Efficiency characteristics of a market for state contingent claims

This paper concludes that a market for state-contingent claims (UK horserace betting) displays evidence of pervasive but heterogeneous forms of inefficiency, in significant contrast to earlier investigations. Using hitherto unavailable data, comparison of notional returns implicit in parallel sets of bookmaker and parimutuel odds identifies inefficiency in terms of zones of distinct but contrasting forms of cross-;market returns differential. The inefficiency is rationalized in terms of both buyer and supplier behaviour; its durability is explained in terms of limited arbitrage opportunities.     

Risk management and its practical application: lessons from the British Army

This study explores, using predominately qualitative data, the risk management approaches of British Army officers in operational theatre. Risks within an operational context are particularly challenging for the British Army to manage due to external constraints such as its adherence to various rules of engagement and international conventions such as the Geneva Convention that consists of treaties that clearly articulate legal protection to be accorded to both civilians and combatants during war. The British Army’s centralised and highly structured control and regulation mechanisms are the product of over 300 years of traditions. Few companies can draw on this history, but we argue that the historical successes of the British Army suggest that contemporary civilian organisations have much to learn from the military approach to risk management.     

The ordinal efficiency of betting markets: an exploded logit approach

This article offers a new perspective on efficiency in betting markets by examining the degree to which finishing order in horse races corresponds to probabilities inherent in odds across different categories of horse race. The application of an exploded logit procedure reveals a significantly greater degree of ordinal efficiency in higher relative to lower-class races. Explanations for the phenomenon include differences in prize-related incentives, cross-market distinctions in information markets and differential opportunity/incentive for market manipulation.     

Assessing Bettors' Ability to Process Dynamic Information: Policy Implications

Regulation is often employed to encourage the provision of readily interpretable, explicit information to betting markets in an effort to promote their efficiency. This approach is supported by a considerable volume of laboratory‐based research which suggests that individuals make poor judgments in the face of implicit, dynamic information. This article investigates to what extent horserace bettors, who have strong incentives to make good probability judgments, require the regulator's protection from such hostile information environments. In particular, we examine the accuracy of the subjective probabilities of bettors concerning 16,344 horses in 1671 races. We find that bettors are skilled in adopting effective heuristics to simplify their dynamic information environment and, even in the face of restricted information, develop well‐calibrated judgments using outcome feedback. A number of factors that help bettors to achieve good calibration are identified and the implications for market regulation are discussed.     

The Impact of Housing Stressors on the Mental Health of a Low-Income African-American Population

Health and disease reflect broad social conditions including economic, environmental, and cultural components. The impact of challenging housing conditions experienced by low-income African American households on their mental health is an example of this principle. Do physical housing conditions, the presence of roaches and rodents, plumbing defects, and heating/cooling problems contribute to mental health dysfunction such as being depressed, feeling worried, feeling sad, feeling helpless, and feeling emotionally upset? To address this research question, a sample of 128 households that originally lived in public housing in Washington, D.C. were surveyed. These households had been relocated to other low-income housing during the demolition and reconstruction phase of a HOPE VI project, some to alternative public housing developments and others to private units based on vouchers. The survey included self-reports by heads of household on their housing conditions and mental health status using Likert scales. The survey also asked participants for demographic, socio-economic, and physical health data and for information on neighborhood characteristics. Correlation and regression analyses were used to estimate the impact of building structure, building systems, neighborhood characteristics, physical health, and socio-economic/demographic variables on mental health stresses. Specific housing issues included the number of bedrooms, plumbing, heating, cooling, rodents, roaches, and building security (the independent variables). Mental health stresses (the dependent variables) included feeling depressed, nervous, anxious, sad, helpless, and having trouble concentrating. Several alternative specifications and models were used and estimated. They generally demonstrated strong overall explanatory value. The findings from these models suggested that challenging housing conditions significantly contributed to many mental health disorders. For example, in the 2SLS model of “problem being depressed”, the condition of the apartment (β?=?0.278, t?=?2.022) and plumbing (β?=?0.182, t?=?2.145) were significant and the model’s explanatory power was reasonable with an adjusted R²?=?0.221. Many non-housing control variables were also significantly associated with mental health challenges.