Dr Yally Avrahampour MAR 5.24

With guest lecturer, Professor Saul Estrin

This course is compulsory on the MSc in Social Innovation and Entrepreneurship. This course is not available as an outside option.

The course will start with an introduction to economics for social entrepreneurs, with attention focused on markets and market failures, notably externalities and public goods. Questions of social welfare and income inequality will also be discussed. The course introduces social enterprises as hybrid organizations with multiple objectives.  We then move to a series of economics topics of particular relevance in analysing the problems of social entrepreneurs, namely the representation and analysis of firm costs; the measurement of costs; analysis of consumer demand; and measurement of performance. 

The course continues by introducing techniques used to measure and monetize social impact including Social Return on Investment (SROI).  We will critically assess the SROI performance measure by discussing the cost of capital of social enterprises and the determination of the counterfactual for assessing impact.  We then consider debates relating to randomized controlled trials and lean data and accounting for environmental impact. The course ends by considering strategy for social enterprises.



Course Objectives

Students should learn:

• Key theoretical approaches in economics and quantitative measurement, which includes related quantitative methods, to understanding social innovation and entrepreneurship;
• Empirical findings - typically from recent economics, accounting and management research;
• The most important economic, accounting and quantitative/statistical insights, concepts, theoretical approaches required to set-up, manage, and scale up social innovation and enterprises;
• To relate theoretical and methodological insights, concepts and frameworks for social innovation and enterprise to real world phenomena and social problems through the use of case studies.

20 hours of lectures and 15 hours of seminars in the MT.

Theoretical material and analytical frameworks from accounting and economics respectively of relevance to social entrepreneurs will be taught in the lecture slots, while the seminars will cover a relevant case study each week. Although the course covers two distinct disciplines, there will be an effort, where possible, to treat the issues in an integrated manner.

In addition students are expected to attend two introductory sessions, each lasting two hours.

• 1 Formative essay in the MT.
• Formative group feedback on other groups’ presentations, twice in MT.

Each week we draw on a variety of required and further readings.  We also make suggestions regarding textbooks that provide background for the concepts outlined in the course.

For Managerial Economics, students without an economics background might start with the textbook by D.Begg, G. Vernasca, Fischer, Dornbusch (11th Edition) Economics, McGraw Hill.

A more advanced treatment is contained in S. Estrin, D. Laidler and M. Dietrich, Microeconomics (6th Edition), Pearson.

Introductory Reading

There are also a number of books that inform the field, that students might wish to read in advance or during the course as background material.

A. Sen, 2009, The Idea of Justice, Harvard University Press

A.V. Banerjee and E. Duflo, 2011, Poor Economics, BBS Publications

R.L. Martin and S.R. Osberg, 2015, Going Beyond Better, Harvard Business Review Press

For Quantitative Measurement the textbooks representing these background readings are:

Weetman, P. (2019) Financial Accounting: An Introduction.  (Available as an e-book through the LSE library).

Kaplan, R. & Atkinson, A. (2014) Advanced Management Accounting 3rd edition, Pearson

The following readings provide an introduction to accounting for social entrepreneurship:

Barker, R., Eccles, R. & Serafeim, G. (2020) “The Future of ESG is … Accounting?” Harvard Business Review, December

Cohen, R. (2020) Impact: Reshaping Capitalism to Drive Real Change, Ebury Press

New Economics Foundation (NEF). (2007). Measuring Real Value: A DIY guide to social return on investment, available at https://neweconomics.org/uploads/files/cf0968d3256d6bffcc_cim6bsty5.pdf

Essay (90%, 3000 words) in the LT.
Class participation (10%) in the MT.

Assessed essays (90%, 3000 words) in the LT.

Class participation (10%) based around student group presentations of cases in the MT.