notes, “The big surprise for me was that negative emotions are pretty valuable. They help people improve.”

The researchers attribute these findings to the psychological phenomenon known as imprinting theory, which holds that early emotional experiences leave a lasting mark on subsequent attitudes and behaviours. In the context of leadership, initial expressions of positivity establish a secure emotional foundation. Subordinates interpret these early signals as indicators of their social worth and respect within the team. Thus, when a leader later introduces critical feedback, it is not perceived as an affront or a withdrawal of respect but rather as a constructive nudge to improve and reaffirm their valued status.

Coutifaris summarises the key practical takeaway: leaders should strive to create a favourable emotional climate at the outset, during the formative stages of a team’s development. Once a sense of belonging and value is securely imprinted, they can judiciously introduce negative feedback midway through the team’s journey to stimulate growth and improvement. “Expressing those positive emotions early allows you, the leader, to use some different emotions at the midpoint to sort of jolt people to perform better and better over time,” he explains. In short, the art of leadership may lie not simply in being positive or critical but in mastering the delicate timing and balance between the two.

More information: Constantinos Coutifaris et al, Timing Is Everything: An Imprinting Framework for the Implications of Leader Emotional Expressions for Team Member Social Worth and Performance, Organization Science. DOI: 10.1287/orsc.2023.17390

Journal information: Organization Science Provided by University of Texas at Austin

Web-Based Tool Analyses Effects of Tax on Sugary Drink Purchases

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Americans have long maintained a deep affection for sugar-laden beverages—not just traditional soda but also sports drinks, energy drinks, and sweetened iced tea. In 2021 alone, the average American purchased around 37 gallons of sugar-sweetened beverages. This translated to an astonishing collective intake of approximately 145,000 calories per day from these drinks. This high level of consumption has alarmed public health experts, given the strong link between excessive sugar intake and chronic conditions such as obesity, diabetes, and cardiovascular disease.

Seeking new ways to address this widespread health concern, researchers at the Fralin Biomedical Research Institute at Virginia Tech Carilion (VTC) have created a first-of-its-kind online platform to simulate how governmental policies — particularly taxes on sugar-sweetened beverages — might alter consumer behaviour. This digital tool, the Experimental Beverage Marketplace, allows scientists to study purchasing patterns in a controlled yet realistic environment. Findings from an initial proof-of-concept study were recently published in Appetite, offering new evidence on the potential effectiveness of beverage taxation strategies.

Dr Jeff Stein, assistant professor and interim co-director of the Centre for Health Behaviours Research at the institute, described the online tool as a critical step forward. “This tool provides a robust opportunity to systematically evaluate the potential effects of tax proposals on purchasing and consumption,” Stein said. “Our aim is to create a strong evidence base so that future food and beverage policies are grounded in research and more likely to achieve meaningful public health outcomes.” The Experimental Beverage Marketplace thus represents an essential innovation in behavioural and nutritional science.

The initial study enrolled 73 participants, all of whom were regular consumers of sugary beverages, were not following any specific dietary restrictions, and served as their household’s primary grocery shoppers. Participants interacted with the online marketplace to complete beverage purchases under different tax conditions. When a tax was applied to sugar-sweetened drinks, participants consistently bought fewer sugary beverages, as measured by fluid ounces, number of items, and total caloric intake. These results aligned with basic economic principles: when the price of a good rises, demand tends to fall.

Haylee Downey, the study’s first author and a doctoral candidate in Virginia Tech’s Translational Biology, Medicine, and Health Graduate Programme, noted the simplicity behind the findings. “In general, people will buy less whatever you tax,” Downey said. “That is a well-established economic theory, and our virtual marketplace allowed us to replicate this concept clearly and effectively.” This outcome confirms that taxation can serve as a viable lever for reducing the consumption of unhealthy products.

Previously, similar experiments had relied on small, physical retail environments explicitly constructed for research purposes. However, such brick-and-mortar models are costly to build, limited in scope, and unable to realistically simulate the wide variety of options available in a modern supermarket. In contrast, the digital marketplace developed by Downey and Stein includes hundreds of beverage options, from individual servings to bulk multipacks, presented through a familiar online shopping interface. Participants reported that the system was user-friendly, supporting its future use in large-scale behavioural studies.

Several American cities — including Philadelphia and Boulder, Colorado — have already implemented taxes on sugar-sweetened beverages, although the rates and specific products targeted vary. Researchers believe that digital tools like the Experimental Beverage Marketplace could help policymakers test and refine proposed interventions before enacting them, thereby anticipating both the intended and unintended consequences. Understanding reductions in sugary drink consumption and possible substitution behaviours is critical for designing policies that promote healthier overall dietary patterns.

Looking ahead, Stein and Downey focus on how consumers adapt when sugary drinks become less attractive through taxation. “Where does the consumption go?” Stein asked. “Are people switching to water, to diet drinks, or are they substituting with other high-sugar products like sweetened cereals?” Addressing these questions will require further modifications to the online tool. Downey is now preparing a second, expanded study, forming the centrepiece of her doctoral dissertation. Ultimately, the researchers hope their work will support more effective public health strategies, leveraging digital innovation to shape healthier futures.

More information: Haylee Downey et al, The Experimental Beverage Marketplace: Feasibility and preliminary validation of a tool to experimentally study sugar-sweetened beverage taxes and beverage purchasing, Appetite. DOI: 10.1016/j.appet.2024.107848

Journal information: Appetite Provided by Virginia Tech

Heavier Tax Burdens Curtail Philanthropic Contributions

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Governments collect taxes to finance the public good, from education and infrastructure to healthcare and social services. Charities, though operating outside the formal machinery of the state, serve parallel functions — addressing social needs, reducing inequalities, and supporting vulnerable populations. Yet an intriguing question arises at the intersection of public and private welfare: do higher government taxes, particularly those targeting personal wealth, reduce individuals’ inclination to give? That’s precisely the issue examined in a recent study by Marius Ring, assistant professor of finance at the Texas McCombs School of Business, in collaboration with Thor Thoresen of Statistics Norway.

The research focuses on Norway, a country with a longstanding wealth tax — a levy not on income but net assets. From 2010 to 2018, Norway taxed households on assets exceeding 1,480,000 NOK (approximately $250,000). During this period, the government altered the tax treatment of real estate, removing discounts on secondary homes while maintaining them on primary residences. This policy shift created a natural experiment, allowing Ring and Thoresen to examine charitable behaviour before and after the change. Their analysis yielded a compelling and perhaps counterintuitive conclusion: wealth taxes appear to discourage, not encourage, philanthropic donations.

One theory in philanthropic economics posits that higher wealth taxation might stimulate giving — a phenomenon known as the acceleration effect. The idea is that when individuals expect more of their assets to be taxed in the future, they may choose to donate sooner while they still control more of their wealth. As Ring explains, “If your wealth is going to be taxed away, you may prefer to give sooner rather than later.” In theory, this approach would allow donors to allocate funds according to their values rather than leaving them to be redirected through state expenditure. However, the Norwegian data did not support this hypothesis.

Instead, the researchers observed a pronounced adverse effect. A mere one per cent increase in the wealth tax rate resulted in a 26% reduction in the average amount donated to charities. Moreover, individuals became 27% less likely to donate at all. According to Ring, this reaction stems from a straightforward economic mechanism: increased wealth taxes reduce after-tax wealth, constraining discretionary spending. Often seen as voluntary or non-essential, philanthropic contributions are among the first expenditures to be curtailed when financial flexibility diminishes. The data underscores how personal giving is intimately tied to perceptions of economic security and disposable assets.

While the research indicates that higher wealth taxes suppress overall giving, it also points to possible policy solutions to mitigate these effects. Chief among them is the strategic use of income tax deductions for charitable donations. When individuals can offset more donations against their income taxes, lowering the effective cost of giving, they respond positively. The study found that a 10% reduction in the after-tax price of giving led to a 4.4% increase in donation levels. These incentives were especially potent regarding religious contributions and became even more effective over time as taxpayers became increasingly aware of and accustomed to the benefits.

This interplay between taxation and giving is part of a broader tension in public finance: how to raise the funds necessary for public welfare without inadvertently weakening civil society. Ring’s earlier research supports that wealth taxes prompt more cautious financial behaviour overall. In a previous study, he demonstrated that such taxes led to increased personal savings — and, by extension, a decrease in external financial commitments such as donations. “One way to save more is to give less,” he summarises. This finding highlights a fundamental behavioural trade-off: altruistic spending often suffers as individuals tighten their financial priorities in the face of taxation.

Nonetheless, Ring is careful not to portray wealth taxes as inherently harmful or misguided. While they may crowd out charitable contributions to some degree, he acknowledges that such policies can still play a vital role in ensuring social equity and funding essential services. He argues that The key question is whether taxes reduce giving and whether public expenditure supported by tax revenues delivers greater overall social welfare than private donations would have achieved. The debate is not about taxation versus charity but about striking the most effective balance between the two. For policymakers, this research serves as a valuable reminder: good intentions must be matched by careful design, especially when the goal is to enhance — not inadvertently diminish — the social good.

More information: Marius Ring et al, Wealth Taxation and Charitable Giving, The Review of Economics and Statistics. DOI: 10.1162/rest_a_01562

Journal information: The Review of Economics and Statistics Provided by University of Texas at Austin

The Impact of Parental Leave Policies on Mothers’ Entrepreneurial Choices

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Recent research published in the Journal of Management Studies offers a nuanced perspective on how parental leave policies—specifically their temporal and financial elements—can shape mothers’ decisions to pursue entrepreneurship. Challenging prevailing assumptions, the study reveals that more generous parental leave, particularly in terms of time rather than financial compensation, may encourage mothers to start their businesses rather than deter them.

The researchers conducted two interrelated studies to explore this phenomenon. The first drew on data from two significant policy reforms in Germany. The 2001 reform, which curtailed the duration of parental leave, was found to reduce the probability of mothers becoming self-employed. In contrast, the 2007 reform, which increased the monetary benefits associated with parental leave but did not extend its duration, did not significantly influence entrepreneurial activity. This finding suggests that time, rather than financial support, is more critical in shaping postnatal entrepreneurial decisions.

The second study employed a vignette-based experimental design in which participants—mothers or expectant mothers—were asked to evaluate their likelihood of pursuing self-employment under different hypothetical policy scenarios. These scenarios varied in the length of leave and the level of financial support. Consistently, mothers expressed greater intent to pursue entrepreneurship when leave duration was extended, irrespective of monetary benefits. This reinforces that time to recover, reflect, and plan after childbirth is a more influential driver of entrepreneurial intention than financial supplementation alone.

However, the research also highlights that financial support is not irrelevant. Further analyses revealed that the monetary component of parental leave can significantly affect certain subgroups—most notably, middle-class mothers juggling substantial domestic responsibilities. For these women, financial security during the early months of motherhood can alleviate stress and potentially free up cognitive and emotional resources that support entrepreneurial ambition.

The study’s lead author, Dr Pomme Theunissen of Maastricht University, summarised the findings succinctly: “After childbirth, giving mothers time to think and reflect will increase their likelihood of becoming self-employed.” This insight reframes the role of parental leave from a potential impediment to career ambition to a possible facilitator of new economic activity led by mothers.

These findings suggest reconsidering how policy design intersects with women’s professional trajectories. By focusing not solely on financial compensation but on the value of time itself, parental leave policies may be crafted to better support the diverse aspirations of mothers, including those who envision entrepreneurship as a viable and fulfilling path forward.

More information: Pomme Theunissen et al, What Makes Mothers Decide (Not) to Become Entrepreneurs? Unpacking the Role of Time and Money in Parental Leave Policies, Journal of Management Studies. DOI: 10.1111/joms.13215

Journal information: Journal of Management Studies Provided by Wiley

New Study Uncovers How Popular CEO Compensation Tactics Are Hindering Innovation

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According to new research, a compensation model designed to incentivise corporate success may do the opposite. A recent study reveals that one of the most prevalent forms of CEO remuneration — value-based equity grants — can inadvertently dampen executive motivation and curtail innovation by discouraging long-term investment strategies. The study conducted by Virginia Tech researchers Jin Xu and Pengfei Ye analyses executive compensation structures’ influence on corporate decision-making, drawing on data from thousands of U.S. firms between 2006 and 2022. Their findings, published in the Journal of Financial and Quantitative Analysis, suggest that a system meant to align executive interests with shareholder value might, paradoxically, weaken that alignment.

The crux of the issue lies in how value-based equity grants function. Under this model, CEOs are awarded stock compensation tied to a fixed monetary value rather than a fixed number of shares. If a company’s stock price rises, the executive receives fewer shares; conversely, if the stock price falls, they receive more. While this approach offers a stable and predictable compensation framework, it significantly caps the potential upside for executives. As a result, CEOs have less incentive to pursue bold, high-return strategies that could drive long-term shareholder value. “Boards of directors often aim to balance retention with risk management,” explains Xu, an associate professor at Virginia Tech’s Pamplin College of Business, “but our findings show that value-based equity grants can backfire. These grants may unintentionally discourage executives from making bold, long-term investments.”

To contextualise this, the study contrasts value-based grants with share-based grants, where a fixed number of shares is awarded irrespective of market price. In the latter scenario, executives directly benefit when stock prices climb — the higher the value, the greater the personal reward. Proponents argue that this model encourages executives to aim for ambitious performance targets. By contrast, value-based grants disincentivise exceptional performance by scaling down share allocations when prices are high. “Under value-based compensation,” notes Ye, assistant professor at the Pamplin College of Business, “stronger stock performance actually results in fewer shares for executives. That weakens the reward for driving long-term gains.” The research finds a clear correlation: firms employing value-based grants consistently invest less in research and development, a primary engine of innovation and future growth.

The study also interrogates the assumption that robust corporate governance can mitigate the drawbacks of flawed pay structures. Xu and Ye measured governance strength through established firm-level metrics and compared innovation spending across companies with varying levels of board oversight. The results were striking. Value-based pay schemes undermine CEO innovation incentives even in firms with strong governance frameworks. Companies most likely to adopt value-based compensation often have more sophisticated internal controls. Yet, these controls proved insufficient in countering the disincentive effects inherent in the compensation model. “Good governance can prevent many executive pay abuses,” Xu remarked, “but it does not completely fix the disincentives created by value-based equity grants.”

Over the past two decades, value-based compensation has become increasingly prevalent. In 2006, approximately 60 per cent of firms used value-based equity grants; by 2022, that number had risen to 73 per cent. Meanwhile, the proportion of firms using traditional share-based compensation fell from 40 per cent to just 27 per cent. This shift suggests a broader corporate America trend favouring compensation predictability and executive retention over performance-driven incentives. While such an approach can provide short-term stability and protect companies from excessive risk, it may ultimately hinder strategic leadership and long-term growth. “As more firms adopt value-based pay,” Ye warned, “they need to recognise the long-term trade-offs. A growing reliance on this model could mean lower innovation and slower corporate growth.”

At the heart of the debate lies a fundamental tension: the challenge of balancing retention with leadership dynamism. Value-based pay offers stability by reducing executive earnings volatility, making retaining top talent easier. However, as Xu and Ye demonstrate, the trade-off is a diminished appetite for risk and a hesitancy to pursue transformative initiatives. The researchers argue that these outcomes are not merely theoretical concerns but have measurable impacts on company performance and investment patterns. “Retention and strategic incentives should not be at odds with each other,” Xu contends. “Boards need to design compensation models that keep top talent and push them to drive sustained company growth.” One potential solution is adopting hybrid models incorporating both share-based and value-based compensation elements, thus preserving stability while reinvigorating the incentive to innovate.

For investors and board members alike, the study underscores an urgent need for critical reflection on the strategic implications of executive pay. Compensation structures are more than just financial mechanisms — they are levers that shape corporate behaviour and long-term planning. Investors should scrutinise how much CEOs are paid and how they are paid, as this can reveal much about a firm’s future trajectory. Companies relying on value-based grants may prioritise cautious, incremental strategies over bold leadership, potentially compromising their competitive edge. “As executive pay continues to evolve,” Ye concludes, “investors should take a closer look at the structure behind the numbers. Executive compensation isn’t just about figures — it’s about the strategy that underpins them.” This study provides compelling evidence that thoughtful, well-calibrated remuneration frameworks are essential for fostering innovation and sustainable growth.

More information: Jin Xu et al, Value-Based CEO Equity Grants, Journal of Financial and Quantitative Analysis. DOI: 10.1017/S0022109025000018

Journal information: Journal of Financial and Quantitative Analysis Provided by Virginia Tech

Where Crypto Meets Carbon: A Collision in Market Turbulence

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The emergence of non-fungible tokens (NFTs) and decentralised finance (DeFi) has significantly reshaped the digital asset landscape, introducing new value creation, trading, and decentralised governance paradigms. However, alongside this innovation, the energy-intensive nature of blockchain operations—particularly those based on proof-of-work consensus mechanisms—has drawn considerable scrutiny for their environmental toll. The issue became even more pronounced following China’s sweeping ban on cryptocurrency mining in 2021. This crackdown prompted a mass exodus of mining operations to other jurisdictions, many of which rely heavily on fossil fuels for electricity generation. Consequently, the migration exacerbated the carbon emissions associated with blockchain-based activities, fuelling an intensifying global debate about the ecological sustainability of crypto technologies and drawing attention to the potential of carbon offsetting mechanisms as a mitigating strategy.

Amid this discourse, a pivotal study published in China Finance Review International offers new insights into the interrelationships between NFTs, DeFi, and global carbon allowance markets. The research breaks ground by examining these intersections during periods of pronounced market stress, providing a much-needed analytical framework for understanding how environmentally focused financial instruments and digital assets interact. These findings are especially timely as global regulatory bodies and climate conferences—such as the upcoming COP29—grapple with formulating coherent responses to the twin imperatives of digital innovation and environmental stewardship. By analysing the dynamic interplay among emerging asset classes and carbon markets, the study is a vital resource for investors, financial regulators, and technology developers.

The study employs sophisticated econometric tools to assess data from four key financial indices from January 2021 to May 2023. These include the NFT Index (NFTI), which captures the performance of primary NFT tokens; the DeFi Pulse Index (DPI), which measures the value of decentralised financial assets; the KraneShares Global Carbon Strategy ETF (KRBN), representing international carbon credit markets; and the Solactive Carbon Emission Allowances Index (SOLCARBT), which tracks carbon futures within the European Union Emissions Trading System. The analysis encompasses several major economic and geopolitical disruptions, including the COVID-19 Delta and Omicron waves, the Russia-Ukraine war, and the collapse of the FTX cryptocurrency exchange. These events provided a fertile ground for investigating the structural connectedness and tail dependencies between digital and carbon-related financial systems.

One of the most compelling findings of the research is the asymmetric transmission of market shocks between asset classes depending on the prevailing market regime. During bull markets, DeFi instruments (as captured by the DPI) act as dominant transmitters of volatility, indicating their broader influence within the financial ecosystem. On the other hand, NFTs tend to remain relatively isolated except under extreme quantile conditions, at which point they begin to transmit idiosyncratic shocks. Conversely, the dynamic reverses in bearish or crisis-ridden environments: carbon markets such as KRBN and SOLCARBT become the primary sources of systemic disturbance. At the same time, NFTs emerge as the most susceptible receivers of such shocks. These patterns underscore risk propagation’s fluid and context-dependent nature in the contemporary financial landscape.

Another key insight lies in the concept of tail dependence, which refers to the increased correlation between assets during periods of extreme stress. The study reveals that during systemic shocks—such as those induced by pandemics or armed conflict—tail dependence among NFTs, DeFi, and carbon assets intensifies dramatically. This phenomenon suggests that digital and environmental markets are more tightly coupled under duress than previously assumed and that portfolio diversification strategies relying on these assets may prove less effective when they are most needed. This revelation has crucial implications for risk management and strategic asset allocation in an increasingly digitised and climate-conscious investment environment.

The broader relevance of the research extends far beyond academia. As international stakeholders debate how to reconcile the carbon footprint of blockchain technologies with global climate objectives, this study offers a practical foundation for developing market-based responses. For example, Web3 investors may use these findings to hedge against carbon exposure by incorporating carbon credits into their decentralised portfolios. Financial innovators could design green fintech products that remain resilient during crises by accounting for the dynamic shock transmission behaviours elucidated in the study. Most importantly, policymakers and environmental regulators now have a valuable early-warning framework for identifying climate-finance systemic risks that may arise from the intersection of digital and carbon markets.

In practical terms, the implications are manifold. For traders, the research opens avenues for short-term arbitrage strategies, particularly between Ethereum options and carbon futures during periods of blockchain congestion. For regulatory agencies, the findings could inform the development of predictive models that flag systemic risks arising from climate and crypto interactions. Finally, for decentralised autonomous organisations (DAOs), the evidence provides a compelling case for integrating carbon offset mechanisms into their governance protocols, thereby aligning technological growth with sustainability imperatives. As the global community looks toward COP29 and beyond, such research offers both a roadmap and a warning—highlighting the profound and increasingly inseparable links between finance, technology, and the environment.

More information: Bikramaditya Ghosh et al, Is there a nexus between NFT, DeFi and carbon allowances during extreme events? China Finance Review International
. DOI: 10.1108/CFRI-03-2023-0057

Journal information: China Finance Review International Provided by Shanghai Jiao Tong University Journal Center

Combating Honey Adulteration Through AI Innovation

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Researchers at McGill University have developed a cutting-edge method that uses artificial intelligence to authenticate the origins of honey, tackling a longstanding issue of fraud in the global food trade. This novel approach, which relies on advanced chemical analysis and machine learning, ensures that the information printed on honey labels accurately reflects the contents of the jar. For years, food scientists and regulators have grappled with widespread mislabelling in the honey industry, and this breakthrough could offer a practical, scalable solution to a problem that has proven difficult to address with conventional techniques.

Dr Stéphane Bayen, Associate Professor and Chair of McGill’s Department of Food Science and Agricultural Chemistry, emphasised the importance of this work: “Honey is among the most fraud-prone commodities in global trade,” he noted. “A great deal of the fraud arises from misrepresenting either the floral source of the honey or the region in which it was produced.” Monofloral honey derived predominantly from a single flower type, such as acacia or manuka, are particularly susceptible to fraud, as they are highly prized for their distinct flavour profiles and associated health benefits. Their rarity and appeal allow them to command significantly higher market prices, creating a strong incentive for unscrupulous producers to mislabel their products.

What makes the McGill method especially significant is its ability to identify the floral sources of honey, even in highly processed samples where traditional authentication methods fall short. Until now, verifying a honey’s origin typically involved pollen analysis, requiring intact pollen grains. This approach, however, becomes unreliable when honey is filtered, pasteurised, or otherwise refined. Instead, the new technique uses high-resolution mass spectrometry to generate a comprehensive molecular fingerprint of the honey. This fingerprint is then interpreted by machine learning algorithms, which compare it against reference profiles from known floral and geographical sources.

Testing has shown that this AI-based technique is accurate and far faster than existing methods. In trials, the researchers successfully classified a range of honey samples according to their botanical origin, including those that had been processed and would have posed challenges for pollen-based identification. “Whereas traditional authentication could take days, and often fails with filtered honey, our system delivers results within minutes,” said Dr Bayen. This increased efficiency opens the door for more widespread and routine testing, making it easier to catch fraudulent products before they reach the market.

Beyond ensuring consumer transparency, the researchers highlight their work’s broader ethical and economic implications. The pressure on producers to compete has increased with the growing demand for local and artisanal food products—such as Quebec’s blueberry honey. This technology could serve as a protective mechanism for honest beekeepers who risk being undercut by fraudulent competitors. At the same time, consumers are increasingly concerned with sustainability and food integrity, and tools like this can provide much-needed reassurance that they are purchasing genuine products. As Bayen remarked, “People deserve to know that their honey is what it claims to be, and honest producers deserve protection.”

The McGill team sees considerable potential for applying this technique beyond honey. Many high-value food products—such as olive oil, wine, saffron, and even coffee—face similar issues of mislabelling and adulteration. Integrating AI with chemical fingerprinting could thus form the foundation of a broader shift in how food authenticity is verified. The researchers are now seeking partnerships with food safety agencies and industry bodies to see their technique adopted as a standard tool in quality assurance and fraud prevention across the food supply chain. Combining rigorous science with technological innovation offers a promising solution to an increasingly pressing global concern.

More information: Stéphane Bayen et al, Rapid Convolutional Algorithm for the Discovery of Blueberry Honey Authenticity Markers via Nontargeted LC-MS Analysis, Analytical Chemistry. DOI: 10.1021/acs.analchem.4c01778

Journal information: Analytical Chemistry Provided by McGill University

Groundbreaking Archaeological Data Uncovers Ancient Connections Between Housing and Social Inequality

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Suppose current interpretations of the archaeological record are accurate. In that case, a series of stone alignments found in Tanzania’s Olduvai Gorge may represent the remains of shelters constructed 1.7 million years ago by Homo habilis, an extinct hominin species considered one of the earliest branches in the human evolutionary lineage. If correctly identified as shelters, these rudimentary structures would considerably push back the timeline for early human habitation.

However, the most precise and unambiguous evidence for housing—structures indisputably built and lived in by humans—dates to just over 20,000 years ago. This period coincides with the last Ice Age, when glaciers blanketed large portions of North America, Europe, and Asia. It also marks a point in human history when communities had only recently formed settled societies. From this time forward, particularly before the onset of industrialisation, the archaeological record becomes increasingly rich. Not only does it reveal the prevalence of housing as a hallmark of settled life, but it also uncovers significant clues regarding the emergence and evolution of social inequality.

A newly published PNAS Special Feature brings together an international team of scholars collaborating to analyse these patterns through a pioneering archaeological initiative. Central to their work is an extensive database comprising over 55,000 housing floor area measurements drawn from archaeological sites worldwide. This vast dataset underpins a series of studies demonstrating compelling correlations between the size of residential structures and levels of economic inequality in various historical contexts.

Scott Ortman, an associate professor of anthropology at the University of Colorado Boulder, worked alongside Amy Bogaard of the University of Oxford and Timothy Kohler of the University of Florida to coordinate this special collection. According to Ortman, archaeologists have long been interested in understanding inequality, often focusing on how and when it emerged. However, the current body of research goes further, seeking to understand the broader dynamics that have shaped economic disparities across time and space. The team has adopted a novel perspective, treating the archaeological record as a sequence of ancient artefacts and a comprehensive repository of human experience. This shift in approach represents an exciting development in archaeological methodology.

The core of this work stems from the Global Dynamics of Inequality (GINI) Project, supported by the National Science Foundation and headquartered at CU Boulder’s Center for Collaborative Synthesis in Archaeology. Ortman, Bogaard, and Kohler, all co-principal investigators, led a global effort to compile housing data from non-industrial societies dating from approximately 12,000 years ago to the advent of industrialisation. By reaching out to archaeologists with regional expertise, the team effectively “crowdsourced” the data collection process, assembling a wide-ranging database that draws on both published excavation records and cutting-edge remote sensing technologies such as LiDAR. Sites represented include the famously preserved cities of Pompeii and Herculaneum, alongside less celebrated but equally informative locations across the Americas, Europe, Africa, and Asia.

Although the dataset does not yet encompass every instance of residential architecture uncovered by archaeology, it represents a highly ambitious and impressively comprehensive sampling of what is currently accessible. Undergraduate and graduate students were crucial in organising and entering the data. With over 55,000 individual housing units catalogued, the database has become a foundational tool for analysing inequality in pre-industrial contexts. Ten papers within the PNAS Special Feature use this information trove to explore how housing size variations reflect broader social and economic trends, particularly the distribution of wealth and power.

In their introductory essay, Ortman, Kohler, and Bogaard underscore the pressing relevance of their research. They frame economic inequality as one of the foremost global challenges of the twenty-first century, closely tied to other critical issues such as climate change and the stability of democratic governance. Prehistoric data, they argue, suggest that societies with pronounced inequalities were often less resilient to environmental shocks. Furthermore, recent evidence from modern democracies indicates that economic disparity undermines political trust and weakens institutional legitimacy. These insights highlight the vital role of archaeology in illuminating not only the distant past but also the foundational mechanisms shaping the present and future of human societies.

Notably, the Special Feature explores how residential data from the same periods and regions—subject to consistent environmental, technological, and cultural conditions—offer valuable comparisons. Some papers examine how wealth inequality evolved with economic growth, focusing on how average house sizes changed over time and what these shifts reveal about access to resources. Others investigate the impact of land use practices, warfare, and duration of site occupation on housing disparities. One key study, led by Ortman and involving an international team, draws a direct connection between variability in house sizes in ancient societies and measures of income inequality used in contemporary settings. Their findings suggest that residential floor area is a conservative but effective proxy for estimating historical wealth disparities.

Bogaard emphasises that wealth inequality did not inevitably follow the advent of agriculture. Instead, high levels of inequality only became entrenched in specific ecological and political contexts—particularly where land could be monopolised. Conversely, some societies managed to maintain relatively egalitarian structures through governance systems designed to curb the accumulation of excess wealth and to promote equitable access to resources. The archaeological record, she asserts, offers powerful lessons for modern societies. It indicates that equitable economic development is best supported by institutions and policies that reduce the reinforcement of inequality through successive generations. In short, understanding the roots of inequality through the lens of ancient housing can help us better address the challenges we face today.

More information: Scott Ortman et al, Economic inequality is fueled by population scale, land-limited production, and settlement hierarchies across the archaeological record, Proceedings of the National Academy of Sciences. DOI: 10.1073/pnas.2400691122

Journal information: Proceedings of the National Academy of Sciences Provided by University of Colorado at Boulder

How Leaders Unknowingly Become Dictators at Work

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Micromanagement remains a persistent issue in the professional world—a tendency toward overcontrol that stifles collaboration and undermines trust. At Penn State’s School of Labour and Employment Relations (LER), faculty members Craig L. Pearce and Hee Man Park refer to these overbearing figures as “accidental dictators.” This term hints not at malicious intent but a leadership misstep many fall into without even realising it.

In an article recently published in Organizational Dynamics, Pearce — the Brova Family Endowed Professor of Leadership and Human Resources — and Park, Associate Professor of Human Resource Management and Director of LER’s graduate programme explore this phenomenon’s underlying causes and consequences. Their audience includes business leaders and HR professionals — precisely the groups they aim to inform and influence. Pearce explains their mission succinctly: “We’re trying to create actionable knowledge that people can read and apply that very same day.” His forthcoming book, Shared Leadership 2.0: Taking Stock and Looking Forward, co-authored with fellow faculty members Natalia Lorinkova and Christina L. Wassenaar, will be released by Cambridge University Press on 24 April and further expands on these themes.

The article’s origin lies in a case study from Pearce’s classroom — a course on shared leadership at the Drucker School of Management. One executive, frustrated that her team refused to take the initiative, shared her experience with Pearce, who replied, “Thank you for sharing — I think you might be the problem.” This anecdote planted the seed for the article’s central argument. Pearce has long taught what he calls the “smart person leadership trap”: the idea that intelligent individuals often rise to leadership roles because they are capable and knowledgeable, but this very expertise can breed dependency. Team members come to rely on the leader for every decision, and gradually, the leader unwittingly establishes a hierarchy that discourages autonomy. It’s a relatable scenario for many managers and one that Pearce and Park argue is best addressed through increased self-awareness and intentional delegation.

Park elaborates by referencing findings from delegation research. Leaders, he explains, rarely delegate key decisions. Instead, they tend to assign their subordinates only minor or routine tasks. This reveals a fundamental lack of trust or, at the very least, a hesitation to relinquish control. The more a leader’s expertise becomes recognised, the more their team depends on them, creating a self-reinforcing cycle of centralised power. Even well-meaning leaders, once immersed in organisational pressures and performance goals, may dismiss others’ input. While this intense goal orientation might drive success in the early stages of a leader’s career, it becomes a limiting factor over time. Park argues that advancement requires technical competence and the ability to collaborate, nurture talent, and build resilient interpersonal relationships.

One of the practical strategies Pearce advocates for avoiding this leadership pitfall is what he terms “circumscribed empowerment.” While empowerment is often viewed as a universal good, it can sometimes lead to unintended outcomes if not properly framed. “When people hear they’re empowered,” Pearce says, “they may think that means total freedom — but that’s rarely what leaders have in mind.” Circumscribed empowerment involves delineating the boundaries within which subordinates can make decisions. It’s about providing structure along with autonomy. For instance, empowered individuals should be encouraged to consult their leaders when their choices affect others, particularly across departments. Leaders can grant genuine autonomy by setting expectations and boundaries while ensuring organisational coherence and coordination.

Another foundational principle discussed in the article is cultivating a shared vision and adopting a long-term perspective. According to Pearce, simply stating a vision does not ensure it is shared; it must be co-created. Involving team members in the vision-building process fosters ownership and alignment. Repetition and reinforcement are essential, but genuine engagement gives a shared vision its staying power. Pearce argues that a long-term mindset radically alters leadership behaviour regarding time orientation. It does not mean discarding short-term objectives but approaching them within a broader sustainability and strategic depth framework. Leaders who adopt a long-term view are better equipped to think critically, balance competing priorities, and make decisions that serve immediate needs and the organisation’s health over time.

Park agrees, noting that organisations too often promote individuals into leadership roles based solely on their success in technical tasks. This might be effective in the short term, but it fails to account for the skills that truly sustain leadership: emotional intelligence, communication, and collaborative acumen. By contrast, a long-term view encourages companies to select leaders who inspire, guide, and grow others. In such cultures, delegation is not seen as relinquishing control but as a strategic move that allows leaders to scale their impact. The mistake, Park warns, is in assuming that leadership is about doing everything oneself. The reality is that effective leadership means cultivating capable teams and distributing decision-making power appropriately.

The School of Labour and Employment Relations has taken proactive steps to tackle these issues at the institutional level. In the autumn of 2024, they introduced a residential major in organisational leadership and a leadership minor. A new certificate programme in leadership is also forthcoming. These offerings aim to equip students — whether their primary fields are engineering, science, finance, or otherwise — with the interpersonal and collaborative skills essential for modern leadership. Pearce says, “You pick the technical topic, and we now have the on-ramp to complement that with leadership development.” The ultimate goal is to prepare graduates to excel in their disciplines and lead others effectively and ethically, avoiding the common traps that turn capable managers into accidental dictators.

More information: Craig L. Pearce et al, Are you an accidental dictator?: The smart person leadership trap…and how to avoid it, Organizational Dynamics. DOI: 10.1016/j.orgdyn.2025.101130

Journal information: Organizational Dynamics Provided by Penn State