Valuing GM technologies using real options: the case of drought tolerant wheat in Australia

ABSTRACT

In this article we seek to estimate the value of a partially-developed crop technology from the perspective of the firm developing the technology. Firms need this value estimation to decide whether their technology will earn a sufficient return in the market to justify investing in it. However, determining the (ex-ante) value of the technology before it is commercialised is challenging as the technology is not yet in the market and hence the demand function has not yet been defined. An alternative valuation method is required. We use risk premiums, Monte Carlo simulation and real options analysis and we demonstrate this combination of valuation tools on wheat that is currently being developed in Australia to be drought tolerant. The results indicate that this drought tolerant wheat variety is likely to be adopted by farmers in most regions and has a pre-commercialisation value that justifies continued investment in its development. We also identified South Australia as a region in which the new variety would not be sufficiently valuable to farmers to see them adopt it and we consider possible explanations for this outcome.     

重新认识劳动价值理论

江泽民同志在“七一”讲话中指出,要结合新的实际,深化对社会主义社会劳动和价值理论的研究和认识。所谓深化对劳动价值论的研究和认识,我理解就是对马克思原来在《资本论》中提出的劳动价值论,在社会主义社会新的历史条件下,应该深化研究和认识。劳动价值理论是马克思政治经济学中一个非常重要的理论问题,在理论上是一个伟大创举,具有划时代意义。(一)劳动价值论是马克思政治经济学的理论基石,马克思的政治经济学就是在此基础上展开的。(二)马克思的劳动价值论发展了古典经济学派的劳动价值学说,提出了抽象劳动和具体劳动,区别了劳动和劳动力,解决了什么劳动创造价值和古典经济学的两难选     

Foreign aid preferences and perceptions in donor countries

We present original survey data on preferences for foreign aid in 24 donor countries from 2005 to 2008. On publicly-funded foreign aid (Official Development Assistance, or ODA), we find patterns that are consistent with a standard model of democratic policy formation, in which donations are treated as a pure public good. Controlling for perceptions of current ODA, we show that individual preferences for ODA are (i) negatively correlated with relative income within a country-year; and (ii) positively correlated with inequality at the country level. We extend the analysis to explain variation in the gap between desired aid and actual ODA, arguing that lobbying by high-income special interest groups can divert resources away from the median voter’s preferred level of aid. Consistent with this, we observe that ODA is significantly lower where policymakers are more susceptible to lobbying. Finally, we present a novel test of competing “crowding out” hypotheses. Self-reported private aid donations are negatively correlated with actual ODA, and positively correlated with perceived ODA. This finding is consistent with an emerging argument in the literature, whereby ODA crowds out private aid by enabling charities to forego fundraising activities and crowds in private aid through a signaling channel.     

Reliability and relevance of fair values: private equity investments and investee fundamentals

Review of Accounting Studies - We directly test the reliability and relevance of investee fair values reported by listed private equity funds (LPEs). In our setting, disaggregated fair value...     

Accounting for the business cycle: Nominal rigidities, factor heterogeneity, and Austrian capital theory

An Austrian interpretation of the New Keynesian small menu cost model of the business cycle is proposed. Austrian and New Keynesian business cycle theories share the feature that the cycle is generated by rigidities which prevent the economy from adapting instantaneously to changing conditions. Austrian business cycle theory is capital-based, focusing on credit expansion which artificially lowers interest rates and causes an investment boom and unsustainable business expansion. In contrast, the New Keynesian small menu cost model of the business cycle is based on nominal rigidities which prevent markets from clearing. Small menu costs introduce dichotomous behavior, where firms find it locally optimal to avoid instantaneous output price adjustments in the face of the cost, but this local optimum results in economy-wide output and employment fluctuations which are much greater in relative magnitude. The small menu cost model of the business cycle is extended and reinterpreted in light of Austrian business cycle theory with heterogeneous, multiply-specific capital, thus providing a rigorous formalization of the Austrian business cycle. The Austrian interpretation of this New Keynesian model fortuitously addresses several of its shortcomings. JEL classification B53, E12, E23, E32     

Environmental taxes in a differentiated mixed duopoly

Beladi and Chao (2006) and Bárcena-Ruiz and Garzón (2006) considered the role of environmental policy on the decision whether to privatize a public firm in different market structures. This paper re-examines whether privatization improves (or deteriorates) the environment in a mixed duopolistic framework with differentiated product and pollution abatement. It is shown that, due to privatization, less attention is paid to pollution abatement by all the firms coupled with less environment taxes levied by the government in a differentiated duopoly, and the environment is more (less) damaged when the product is less (more) substitutable. When the product is highly substitutable, industry profits increase because this softens the intensity of the product market, but social welfare deteriorates accompanied with the path of privatization because the loss of consumer surplus and tax revenue exceeds the increases in profits, even if the environment is less damaged.     

An assessment and ranking of barriers to doing environmental business with China

The transfer of environmental goods and services to China will increasingly be of importance to developed nations as the demand for environmental management services increases in China. A review of the literature on technology transfer to China revealed a range of well recognized and commonly known constraints to transferring technologies to China. There were gaps in the literature in relation to the concerns that environmental professionals have regarding technology transfer to China, as there is limited information on the transfer in environmental goods and services to China. A survey of the non‐trade barriers and their practical impact on the transfer of environmental technologies and goods and services to China, focusing on Australian suppliers, was undertaken to address these gaps. The survey, which was developed from barriers to technology transfer already described in the extensive research addressing the wider issues of technology transfer to China, targeted environmental professionals but also included other professionals with interests in transferring environmental goods and services to China. From the survey, the highest priority barriers to transferring environmental goods and service to China were identified, and those that are most likely to limit Australian vendors of environmental goods and services in their technology transfers to China were protection of intellectual property (IP), limitations of the rule of law, fragmentation and bureaucracy of the Chinese government and establishing appropriate level of ownership (of environmental goods and services providers in China). Examples of Australian experience were also examined, which confirmed these barriers to providing the needed technology and innovation to manage China's increasing environmental impacts. The research also shows that the barriers identified do not appear to be unique to transfer of environmental goods and services but rather generic to the transfer and adoption of Australian technology into China. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.