Management motivation for using financial derivatives in Australia

This study takes a direct approach to determine management motivation for the use of financial derivatives. We survey a sample of Australian firms on attitudes to derivative use and financial risk management. Management views are sought on the importance of a series of theoretical reasons for using derivatives. Generally, we find that managers are focused on the broad reduction of risk and volatility of cash flows and earnings in using derivatives. Specific issues such as reducing bankruptcy costs, debt levels and taxation are not considered as important. A further interesting result from this research is that even though firms may use derivatives they may not necessarily hedge all of their annual exposures across different financial risks. This helps explain the inconsistency of results in many empirical studies on the determinants of derivative use.

Minding the money: A growing responsibility for informal carers

Managing the assets of older people is a common and potentially complex task of informal care with legal, financial, cultural, political and family dimensions. Older people are increasingly recognised -as having significant assets, but the family, the state, service providers and the market have competing interests in their use. Increased policy interest in self-provision and user-charges for services underline the importance of asset management in protecting the current and future health, care and accommodation choices of older people. Although 'minding the money' has generally been included as an informal care-giving task, there is limited recognition of either its growing importance and complexity or of care-givers' involvement. The focus of both policy and practice have been primarily on substitute decision-making and abuse. This paper reports an Australian national survey and semi-structured interviews that have explored the prevalence of non-professional involvement in asset management. The findings reveal the nature and extent of involvement, the tasks that informal carers take on, the management processes that they use, and that 'minding the money' is a common informal care task and mostly undertaken in the private sphere using some risky practices. Assisting informal care-givers with asset management and protecting older people from financial risks and abuse require various strategic policy and practice responses that extend beyond substitute decision-making legislation. Policies and programmes are required: to increase the awareness of the tasks, tensions and practices surrounding asset management; to improve the financial literacy of older people, their informal care-givers and service providers; to ensure access to information, advice and support services; and to develop better accountability practices.

Increasing profits and reducing risks in crop production using participatory systems simulation approaches

The development of cropping systems simulation capabilities world-wide combined with easy access to powerful computing has resulted in a plethora of agricultural models and consequently, model applications. Nonetheless, the scientific credibility of such applications and their relevance to farming practice is still being questioned. Our objective in this paper is to highlight some of the model applications from which benefits for farmers were or could be obtained via changed agricultural practice or policy. Changed on-farm practice due to the direct contribution of modelling, while keenly sought after, may in some cases be less achievable than a contribution via agricultural policies. This paper is intended to give some guidance for future model applications. It is not a comprehensive review of model applications, nor is it intended to discuss modelling in the context of social science or extension policy. Rather, we take snapshots around the globe to 'take stock' and to demonstrate that well-defined financial and environmental benefits can be obtained on-farm from the use of models. We highlight the importance of 'relevance' and hence the importance of true partnerships between all stakeholders (farmer, scientists, advisers) for the successful development and adoption of simulation approaches. Specifically, we address some key points that are essential for successful model applications such as: (1) issues to be addressed must be neither trivial nor obvious; (2) a modelling approach must reduce complexity rather than proliferate choices in order to aid the decision-making process (3) the cropping systems must be sufficiently flexible to allow management interventions based on insights gained from models. The pro and cons of normative approaches (e.g. decision support software that can reach a wide audience quickly but are often poorly contextualized for any individual client) versus model applications within the context of an individual client's situation will also be discussed. We suggest that a tandem approach is necessary whereby the latter is used in the early stages of model application for confidence building amongst client groups. This paper focuses on five specific regions that differ fundamentally in terms of environment and socio-economic structure and hence in their requirements for successful model applications. Specifically, we will give examples from Australia and South America (high climatic variability, large areas, low input, technologically advanced); Africa (high climatic variability, small areas, low input, subsistence agriculture); India (high climatic variability, small areas, medium level inputs, technologically progressing; and Europe (relatively low climatic variability, small areas, high input, technologically advanced). The contrast between Australia and Europe will further demonstrate how successful model applications are strongly influenced by the policy framework within which producers operate. We suggest that this might eventually lead to better adoption of fully integrated systems approaches and result in the development of resilient farming systems that are in tune with current climatic conditions and are adaptable to biophysical and socioeconomic variability and change. (C) 2001 Elsevier Science Ltd. All rights reserved.

Technological and financial approaches to risk management in agriculture: an integrated approach

In the present paper, risk-management problems where farmers manage risk both through production decisions and through the use of market-based and informal risk-management mechanisms are considered. It is shown that many of these problems share a common structure, and that a unified and informative treatment of a broad spectrum of risk-management tools is possible within a cost-minimisation framework, under minimal conditions on their objective functions. Fundamental results are derived that apply regardless of the producer's preference towards risks, using only the no-arbitrage condition that agricultural producers never forego any opportunity to lower costs without lowering returns.

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.

The respiratory risks of cannabis smoking

Cannabis users have recently been told that cannabis smoking is ª relatively harmlessº 1 and presents ª minimal danger to the lungsº .2 These statements seem at odds with the similarities between the carcinogens and other toxic constituents in tobacco and cannabis smoke, the fact that un® ltered cannabis smoke contains more of some carcinogens than ® ltered tobacco smoke3,4 and other evidence that chronic cannabis smoking has adverse respiratory effects.5

On modifications to the long-term survival mixture model in the presence of competing risks

A mixture model for long-term survivors has been adopted in various fields such as biostatistics and criminology where some individuals may never experience the type of failure under study. It is directly applicable in situations where the only information available from follow-up on individuals who will never experience this type of failure is in the form of censored observations. In this paper, we consider a modification to the model so that it still applies in the case where during the follow-up period it becomes known that an individual will never experience failure from the cause of interest. Unless a model allows for this additional information, a consistent survival analysis will not be obtained. A partial maximum likelihood (ML) approach is proposed that preserves the simplicity of the long-term survival mixture model and provides consistent estimators of the quantities of interest. Some simulation experiments are performed to assess the efficiency of the partial ML approach relative to the full ML approach for survival in the presence of competing risks.

MDMA (Ecstasy) neurotoxicity: assessing and communicating the risks

MDMA (3,4-methylenedioxymethamphetamine) is an amphetamine analogue that produces euphoric and stimulant effects and a feeling of closeness towards others.1 and 2 For more than a decade, MDMA (colloquially known as “Ecstasy” or “E”) has been widely used by young adults as a dance-party drug. The usual recreational oral dose is 1-2 tablets (each containing about 60-120 mg of MDMA) a standard oral dose of 0·75–4·00 mg per kg in 60–80 kg people. MDMA is typically used once fortnightly or less because tolerance to the effects of MDMA develops rapidly. More frequent use requires larger doses to achieve the desired effects, but this increases the prevalence of unpleasant side-effects.3 A number of deaths have occurred as a result of malignant hyperthermia or idiosyncractic reactions to the drug, but these have been rare.4 MDMA is perceived by many users to be a safe drug.1 Few report the craving associated with opiates or cocaine3 and most MDMA users are aware of only mild and transient disruptions of functioning.3 and 5 AC Parrott and J Lasky, Ecstasy (MDMA) effects upon mood and cognition: before, during and after a Saturday night dance, Psychopharmacology 139 (1998), pp. 261–268. Full Text via CrossRef | View Record in Scopus | Cited By in Scopus (174)5 The perceived safety of MDMA is at odds with animal evidence of MDMA neurotoxicity, an increasing prevalence of hazardous patterns of use among recreational MDMA users, and emerging evidence of neurotoxicity among heavier MDMA users.

HRT and breast cancer: Impact on population risk and incidence

This study has calculated the potential impact of hormone replacement therapy (HRT) on breast cancer incidence in Australia and has estimated how changes in prescribing HRT to women could affect this risk. The effects of HRT on breast cancer incidence was estimated using the attributable fraction technique with prevalence data derived from the 2001 Australian Health Survey and published rates of breast cancer relative risks from HRT use. In Australia, 12% of adult women were current HRT users and in 2001, 11783 breast cancers were reported. Of these, 1066 (9%) were potentially attributable to HRT. Restricting HRT use to women aged less than 65 years, ceasing HRT prescribing after 10 years or limiting combined oestrogen and progesterone HRT to five years (but otherwise keeping prescription levels to 2001 levels) may reduce the annual breast cancer caseload by 280 (2.4%), 555 (4.7%) or 674 (5.7%), respectively. In conclusion, this study has demonstrated that when HRT prevalence is relatively high, the effect on breast cancer incidence in the population will be significant. A small modification in HRT prescribing practices may impact breast cancer incidence in Australia with associated financial and health care provision implications. (C) 2005 Elsevier Ltd. All rights reserved.