How Rich are the Parents of Your Money Manager, and What Does it Tell You About his Alpha?

In the last few decades, numerous studies in financial literature have been devoted to the question of “alpha”—that is, the ability of money managers to beat market returns. The main finding is that most asset managers fail to beat the market, and high active management fees are the main culprit. Yet, many investors still choose to give their money to active money managers in the hope that they will beat the market. Researchers at the University of Michigan and the University of New South Wales used a novel dataset to come up with another possible criterion for managers who have […]

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Certificate of Need Laws Show Entry Barriers Can Raise Spending

In most states, health care providers who seek to open a new hospital must obtain a “certificate of need” (CON) from a state board certifying that there is an “economic necessity” for their services. A new working paper published by the Mercatus Center finds that states with CON laws spend 3 percent more on health care than other states.  

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Why is Medical Marijuana Still Not Accepted in All 50 States? Ask George Stigler

A new working paper by University of Georgia researchers shows that medical marijuana leads to sharp drops in the number of prescriptions for branded drugs.The paper estimates savings of up to $1.5 billion per year in Medicaid spending if medical marijuana was legalized in all 50 states. The ideas of the late University of Chicago economist George Stigler might offer a potential explanation of why this has not happened yet.  

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