Public perception of carbon capture and storage in relation to hydraulic fracturing: content analyses, survey results, and policy proposals

Carbon capture and storage (CCS) can contribute significantly to addressing the global greenhouse gas (GHG) emissions problem. Despite widespread political support, CCS remains unknown to the general public. Public perception researchers have found that, when asked, the public is relatively unfamiliar with CCS yet many individuals voice specific safety concerns regarding the technology. We believe this leads many stakeholders conflate CCS with the better-known and more visible technology hydraulic fracturing (fracking). We support this with content analysis of media coverage, web analytics, and public lobbying records. Furthermore, we present results from a survey of United States residents. This first-of-its-kind survey assessed participants’ knowledge, opinions and support of CCS and fracking technologies. The survey showed that participants had more knowledge of fracking than CCS, and that knowledge of fracking made participants less willing to support CCS projects. Additionally, it showed that participants viewed the two technologies as having similar risks and similar risk intensities. In the CCS stakeholder literature, judgment and decision-making (JDM) frameworks are noticeably absent, and public perception is not discussed using any cognitive biases as a way of understanding or explaining irrational decisions, yet these survey results show evidence of both anchoring bias and the ambiguity effect. Public acceptance of CCS is essential for a national low-carbon future plan. In conclusion, we propose changes in communications and incentives as programs to increase support of CCS.

Risk Factors and Associations for Hepatitis C Infection among Hispanic/Latino Intravenous Drug Users in Miami-Dade County, Florida

Hepatitis C infection (HCV) continues to disproportionately affect Hispanics/Latinos in the United States. Hispanic/Latino intravenous drug users (IDUs), because of their risky injection and sexual behaviors, are prone to HCV infection and rapid transmission of the virus to others via several routes. With a prevalence rate of approximately 75% among IDUs, it is imperative that transmission of HCV be prevented in this population. This study aims to examine the associations between demographic, injection and sexual risk factors to HCV infection in a group Hispanic/Latino IDUs in Miami-Dade County, Florida. Preliminary unadjusted results in this sample reveal that age (OR=4.592, p=0.004), weekly injection (OR=5.171, p=0.000), daily injection frequency (OR=3.856, p=0.000) and use of a dirty needle (OR=2.320, p= 0.006) were all significantly associated with HCV infection. Being born outside the U.S. was significantly negatively associated with HCV infection (OR=0.349, p=0.004). Additionally, having two or more sex partners in the past three months (OR=0.472, p=0.014) was negatively associated with HCV infection. After adjusting for all other variables, older age (AOR=7.470, p=0.006), weekly injection (AOR=3.238, p=0.007) and daily injection frequency (AOR=2.625, p=0.010) were all significantly associated with HCV infection. Being born outside the U.S. (AOR=0.369, p=0.019) was a significant protective factor for HCV infection, along with having two or more sex partners in the past three months (AOR=0.481, p=0.037). When analyzing the significant variables in a backward regression model, having 2 or more sex partners in the past three months was not significant at the p

Three essays on asset pricing

In this dissertation, I investigate three related topics on asset pricing: the consumption-based asset pricing under long-run risks and fat tails, the pricing of VIX (CBOE Volatility Index) options and the market price of risk embedded in stock returns and stock options. These three topics are fully explored in Chapter II through IV. Chapter V summarizes the main conclusions. In Chapter II, I explore the effects of fat tails on the equilibrium implications of the long run risks model of asset pricing by introducing innovations with dampened power law to consumption and dividends growth processes. I estimate the structural parameters of the proposed model by maximum likelihood. I find that the stochastic volatility model with fat tails can, without resorting to high risk aversion, generate implied risk premium, expected risk free rate and their volatilities comparable to the magnitudes observed in data. In Chapter III, I examine the pricing performance of VIX option models. The contention that simpler-is-better is supported by the empirical evidence using actual VIX option market data. I find that no model has small pricing errors over the entire range of strike prices and times to expiration. In general, Whaley’s Black-like option model produces the best overall results, supporting the simpler-is-better contention. However, the Whaley model does under/overprice out-of-the-money call/put VIX options, which is contrary to the behavior of stock index option pricing models. In Chapter IV, I explore risk pricing through a model of time-changed Lvy processes based on the joint evidence from individual stock options and underlying stocks. I specify a pricing kernel that prices idiosyncratic and systematic risks. This approach to examining risk premia on stocks deviates from existing studies. The empirical results show that the market pays positive premia for idiosyncratic and market jump-diffusion risk, and idiosyncratic volatility risk. However, there is no consensus on the premium for market volatility risk. It can be positive or negative. The positive premium on idiosyncratic risk runs contrary to the implications of traditional capital asset pricing theory.

A study of stock market linkages between the US and frontier countries

My dissertation investigates the financial linkages and transmission of economic shocks between the US and the smallest emerging markets (frontier markets). The first chapter sets up an empirical model that examines the impact of US market returns and conditional volatility on the returns and conditional volatilities of twenty-one frontier markets. The model is estimated via maximum likelihood; utilizes the GARCH model of errors, and is applied to daily country data from the MSCI Barra. We find limited, but statistically significant exposure of Frontier markets to shocks from the US. Our results suggest that it is not the lagged US market returns that have impact; rather it is the expected US market returns that influence frontier market returns The second chapter sets up an empirical time-varying parameter (TVP) model to explore the time-variation in the impact of mean US returns on mean Frontier market returns. The model utilizes the Kalman filter algorithm as well as the GARCH model of errors and is applied to daily country data from the MSCI Barra. The TVP model detects statistically significant time-variation in the impact of US returns and low, but statistically and quantitatively important impact of US market conditional volatility. The third chapter studies the risk-return relationship in twenty Frontier country stock markets by setting up an international version of the intertemporal capital asset pricing model. The systematic risk in this model comes from covariance of Frontier market stock index returns with world returns. Both the systematic risk and risk premium are time-varying in our model. We also incorporate own country variances as additional determinants of Frontier country returns. Our results suggest statistically significant impact of both world and own country risk in explaining Frontier country returns. Time-variation in the world risk premium is also found to be statistically significant for most Frontier market returns. However, own country risk is found to be quantitatively more important.

Essays on Exchange Rate Economics

Exchange rate economics has achieved substantial development in the past few decades. Despite extensive research, a large number of unresolved problems remain in the exchange rate debate. This dissertation studied three puzzling issues aiming to improve our understanding of exchange rate behavior. Chapter Two used advanced econometric techniques to model and forecast exchange rate dynamics. Chapter Three and Chapter Four studied issues related to exchange rates using the theory of New Open Economy Macroeconomics. Chapter Two empirically examined the short-run forecastability of nominal exchange rates. It analyzed important empirical regularities in daily exchange rates. Through a series of hypothesis tests, a best-fitting fractionally integrated GARCH model with skewed student-t error distribution was identified. The forecasting performance of the model was compared with that of a random walk model. Results supported the contention that nominal exchange rates seem to be unpredictable over the short run in the sense that the best-fitting model cannot beat the random walk model in forecasting exchange rate movements. Chapter Three assessed the ability of dynamic general-equilibrium sticky-price monetary models to generate volatile foreign exchange risk premia. It developed a tractable two-country model where agents face a cash-in-advance constraint and set prices to the local market; the exogenous money supply process exhibits time-varying volatility. The model yielded approximate closed form solutions for risk premia and real exchange rates. Numerical results provided quantitative evidence that volatile risk premia can endogenously arise in a new open economy macroeconomic model. Thus, the model had potential to rationalize the Uncovered Interest Parity Puzzle. Chapter Four sought to resolve the consumption-real exchange rate anomaly, which refers to the inability of most international macro models to generate negative cross-correlations between real exchange rates and relative consumption across two countries as observed in the data. While maintaining the assumption of complete asset markets, this chapter introduced endogenously segmented asset markets into a dynamic sticky-price monetary model. Simulation results showed that such a model could replicate the stylized fact that real exchange rates tend to move in an opposite direction with respect to relative consumption.

Three Essays on Asset Pricing

In this dissertation, I investigate three related topics on asset pricing: the consumption-based asset pricing under long-run risks and fat tails, the pricing of VIX (CBOE Volatility Index) options and the market price of risk embedded in stock returns and stock options. These three topics are fully explored in Chapter II through IV. Chapter V summarizes the main conclusions. In Chapter II, I explore the effects of fat tails on the equilibrium implications of the long run risks model of asset pricing by introducing innovations with dampened power law to consumption and dividends growth processes. I estimate the structural parameters of the proposed model by maximum likelihood. I find that the stochastic volatility model with fat tails can, without resorting to high risk aversion, generate implied risk premium, expected risk free rate and their volatilities comparable to the magnitudes observed in data. In Chapter III, I examine the pricing performance of VIX option models. The contention that simpler-is-better is supported by the empirical evidence using actual VIX option market data. I find that no model has small pricing errors over the entire range of strike prices and times to expiration. In general, Whaley’s Black-like option model produces the best overall results, supporting the simpler-is-better contention. However, the Whaley model does under/overprice out-of-the-money call/put VIX options, which is contrary to the behavior of stock index option pricing models. In Chapter IV, I explore risk pricing through a model of time-changed Lévy processes based on the joint evidence from individual stock options and underlying stocks. I specify a pricing kernel that prices idiosyncratic and systematic risks. This approach to examining risk premia on stocks deviates from existing studies. The empirical results show that the market pays positive premia for idiosyncratic and market jump-diffusion risk, and idiosyncratic volatility risk. However, there is no consensus on the premium for market volatility risk. It can be positive or negative. The positive premium on idiosyncratic risk runs contrary to the implications of traditional capital asset pricing theory.