The relative importance of sectors v's regions in determining property returns

A number of studies have investigated the benefits of sector versus regional diversification within a real estate portfolio without explicitly quantify the relative benefits of one against the other. This paper corrects this omission by adopting the approach of Heston and Rouwenhorst (1994) and Beckers, Connor and Curds (1996) on a sample of 187 property data points using annual data over the period 1981-1995. The general conclusion of which is the sector diversification explains on average 22% of the variability of property returns compared with 8% for administratively defined regions. A result in line with previous work. Implying that sector diversification should be the first level of analysis in constructing and managing the real estate portfolio. However, unlike previous work functionally defined regions provide less of an explanation of regional diversification than administrative regions. Which may be down to the weak definition of economic regions employed in this study.

Changes in the relative importance of sector and regional Factors: 1987-2002

A stylised fact in the real estate portfolio diversification literature is that sector (property-type) effects are relatively more important than regional (geographical) factors in determining property returns. Thus, for those portfolio managers who follow a top-down approach to portfolio management, they should first choose in which sectors to invest and then select the best properties in each market. However, the question arises as to whether the dominance of the sector effects relative to regional effects is constant. If not property fund managers will need to take account of regional effects in developing their portfolio strategy. We find the results show that the sector-specific factors dominate the regional-specific factors for the vast majority of the time. Nonetheless, there are periods when the regional factors are of equal or greater importance than the sector effects. In particular, the sector effects tend to dominate during volatile periods of the real estate cycle; however, during calmer periods the sector and regional effects are of equal importance. These findings suggest that the sector effects are still the most important aspect in the development of an active portfolio strategy.

The importance of attractive three-point interaction in enantioselective surface chemistry: stereospecific adsorption of serine on the intrinsically chiral Cu{531} surface

Both enantiomers of serine adsorb on the intrinsically chiral Cu{531} surface in two different adsorption geometries, depending on the coverage. At saturation, substrate bonds are formed through the two oxygen atoms of the carboxylate group and the amino group (μ3 coordination), whereas at lower coverage, an additional bond is formed through the deprotonated β−OH group (μ4 coordination). The latter adsorption geometry involves substrate bonds through three side groups of the chiral center, respectively, which leads to significantly larger enantiomeric differences in adsorption geometries and energies compared to the μ3 coordination, which involves only two side groups. This relatively simple model system demonstrates, in direct comparison, that attractive interactions of three side groups with the substrate are much more effective in inducing strong enantiomeric differences in heterogeneous chiral catalyst systems than hydrogen bonds or repulsive interactions.

The importance of friction in mountain wave drag amplification by Scorer parameter resonance

A mechanism for amplification of mountain waves, and their associated drag, by parametric resonance is investigated using linear theory and numerical simulations. This mechanism, which is active when the Scorer parameter oscillates with height, was recently classified by previous authors as intrinsically nonlinear. Here it is shown that, if friction is included in the simplest possible form as a Rayleigh damping, and the solution to the Taylor-Goldstein equation is expanded in a power series of the amplitude of the Scorer parameter oscillation, linear theory can replicate the resonant amplification produced by numerical simulations with some accuracy. The drag is significantly altered by resonance in the vicinity of n/l_0 = 2, where l_0 is the unperturbed value of the Scorer parameter and n is the wave number of its oscillation. Depending on the phase of this oscillation, the drag may be substantially amplified or attenuated relative to its non-resonant value, displaying either single maxima or minima, or double extrema near n/l_0 = 2. Both non-hydrostatic effects and friction tend to reduce the magnitude of the drag extrema. However, in exactly inviscid conditions, the single drag maximum and minimum are suppressed. As in the atmosphere friction is often small but non-zero outside the boundary layer, modelling of the drag amplification mechanism addressed here should be quite sensitive to the type of turbulence closure employed in numerical models, or to computational dissipation in nominally inviscid simulations.

Regulation of surface water quality in a Cretaceous chalk catchment, UK: an assessment of the relative importance of instream and wetland processes

To investigate the relative importance of instream nutrient spiralling and wetland transformation processes on surface water quality, total nitrogen (TN) and total phosphorus (TP) concentrations in a 200 m reach of the River Lambourn in the south-east of England were monitored over a 2-year period. In addition, the soil pore water nutrient dynamics in a riparian ecosystem adjacent to the river were investigated. Analysis of variance indicated that TN, TP and suspended sediment concentrations recorded upstream of the wetland were statistically significantly higher (P<0.05) than those downstream of the site. Such results suggest that the wetland was performing a nutrient retention function. Indeed, analysis of soil pore waters within the site show that up to 85% of TN and 70% of TP was removed from water flowing through the wetland during baseflow conditions, thus supporting the theory that the wetland played an important role in the regulation of surface water quality at the site. However, the small variations observed (0.034 mg TN l-1 and 0.031 mg P l-1) are consistent with the theory of nutrient spiralling suggesting that both instream and wetland retention processes have a causal effect on surface water quality.

Importance of oceanic resolution and mean state on the extra-tropical response to El Niño in a matrix of coupled models

The extra-tropical response to El Niño in configurations of a coupled model with increased horizontal resolution in the oceanic component is shown to be more realistic than in configurations with a low resolution oceanic component. This general conclusion is independent of the atmospheric resolution. Resolving small-scale processes in the ocean produces a more realistic oceanic mean state, with a reduced cold tongue bias, which in turn allows the atmospheric model component to be forced more realistically. A realistic atmospheric basic state is critical in order to represent Rossby wave propagation in response to El Niño, and hence the extra-tropical response to El Niño. Through the use of high and low resolution configurations of the forced atmospheric-only model component we show that, in isolation, atmospheric resolution does not significantly affect the simulation of the extra-tropical response to El Niño. It is demonstrated, through perturbations to the SST forcing of the atmospheric model component, that biases in the climatological SST field typical of coupled model configurations with low oceanic resolution can account for the erroneous atmospheric basic state seen in these coupled model configurations. These results highlight the importance of resolving small-scale oceanic processes in producing a realistic large-scale mean climate in coupled models, and suggest that it might may be possible to “squeeze out” valuable extra performance from coupled models through increases to oceanic resolution alone.

Importance of density-compensated temperature change for deep North Atlantic Ocean heat uptake

The efficiency with which the oceans take up heat has a significant influence on the rate of global warming. Warming of the ocean above 700 m over the past few decades has been well documented. However, most of the ocean lies below 700 m. Here we analyse observations of heat uptake into the deep North Atlantic. We find that the extratropical North Atlantic as a whole warmed by 1.45±0.5×1022 J between 1955 and 2005, but Lower North Atlantic Deep Water cooled, most likely as an adjustment from an early twentieth-century warm period. In contrast, the heat content of Upper North Atlantic Deep Water exhibited strong decadal variability. We demonstrate and quantify the importance of density-compensated temperature anomalies for long-term heat uptake into the deep North Atlantic. These anomalies form in the subpolar gyre and propagate equatorwards. High salinity in the subpolar gyre is a key requirement for this mechanism. In the past 50 years, suitable conditions have occurred only twice: first during the 1960s and again during the past decade. We conclude that heat uptake through density-compensated temperature anomalies will contribute to deep ocean heat uptake in the near term. In the longer term, the importance of this mechanism will be determined by competition between the multiple processes that influence subpolar gyre salinity in a changing climate.

Life before the minster: the social dynamics of monastic foundation at Anglo-Saxon Lyminge, Kent

Anglo-Saxon monastic archaeology has been constrained by the limited scale of past investigations and their overriding emphasis on core buildings. This paper draws upon the results of an ongoing campaign of archaeological research that is redressing the balance through an ambitious programme of open-area excavation at Lyminge, Kent, the site of a royal double monastery founded in the seventh century ad. The results of five completed fieldwork seasons are assessed and contextualised in a narrative sequence emphasising the dynamic character of Lyminge as an Anglo-Saxon monastic settlement. In so doing, the study brings into sharp focus how early medieval monasteries were emplaced in the landscape, with specific reference to Anglo-Saxon Kent, a regional context offering key insights into how the process of monastic foundation redefined antecedent central places of long-standing politico-religious significance and social action.

The importance of surface pressure changes in the response of the atmosphere to zonally-symmetric thermal and mechanical forcing

he classical problem of the response of a balanced, axisymmetric vortex to thermal and mechanical forcing is re-examined, paying special attention to the lower boundary condition. The correct condition is DΦ/Dt = 0, where Φ is the geopotential and D/Dt the material derivative, which explicitly accounts for a mass redistribution as part of the mean-flow response. This redistribution is neglected when using the boundary condition Dp/Dt = 0, which has conventionally been applied in this problem. It is shown that applying the incorrect boundary condition, and thereby ignoring the surface pressure change, leads to a zonal wind acceleration δū/δt that is too strong, especially near the surface. The effect is significant for planetary-scale forcing even when applied at tropopause level. A comparison is made between the mean-flow evolution in a baroclinic life-cycle, as simulated in a fully nonlinear, primitive-equation model, and that predicted by using the simulated eddy fluxes in the zonally-symmetric response problem. Use of the correct lower boundary condition is shown to lead to improved agreement.

The importance of moisture distribution for the growth and energetics of mid-latitude systems

A primitive equation model is used to study the sensitivity of baroclinic wave life cycles to the initial latitude-height distribution of humidity. Diabatic heating is parametrized only as a consequence of condensation in regions of large-scale ascent. Experiments are performed in which the initial relative humidity is a simple function of model level, and in some cases latitude bands are specified which are initially relatively dry. It is found that the presence of moisture can either increase or decrease the peak eddy kinetic energy of the developing wave, depending on the initial moisture distribution. A relative abundance of moisture at mid-latitudes tends to weaken the wave, while a relative abundance at low latitudes tends to strengthen it. This sensitivity exists because competing processes are at work. These processes are described in terms of energy box diagnostics. The most realistic case lies on the cusp of this sensitivity. Further physical parametrizations are then added, including surface fluxes and upright moist convection. These have the effect of increasing wave amplitude, but the sensitivity to initial conditions of relative humidity remains. Finally, 'control' and 'doubled CO2' life cycles are performed, with initial conditions taken from the time-mean zonal-mean output of equilibrium GCM experiments. The attenuation of the wave resulting from reduced baroclinicity is more pronounced than any effect due to changes in initial moisture.

Relief for the environment? The importance of an increasingly unimportant industrial sector

Deindustrialization, stagnant real incomes of production workers, and increasing inequality are latter day features of many economies. It is common to assume that such developments pressure policymakers to relax environmental standards. However, when heavily polluting industries become less important economically, their political importance also tends to diminish. Consequently, a regulator may increase the stringency of environmental policies. Like some other studies, we find that declining industrial employment translates into stricter environmental standards. In contrast to previous studies, but consistent with our argument, we find that greater income inequality is associated with policies that promote a cleaner environment. (JEL Q58, P16, J31, C23)