Strategic travel planning toward future emission targets—A comparative analysis of 20 Swedish municipalities applying the CERO model

Organizations displaying best practices for attaining proactive sustainability targets at local level are of major importance as role models in the transition toward a sustainable transport system. This study summarizes results and conclusions from 20 municipalities in Sweden that have implemented the so called CERO analysis in order to adapt to future emission targets for travel. The overall aim of the study is to identify factors explaining why some municipalities are more successful than others in a benchmarking comparison.

The results indicate that commuting by car is by far the most dominant source of emissions, constituting on average 76% of total annual travel emissions (including both commuting and business travel). In order to reduce these emissions, travel planning programs within organizations must address both commuting conditions and business travel conditions to reduce car dependence for work travel, e.g., employees using private cars for business trips most likely also use their own cars for commuting. To identify potential success factors as regards emissions-efficient travel, three comparative statistical analyses were conducted: grouping municipalities with low emissions in relation to the total average; analysis of car commuters' willingness to change travel mode; and before-and-after analyses of municipalities implementing specific action plans. The results revealed that municipalities conducting follow-up studies 2 years after implementing travel planning programs all lowered their total CO₂ emissions, by on average 10% during a 2-year period. Overall, these municipalities achieved redistribution to alternative travel modes but also reduced total travel mileage.     

Liquidity risk in derivatives valuation: an improved credit proxy method

The models used to calculate post-crisis valuation adjustments, market risk and capital measures for derivatives are subject to liquidity risk due to severe lack of available information to obtain market implied model parameters. The European Banking Authority has proposed an intersection methodology to calculate a proxy CDS or Bond spread. Due to practical issues of this method, Chourdakis et al. introduce a cross-section approach. In this paper, we extend the cross-section methodology using equity returns, and show that our methodology is significantly more accurate compared to both existing methodologies, and produces more reliable, stable and robust market risk and capital measures, and credit valuation adjustment.     

Portfolio diversification: the influence of herding,status-quo bias,and the gambler’s fallacy

This experimental study examines the influence of herding [following the majority of fellow gamblers or the most successful gambler (guru)], status-quo bias, and the gambler’s fallacy on diversification behavior. We find that neither herding nor status-quo bias contributes significantly to non-optimal portfolio choices. The gambler’s fallacy, however, plays an important role in these decisions. Many subjects appear to find patterns in a history of random events and then use these “patterns” to infer the sequence of future events. The gambler’s fallacy is significantly responsible for the fact that the optimal structure of a portfolio is considered in only 37.7% of all choices made by an investor.     

How to Handle the Fiscal Crisis in Greece: Empirical Evidence Based on a Survey of Economic Experts

We asked economic experts polled by the CESifo World Economic Survey how to handle the fiscal crisis in Greece in the year 2015. The sample includes about 850 experts from 110 countries. We find systematic differences in experts’ recommendations. Our results suggest that policy advice is related to an expert's personal and country‐level attributes. Country‐level characteristics, especially credit default swaps as a measure of fiscal stability, predict views on whether Greece should exit the eurozone. An expert's educational background, age and professional affiliation predict opinions on the credit programmes of the International Monetary Fund. We propose that policymakers who seek balanced policy advice should consult experts from different countries and personal backgrounds.     

Inferring volatility dynamics and risk premia from the S&P 500 and VIX markets

We estimate a flexible affine model using an unbalanced panel containing S&P 500 and VIX index returns and option prices and analyze the contribution of VIX options to the model’s in- and out-of-sample performance. We find that they contain valuable information on the risk-neutral conditional distributions of volatility at different time horizons, which is not spanned by the S&P 500 market. This information allows enhanced estimation of the variance risk premium. We gain new insights on the term structure of the variance risk premium, present a trading strategy exploiting these insights, and show how to improve S&P 500 return forecasts.     

Prospects for low cyanide cassava in Nigeria

Sweet (low cyanide) and bitter (high cyanide) varieties of cassava are compared from the viewpoint of their production, processing and consumption in Nigeria. With this information, the costs and benefits of breeding higher yielding sweet varieties are calculated. A new processing method, currently in use in one region of Nigeria, is examined for its likely impact on the demand for sweet cassava.     

September 11 and Stock Return Expectations of Individual Investors

This study uses data that offers the unique opportunity to analyze how an unprecedented crisis such as the September 11 tragedy influences expected returns and volatility forecasts of individual investors. Via e-mail, we asked a randomly selected group of individual investors with accounts at a German online broker to answer an internet questionnaire at the beginning of August 2001. A second e-mail to the investors who had not yet answered, scheduled five weeks later, was postponed due to the terror attacks until September 20, which was exactly the day with the lowest share prices in Germany in the year 2001. Based on the answers to questions concerning stock market predictions, we find that return forecasts of the investors in our sample are significantly higher after September 11, suggesting a belief in mean reversion. Our results show that investors interpret the large drop in share prices during the ten day period after September 11 mainly as temporary rather than permanent. After the terror attacks, volatility forecasts are higher than before September 11. In two out of four cases, historical volatilities are overestimated. Therefore, investors are not generally overconfident in the way that they underestimate the variance of stock returns. Differences of opinion with regard to return forecasts are lower after the terror attacks whereas differences of opinion concerning volatility forecasts are mainly unaffected.We would like to thank William Goetzmann (the editor), Alexander Klos, Markus Nöth, Jens Reynders, Zacharias Sautner, an anonymous referee, several faculty members of the Fuqua School of Business, and seminar participants at the University of Mannheim for valuable comments and insights. Parts of this paper were written while Markus Glaser was visiting the Fuqua School of Business, Duke University, North Carolina, USA, whose support is gratefully acknowledged. Financial Support from the Deutsche Forschungsgemeinschaft (DFG) is also gratefully acknowledged.