Is the Australian wool futures market efficient as a predictor of spot prices?

Giles and Goss (1980) have suggested that, if a futures market provides a forward pricing function, then it is an efficient market. In this article a simple test for whether the Australian Wool Futures market is efficient is proposed. The test is based on applying cointegration techniques to test the Law of One Price over a three, six, nine, and twelve month spread of futures prices. We found that the futures market is efficient for up to a six-month spread, but no further into the future. Because futures market prices can be used to predict spot prices up to six months in advance, woolgrowers can use the futures price to assess when they market their clip, but not for longer-term production planning decisions. (C) 1999 John Wiley & Sons, Inc.

Asset Price Instability and Policy Responses: The Legacy of Liberalisation

The debate about the dynamics and potential policy responses to asset inflation has intensified in recent years. Some analysts, notably Borio and Lowe, have called for 'subtle' changes to existing monetary targeting frameworks to try to deal with the problems of asset inflation and have attempted to developed indicators of financial vulnerability to aid this process. In contrast, this paper argues that the uncertainties involved in understanding financial market developments and their potential impact on the real economy are likely to remain too high to embolden policy makers. The political and institutional risks associated with policy errors are also significant. The fundamental premise that a liberalised financial system is based on 'efficient' market allocation cannot be overlooked. The corollary is that any serious attempt to stabilize financial market outcomes must involve at least a partial reversal of deregulation.

Experimental evidence that partner choice is a driving force in the payoff distribution among cooperators or mutualists: the cleaner fish case

Supply and demand largely determine the price of goods on human markets. It has been proposed that in animals, similar forces influence the payoff distribution between trading partners in Sexual selection, intraspecific cooperation and interspecific mutualism. Here we present the first experimental evidence supporting biological market theory in it study on cleaner fish, Labroides dimidiatus. Cleaners interact with two classes of clients: choosy client species with access to several cleaners usually do not queue for service and do not return if ignored, while resident client species with access to only one cleaning station do queue or return. We used plexiglas plates with equal amounts of food to stimulate these behaviours of the two client classes. Cleaners soon inspected 'choosy' plates before 'resident' plates. This supports previous field observations that suggest that client species with access to several cleaners exert choice to receive better(immediate) service.

Client fish ectoparasite loads and cleaner shrimp Urocaridella sp c hunger levels affect cleaning behaviour

Cleaning is a classic example of mutualism and determining the factors that maintain the balance between the costs and benefits for mutualist partners can assist our understanding of how cleaning relationships are maintained. Optimal foraging theory suggests two factors that might help to maintain the relationship between cleaners and their clients: client ectoparasite load and cleaner hunger levels. The ecological relevance and importance of foraging by cleaner fish in marine systems has been demonstrated repeatedly, yet there is little information available on this behaviour in cleaner shrimp. To determine whether cleaner shrimp base their choice of client fish on food patch quality (i.e. client fish ectoparasite load) we offered the yellow-beaked cleaner shrimp Urocaridella sp. c a choice of parasitized and unparasitized rock cods, Cephalopholis cyanostigma. To determine whether cleaner shrimp hunger levels influence cleaning time, we manipulated hunger levels in Urocaridella sp. c and examined their behaviour towards parasitized client fish. Cleaner shrimp preferred parasitized to unparasitized client fish and food-deprived cleaner shrimp cleaned parasitized rock cods more frequently than satiated cleaner shrimp did. Therefore, variations in client fish ectoparasite load and cleaner shrimp hunger level are two factors that affect the balance in this mutualism. Finally, our results meet some of the assumptions of biological market theory, a framework used to understand cooperative interactions, and thus this framework is suggested for future studies on this cleaning system.

Can globalisation result in less efficient and more vulnerable industries?

Growing economic globalisation (a means of market extension) may increase the economic vulnerability of firms in modern industries, especially those in which firms experience substantial economies of scale. The possibility is explored that globalisation activates competitive pressures that forces firms into a situation where their leverage (fixed costs relative to variable costs, or overhead cost relative to operating costs or capital intensity) rises substantially. Consequently, they become increasingly vulnerable to a sudden adverse change in economic conditions, such as a collapse in the demand for their industry’s product. This is explored for monopolistically competitive markets and also for oligopolistic markets of the type considered and modelled by Sweezy using kinked demand curves. In addition, globalisation is hypothesised to induce firms to become more uniformly efficient. While this has static efficiency advantages, this lack of heterogeneity in productive efficiency of firms can make for economic inefficiency in the adjustment of the industry to altered economic conditions. It is shown that lack of variation in the economic efficiency of firms can impede the speed of market adjustment to new equilibria and may destabilise market equilibria.

Assessing the competitiveness of loss allocation methods in a deregulated electricity market

This paper critically assesses several loss allocation methods based on the type of competition each method promotes. This understanding assists in determining which method will promote more efficient network operations when implemented in deregulated electricity industries. The methods addressed in this paper include the pro rata [1], proportional sharing [2], loss formula [3], incremental [4], and a new method proposed by the authors of this paper, which is loop-based [5]. These methods are tested on a modified Nordic 32-bus network, where different case studies of different operating points are investigated. The varying results obtained for each allocation method at different operating points make it possible to distinguish methods that promote unhealthy competition from those that encourage better system operation.

A hybrid probabilistic criterion for market-based transmission expansion planning

Market-based transmission expansion planning gives information to investors on where is the most cost efficient place to invest and brings benefits to those who invest in this grid. However, both market issue and power system adequacy problems are system planers’ concern. In this paper, a hybrid probabilistic criterion of Expected Economical Loss (EEL) is proposed as an index to evaluate the systems’ overall expected economical losses during system operation in a competitive market. It stands on both investors’ and planner’s point of view and will further improves the traditional reliability cost. By applying EEL, it is possible for system planners to obtain a clear idea regarding the transmission network’s bottleneck and the amount of losses arises from this weak point. Sequentially, it enables planners to assess the worth of providing reliable services. Also, the EEL will contain valuable information for moneymen to undertake their investment. This index could truly reflect the random behaviors of power systems and uncertainties from electricity market. The performance of the EEL index is enhanced by applying Normalized Coefficient of Probability (NCP), so it can be utilized in large real power systems. A numerical example is carried out on IEEE Reliability Test System (RTS), which will show how the EEL can predict the current system bottleneck under future operational conditions and how to use EEL as one of planning objectives to determine future optimal plans. A well-known simulation method, Monte Carlo simulation, is employed to achieve the probabilistic characteristic of electricity market and Genetic Algorithms (GAs) is used as a multi-objective optimization tool.

A power system control scheme based on security visualisation in parameter space

Power system real time security assessment is one of the fundamental modules of the electricity markets. Typically, when a contingency occurs, it is required that security assessment and enhancement module shall be ready for action within about 20 minutes’ time to meet the real time requirement. The recent California black out again highlighted the importance of system security. This paper proposed an approach for power system security assessment and enhancement based on the information provided from the pre-defined system parameter space. The proposed scheme opens up an efficient way for real time security assessment and enhancement in a competitive electricity market for single contingency case

What are the economic prospects of developing aquaculture in Queensland to supply the low price white fillet market? Lessons from the US channel catfish industry

The farming of channel catfish (Ictalurus punctatus) is the largest (by volume and value) and most successful (in terms of market impact) aquaculture industry in the United States of America. Farmed channel catfish is the most consumed (in terms of volume per capita) fish fillet in the U.S. market. Within Australia, it has long been suggested by researchers and industry that silver perch (Bidyanus bidyanus) and possibly other endemic teraponid species possess similar biological attributes for aquaculture as channel catfish and may have the potential to generate a similar industry. The current teraponid industry in Australia, however, shows very little resemblance to the catfish industry, either in production style or market philosophy. A well established budget framework from the literature on U.S. channel catfish farming has been adapted for cost and climate conditions of the Burdekin region, Queensland, Australia. Breakeven prices for the hypothetical teraponid farms were found to be up to 50% higher than those published for catfish farms however were much lower than those reported for silver perch production in Australia using current, endemic styles of production. The breakeven prices for the hypothetical teraponid farms were most sensitive (in order of significance) to feed prices, production rates, interest rates, fingerling prices and electricity prices. At equivalent feed costs the costs of production between the hypothetical catfish farms in the Mississippi, U.S. and the hypothetical teraponid farms in the Burdekin, Australia were remarkably similar. The cost of feeds suitable for teraponid production in Australia are currently around double that of catfish feeds in the U.S. Issues currently hindering the development of a large scale teraponid industry in Australia are discussed.

Efficient transformation and regeneration of diverse cultivars of peanut (Arachis hypogaea L.) by particle bombardment into embryogenic callus produced from mature seeds

Peanut, one of the world's most important oilseed crops, has a narrow germplasm base and lacks sources of resistance to several major diseases. The species is considered recalcitrant to transformation, with few confirmed transgenic plants upon particle bombardment or Agrobacterium treatment. Reported transformation methods are limited by low efficiency, cultivar specificity, chimeric or infertile transformants, or availability of explants. Here we present a method to efficiently transform cultivars in both botanical types of peanut, by (1) particle bombardment into embryogenic callus derived from mature seeds, (2) escape-free (not stepwise) selection for hygromycin B resistance, (3) brief osmotic desiccation followed by sequential incubation on charcoal and cytokinin-containing media; resulting in efficient conversion of transformed somatic embryos into fertile, non-chimeric, transgenic plants. The method produces three to six independent transformants per bombardment of 10 cm(2) embryogenic callus. Potted, transgenic plant lines can be regenerated within 9 months of callus initiation, or 6 months after bombardment. Transgene copy number ranged from one to 20 with multiple integration sites. There was ca. 50% coexpression of hph and luc or uidA genes coprecipitated on separate plasmids. Reporter gene (luc) expression was confirmed in T-1 progeny from each of six tested independent transformants. Insufficient seeds were produced under containment conditions to determine segregation ratios. The practicality of the technique for efficient cotransformation with selected and unselected genes is demonstrated using major commercial peanut varieties in Australia (cv. NC-7, a virginia market type) and Indonesia (cv. Gajah, a spanish market type).

Notes on market failure and the Paretian (Kaldor-Hicks) relevance and irrelevance of unfavourable externalities

The following are notes that have been distributed by me over the last few years to students in Environmental Economics at The University of Queensland. They give particular attention to whether externalities are Pareto or Kaldor-Hicks relevant from a policy point of view. Externalities are Kaldor-Hicks or Pareto irrelevant if no change is possible for which gainers could compensate losers. Both absolute and marginal externalities may be Kaldor-Hicks relevant. Infra-marginal negative externalities are often, but not always, Kaldor-Hicks irrelevant. There are at least two cases where such externalities can be relevant. First, the absolute impact of the negative externality may be so great that the source of the externality should be eliminated. Secondly, if the externality arises from production, its nature may depend on the type of production technique adopted. Although for the technique adopted, an infra-marginal negative externality occurs. That is Paretian irrelevant given that choice of this technique is the only available possibility, alternative techniques may actually be available in practice. Some of these may generate even smaller total external effects and be socially preferable. Both cases are outlined and illustrated in these notes. The analysis reveals the dangers of relying on marginalism for deciding on environmental policy. Total (external) effects are often of great social and economic importance and appropriate social choices cannot be made on the basis of marginalism alone.