The structure of the optimal income tax in the quasi-linear model

Existing numerical characterizations of the optimal income tax have been based on a limited number of model specifications. As a result, they do not reveal which properties are general. We determine the optimal tax in the quasi-linear model under weaker assumptions than have previously been used; in particular, we remove the assumption of a lower bound on the utility of zero consumption and the need to permit negative labor incomes. A Monte Carlo analysis is then conducted in which economies are selected at random and the optimal tax function constructed. The results show that in a significant proportion of economies the marginal tax rate rises at low skills and falls at high. The average tax rate is equally likely to rise or fall with skill at low skill levels, rises in the majority of cases in the centre of the skill range, and falls at high skills. These results are consistent across all the specifications we test. We then extend the analysis to show that these results also hold for Cobb-Douglas utility.

An integrated view of data quality in Earth observation

Data quality is a difficult notion to define precisely, and different communities have different views and understandings of the subject. This causes confusion, a lack of harmonization of data across communities and omission of vital quality information. For some existing data infrastructures, data quality standards cannot address the problem adequately and cannot fulfil all user needs or cover all concepts of data quality. In this study, we discuss some philosophical issues on data quality. We identify actual user needs on data quality, review existing standards and specifications on data quality, and propose an integrated model for data quality in the field of Earth observation (EO). We also propose a practical mechanism for applying the integrated quality information model to a large number of datasets through metadata inheritance. While our data quality management approach is in the domain of EO, we believe that the ideas and methodologies for data quality management can be applied to wider domains and disciplines to facilitate quality-enabled scientific research.

Ontology modeling for generation of clinical pathways

Purpose: Increasing costs of health care, fuelled by demand for high quality, cost-effective healthcare has drove hospitals to streamline their patient care delivery systems. One such systematic approach is the adaptation of Clinical Pathways (CP) as a tool to increase the quality of healthcare delivery. However, most organizations still rely on are paper-based pathway guidelines or specifications, which have limitations in process management and as a result can influence patient safety outcomes. In this paper, we present a method for generating clinical pathways based on organizational semiotics by capturing knowledge from syntactic, semantic and pragmatic to social level. Design/methodology/approach: The proposed modeling approach to generation of CPs adopts organizational semiotics and enables the generation of semantically rich representation of CP knowledge. Semantic Analysis Method (SAM) is applied to explicitly represent the semantics of the concepts, their relationships and patterns of behavior in terms of an ontology chart. Norm Analysis Method (NAM) is adopted to identify and formally specify patterns of behavior and rules that govern the actions identified on the ontology chart. Information collected during semantic and norm analysis is integrated to guide the generation of CPs using best practice represented in BPMN thus enabling the automation of CP. Findings: This research confirms the necessity of taking into consideration social aspects in designing information systems and automating CP. The complexity of healthcare processes can be best tackled by analyzing stakeholders, which we treat as social agents, their goals and patterns of action within the agent network. Originality/value: The current modeling methods describe CPs from a structural aspect comprising activities, properties and interrelationships. However, these methods lack a mechanism to describe possible patterns of human behavior and the conditions under which the behavior will occur. To overcome this weakness, a semiotic approach to generation of clinical pathway is introduced. The CP generated from SAM together with norms will enrich the knowledge representation of the domain through ontology modeling, which allows the recognition of human responsibilities and obligations and more importantly, the ultimate power of decision making in exceptional circumstances.

The dynamics of commodity prices

In this paper we study the stochastic behavior of the prices and volatilities of a sample of six of the most important commodity markets and we compare these properties with those of the equity market. we observe a substantial degree of heterogeneity in the behavior of the series. Our findings show that it is inappropriate to treat different kinds of commodities as a single asset class as is frequently the case in the academic literature and in the industry. We demonstrate that commodities can be a useful diversifier of equity volatility as well as equity returns. Options pricing and hedging applications exemplify the economic impacts of the differences across commodities and between model specifications.

FACSGen 2.0 animation software: generating three-dimensional FACS-valid facial expressions for emotion research

In this article, we present FACSGen 2.0, new animation software for creating static and dynamic threedimensional facial expressions on the basis of the Facial Action Coding System (FACS). FACSGen permits total control over the action units (AUs), which can be animated at all levels of intensity and applied alone or in combination to an infinite number of faces. In two studies, we tested the validity of the software for the AU appearance defined in the FACS manual and the conveyed emotionality of FACSGen expressions. In Experiment 1, four FACS-certified coders evaluated the complete set of 35 single AUs and 54 AU combinations for AU presence or absence, appearance quality, intensity, and asymmetry. In Experiment 2, lay participants performed a recognition task on emotional expressions created with FACSGen software and rated the similarity of expressions displayed by human and FACSGen faces. Results showed good to excellent classification levels for all AUs by the four FACS coders, suggesting that the AUs are valid exemplars of FACS specifications. Lay participants’ recognition rates for nine emotions were high, and comparisons of human and FACSGen expressions were very similar. The findings demonstrate the effectiveness of the software in producing reliable and emotionally valid expressions, and suggest its application in numerous scientific areas, including perception, emotion, and clinical and euroscience research.

The role of undisclosed reserves in English open outcry auctions

This study considers the role that reserve prices may play in residential property auctions. In comparison to much of the previous empirical work, this study has access to undisclosed reserve prices from English auctions. Consistent with theoretical arguments in the auction literature, the results obtained illustrate that whilst higher reserve prices increase the revenue obtained for the seller, they also reduce the probability of sale. The findings also highlight the importance of auction participation, with the number of individual bidders and the number of bids significant in most specifications.

The probability of sale and price premiums in withdrawn auctioned properties

This paper examines the impact of the auction process of residential properties that whilst unsuccessful at auction sold subsequently. The empirical analysis considers both the probability of sale and the premium of the subsequent sale price over the guide price, reserve and opening bid. The findings highlight that the final achieved sale price is influenced by key price variables revealed both prior to and during the auction itself. Factors such as auction participation, the number of individual bidders and the number of bids are significant in a number of the alternative specifications.

Macro-economic and financial determinants of comovement across global real estate security markets

This paper models the determinants of integration in the context of global real estate security markets. Using both local and U.S. Dollar denominated returns, we model conditional correlations across listed real estate sectors and also with the global stock market. The empirical results find that financial factors, such as the relationship with the respective equity market, volatility, the relative size of the real estate sector and trading turnover all play an important role in the degree of integration present. Furthermore, the results highlight the importance of macro-economic variables in the degree of integration present. All four of the macro-economic variables modeled provide at least one significant result across the specifications estimated. Factors such as financial and trade openness, monetary independence and the stability of a country’s currency all contribute to the degree of integration reported.

Wearable device to assist independent living

Older people increasingly want to remain living independently in their own homes. The aim of the ENABLE project is to develop a wearable device that can be used to support older people in their daily lives and which can monitor their health status, detect potential problems, provide activity reminders and offer communication and alarm services. In order to determine the specifications and functionality required for the development of the device, user surveys and focus groups were undertaken, use case analysis and scenario modeling carried out. The project has resulted in the development of a wrist-worn device and mobile phone combination that can support and assist older and vulnerable wearers with a range of activities and services both inside their home and as they move around their local environment. The device is currently undergoing pilot trials in five European countries. The aim of this paper is to describe the ENABLE device, its features and services, and the infrastructure within which it operates.

Performance-based contracting in the construction sector

Construction procurement is complex and there is a very wide range of options available to procurers. Inappropriate choices about how to procure may limit practical opportunities for innovation. In particular, traditional approaches to construction procurement set up many obstacles for technology suppliers to provide innovative solutions. This is because they are often employed as sub-contractors simply to provide and install equipment to specifications developed before the point at which they become involved in a project. A research team at the University of Reading has developed a procurement framework that comprehensively defines the various options open to procurers in a more fine-grained way than has been known in the past. This enables informed decisions that can establish tailor-made procurement approaches that take into account the needs of specific clients. It enables risk and reward structures to be aligned so that contracts and payment mechanisms are aligned precisely with what a client seeks to achieve. This is not a “one-size-fits-all” approach. Rather, it is an approach that enables informed decisions about how to organize individual procurements that are appropriate to particular circumstances, acknowledging that they differ for each client and for each procurement exercise. Within this context, performance-based contracting (PBC) is explored in terms of the different ways in which technology suppliers within constructed facilities might be encouraged and rewarded for the kinds of innovation sought by the ultimate clients. Examples from various industry sectors are presented, from public sector and from private sector, with a commentary about what they sought to achieve and the extent to which they were successful. The lessons from these examples are presented in terms of feasibility in relation to financial issues, governance, economics, strategic issues, contractual issues and cash flow issues for clients and for contractors. Further background documents and more detailed readings are provided in an appendix for those who wish to find out more.

An historical perspective on forecast errors

Using annual observations on industrial production over the last three centuries, and on GDP over a 100-year period, we seek an historical perspective on the forecastability of these UK output measures. The series are dominated by strong upward trends, so we consider various specifications of this, including the local linear trend structural time-series model, which allows the level and slope of the trend to vary. Our results are not unduly sensitive to how the trend in the series is modelled: the average sizes of the forecast errors of all models, and the wide span of prediction intervals, attests to a great deal of uncertainty in the economic environment. It appears that, from an historical perspective, the postwar period has been relatively more forecastable.

Modelling methodology and forecast failure

We analyse by simulation the impact of model-selection strategies (sometimes called pre-testing) on forecast performance in both constant-and non-constant-parameter processes. Restricted, unrestricted and selected models are compared when either of the first two might generate the data. We find little evidence that strategies such as general-to-specific induce significant over-fitting, or thereby cause forecast-failure rejection rates to greatly exceed nominal sizes. Parameter non-constancies put a premium on correct specification, but in general, model-selection effects appear to be relatively small, and progressive research is able to detect the mis-specifications.

Evaluating multivariate forecast densities: a comparison of two approaches

We consider methods of evaluating multivariate density forecasts. A recently proposed method is found to lack power when the correlation structure is mis-specified. Tests that have good power to detect mis-specifications of this sort are described. We also consider the properties of the tests in the presence of more general mis-specifications.

Automated algorithms for multilayer thin film filter design using metamaterials

Currently, infrared filters for astronomical telescopes and satellite radiometers are based on multilayer thin film stacks of alternating high and low refractive index materials. However, the choice of suitable layer materials is limited and this places limitations on the filter performance that can be achieved. The ability to design materials with arbitrary refractive index allows for filter performance to be greatly increased but also increases the complexity of design. Here a differential algorithm was used as a method for optimised design of filters with arbitrary refractive indices, and then materials are designed to these specifications as mono-materials with sub wavelength structures using Bruggeman’s effective material approximation (EMA).

Crossbred cow adoption and its correlates: countable adoption specification search in Sri Lanka's small holder dairy sector

Considerable specification choice confronts countable adoption investigations and there is need to measure, formally, the evidence in favor of competing formulations. This article presents alternative countable adoption specifications���hitherto neglected in the agricultural-economics literature—and assesses formally their usefulness to practitioners. Reference to the left side of de Finetti's (1937) famous representation theorem motivates Bayesian unification of agricultural adoption studies and facilitates comparisons with conventional binary-choice specifications. Such comparisons have not previously been considered. The various formulations and the specific techniques are highlighted in an application to crossbred cow adoption in Sri Lanka's small-holder dairy sector.