Education

• Recent study finds that math skills are linked to better financial outcomes and improved health, but a lack of confidence in one's abilities may obviate the benefits.  To assess financial well-being and health, the researchers evaluated self-reported financial outcomes for 4,572 Americans and physician-reported disease activity data among 91 lupus patients.  They found the best outcomes for those with high numeracy and high numeric confidence, while "mismatched" individuals--those with high ability/low confidence or low ability/high confidence--experienced the worst outcomes.  Individuals who scored perfectly on a math test and had high confidence in their ability reported 82% of the good financial outcomes that were possible, while people who scored just as well but had low confidence reported only 78% of the good outcomes.  Among lupus patients who got a perfect score on a numeracy test, only 7% needed more aggressive treatment to control their disease vs. 31% of those with low confidence.  The researchers hypothesized that people who are numerically confident play a more active role in their health and financial decisions.  When combined with higher ability, numeric confidence may better prepare people to plan financially or choose high-quality doctors.  Since confidence determines the extent to which people benefit from objective numerical ability, the researchers emphasize the importance of fostering both confidence and capability. (Peters et al., 2019, University of Oregon)
• Results from international PISA exam reveal that learning outcomes have barely improved since 2000 despite a 15% increase in per pupil expenditure in the last decade alone.  Nearly 600,000 fifteen-year-olds from 79 high- and middle-income countries took the exam last year to assess their math, reading, and science ability.  Chinese students came in first across all three subjects--in fact, the most disadvantaged 10% of students in the four provinces that took the exam showed better reading skills than the average student in OECD countries.  While these four provinces in eastern China are far from representative of the entire country, their combined size is larger than most of the other included countries and their level of income is below the OECD average.  While the US's performance remained stagnant (American students performed in the top quartile on reading and in the middle of math performers), some countries gained ground, including Singapore, Jordan, Poland and Turkey. The results also show that there is a positive relationship between investment in education and average performance up to a threshold of $50K USD in cumulative expenditure per student from age 6 to 15.  Beyond that threshold, there is almost no relationship between expenditure and performance. (Schleicher, 2019)
• Speech therapy interventions exhibit positive effects on language improvement, which can be linked to potential labor market gains.  In 2012, the What Works Clearinghouse released a review of 225 studies of phonological awareness training on children with learning disabilities in early childhood education.  The most rigorous studies indicate that such interventions can have positive effects on communication/language competencies, with an effect size of .33 (equivalent to moving a child in the 50^th percentile to the 63^rd percentile of language ability).  More recent research has built upon this finding by evaluating new formats of therapy delivery, including teletherapy.  For example, a 2018 paper published in The American Journal of Speech-Language Pathology found that teletherapy was just as effective as traditional speech therapy for children exhibiting speech sound disorders.  While several researchers have conducted cost-effectiveness analyses of speech therapy interventions, few papers make a direct connection to future earning potential for students.  One UK paper, however, was able to quantify the earning gains by linking language improvement to better standardized exam performance and higher resulting earnings.  The self-published 2010 study from Matrix Evidence estimates that £1 invested in enhanced speech and language therapy generates £6.43 in increased lifetime earnings. (What Works Clearinghouse, 2012; Coufal et al., 2018, Marsh et al., 2010)
• New study finds that young children can gain math skills from intelligent virtual characters.  Researchers at Georgetown University studied 217 children ages 3 to 6 years as they used a math game featuring a prototype of an intelligent character—a virtual character that uses adaptive technology to respond to children and provide corrective feedback using spoken language.  The game in the study featured the media character Dora the Explorer.  They found that students who talked more to the character and developed a stronger relationship with her had quicker, more accurate math responses.  Students who used the Dora game also saw higher learning gains than students that used a comparison game that included the same voiceover but did not illustrate the virtual character.  The findings indicate that children's relationships and interactions with intelligent characters can provide new pathways for acquiring basic math skills and potentially skills in other subjects. (Calvert et al., 2019, Society for Research in Child Development)

Energy

• Latest research from the UN Principles of Responsible Investing network (UNPRI) indicates potential risks in public equities portfolios due to climate change. The analysis, based on companies in the MSCI ACWI index (which includes more than 2,700 firms across 49 countries), finds that an “inevitable policy response” to climate change could permanently wipe out $1.6T to $2.3T from the value of the companies in the index. The 100 highest-emitting companies in the index could lose 43% of their market capitalization by 2025, equivalent to a total loss of $1.4T, it claimed, while the 100 best-performing firms could see their value increase by 33%, a total gain of $700B. (UN PRI, 2019)
• 2019 United Nations Climate Change Conference (COP25) concluded earlier this month on a dispiriting note with UN Secretary General Antonio Guterres stating “I am disappointed with the results of #COP25.” The international community lost an important opportunity to show increased ambition on mitigation, adaptation, and finance to tackle the climate crisis.” Helen Mountford, Vice President for Climate and Economics at the World Resources Institute, said "the negotiations fell far short of what was expected," and "the can-do spirit that birthed the Paris Agreement feels like a distant memory." (CBS News, New York Times)
• Following nearly 10 months of discussion, the government of the Indian state of Andhra Pradesh appears to step back from attempts to renegotiate power purchase agreements with renewable energy providers.  Earlier this year, in a blow to investor confidence in renewable energy in India, the newly elected government in the state of Andhra Pradesh started proceedings to renegotiate 139 PPAs (Power Purchase Agreements) signed by the previous government, citing budget constraints and a 45-50% reduction in prices in the years since the projects were signed. PPAs are typically structured as 20-25 year fixed price contracts, depending on the costs for the IPP (Independent Power Producer) at the time of signing the contract. Repricing would significantly reduce revenue for the IPPs, who have already made ~$3B in investments, leaving them at risk of bankruptcy (and further exacerbating the country’s bad loans crisis). With these risks in mind, IPPs, investors, and the central government were urging the state not to renegotiate the contracts. After nearly 10 months of tension, the latest events suggest that the state has agreed to step back. Though no official statement has been released from the state or central governments, initial reports suggest that the central government and the state have agreed to work together on financing, ensuring retention of the price points in the original PPAs and easing concerns for IPPs. (Quartz, Mercom)

Financial Services

• An experiment in Kenya finds that direct cash-transfers to poor individuals can have positive spillover effects on non-recipient households and firms with minimal price inflation. The experiment provided one-time unconditional cash transfers worth ~USD $1K (distributed by the NGO GiveDirectly) to over 10.5K poor households in a sample of 653 villages with a population of 280K. The injection of cash had large impacts on consumption and assets for recipients as well as for non-recipients whose annualized consumption increased by 13%.  Average price inflation was found to be 0.1%.  The implied fiscal multiplier is 2.6 (the multiplier reflects the cumulative effect of transfers on local GDP relative to the amount transferred). (Egger et al. 2019, Burke et al., 2019)

• A U.S. experiment published in The National Bureau of Economic Research reveals that access to FICO score information significantly reduces late payments and increases borrowers’ scores.  Sallie Mae’s (national financial institution specializing in student loans) borrowers were randomly assigned to receive direct communications about a feature that allowed them to have unlimited views of their FICO score. Treatment group members were 0.7 percentage points less likely to have an account that was 30 days or more past due, a 4% decrease relative to the control group. The intervention also led to a net positive outcome for the borrower's creditworthiness as indicated by an increase in the borrower's FICO score (a statistically significant increase of 0.7 points) and reduced the proportion of subprime borrowers by 0.4 percentage points. These effects largely persist across the full two-year study period. (Homonoff et al., 2019)
• A survey conducted by the Financial Health Network between April and June of 2019 in the U.S. reveals that only 29% of Americans are considered “financially healthy.” Meanwhile, 54% are financially coping and 17% are considered financially vulnerable. An individual is considered financially healthy if he/she scores highly across eight indicators which include spending less than income, paying bills on time, having sufficient liquid savings, exhibiting a manageable debt load, and planning ahead financially. Additionally, amidst historically low unemployment and strong wage growth, Americans report having an easier time paying their bills and debts than past years: 66% say they can pay their bills on time (up 2.2 points from 2018) and 60.5% expect their households to pay off their current debt within 5 years excluding mortgages (up 2.6 points from 2018). (Brockland et al., 2019)

Food and Agriculture

• The prevalence of resistant bacterial strains occurring in livestock has significantly increased over the last two decades. Globally, 73% of antimicrobials are given to animals raised for food.  A study published in Science reviewed 901 point prevalence surveys from low- and middle-income countries which tracked the prevalence of antimicrobial resistance (AMR) in animals. The proportion of antibiotics with AMR above 50% used in chickens and pigs grew from 0.15 to 0.41 and 0.13 to 0.34, respectively, from 2000 to 2018. AMR in animals is found to be highly prevalent in northeastern India, northeastern China, the south coast of Brazil, and the areas surrounding Mexico City. The highest resistance rates were observed among tetracyclines, sulfonamides, and penicillins. (Van Boeckel et al., 2019)

• A study published in Science finds that elevated levels of CO₂ decrease the nutrient density in rice. The authors conducted field experiments in China and Japan among 18 rice cultivars to test the impact of atmospheric CO₂ levels on protein and micronutrient density. The study applied CO₂ levels in line with expected end-of century levels if significant emissions reductions are not implemented (from 568 to 590 μmol mol⁻¹). The study found that rice grown in higher CO­₂ environments contained 10% less protein, 8% less iron, and 5% less zinc. (Zhu et al., 2018)

• Following a year of $16.8B in food and agriculture investment, investors in the space rank ag biotech, innovative food (e.g., alternative proteins), and farm management software as the most exciting opportunities to look for next year.  Idea2scale and AgFunder conducted interviews with 50 global food & agtech investors to measure perceptions of agri-foodtech opportunities.  When asked which sectors have received too much attention to date, respondents listed downstream categories such as meal kits (54%) and eGrocery (40%).  Whereas, midstream technologies—such as supply chain, food safety, traceability, and processing—were ranked as the least overhyped. (O’Brien, 2019)

Healthcare

• New study in The Journal of Health Economics finds that spatial competition for healthcare providers is associated with improved clinical quality. The authors study 8K family practices in the UK and analyzed responses to level of local competition, defined as the number of rival doctors within a short distance. Family practices with more competition were found to be associated with higher levels of patient satisfaction and clinical quality, although the magnitude of the effect was small. (Gravelle et al., 2019)
• New Medicare study finds that universal healthcare is associated with earlier diagnosis and improved health outcomes. The working paper in The National Bureau of Economic Research compares the increases in cancer detection and reduction in cancer mortality among Medicare beneficiaries to a representative control population in Canada, focusing on breast, colon, and lung cancer (three of the most common cancer sites in the US). Universal healthcare for those aged 65 and above - and eligible for Medicare - was associated with increases in cancer diagnosis of 33-72 people per 100K people, and reductions in cancer mortality of 9 people per 100K. (Myerson et al., 2019)
• Evidence published in Health Economics, Policy and Law estimates the constraints South Africans face in accessing healthcare. Affordability constraints were faced by 23% of survey respondents, although the majority of affordability issues (73%) were related to travel costs. Availability constraints, involving distances and transport costs, were faced by 27% of survey respondents. Acceptability constraints, as measured by patients' usage of nearest facilities, were faced by 10% of survey respondents. The study highlights the need for high quality and affordable healthcare facilities in the country, particularly in underserved areas. (Burger and Christian, 2018)

Infrastructure

• A study conducted on the TransJakarta bus rapid transit (BRT) system in Indonesia shows reduced take-up and increased travel times on the bus corridors. TransJakarta opened in 2004 as the world's longest BRT system with 240 stations, connected by 13 corridors, spanning a length of 206 km. Using data from large scale commuting pattern surveys from 2002 and 2010, an equilibrium commuting model shows that only 4.3% of commuters in Jakarta chose BRT as their primary mode of transport. The study also shows increased travel duration for others on the bus corridors, as the buses diminished road capacity and higher congestion during peak hours.  The analysis was conducted between 'treated' neighborhoods (i.e. those within one km of the closest BRT station) to 'almost treated' neighborhoods (i.e. those that were either planned to be treated or would eventually be treated).  The challenges faced by TransJakarta are not uncommon—only 11% of BRT corridors received a Gold Standard in quality following an evaluation of 122 corridors around the world by the Institute for Transportation and Development Policy. (Gaduh et al., 2019)
• A quasi-experimental study shows that infrastructure alone will not fully address inequality of water access in a rural semi-arid region of Northeast Brazil. Published in Science of the Total Environment, the study incorporated the framework of Human Right to Water (HRW) – quality, accessibility, and availability of water, and was conducted using data from 380 control and treatment households before and after the construction of a new Water Supply System (WSS). The data shows that the new WSS increased the per capita volume of water used by families, but practices such as collection of water, or use of fecal-contaminated water continued. (Aleixo et al., 2018)

Disclaimer:  Views presented in the linked articles are the author’s own and not representative of Y Analytics. For informational purposes only, not intended as investment advice. Content may not be comprehensive of all timely research within each sector.  Text is often drawn directly from cited sources.