Focusing on volatility information instead of portfolio weights as an aid to investor decisions

When faced with the challenge of forming a portfolio containing a risky and a risk-free asset, investors tend to apply the same portfolio weights independently of the volatility of the risky asset. This “percentage heuristic” can lead to different levels of portfolio risk when the same investor is presented with a more or a less risky asset. Using four experiments, we show that asking investors to choose the return distribution for their portfolio while keeping the exact portfolio weights unknown leads to greater similarity in levels of portfolio volatility (across different levels of risk of the risky asset) than asking investors to choose this distribution while additionally facing the portfolio weights. Higher consistency in risk taking is obtained both between and within test subjects.     

Soil,Striga, or subsidies? Determinants of maize productivity in northern Ghana

High yield gaps persist in sub‐Saharan Africa and increased fertilizer use is considered among the crucial measures to increase productivity. Despite high government investments, particularly in fertilizer subsidy programs (FSPs), overwhelming evidence has revealed their inefficiency. This study employs a multidisciplinary approach to identify the determinants of low maize yields in the Guinea savanna zone of Ghana. We conducted a socioeconomic household survey and analyzed plot‐specific soil samples. Econometric models were estimated based on both socioeconomic and soil variables. The results show that a common parasitic weed, Striga, and labile soil structure have significant effects on yield in the study region. Plot sizes were recorded both from farmers’ direct elicitation and using GPS devices. Considerable discrepancies were detected between self‐reported and GPS‐measured plot sizes. Fertilizer samples from randomly selected agro‐input shops were analyzed to control for adulterated or fake inputs. The measured nutrient contents of the samples reflected the composition indicated on the package labels. Findings underline the need of site‐specific data collection, supported by laboratory‐based soil test results, to efficiently address low productivity. Although there are no signs of fertilizer adulteration, governance challenges persist in targeting, timing, and elite capture in the distribution system of the subsidy program. The study shows that the FSP has not been an effective standalone measure. Rather, the government needs to invest in capacity building and extension services to address the site‐specific problems through comprehensive soil fertility management techniques and weed control. Promoting soil carbon management, minimum mechanical stress, crop rotation, and permanent soil cover should be further investigated as options for the region.     

Using discrete choice experiments to estimate willingness-to-pay intervals

Willingness-to-pay has always been conceptualized as a point estimate, frequently as the price that makes the consumer indifferent between buying and not buying the product. In contrast, this article estimates willingness-to-pay (WTP) as an interval based on discrete choice experiments and a scale-adjusted latent-class model. The middle value of this interval corresponds to the traditional WTP point estimate and depends on the deterministic utility; the range of the interval depends on price sensitivity and the utility??s error variance (scale). With this conceptualization of WTP, we propose a new measure, the attractiveness index, which serves to identify attractive consumers by combining knowledge about their price sensitivities and error variances. An empirical study demonstrates that the attractiveness index identifies the most attractive consumers, who do not necessarily have the largest WTP point estimates. Furthermore, consumers with comparable preferences can differ in their purchase probability by an average of 16%, as reflected in differences in their WTP intervals, which yields implications for more customized target marketing.     

Transformation of China's sovereign wealth fund since the 2008‐2009 global crisis

China Investment Corporation (CIC) transformed its initial investment strategy of focusing mainly on the US financial sector during 2007‐2008 into a new strategy of diversified investments across geography and sectors since 2009. Massive financial losses and domestic political backlash during the global financial crisis of 2008 gave impetus to CIC's rethinking of strategy. In the midst of the crisis, CIC engineered a capacity‐building and reorganization exercise to reposition itself for a new strategy that has since allowed for more diversification of investments. A more receptive global investment climate for sovereign wealth funds has also aided CIC's efforts to present itself as a responsible global investor and facilitated its investments. Postcrisis, CIC's new strategy of diversification is characterized by continued investments in the financial sector, but with new investments increasingly directed to real sectors of energy, natural resources, and real estate in both developed and emerging economies. Notwithstanding a global recovery that is fraught with uncertainties, CIC's judicious timing in making diversified investments, and its attention to reducing risks and enhancing returns, have been rewarded by an impressive turnaround in performance since 2009. Going forward, the success and sustainability of the new strategy will be contingent on how well CIC can navigate domestic bureaucratic rivalry and the shifting climate of the international investment environment in the medium to long term. Ultimately, CIC's shareholder, the government of the People's Republic of China (PRC), holds the key to its future direction and goals. © 2012 Wiley Periodicals, Inc.     

The Case for Secondary Buyouts as Exit Channel

Do private equity firms have a clear pecking order when deciding on exit channels for their portfolio companies? Are secondary buyouts—that is, sales to other PE firms—always an exit of last resort? And are there company‐ or market‐related factors that have a clear and predictable influence on decisions to pursue secondary buyouts? Using a proprietary dataset of over 1,100 leveraged buyouts that exited in North America or Europe between 1995 and 2008, the authors attempt to answer these questions by analyzing the returns associated with public, private, and secondary (or “financial”) exits. Based on their analysis of the realized returns, there is no clear pecking order of exit types. Secondary buyouts deliver rates of return that are the equal of those achieved through public exits. In addition, the authors assess the relationship between the likelihood of choosing a financial exit and certain company‐related as well as market‐related factors. Portfolio companies with greater debt capacity are more likely to be sold in secondary buyouts. Furthermore, increases in both the liquidity of debt markets and the amount of undrawn capital commitments to the private equity industry increase the probability of exit through secondary buyouts.     

房屋共享经济下保险保障的新选择

近几年来,共享经济热潮兴起带来了我们生活和消费方式的改变,共享单车、共享房屋等已经被越来越多的人接受和使用。在这场变革中,我们看到了共享经济带来的便利,但作为保险人的视角,同业也关注这一新模式下的潜在风险。     

Improving corporate biodiversity management through employee involvement

This paper presents an empirical examination of the role of employee involvement in the internalization of corporate biodiversity management. A qualitative study in natural resource companies was conducted, based on semi‐directive interviews with managers, consultants, and experts in this area. The findings show that employee involvement is essential to improve biodiversity practices in natural resource companies, which largely rely on organizational citizenship behaviors for the environment. The role of tacit knowledge, voluntary initiatives, and prevention of harmful behaviors in the workplace are highlighted. The main obstacles to the internalization of biodiversity issues include their complexity, the lack of corporate commitment, the externalization of initiatives, and the lack of training for employees. The contributions to the literature on corporate environmental management, internalization of new practices, and organizational citizenship behaviors for the environment are explained. Managerial implications and avenues for future research are also provided.     

Surveying Lifelong Learning in the German National Educational Panel Study

This article outlines the German National Educational Panel Study, which collects comprehensive data on lifelong learning in a multi‐cohort sequence design, covering early childhood, childhood, adolescence, young adulthood and adulthood. It outlines data collection for all the cohorts and educational phases across the life course whilst focusing on the educational stage ‘Adult Education and Lifelong Learning’. Data can be accessed for academic purposes as scientific use files under data contract.