Asset pricing in created markets

We investigate the applicability of the present-value asset pricing model to fishing quota markets by applying instrumental variable panel data estimation techniques to 15 years of market transactions from New Zealand's individual transferable quota (ITQ) market. In addition to the influence of current fishing rents, we explore the effect of market interest rates, risk, and expected changes in future rents on quota asset prices. The results indicate that quota asset prices are positively related to declines in interest rates, lower levels of risk, expected increases in future fish prices, and expected cost reductions from rationalization under the quota system. © 2007 American Agricultural Economics Association.

Regulating the Ocean: Piracy and Protection along the East African Coast

From 2008-2012, a dramatic upsurge in incidents of maritime piracy in the Western Indian Ocean led to renewed global attention to this region: including the deployment of multi national naval patrols, attempts to prosecute suspected pirates, and the development of financial interdiction systems to track and stop the flow of piracy ransoms. Largely seen as the maritime ripple effect of anarchy on land, piracy has been slotted into narratives of state failure and problems of governance and criminality in this region.

This view fails to account for a number of factors that were crucial in making possible the unprecedented rise of Somali piracy and its contemporary transformation. Instead of an emphasis on failed states and crises of governance, my dissertation approaches maritime piracy within a historical and regional configuration of actors and relationships that precede this round of piracy and will outlive it. The story I tell in this work begins before the contemporary upsurge of piracy and closes with a foretaste of the itineraries beyond piracy that are being crafted along the East African coast.

Beginning in the world of port cities in the long nineteenth century, my dissertation locates piracy and the relationship between trade, plunder, and state formation within worlds of exchange, including European incursions into this oceanic space. Scholars of long distance trade have emphasized the sociality engendered through commerce and the centrality of idioms of trust and kinship in structuring mercantile relationships across oceanic divides. To complement this scholarship, my work brings into view the idiom of protection: as a claim to surety, a form of tax, and a moral claim to authority in trans-regional commerce.

To build this theory of protection, my work combines archival sources with a sustained ethnographic engagement in coastal East Africa, including the pirate ports of Northern Somalia, and focuses on the interaction between land-based pastoral economies and maritime trade. This connection between land and sea calls attention to two distinct visions of the ocean: one built around trade and mobility and the other built on the ocean as a space of extraction and sovereignty. Moving between historical encounters over trade and piracy and the development of a national maritime economy during the height of the Somali state, I link the contemporary upsurge of maritime piracy to the confluence of these two conceptualizations of the ocean and the ideas of capture, exchange, and redistribution embedded within them.

The second section of my dissertation reframes piracy as an economy of protection and a form of labor implicated within other legal and illegal economies in the Indian Ocean. Based on extensive field research, including interviews with self-identified pirates, I emphasize the forms of labor, value, and risk that characterize piracy as an economy of protection. The final section of my dissertation focuses on the diverse international, regional, and local responses to maritime piracy. This section locates the response to piracy within a post-Cold War and post-9/11 global order and longer attempts to regulate and assuage the risks of maritime trade. Through an ethnographic focus on maritime insurance markets, navies, and private security contractors, I analyze the centrality of protection as a calculation of risk and profit in the contemporary economy of counter-piracy.

Through this focus on longer histories of trade, empire, and regulation my dissertation reframes maritime piracy as an economy of protection straddling boundaries of land and sea, legality and illegality, law and economy, and history and anthropology.

Can prospect theory explain risk-seeking behavior by terminally ill patients?

Patients with life-threatening conditions sometimes appear to make risky treatment decisions as their condition declines, contradicting the risk-averse behavior predicted by expected utility theory. Prospect theory accommodates such decisions by describing how individuals evaluate outcomes relative to a reference point and how they exhibit risk-seeking behavior over losses relative to that point. The authors show that a patient's reference point for his or her health is a key factor in determining which treatment option the patient selects, and they examine under what circumstances the more risky option is selected. The authors argue that patients' reference points may take time to adjust following a change in diagnosis, with implications for predicting under what circumstances a patient may select experimental or conventional therapies or select no treatment.

A soft robust model for optimization under ambiguity

In this paper, we propose a framework for robust optimization that relaxes the standard notion of robustness by allowing the decision maker to vary the protection level in a smooth way across the uncertainty set. We apply our approach to the problem of maximizing the expected value of a payoff function when the underlying distribution is ambiguous and therefore robustness is relevant. Our primary objective is to develop this framework and relate it to the standard notion of robustness, which deals with only a single guarantee across one uncertainty set. First, we show that our approach connects closely to the theory of convex risk measures. We show that the complexity of this approach is equivalent to that of solving a small number of standard robust problems. We then investigate the conservatism benefits and downside probability guarantees implied by this approach and compare to the standard robust approach. Finally, we illustrate theme thodology on an asset allocation example consisting of historical market data over a 25-year investment horizon and find in every case we explore that relaxing standard robustness with soft robustness yields a seemingly favorable risk-return trade-off: each case results in a higher out-of-sample expected return for a relatively minor degradation of out-of-sample downside performance. © 2010 INFORMS.

Decision making across social contexts: Competition increases preferences for risk in chimpanzees and bonobos

Context can have a powerful influence on decision-making strategies in humans. In particular, people sometimes shift their economic preferences depending on the broader social context, such as the presence of potential competitors or mating partners. Despite the important role of competition in primate conspecific interactions, as well as evidence that competitive social contexts impact primates' social cognitive skills, there has been little study of how social context influences the strategies that nonhumans show when making decisions about the value of resources. Here we investigate the impact of social context on preferences for risk (variability in payoffs) in our two closest phylogenetic relatives, chimpanzees, Pan troglodytes, and bonobos, Pan paniscus. In a first study, we examine the impact of competition on patterns of risky choice. In a second study, we examine whether a positive play context affects risky choices. We find that (1) apes are more likely to choose the risky option when making decisions in a competitive context; and (2) the play context did not influence their risk preferences. Overall these results suggest that some types of social contexts can shift patterns of decision making in nonhuman apes, much like in humans. Comparative studies of chimpanzees and bonobos can therefore help illuminate the evolutionary processes shaping human economic behaviour. © 2012 The Association for the Study of Animal Behaviour.

Using Bird Distributions to Assess Extinction Risk and Identify Conservation Priorities in Biodiversity Hotspots

Habitat loss, fragmentation, and degradation threaten the World’s ecosystems and species. These, and other threats, will likely be exacerbated by climate change. Due to a limited budget for conservation, we are forced to prioritize a few areas over others. These places are selected based on their uniqueness and vulnerability. One of the most famous examples is the biodiversity hotspots: areas where large quantities of endemic species meet alarming rates of habitat loss. Most of these places are in the tropics, where species have smaller ranges, diversity is higher, and ecosystems are most threatened.

Species distributions are useful to understand ecological theory and evaluate extinction risk. Small-ranged species, or those endemic to one place, are more vulnerable to extinction than widely distributed species. However, current range maps often overestimate the distribution of species, including areas that are not within the suitable elevation or habitat for a species. Consequently, assessment of extinction risk using these maps could underestimate vulnerability.

In order to be effective in our quest to conserve the World’s most important places we must: 1) Translate global and national priorities into practical local actions, 2) Find synergies between biodiversity conservation and human welfare, 3) Evaluate the different dimensions of threats, in order to design effective conservation measures and prepare for future threats, and 4) Improve the methods used to evaluate species’ extinction risk and prioritize areas for conservation. The purpose of this dissertation is to address these points in Colombia and other global biodiversity hotspots.

In Chapter 2, I identified the global, strategic conservation priorities and then downscaled to practical local actions within the selected priorities in Colombia. I used existing range maps of 171 bird species to identify priority conservation areas that would protect the greatest number of species at risk in Colombia (endemic and small-ranged species). The Western Andes had the highest concentrations of such species—100 in total—but the lowest densities of national parks. I then adjusted the priorities for this region by refining these species ranges by selecting only areas of suitable elevation and remaining habitat. The estimated ranges of these species shrank by 18–100% after accounting for habitat and suitable elevation. Setting conservation priorities on the basis of currently available range maps excluded priority areas in the Western Andes and, by extension, likely elsewhere and for other taxa. By incorporating detailed maps of remaining natural habitats, I made practical recommendations for conservation actions. One recommendation was to restore forest connections to a patch of cloud forest about to become isolated from the main Andes.

For Chapter 3, I identified areas where bird conservation met ecosystem service protection in the Central Andes of Colombia. Inspired by the November 11th (2011) landslide event near Manizales, and the current poor results of Colombia’s Article 111 of Law 99 of 1993 as a conservation measure in this country, I set out to prioritize conservation and restoration areas where landslide prevention would complement bird conservation in the Central Andes. This area is one of the most biodiverse places on Earth, but also one of the most threatened. Using the case of the Rio Blanco Reserve, near Manizales, I identified areas for conservation where endemic and small-range bird diversity was high, and where landslide risk was also high. I further prioritized restoration areas by overlapping these conservation priorities with a forest cover map. Restoring forests in bare areas of high landslide risk and important bird diversity yields benefits for both biodiversity and people. I developed a simple landslide susceptibility model using slope, forest cover, aspect, and stream proximity. Using publicly available bird range maps, refined by elevation, I mapped concentrations of endemic and small-range bird species. I identified 1.54 km2 of potential restoration areas in the Rio Blanco Reserve, and 886 km2 in the Central Andes region. By prioritizing these areas, I facilitate the application of Article 111 which requires local and regional governments to invest in land purchases for the conservation of watersheds.

Chapter 4 dealt with elevational ranges of montane birds and the impact of lowland deforestation on their ranges in the Western Andes of Colombia, an important biodiversity hotspot. Using point counts and mist-nets, I surveyed six altitudinal transects spanning 2200 to 2800m. Three transects were forested from 2200 to 2800m, and three were partially deforested with forest cover only above 2400m. I compared abundance-weighted mean elevation, minimum elevation, and elevational range width. In addition to analyzing the effect of deforestation on 134 species, I tested its impact within trophic guilds and habitat preference groups. Abundance-weighted mean and minimum elevations were not significantly different between forested and partially deforested transects. Range width was marginally different: as expected, ranges were larger in forested transects. Species in different trophic guilds and habitat preference categories showed different trends. These results suggest that deforestation may affect species’ elevational ranges, even within the forest that remains. Climate change will likely exacerbate harmful impacts of deforestation on species’ elevational distributions. Future conservation strategies need to account for this by protecting connected forest tracts across a wide range of elevations.

In Chapter 5, I refine the ranges of 726 species from six biodiversity hotspots by suitable elevation and habitat. This set of 172 bird species for the Atlantic Forest, 138 for Central America, 100 for the Western Andes of Colombia, 57 for Madagascar, 102 for Sumatra, and 157 for Southeast Asia met the criteria for range size, endemism, threat, and forest use. Of these 586 species, the Red List deems 108 to be threatened: 15 critically endangered, 29 endangered, and 64 vulnerable. When ranges are refined by elevational limits and remaining forest cover, 10 of those critically endangered species have ranges < 100km2, but then so do 2 endangered species, seven vulnerable, and eight non-threatened ones. Similarly, 4 critically endangered species, 20 endangered, and 12 vulnerable species have refined ranges < 5000km2, but so do 66 non-threatened species. A striking 89% of these species I have classified in higher threat categories have <50% of their refined ranges inside protected areas. I find that for 43% of the species I assessed, refined range sizes fall within thresholds that typically have higher threat categories than their current assignments. I recommend these species for closer inspection by those who assess risk. These assessments are not only important on a species-by-species basis, but by combining distributions of threatened species, I create maps of conservation priorities. They differ significantly from those created from unrefined ranges.

Simplified Predictive Instrument to Rule Out Acute Coronary Syndromes in a High-Risk Population.

BACKGROUND: It is unclear whether diagnostic protocols based on cardiac markers to identify low-risk chest pain patients suitable for early release from the emergency department can be applied to patients older than 65 years or with traditional cardiac risk factors. METHODS AND RESULTS: In a single-center retrospective study of 231 consecutive patients with high-risk factor burden in which a first cardiac troponin (cTn) level was measured in the emergency department and a second cTn sample was drawn 4 to 14 hours later, we compared the performance of a modified 2-Hour Accelerated Diagnostic Protocol to Assess Patients with Chest Pain Using Contemporary Troponins as the Only Biomarker (ADAPT) rule to a new risk classification scheme that identifies patients as low risk if they have no known coronary artery disease, a nonischemic electrocardiogram, and 2 cTn levels below the assay's limit of detection. Demographic and outcome data were abstracted through chart review. The median age of our population was 64 years, and 75% had Thrombosis In Myocardial Infarction risk score ≥2. Using our risk classification rule, 53 (23%) patients were low risk with a negative predictive value for 30-day cardiac events of 98%. Applying a modified ADAPT rule to our cohort, 18 (8%) patients were identified as low risk with a negative predictive value of 100%. In a sensitivity analysis, the negative predictive value of our risk algorithm did not change when we relied only on undetectable baseline cTn and eliminated the second cTn assessment. CONCLUSIONS: If confirmed in prospective studies, this less-restrictive risk classification strategy could be used to safely identify chest pain patients with more traditional cardiac risk factors for early emergency department release.

Impact of Genetic Testing and Family Health History Based Risk Counseling on Behavior Change and Cognitive Precursors for Type 2 Diabetes.

Family health history (FHH) in the context of risk assessment has been shown to positively impact risk perception and behavior change. The added value of genetic risk testing is less certain. The aim of this study was to determine the impact of Type 2 Diabetes (T2D) FHH and genetic risk counseling on behavior and its cognitive precursors. Subjects were non-diabetic patients randomized to counseling that included FHH +/- T2D genetic testing. Measurements included weight, BMI, fasting glucose at baseline and 12 months and behavioral and cognitive precursor (T2D risk perception and control over disease development) surveys at baseline, 3, and 12 months. 391 subjects enrolled of which 312 completed the study. Behavioral and clinical outcomes did not differ across FHH or genetic risk but cognitive precursors did. Higher FHH risk was associated with a stronger perceived T2D risk (pKendall < 0.001) and with a perception of "serious" risk (pKendall < 0.001). Genetic risk did not influence risk perception, but was correlated with an increase in perception of "serious" risk for moderate (pKendall = 0.04) and average FHH risk subjects (pKendall = 0.01), though not for the high FHH risk group. Perceived control over T2D risk was high and not affected by FHH or genetic risk. FHH appears to have a strong impact on cognitive precursors of behavior change, suggesting it could be leveraged to enhance risk counseling, particularly when lifestyle change is desirable. Genetic risk was able to alter perceptions about the seriousness of T2D risk in those with moderate and average FHH risk, suggesting that FHH could be used to selectively identify individuals who may benefit from genetic risk testing.

Potassium Measures and Their Associations with Glucose and Diabetes Risk: The Multi-Ethnic Study of Atherosclerosis (MESA).

BACKGROUND: Recent studies have found low-normal potassium (K) to be associated with increased diabetes risk. We sought to verify these associations in a multi-ethnic US cohort; and to determine if these associations extend to US Hispanics and Asian-Americans. METHODS: We analyzed data from Multi-Ethnic Study of Atherosclerosis (MESA) participants who were free-of-diabetes at baseline. We examined cross-sectional associations between measures of K-serum, dietary, and urine-with fasting glucose and HOMA-IR. We examined longitudinal associations between K and diabetes risk over 8 years. FINDINGS: In multivariable models, compared to those with higher serum K (≥4.5mmol/L), those with lower serum K (<4.0mmol/L) had significantly higher fasting glucose [1.3 mg/dL (95%CI 0.2, 2.4), P-value = 0.03]. Incident diabetes developed in 1281 of 5415 at-risk participants. In minimally-adjusted models, we found inverse associations between serum and dietary K and diabetes risk. Compared to those with higher serum K, those with lower serum K had an HR (95% CI) of incident diabetes of 1.23 (1.04, 1.47), P-value = 0.02. However, these associations were attenuated in fully-adjusted models. We found no significant interaction between potassium and ethnicity. CONCLUSIONS: In this multi-ethnic cohort, we found a significant inverse association between serum K and fasting glucose but no significant association with longer-term diabetes risk. This inverse association between potassium and glucose must be studied further to understand the physiology and its potential impact on chronic health.