Risk reduction and real estate portfolio size

Despite a number of papers that discuss the advantages of increased size on risk levels in real estate portfolios there is remarkably little empirical evidence based on actual portfolios. The objective of this paper is to remedy this deficiency by examining the portfolio risk of a large sample of actual property data over the period 1981 to 1996. The results show that all that can be said is that portfolios of properties of a large size, on the average, tend to have lower risks than small sized portfolios. More importantly portfolios of a few properties can have very high or very low risk.

Risk reduction and diversification in UK commercial property portfolios

The issue of diversification in direct real estate investment portfolios has been widely studied in academic and practitioner literature. Most work, however, has been done using either partially aggregated data or data for small samples of individual properties. This paper reports results from tests of both risk reduction and diversification that use the records of 10,000+ UK properties tracked by Investment Property Databank. It provides, for the first time, robust estimates of the diversification gains attainable given the returns, risks and cross‐correlations across the individual properties available to fund managers. The results quantify the number of assets and amount of money needed to construct both ‘balanced’ and ‘specialist’ property portfolios by direct investment. Target numbers will vary according to the objectives of investors and the degree to which tracking error is tolerated. The top‐level results are consistent with previous work, showing that a large measure of risk reduction can be achieved with portfolios of 30–50 properties, but full diversification of specific risk can only be achieved in very large portfolios. However, the paper extends previous work by demonstrating on a single, large dataset the implications of different methods of calculating risk reduction, and also by showing more disaggregated results relevant to the construction of specialist, sector‐focussed funds.

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.

Empirical test of an agricultural landscape model: the importance of farmer preference for risk aversion and crop complexity

Developing models to predict the effects of social and economic change on agricultural landscapes is an important challenge. Model development often involves making decisions about which aspects of the system require detailed description and which are reasonably insensitive to the assumptions. However, important components of the system are often left out because parameter estimates are unavailable. In particular, measurements of the relative influence of different objectives, such as risk, environmental management, on farmer decision making, have proven difficult to quantify. We describe a model that can make predictions of land use on the basis of profit alone or with the inclusion of explicit additional objectives. Importantly, our model is specifically designed to use parameter estimates for additional objectives obtained via farmer interviews. By statistically comparing the outputs of this model with a large farm-level land-use data set, we show that cropping patterns in the United Kingdom contain a significant contribution from farmer’s preference for objectives other than profit. In particular, we found that risk aversion had an effect on the accuracy of model predictions, whereas preference for a particular number of crops grown was less important. While nonprofit objectives have frequently been identified as factors in farmers’ decision making, our results take this analysis further by demonstrating the relationship between these preferences and actual cropping patterns.

Identifying and recording every casualty of armed conflict

This article discusses the international legal obligation to identify and record every casualty of armed conflict that finds its basis in the treaties and customs of international humanitarian law and international human rights law. The article applies the various facets of the legal obligation to the armed conflicts in Iraq and Sri Lanka and argues that the parties in these conflicts failed in their international legal responsibility to civilians.

Shifting Shores: managing landscape challenge and change on the Lizard Peninsula, Cornwall

In this paper, we look at how landscape and climate change are simultaneously apprehended through institutional strategies and then negotiated through local knowledge and social relations on the ground. We argue that by examining landscapes that are practised, embodied and lived, it is possible to gain an understanding of people's actions, beliefs and values in relation to climate and climate change. This attention to cultural landscapes also enables us to ask how a variety of publics make sense of climate change, and how they are invited to do so by organisations that take responsibility for the management and preservation of landscape, such as the National Trust, Europe's biggest conservation organisation. This paper considers how the Trust makes sense of climate change via the document Shifting Shores and how its strategies are operationalised on the Lizard Peninsula, Cornwall, UK.

Risk perception and commitment to reduce global climate change in Spain

An online national survey among the Spanish population (n = 602) was conducted to examine the factors underlying a person’s support for commitments to global climate change reductions. Multiple hierarchical regression analysis was conducted in four steps and a structural equations model was tested. A survey tool designed by the Yale Project on Climate Change Communication was applied in order to build scales for the variables introduced in the study. The results show that perceived consumer effectiveness and risk perception are determinant factors of commitment to mitigating global climate change. However, there are differences in the influence that other factors, such as socio-demographics, view of nature and cultural cognition, have on the last predicted variable.

A critical account of the relationship between institutional trust, risk perception, and technology acceptance with an application to genetically modified foods

This article critically reflects on the widely held view of a causal chain with trust in public authorities impacting technology acceptance via perceived risk. It first puts forward conceptual reason against this view, as the presence of risk is a precondition for trust playing a role in decision making. Second, results from consumer surveys in Italy and Germany are presented that support the associationist model as counter hypothesis. In that view, trust and risk judgments are driven by and thus simply indicators of higher order attitudes toward a certain technology which determine acceptance instead. The implications of these findings are discussed.

Risk-taking and inhibitory control in behaviourally inhibited and disinhibited preschool children

The temperament style Behavioural Inhibition (BI) has been implicated as a risk factor for the development of internalising disorders such as anxiety. Of interest is what factors influence the developmental trajectories of both inhibited and disinhibited children and the development of psychopathology. One such factor is risk-taking behaviour. Using the computer based Balloon Analogue Risk Task, we assessed risk taking behaviour in behaviourally inhibited (n = 27) and behaviourally disinhibited (n = 43) children. This is the first study to examine the relationship between BI, executive functioning and risk-taking. The results indicated Behavioural Inhibition was not related to risk-taking but that inhibitory control predicted reward focused results. These findings illustrate how inhibitory control affects risk-taking and risk avoidance in both inhibited and disinhibited children.

Local spaces: open minds - inspirational ideas for managing lowland commons and other green spaces

The Chiltern commons are typical of those in the south east of England: small and numerous, but with the potential to provide important natural green space whilst contributing to environmental sustainability. In order to keep commons in good heart, they need to be managed. However, as activities such as grazing and coppicing become unviable on the commons, owners need to find sustainable roles beyond traditional agricultural and silvicultural practices. This paper examines ways of making management pay. It begins by exploring the economic, social and environmental challenges of sustainable management within the context of contemporary life. Section 2 identifies the different ways in which revenue contributions might be made towards the management of commons. Section 3 examines the relevant legal and other restrictions and Section 4 offers insights into where management proposals might offer multiple positive benefits, but also where there is the potential to cause conflict with environmental and social interests. Section 5 explores alternative funding streams for commons. Finally, Section 6 concludes with practical tips for the owners and managers of commons in the Chilterns and identifies areas for further research. Full references, links and resources are provided in the footnotes and appendix.

Common components of risk and uncertainty attitudes across contexts and domains: Evidence from 30 countries

Attitudes towards risk and uncertainty have been indicated to be highly context-dependent, and to be sensitive to the measurement technique employed. We present data collected in controlled experiments with 2,939 subjects in 30 countries measuring risk and uncertainty attitudes through incentivized measures as well as survey questions. Our data show clearly that measures correlate not only within decision contexts or measurement methods, but also across contexts and methods. This points to the existence of one underlying “risk preference”, which influences attitudes independently of the measurement method or choice domain. We furthermore find that answers to a general and a financial survey question correlate with incentivized lottery choices in most countries. Incentivized and survey measures also correlate significantly between countries. This opens the possibility to conduct cultural comparisons on risk attitudes using survey instruments.

Identifying and explaining framing strategies of low carbon lifestyle movement organisations

Over the last decade we have seen the growth and development of low carbon lifestyle movement organisations, which seek to encourage members of the public to reduce their personal energy use and carbon emissions. As a first step to assess the transformational potential of such organisations, this paper examines the ways in which they frame their activities. This reveals an important challenge they face: in addressing the broader public, do they promote ‘transformative’ behaviours or do they limit themselves to encouraging ‘easy changes’ to maintain their appeal? We find evidence that many organisations within this movement avoid ‘transformative’ frames. The main reasons for this are organisers’ perceptions that transformational frames lack resonance with broader audiences, as well as wider cultural contexts that caution against behavioural intervention. The analysis draws on interviews with key actors in the low carbon lifestyle movement and combines insights from the literatures on collective action framing and lifestyle movements.

Supporting schools in identifying and safeguarding the needs of disabled children: the challenges for data collection

Conceptualisations of disability that emphasise the contextual and cultural nature of disability and the embodiment of these within a national system of data collection present a number of challenges especially where this process is devolved to schools. The requirement for measures based on contextual and subjective experiences gives rise to particular difficulties in achieving parity in the way data is analysed and reported. This paper presents an account of the testing of a tool intended for use by schools as they collect data from parents to identify children who meet the criteria of disability established in Disability Discrimination Acts (DDAs). Data were validated through interviews with parents and teachers and observations of children and highlighted the pivotal role of the criterion of impact. The findings are set in the context of schools meeting their legal duties to identify disabled children and their support needs in a way that captures the complexity of disabled children’s school lives and provides useful and useable data.

Retrieval of effective ice crystal size in the infrared: sensitivity study and global measurements from TIROS-N Operational Vertical Sounder

The difference between cirrus emissivities at 8 and 11 μm is sensitive to the mean effective ice crystal size of the cirrus cloud, De. By using single scattering properties of ice crystals shaped as planar polycrystals, diameters of up to about 70 μm can be retrieved, instead of up to 45 μm assuming spheres or hexagonal columns. The method described in this article is used for a global determination of mean effective ice crystal sizes of cirrus clouds from TOVS satellite observations. A sensitivity study of the De retrieval to uncertainties in hypotheses on ice crystal shape, size distributions, and temperature profiles, as well as in vertical and horizontal cloud heterogeneities shows that uncertainties can be as large as 30%. However, the TOVS data set is one of few data sets which provides global and long-term coverage. Having analyzed the years 1987–1991, it was found that measured effective ice crystal diameters De are stable from year to year. For 1990 a global median De of 53.5 μm was determined. Averages distinguishing ocean/land, season, and latitude lie between 23 μm in winter over Northern Hemisphere midlatitude land and 64 μm in the tropics. In general, larger Des are found in regions with higher atmospheric water vapor and for cirrus with a smaller effective emissivity.