Listed property trusts and downside systematic risk sensitivity

Purpose: This paper aims to identify and examine the determinants of downside systematic risk in Australian listed property trusts (LPTs).

Design/methodology/approach: Capital asset pricing model (CAPM) and lower partial moment-CAPM (LPM-CAPM) are employed to compute both systematic risk and downside systematic risk. The methodology of Patel and Olsen and Chaudhry et al. is adopted to examine the determinants of systematic risk and downside systematic risk.

Findings: The results confirm that systematic risk and downside systematic risk can be individually identified. There is little evidence to support the existence of linkages between systematic risk in Australian LPTs and financial/management structure determinants. On the other hand, downside systematic risk is directly related to the leverage/management structure of a LPT. The results are also robust after controlling for the LPTs' investment characteristics and varying target rates of return.

Practical implications: Investors and real estate analysts should conscious with the higher returns from high leverage and internally managed LPTs. Although there is no evidence that these higher returns are related to higher systematic risk, there could be the compensation for higher downside systematic risk.

Originality/value: This study provides invaluable insights into the management of real estate risk in Australian LPTs with implications for REITs in other countries. Unlike previous studies of systematic risk in REITs or LPTs, this is the first study to assess downside systematic risk and explore the determinants of downside systematic risk in LPTs.

The relationship between sustainability and the value of office buildings

There is an increasing body of evidence to suggest that the development of sustainability in office buildings and the acceptance of these buildings in the broader property market is increasing. However a gap still remains between the value of sustainability and the value of the building from an International Valuation Standards Committee (IVSC) definition of market value. Current literature is limited in the investigation of the impact of sustainable criteria on value component when undertaking a valuation of a commercial office building. Whilst substantial advances have been made in sustainable design and construction aspects, as well as reducing implementation costs and enhancing benefits associated with sustainability, there appears to be inherent barriers in adopting sustainability in the valuation process for the property industry.

This paper examines the limited previous research into the elements of sustainable criteria that impact upon property value, and in turn should be reflected in traditional valuation methods. The immaturity of the property market for sustainable building is such that current valuation methods do not appear to have significant evidential proof of increased property value through sales or lease evidence for sustainable buildings. Furthermore, this lack of market evidence makes it inherently difficult for valuers to assess the real market value of sustainable buildings through current valuation methodology. In other words, the level of risk associated with incorporating different levels of sustainability into office buildings appears difficult to measure using a market value perspective in today’s property market. Accordingly this paper examines current research that has been undertaken to identify particular sustainable criteria that potentially affects the value of a sustainable building. For example, previous research suggests that sustainable criteria impact upon the valuation equation through rental growth, depreciation, risk premium and cash flow. This paper also examines how other studies have viewed the impact of sustainable criteria and how they are weighted within the valuation equation. The discussion provides an insight into the rapidly evolving area of sustainability and office buildings with emphasis placed on the valuation process that seeks to assess a hypothetical purchaser’s perspective of this relationship.

Can the ABCD Score be dichotomised to identify high−risk patients with trainsient ischaemic attack in the emergency department?

Background: Recent evidence shows a substantial short-term risk of ischaemic stroke after transient ischaemic attack (TIA). Identification of patients with TIA with a high short-term risk of stroke is now possible through the use of the “ABCD Score”, which considers age, blood pressure, clinical features and duration of symptoms predictive of stroke.

Aim: To evaluate the ability of dichotomising the ABCD Score to predict stroke at 7 and 90 days in a population with TIA presenting to an emergency department.

Methods: A retrospective audit was conducted on all probable or definite TIAs presenting to the emergency department of a metropolitan hospital from July to December 2004. The ABCD Score was applied to 98 consecutive patients with TIA who were reviewed for subsequent strokes within 90 days. Patients obtaining an ABCD Score ≥5 were considered to be at high risk for stroke.

Results: Dichotomising the ABCD Score categorised 48 (49%) patients with TIA at high risk for stroke (ABCD Score ≥5). This high-risk group contained all four strokes that occurred within 7 days (sensitivity 100% (95% confidence interval (CI) 40% to 100%), specificity 53% (95% CI 43% to 63%), positive predictive value 8% (95% CI 3% to 21%) and negative predictive value 100% (95% CI 91% to 100%)), and six of seven occurring within 90 days (sensitivity 86% (95% CI 42% to 99%), specificity 54% (95% CI 43% to 64%), positive predictive value 12.5% (95% CI 5% to 26%) and negative predictive value 98% (95% CI 88% to 100%)). Removal of the “age” item from the ABCD Score halved the number of false-positive cases without changing its predictive value for stroke.

Conclusion: In this retrospective analysis, dichotomising the ABCD Score was overinclusive but highly predictive in identifying patients with TIA at a high short-term risk of stroke. Use of the ABCD Score in the emergency care of patients with TIA is simple, efficient and provides a unique opportunity to prevent stroke in this population of patients.

Risk allocation in public-private partnership projects : an innovative model with an intelligent approach

Both the increasing private participation in public projects and the critical importance of appropriate risk allocation to the success of Public-private partnership (PPP) projects justify specific research on how to establish effective risk allocation strategies in PPP projects. Partner’s risk management capability is currently the main concern to risk allocation in PPP projects. Following the transaction cost economics, it is argued that factors such as partner’s commitment and risk management structure should be considered simultaneously in order to develop effective risk allocation strategies. Based on the holistic capability-commitment governance-driven view, this paper proposed a model for generating an optimal risk allocation strategy in PPP projects. The model is demonstrated and described. An artificial intelligent technique integrated with fuzzy logic for model testing and validation is then introduced and justified. The innovative model is expected to provide a logical and complete understanding of the risk allocation strategy selection process, and to provide stakeholders with a richer framework than previously existing ones to guide their decision-making on risk allocation strategies.

Laboratory and non-laboratory-based risk prevention models for secondary prevention of cardiovascular disease : the LIPID study

Aims : The aims of this study were to examine whether risk prediction models for recurrent cardiovascular disease (CVD) events have prognostic value, and to particularly examine the performance of those models based on non-laboratory data. We also aimed to construct a risk chart based on the risk factors that showed the strongest relationship with CVD.

Methods and results : Cox proportional hazards models were used to calculate a risk score for each recurrent event in a CVD patient who was enrolled in a very large randomized controlled clinical trial. Patients were then classified into groups according to quintiles of their risk score. These risk models were validated by calibration and discrimination analyses based on data from patients recruited in New Zealand for the same study. Non-laboratory-based risk factors, such as age, sex, body mass index, smoking status, angina grade, history of myocardial infarction, revascularization, stroke, diabetes or hypertension and treatment with pravastatin, were found to be significantly associated with the risk of developing a recurrent CVD event. Patients who were classified into the medium and high-risk groups had two-fold and four-fold the risk of developing a CVD event compared with those in the low-risk group, respectively. The risk prediction models also fitted New Zealand data well after recalibration.

Conclusion : A simpler non-laboratory-based risk prediction model performed equally as well as the more comprehensive laboratory-based risk prediction models. The risk chart based on the further simplified Score Model may provide a useful tool for clinical cardiologists to assess an individual patient's risk for recurrent CVD events.

Media reports of heroin overdose spates: public health messages, moral panics or risk advertisements?

This article reports on an investigation of the public health utility of media messages concerning spates (temporal clusters) of heroin-related overdose (HOD) from the perspective of some injecting drug users (IDUs). In-depth qualitative interviews were carried out with a convenience sample of 60 IDUs, in the setting of two Needle and Syringe Programs in an Australian regional city (Geelong) between April and May 2000. Very few interviewees reported that they had personally experienced a spate of overdoses. None of the interviewees reported communicating the existence of a killer batch to other IDUs. No interviewees reported having changed either their injecting practices or the amount of heroin they used following such a media alert. Indeed, a substantial minority of the interviewees reported seeking out these stronger batches and participant narratives illustrate that, for a substantial group of interviewees, the media reporting of a hypothetical 'killer batch' of heroin may have implications for their drug-seeking and health-related behaviour. It was found that the accuracy of information available to IDUs is mixed and that the flow of information within this social network was slow. Findings demonstrate that media reporting of killer batches of heroin has little value as a public health strategy and provide an example of how some activities that are proposed as public health measures may in fact have the opposite effect.

Connecting entrepreneurship with innovation value in university knowledge transfer

This paper conceptually links entrepreneurship and innovation through a structured and comprehensive examination of the levels of activities that may be (or should be) found within the modern university. By doing so, we believe a fertile ground for testing insightful new hypothesis will be opened for exploration. The authors explore several literatures and introduce three novel theoretical models to help examine innovation and entrepreneurship within the domain of university knowledge transfer. Predicated upon our generalized conceptual assertion that innovation is a function of new knowledge and entrepreneurial capacity, we pose four research questions: 1) what is innovation and entrepreneurship in the university context, 2) how might it be studied, fostered and evaluated, 3) how do the domains of individually driven entrepreneurship and organizational entrepreneurship interact and converge within the university innovation value creation process and 4) how does entrepreneurship ultimately impact upon innovation with respect to creating value from all areas of research and activities provided by the modern university? It is expected that the models offered will allow for both theoretical and empirical testing of these questions.

Exploring critical factors for achieving successful risk allocation in public-private partnership projects

Public Private Partnerships (PPP) as a procurement mechanism for infrastructure projects is becoming increasingly common. This is principally due to the value for money opportunities it offers the public sector sponsors. This value for money is primarily achieved through the optimisation of the allocation of risk inherent in the project being transferred from the public sector sponsors onto private sector bidders. This paper analyses the influence that these factors have on successful risk allocation with the aim of providing clearer parameters for optimal risk allocation in PPP projects. Through an extensive review of existing literature, the critical success factors for optimal risk allocation in PPP projects are identified. It is found that the optimisation of risk allocation in PPP projects is critically influenced by the identified factors, which will undoubtedly aid in the successful outcome for future PPP projects.

The educative value of values

There appears to be increasing interest among certain educational institutions to include values as a prominent feature of their practice (Buckley & Erricker, 2004). One recent example is the Victorian Curriculum Assessment Authority (VCAA) who released a discussion paper earlier this year, which indicates that values are to play a much greater role in government schools. However, endeavouring to promote values as common standards can be criticised to be problematic in our pluralist society, because not all values are necessarily valuable.

This paper reviews the VCAA paper and attempts to respond to Nietzsche’s (1998) challenge to question the value of our values, by offering guidance as to how the educative value of values might be determined. Such an examination is expected to identify a potential tension between a particular civic education and that of a more philosophic and universally educative perspective. In order to do this, a differentiation between a value (noun) as ‘objective fact’ and value (verb) as a ‘subjective relation’ is made. This paper will adopt an existential perspective by drawing upon consequentialism, intentionality and the works of Kierkegaard and Dewey, to argue that emphasis should be placed on the subjective aspects of educative valuing without fostering an objective/subjective divide.

An agent-based approach to value theory and wealth distribution in economics

Any attempt to model an economy requires foundational assumptions about the relations between prices, values and the distribution of wealth. These assumptions exert a profound influence over the results of any model. Unfortunately, there are few areas in economics as vexed as the theory of value. I argue in this paper that the fundamental problem with past theories of value is that it is simply not possible to model the determination of value, the formation of prices and the distribution of income in a real economy with analytic mathematical models. All such attempts leave out crucial processes or make unrealistic assumptions which significantly affect the results. There have been two primary approaches to the theory of value. The first, associated with classical economists such as Ricardo and Marx were substance theories of value, which view value as a substance inherent in an object and which is conserved in exchange. For Marxists, the value of a commodity derives solely from the value of the labour power used to produce it - and therefore any profit is due to the exploitation of the workers. The labour theory of value has been discredited because of its assumption that labour was the only ‘factor’ that contributed to the creation of value, and because of its fundamentally circular argument. Neoclassical theorists argued that price was identical with value and was determined purely by the interaction of supply and demand. Value then, was completely subjective. Returns to labour (wages) and capital (profits) were determined solely by their marginal contribution to production, so that each factor received its just reward by definition. Problems with the neoclassical approach include assumptions concerning representative agents, perfect competition, perfect and costless information and contract enforcement, complete markets for credit and risk, aggregate production functions and infinite, smooth substitution between factors, distribution according to marginal products, firms always on the production possibility frontier and firms’ pricing decisions, ignoring money and credit, and perfectly rational agents with infinite computational capacity. Two critical areas include firstly, the underappreciated Sonnenschein-Mantel- Debreu results which showed that the foundational assumptions of the Walrasian general-equilibrium model imply arbitrary excess demand functions and therefore arbitrary equilibrium price sets. Secondly, in real economies, there is no equilibrium, only continuous change. Equilibrium is never reached because of constant changes in preferences and tastes; technological and organisational innovations; discoveries of new resources and new markets; inaccurate and evolving expectations of businesses, consumers, governments and speculators; changing demand for credit; the entry and exit of firms; the birth, learning, and death of citizens; changes in laws and government policies; imperfect information; generalized increasing returns to scale; random acts of impulse; weather and climate events; changes in disease patterns, and so on. The problem is not the use of mathematical modelling, but the kind of mathematical modelling used. Agent-based models (ABMs), objectoriented programming and greatly increased computer power however, are opening up a new frontier. Here a dynamic bargaining ABM is outlined as a basis for an alternative theory of value. A large but finite number of heterogeneous commodities and agents with differing degrees of market power are set in a spatial network. Returns to buyers and sellers are decided at each step in the value chain, and in each factor market, through the process of bargaining. Market power and its potential abuse against the poor and vulnerable are fundamental to how the bargaining dynamics play out. Ethics therefore lie at the very heart of economic analysis, the determination of prices and the distribution of wealth. The neoclassicals are right then that price is the enumeration of value at a particular time and place, but wrong to downplay the critical roles of bargaining, power and ethics in determining those same prices.

Rehabilitation : beyond the risk paradigm

Providing a succinct summary and critique of the scientific approach to offender rehabilitation, this volume for students of criminology, sociology and clinical psychology gives a comprehensive evaluation of both the Risk-Need-Responsivity Model and the Good Lives Model." "Rehabilitation is a value-laden process involving a delicate balance of the needs and desires of clinicians, clients, the State and the public. Written by two internationally renowned academics in rehabilitation research, this book argues that intervention with offenders is not simply a matter of implementing the best therapeutic technology and leaving political and social debate to politicians and policy-makers.

Incorporating a knowledge perspective into security risk assessments

Purpose – Many methodologies exist to assess the security risks associated with unauthorized leakage, modification and interruption of information used by organisations. This paper argues that these methodologies have a traditional orientation towards the identification and assessment of technical information assets. This obscures key risks associated with the cultivation and deployment of organisational knowledge. The purpose of this paper is to explore how security risk assessment methods can more effectively identify and treat the knowledge associated with business processes.

Design/methodology/approach – The argument was developed through an illustrative case study in which a well-documented traditional methodology is applied to a complex data backup process. Follow-up interviews were conducted with the organisation’s security managers to explore the results of the assessment and the nature of knowledge “assets” within a business process.

Findings – It was discovered that the backup process depended, in subtle and often informal ways, on tacit knowledge to sustain operational complexity, handle exceptions and make frequent interventions. Although typical information security methodologies identify people as critical assets, this study suggests a new approach might draw on more detailed accounts of individual knowledge, collective knowledge and their relationship to organisational processes.

Originality/value – Drawing on the knowledge management literature, the paper suggests mechanisms to incorporate these knowledge-based considerations into the scope of information security risk methodologies. A knowledge protection model is presented as a result of this research. This model outlines ways in which organisations can effectively identify and treat risks around process knowledge critical to the business.

The effects of perceived business uncertainty, external consultants and risk management on organisational outcomes

Purpose – The purpose of this paper is to investigate the relations between perceived business uncertainty (PBU), use of external risk management (RM) consultants, formalisation of RM, magnitude of RM methods and perceived organisational outcomes.
Design/methodology/approach – This paper is based on a questionnaire survey of members of the Chartered Institute of Management Accountants in the UK. Using AMOS 17.0, the paper tests the strength of the direct and indirect effects among the variables and explores the fit of the overall path model.
Findings – The results indicate significant and positive associations exist between the extent of PBU and the level ofRMformalisation, as well as between the level ofRMformalisation and the magnitude of RMmethods adopted. The use of externalRMconsultants is also found to have a significant and positive impact on the magnitude of RM methods adopted. Finally, both the extent of RM formalisation and the magnitude of RM methods adopted are seen to be significantly associated with overall improvement in organisational outcomes.
Research limitations/implications – The study uses perceptual measures of the level of business uncertainty, usage of RM and organisational outcomes. Further, the respondents are members of a management accounting professional body and the views of other managers, such as risk managers, who are also important to the governance process are not incorporated.
Originality/value – This study provides empirical evidence on the impact ofRMdesign and usage on improvements in organisational outcomes. It contributes to the RM literature where empirical research is needed in order to be comparable with the traditional management control system literature.

Internal audit involvement in enterprise risk management

Purpose – The purpose of this paper is to examine the impact of internal auditors’ involvement in enterprise risk management (ERM) on perceptions of their willingness to report a breakdown in risk procedures and whether a strong relationship with the audit committee affects such willingness to report. The study also investigates the use of ERM and the role of internal audit in ERM in Australian private and public sector entities.
Design/methodology/approach – The study uses an experimental design, manipulating the internal auditor’s involvement in ERM and the strength of the relationship between internal audit and the audit committee. Participants are 117 certified internal auditors. The study also gathers descriptive data on the use of ERM.
Findings – The study indicates that a high involvement in ERM impacts the perceptions of internal
auditors’ willingness to report a breakdown in risk procedures to the audit committee. However, a strong relationship with the audit committee does not appear to affect their perceived willingness to report. The study also finds that the majority of organisations have recently adopted ERM. Internal auditors are involved in ERM assurance activities but some also engage in activities that could compromise objectivity.
Research limitations/implications – There are internal and external validity threats associated with the experimental design.
Practical implications – The findings reinforce the need for organisations to adhere to the recommendations of the Institute of Internal Auditors and to ensure that internal auditors do not play an inappropriate role in ERM.
Originality/value – The paper contributes to our understanding of the impact of involvement in ERM on internal audit objectivity and of the current role of internal audit in ERM in Australia.

A note on the property rights theory and the ex ante value of information

This paper examines the ex ante value of information in the property rights model where the possibility exists that an investing agent can be provided with relevant information before investments are undertaken. When contracts are incomplete, from an ex ante perspective, informing the investing agent does not necessarily increase the expected surplus resulting from a relationship between two economic agents. The paper highlights the fact that the second-best nature of the problem that arises from contractual incompleteness can ensure this.