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Real and private-value assets—defined here as the sum of real estate, infrastructure, collectibles, and noncorporate business equity—compose an investment class worth an estimated $84 trillion in the U.S. alone. Furthermore, private values can affect pricing in many other financial markets, such as that for sustainable investments. This paper introduces the research on real assets and private values that can be found in this special issue. It also reviews recent advances and highlights new research directions on a number of topics in the real assets space that we believe to be particularly important and exciting.

We examine whether impact investing is more effective in fostering business venture success and social impact when directed toward ventures located in vs. outside disadvantaged urban areas (i.e., areas with high crime, unemployment, and poverty). We explore this question in the context of loans made to business ventures located in French “banlieues” vs. “non-banlieues”. We find that loans issued to banlieue ventures, compared to non-banlieue ventures, yield greater improvements in financial performance, as well as greater social impact in terms of the creation of local employment opportunities, quality jobs, and jobs for minorities — all of which contribute to the social inclusion of marginalized communities and the development of sustainable cities.

I study the effect of improved access to health insurance on the rate new business formation and the quality of those newly created businesses. I develop theoretical models which provide predictions on how improved access to health insurance would heterogeneously affect firms by non-profit status and capital requirements. Using the 2006 reform of the Massachusetts health insurance market, I test those predications and find non-profit entrepreneurship was significantly affected although overall entrepreneurship seems constrained by factors other than access to health care such as access to capital. I also provide evidence that the quality of non-profits created by the shock where poor. These results suggest that even when policy changes are able to induce more entrepreneurship, the marginal quality of those entrepreneurs may be poor.

This paper contains the on on-line appendix to the paper with the same title forthcoming in ILRR.; Is the Bayh-Dole intellectual property regime associated with more and better academic entrepreneurship than the Professor Privilege regime? The authors examine data on US PhDs in the natural sciences, engineering, and medical fields who became entrepreneurs in 1993–2006 and compare this to similar data from Sweden. They find that, in both countries, those with an academic background have lower rates of entry into entrepreneurship than do those with a non-academic background. The relative rate of academics starting entrepreneurial firms is slightly lower in the United States than in Sweden. Moreover, the mean economic gains from becoming an entrepreneur are negative, both for PhDs originating in academia and non-academic settings in both countries. Analysis indicates that selection into entrepreneurship occurs from the lower part of the ability distribution among academics. The results suggest that policies aimed at supporting entrepreneurial decisions by younger, tenure-track academics may be more effective than general incentives at increasing academic entrepreneurship in general.

Online crowdfunding is a popular new tool for raising capital to commercialize product innovation. Product innovation must be both novel and useful (1-4). Therefore, we study the role of novelty and usefulness claims on Kickstarter. Startlingly, we find that a single claim of novelty increases project funding by about 200%, a single claim of usefulness increases project funding by about 1200%, and the co-occurrence of novelty and usefulness claims lowers funding by about 26%. Our findings are encouraging because they suggest the crowd strongly supports novelty and usefulness. However, our findings are disappointing because the premise of crowdfunding is to support projects that are innovative, i.e. that are both novel and useful, rather than projects that are only novel or only useful.

Using a dataset with over 24 million observations and the universe of more than 230,000 entries into entrepreneurship we analyze the gross (including the founders), net (excluding the founders), and new (jobs to the former unemployed or those outside the labor force) job creation by entrepreneurs two and six years after start-up. These novel measures of job creation shows that the average entrepreneur does not create any jobs for any other than him/her-self, and typically arrives from having another job. Thus, short term job creation by entrepreneurs involves a reshuffling of jobs from older to new firms rather than creating new jobs.

We debate the motivation for and effectiveness of public policies to encourage individuals to become entrepreneurs. Reviewing established evidence we find that most western world policies do not greatly reduce or solve any market failures but instead waste taxpayers’ money, encourage those already intent on becoming entrepreneurs, and mostly generate one-employee businesses with low growth intentions and a lack of interest in innovating. Most policy initiatives that would have the effect of promoting valuable entrepreneurship would not be recognizable as such, because they would primarily address other market failures: a central-payer healthcare would remove health-care related distortions affecting employment choices; greater STEM education would produce more engineers of which some start valuable new firms; and labor market reform to encourage hiring immigrants in jobs they have been educated for would reduce inefficient allocation of talent to entrepreneurship.

We use two sequential randomized controlled trials (RCTs) to study the impact of the first two editions of a 12-day intensive training program that cost about 12,000 euros (approx. $14,878) per participant to encourage youth to become leaders in social entrepreneurship. The first edition of the program showed no robust treatment effects. The program was adjusted to reduce leadership training and increase “hard skills” entrepreneurship training. The second edition of the program had treatment effects on entrepreneurial activities and the creation of a new venture during the program, as well as subsequent start-up activity. In both RCTs, participants who had made more entrepreneurial progress before the start of the program made more progress afterward, irre-spective of treatment. Those with the highest pretreatment expectations made the least progress, irrespective of treatment. Training people to learn entrepreneurship seems to be difficult and costly, but repeated field experiments will increase our knowledge of the impact of entrepreneurship training.

International audience; There is a growing body of evidence that many entrepreneurs seem to enter and persist in entrepreneurship despite earning low risk-adjusted returns. This has lead to attempts to provide explanations--using both standard economic theory and behavioral economics--for why certain individuals may be attracted to such an apparently unprofitable activity. Drawing on research in behavioral economics, in the sections that follow, we review three sets of possible interpretations for understanding the empirical facts related to the entry into, and persistence in, entrepreneurship. Differences in risk aversion provide a plausible and intuitive interpretation of entrepreneurial activity. In addition, a growing literature has begun to highlight the potential importance of overconfidence in driving entrepreneurial outcomes. Such a mechanism may appear at face value to work like a lower level of risk aversion, but there are clear conceptual differences--in particular, overconfidence likely arises from behavioral biases and misperceptions of probability distributions. Finally, nonpecuniary taste-based factors may be important in motivating both the decisions to enter into and to persist in entrepreneurship.

We explore whether the Bayh-Dole intellectual property regime is associated with more, and more valuable academic entrepreneurship than the “Professor’s Privilege” regime. Using data on U.S. STEM Ph.D.’s becoming entrepreneurs during 1993-2006 and similar data from Sweden we present evidence showing that in both countries the entry rate into entrepreneurship is lower for those originating from academia than for those orginating from non-university employment, and that the relative rate of academic entrepreneurship is slightly lower in the U.S. than in Sweden. We also find that the mean economic gains for becoming an entrepreneur is negative, both for Ph.D.’s originating from academia and non-university alike in both countries. Further analysis indicates that in both countries there is selection from the bottom of the ability distribution among academics. The results suggest that policies aimed at screening entrepreneurial decisions by younger, tenure-track academics may be more effective than general incentives to increase academic entrepreneurship.