Trust,acceptance and knowledge of technological and environmental hazards in Chile

Studies over the past decade have found empirical links between trust in risk management institutions and the risk perceptions and acceptability of various individual hazards. Mostly addressing food technologies, no study to date has explored wider possible relationships among all four core variables (risk, benefit, trust and acceptability) covering a heterogeneous group of hazards. Our prime objective was to ascertain effects among social trust in regulatory entities, and the public's perceived risk, perceived benefit and the degree of acceptability towards both technological and environmental hazards. We also assess whether trust in regulatory authorities is the cause (causal model) or a consequence (associationist model) of a hazard's acceptability for a wide and heterogeneous range of hazards on all four core variables. Using a web‐based survey, 539 undergraduates in Chile rated the five variables across 30 hazards. Implications for technology and environmental risk management organizations are discussed. Independent of the magnitude of the perceived risk or benefit surrounding a given hazard, or how knowledgeable the public claim to be of it, the trust sustained in regulatory institutions will either generate or be the consequence of public attitudes towards the hazard.     

Experience and the unexpected: risk and mitigation issues for operating underground storage silos for coal-fired power plant

Observed autoignition events and extinguishing the resulting smouldering fires in an underground storage system of a coal-fired power plant have provided insight into the array of contributing variables, and some experience on quantifying the risk with alternative scenarios of event initiation, progress and potential mitigation. Although the first attempts to quantify the risk suggest high sensitivity to the sequence of action taken after fire alarm, and no similar storage sites really exist, some recommended preventive, corrective and other mitigating activities can be at least partly defined and improved by using the cumulative experience and parallel efforts in other closed or underground storage sites. However, there are also so-called black (or at least grey) swans: unexpected events for which the facility may be poorly prepared for. In the case of the underground storage silos, such an event was experienced when incoming cold coal during a harsh winter season froze the sewer system that normally protects the stored coal from seepage water. With blocked normal bypass, the seepage water found its way to the coal silos and created large clumps of icy coal that blocked the coal conveyors. Although freezing weather is not unusual at high-latitude power plants, the common methods to combat freezing of coal are mainly useful for open storage sites and above-ground transport. Options for mitigation are discussed, as well as the event chain leading to an event that had never previously occurred. The case is discussed from the point of view of options to prepare for rare or unforeseen events.     

Application of Social Vulnerability Index (SoVI) and delineation of natural risk zones in Greater Lisbon,Portugal

Social Vulnerability Index (SoVI) was applied to Greater Lisbon (Portugal). Based on the concepts used for the SoVI assessments in the US, 46 variables representing social vulnerability of the 149 civil parishes of Greater Lisbon were chosen. Thirty-eight variables were selected after application of correlation tests. They were standardized, and a Principal Component Analysis and a Varimax rotation were applied to them. Seven factors were extracted using the Kaiser criterion, which explain 79.5% of the variance, and the SoVI scores were then mapped using a standard deviation classification. Twelve of the 149 civil parishes of Greater Lisbon have a very high social vulnerability and 24 of them have a high social vulnerability. The map of SoVI was then integrated with susceptibility maps of earthquakes, floods, flash floods, landslides, tsunami, and coastal erosion, thus delineating risk zones. Twenty-two civil parishes of Greater Lisbon have a very high risk; among them, 17 belong to Lisbon Municipality, four belong to Loures Municipality, and one belongs to Vila Franca de Xira Municipality. Finally, exposed population was considered and combined with risk zones map in order to assess the number of people being potentially exposed to risk and their location.     

Econophysics review: II. Agent-based models

This article is the second part of a review of recent empirical and theoretical developments usually grouped under the heading Econophysics. In the first part, we reviewed the statistical properties of financial time series, the statistics exhibited in order books and discussed some studies of correlations of asset prices and returns. This second part deals with models in Econophysics from the point of view of agent-based modeling. Of the large number of multi-agent-based models, we have identified three representative areas. First, using previous work originally presented in the fields of behavioral finance and market microstructure theory, econophysicists have developed agent-based models of order-driven markets that we discuss extensively here. Second, kinetic theory models designed to explain certain empirical facts concerning wealth distribution are reviewed. Third, we briefly summarize game theory models by reviewing the now classic minority game and related problems.     

Creative Accounting and Investment Analyst Response

This paper investigates the impact of window dressing on stockbroker analyst evaluation of a company's annual accounting numbers. A new methodological approach is used involving a laboratory experiment in which a large sample of experienced investment analysts drawn from five of the top London houses processes real company accounts. The research was conducted in the first half of 1990 at the end of a long bull market. The participating analysts were not overly concerned about the quality of published accounting information and creative accounting was not then viewed as a serious problem. Contrary to our prior expectations we found little evidence of window dressing adjustments being made by the subjects in general. However, those subjects who did correct were significantly more experienced. Possible explanations for our results and potential implications for capital market behaviour and information processing are discussed.     

Valuación de opciones de tipo de cambio asumiendo distribuciones α-estables

This paper aims to present the valuation of options using the Black-Scholes method assuming α-stable distributions as an alternative option valuation in the Mexican market. The use of α-stable distributions for modelling financial series allows to overcome the classical valuation main weakness which assumes normality, by capturing the presence of heavy tails and asymmetry in financial time series. One of the main results is the price differential between the two models and the effect of alpha and beta parameters on prices; to show the difference valuation is made of a call option and a put option for the peso-dollar exchange rate. Likewise, basic sensitivity measurements of options (delta, gamma, and rho) were made and the effect of the stability parameter (α) was made on the implied volatility of options assuming the α-stable price as the market price.     

Seasonal mortality for fractional ages in short term life insurance

Abstract

Fernández-Durán, and Gregorio-Domínguez, Seasonal Mortality for Fractional Ages in Life Insurance. Scandinavian Actuarial Journal. A uniform distribution of deaths between integral ages is a widely used assumption for estimating future-lifetimes; however, this assumption does not necessarily reflect the true distribution of deaths throughout the year. We propose the use of a seasonal mortality assumption for estimating the distribution of future-lifetimes between integral ages: this assumption accounts for the number of deaths that occurs in given months of the year, including the excess mortality that is observed in winter months. The impact of this seasonal mortality assumption on short-term life insurance premium calculations is then examined by applying the proposed assumption to Mexican mortality data.     

Persistent misalignments of the European exchange rates: some evidence from non-linear cointegration

The asymmetric and persistent adjustment of the European real exchange rates is investigated using the framework of non-linear cointegration. The episodes of slow mean-reversion dynamics over the period from 1979 to 1999 are explained. A test of unit root against STAR cointegration is proposed and some complete estimations and stochastic simulations of ESTAR models are presented. The presence of effective non-linear adjustment during the moving of the currencies to their long-run fundamental equilibrium exchange rate value is discussed.     

Trend breaks in the research and development process

This work examines the behaviour of the input and output measures of the R&D process in the United States, Germany, France and the United Kingdom, in the second half of the 20th century. The researcher and idea stock series can be construed as stationary fluctuations around a trend function, with a main breakpoint at the end of the 1960s. All the countries exhibit slower growth after their last breaks that during the decades preceding its first breaks. In this connection, the United States and Germany appear to represent the end points in the range of incidence.