Diversification Issues in Real Estate Investment

Real estate asset management has been and will continue to be a topic of great interest. Specifically, does real estate warrant inclusion in an efficient portfolio? And if so, how much should be invested in real estate? This article reviews the extant literature in the area of real estate diversification and helps identify the reasons that there exists so much divergence in the answer to the question, “How much in real estate?” Moreover, diversification as it relates to real estate is discussed in reference to both mixed-asset portfolios and for diversification within the real estate asset class. Directions for future research are also discussed.     

Complexity in choice experiments: choice of the status quo alternative and implications for welfare measurement*

We examine the propensity of respondents to choose the status quo (SQ) or current situation alternative as a function of complexity in two separate state‐of‐the‐world choice experiments. Complexity in each choice set was characterized as the number of single and multiple changes in levels of attributes from the current situation and the order of the choice task in the sequence of multiple tasks provided to respondents. We show that increasing complexity leads to increased choice of the SQ and that a respondent’s age and level of education also influenced this choice. We outline the effects of the alternate approaches for incorporating the SQ into welfare measurement. These findings have implications for the design of stated preference experiments, examining passive use values and for empirical analysis leading to welfare measurement.     

The recognition and valuing of patient knowledge: a way forward

The health care that patients receive, particularly in acute care settings, is mainly based in biomedical knowledge. The scientific method of investigating health conditions has directly contributed to the development of this knowledge. This has made a significant contribution to increased survival rates, reduced recovery periods and extending the duration of life. The influence of consumerism on health‐care management has led to an expectation of increased patient involvement when making decisions about their treatment options. This assumes that the provision of information helps improve patients' understanding of the diagnosed health condition and assists them to make ‘good’ decisions. Accordingly, there is a greater focus on providing information to patients. The information provided to patients mostly involves explanation about the biomedical aspects of their health condition. However, patients also desire information about how the health condition will affect their everyday life. We call the understanding of the implications of this information ‘everyday knowledge’. Provision of this information can assist patients by helping them realize their expectations and providing reassurance to both patients and their significant others. Unfortunately, everyday knowledge that assists patients to understand and manage their daily life has not been as systematically researched or examined. While biomedical knowledge has been extensively developed and promoted through funding regimes, everyday knowledge has not benefited from the same support. The interactions in health‐care settings are influential in the generation and use of knowledge. Practises that encourage sensitivity by health professionals to each patient's situation need to be identified and implemented. An increased focus on the inclusion of everyday knowledge alongside biomedical knowledge is likely to enhance the relevance of the information that patients currently receive.     

The Bootstrap Efficient Frontier for Mixed-Asset Portfolios

How much in real estate? To answer this question, uncertainty needs to be introduced into the efficient frontier, so that a confidence interval can be estimated for the real estate weight in a mixed-asset portfolio. Instead of focusing on a single optimal portfolio, this study examines the entire efficient frontier using the traditional point estimate method and the bootstrap simulation. The bootstrap distributions of the estimated weight vectors indicate that their confidence intervals are large enough to render them effectively useless. Once uncertainty is introduced, the efficient frontier becomes fuzzy and the weight vectors become even fuzzier.     

Exploring income variations across traditional authorities in KwaZulu‐Natal,South Africa

To understand income inequality and poverty, one must go beyond the important and much‐studied differences rural and urban living and investigate inequalities within rural areas. Using new South African data aggregated by ‘traditional authorities’, this article examines variations in per capita income across poor, rural, mostly black areas of KwaZulu‐Natal (KZN) province. The inequalities are significant. In explaining them, the article examines the importance of such variables as education, proportion of females in the resident population, population density, soil quality and rainfall. A geographical information system is used to map both the raw data and the residuals from a regression analysis, and this combination of statistical and geographical analyses yields new insights. Finally, the article suggests how these techniques might be supplemented by qualitative and quantitative studies of ‘overachieving’ and ‘underachieving’ traditional authorities ‐ those whose incomes per capita are well above or below what regression equations would predict.     

The Financial Sector and Deregulation in Australia: Drivers of Reform or Reluctant Followers?

This paper argues that contrary to capture theory, a key feature of financial deregulation in Australia was the lack of support from financial sector interest groups. An examination of the Campbell Inquiry (1979-1981) reveals that deregulation was not initiated by either the regulated banks or unregulated non-bank financial institutions (NBFIs). In fact, both groups were resistant to change prior to the establishment of the Inquiry. During the Inquiry, neither group advocated wide-ranging deregulation, preferring the retention of many financial regulations.