Neural and wavelet network models for financial distress classification

This work analyzes the use of linear discriminant models, multi-layer perceptron neural networks and wavelet networks for corporate financial distress prediction. Although simple and easy to interpret, linear models require statistical assumptions that may be unrealistic. Neural networks are able to discriminate patterns that are not linearly separable, but the large number of parameters involved in a neural model often causes generalization problems. Wavelet networks are classification models that implement nonlinear discriminant surfaces as the superposition of dilated and translated versions of a single "mother wavelet" function. In this paper, an algorithm is proposed to select dilation and translation parameters that yield a wavelet network classifier with good parsimony characteristics. The models are compared in a case study involving failed and continuing British firms in the period 1997-2000. Problems associated with over-parameterized neural networks are illustrated and the Optimal Brain Damage pruning technique is employed to obtain a parsimonious neural model. The results, supported by a re-sampling study, show that both neural and wavelet networks may be a valid alternative to classical linear discriminant models.

Cannabidivarin is anticonvulsant in mouse and rat in vitro and in seizure models

Summary Background and purpose: Phytocannabinoids in Cannabis sativa have diverse pharmacological targets extending beyond cannabinoid receptors and several exert notable anticonvulsant effects. For the first time, we investigated the anticonvulsant profile of the phytocannabinoid cannabidivarin (CBDV) in vitro and in in vivo seizure models. Experimental approach: The effect of CBDV (1-100μM) on epileptiform local field potentials (LFPs) induced in rat hippocampal brain slices by 4-AP application or Mg2+-free conditions was assessed by in vitro multi-electrode array recordings. Additionally, the anticonvulsant profile of CBDV (50-200 mg kg-1) in vivo was investigated in four rodent seizure models: maximal electroshock (mES) and audiogenic seizures in mice, and pentylenetetrazole (PTZ) and pilocarpine-induced seizures in rat. CBDV effects in combination with commonly-used antiepileptic drugs were investigated in rat seizures. Finally, the motor side effect profile of CBDV was investigated using static beam and gripstrength assays. Key results: CDBV significantly attenuated status epilepticus-like epileptiform LFPs induced by 4-AP and Mg2+-free conditions. CBDV had significant anticonvulsant effects in mES (≥100 mg kg-1), audiogenic (≥50 mg kg-1) and PTZ-induced seizures (≥100 mg kg-1). CBDV alone had no effect against pilocarpine-induced seizures, but significantly attenuated these seizures when administered with valproate or phenobarbital at 200 mg kg-1 CBDV. CBDV had no effect on motor function. Conclusions and Implications: These results indicate that CBDV is an effective anticonvulsant across a broad range of seizure models, does not significantly affect normal motor function and therefore merits further investigation in chronic epilepsy models to justify human trials.

A comparison of Shiga-toxin negative Escherichia coli O157 aflagellate and intimin deficient mutants in porcine in vitro and in vivo models of infection

Isolation of Shiga-toxin (Stx) positive Escherichia coli O157:H7 from commercially grown pigs has been reported. Furthermore, experimental infection studies have demonstrated that Stx-positive E. coli O157:H7 can persist in 12-week-old experimentally orally inoculated conventional pigs for up to 2 months and that persistence was not dependent upon intimin. We have shown that the flagellum of Stx-negative E. coli O157:H7 does not have a role to play in pathogenesis in ruminant models whereas, in poultry, the flagellum of E. coli O157:H7 was important for long-term persistent infection. The contribution of the flagellum of Stx-negative E. coli O157 in the colonisation of pigs was investigated by adherence assays on a porcine (IPI-21) cell line, porcine in vitro organ culture (IVOC) and experimental oral inoculation of conventional 14-week-old pigs. E. coli O157:H7 NCTC12900nal(r) and isogenic aflagellate and intimin deficient mutants adhered equally well to IPI-21 cells. In porcine IVOC association assays, E. coli O157:H7 NCTC12900nal(r) was associated in significantly higher numbers to tissues from the caecum and the terminal rectum than other sites. The aflagellate and intimin deficient mutants significantly adhered in greater numbers to more IVOC gastrointestinal tissues than the parent. Groups of 14-week-old pigs were dosed orally with 10(10) CFU/10 ml of either E. coli O157:H7 NCTC12900nal(r) or isogenic aflagellate and intimin deficient mutants and recovery of each test strain was similar. Histological analysis of pig tissues at post mortem examination revealed that E. coli O157 specifically stained bacteria were associated with the mucosa of the ascending and spiral colon. These data suggest that colonisation and persistence of Stx-negative E. coli O157:H7 in pigs, involves mechanisms that do not require the flagellum or intimin.

Systematic winter sea-surface temperature biases in the northern Arabian Sea in HiGEM and the CMIP3 models

Analysis of 20th century simulations of the High resolution Global Environment Model (HiGEM) and the Third Coupled Model Intercomparison Project (CMIP3) models shows that most have a cold sea-surface temperature (SST) bias in the northern Arabian Sea during boreal winter. The association between Arabian Sea SST and the South Asian monsoon has been widely studied in observations and models, with winter cold biases known to be detrimental to rainfall simulation during the subsequent monsoon in coupled general circulation models (GCMs). However, the causes of these SST biases are not well understood. Indeed this is one of the first papers to address causes of the cold biases. The models show anomalously strong north-easterly winter monsoon winds and cold air temperatures in north-west India, Pakistan and beyond. This leads to the anomalous advection of cold, dry air over the Arabian Sea. The cold land region is also associated with an anomalously strong meridional surface temperature gradient during winter, contributing to the enhanced low-level convergence and excessive precipitation over the western equatorial Indian Ocean seen in many models.

Comparison of polar ozone loss rates simulated by one-dimensional and three-dimensional models with Match observations in recent Antarctic and Arctic winters

Simulations of ozone loss rates using a three-dimensional chemical transport model and a box model during recent Antarctic and Arctic winters are compared with experimental loss rates. The study focused on the Antarctic winter 2003, during which the first Antarctic Match campaign was organized, and on Arctic winters 1999/2000, 2002/2003. The maximum ozone loss rates retrieved by the Match technique for the winters and levels studied reached 6 ppbv/sunlit hour and both types of simulations could generally reproduce the observations at 2-sigma error bar level. In some cases, for example, for the Arctic winter 2002/2003 at 475 K level, an excellent agreement within 1-sigma standard deviation level was obtained. An overestimation was also found with the box model simulation at some isentropic levels for the Antarctic winter and the Arctic winter 1999/2000, indicating an overestimation of chlorine activation in the model. Loss rates in the Antarctic show signs of saturation in September, which have to be considered in the comparison. Sensitivity tests were performed with the box model in order to assess the impact of kinetic parameters of the ClO-Cl2O2 catalytic cycle and total bromine content on the ozone loss rate. These tests resulted in a maximum change in ozone loss rates of 1.2 ppbv/sunlit hour, generally in high solar zenith angle conditions. In some cases, a better agreement was achieved with fastest photolysis of Cl2O2 and additional source of total inorganic bromine but at the expense of overestimation of smaller ozone loss rates derived later in the winter.

Sustained striatal activity predicts eudaimonic well-being and cortisol output

Eudaimonic well-being—a sense of purpose, meaning, and engagement with life—is protective against psychopathology and predicts physical health, including lower levels of the stress hormone cortisol. Although it has been suggested that the ability to engage the neural circuitry of reward may promote well-being and mediate the relationship between well-being and health, this hypothesis has remained untested. To test this hypothesis, we had participants view positive, neutral, and negative images while fMRI data were collected. Individuals with sustained activity in the striatum and dorsolateral prefrontal cortex to positive stimuli over the course of the scan session reported greater well-being and had lower cortisol output. This suggests that sustained engagement of reward circuitry in response to positive events underlies well-being and adaptive regulation of the hypothalamic-pituitary-adrenal axis.

Heritage speaker competence differences, language change and input type: inflected infinitives in Heritage Brazilian Portuguese

It has been argued that colloquial dialects of Brazilian Portuguese (BP) have undergone significant linguistic change resulting in the loss of inflected infinitives (e.g., Pires, 2002, 2006). Since BP adults, at least educated ones, have complete knowledge of inflected infinitives, the implicit claim is that they are transmitted via formal education in the standard dialect. In the present article, I test one of the latent predictions of such claims; namely, the fact that heritage speakers of BP who lack formal education in the standard dialect should never develop native-like knowledge of inflected infinitives. In doing so, I highlight two significant implications (a) that heritage speaker grammars are a good source for testing dialectal variation and language change proposals and (b) incomplete acquisition and/or attrition are not the only sources of heritage language competence differences. Employing the syntactic and semantic tests of Rothman and Iverson (2007), I compare heritage speakers' knowledge to Rothman and Iverson's advanced adult L2 learners and educated native controls. Unlike the latter groups, the data for heritage speakers indicate that they do not have target knowledge of inflected infinitives, lending support to Pires' claims, suggesting that literacy plays a significant role in the acquisition of this grammatical property in BP.

Overall and income specific effect on prevalence of overweight and obesity of 20% sugar sweetened drink tax in UK: econometric and comparative risk assessment modelling study

Objective To model the overall and income specific effect of a 20% tax on sugar sweetened drinks on the prevalence of overweight and obesity in the UK. Design Econometric and comparative risk assessment modelling study. Setting United Kingdom. Population Adults aged 16 and over. Intervention A 20% tax on sugar sweetened drinks. Main outcome measures The primary outcomes were the overall and income specific changes in the number and percentage of overweight (body mass index ≥25) and obese (≥30) adults in the UK following the implementation of the tax. Secondary outcomes were the effect by age group (16-29, 30-49, and ≥50 years) and by UK constituent country. The revenue generated from the tax and the income specific changes in weekly expenditure on drinks were also estimated. Results A 20% tax on sugar sweetened drinks was estimated to reduce the number of obese adults in the UK by 1.3% (95% credible interval 0.8% to 1.7%) or 180 000 (110 000 to 247 000) people and the number who are overweight by 0.9% (0.6% to 1.1%) or 285 000 (201 000 to 364 000) people. The predicted reductions in prevalence of obesity for income thirds 1 (lowest income), 2, and 3 (highest income) were 1.3% (0.3% to 2.0%), 0.9% (0.1% to 1.6%), and 2.1% (1.3% to 2.9%). The effect on obesity declined with age. Predicted annual revenue was £276m (£272m to £279m), with estimated increases in total expenditure on drinks for income thirds 1, 2, and 3 of 2.1% (1.4% to 3.0%), 1.7% (1.2% to 2.2%), and 0.8% (0.4% to 1.2%). Conclusions A 20% tax on sugar sweetened drinks would lead to a reduction in the prevalence of obesity in the UK of 1.3% (around 180 000 people). The greatest effects may occur in young people, with no significant differences between income groups. Both effects warrant further exploration. Taxation of sugar sweetened drinks is a promising population measure to target population obesity, particularly among younger adults.

Assessing the impact on chronic disease of incorporating the societal cost of greenhouse gases into the price of food: an econometric and comparative risk assessment modelling study

Objectives To model the impact on chronic disease of a tax on UK food and drink that internalises the wider costs to society of greenhouse gas (GHG) emissions and to estimate the potential revenue. Design An econometric and comparative risk assessment modelling study. Setting The UK. Participants The UK adult population. Interventions Two tax scenarios are modelled: (A) a tax of £2.72/tonne carbon dioxide equivalents (tCO2e)/100 g product applied to all food and drink groups with above average GHG emissions. (B) As with scenario (A) but food groups with emissions below average are subsidised to create a tax neutral scenario. Outcome measures Primary outcomes are change in UK population mortality from chronic diseases following the implementation of each taxation strategy, the change in the UK GHG emissions and the predicted revenue. Secondary outcomes are the changes to the micronutrient composition of the UK diet. Results Scenario (A) results in 7770 (95% credible intervals 7150 to 8390) deaths averted and a reduction in GHG emissions of 18 683 (14 665to 22 889) ktCO2e/year. Estimated annual revenue is £2.02 (£1.98 to £2.06) billion. Scenario (B) results in 2685 (1966 to 3402) extra deaths and a reduction in GHG emissions of 15 228 (11 245to 19 492) ktCO2e/year. Conclusions Incorporating the societal cost of GHG into the price of foods could save 7770 lives in the UK each year, reduce food-related GHG emissions and generate substantial tax revenue. The revenue neutral scenario (B) demonstrates that sustainability and health goals are not always aligned. Future work should focus on investigating the health impact by population subgroup and on designing fiscal strategies to promote both sustainable and healthy diets.

Forecasting with difference and trend stationary models

Although difference-stationary (DS) and trend-stationary (TS) processes have been subject to considerable analysis, there are no direct comparisons for each being the data-generation process (DGP). We examine incorrect choice between these models for forecasting for both known and estimated parameters. Three sets of Monte Carlo simulations illustrate the analysis, to evaluate the biases in conventional standard errors when each model is mis-specified, compute the relative mean-square forecast errors of the two models for both DGPs, and investigate autocorrelated errors, so both models can better approximate the converse DGP. The outcomes are surprisingly different from established results.

Threshold autoregressive and Markov switching models: an application to commercial real estate

Although financial theory rests heavily upon the assumption that asset returns are normally distributed, value indices of commercial real estate display significant departures from normality. In this paper, we apply and compare the properties of two recently proposed regime switching models for value indices of commercial real estate in the US and the UK, both of which relax the assumption that observations are drawn from a single distribution with constant mean and variance. Statistical tests of the models' specification indicate that the Markov switching model is better able to capture the non-stationary features of the data than the threshold autoregressive model, although both represent superior descriptions of the data than the models that allow for only one state. Our results have several implications for theoretical models and empirical research in finance.

In vitro and in vivo models of colorectal cancer: antigenotoxic activity of berries.

The etiology of colorectal cancer (CRC), a common cause of cancer-related mortality globally, has strong associations with diet. There is considerable epidemiological evidence that fruits and vegetables are associated with reduced risk of CRC. This paper reviews the extensive evidence, both from in vitro studies and animal models, that components of berry fruits can modulate biomarkers of DNA damage and that these effects may be potentially chemoprotective, given the likely role that oxidative damage plays in mutation rate and cancer risk. Human intervention trials with berries are generally consistent in indicating a capacity to significantly decrease oxidative damage to DNA, but represent limited evidence for anticarcinogenicity, relying as they do on surrogate risk markers. To understand the effects of berry consumption on colorectal cancer risk, future studies will need to be well controlled, with defined berry extracts, using suitable and clinically relevant end points and considering the importance of the gut microbiota.