Validation of a Spatially Continuous EDEN Water-Surface Model for the Everglades, Florida

The Everglades Depth Estimation Network (EDEN) is an integrated network of realtime water-level monitoring, ground-elevation modeling, and water-surface modeling that provides scientists and managers with current (2000-present), online water-stage and water-depth information for the entire freshwater portion of the Greater Everglades. Continuous daily spatial interpolations of the EDEN network stage data are presented on grid with 400-square-meter spacing. EDEN offers a consistent and documented dataset that can be used by scientists and managers to: (1) guide large-scale field operations, (2) integrate hydrologic and ecological responses, and (3) support biological and ecological assessments that measure ecosystem responses to the implementation of the Comprehensive Everglades Restoration Plan (CERP) (U.S. Army Corps of Engineers, 1999). The target users are biologists and ecologists examining trophic level responses to hydrodynamic changes in the Everglades. The first objective of this report is to validate the spatially continuous EDEN water-surface model for the Everglades, Florida developed by Pearlstine et al. (2007) by using an independent field-measured data-set. The second objective is to demonstrate two applications of the EDEN water-surface model: to estimate site-specific ground elevation by using the validated EDEN water-surface model and observed water depth data; and to create water-depth hydrographs for tree islands. We found that there are no statistically significant differences between model-predicted and field-observed water-stage data in both southern Water Conservation Area (WCA) 3A and WCA 3B. Tree island elevations were derived by subtracting field water-depth measurements from the predicted EDEN water-surface. Water-depth hydrographs were then computed by subtracting tree island elevations from the EDEN water stage. Overall, the model is reliable by a root mean square error (RMSE) of 3.31 cm. By region, the RMSE is 2.49 cm and 7.77 cm in WCA 3A and 3B, respectively. This new landscape-scale hydrological model has wide applications for ongoing research and management efforts that are vital to restoration of the Florida Everglades. The accurate, high-resolution hydrological data, generated over broad spatial and temporal scales by the EDEN model, provides a previously missing key to understanding the habitat requirements and linkages among native and invasive populations, including fish, wildlife, wading birds, and plants. The EDEN model is a powerful tool that could be adapted for other ecosystem-scale restoration and management programs worldwide.

The Long-Run Relationship between Money, Nominal GDP, and the Price Level in Venezuela: 1950 to 1996

This paper explores whether a significant long-run relationship exists between money and nominal GDP and between money and the price level in the Venezuelan economy. We apply time-series econometric techniques to annual data for the Venezuelan economy for 1950 to 1996. An important feature of our analysis is the use of tests for unit roots and cointegration with structural breaks. Certain characteristics of the Venezuelan experience suggest that structural breaks may be important. Since the economy depends heavily on oil revenue, oil price shocks have had important influences on most macroeconomic variables. Also since the economy possesses large foreign debt, the world debt crisis that exploded in 1982 had pervasive effects on the Venezuelan economy. Radical changes in economic policy and political instability may have also significantly affected the movement of the macroeconomy. We find that a long-run relationship exists between narrow money (M1) and nominal GDP, the GDP deflator, and the CPI when one makes allowances for one or two structural breaks. We do not find such long-run relationships when broad money (M2) is used.

Scaling the Costs of 404 Testing to Fit the Needs of Small Public Companies

In July of 2002, the Sarbanes-Oxley Act was passed by Congress, including section 404 which requires the auditors to test and opine on the company's internal controls. Since that time there has been much debate about whether the intended benefits of increased investor confidence and financial statement transparency trump the unexpectedly high compliance costs, especially for public companies with market-caps less than $75 million. Before these companies begin complying in the upcoming year, interest groups are calling for the requirements to be 'scaled' to better fit the needs of these companies. While auditors already are expected to scale their audit approach to each individual client, more must be done to significantly decrease the costs in order to reverse the trend of small companies foregoing listing on U.S. capital markets. Increased guidance from the PCAOB, SEC, and other related parties could help the small-cap companies and their auditors be aware of best practices. Also, exempting industries that already follow similar guidelines or are significantly injured by the compliance requirements could help. Lastly, the controversial proposal of rotational audits could be put in place if the affected parties cooperate to remove the undue burden on these small-cap companies. Without some form of significant action, the investors could soon lose the ability to buy small-cap companies in U.S. markets.

The Congressional Budget Process and the Aggregate Level of Spending

This paper analyzes whether the Congressional budget process (instituted in 1974) leads to lower aggregate spending than does the piece-meal appropriations process that preceded it. Previous theoretical analysis, using spatial models of legislator preferences, is inconclusive. This paper uses a model of interest group lobbying, where a legislature determines spending on a national public good and on subsidies to subsets of the population that belong to nationwide sector-specific interest groups. In the appropriations process, the Appropriations Committee proposes a budget, maximizing the joint welfare of voters and the interest groups, that leads to overspending on subsidies. In the budget process, a Budget Committee proposes an aggregate level of spending (the budget resolution); the Appropriations Committee then proposes a budget. If the lobby groups are not subject to a binding resource constraint, the two institutional structures lead to identical outcomes. With such a constraint, however, there is a free rider problem among the groups in lobbying the Budget Committee, as each group only obtains a small fraction of the benefits from increasing the aggregate budget. If the number of groups is sufficiently large, each takes the budget resolution as given, and lobbies only the Appropriations Committee. The main results are that aggregate spending is lower, and social welfare higher, under the budget process; however, provision of the public good is suboptimal. The paper also presents two extensions: the first endogenizes the enforcement of the budget resolution by incorporating the relevant procedural rules into the model. The second analyzes statutory budget rules that limit spending levels, but can be revised by a simple majority vote. In each case,the free rider problem prevents the groups from securing the required changes to procedural and budget rules.