Modelling the volatility of commodities prices using a stochastic volatility model with random level shifts

We use the approach of Qu and Perron (Econom J 16(3):309–339, 2013) for the modeling and inference of volatility of a set of commodity prices in the presence of random level shifts of unknown timing, magnitude and frequency. Our approach contributes to the study of commodities in several aspects. First, we test for the presence of a genuine long-memory process in the volatility of commodities. Second, we determine that the random level shifts are certainly the main source of variation in the commodity price volatility. Finally, we estimate the volatility and its components as latent variables, thereby making it possible to evaluate their level of correlation with macroeconomic variables in small open economies such as Latin-American countries where the dependence on commodity price volatility is high. We use six commodity series: agriculture, livestock, gold, oil, industrial metals and a general commodity index. All series cover the period from January 1983 until December 2013 in daily frequency. The results show that although the occurrence of a level shift is rare, (about once every 1.5 or 1.8 years), this component clearly contributes most to the variation in the volatility. Furthermore, isolating the level shift component from the overall volatility indicates a strong relationship of this component with a set of business cycle indicators of several Latin American countries.     

Is there a forest transition outside forests? Trajectories of farm trees and effects on ecosystem services in an agricultural landscape in Eastern Germany

Most industrial countries have experienced a transformation of land use: from decreasing to expanding forest areas, the so-called forest transition. Outside closed forests, European rural landscapes exhibit a diversity of tree-based agricultural systems, but the question of whether this forest transition has also affected ‘trees outside forests’ has rarely been studied. The aim of this study is to analyze the spatial-temporal dynamics of farm trees and woodlands in an agricultural landscape in Eastern Germany from 1964 to 2008, based on aerial photographs and digital orthophotos. Taking a landscape ecological perspective, we quantify farm tree dynamics, disentangle processes of gain and loss in the socialist and post-socialist periods of Eastern Germany, and assess differences in ecosystem services provided by farm trees. A substantial increase of overall tree cover by 24.8% was observed for the selected time period, but trajectories have been disparate across different farm tree classes. The increase in tree cover was stronger in steep valleys than on hills and plateaus, indicating a significant interdependence between topography and trajectories of change. Patch numbers of farm trees did not increase, which suggests that the expansion of tree cover is mostly due to a spatial expansion of previously existing tree patches. Overall net gains in tree cover were rather similar during the socialist and post-socialist eras. The general increase in tree cover was accompanied by increase in agriculture-related ecosystem service provision, but the increase in pollination and pest control services was much lower than that in water purification services. These findings present the first empirical evidence from an industrialized country that there is also an ongoing ‘forest transition’ outside closed forests. Potential, partially counteracting drivers of change during the socialist and post-socialist periods have mainly been related to farm policies and the environmental consciousness of land users and society as a whole.     

The division of labour and market structure

Most firms produce most of the time under conditions of substantial economies of scale. The division of labour, according to Adam Smith the mainspring of wealth, is intrinsically an economies of scale phenomenon. Market structure in most industries in characterized by a small number of suppliers and a larger number of customers. I explain this law of small numbers as the equilibrium of two forces: the deconcentration effect of imitation and the market spliting effect of further refinements in the division of labour by innovation. A deconcentrated market creates larger incentives for market splitting (product differentiation) by innovation than a concentrated market. But market splitting raises concentration in the market and it raises the number of different markets in the economy. Before the economies of scale of old products are fully exploited, new products are being offered which again are produced under conditions of economies of scale.     

The impact of traffic sign deficit on road traffic accidents in Nigeria

This study assesses the impact of traffic sign deficit on road traffic accidents in Nigeria. The participants were 720 commercial vehicle drivers. While simple random sampling was used to select 6 out of 137 federal highways, stratified random sampling was used to select six categories of commercial vehicle drivers. The study used qual-dominant mixed methods approach comprising key informant interviews; group interviews; field observation; policy appraisal and secondary literature on traffic signs. Result shows that the failure of government to provide and maintain traffic signs in order to guide road users through the numerous accident black spots on the highways is the major cause of road accidents in Nigeria. The study argues that provision and maintenance of traffic signs present opportunity to promoting safety on the highways and achieving the sustainable development goals.     

The evaluation of forest crop damages due to climate change. An application of Dempster–Shafer method

In order to assess damage risk caused by climate change in forest areas, Dempster–Shafer theory of evidence and fuzzy measures were applied to develop a framework for the estimation of economic forest damage. According to the definition of risk supported by the Intergovernmental Panel on Climate Change, a function of hazard and resilience lines of evidence was defined. The results of the hazard and resilience assessment were used to develop an economic framework based on Faustmann studies. The evaluation model, implemented through a spatial analysis procedure, was carried out linking Faustmann formula with hazard and resilience raster maps. The model permitted to estimate in monetary terms two possible costs to be supported: the first one is expressed as the expected damage to the forest crop on the basis of the current obtainable woody assortments and the second one referred to the potential expenses to pay in order to mitigate the risk. Finally, the framework was tested on an area of central Italy (Tuscany region).     

Welfare Measurement and Measurement Error

The approximate effects of measurement error on a variety of measures of inequality and poverty are derived. They are shown to depend on the measurement error variance and functionals of the error–contaminated income distribution, but not on the form of the measurement error distribution, and to be accurate within a rich class of error–free income distributions and measurement error distributions. The functionals of the error–contaminated income distribution that approximate the measurement error induced distortions can be estimated. So it is possible to investigate the sensitivity of welfare measures to alternative amounts of measurement error and, when an estimate of the measurement error variance is available, to calculate corrected welfare measures. The methods are illustrated in an application using Indonesian household expenditure data.     

Approaches towards a generic methodology for storage of hazardous energy carriers and waste products

Energy carriers – either conventional or ‘new’ ones – have to be provided in large amounts to meet the requirements of permanent availability and reliable supply of electricity. Depending on their state of aggregation, energy carriers are either stored in large masses (if solid or liquid) or at elevated pressures (if gaseous). Both impose the hazard of large-scale fire, in the latter case additionally the danger of explosion or unintended release. Very similar hazards occur for wastes. Solid wastes are present in large masses and only a small part is recycled. Most of the solid wastes are used in energy conversion. The main gaseous waste is CO₂. During capturing also the hazard of unintended release exists. In this article, existing approaches for safe storage and fire prevention are discussed and a generic methodology is outlined. This methodology consists of the following steps:

? gaining knowledge about the behaviour of the material stored (reactivity, thermal stability, etc.),

? assessing the environmental conditions for the storage site (neighbourhood, safety distances, etc.),

? assessment of prospective consequences of an incident and

? development of individual loss prevention conceptions.

All steps require both experimental testing and theoretical considerations about accident scenarios as integral parts of the methodology.     

Missionaries,Mercenaries Or Car Salesmen? MBA Teaching In Malaysia*

Increasing academic attention is being given to the role of management gurus, consultants, managers and academic researchers in the international diffusion of Western management ideas. This is part of wider debates on knowledge, power and globalization. Relatively little attention has been paid to the mechanisms through which diffusion takes place and, in particular, the role of academics as lecturers and business schools as disseminators of management knowledge at home and abroad. This paper draws on the authors' personal experiences and perceptions of teaching on an Executive MBA programme in Malaysia and those of their students.
Management education is growing rapidly in many regions of the world and has become highly commodified and commercialized, with Western universities competing in emerging markets for potentially lucrative local opportunities and foreign students or 'consumers'. Accordingly, the process of diffusion of Western management ideas is examined through a consumption perspective which treats the foreign MBA as a standardized commodity (much like the foreign car) with particular use, symbolic and exchange values. However, the limits of the consumption perspective in terms of both consumer sovereignty and subordination are also established in revealing deeper and more dynamic relations of power. Moreover, it is argued that while there are parallels with domestic consumption of MBAs, the teaching of MBAs in Malaysia generates added ambivalence among learners founded on global–local and development–imperialism dynamics and tensions.     

Metropolitan government and governance in western countries: a critical review

The failure of top-down imposed institutional reform for metropolitan areas in the western world has called for new conceptions of institution-building. A bottom up, governance type approach is now considered in various countries which focuses on flexible, voluntary and partnership elements of collective action through which institution is no longer considered as a ready-made object but as a process. A large part of the literature insists upon the effectiveness of this approach through the search for consensus and highlights its internal elements as conditions of success. However, this conception forgets the political and ideological dimensions of institution-building and, consequently, the likely conflicts and obstacles unresolved by governance. This article discusses the relationships between metropolitan government and governance taking a few western urban areas as examples and questions the apparent success of the ongoing metropolitan experiences.     

Efficient Contests

In their seminal contribution, Lazear and Rosen (1981) show that wages based upon rank induce the same efficient effort as incentive‐based reward schemes. They also show that this equivalence result is not robust toward heterogeneity in worker ability, as long as ability is private information because it is not possible to structure contests to simultaneously satisfy self‐selection constraints and first‐best incentives. This paper demonstrates that efficiency can be achieved by a simple modification of the prize scheme in a mixed (heterogenous) contest where contestants learn their type after entry. If contestants know their type before entering the contest, rent extraction becomes an issue. Implications for optimal contest design are also explored. Finally, the relationship between effort maximizing contests and profit maximizing contests are discussed.