Uncertain outlays in time-to-build problems

In this paper we analyze investment projects in which there is uncertainty in the total investment cost in addition to uncertainty in the completed project value. We deal with an uncertain time-to-build. Uncertainties in investment cost are quite common in long-term, large-scale, path-breaking undertakings such as some R&D projects. We find that the inclusion of uncertainty in investment cost tends to mitigate the impacts of the uncertainty of completed project value. The implications of the results are significant. First, when uncertainty of investment cost is ignored, the value of the project is underestimated and a tendency toward underinvestment will result; and second, the existence of uncertainty in investment cost will cause long-term projects to require larger declines in value before discontinuation of investment should occur.     

Optimal Valuation of Noisy Real Assets

We study the optimal valuation of real assets when true asset values are unobservable. In our model, the observed value cointegrates with the unobserved true asset value to cause serial correlation in the time series of observed values. Autocorrelation as well as total variance in the observed value are used to calculate an efficient unbiased estimate of the true asset value (the time–filtered value). The optimal value estimate is shown to have three time–weighted terms: a deterministic forward value, a comparison of observed values with previously determined time–filtered values, and a convexity correction for incomplete information. The residual variance measures the precision of the value estimate, which can increase or decrease monotonically over time as well as display a linear or nonlinear time trend. We also show how to revise time–filtered estimates based on the arrival of new information. Our results relate to work on illiquid asset markets, including appraisal smoothing, tests of market efficiency, and the valuation of options on real assets.     

Is Economic Integration the Solution to African Development?

In the African continent, several regional initiatives have been launched or executed. These gave rise to several groupings including COMESA consisting of 19 countries, ECOWAS (15 countries), ECCAS (10 countries), and SADC with 15 countries. These groupings are not exclusive in that several countries belong to more than one regional group. The road to full integration clearly begins with a regional arrangement. The many groupings in Africa had the long term goal of creating an all inclusive African Economic Union. The objective is to promote the African continent’s economic growth, political stability, and good governance. The paper examines the effectiveness of some of these regional grouping in the context of an all-inclusive African club with the aid of the club model. Using data for the period 1986–2005, costs and benefits of membership are evaluated using the gravity Model. The Helpman’s size dispersion index is used to identify a potential anchor for a regional grouping.

Defecography: Results in 55 patients and impact on clinical management

We reviewed the medical records and defecograms in 55 consecutive patients to determine the impact of results of defecography on clinical management. Main indication for defecography was constipation, present in 40 (73%) of 55 patients. In the remaining 15 patients, indications included obstructed defecation (5), incontinence (5), and miscellaneous symptoms (5). Defecography evaluated pelvic floor motion by assessing changes in the anorectal angle (ARA) and anorectal junction (ARJ) during various maneuvers, extent of evacuation, and structural abnormalities. Patients were grouped based on results of defecography as being normal (26) or abnormal (29). Comparison of measurements of the ARA and ARJ with various maneuvers showed no significant differences between the two groups. Clinical impact was determined by analyzing therapy done following defecography and subsequent patient response. In the normal group, 15 patients were managed medically, seven surgically, and four lost to follow-up. Clinical improvement occurred in 13 (59%) of 22 patients, with similar results between medical (60%) and surgical (57%) therapy. In the abnormal group, 16 had medical management, seven surgical therapy, and six lost to follow-up. Clinical improvement occurred in 13 (57%) of 23 patients but surgical therapy showed more improvement. In conclusion, most standard measurements of the ARA and ARJ were of no value in determining abnormality. Results of defecography did not alter selection of medical or surgical therapy, and had little impact on patient response to therapy.     

The public economics of self control

This paper analyzes self-control problems in intertemporal consumption of a sin good where current consumption imposes a negative externality on one’s future selves due to the existence of present-biased preferences. We introduce the negative externality dubbed ‘internality’, which is augmented by the cumulative distribution function of the sum of previous consumption. We show that the shot-run self with self-control problem over consumes the sin good compared to that of the long-run self without present-biased preferences. Further, we investigate the effectiveness of self-bargaining with the presence of an external control devise as possible punishment. The short-run self faces three possible options: do nothing, accept the long-run self’s offer, or reject the offer. In the latter case an external control devices is implemented. It is shown that successful self-bargaining depends on the efficiency of the control device.

Influence of circadian rhythms on television viewers’ behaviour: is there a need for new programming?

As a common activity, television (TV) watching plays an important role in leisure behaviour. The influence of circadian rhythms on nearly all aspects of leisure behaviour and social life has been well examined in many fields. Less is known about circadian influences on TV use/social behaviour, and inconsistent findings have been reported. We analysed epidemiologic data from public TV stations to interpret them in light of circadian/seasonal rhythms and their interaction with leisure behaviour with the goal of improving quality of life by using TV as a pure leisure activity. We found that TV programme schedules failed to synchronise with circadian rhythms. Problems with synchronisation were observed for all viewers and were significantly related to factors such as working behaviour and social activities. Future studies should focus on the circadian influence on TV watching as a leisure behaviour. We propose a newly defined schedule based on circadian influences.