'Nonprofits' need surplus too

By definition profit refers to the difference between revenue and expenses. In for-profit organizations profit or surplus gives a return to the owners of the company and serves as a source of financing for capital acquisitions and working capital. Nonprofit organizations, which are not allowed a surplus, don't suffer on the first count because they have no owners. But they do suffer on the second count because, if expected to grow, they need to finance asset replacement and growth. In these days when funds for long-term debt are becoming scarcer, this author asserts, the need for regulators to allow 'nonprofits' to keep a surplus is increasing. In this article, he argues for a surplus and then discusses how managers and regulators can determine how much a nonprofit organization should be allowed. He presents a combination of a modified version of the return-on-asset pricing model used in for-profit organizations and a model for assessing working capital needs associated with growth.     

Persistent myths about emergency seed aid

Seed interventions are the major agricultural response during emergency and recovery phases of humanitarian relief. They are implemented by diverse agencies, and widely promoted: for instance the FAO alone managed 400 such projects between 2003 and 2005. However, seed aid suffers from a lack of critical attention, perpetuating widespread myths among practitioners, policymakers, and the larger humanitarian community. This paper challenges five predominant myths about seed aid: (1) seed aid is needed whenever food aid is; (2) seed aid can do no harm; (3) disasters wipe out seed systems; (4) effective implementation is a straightforward logistical exercise, and; (5) improved seed is the best form of aid. These myths are juxtaposed with recent empirical work across a range of countries, particularly in Eastern and Southern Africa. The perpetuation of such myths highlights a serious absence of scrutiny of emergency seed aid, and helps explain why such aid is repeated year after year in many sites, with little apparent positive effect. The paper argues that the invisibility of seed aid is a major cause for the lack of oversight and concludes that donors and farmer beneficiaries must become centrally involved in seed aid governance.     

Implementing STD on a Small Island: Development and Use of Sustainable Tourism Development Indicators in Samoa

Small island states present a significant challenge in terms of sustainable tourism development. On a small island there are limited resources, economic and social activities tend to be concentrated on the coastal zone, and the interconnectivity between economic, environmental, social, cultural and political spheres is strong and pervasive. Consequently the sustainable development of tourism is more a practical necessity than an optional extra. This paper investigates the question of how to monitor sustainable tourism development (STD) in Samoa, an independent small island state in the South Pacific. It describes some of the methodological considerations and processes involved in the development of STD indicators and particularly highlights the importance of formulating clear objectives before trying to identify indicators, the value of establishing a multi-disciplinary advisory panel, and the necessity of designing an effective and flexible implementation framework for converting indicator results into management action.     

Desired recreation companionship and travel behaviour of people with disabilities

This study examines whether people with disabilities(PWD) participate in leisure and travel activities with their desired companions and if there are discrepancies between their social networks and real recreation companions. The recreation companionship and travel behaviour of PWD have not been thoroughly explored, particularly in non-Western contexts. Accordingly, data were collected from 494 respondents in South Korea, and findings suggest that there was a significant gap between companions PWD desire and those they actually maintain. Travel and tourism were the least frequent recreation activities for PWD. The results can provide managerial implications regarding practices of inclusive and accessible tourism.     

Fairness of prices,user fee policy and willingness to pay among visitors to a national forest

Imposing user fees in Nature-Based Tourism (NBT) contexts has been a controversial issue. Based on the notions of justice and fairness, this study extended previous work examining the relationship between attitudes toward user fees and spending support. In a proposed structural model of price fairness, fee spending support, and willingness to pay (WTP), this paper identified the antecedents of WTP user fees, and empirically examined to what extent the data fit the model. Furthermore, the moderating role of place attachment in the model was investigated by using multiple-group structural equation modeling. Subjects (n = 562) were recreational tourists to a forest area in the southeast U.S. Results revealed that spending support partially played a mediating role in the relationship between perceived price fairness and WTP user fees. A multiple-group invariance test also demonstrated that while the degree of place identity moderated the effect of price fairness on spending support, the degree of place dependence did not influence the relationships among the antecedents of WTP.     

Equity-Indexed Life Insurance: Pricing and Reserving Using the Principle of Equivalent Utility

Abstract

The author applies the principle of equivalent utility to price and reserve equity-indexed life insurance. Young and Zariphopoulou (2002a, b) extended this principle to price insurance products in a dynamic framework. However, in those papers, the insurance risks were independent of the risky asset in the financial market. By contrast, the death benefit for equity-indexed life insurance is a function of a risky asset; therefore, this paper further extends the principle of equivalent utility. In a second extension, the author applies the principle of equivalent utility to calculate reserves, as introduced by Gerber (1976). In a related paper, Moore and Young (2002) price equity-indexed pure endowments, the building blocks of equity-indexed life annuities.     

Just looking for a good game: competitive balance in the Korean Professional Baseball League

Rottenberg’s uncertainty of outcome hypothesis is about preferences that can vary across fans and sports. We provide the first evidence of the empirical power of the hypothesis in the Korean Professional Baseball League (KPBL). In a panel data set, team-level aggregation over years shows that fans of this league attend in ways consistent with the hypothesis at the level of game uncertainty and consecutive season uncertainty, but only the first is statistically significant. KPBL fans appear to just be looking for a good game. This is consistent with the nearly complete concentration of post-season participation among a very few teams outside of the major population centre in Seoul and a lack of local team identification among KPBL fans. Our work adds to the diversity of league structures in the competitive balance literature since talent levels in KPBL are the result of parent company advertising choices rather than geographic identification. There are research questions and a policy implication.     

CONVERTIBLE BOND PRICING MODELS

Convertible bonds are an important segment of the corporate bond market, with worldwide outstandings approaching US$235 billion. Simple pricing models value a convertible bond as being equivalent to a straight bond with an embedded option that enables the bond holder to convert to a specific amount of common stock. The straight bond is subject to both interest rate and credit risk, whereas the option to convert is dependent on the underlying stock price, which exposes the convertible bond holder to equity risk. The complexity of these features means that convertible bonds tend to be treated casually in major derivatives and corporate finance textbooks. This paper presents a survey of the theoretical and empirical aspects of convertible bond pricing. The limitations of these studies are highlighted to identify those areas of research that may improve the valuation process and facilitate the application of these securities for corporate financing.     

The relationship between risk experience and risk response: a study of farmers and climate change

Within the existing literature, the role of experience of risk on attitudinal and behavioural risk response has been relatively neglected. Recent research that draws on the psychological distance of climate change as a concept notes the importance of local, significant experience as a driver for encouraging appropriate response. The experience of flooding was used as the stimulus in this paper, and emphasis placed on whether direct and/or indirect experience of flood risk is associated with different responses to climate change risk. In order to explore the relationship between climate change risk experience and response in the form of on-farm mitigation and adaptation, this paper draws on a case study of farmers in England, many of whom have experienced flooding. Results from a quantitative survey undertaken with 200 farmers in Gloucestershire, England are discussed. Statistical analysis found experience of flooding to be significantly associated with a heightened concern for climate change. Although also finding an association between experience and behavioural response, the sample were most likely to be taking adaptive behaviour as part of normal practice, with factors such as lack of overall concern for climate change risk and absence of information and advice likely to be the main barriers to action. Risk communication needs to further emphasise the connection between climate change and extreme weather events to allow for farmers to perceive climate change as a relevant and locally salient phenomenon, and subsequent tailored information and advice should be offered to clearly illustrate the best means of on-farm response. Where possible, emphasis must be placed on actions that also enable adaptation to other, more immediate risks which farmers in this study more readily exhibited concern for, such as market volatility.