Infrastructure, investment and development evaluation: A Complex Stakeholder Perception Mapping approach for improving local and regional economic development outcomes

Partial evaluation of infrastructure investments have resulted in expensive mistakes, unsatisfactory outcomes and increased uncertainties for too many stakeholders, communities and economies in both developing and developed nations. "Complex Stakeholder Perception Mapping" (CSPM), is a novel approach that can address existing limitations by inclusively framing, capturing and mapping the spectrum of insights and perceptions using extended Geographic Information Systems. Maps generated in CSPM offer presentations of flexibly combined, complex perceptions of stakeholders on multiple aspects of development. CSPM extends the applications of GIS software in non-spatial mapping and of Multi-Criteria Analysis with a multidimensional evaluation platform and augments decision science capabilities in addressing complexities. Application of CSPM can improve local and regional economic gains from infrastructure projects and aid any multi-objective and multi-stakeholder decision situations.

On the benefits of equicorrelation for portfolio allocation

The importance of modelling correlation has long been recognised in the field of portfolio management, with largedimensional multivariate problems increasingly becoming the focus of research. This paper provides a straightforward and commonsense approach toward investigating a number of models used to generate forecasts of the correlation matrix for large-dimensional problems.We find evidence in favour of assuming equicorrelation across various portfolio sizes, particularly during times of crisis. During periods of market calm, however, the suitability of the constant conditional correlation model cannot be discounted, especially for large portfolios. A portfolio allocation problem is used to compare forecasting methods. The global minimum variance portfolio and Model Confidence Set are used to compare methods, while portfolio weight stability and relative economic value are also considered.

Why does child labor persist with declining poverty?

We develop a dynamic overlapping generations model to highlight the role of income inequality in explaining the persistence of child labor under declining poverty. Differential investment in two forms of human capital—schooling and health—in the presence of inequality gives rise to a nonconvergent income distribution in the steady state characterized by multiple steady states of relative income with varying levels of education, health, and child labor. The child labor trap thus generated is shown to preserve itself despite rising per capita income. Policy recommendations include public provision of education targeted toward reducing schooling costs for the poor or raising the efficacy of public health infrastructure.

Selection criteria in the search for a sperm donor: Behavioural traits versus physical appearance

Despite extensive literature on female mate choice, empirical evidence on women’s mating preferences in the search for a sperm donor is scarce, even though this search, by isolating a male’s genetic impact on offspring from other factors like paternal investment, offers a naturally ”controlled” research setting. In this paper, we work to fill this void by examining the rapidly growing online sperm donor market, which is raising new challenges by offering women novel ways to seek out donor sperm. We not only identify individual factors that influence women’s mating preferences but find strong support for the proposition that behavioural traits (inner values) are more important in these choices than physical appearance (exterior values). We also report evidence that physical factors matter more than resources or other external cues of material success, perhaps because the relevance of good character in donor selection is part of a female psychological adaptation throughout evolutionary history. The lack of evidence on a preference for material resources, on the other hand, may indicate the ability of peer socialization and better access to resources to rapidly shape the female decision process. Overall, the paper makes useful contributions to both the literature on human behaviour and that on decision-making in extreme and highly important situations.

In search of good probability assessors: An experimental comparison of elicitation rules for confidence judgments

In this paper, we use an experimental design to compare the performance of elicitation rules for subjective beliefs. Contrary to previous works in which elicited beliefs are compared to an objective benchmark, we consider a purely subjective belief framework (confidence in one’s own performance in a cognitive task and a perceptual task). The performance of different elicitation rules is assessed according to the accuracy of stated beliefs in predicting success. We measure this accuracy using two main factors: calibration and discrimination. For each of them, we propose two statistical indexes and we compare the rules’ performances for each measurement. The matching probability method provides more accurate beliefs in terms of discrimination, while the quadratic scoring rule reduces overconfidence and the free rule, a simple rule with no incentives, which succeeds in eliciting accurate beliefs. Nevertheless, the matching probability appears to be the best mechanism for eliciting beliefs due to its performances in terms of calibration and discrimination, but also its ability to elicit consistent beliefs across measures and across tasks, as well as its empirical and theoretical properties.

The impact of project announcements on property values: An empirical analysis

The study examines the property value impacts of an announcement of a project which has potential environmental impacts as distinct from other studies that address costs associated with under-construction and the operating impacts of developments. The hypothesis is that the announcement of a proposed project with potential environmental impact creates uncertainty in the property market of the affected area, and this impact is greater on properties closer to the project than those farther from it. The results of the study confirm the hypothesis and indicate that the marginal willingness to pay for properties within a 5 km distance declined by AU$17,020 per km proximity to the proposed heavy vehicle route, after the proposed route was announced. The results support the need for more holistic measurement of cost–benefit analysis of projects and provide a basis for improved consideration by policy makers of the rights of affected parties.

An experimental investigation of moral commitments

This thesis explored the impact of non-contractual agreements in economic decisions. These statements of intent serve as a commitment device in strategic decisions and have been found to be an effective alternative to strong regulations in promoting social behaviour. Three studies have been undertaken using conceptual and methodological approaches from Behavioral and Experimental Economics. The first study explored in a public good setting the effect of public statements about intended social behaviour. The second study tested whether promises can help to promote co-operation in environments with uncertain choice options. The third study investigated a possible application of statement of intent and tested the effect of payment promises in a tax setting.

A case study of short-sale constraints and limits to arbitrage

This paper uses a unique data set of trades in a unique pair of securities that enables the precise identification of individual broker activity and the trade direction of that activity. We find direct evidence that the imposition (removal) of short-sale constraints limits (generates) trading activity consistent with brokers exploiting apparent mispricing.

The role of offsets in compensating for damage in the coastal and marine environments

This thesis examines the extent of which economic instruments can be used to minimise environmental damage in the coastal and marine environments, and the role of offsets to compensate for residual damage. Economic principles are used to review current command and control systems, potential incentive based mechanisms, and the development of appropriate offsets. Implementing offsets in the marine environment has a number of challenges, so alternative approaches may be necessary. The study finds that offsets in areas remote from the initial impact, or even to protect different species, may be acceptable provided they result in greater conservation benefits than the standard like-for-like offset. This study is particularly relevant for the design of offsets in the coastal and marine environments where there is limited scope for like-for-like offsets.

Forecasting outcomes in tennis matches using within-match betting markets

Klaassen and Magnus (2003) provide a model of the probability of a given player winning a tennis match, with the prediction updated on a point-by-point basis. This paper provides a point-by-point comparison of that model with the probability of a given player winning the match, as implied by betting odds. The predictions implied by the betting odds match the model predictions closely, with an extremely high correlation being found between the model and the betting market. The results for both men’s and women’s matches also suggest that there is a high level of efficiency in the betting market, demonstrating that betting markets are a good predictor of the outcomes of tennis matches. The significance of service breaks and service being held is anticipated up to four points prior to the end of the game. However, the tendency of players to lose more points than would be expected after conceding a break of service is not captured instantaneously in betting odds. In contrast, there is no evidence of a biased reaction to a player winning a game on service.

The equity and efficiency of the Australian share market with respect to director trading

Purpose – The purpose of this paper is to investigate the extent of directors breaching the reporting requirements of the Australian Stock Exchange (ASX) and the Corporations Act in Australia. Further, it seeks to assess whether directors in Australia achieve abnormal returns from trades in their own companies. Design/methodology/approach – Using an event study approach on an Australian sample, abnormal returns for a range of situations were estimated. Findings – A total of 13 (seven) per cent of own‐company directors trades do not meet the ASX (Corporations Act) requirement of reporting within five (14) business days. Directors do achieve abnormal returns through trading in shares of their own companies. Ignoring transaction costs, outsiders can achieve abnormal returns by imitating directors' trades. Analysis of returns to directors after they trade but before they announce the trade to the market shows that directors are making small but statistically significant returns that are not available to the market. Analysis of returns to directors subsequent to the ASX reporting requirement up to the day the trade is reported shows that directors are making small but statistically significant returns that should be available to the market. Research limitations/implications – Future research should investigate the linkages between late reporting by directors and disadvantages to outside shareholders and the implementation of internal policies implemented to mitigate insider trading. Practical implications – Market participants should remain vigilant regarding the potential for late/non‐reporting of directors' trades. Originality/value – Uncovering breaches of reporting regulations are particularly important given that directors tend to purchase (sell) shares when the price is low (high), thereby achieving abnormal returns.

The differential impact of monetary policy announcements and explanatory minutes releases on the Australian interest rate futures market

Unlike US and Continental European jurisdictions, Australian monetary policy announcements are not followed promptly by projections materials or comprehensive summaries that explain the decision process. This information is disclosed 2 weeks later when the explanatory minutes of the Reserve Bank board meeting are released. This paper is the first study to exploit the features of the Australian monetary policy environment in order to examine the differential impact of monetary policy announcements and explanatory statements on the Australian interest rate futures market. We find that both monetary policy announcements and explanatory minutes releases have a significant impact on the implied yield and volatility of Australian interest rate futures contracts. When the differential impact of these announcements is examined using the full sample, no statistically significant difference is found. However, when the sample is partitioned based on stable periods and the Global Financial Crisis, a differential impact is evident. Further, contrary to the findings of Kim and Nguyen (2008), Lu et al. (2009), and Smales (2012a), the response along the yield curve, is found to be indifferent between the short and medium terms.

An evaluation of the effectiveness of Value-at-Risk (VaR) models for Australian banks under Basel III

This study compares Value-at-Risk (VaR) measures for Australian banks over a period that includes the Global Financial Crisis (GFC) to determine whether the methodology and parameter selection are important for capital adequacy holdings that will ultimately support a bank in a crisis period. VaR methodology promoted under Basel II was largely criticised during the GFC for its failure to capture downside risk. However, results from this study indicate that 1-year parametric and historical models produce better measures of VaR than models with longer time frames. VaR estimates produced using Monte Carlo simulations show a high percentage of violations but with lower average magnitude of a violation when they occur. VaR estimates produced by the ARMA GARCH model also show a relatively high percentage of violations, however, the average magnitude of a violation is quite low. Our findings support the design of the revised Basel II VaR methodology which has also been adopted under Basel III.

Fertility in Australia: The role of policy and the labour market

One of the most discussed topics in labour and demographic studies, population ageing and stability, is closely related to fertility choices. This thesis explores recent developments in the fertility literature in the context of Australia. We investigate individual preferences for child bearing, the determinants of fertility decisions and the effectiveness of policies implemented by the government aimed at improving total fertility. The first study highlights the impact of monetary incentives on the decision to bear children in light of potentially differential responses across the native and immigrant population. The second study analyses the role of unemployment and job stability on the fertility choices of women. The final study examines whether the quality-quantity trade-off exists for Australian families and explores the impact of siblings on a child's health and educational outcomes.

Environmental efficiency of energy, materials, and emissions

This study estimates the environmental efficiency of international listed firms in 10 worldwide sectors from 2007 to 2013 by applying an order-m method, a non-parametric approach based on free disposal hull with subsampling bootstrapping. Using a conventional output of gross profit and two conventional inputs of labor and capital, this study examines the order-m environmental efficiency accounting for the presence of each of 10 undesirable inputs/outputs and measures the shadow prices of each undesirable input and output. The results show that there is greater potential for the reduction of undesirable inputs rather than bad outputs. On average, total energy, electricity, or water usage has the potential to be reduced by 50%. The median shadow prices of undesirable inputs, however, are much higher than the surveyed representative market prices. Approximately 10% of the firms in the sample appear to be potential sellers or production reducers in terms of undesirable inputs/outputs, which implies that the price of each item at the current level has little impact on most of the firms. Moreover, this study shows that the environmental, social, and governance activities of a firm do not considerably affect environmental efficiency.