Essays on Labor Market Frictions, Technological Change and Macroeconomic Fluctuations

The dissertation consists of an introductory chapter and three essays that apply search-matching theory to study the interaction of labor market frictions, technological change and macroeconomic fluctuations. The first essay studies the impact of capital-embodied growth on equilibrium unemployment by extending a vintage capital/search model to incorporate vintage human capital. In addition to the capital obsolescence (or creative destruction) effect that tends to raise unemployment, vintage human capital introduces a skill obsolescence effect of faster growth that has the opposite sign. Faster skill obsolescence reduces the value of unemployment, hence wages and leads to more job creation and less job destruction, unambiguously reducing unemployment. The second essay studies the effect of skill biased technological change on skill mismatch and the allocation of workers and firms in the labor market. By allowing workers to invest in education, we extend a matching model with two-sided heterogeneity to incorporate an endogenous distribution of high and low skill workers. We consider various possibilities for the cost of acquiring skills and show that while unemployment increases in most scenarios, the effect on the distribution of vacancy and worker types varies according to the structure of skill costs. When the model is extended to incorporate endogenous labor market participation, we show that the unemployment rate becomes less informative of the state of the labor market as the participation margin absorbs employment effects. The third essay studies the effects of labor taxes on equilibrium labor market outcomes and macroeconomic dynamics in a New Keynesian model with matching frictions. Three policy instruments are considered: a marginal tax and a tax subsidy to produce tax progression schemes, and a replacement ratio to account for variability in outside options. In equilibrium, the marginal tax rate and replacement ratio dampen economic activity whereas tax subsidies boost the economy. The marginal tax rate and replacement ratio amplify shock responses whereas employment subsidies weaken them. The tax instruments affect the degree to which the wage absorbs shocks. We show that increasing tax progression when taxation is initially progressive is harmful for steady state employment and output, and amplifies the sensitivity of macroeconomic variables to shocks. When taxation is initially proportional, increasing progression is beneficial for output and employment and dampens shock responses.

Kirjan tie lukijalle : Kirjakauppojen vakiintuminen Suomessa 1740 - 1860

Books Paths to Readers describes the history of the origins and consolidation of modern and open book stores in Finland 1740 1860. The thesis approaches the book trade as a part of a print culture. Instead of literary studies choice to concentrate on texts and writers, book history seeks to describe the print culture of a society and how the literary activities and societies interconnect. For book historians, printed works are creations of various individuals and groups: writers, printers, editors, book sellers, censors, critics and finally, readers. They all take part in the creation, delivery and interpretation of printed works. The study reveals the ways selling and distributing books have influenced the printed works and the literary and print culture. The research period 1740 1860 covers the so-called second revolution of the book, or the modernisation of the print culture. The thesis describes the history of 60 book stores and their 96 owners. The study concentrates on three themes: firstly, how the particular book trade network became a central institution for printed works distribution, secondly what were the relations between cosmopolitan European book markets and the national cultural sphere, and thirdly how book stores functioned as cultural institutions and business enterprises. Book stores that have a varied assortment and are targeted to all readers became the main institution for book trade in Finland during 1740 1860. It happened because of three features. First, the book binders monopoly on selling bound copies in Sweden was abolished in 1740s. As a consequence entrepreneurs could concentrate solely to trade activities and offer copies from various publishers at their stores. Secondly the common business model of bartering was replaced by selling copies for cash, first in the German book trade centre Leipzig in 1770s. The change intensified book markets activities and Finnish book stores foreign connections. Thirdly, after Finland was annexed to the Russian empire in 1809, the Grand duchy s administration steered foreign book trade to book stores (because of censorship demands). Up to 1830 s book stores were available only in Helsinki and Turku. During next ten years book stores opened in six regional centres. The early entrepreneurs ran usually vertical businesses consisting of printing, publishing and distribution activities. This strategy lowered costs, eased the delivery of printed works and helped to create elaborated centres for all book activities. These book stores main clientele consisted of the Swedish speaking gentry. During late 1840s various opinion leaders called for the development of a national Finnish print culture, and also book stores. As a result, during the five years before the beginning of the Crimean war (1853 1856) book stores were opened in almost all Finnish towns: at the beginning of the war 36 book stores operated in 21 towns. The later book sellers, mainly functioning in small towns among Finnish speaking people, settled usually strictly for selling activities. Book stores received most of their revenues from selling foreign titles. Swedish, German, French and Belgian (pirate editions of popular French novels) books were widely available for the multilingual gentry. Foreign titles and copies brought in most of the revenues. Censorship inspections or unfavourable custom fees would not limit the imports. Even if the local Finnish print production steadily rose, many copies, even titles, were never delivered via book stores. Only during the 1840 s and 1850 s the most advanced publishers would concentrate on creating publishing programmes and delivering their titles via book stores. Book sellers regulated commissions were small. They got even smaller because of large amounts of unsold copies, various and usual misunderstandings of consignments and accounts or plain accidents that destroyed shipments and warehouses. Also, the cultural aim of a creating large and assortments and the tendency of short selling periods demanded professional entrepreneurship, which many small town book sellers however lacked. In the midst of troublesome business efforts, co-operation and mutual concern of the book market s entrepreneurs were the key elements of the trade, although on local level book sellers would compete, sometimes even ferociously. The difficult circumstances (new censorship decree of 1850, Crimean war) and lack of entrepreneurship, experience and customers meant that half of the book stores opened in 1845 1860 was shut in less than five years. In 1858 the few leading publishers established The Finnish Book Publishers Association. Its first task was to create new business rules and manners for the book trade. The association s activities began to professionalise the whole network, but at the same time the earlier independence of regional publishing and selling enterprises diminished greatly. The consolidation of modern and open book store network in Finland is a history of a slow and complex development without clear signs of a beginning or an end. The ideal book store model was rarely accomplished in its all features. Nevertheless, book stores became the norm of the book trade. They managed to offer larger selections, reached larger clienteles and maintained constant activity better than any other book distribution model. In essential, the book stores methods have not changed up to present times.

Distribution and adhesion-promoting activity of alpha4 and alpha5 chain laminins in human endothelia and carcinomas

Basement membranes are specialized sheets of extracellular matrix found in contact with epithelia, endothelia, and certain isolated cells. They support tissue architecture and regulate cell behaviour. Laminins are among the main constituents of basement membranes. Due to differences between laminin isoforms, laminins confer structural and functional diversity to basement membranes. The first aim of this study was to gain insights into the potential functions of the then least characterized laminins, alpha4 chain laminins, by evaluating their distribution in human tissues. We thus created a monoclonal antibody specific for laminin alpha4 chain. By immunohistochemistry, alpha4 chain laminins were primarily localized to basement membranes of blood vessel endothelia, skeletal, heart, and smooth muscle cells, nerves, and adipocytes. In addition, alpha4 chain laminins were found in the region of certain epithelial basement membranes in the epidermis, salivary gland, pancreas, esophagus, stomach, intestine, and kidney. Because of the consistent presence of alpha4 chain laminins in endothelial basement membranes of blood vessels, we evaluated the potential roles of endothelial laminins in blood vessels, lymphatic vessels, and carcinomas. Human endothelial cells produced alpha4 and alpha5 chain laminins. In quantitative and morphological adhesion assays, human endothelial cells barely adhered to alpha4 chain-containing laminin-411. The weak interaction of endothelial cells with laminin-411 appeared to be mediated by alpha6beta1 integrin. The alpha5 chain-containing laminin-511 promoted endothelial cell adhesion better than laminin-411, but it did not promote the formation of cell-extracellular matrix adhesion complexes. The adhesion of endothelial cells to laminin-511 appeared to be mediated by Lutheran glycoprotein together with beta1 and alphavbeta3 integrins. The results suggest that these laminins may induce a migratory phenotype in endothelial cells. In lymphatic capillaries, endothelial basement membranes showed immunoreactivity for laminin alpha4, beta1, beta2, and gamma1 chains, type IV and XVIII collagens, and nidogen-1. Considering the assumed inability of alpha4 chain laminins to polymerize and to promote basement membrane assembly, the findings may in part explain the incomplete basement membrane formation in these vessels. Lymphatic capillaries of ovarian carcinomas showed immunoreactivity also for laminin alpha5 chain and its receptor Lutheran glycoprotein, emphasizing a difference between normal and ovarian carcinoma lymphatic capillaries. In renal cell carcinomas, immunoreactivity for laminin alpha4 chain was found in stroma and basement membranes of blood vessels. In most tumours, immunoreactivity for laminin alpha4 chain was also observed in the basement membrane region of tumour cell islets. Renal carcinoma cells produced alpha4 chain laminins. Laminin-411 did not promote adhesion of renal carcinoma cells, but inhibited their adhesion to fibronectin. Renal carcinoma cells migrated more on laminin-411 than on fibronectin. The results suggest that alpha4 chain laminins have a counteradhesive function, and may thus have a role in detachment and invasion of renal carcinoma cells.

Inpatient hospital care and its costs among type 1 diabetic patients in Finland : a nationwide longitudinal study

Background. In Finland, the incidence of type 1 diabetes mellitus (T1DM) is the highest in the world, and it continues to increase steadily. No effective preventative interventions exist either for individuals at high risk or for the population as a whole. In addition to problems with daily lifelong insulin replacement therapy, T1DM patients with long-lasting disease suffer from various diabetes related complications. The complications can lead to severe impairments and reductions in functional capacity and quality of life and in the worst case they can be fatal. Longitudinal studies on the costs of T1DM are extremely rare, especially in Finland. Typically, in these studies, distinctions between the various types of diabetes have not been made, and costs have not been calculated separately for the sexes. Aims. The aim of this study was to describe inpatient hospital care and costs of inpatient care in a cohort of 5,166 T1DM patients by sex during 1973-1998 in Finland. Inpatient care and costs of care due to T1DM without complications, due to T1DM with complications and due to other causes were calculated separately. Material and Methods. The study population consisted of all Finnish T1DM patients diagnosed before the age of 18 years between January 1st in 1965 and December 31st in 1979 and derived from the Finnish population based T1DM register (N=5,120 in 1979 and N=4,701 in 1997). Data on hospitalisations were obtained from the Finnish Hospital Discharge Register. Results. In the early stages of T1DM, the majority of the use of inpatient care was due to the treatment of T1DM without complications. There were enormous increases in the use of inpatient care for certain complications when T1DM lasted longer (from 9.5 years to 16.5 years). For women, the yearly number of bed-days for renal complications increased 4.8-fold, for peripheral vascular disease 4.3-fold and for ophthalmic complications 2.5-fold. For men, the corresponding increases were as follows: 5-fold, 6.9-fold and 2.5-fold. The yearly bed-days for glaucoma increased 8-fold, nephropathy 7-fold and microangiopathy 6-fold in the total population. During these 7 years, the yearly numbers of bed-days for T1DM without complications dropped dramatically. The length of stay in inpatient care decreased notably, but hospital visits became more frequent when the length of duration of T1DM increased from 9.5 years to 16.5 years. The costs of treatments due to complications increased when T1DM lasted longer. Costs due to inpatient care of complications in the cohort 2.5-folded as duration of T1DM increased from 9.5 years to 16.5 years, while the total costs of inpatient care in the cohort dropped by 22% due to an 80% decrease in the costs of care of T1DM without complications. Treating complications of female patients was more expensive than treating complications of men when T1DM had lasted 9.5 years; the mean annual costs for inpatient care of a female diabetic (any cause) were 1,642 , and the yearly costs of care of complications were 237 . The corresponding yearly mean costs for a male patient were 1,198 and 167 . Treating complications of female patients was more expensive than that of male patients also when the duration of diabetes was 16.5 years, although the difference in average annual costs between sexes was somewhat smaller. Conclusions. In the early phases of T1DM, the treatment of T1DM without complications causes a considerable amount of hospital bed-days. The use of inpatient care due to complications of T1DM strongly increases with ageing of patients. The economic burden of inpatient care of T1DM is substantial.

Campylobacter Infections of Domestic Origin in Finland

Campylobacter jejuni and C. coli are the leading causes of human bacterial gastroenteritis in developed countries. Most human Campylobacter infections are sporadic and a seasonal peak in the distribution of infections can be seen in the summer months in several countries, including Finland. A variety of risk factors for Campylobacter infections have been identified; handling and eating poultry, drinking unpasteurized milk, contact with domestic animals, and travelling abroad. However, the relative importance of the different risk factors in sporadic cases of Campylobacter infection remains unknown. In most cases, the infection is self-limiting and no specific treatment is required. Campylobacter enteritis can cause a wide range of complications, including reactive arthritis (ReA) that is reported in 1-5% of the cases. Seven clinical microbiology laboratories serving different geographical areas of Finland, participated in this multi-centre study, conducted during a seasonal peak in 2002. In a matched case-control study, domestically-acquired sporadic Campylobacter infections from three geographical areas were collected. The final study comprised 100 cases and 137 controls. Risk factors for sporadic domestically-acquired Campylobacter infections were identified on the basis of a questionnaire; swimming in natural waters was found to be a novel risk factor for Campylobacter infection. Other independent risk factors were tasting or eating raw or undercooked meat and drinking untreated water from a dug well. The role of bacterial strain and host characteristics are not fully understood in Campylobacter infections. Exposure factors, demographical characteristics, and the serotype of the Campylobacter isolate may affect the severity of the enteritis. This cross-sectional study comprised 114 patients with C. jejuni enteritis, diagnosed in three clinical microbiology laboratories; most of the patients had participated in the previous case-control study. Swimming was associated with age ≤ 5 years and serotype Pen 6,7 was found significantly more often among patients reporting swimming. The geographical distribution among serotypes varied; serotype Pen 4-complex appeared more often in patients from urban areas and serotype Pen 21 among patients from more rural areas. Thus, risk factors and sources of infection for C. jejuni infection may vary among individuals depending on age and geographical location. The in vitro susceptibilities of C. jejuni and C. coli strains isolated from patients infected abroad (85 strains) or domestically (393 strains) revealed that susceptibility to erythromycin is still high, even among isolates of foreign origin. However, the novel antimicrobial agent telithromycin did not offer any advantage over erythromycin; isolates with high minimal inhibitory concentrations (MICs) for erythromycin also showed reduced susceptibility to telithromycin. Reduced susceptibility to fluoroquinolones was detected almost exclusively among isolates of foreign origin and half of these isolates with high MICs for fluoroquinolones also showed elevated MICs for doxycycline. Questionnaires concerning complications associated with C. jejuni enteritis were sent to patients two months after becoming ill; 201 patients from seven different geographical areas were included in the study. Musculoskeletal complications after C. jejuni infection were commonly reported by patients (39%). The incidence of classical ReA was 4% and that of Achilles enthesopathy and/or heel pain 9%. Other C. jejuni-associated reactive joint symptoms were commonly reported, however, due to their milder nature seldom seen and diagnosed by a physician. The severity of the enteritis may predict further complications; stomach ache during enteritis was connected to the development of later joint pain. Early antimicrobial treatment, within two days from the start of symptoms, shortened the duration of diarrhoea by two days but did not prevent later musculoskeletal complications. Campylobacter is an important human enteropathogen and causes a significant burden of illness. As the incidence of Campylobacter infections is high, the importance of the infection and the occurrence of complications will increase. This stresses the importance of understanding the risk factors for acquiring Campylobacter infection and how bacterial strain and host characteristics may affect the risk for infection. The role of antimicrobial treatment for acute Campylobacter enteritis seems to be marginal and should be used restrictively.

The efficacy and potential risks of controlling sprouting in Finnish birches (Betula spp.) with the fungal decomposer Chondrostereum purpureum

Sprouting of fast-growing broad-leaved trees causes problems in young coniferous stands, under power transmission lines and along roads and railways. Public opinion and the Finnish Forest Certification System oppose the use of chemical herbicides to control sprouting, which means that most areas with problems rely on mechanical cutting. However, cutting is a poor control method for many broad-leaved species because the removal of leaders can stimulate the sprouting of side branches and cut stumps quickly re-sprout. In order to be effective, cutting must be carried out frequently but each cut increases the costs, making this control method increasingly difficult and expensive once begun. As such, alternative methods for sprout control that are both effective and environmentally sound represent a continuing challenge to managers and research biologists. Using biological control agents to prevent sprouting has been given serious consideration recently. Dutch and Canadian researchers have demonstrated the potential of the white-rot fungus Chondrostereum purpureum (Pers. ex Fr.) Pouzar as a control agent of stump sprouting in many hardwoods. These findings have focused the attention of the Finnish forestry community on the utilization of C. purpureum for biocontrol purposes. Primarily, this study sought determines the efficacy of native C. purpureum as an inhibitor of birch stump sprouting in Finland and to clarify its mode of action. Additionally, genotypic variation in Finnish C. purpureum was examined and the environmental risks posed by a biocontrol program using this fungus were assessed. Experimental results of the study demonstrated that C. purpureum clearly affects the sprouting of birch: both the frequency of living stumps and the number of living sprouts per stump were effectively reduced by the treatment. However, the treatment had no effect on the maximum height of new sprouts. There were clear differences among fungal isolates in preventing sprouting and those that possessed high oxidative activities as measured in the laboratory inhibited sprouting most efficiently in the field. The most effective treatment time during the growing season was in early and mid summer (May July). Genetic diversity in Nordic and Baltic populations of C. purpureum was found to be high at the regional scale but locally homogeneous. This natural distribution of diversity means that using local genotypes in biocontrol programs would effectively prevent the introduction of novel genes or genotypes. While a biocontrol program using local strains of C. purpureum would be environmentally neutral, pruned birches that are close to the treatment site would have a high susceptibility to infect by the fungus during the early spring.

Automatic Lameness Detection in a Milking Robot : Instrumentation, measurement software, algorithms for data analysis and a neural network model

The aim of this thesis is to develop a fully automatic lameness detection system that operates in a milking robot. The instrumentation, measurement software, algorithms for data analysis and a neural network model for lameness detection were developed. Automatic milking has become a common practice in dairy husbandry, and in the year 2006 about 4000 farms worldwide used over 6000 milking robots. There is a worldwide movement with the objective of fully automating every process from feeding to milking. Increase in automation is a consequence of increasing farm sizes, the demand for more efficient production and the growth of labour costs. As the level of automation increases, the time that the cattle keeper uses for monitoring animals often decreases. This has created a need for systems for automatically monitoring the health of farm animals. The popularity of milking robots also offers a new and unique possibility to monitor animals in a single confined space up to four times daily. Lameness is a crucial welfare issue in the modern dairy industry. Limb disorders cause serious welfare, health and economic problems especially in loose housing of cattle. Lameness causes losses in milk production and leads to early culling of animals. These costs could be reduced with early identification and treatment. At present, only a few methods for automatically detecting lameness have been developed, and the most common methods used for lameness detection and assessment are various visual locomotion scoring systems. The problem with locomotion scoring is that it needs experience to be conducted properly, it is labour intensive as an on-farm method and the results are subjective. A four balance system for measuring the leg load distribution of dairy cows during milking in order to detect lameness was developed and set up in the University of Helsinki Research farm Suitia. The leg weights of 73 cows were successfully recorded during almost 10,000 robotic milkings over a period of 5 months. The cows were locomotion scored weekly, and the lame cows were inspected clinically for hoof lesions. Unsuccessful measurements, caused by cows standing outside the balances, were removed from the data with a special algorithm, and the mean leg loads and the number of kicks during milking was calculated. In order to develop an expert system to automatically detect lameness cases, a model was needed. A probabilistic neural network (PNN) classifier model was chosen for the task. The data was divided in two parts and 5,074 measurements from 37 cows were used to train the model. The operation of the model was evaluated for its ability to detect lameness in the validating dataset, which had 4,868 measurements from 36 cows. The model was able to classify 96% of the measurements correctly as sound or lame cows, and 100% of the lameness cases in the validation data were identified. The number of measurements causing false alarms was 1.1%. The developed model has the potential to be used for on-farm decision support and can be used in a real-time lameness monitoring system.

The Significance of Wild Plants in the Evolutionary Ecology of Three Major Viruses Infecting Cultivated Sweetpotato in Uganda

The studies presented in this thesis contribute to the understanding of evolutionary ecology of three major viruses threatening cultivated sweetpotato (Ipomoea batatas Lam) in East Africa: Sweet potato feathery mottle virus (SPFMV; genus Potyvirus; Potyviridae), Sweet potato chlorotic stunt virus (SPCSV; genus Crinivirus; Closteroviridae) and Sweet potato mild mottle virus (SPMMV; genus Ipomovirus; Potyviridae). The viruses were serologically detected and the positive results confirmed by RT-PCR and sequencing. SPFMV was detected in 24 wild plant species of family Convolvulacea (genera Ipomoea, Lepistemon and Hewittia), of which 19 species were new natural hosts for SPFMV. SPMMV and SPCSV were detected in wild plants belonging to 21 and 12 species (genera Ipomoea, Lepistemon and Hewittia), respectively, all of which were previously unknown to be natural hosts of these viruses. SPFMV was the most abundant virus being detected in 17% of the plants, while SPMMV and SPCSV were detected in 9.8% and 5.4% of the assessed plants, respectively. Wild plants in Uganda were infected with the East African (EA), common (C), and the ordinary (O) strains, or co-infected with the EA and the C strain of SPFMV. The viruses and virus-like diseases were more frequent in the eastern agro-ecological zone than the western and central zones, which contrasted with known incidences of these viruses in sweetpotato crops, except for northern zone where incidences were lowest in wild plants as in sweetpotato. The NIb/CP junction in SPMMV was determined experimentally which facilitated CP-based phylogenetic and evolutionary analyses of SPMMV. Isolates of all the three viruses from wild plants were genetically similar to those found in cultivated sweetpotatoes in East Africa. There was no evidence of host-driven population genetic structures suggesting frequent transmission of these viruses between their wild and cultivated hosts. The p22 RNA silencing suppressor-encoding sequence was absent in a few SPCSV isolates, but regardless of this, SPCSV isolates incited sweet potato virus disease (SPVD) in sweetpotato plants co-infected with SPFMV, indicating that p22 is redundant for synergism between SCSV and SPFMV. Molecular evolutionary analysis revealed that isolates of strain EA of SPFMV that is largely restricted geographically in East Africa experience frequent recombination in comparison to isolates of strain C that is globally distributed. Moreover, non-homologous recombination events between strains EA and C were rare, despite frequent co-infections of these strains in wild plants, suggesting purifying selection against non-homologous recombinants between these strains or that such recombinants are mostly not infectious. Recombination was detected also in the 5 - and 3 -proximal regions of the SPMMV genome providing the first evidence of recombination in genus Ipomovirus, but no recombination events were detected in the characterized genomic regions of SPCSV. Strong purifying selection was implicated on evolution of majority of amino acids of the proteins encoded by the analyzed genomic regions of SPFMV, SPMMV and SPCSV. However, positive selection was predicted on 17 amino acids distributed over the whole the coat protein (CP) in the globally distributed strain C, as compared to only 4 amino acids in the multifunctional CP N-terminus (CP-NT) of strain EA largely restricted geographically to East Africa. A few amino acid sites in the N-terminus of SPMMV P1, the p7 protein and RNA silencing suppressor proteins p22 and RNase3 of SPCSV were also submitted to positive selection. Positively selected amino acids may constitute ligand-binding domains that determine interactions with plant host and/or insect vector factors. The P1 proteinase of SPMMV (genus Ipomovirus) seems to respond to needs of adaptation, which was not observed with the helper component proteinase (HC-Pro) of SPMMV, although the HC-Pro is responsible for many important molecular interactions in genus Potyvirus. Because the centre of origin of cultivated sweetpotato is in the Americas from where the crop was dispersed to other continents in recent history (except for the Australasia and South Pacific region), it would be expected that identical viruses and their strains occur worldwide, presuming virus dispersal with the host. Apparently, this seems not to be the case with SPMMV, the strain EA of SPFMV and the strain EA of SPCSV that are largely geographically confined in East Africa where they are predominant and occur both in natural and agro-ecosystems. The geographical distribution of plant viruses is constrained more by virus-vector relations than by virus-host interactions, which in accordance of the wide range of natural host species and the geographical confinement to East Africa suggest that these viruses existed in East African wild plants before the introduction of sweetpotato. Subsequently, these studies provide compelling evidence that East Africa constitutes a cradle of SPFMV strain EA, SPCSV strain EA, and SPMMV. Therefore, sweet potato virus disease (SPVD) in East Africa may be one of the examples of damaging virus diseases resulting from exchange of viruses between introduced crops and indigenous wild plant species. Keywords: Convolvulaceae, East Africa, epidemiology, evolution, genetic variability, Ipomoea, recombination, SPCSV, SPFMV, SPMMV, selection pressure, sweetpotato, wild plant species Author s Address: Arthur K. Tugume, Department of Agricultural Sciences, Faculty of Agriculture and Forestry, University of Helsinki, Latokartanonkaari 7, P.O Box 27, FIN-00014, Helsinki, Finland. Email: tugume.arthur@helsinki.fi Author s Present Address: Arthur K. Tugume, Department of Botany, Faculty of Science, Makerere University, P.O. Box 7062, Kampala, Uganda. Email: aktugume@botany.mak.ac.ug, tugumeka@yahoo.com

The Impact of Emissions Trading on the Price of Electricity in Nord Pool : Market Power and Price Determination in the Nordic Electricity Market

The objective of this thesis is to find out how dominant firms in a liberalised electricity market will react when they face an increase in the level of costs due to emissions trading, and how this will effect the price of electricity. The Nordic electricity market is chosen as the setting in which to examine the question, since recent studies on the subject suggest that interaction between electricity markets and emissions trading is very much dependent on conditions specific to each market area. There is reason to believe that imperfect competition prevails in the Nordic market, thus the issue is approached through the theory of oligopolistic competition. The generation capacity available at the market, marginal cost of electricity production and seasonal levels of demand form the data based on which the dominant firms are modelled using the Cournot model of competition. The calculations are made for two levels of demand, high and low, and with several values of demand elasticity. The producers are first modelled under no carbon costs and then by adding the cost of carbon dioxide at 20€/t to those technologies subject to carbon regulation. In all cases the situation under perfect competition is determined as a comparison point for the results of the Cournot game. The results imply that the potential for market power does exist on the Nordic market, but the possibility for exercising market power depends on the demand level. In season of high demand the dominant firms may raise the price significantly above competitive levels, and the situation is aggravated when the cost of carbon dioixide is accounted for. Under low demand leves there is no difference between perfect and imperfect competition. The results are highly dependent on the price elasticity of demand.

Composition operators, Aleksandrov measures and value distribution of analytic maps in the unit disc

A composition operator is a linear operator that precomposes any given function with another function, which is held fixed and called the symbol of the composition operator. This dissertation studies such operators and questions related to their theory in the case when the functions to be composed are analytic in the unit disc of the complex plane. Thus the subject of the dissertation lies at the intersection of analytic function theory and operator theory. The work contains three research articles. The first article is concerned with the value distribution of analytic functions. In the literature there are two different conditions which characterize when a composition operator is compact on the Hardy spaces of the unit disc. One condition is in terms of the classical Nevanlinna counting function, defined inside the disc, and the other condition involves a family of certain measures called the Aleksandrov (or Clark) measures and supported on the boundary of the disc. The article explains the connection between these two approaches from a function-theoretic point of view. It is shown that the Aleksandrov measures can be interpreted as kinds of boundary limits of the Nevanlinna counting function as one approaches the boundary from within the disc. The other two articles investigate the compactness properties of the difference of two composition operators, which is beneficial for understanding the structure of the set of all composition operators. The second article considers this question on the Hardy and related spaces of the disc, and employs Aleksandrov measures as its main tool. The results obtained generalize those existing for the case of a single composition operator. However, there are some peculiarities which do not occur in the theory of a single operator. The third article studies the compactness of the difference operator on the Bloch and Lipschitz spaces, improving and extending results given in the previous literature. Moreover, in this connection one obtains a general result which characterizes the compactness and weak compactness of the difference of two weighted composition operators on certain weighted Hardy-type spaces.

Modeling Asymmetries in Financial Data with Multiplicative Error Models

This thesis addresses modeling of financial time series, especially stock market returns and daily price ranges. Modeling data of this kind can be approached with so-called multiplicative error models (MEM). These models nest several well known time series models such as GARCH, ACD and CARR models. They are able to capture many well established features of financial time series including volatility clustering and leptokurtosis. In contrast to these phenomena, different kinds of asymmetries have received relatively little attention in the existing literature. In this thesis asymmetries arise from various sources. They are observed in both conditional and unconditional distributions, for variables with non-negative values and for variables that have values on the real line. In the multivariate context asymmetries can be observed in the marginal distributions as well as in the relationships of the variables modeled. New methods for all these cases are proposed. Chapter 2 considers GARCH models and modeling of returns of two stock market indices. The chapter introduces the so-called generalized hyperbolic (GH) GARCH model to account for asymmetries in both conditional and unconditional distribution. In particular, two special cases of the GARCH-GH model which describe the data most accurately are proposed. They are found to improve the fit of the model when compared to symmetric GARCH models. The advantages of accounting for asymmetries are also observed through Value-at-Risk applications. Both theoretical and empirical contributions are provided in Chapter 3 of the thesis. In this chapter the so-called mixture conditional autoregressive range (MCARR) model is introduced, examined and applied to daily price ranges of the Hang Seng Index. The conditions for the strict and weak stationarity of the model as well as an expression for the autocorrelation function are obtained by writing the MCARR model as a first order autoregressive process with random coefficients. The chapter also introduces inverse gamma (IG) distribution to CARR models. The advantages of CARR-IG and MCARR-IG specifications over conventional CARR models are found in the empirical application both in- and out-of-sample. Chapter 4 discusses the simultaneous modeling of absolute returns and daily price ranges. In this part of the thesis a vector multiplicative error model (VMEM) with asymmetric Gumbel copula is found to provide substantial benefits over the existing VMEM models based on elliptical copulas. The proposed specification is able to capture the highly asymmetric dependence of the modeled variables thereby improving the performance of the model considerably. The economic significance of the results obtained is established when the information content of the volatility forecasts derived is examined.

The Population Consequences of Sex and Conflict

Natural selection generally operates at the level of the individual, or more specifically at the level of the gene. As a result, individual selection does not always favour traits which benefit the population or species as a whole. The spread of an individual gene may even act to the detriment of the organism in which it finds. Thus selection at the level of the individual can affect processes at the level of the organism, group or even at the level of the species. As most behaviours ultimately affect births, deaths and the distribution of individuals, it seems inevitable that behavioural decisions will have an impact on population dynamics and population densities. Behavioural decisions can often involve costs through allocation of energy into behavioural strategies, such as the investment into armaments involved in fighting over resources or increased mortality due to injury or increased predation risk. Similarly, behaviour may act o to benefit the population, in terms of higher survival and increased fecundity. Examples include increased investment through parental care, choosing a mate based on the nuptial gifts they may supply and choosing territories in the face of competition. Investigating the impact of behaviour on population ecology may seem like a trivial task, but it is likely to have important consequences at different levels. For example, antagonistic behaviour may occasionally become so extreme that it increases the risk of extinction, and such extinction risk may have important implications for conservation. As a corollary, any such behaviour may also act as a macroevolutionary force, weeding out populations with traits which, whilst beneficial to the individuals in the short term, ultimately result in population extinction. In this thesis, I examine how behaviours, specifically conflict and competition over a resource and aspects of behaviour involved in sexual selection, can affect population densities, and what the implications are for the evolution and ecology of the populations in question. It is found that both behaviours related to individual conflict and mating strategies can have an effect at the level of the population, but that various factors, such as a feedback between selection and population densities or macroevolution caused by species extinctions, may act to limit the intensity of conflicts that we observe in nature.