On the evolution of the spatial economy with multi-unit · multi-plant firms: the impact of IT development

This paper examines how the decline of communication costs between management and production facilities within firms and the decrease in trade costs of manufactured goods affect the spatial organization of a two-region economy with multi-unit·multi-plant firms. The development of information technology decreases the costs of communication and trade costs. Thus, the fragmentation of firms is promoted. Our result indicates that, with decreasing communication costs, firms producing low trade-cost goods (such as electronics products) tend to concentrate their manufacturing plants in low wage countries. In contrast, firms producing high trade-cost products (such as automobiles) tend to have multiple plants serving to segmented markets, even in the absence of wage differentials.Received: November 2004, Accepted: March 2005, JEL Classification: F12, L13, R13Masahisa Fujita: Correspondence toWe are very grateful to J. Vernon Henderson, J. Pedro Pontes and Koumei Sasaki for helpful comments.     

Long-term optimal portfolios with floor

Long-term risk-sensitive portfolio optimization is studied with floor constraint. A simple rule to characterize its solution is mentioned under a general setting. Following this rule, optimal portfolios are constructed in several ways, using the optimal portfolio without floor constraint, combined with ideas of dynamic portfolio insurance, such as CPPI (constant proportion portfolio insurance), OBPI (option-based portfolio insurance), and DFP (dynamic fund protection). In addition, examples are presented with explicit computations of solutions.     

A One-Factor Conditionally Linear Commodity Pricing Model under Partial Information

A one-factor asset pricing model with an Ornstein–Uhlenbeck process as its state variable is studied under partial information: the mean-reverting level and the mean-reverting speed parameters are modeled as hidden/unobservable stochastic variables. No-arbitrage pricing formulas for derivative securities written on a liquid asset and exponential utility indifference pricing formulas for derivative securities written on an illiquid asset are presented. Moreover, a conditionally linear filtering result is introduced to compute the pricing/hedging formulas and the Bayesian estimators of the hidden variables.     

Risk-Sensitive Asset Management in a Wishart-Autoregressive Factor Model with Jumps

Risk-sensitive asset management problems, both those with a finite horizon and those with an infinite horizon, are studied in a financial market model that has a Wishart autoregressive-type jump-diffusion factor, which is a positive-definite symmetric matrix-valued process. The model describes the stochasticity of the market covariance structure, the interest rates, and the risk-premium of the risky assets. We obtain explicit representations of the solutions to the problems.     

Risk-sensitive Portfolio Optimization with Two-factor Having a Memory Effect

Risk-sensitive portfolio optimization problems are studied with a specific setting: a market model with a two-dimensional linear-factor is considered, where the factor consisits of an Ornshtein-Uhlenbeck process and its historic weighted-average. A sharp solvability condition is obtained in risk-seeking case. Further, an application of CPPI technique is mentioned to treat a problem with floor-constraint.     

On the timescales of sustainability and futurability

Sustainability has a plethora of ambiguous definitions, partly because there are no consistent timescales acceptable to all interested authors. Co-evolutionary processes between the anthroposphere and the biosphere offer an alternative to sustainability and hence the timescales could be examined by a simple systems analysis. We consider a system of anthropospheric food energy demand and entropy production to evaluate the timescales of sustainability at past technological revolutions in the anthroposphere. Our analysis suggests that each of technological revolutionary steps, the Neolithic/Agricultural, Industrial, and Information Revolutions, has forced the sustainability timescale to decrease by an order of 2. However, we suggest that the minimum timescale of the most recent sustainability is 100-400 years, which is longer than that implied by other sustainability indices (∼100 years). The recently emerged concept of ‘futurability’, an ideal form of sustainability, could help seek futurable states of human-environment interactions beyond the next few hundred years.     

Evaluation of risk communication for rural water supply management: a case study of a coastal area of Bangladesh

Consumption of safe drinking water is an important public health issue. In this study, we considered the risk communication topic of human health concerns related to unsafe water consumption in rural coastal areas of Bangladesh, where potable water is scarce. Our objective was to investigate the level of knowledge that rural residents had concerning safe water consumption and to evaluate the effects of risk communication on knowledge and behavior changes. We considered four rural villages of southwest coastal areas of Bangladesh as sample. This study was based on the results of a questionnaire survey administered before and after risk communication. The pre- and post-survey were conducted during August 2009 and March 2010, respectively. Data were collected from 120 women aged 18–60 years. Two format presentations, with and without water quality information, were used to convey the risk messages. In the present study, indicator bacterial (Escherichia coli) contamination levels in drinking water sources were considered as water quality information since absence of E. coli is the safety margin for the detection of disease-causing organisms. Analysis of the survey data revealed that risk communication can be vital to changes in water consumption knowledge and behavior. Overall general knowledge scores were almost same in the pre-survey for without- (mean score 3.16) and with-information (mean score 3.10) villages. However, after risk communication, there were detectable increases in the mean scores (mean scores, 3.54 and 3.64, respectively, on a 4 point scale) for both groups. Furthermore, risk communication with water quality information appears to be a more effective method of risk communication. Dissemination of risk messages was also higher in with-information villages. Seventy four percent of the participants from with-information villages reported that they had discussed the risk messages with family members and neighbors, compared to 59% of those from without-information villages. The results of this study revealed that age, education, and distance of water sources influence changes in consumption and maintenance behavior. These findings suggest that, in addition to installation of water supply facilities, there is a need to address the low levels of knowledge about safe water consumption in rural coastal communities of Bangladesh. Location specific water quality information may be more useful to convey health risk messages concerning unsafe drinking water consumption.