Peter Tufano’s research focuses on three major topics: consumer finance; risk management and corporate financial engineering; and mutual funds.
During the past decade, Tufano has worked to advance the academic field of consumer and household finance, an important but often overlooked field that blends finance with psychology, sociology, history and management. His work has directly influenced policy makers and businesses and led to two changes in US federal tax policy, new models for savings products and new approaches to financial education.
One of Tufano’s main goals in his research is to help low and middle-income consumers by successfully encouraging policy makers to create better, more relevant financial regulations. Specifically, in a July 2011 Harvard Business Review article, co-written with three colleagues, Tufano advised the head of the new US Consumer Financial Protection Bureau about financial policy.
“When consumer financial markets break, entire economies break. That is why this field is so critically important right now,” he says. “I picked this area of study because this part of the financial sector affects every single person. It is the point of contact between our large, complex financial system and each of us.”
Tufano conducts research at three different levels within consumer finance:
1. Understanding Household Finances: This research aims to better understand how consumers and households make financial decisions, such as saving, investing, spending and borrowing. A 2011 Brookings Papers on Economic Activity publication co-written by Tufano, titled “Financially Fragile Households,” specifically examines how many low- and middle-income households are unable to produce $2,000 when faced with a crisis.
2. Consumer Finance Businesses: This research focuses on financial businesses and products that cater to consumers. Tufano has completed in-depth studies examining payday loan companies, retail banks, overdraft facilities, consumer payment systems and retirement products. Tufano has looked at the value chain and competitive strategy of these businesses and financial products.
3. Political Economy: Tufano is keenly interested in understanding the rules and policies that guide the consumer finance sector. He is the co-author of the paper, “A Brief Postwar History of US Consumer Finance,” which looks at how consumer finance has changed over the last few decades, specifically examining the rise of do-it-yourself financial products and the increase in risk bearing by households.
To support other researchers in this nascent field of consumer finance, Tufano co-founded the National Bureau of Economic Research’s Household Finance working group.
Risk Management and Financial Engineering
Tufano is a seasoned expert in the area of risk management and financial engineering. His research has been published in top academic journals and a variety of books. He also co-authored a casebook on corporate financial engineering. His paper on risk management practices in the gold mining industry shared the Smith-Breeden prize for the best paper published in the Journal of Finance.
Tufano's work in mutual funds, especially his cross-country research on mutual fund fees and the apparent lack of benefits of broker-sold funds, has led to lively debate amongst business people and regulators.
For a full listing of Tufano’s research interests and publications, please see his curriculum vitae.