Intraday Empirical Analysis and Modeling of Diversified World Stock Indices

This paper proposes an approach to the intraday analysis of diversified world stock accumulation indices. The growth optimal portfolio (GOP) is used as reference unit or benchmark in a continuous financial market model. Diversified portfolios, covering the world stock market, are constructed and shown to approximate the GOP, providing the basis for a range of financial applications. The normalized GOP is modeled as a time transformed square root process of dimension four. Its dynamics are empirically verified for several world stock indices. Furthermore, the evolution of the transformed time is modeled as the integral over a rapidly evolving mean-reverting market activity process with deterministic volatility. The empirical findings suggest a rather simple and robust model for a world stock index that reflects the historical evolution, by using only a few readily observable parameters. Mathematics Subject Classification: (1991) primary 90A12, secondary 60G30,62P20 JEL Classification: G10, G13     

The structural transformation of African agriculture and rural spaces: introduction to a special section†

This article briefly introduces a special section on the structural transformation of African agriculture and rural spaces. The five papers that comprise this special section all draw on household‐level microdata to explore important aspects of the salient changes taking place in the world's most agrarian and poorest continent.     

Poverty Reduction Effects of Agricultural Technology Adoption: The Case of Improved Cassava Varieties in Nigeria

We use DNA‐fingerprinting to estimate the poverty reduction effect of adoption of improved cassava varieties in Nigeria. We estimate the counterfactual household income distribution of cassava producers by combining farm‐level treatment effects with a market‐level model. Our results suggest that adoption of improved cassava varieties has led to a 4.6 percentage point reduction in poverty, though this is sensitive to the measurement of adoption status. Therefore, accurate measurement of adoption is crucial for a more credible estimate of the poverty reduction effect of adoption. Our analysis also suggests that farmers who are more likely to be adopters are also likely to face higher structural costs. Addressing structural barriers that make improved technologies less profitable for the poor would therefore be important to increase the poverty reduction effect of improved cassava varieties.     

Agricultural technology adoption and child nutrition enhancement: improved maize varieties in rural Ethiopia

Adoption of improved crop varieties can lead to multiple benefits to farm households, including increased productivity, incomes, and food consumption. However, possible impacts of adoption on child nutrition outcomes are rarely explored in the literature. This article helps bridge this gap through an impact assessment of the adoption of improved maize varieties (IMVs) on child nutrition outcomes using a recent household survey from rural Ethiopia. The conceptual linkage between IMV adoption and child nutrition is first established using an agricultural household model. Instrumental variable estimation suggests the overall impacts of adoption on child height‐for‐age and weight‐for‐age z‐scores to be positive and significant. Quantile instrumental variable regressions further reveal that such impacts are largest among children with poorest nutrition outcomes. Finally, by combining a decomposition procedure with system of equations estimation, it is found that the increase in own‐produced maize consumption is the major channel through which IMV adoption affects child nutrition.     

Variability in agricultural productivity and rural household consumption inequality: Evidence from Nigeria and Uganda

This paper uses multiple rounds of panel data to assess the distributional implications of the variability in agricultural productivity in Nigeria and Uganda. It uses both a conventional decomposition and a regression‐based inequality decomposition approach to estimate the impact of climate‐induced variability in agricultural productivity. To mitigate the endogeneity associated with unobserved time‐invariant and time‐variant household fixed effects, we use rainfall shocks as a proxy for estimating the exogenous variability in agricultural productivity that affects consumption. Results suggest that a 10% increase in the variability of agricultural productivity tends to decrease household consumption by 38 and 52% on average for Nigeria and Uganda, respectively. Controlling for other factors, variability in agricultural productivity contributed to between 25% and 43% of consumption inequality between 2010 and 2015 for Nigeria; and 16% and 31% of consumption inequality between 2009 and 2011 for Uganda. We also show that variability in agricultural productivity increases changes in consumption inequality over time.     

Determinants of food security in Southern Ethiopia at the household level

In the early 1980s, a paradigm shift occurred in the field of food security, following Amartya Sens (1981) claims that food insecurity is more of a demand concern, affecting the poor's access to food, than a supply concern, affecting availability of food at the national level. Despite the wide acceptance of Sen's thinking, many controversies including the relative importance of supply‐side versus demand‐side variables in causing and solving food insecurity have remained in academic and policy circles. This study develops a recursive household food security model within the framework of consumer demand and production theories following Singh et al. (1986) , and parses out the relative importance of supply‐side versus demand‐side variables in determining household food security in southern Ethiopia. Based on results of a test of full/reduced model and the magnitude of changes in conditional probabilities of food security, we conclude that the supply‐side variables are more powerful determinants of food security than the demand‐side variables.     

Market Imperfections and Land Productivity in the Ethiopian Highlands

This study analyses how market imperfections affect land productivity in a degraded low‐potential cereal‐livestock economy in the Ethiopian highlands. A wide array of variables is used to control for land quality in the analysis. Results of three different selection models were compared with least squares models using the HC3 heteroskedasticity‐consistent covariance matrix estimator. Market imperfections in labour and land markets were found to affect land productivity. Land productivity was positively correlated with household male and female labour force per unit of land. Female‐headed households achieved much lower land productivity than male‐headed households. Old age of household heads was also correlated with lower land productivity. Imperfections in the rental market for oxen appeared to cause overstocking of oxen by some households. Conservation technologies had no significant positive short‐run effect on land productivity. The main results were consistent across the different econometric models.     

Estimates of the direct and indirect cost savings associated with heart disease that could be avoided through dietary change in the United States

Aims: Diets high in saturated fat are associated with elevated risk of heart disease. This study estimates the savings in direct (medical care) costs and indirect (job absenteeism) costs in the US from reductions in heart disease associated with substituting monounsaturated fats (MUFA) for saturated fats.

Materials and methods: A four-part model of the medical care cost savings from avoided heart disease was estimated using data on 247,700 adults from the 2000–2010 Medical Expenditure Panel Survey (MEPS). The savings from reduced job absenteeism due to avoided heart disease was estimated using a zero-inflated negative binomial model of the number of annual work loss days applied to data on 164,577 adults from the MEPS.

Results: Estimated annual savings in medical care expenditures resulting from a switch from a diet high in saturated fat to a high-MUFA diet totaled ～ $25.7 billion (95% CI = $6.0–$45.4 billion) in 2010, with private insurance plans saving $7.9 billion (95% CI?=?$1.8–$14.0 billion), Medicare saving $9.4 billion (95% CI?=?$2.1–$16.7 billion), Medicaid saving $1.4 billion (95% CI?=?Aims: Diets high in saturated fat are associated with elevated risk of heart disease. This study estimates the savings in direct (medical care) costs and indirect (job absenteeism) costs in the US from reductions in heart disease associated with substituting monounsaturated fats (MUFA) for saturated fats.

Materials and methods: A four-part model of the medical care cost savings from avoided heart disease was estimated using data on 247,700 adults from the 2000–2010 Medical Expenditure Panel Survey (MEPS). The savings from reduced job absenteeism due to avoided heart disease was estimated using a zero-inflated negative binomial model of the number of annual work loss days applied to data on 164,577 adults from the MEPS.

Results: Estimated annual savings in medical care expenditures resulting from a switch from a diet high in saturated fat to a high-MUFA diet totaled ～ $25.7 billion (95% CI = $6.0–$45.4 billion) in 2010, with private insurance plans saving $7.9 billion (95% CI?=?$1.8–$14.0 billion), Medicare saving $9.4 billion (95% CI?=?$2.1–$16.7 billion), Medicaid saving $1.4 billion (95% CI?=?$0.2–$2.5 billion), and patients saving $2.2 billion (95% CI?=?$0.5–$3.8 billion). The annual savings in terms of reduced job absenteeism ranges from a lower bound of $600 million (95% CI?=?$100 million to $1.0 billion) to an upper bound of $1.2 billion (95% CI?=?$0.2–$2.1 billion) for 2010.

Limitations: The data cover only the non-institutionalized population. Decreased costs due to any decreases in the severity of heart disease are not included. Cost savings do not include any reduction in informal care at home.

Conclusions: Diets high in saturated fat impose substantial medical care costs and job absenteeism costs, and substantial savings could be achieved by substituting MUFA for saturated fat.     

The information society in California: Social factors influencing its emergence

The authors identify three elements which will influence California's future. First, demographic shifts in the state's population have altered California's ethnic and cultural foundations. Second, the state educational system does not seem prepared to train larger numbers for information work, especially members of its growing ethnic population. Third, almost half the state's workforce is now employed in information-oriented work, whether in the industrial, service, or agricultural sectors. The authors demonstrate that the interaction of these elements has profound implications for California's development.