A method for the economic valuation of animal welfare benefits using a single welfare score

Unless the benefits to society of measures to protect and improve the welfare of animals are made transparent by means of their valuation they are likely to go unrecognised and cannot easily be weighed against the costs of such measures as required, for example, by policy-makers. A simple single measure scoring system, based on the Welfare Quality® index, is used, together with a choice experiment economic valuation method, to estimate the value that people place on improvements to the welfare of different farm animal species measured on a continuous (0-100) scale. Results from using the method on a survey sample of some 300 people show that it is able to elicit apparently credible values. The survey found that 96% of respondents thought that we have a moral obligation to safeguard the welfare of animals and that over 72% were concerned about the way farm animals are treated. Estimated mean annual willingness to pay for meat from animals with improved welfare of just one point on the scale was £5.24 for beef cattle, £4.57 for pigs and £5.10 for meat chickens. Further development of the method is required to capture the total economic value of animal welfare benefits. Despite this, the method is considered a practical means for obtaining economic values that can be used in the cost-benefit appraisal of policy measures intended to improve the welfare of animals.

Images of the multinational firm

A compilation of perspectives from leading authors from international business studies and organisation studies, including John Dunning, Eleanor Westney, John Cantwell, Richard Whitely and Alan Rugman.

Race-to-the-bottom or -top at home or abroad: Health and safety standards and the multinational firm

We develop a model to illustrate potential complexities in the relationship between corporate geographical diversification and the health and safety (H&S) standards set in national jurisdictions. A firm, that initially has a plant in its home country, may choose to also have one or two foreign plants in order to improve its bargaining position versus local governments, and so ensure reduced H&S standards, i.e. a race-to-the-bottom. However, contrary to the main focus of the popular debate on this topic, we note the potential for the race-to-the-bottom tendency to be exerted on H&S standards in the multinational company’s home rather than host country, and also for an upward push on H&S to instead result.

Firm size and competition: a comparison of the housebuilding industries in Australia, the UK and the USA

Housebuilding is frequently viewed as an industry full of small firms. However, large firms exist in many countries. Here, a comparative analysis is made of the housebuilding industries in Australia, Britain and the USA. Housebuilding output is found to be much higher in Australia and the USA than in Britain when measured on a per capita basis. At the same time, the degree of market concentration in Australia and the USA is relatively low but in Britain it is far greater, with a few firms having quite substantial market shares. Investigation of the size distribution of the top 100 or so firms ranked by output also shows that the decline in firm size from the largest downwards is more rapid in Britain than elsewhere. The exceptionalism of the British case is put down to two principal reasons. First, the close proximity of Britain’s regions enables housebuilders to diversify successfully across different markets. The gains from such diversification are best achieved by large firms, because they can gain scale benefits in any particular market segment. Second, land shortages induced by a restrictive planning system encourage firms to takeover each other as a quick and beneficial means of acquiring land. The institutional rules of planning also make it difficult for new entrants to come in at the bottom end of the size hierarchy. In this way, concentration grows and a handful of large producers emerge. These conditions do not hold in the other two countries, so their industries are less concentrated. Given the degree of rivalry between firms over land purchases and takeovers, it is difficult to envisage them behaving in a long-term collusive manner, so that competition in British housebuilding is probably not unduly compromised by the exceptional degree of firm concentration. Reforms to lower the restrictions, improve the slow responsiveness and reduce the uncertainties associated with British planning systems’ role in housing supply are likely to greatly improve the ability of new firms to enter housebuilding and all firms’ abilities to increase output in response to rising housing demand. Such reforms would also probably lower overall housebuilding firm concentration over time.

Contributory negligence involving overseas European banks in property valuation negligence cases in the UK

This paper examines the phenomenon of cross-border property lending and examines a number of issues regarding lending procedures and decision making processes in the context of the relationship between lender and professional advisor. It commences by placing these procedures and processes in the context of the development of cross border European property investment and finance. The UK has been a popular destination for overseas investors and lenders over the last decade and is therefore used as a case study to examine the additional institutional risk that overseas lenders may face when operating outside of their own country and obtaining advice from home professionals. The UK market was the subject of a boom period during the late 1980s, followed by a recession in the early 1990s. The losses triggered a number of professional negligence actions by lenders against valuers. These include a number of overseas lenders mainly from Europe and these cases have been examined for any particular features which, coupled with other data gained from overseas lenders as part of an interview survey, could be used to isolate any significant problems for European lenders in overseas markets. The research identified a lack of clarity in roles and relationships between lender and advisor, difficulties in communications both internally and between overseas branches and headquarters and failures in provision and interpretation of advice. The paper concludes by identifying the issues which may need to be addressed generally by lenders and their advisors, when the lenders are operating in overseas markets.

Valuation and arbitrage

The use of discounted cash flow (DCF) methods in investment valuation and appraisal is argued by many academics as being rational and more rigorous than the traditional capitalisation model. However those advocates of DCF should be cautious in their claims for rationality. The various DCF models all rely upon an all-encompassing equated yield (IRR) within the calculation. This paper will argue that this is a simplification of the risk perception which the investor places on the income profile from property. In determining the long term capital value of a property an 'average' DCF method will produce the 'correct' price, however, the individual short term values of each cash-flow may differ significantly. In the UK property market today, where we are facing a period in which prices are not expected to rise generally at the same rate or with such persistence as hitherto, investors and tenants are increasingly concerned with the down side implications of rental growth and investors may indeed be interested in trading property over a shorter investment horizon than they had originally planned. The purpose of this paper is therefore to bring to the analysis a rigorous framework which can be used to analyse the constituent cash flows within the freehold valuation. We show that the arbitrage analysis lends itself to segregating the capital value of the cash flows in a way which is more appropriate for financial investors

The uncertainty of valuation

Valuation is often said to be “an art not a science” but this relates to the techniques employed to calculate value not to the underlying concept itself. Valuation is the process of estimating price in the market place. Yet, such an estimation will be affected by uncertainties. Uncertainty in the comparable information available; uncertainty in the current and future market conditions and uncertainty in the specific inputs for the subject property. These input uncertainties will translate into an uncertainty with the output figure, the valuation. The degree of the uncertainties will vary according to the level of market activity; the more active a market, the more credence will be given to the input information. In the UK at the moment the Royal Institution of Chartered Surveyors (RICS) is considering ways in which the uncertainty of the output figure, the valuation, can be conveyed to the use of the valuation, but as yet no definitive view has been taken. One of the major problems is that Valuation models (in the UK) are based upon comparable information and rely upon single inputs. They are not probability based, yet uncertainty is probability driven. In this paper, we discuss the issues underlying uncertainty in valuations and suggest a probability-based model (using Crystal Ball) to address the shortcomings of the current model.

Dynamic capabilities in a sixth generation family firm: entrepreneurship and the Bibby Line

In this paper we draw on the theory of dynamic capabilities to examine development of the only surviving family-owned Liverpool shipping company. The Bibby Line was founded in 1807 to take advantage of the growing sea-trade based in Liverpool. The company remained in shipping until the mid-1960s, when a series of external crises led the owner, Derek Bibby, to begin a process of diversification. In the last 50 years, the Bibby Line has grown into a £1bn business with interests in retail, distribution and financial services as well as a continuing commitment to shipping. Our intention is to demonstrate how multigenerational ownership contributes to the creation of dynamic capabilities in family firms. The distinctive nature of Bibby as a long-standing family business is related to unique assets such as patient capital, flexible governance structures as well as the ability to mobilise social and human capital.