Roads, Land Use, and Deforestation: A Spatial Model Applied to Belize

Rural roads promote economic development, but they also facilitatedeforestation. To explore this tradeoff, this article developsa spatially explicit model of land use and estimates probabilitiesof alternative land uses as a function of land characteristicsand distance to market using a multinomial logit specificationof this model. Controls are incorporated for the endogeneityof road placement. The model is applied to data for southern Belize, an area experiencingrapid expansion of both subsistence and commercial agriculture,using geographic information system (GIS) techniques to selectsample points at 1-kilometer intervals. Market access, landquality, and tenure status affect the probability of agriculturalland use synergistically, having differential effects on thelikelihood of commercial versus semisubsistence farming. Theresults suggest that road building in areas with agriculturallypoor soils and low population densities may be a "lose-lose"proposition, causing habitat fragmentation and providing loweconomic returns.     

Profits for nonprofits: find a corporate partner

Here's a familiar story. A nonprofit organization joins forces with a corporation in a caused-related marketing campaign. It seems like a win-win deal, but the nonprofit--and the media--find out several weeks into the campaign that the corporation's business practices are antithetical to the nonprofit's mission. The nonprofit's credibility is severely damaged. Is the moral of the story that nonprofits should steer clear of alliances with for-profit organizations? Not at all, Alan Andreasen says. Nonprofit managers can help their organizations avoid many of the risks and reap the rewards of cause-related marketing alliances by thinking of themselves not as charities but as partners in the marketing effort. More than ever, nonprofits need what many companies can offer: crucial new sources of revenue. But nonprofits offer corporate partners a great deal in return: the opportunity to enhance their image--and increase the bottom line--by supporting a worthy cause. Consider the fruitful partnership between American Express and Share Our Strength, a hunger-relief organization. Through the Charge Against Hunger program, now in its fourth year, American Express has helped contribute more than +16 million to SOS. In return, American Express has seen an increase in transactions with the card and in the number of merchants carrying the card. How can nonprofit managers build a successful partnership? They can assess their organization to see how it can add value to a corporate partner. They can identify those companies that stand to gain the most from a cause-related marketing alliance. And they can take an active role in shaping the partnership and monitoring its progress.     

Interest-only and principal-only mortgage strips as interest-rate contingent claims

Interest-only (IO) and principal-only (PO) mortgage strips are valued in a stochastic interest-rate environment. The prepayment rate of the underlying mortgages is affected by two considerations not present in the pure financially rational model: (1) The property owner's holding period is assumed to follow a Gamma distribution, resulting in the possibility of prepayment due to the sale of the property (i.e., prepayment that is too early based on market interest rates); and (2) borrowers are assumed to face heterogeneous transaction costs related to refinancing the existing mortgage, and delay refinancing when market conditions make it optimal to do so (refinancing too late). Properties of IO/PO strips are identified by the finite difference method.     

Strategy and the new economics of information

We are in the midst of a fundamental shift in the economics of information--a shift that will precipitate changes in the structure of entire industries and in the ways companies compete. This shift is made possible by the widespread adoption of Internet technologies, but it is less about technology than about the fact that a new behavior is reaching critical mass. Millions of people are communicating at home and at work in an explosion of connectivity that threatens to undermine the established value chains for businesses in many sectors of the economy. What will happen, for instance, to dominant retailers such as Toys "R" Us and Home Depot when a search through the Internet gives consumers more choice than any store? What will be the point of cultivating a long-standing supplier relationship with General Electric when it posts its purchasing requirements on an Internet bulletin board and entertains bids from anybody inclined to respond? The authors present a conceptual framework for approaching such questions--for understanding the relationship of information to the physical components of the value chain and how the Internet's ability to separate the two will lead to the reconfiguration of the value proposition in many industries. In any business where the physical value chain has been compromised for the sake of delivering information, there will be an opportunity to create a separate information business and a need to streamline the physical one. Executives must mentally deconstruct their businesses to see the real value of what they have. If they don't, the authors warn, someone else will.     

How Fidelity invests in service professionals

If you're in the business of service delivery, investment in the training and development of your staff is one of the keys to your company's success. But what's the best way to design and implement your investment? In 1994, Fidelity Institutional Retirement Services Company (FIRSCo) needed to ensure that its rapidly expanding staff maintained the company's high levels of customer satisfaction. The solution, according to Ellyn McColgan, formerly an executive vice president of FIRSCo and now the president of Fidelity Investments Tax-Exempt Services Company, was to reach out to its service associates with a powerful new model for training and development called Service Delivery University. SDU is a virtual university with a content-based core curriculum and five colleges that focus on business concepts and skills. It is driven by three principles. First, all training must be directly aligned with the company's strategic and financial objectives and focused on customer needs. Second, service delivery is a profession and should be taught as such. And finally, professional development should be the primary responsibility of line managers rather than the human resources department. McColgan explains how FIRSCo overcame resistance to this sweeping change in employee education. (Time was one obstacle: each associate receives 80 hours of training per year.) In addition, the author discusses the fine art of measuring the success of a program like SDU. She finds that the company's investment has paid dividends to the staff, to the organization as a whole, and to FIRSCo's customers.