How contractors price risk in bids: theory and practice

Formal and analytical models that contractors can use to assess and price project risk at the tender stage have proliferated in recent years. However, they are rarely used in practice. Introducing more models would, therefore, not necessarily help. A better understanding is needed of how contractors arrive at a bid price in practice, and how, and in what circumstances, risk apportionment actually influences pricing levels. More than 60 proposed risk models for contractors that are published in journals were examined and classified. Then exploratory interviews with five UK contractors and documentary analyses on how contractors price work generally and risk specifically were carried out to help in comparing the propositions from the literature to what contractors actually do. No comprehensive literature on the real bidding processes used in practice was found, and there is no evidence that pricing is systematic. Hence, systematic risk and pricing models for contractors may have no justifiable basis. Contractors process their bids through certain tendering gateways. They acknowledge the risk that they should price. However, the final settlement depends on a set of complex, micro-economic factors. Hence, risk accountability may be smaller than its true cost to the contractor. Risk apportionment occurs at three stages of the whole bid-pricing process. However, analytical approaches tend not to incorporate this, although they could.

Future directions for child anxiety theory and treatment

The aim of this introductory paper, and of this special issue of Cognition and Emotion, is to stimulate debate about theoretical issues that will inform child anxiety research in the coming years. Papers included in this special issue have arisen from an Economic and Social Research Council (ESRC, UK) funded seminar series, which we called Child Anxiety Theory and Treatment (CATTS). We begin with an overview of the CATTS project before discussing (1) the application of adult models of anxiety to children, and (2) the role of parents in child anxiety. We explore the utility of adult models of anxiety for child populations before discussing the problems that are associated with employing them uncritically in this context. The study of anxiety in children provides the opportunity to observe the trajectory of anxiety and to identify variables that causally influence its development. Parental influences are of particular interest and new and imaginative strategies are required to isolate the complex network of causal relationships therein. We conclude by suggesting that research into the causes and developmental course of anxiety in children should be developed further. We also propose that, although much is known about the role of parents in the development of anxiety, it would be useful for research in this area to move towards an examination of the specific processes involved. We hope that these views represent a constructive agenda for people in the field to consider when planning future research.

Adapting to new challenges: extension theory and practice for the 21st century

Twenty first century challenges facing agriculture include climate change, threats to food security for a growing population and downward economic pressures on rural livelihoods. Addressing these challenges will require innovation in extension theory, policy and education, at a time when the dominance of the state in the provision of knowledge and information services to farmers and rural entrepreneurs continues to decline. This paper suggests that extension theory is catching up with and helping us to understand innovative extension practice, and therefore provides a platform for improving rural development policies and strategies. Innovation is now less likely to be spoken of as something to be passed on to farmers, than as a continuing process of creativity and adaptation that can be nurtured and sustained. Innovation systems and innovation platforms are concepts that recognise the multiple factors that lead to farmers’ developing, adapting and applying new ideas and the importance of linking all actors in the value chain to ensure producers can access appropriate information and advice for decision making at all stages in the production process. Concepts of social learning, group development and solidarity, social capital, collective action and empowerment all help to explain and therefore to apply more effectively group extension approaches in building confidence and sustaining innovation. A challenge facing educators is to ensure the curricula for aspiring extension professionals in our higher education institutions are regularly reviewed and keep up with current and future developments in theory, policy and practice.

Curriculum theory, curriculum policy and the problem of ill-disciplined thinking

This paper examines the implications of policy fracture and arms length governance within the decision making processes currently shaping curriculum design within the English education system. In particular it argues that an unresolved ‘ideological fracture’ at government level has been passed down to school leaders whose response to the dilemma is distorted by the target-driven agenda of arms length agencies. Drawing upon the findings of a large scale on-line survey of history teaching in English secondary schools, this paper illustrates the problems that occur when policy making is divorced from curriculum theory, and in particular from any consideration of the nature of knowledge. Drawing on the social realist theory of knowledge elaborated by Young (2008), we argue that the rapid spread of alternative curricular arrangements, implemented in the absence of an understanding of curriculum theory, undermines the value of disciplined thinking to the detriment of many young people, particularly those in areas of social and economic deprivation.

Community based ecotourism as a panacea for protected areas: the use of common property theory in its analysis and development

Tourism is the worlds largest employer, accounting for 10% of jobs worldwide (WTO, 1999). There are over 30,000 protected areas around the world, covering about 10% of the land surface(IUCN, 2002). Protected area management is moving towards a more integrated form of management, which recognises the social and economic needs of the worlds finest areas and seeks to provide long term income streams and support social cohesion through active but sustainable use of resources. Ecotourism - 'responsible travel to natural areas that conserves the environment and improves the well- being of local people' (The Ecotourism Society, 1991) - is often cited as a panacea for incorporating the principles of sustainable development in protected area management. However, few examples exist worldwide to substantiate this claim. In reality, ecotourism struggles to provide social and economic empowerment locally and fails to secure proper protection of the local and global environment. Current analysis of ecotourism provides a useful checklist of interconnected principles for more successful initiatives, but no overall framework of analysis or theory. This paper argues that applying common property theory to the application of ecotourism can help to establish more rigorous, multi-layered analysis that identifies the institutional demands of community based ecotourism (CBE). The paper draws on existing literature on ecotourism and several new case studies from developed and developing countries around the world. It focuses on the governance of CBE initiatives, particularly the interaction between local stakeholders and government and the role that third party non-governmental organisations can play in brokering appropriate institutional arrangements. The paper concludes by offering future research directions."

A holistic method to assess building energy efficiency combining D-S theory and the evidential reasoning approach

The assessment of building energy efficiency is one of the most effective measures for reducing building energy consumption. This paper proposes a holistic method (HMEEB) for assessing and certifying building energy efficiency based on the D-S (Dempster-Shafer) theory of evidence and the Evidential Reasoning (ER) approach. HMEEB has three main features: (i) it provides both a method to assess and certify building energy efficiency, and exists as an analytical tool to identify improvement opportunities; (ii) it combines a wealth of information on building energy efficiency assessment, including identification of indicators and a weighting mechanism; and (iii) it provides a method to identify and deal with inherent uncertainties within the assessment procedure. This paper demonstrates the robustness, flexibility and effectiveness of the proposed method, using two examples to assess the energy efficiency of two residential buildings, both located in the ‘Hot Summer and Cold Winter’ zone in China. The proposed certification method provides detailed recommendations for policymakers in the context of carbon emission reduction targets and promoting energy efficiency in the built environment. The method is transferable to other countries and regions, using an indicator weighting system to modify local climatic, economic and social factors.

Protecting developing countries' forests: enforcement in theory and practice

This paper relates the key findings of the optimal economic enforcement literature to practical issues of enforcing forest and wildlife management access restrictions in developing countries. Our experiences, particularly from Tanzania and eastern India, provide detail of the key pragmatic issues facing those responsible for protecting natural resources. We identify large gaps in the theoretical literature that limit its ability to inform practical management, including issues of limited funding and cost recovery, multiple tiers of enforcement and the incentives facing enforcement officers, and conflict between protected area managers and rural people's needs.

A theory of rational spatial agglomerations

We model the behavior of rational forward-looking agents in a spatial economy. The economic geography structure is built on Fujita et al. (1999)'s racetrack economy. Workers choose optimally what to consume at each period, as well as which spatial itinerary to follow in the geographical space. The spatial extent of the resulting agglomerations increases with the taste for variety and the expenditure share on manufactured goods, and decreases with transport costs. Because forward-looking agents anticipate the future formation of agglomerations, they are more responsive to spatial utility differentials than myopic agents. As a consequence, the emerging agglomerations are larger under perfect foresight spatial adjustments than under myopic ones.

Commodity futures prices: more evidence on forecast power, risk premia and the theory of storage

In this paper, we examine the temporal stability of the evidence for two commodity futures pricing theories. We investigate whether the forecast power of commodity futures can be attributed to the extent to which they exhibit seasonality and we also consider whether there are time varying parameters or structural breaks in these pricing relationships. Compared to previous studies, we find stronger evidence of seasonality in the basis, which supports the theory of storage. The power of the basis to forecast subsequent price changes is also strengthened, while results on the presence of a risk premium are inconclusive. In addition, we show that the forecasting power of commodity futures cannot be attributed to the extent to which they exhibit seasonality. We find that in most cases where structural breaks occur, only changes in the intercepts and not the slopes are detected, illustrating that the forecast power of the basis is stable over different economic environments.

What determines religious school choice? Theory and evidence from rural Bangladesh

This paper looks at the determinants of school selection in rural Bangladesh, focusing on the choice between registered Islamic and non-religious schools. Using a unique dataset on secondary school-age children from rural Bangladesh, we find that madrasah enrolment falls as household income increases. At the same time, more religious households, and those that live further away from a non-religious school are more likely to send their children to madrasahs. However, in contrast to the theory, we find that Islamic school demand does not respond to the average quality of schools in the locality.

Economic analysis of international supply chains: an internalization perspective

Offshoring and outsourcing in global value chains have been extensively analyzed from a strategic management perspective (Gereffi & Li, 2012; Gereffi, Humphrey & Sturgeon, 2005; Mudambi & Venzin, 2010). This paper examines these issues from an internalization theory perspective by summarizing the contribution of internalization theory to supply chain analysis; considering how a division of labor is coordinated and comparing coordination by management with coordination by the market; and discussing the formal models of supply chains developed by economists. Supply chain researchers possessing an interest in economic principles and good mathematical skills can make an important contribution to internalization theory, and it is hoped that this paper will encourage them to do so.

Economic forecasting in a changing world

This article explains the basis for a theory of economic forecasting developed over the past decade by the authors. The research has resulted in numerous articles in academic journals, two monographs, Forecasting Economic Time Series, 1998, Cambridge University Press, and Forecasting Nonstationary Economic Time Series, 1999, MIT Press, and three edited volumes, Understanding Economic Forecasts, 2001, MIT Press, A Companion to Economic Forecasting, 2002, Blackwells, and the Oxford Bulletin of Economics and Statistics, 2005. The aim here is to provide an accessible, non-technical, account of the main ideas. The interested reader is referred to the monographs for derivations, simulation evidence, and further empirical illustrations, which in turn reference the original articles and related material, and provide bibliographic perspective.