The interaction between the equity premium and the risk-free rate

The equity premium arises from the interaction between the atemporal risk premium for equity, the risk-free rate of intertemporal substitution and the impact of risk on the precautionary motive for saving. Depending on parameter values, the equity premium may either be increased or reduced by the presence of undiversifiable background risk. (C) 2000 Elsevier Science S.A. All rights reserved.

Returns to farm-level soil conservation on tropical steep slopes: The case of the Eritrean highlands

This study conducts an economic analysis of investment in simple soil conservation technologies in the highlands of Eritrea. The data used in the analysis were obtained from a farm survey and supplemented with data from secondary sources. Risk analysis techniques are used to take account of the uncertainties regarding the relationship between soil erosion and crop yield. The financial analysis reveals negative net present values (NPVs) and internal rates of return (IRRs) below 12 per cent for various slope categories. On the other hand, the economic analysis returns positive NPVs and IRRs of over 20 per cent. The results clearly indicate that in-vestment in soil conservation technology may not be a viable short-term proposition from the farmer's point of view and yet the net social benefits are positive. There is a strong case for government to provide incentives for soil conservation in view of the economic benefits.

A model for predicting the future incidence of coronary heart disease within percentiles of coronary heart disease risk

Background We present a method (The CHD Prevention Model) for modelling the incidence of fatal and nonfatal coronary heart disease (CHD) within various CHD risk percentiles of an adult population. The model provides a relatively simple tool for lifetime risk prediction for subgroups within a population. It allows an estimation of the absolute primary CHD risk in different populations and will help identify subgroups of the adult population where primary CHD prevention is most appropriate and cost-effective. Methods The CHD risk distribution within the Australian population was modelled, based on the prevalence of CHD risk, individual estimates of integrated CHD risk, and current CHD mortality rates. Predicted incidence of first fatal and nonfatal myocardial infarction within CHD risk strata of the Australian population was determined. Results Approximately 25% of CHD deaths were predicted to occur amongst those in the top 10 percentiles of integrated CHD risk, regardless of age group or gender. It was found that while all causes survival did not differ markedly between percentiles of CHD risk before the ages of around 50-60, event-free survival began visibly to differ about 5 years earlier. Conclusions The CHD Prevention Model provides a means of predicting future CHD incidence amongst various strata of integrated CHD risk within an adult population. It has significant application both in individual risk counselling and in the identification of subgroups of the population where drug therapy to reduce CHD risk is most cost-effective. J Cardiovasc Risk 8:31-37 (C) 2001 Lippincott Williams & Wilkins.

A method for setting the size of plant conservation target areas

Realistic time frames in which management decisions are made often preclude the completion of the detailed analyses necessary for conservation planning. Under these circumstances, efficient alternatives may assist in approximating the results of more thorough studies that require extensive resources and time. We outline a set of concepts and formulas that may be used in lieu of detailed population viability analyses and habitat modeling exercises to estimate the protected areas required to provide desirable conservation outcomes for a suite of threatened plant species. We used expert judgment of parameters and assessment of a population size that results in a specified quasiextinction risk based on simple dynamic models The area required to support a population of this size is adjusted to take into account deterministic and stochastic human influences, including small-scale disturbance deterministic trends such as habitat loss, and changes in population density through processes such as predation and competition. We set targets for different disturbance regimes and geographic regions. We applied our methods to Banksia cuneata, Boronia keysii, and Parsonsia dorrigoensis, resulting in target areas for conservation of 1102, 733, and 1084 ha, respectively. These results provide guidance on target areas and priorities for conservation strategies.

Small area population disease burden

Small area health statistics has assumed increasing importance as the focus of population and public health moves to a more individualised approach of smaller area populations. Small populations and low event occurrence produce difficulties in interpretation and require appropriate statistical methods, including for age adjustment. There are also statistical questions related to multiple comparisons. Privacy and confidentiality issues include the possibility of revealing information on individuals or health care providers by fine cross-tabulations. Interpretation of small area population differences in health status requires consideration of migrant and Indigenous composition, socio-economic status and rural-urban geography before assessment of the effects of physical environmental exposure and services and interventions. Burden of disease studies produce a single measure for morbidity and mortality - disability adjusted life year (DALY) - which is the sum of the years of life lost (YLL) from premature mortality and the years lived with disability (YLD) for particular diseases (or all conditions). Calculation of YLD requires estimates of disease incidence (and complications) and duration, and weighting by severity. These procedures often mean problematic assumptions, as does future discounting and age weighting of both YLL and YLD. Evaluation of the Victorian small area population disease burden study presents important cross-disciplinary challenges as it relies heavily on synthetic approaches of demography and economics rather than on the empirical methods of epidemiology. Both empirical and synthetic methods are used to compute small area mortality and morbidity, disease burden, and then attribution to risk factors. Readers need to examine the methodology and assumptions carefully before accepting the results.

The burden of disease and injury in Australia

An overview of the results of the Australian Burden of Disease (ABD) study is presented. The ABD study was the first to use methodology developed for the Global Burden of Disease study to measure the burden of disease and injury in a developed country. In 1996, mental disorders were the main causes of disability burden, responsible for nearly 30% of total years of life lost to disability (YLD), with depression accounting for 8% of the total YLD. Ischaemic heart disease and stroke were the main contributors to the disease burden disability-adjusted life years (DALYs), together causing nearly 18% of the total disease burden. Risk factors such as smoking, alcohol consumption, physical inactivity, hypertension, high blood cholesterol, obesity and inadequate fruit and vegetable consumption were responsible for much of the overall disease burden in Australia. The lessons learnt from the ABD study are discussed, together with methodological issues that require further attention.

Decreased perinatal sunshine duration is associated with increased non-affective but not affective psychosis birth rates

We have previously found an association between variations in schizophrenia birth rates and varyinglevels of perinatal sunshine duration. This study examines whether such an association can also be found for Ža. affective psychosis, and Žb. broadly defined nonaffective psychoses. Data for individuals born between 1931 and 1970 in Australia with ICD9 Other PsychosisŽ295–299.were obtained from the Queensland Mental Health Statistical System. ‘Affective psychosis’ included affective psychosis, schizo-affective psychosis, and depressive and excitative non-organic psychoses. ‘Non-affective psychosis’ included chizophrenia, paranoid disorders and other non-organic psychoses. Those receiving both affective and non-affective psychotic diagnoses were excluded. Rates per 10,000 live monthly general population births were calculated. For each month, we assessed the agreementŽusing the kappa statistic. between trends in Ža. birth rates and Žb. long-term trends in seasonally adjusted perinatal sunshine duration. The analyses were performed separately for males and females. There were 6265 with non-affective psychosis ŽMs3964 rate 66r10,000; Fs2299 44r10,000. and 2858 with affective psychosisŽMs1392 24r10,000; Fs1466 28r10,000.. There were no significant associations between Ža. affective psychosis birth rates for either males or females and Žb. sunshine duration. There was a significant association between nonaffective psychosis birth rates for males only and Žb. sunshine duration Žkappas0.15 p-0.001.. This suggests that, as a risk factor, the effect of reduced perinatal sunshine is specifically associated with males who develop non-affective psychosis. The Stanley Foundation supported this project.

Paternal age as a risk factor for psychosis and schizophrenia: Findings from Denmark, Sweden and Australia

The offspringof older fathers have an increased risk of various disorders that may be due to the accumulation of DNA mutations during spermatogenesis. Previous studies have suggested increased paternal age may be a risk factor for schizophrenia. The aim of the current study was to examine paternal age as a risk factor for schizophrenia andror psychosis. We used data from three sources: a population-based cohort studyŽDenmark., and two case-control studiesŽSweden and Australia.. In the Danish and Australian studies, we examined both psychosis and schizophrenia. In the Swedish study we examined psychosis only. After controllingfor the effect of maternal age, increased paternal age was significantly associated with increased risk of both psychosis and schizophrenia in the Danish study and of psychosis in the Swedish study. The Australian study found no association between paternal age and risk of psychosis or schizophrenia. In all three studies the relationship between paternal age and risk of disorder in the offspring was AUB-shaped. In addition to an increased risk for the offspringof older father Ž)35 years., there was a non-significant increase for the offspringof fathers aged less than 20 years. The possible role of paternally derived DNA mutations andror other psychosocial factors associated with older paternal age warrants further research. The ‘U’-shaped relationship suggests that factors other than DNA mutations may warrant consideration in this research. The Stanley Foundation supported this project.

Influence of patient age and implantation technique on the probability of re-replacement of the homograft aortic valve

Background and aim of the study: Results of valve re-replacement (reoperation) in 898 patients undergoing aortic valve replacement with cryopreserved homograft valves between 1975 and 1998 are reported. The study aim was to provide estimates of unconditional probability of valve reoperation and cumulative incidence function (actual risk) of reoperation. Methods: Valves were implanted by subcoronary insertion (n = 500), inclusion cylinder (n = 46), and aortic root replacement (n = 352). Probability of reoperation was estimated by adopting a mixture model framework within which estimates were adjusted for two risk factors: patient age at initial replacement, and implantation technique. Results: For a patient aged 50 years, the probability of reoperation in his/her lifetime was estimated as 44% and 56% for non-root and root replacement techniques, respectively. For a patient aged 70 years, estimated probability of reoperation was 16% and 25%, respectively. Given that a reoperation is required, patients with non-root replacement have a higher hazard rate than those with root replacement (hazards ratio = 1.4), indicating that non-root replacement patients tend to undergo reoperation earlier before death than root replacement patients. Conclusion: Younger patient age and root versus non-root replacement are risk factors for reoperation. Valve durability is much less in younger patients, while root replacement patients appear more likely to live longer and hence are more likely to require reoperation.

Perioperative epidural analgesia and outcome after major abdominal surgery in high-risk patients

In a primary analysis of a large recently completed randomized trial in 915 high-risk patients undergoing major abdominal surgery, we found no difference in outcome between patients receiving perioperative epidural analgesia and those receiving IV opioids, apart from the incidence of respiratory failure. Therefore, we performed a selected number of predetermined subgroup analyses to identify specific types of patients who may have derived benefit from epidural analgesia. We found no difference in outcome between epidural and control groups in subgroups at increased risk of respiratory or cardiac complications or undergoing aortic surgery, nor in a subgroup with failed epidural block (all P > 0.05). There was a small reduction in the duration of postoperative ventilation (geometric mean [SD]: control group, 0.3 [6.5] h, versus epidural group, 0.2 [4.8] h, P = 0.048). No differences were found in length of stay in intensive care or in the hospital. There was no relationship between frequency of use of epidural analgesia in routine practice outside the trial and benefit from epidural analgesia in the trial. We found no evidence that perioperative epidural analgesia significantly influences major morbidity or mortality after major abdominal surgery.