Estimating variable returns to scale production frontiers with alternative stochastic assumptions

Two stochastic production frontier models are formulated within the generalized production function framework popularized by Zellner and Revankar (Rev. Econ. Stud. 36 (1969) 241) and Zellner and Ryu (J. Appl. Econometrics 13 (1998) 101). This framework is convenient for parsimonious modeling of a production function with returns to scale specified as a function of output. Two alternatives for introducing the stochastic inefficiency term and the stochastic error are considered. In the first the errors are added to an equation of the form h(log y, theta) = log f (x, beta) where y denotes output, x is a vector of inputs and (theta, beta) are parameters. In the second the equation h(log y,theta) = log f(x, beta) is solved for log y to yield a solution of the form log y = g[theta, log f(x, beta)] and the errors are added to this equation. The latter alternative is novel, but it is needed to preserve the usual definition of firm efficiency. The two alternative stochastic assumptions are considered in conjunction with two returns to scale functions, making a total of four models that are considered. A Bayesian framework for estimating all four models is described. The techniques are applied to USDA state-level data on agricultural output and four inputs. Posterior distributions for all parameters, for firm efficiencies and for the efficiency rankings of firms are obtained. The sensitivity of the results to the returns to scale specification and to the stochastic specification is examined. (c) 2004 Elsevier B.V. All rights reserved.

Output price subsidies in a stochastic world

This article studies the comparative statics of output subsidies for firms, with monotonic preferences over costs and returns, that face price and production uncertainty. The modeling of deficiency payments, support-price schemes, and stochastic supply shifts in a state-space framework is discussed. It is shown how these notions can be used, via a simple application of Shephard's lemma, to analyze input-demand shifts once comparative-static results for supply are available. A range of comparative-static results for supply are then developed and discussed.

A stochastic metapopulation model accounting for habitat dynamics

A stochastic metapopulation model accounting for habitat dynamics is presented. This is the stochastic SIS logistic model with the novel aspect that it incorporates varying carrying capacity. We present results of Kurtz and Barbour, that provide deterministic and diffusion approximations for a wide class of stochastic models, in a form that most easily allows their direct application to population models. These results are used to show that a suitably scaled version of the metapopulation model converges, uniformly in probability over finite time intervals, to a deterministic model previously studied in the ecological literature. Additionally, they allow us to establish a bivariate normal approximation to the quasi-stationary distribution of the process. This allows us to consider the effects of habitat dynamics on metapopulation modelling through a comparison with the stochastic SIS logistic model and provides an effective means for modelling metapopulations inhabiting dynamic landscapes.

First-principles quantum dynamics in interacting Bose gases II: stochastic gauges

First principles simulations of the quantum dynamics of interacting Bose gases using the stochastic gauge representation are analysed. In a companion paper, we showed how the positive-P representation can be applied to these problems using stochastic differential equations. That method, however, is limited by increased sampling error as time evolves. Here, we show how the sampling error can be greatly reduced and the simulation time significantly extended using stochastic gauges. In particular, local stochastic gauges (a subset) are investigated. Improvements are confirmed in numerical calculations of single-, double- and multi-mode systems in the weak-mode coupling regime. Convergence issues are investigated, including the recognition of two modes by which stochastic equations produced by phase-space methods in general can diverge: movable singularities and a noise-weight relationship. The example calculated here displays wave-like behaviour in spatial correlation functions propagating in a uniform 1D gas after a sudden change in the coupling constant. This could in principle be tested experimentally using Feshbach resonance methods.

Oscillatory regulation of hes1: Discrete stochastic delay modelling and simulation

Discrete stochastic simulations are a powerful tool for understanding the dynamics of chemical kinetics when there are small-to-moderate numbers of certain molecular species. In this paper we introduce delays into the stochastic simulation algorithm, thus mimicking delays associated with transcription and translation. We then show that this process may well explain more faithfully than continuous deterministic models the observed sustained oscillations in expression levels of hes1 mRNA and Hes1 protein.

Stochastic dynamic programming for election timing: A game theory approach

In this paper, we consider dynamic programming for the election timing in the majoritarian parliamentary system such as in Australia, where the government has a constitutional right to call an early election. This right can give the government an advantage to remain in power for as long as possible by calling an election, when its popularity is high. On the other hand, the opposition's natural objective is to gain power, and it will apply controls termed as "boosts" to reduce the chance of the government being re-elected by introducing policy and economic responses. In this paper, we explore equilibrium solutions to the government, and the opposition strategies in a political game using stochastic dynamic programming. Results are given in terms of the expected remaining life in power, call and boost probabilities at each time at any level of popularity.

Stochastic models for mainland-island metapopulations in static and dynamic landscapes

This paper has three primary aims: to establish an effective means for modelling mainland-island metapopulations inhabiting a dynamic landscape: to investigate the effect of immigration and dynamic changes in habitat on metapopulation patch occupancy dynamics; and to illustrate the implications of our results for decision-making and population management. We first extend the mainland-island metapopulation model of Alonso and McKane [Bull. Math. Biol. 64:913-958,2002] to incorporate a dynamic landscape. It is shown, for both the static and the dynamic landscape models, that a suitably scaled version of the process converges to a unique deterministic model as the size of the system becomes large. We also establish that. under quite general conditions, the density of occupied patches, and the densities of suitable and occupied patches, for the respective models, have approximate normal distributions. Our results not only provide us with estimates for the means and variances that are valid at all stages in the evolution of the population, but also provide a tool for fitting the models to real metapopulations. We discuss the effect of immigration and habitat dynamics on metapopulations, showing that mainland-like patches heavily influence metapopulation persistence, and we argue for adopting measures to increase connectivity between this large patch and the other island-like patches. We illustrate our results with specific reference to examples of populations of butterfly and the grasshopper Bryodema tuberculata.

Stochastic models for regulatory networks of the genetic toggle switch

Bistability arises within a wide range of biological systems from the A phage switch in bacteria to cellular signal transduction pathways in mammalian cells. Changes in regulatory mechanisms may result in genetic switching in a bistable system. Recently, more and more experimental evidence in the form of bimodal population distributions indicates that noise plays a very important role in the switching of bistable systems. Although deterministic models have been used for studying the existence of bistability properties under various system conditions, these models cannot realize cell-to-cell fluctuations in genetic switching. However, there is a lag in the development of stochastic models for studying the impact of noise in bistable systems because of the lack of detailed knowledge of biochemical reactions, kinetic rates, and molecular numbers. in this work, we develop a previously undescribed general technique for developing quantitative stochastic models for large-scale genetic regulatory networks by introducing Poisson random variables into deterministic models described by ordinary differential equations. Two stochastic models have been proposed for the genetic toggle switch interfaced with either the SOS signaling pathway or a quorum-sensing signaling pathway, and we have successfully realized experimental results showing bimodal population distributions. Because the introduced stochastic models are based on widely used ordinary differential equation models, the success of this work suggests that this approach is a very promising one for studying noise in large-scale genetic regulatory networks.

Stochastic delay differential equations for genetic regulatory networks

Time delay is an important aspect in the modelling of genetic regulation due to slow biochemical reactions such as gene transcription and translation, and protein diffusion between the cytosol and nucleus. In this paper we introduce a general mathematical formalism via stochastic delay differential equations for describing time delays in genetic regulatory networks. Based on recent developments with the delay stochastic simulation algorithm, the delay chemical masterequation and the delay reaction rate equation are developed for describing biological reactions with time delay, which leads to stochastic delay differential equations derived from the Langevin approach. Two simple genetic regulatory networks are used to study the impact of' intrinsic noise on the system dynamics where there are delays. (c) 2006 Elsevier B.V. All rights reserved.

Stochastic modelling of the invasion process of nematodes in fly larvae

Stochastic models based on Markov birth processes are constructed to describe the process of invasion of a fly larva by entomopathogenic nematodes. Various forms for the birth (invasion) rates are proposed. These models are then fitted to data sets describing the observed numbers of nematodes that have invaded a fly larval after a fixed period of time. Non-linear birthrates are required to achieve good fits to these data, with their precise form leading to different patterns of invasion being identified for three populations of nematodes considered. One of these (Nemasys) showed the greatest propensity for invasion. This form of modelling may be useful more generally for analysing data that show variation which is different from that expected from a binomial distribution.

Stochastic modelling and simulations for solute transport in porous media

A stochastic model for solute transport in aquifers is studied based on the concepts of stochastic velocity and stochastic diffusivity. By applying finite difference techniques to the spatial variables of the stochastic governing equation, a system of stiff stochastic ordinary differential equations is obtained. Both the semi-implicit Euler method and the balanced implicit method are used for solving this stochastic system. Based on the Karhunen-Loeve expansion, stochastic processes in time and space are calculated by means of a spatial correlation matrix. Four types of spatial correlation matrices are presented based on the hydraulic properties of physical parameters. Simulations with two types of correlation matrices are presented.

Quantification of geological uncertainty and risk using stochastic simulation and applications in the coal mining industry

Stochastic simulation is a recognised tool for quantifying the spatial distribution of geological uncertainty and risk in earth science and engineering. Metals mining is an area where simulation technologies are extensively used; however, applications in the coal mining industry have been limited. This is particularly due to the lack of a systematic demonstration illustrating the capabilities these techniques have in problem solving in coal mining. This paper presents two broad and technically distinct areas of applications in coal mining. The first deals with the use of simulation in the quantification of uncertainty in coal seam attributes and risk assessment to assist coal resource classification, and drillhole spacing optimisation to meet pre-specified risk levels at a required confidence. The second application presents the use of stochastic simulation in the quantification of fault risk, an area of particular interest to underground coal mining, and documents the performance of the approach. The examples presented demonstrate the advantages and positive contribution stochastic simulation approaches bring to the coal mining industry