Diversification and value-at-risk

A pervasive and puzzling feature of banks’ Value-at-Risk (VaR) is its abnormally high level, which leads to excessive regulatory capital. A possible explanation for the tendency of commercial banks to overstate their VaR is that they incompletely account for the diversification effect among broad risk categories (e.g., equity, interest rate, commodity, credit spread, and foreign exchange). By underestimating the diversification effect, bank’s proprietary VaR models produce overly prudent market risk assessments. In this paper, we examine empirically the validity of this hypothesis using actual VaR data from major US commercial banks. In contrast to the VaR diversification hypothesis, we find that US banks show no sign of systematic underestimation of the diversification effect. In particular, diversification effects used by banks is very close to (and quite often larger than) our empirical diversification estimates. A direct implication of this finding is that individual VaRs for each broad risk category, just like aggregate VaRs, are biased risk assessments.

Reconstructing the history of maize streak virus strain a dispersal to reveal diversification hot spots and its origin in southern Africa

Maize streak virus strain A (MSV-A), the causal agent of maize streak disease, is today one of the most serious biotic threats to African food security. Determining where MSV-A originated and how it spread transcontinentally could yield valuable insights into its historical emergence as a crop pathogen. Similarly, determining where the major extant MSV-A lineages arose could identify geographical hot spots of MSV evolution. Here, we use model-based phylogeographic analyses of 353 fully sequenced MSV-A isolates to reconstruct a plausible history of MSV-A movements over the past 150 years. We show that since the probable emergence of MSV-A in southern Africa around 1863, the virus spread transcontinentally at an average rate of 32.5 km/year (95% highest probability density interval, 15.6 to 51.6 km/year). Using distinctive patterns of nucleotide variation caused by 20 unique intra-MSV-A recombination events, we tentatively classified the MSV-A isolates into 24 easily discernible lineages. Despite many of these lineages displaying distinct geographical distributions, it is apparent that almost all have emerged within the past 4 decades from either southern or east-central Africa. Collectively, our results suggest that regular analysis of MSV-A genomes within these diversification hot spots could be used to monitor the emergence of future MSV-A lineages that could affect maize cultivation in Africa. © 2011, American Society for Microbiology.

Diversification for sustainable development in rural and regional Australia : how local community leaders conceptualise the impacts and opportunities from agriculture, tourism and mining

Although the multiple economic, environmental and social challenges threatening the viability of rural and regional communities in Australia are well-known, little research has explored how community leaders conceptualise the impact and opportunities associated with economic diversification from agriculture into alternative industries, such as tourism and mining. This qualitative research, utilising the Darling Downs in Queensland as a case study, documents how 28 local community leaders have experienced this economic diversification process. The findings reveal that local community leaders have a deep understanding about the opportunities and challenges presented by diversification, articulating a clear vision about how to achieve the best possible future for their region. Despite excitement about growth, there were concerns about preserving heritage, the increased pressure on local infrastructure and an ageing population. By documenting local leader’s insights, these findings may help inform planning for rural and regional communities and facilitate management of the exciting yet challenging process of growth and diversification

Innovative methods for assessing viability of diversification into new markets : a study based on an engineering consultancy

This study resulted in the development of a decision making tool for engineering consultancies looking to diversify into new markets. It reviewed existing decision tools used by contractor's entering new markets to develop a bespoke tool for engineering consultants to establish more rigor around the decision making process rather than rely purely on the intuition of company executives. The tool can be used for developing medium and long term company strategies or as a quick and efficient way to assess the viability of new market opportunities when they arise. A combination of Delphi and Analytical Hierarchy Process was selected as the basis of the decision theory.

The evolution and diversification of Dicers in plants

Most multicellular organisms regulate developmental transitions by microRNAs, which are generated by an enzyme, Dicer. Insects and fungi have two Dicer-like genes, and many animals have only one, yet the plant, Arabidopsis, has four. Examining the poplar and rice genomes revealed that they contain five and six Dicer-like genes, respectively. Analysis of these genes suggests that plants require a basic set of four Dicer types which were present before the divergence of mono- and dicotyledonous plants (∼200 million years ago), but after the divergence of plants from green algae. A fifth type of Dicer seems to have evolved in monocots. © 2006 Federation of European Biochemical Societies.

Revenue diversification opportunities from sugarcane

Sugarcane is a major global agricultural crop that produces significant quantities of sugar and biomass in tropical and sub-tropical regions. Over many centuries, the crop has been grown primarily for its high sugar content which traditionally contributes over 95% of the revenue derived from the crop. While the production of renewable electricity from bagasse and rum from molasses has a long history, in more recent decades significant advances have been made in the production of cogeneration products and fuel ethanol at large scale. Sugarcane biorefineries producing fuels, green chemicals, biopolymers and bio-products offer great potential for improving the profitability of sugarcane production. This paper will address the opportunities available for sugarcane biorefineries to contribute to future profitability and sustainability of the sugarcane industry.

Increased profitability through product diversification and improved sugar quality.

The proposed simplified Integrated Sugar Production Process (ISPP) using membrane technology would allow the sugar industry to produce new product streams and higher quality mill sugar with increased sugar extraction efficiency. Membrane filtration technology has proven to be a technically sound process to increase sugar quality. However commercial viability has been uncertain partly because the benefits to crystallisation and sugar quality have not outweighed the increased processing cost. This simplified ISPP produces additional value-added liquid streams to make the membrane fractionation process more financially viable and improve the profitability of sugar manufacture. An experimental study used pilot scale membrane fractionation of clarified mill juice confirmed the technical feasibility of separating inorganic salt and antioxidant rich fractions from cane juice. The paper presents details on the compositions of the liquid streams along with their potential uses, values and challenges in getting these products out to market.

Increased profitability through product diversification and improved sugar quality.

The proposed simplified Integrated Sugar Production Process (ISPP) using membrane technology would allow the sugar industry to produce new product streams and higher quality mill sugar with increased sugar extraction efficiency. Membrane filtration technology has proven to be a technically sound process to increase sugar quality. However commercial viability has been uncertain partly because the benefits to crystallisation and sugar quality have not outweighed the increased processing cost. This simplified ISPP produces additional value-added liquid streams to make the membrane fractionation process more financially viable and improve the profitability of sugar manufacture. An experimental study used pilot scale membrane fractionation of clarified mill juice confirmed the technical feasibility of separating inorganic salt and antioxidant rich fractions from cane juice. The paper presents details on the compositions of the liquid streams along with their potential uses, values and challenges in getting these products out to market. This paper was presented at the 2010 Australian Society of Sugar Cane Technologists annual conference.

Rural Income Generation and Diversification : A Case Study in Eastern Zambia

Rural income diversification has been found to be rather the norm than the exception in developing countries. Smallholder households tend to diversify their income sources because of the need to manage risks, secure a smooth flow of income, allocate surplus labour, respond to various kinds of market failures, and apply coping strategies. The Agricultural Household Model provides a theoretical rationale for income diversification in that rural households aim at maximising their utility. There are several elements involved, such as agricultural production for their own consumption and markets, leisure activities and income from non-farm sources. The aim of the present study is to enhance understanding of the processes of rural income generation and diversification in eastern Zambia. Specifically, it explores the relationship between household characteristics, asset endowments and income-generation patterns. According to the sustainable- rural-livelihoods framework, the assets a household possesses shape its capacity to seize new economic opportunities. The study is based on two surveys conducted among rural smallholder households in four districts of Eastern Province in Zambia in 1985/86 and 2003. Sixty-seven of the interviewed households were present in both surveys and this panel allows comparison between the two points of time. The initial descriptive analysis is complemented with an econometric analysis of the relationships between household assets and income sources. The results show that, on average, 30 per cent of the households income originated from sources outside their own agriculture. There was a slight increase in the proportion of non-farm income from 1985/86 to 2003, but total income clearly declined mainly on account of diminishing crop income. The land area the household was able to cultivate, which is often dependent on the available labour, was the most significant factor affecting both the household-income level and the diversification patterns. Diversification was, in most cases, a coping strategy rather than a voluntary choice. Measured as income/capita/day, all households were below the poverty line in 2003. The agricultural reforms in Zambia, combined with other trends such as changes in rainfall pattern, the worsening livestock situation and the incidence of human disease, had a negative impact on agricultural productivity and income between 1985/86 and 2003. Sources of non-farm income were closely linked to agriculture either upstream or downstream and the income they generated was not enough to compensate for the decline of agricultural income. Household assets and characteristics had a smaller impact on diversification patterns than expected, which could reflect the lack of opportunities in the remote rural environment.

Avian diversification patterns across the K-Pg boundary: Influence of calibrations, datasets, and model misspecification

Birds represent the most diverse extant tetrapod clade, with ca. 10,000 extant species, and the timing of the crown avian radiation remains hotly debated. The fossil record supports a primarily Cenozoic radiation of crown birds, whereas molecular divergence dating analyses generally imply that this radiation was well underway during the Cretaceous. Furthermore, substantial differences have been noted between published divergence estimates. These have been variously attributed to clock model, calibration regime, and gene type. One underappreciated phenomenon is that disparity between fossil ages and molecular dates tends to be proportionally greater for shallower nodes in the avian Tree of Life. Here, we explore potential drivers of disparity in avian divergence dates through a set of analyses applying various calibration strategies and coding methods to a mitochondrial genome dataset and an 18-gene nuclear dataset, both sampled across 72 taxa. Our analyses support the occurrence of two deep divergences (i.e., the Palaeognathae/Neognathae split and the Galloanserae/Neoaves split) well within the Cretaceous, followed by a rapid radiation of Neoaves near the K-Pg boundary. However, 95% highest posterior density intervals for most basal divergences in Neoaves cross the boundary, and we emphasize that, barring unreasonably strict prior distributions, distinguishing between a rapid Early Paleocene radiation and a Late Cretaceous radiation may be beyond the resolving power of currently favored divergence dating methods. In contrast to recent observations for placental mammals, constraining all divergences within Neoaves to occur in the Cenozoic does not result in unreasonably high inferred substitution rates. Comparisons of nuclear DNA (nDNA) versus mitochondrial DNA (mtDNA) datasets and NT- versus RY-coded mitochondrial data reveal patterns of disparity that are consistent with substitution model misspecifications that result in tree compression/tree extension artifacts, which may explain some discordance between previous divergence estimates based on different sequence types. Comparisons of fully calibrated and nominally calibrated trees support a correlation between body mass and apparent dating error. Overall, our results are consistent with (but do not require) a Paleogene radiation for most major clades of crown birds.

Models of Dispersal and Diversification

Ecology and evolutionary biology is the study of life on this planet. One of the many methods applied to answering the great diversity of questions regarding the lives and characteristics of individual organisms, is the utilization of mathematical models. Such models are used in a wide variety of ways. Some help us to reason, functioning as aids to, or substitutes for, our own fallible logic, thus making argumentation and thinking clearer. Models which help our reasoning can lead to conceptual clarification; by expressing ideas in algebraic terms, the relationship between different concepts become clearer. Other mathematical models are used to better understand yet more complicated models, or to develop mathematical tools for their analysis. Though helping us to reason and being used as tools in the craftmanship of science, many models do not tell us much about the real biological phenomena we are, at least initially, interested in. The main reason for this is that any mathematical model is a simplification of the real world, reducing the complexity and variety of interactions and idiosynchracies of individual organisms. What such models can tell us, however, both is and has been very valuable throughout the history of ecology and evolution. Minimally, a model simplifying the complex world can tell us that in principle, the patterns produced in a model could also be produced in the real world. We can never know how different a simplified mathematical representation is from the real world, but the similarity models do strive for, gives us confidence that their results could apply. This thesis deals with a variety of different models, used for different purposes. One model deals with how one can measure and analyse invasions; the expanding phase of invasive species. Earlier analyses claims to have shown that such invasions can be a regulated phenomena, that higher invasion speeds at a given point in time will lead to a reduction in speed. Two simple mathematical models show that analysis on this particular measure of invasion speed need not be evidence of regulation. In the context of dispersal evolution, two models acting as proof-of-principle are presented. Parent-offspring conflict emerges when there are different evolutionary optima for adaptive behavior for parents and offspring. We show that the evolution of dispersal distances can entail such a conflict, and that under parental control of dispersal (as, for example, in higher plants) wider dispersal kernels are optimal. We also show that dispersal homeostasis can be optimal; in a setting where dispersal decisions (to leave or stay in a natal patch) are made, strategies that divide their seeds or eggs into fractions that disperse or not, as opposed to randomized for each seed, can prevail. We also present a model of the evolution of bet-hedging strategies; evolutionary adaptations that occur despite their fitness, on average, being lower than a competing strategy. Such strategies can win in the long run because they have a reduced variance in fitness coupled with a reduction in mean fitness, and fitness is of a multiplicative nature across generations, and therefore sensitive to variability. This model is used for conceptual clarification; by developing a population genetical model with uncertain fitness and expressing genotypic variance in fitness as a product between individual level variance and correlations between individuals of a genotype. We arrive at expressions that intuitively reflect two of the main categorizations of bet-hedging strategies; conservative vs diversifying and within- vs between-generation bet hedging. In addition, this model shows that these divisions in fact are false dichotomies.

Cretaceous-Tertiary diversification among select Scolopendrid centipedes of South India

Given that peninsular India was part of the Gondwanan super continent, part of its current biota has Gondwanan origin. To determine the Gondwanan component of the peninsular Indian biota, a large number of species spanning diverse taxonomic groups need to be sampled from multiple, if not all, of the former Gondwanan fragments. Such a large scale phylogenetic approach will be time consuming and resource intensive. Here, we explore the utility of a limited sampling approach, wherein sampling is confined to one of the Gondwanan fragments (peninsular India), in identifying putative Gondwanan elements. To this end, samples of Scolopendrid centipedes from Western Ghats region of peninsular India were subjected to molecular phylogenetic and dating analyses. The resulting phylogenetic tree supported monophyly of the family Scolopendridae which was in turn split into two clades constituting tribes Otostigmini and Scolopendrini-Asanadini. Bayesian divergence date estimates suggested that the earliest diversifications within various genera were between 86 and 73 mya, indicating that these genera might have Gondwanan origin. In particular, at least four genera of Scolopendrid centipedes, Scolopendra, Cormocephalus, Rhysida and Digitipes, might have undergone diversification on the drifting peninsular India during the Late Cretaceous. These putative Gondwanan taxa can be subjected to more extensive sampling to confirm their Gondwanan origin. (C) 2011 Elsevier Inc. All rights reserved.