What Transaction Costs are Acceptable in Life Insurance Products from the Policyholders' Viewpoint?

Purpose - The purpose of this paper is to analyze what transaction costs are acceptable for customers in different investments. In this study, two life insurance contracts, a mutual fund and a risk-free investment, as alternative investment forms are considered. The first two products under scrutiny are a life insurance investment with a point-to-point capital guarantee and a participating contract with an annual interest rate guarantee and participation in the insurer's surplus. The policyholder assesses the various investment opportunities using different utility measures. For selected types of risk profiles, the utility position and the investor's preference for the various investments are assessed. Based on this analysis, the authors study which cost levels can make all of the products equally rewarding for the investor. Design/methodology/approach - The paper notes the risk-neutral valuation calibration using empirical data utility and performance measurement dynamics underlying: geometric Brownian motion numerical examples via Monte Carlo simulation. Findings - In the first step, the financial performance of the various saving opportunities under different assumptions of the investor's utility measurement is studied. In the second step, the authors calculate the level of transaction costs that are allowed in the various products to make all of the investment opportunities equally rewarding from the investor's point of view. A comparison of these results with transaction costs that are common in the market shows that insurance companies must be careful with respect to the level of transaction costs that they pass on to their customers to provide attractive payoff distributions. Originality/value - To the best of the authors' knowledge, their research question - i.e. which transaction costs for life insurance products would be acceptable from the customer's point of view - has not been studied in the above described context so far.

Risk optimization of a steel frame communications tower subject to tornado winds

The structural engineering community in Brazil faces new challenges with the recent occurrence of high intensity tornados. Satellite surveillance data shows that the area covering the south-east of Brazil, Uruguay and some of Argentina is one of the world most tornado-prone areas, second only to the infamous tornado alley in central United States. The design of structures subject to tornado winds is a typical example of decision making in the presence of uncertainty. Structural design involves finding a good balance between the competing goals of safety and economy. This paper presents a methodology to find the optimum balance between these goals in the presence of uncertainty. In this paper, reliability-based risk optimization is used to find the optimal safety coefficient that minimizes the total expected cost of a steel frame communications tower, subject to extreme storm and tornado wind loads. The technique is not new, but it is applied to a practical problem of increasing interest to Brazilian structural engineers. The problem is formulated in the partial safety factor format used in current design codes, with all additional partial factor introduced to serve as optimization variable. The expected cost of failure (or risk) is defined as the product of a. limit state exceedance probability by a limit state exceedance cost. These costs include costs of repairing, rebuilding, and paying compensation for injury and loss of life. The total expected failure cost is the sum of individual expected costs over all failure modes. The steel frame communications, tower subject of this study has become very common in Brazil due to increasing mobile phone coverage. The study shows that optimum reliability is strongly dependent on the cost (or consequences) of failure. Since failure consequences depend oil actual tower location, it turn,,; out that different optimum designs should be used in different locations. Failure consequences are also different for the different parties involved in the design, construction and operation of the tower. Hence, it is important that risk is well understood by the parties involved, so that proper contracts call be made. The investigation shows that when non-structural terms dominate design costs (e.g, in residential or office buildings) it is not too costly to over-design; this observation is in agreement with the observed practice for non-optimized structural systems. In this situation, is much easier to loose money by under-design. When by under-design. When structural material cost is a significant part of design cost (e.g. concrete dam or bridge), one is likely to lose significantmoney by over-design. In this situation, a cost-risk-benefit optimization analysis is highly recommended. Finally, the study also shows that under time-varying loads like tornados, the optimum reliability is strongly dependent on the selected design life.

Screening of Food Grade Lipases to be Used in Esterification and Interesterification Reactions of Industrial Interest

Seven food grade commercially available lipases were immobilized by covalent binding on polysiloxane-polyvinyl alcohol (POS-PVA) hybrid composite and screened to mediate reactions of industrial interest. The synthesis of butyl butyrate and the interesterification of tripalmitin with triolein were chosen as model reactions. The highest esterification activity (240.63 mu M/g min) was achieved by Candida rugosa lipase, while the highest interesterification yield (31%, in 72 h) was achieved by lipase from Rhizopus oryzae, with the production of about 15 mM of the triglycerides C(50) and C(52). This lipase also showed a good performance in butyl butyrate synthesis, with an esterification activity of 171.14 mu M/g min. The results demonstrated the feasibility of using lipases from C. rugosa for esterification and R. oryzae lipase for both esterification and interesterification reactions.

Hybrid Method to Assess Sensitive Process Interruption Costs Due to Faults in Electric Power Distribution Networks

This paper shows a new hybrid method for risk assessment regarding interruptions in sensitive processes due to faults in electric power distribution systems. This method determines indices related to long duration interruptions and short duration voltage variations (SDVV), such as voltage sags and swells in each customer supplied by the distribution network. Frequency of such occurrences and their impact on customer processes are determined for each bus and classified according to their corresponding magnitude and duration. The method is based on information regarding network configuration, system parameters and protective devices. It randomly generates a number of fault scenarios in order to assess risk areas regarding long duration interruptions and voltage sags and swells in an especially inventive way, including frequency of events according to their magnitude and duration. Based on sensitivity curves, the method determines frequency indices regarding disruption in customer processes that represent equipment malfunction and possible process interruptions due to voltage sags and swells. Such approach allows for the assessment of the annual costs associated with each one of the evaluated power quality indices.

Reconfiguration of distribution networks to minimize loss and disruption costs using genetic algorithms

In this paper a computational implementation of an evolutionary algorithm (EA) is shown in order to tackle the problem of reconfiguring radial distribution systems. The developed module considers power quality indices such as long duration interruptions and customer process disruptions due to voltage sags, by using the Monte Carlo simulation method. Power quality costs are modeled into the mathematical problem formulation, which are added to the cost of network losses. As for the EA codification proposed, a decimal representation is used. The EA operators, namely selection, recombination and mutation, which are considered for the reconfiguration algorithm, are herein analyzed. A number of selection procedures are analyzed, namely tournament, elitism and a mixed technique using both elitism and tournament. The recombination operator was developed by considering a chromosome structure representation that maps the network branches and system radiality, and another structure that takes into account the network topology and feasibility of network operation to exchange genetic material. The topologies regarding the initial population are randomly produced so as radial configurations are produced through the Prim and Kruskal algorithms that rapidly build minimum spanning trees. (C) 2009 Elsevier B.V. All rights reserved.

Fast Transforms for Acoustic Imaging-Part I: Theory

The classical approach for acoustic imaging consists of beamforming, and produces the source distribution of interest convolved with the array point spread function. This convolution smears the image of interest, significantly reducing its effective resolution. Deconvolution methods have been proposed to enhance acoustic images and have produced significant improvements. Other proposals involve covariance fitting techniques, which avoid deconvolution altogether. However, in their traditional presentation, these enhanced reconstruction methods have very high computational costs, mostly because they have no means of efficiently transforming back and forth between a hypothetical image and the measured data. In this paper, we propose the Kronecker Array Transform ( KAT), a fast separable transform for array imaging applications. Under the assumption of a separable array, it enables the acceleration of imaging techniques by several orders of magnitude with respect to the fastest previously available methods, and enables the use of state-of-the-art regularized least-squares solvers. Using the KAT, one can reconstruct images with higher resolutions than was previously possible and use more accurate reconstruction techniques, opening new and exciting possibilities for acoustic imaging.

An estimate of biometric parameters in eucalyptus clone plantations in Southern Bahia: an application of the airborne laser scanning (ALS) technology

The application of airborne laser scanning (ALS) technologies in forest inventories has shown great potential to improve the efficiency of forest planning activities. Precise estimates, fast assessment and relatively low complexity can explain the good results in terms of efficiency. The evolution of GPS and inertial measurement technologies, as well as the observed lower assessment costs when these technologies are applied to large scale studies, can explain the increasing dissemination of ALS technologies. The observed good quality of results can be expressed by estimates of volumes and basal area with estimated error below the level of 8.4%, depending on the size of sampled area, the quantity of laser pulses per square meter and the number of control plots. This paper analyzes the potential of an ALS assessment to produce certain forest inventory statistics in plantations of cloned Eucalyptus spp with precision equal of superior to conventional methods. The statistics of interest in this case were: volume, basal area, mean height and dominant trees mean height. The ALS flight for data assessment covered two strips of approximately 2 by 20 Km, in which clouds of points were sampled in circular plots with a radius of 13 m. Plots were sampled in different parts of the strips to cover different stand ages. The clouds of points generated by the ALS assessment: overall height mean, standard error, five percentiles (height under which we can find 10%, 30%, 50%,70% and 90% of the ALS points above ground level in the cloud), and density of points above ground level in each percentile were calculated. The ALS statistics were used in regression models to estimate mean diameter, mean height, mean height of dominant trees, basal area and volume. Conventional forest inventory sample plots provided real data. For volume, an exploratory assessment involving different combinations of ALS statistics allowed for the definition of the most promising relationships and fitting tests based on well known forest biometric models. The models based on ALS statistics that produced the best results involved: the 30% percentile to estimate mean diameter (R(2)=0,88 and MQE%=0,0004); the 10% and 90% percentiles to estimate mean height (R(2)=0,94 and MQE%=0,0003); the 90% percentile to estimate dominant height (R(2)=0,96 and MQE%=0,0003); the 10% percentile and mean height of ALS points to estimate basal area (R(2)=0,92 and MQE%=0,0016); and, to estimate volume, age and the 30% and 90% percentiles (R(2)=0,95 MQE%=0,002). Among the tested forest biometric models, the best fits were provided by the modified Schumacher using age and the 90% percentile, modified Clutter using age, mean height of ALS points and the 70% percentile, and modified Buckman using age, mean height of ALS points and the 10% percentile.

Are there costs in the repeated mating activities of female Southern stink bugs Nezara viridula?

Mating is an energy demanding process, imposing risks to physical injuries, pathogen infection and predation. Nevertheless, repeated and multiple mating are widespread even in insect species where nuptial gifts are not involved. The effects of repeated mating, by the same male, are examined on the reproductive performance of female Southern green stink bug Nezara viridula (L.). Fecundity is reduced in females mated three or four times, although there is increased longevity. Females mated once or twice produce more egg clusters and concentrate egg-laying activity in the early part of adult life, whereas those mating more often lay eggs throughout the life span, with fewer egg clusters. Although fecundity is negatively affected by the number of matings, egg fertility remains unaffected.

Olfactory eavesdropping between two competing stingless bee species

Foragers can improve search efficiency, and ultimately fitness, by using social information: cues and signals produced by other animals that indicate food location or quality. Social information use has been well studied in predator-prey systems, but its functioning within a trophic level remains poorly understood. Eavesdropping, use of signals by unintended recipients, is of particular interest because eavesdroppers may exert selective pressure on signaling systems. We provide the most complete study to date of eavesdropping between two competing social insect species by determining the glandular source and composition of a recruitment pheromone, and by examining reciprocal heterospecific responses to this signal. We tested eavesdropping between Trigona hyalinata and Trigona spinipes, two stingless bee species that compete for floral resources, exhibit a clear dominance hierarchy and recruit nestmates to high-quality food sources via pheromone trails. Gas chromatography-mass spectrometry of T. hyalinata recruitment pheromone revealed six carboxylic esters, the most common of which is octyl octanoate, the major component of T. spinipes recruitment pheromone. We demonstrate heterospecific detection of recruitment pheromones, which can influence heterospecific and conspecific scout orientation. Unexpectedly, the dominant T. hyalinata avoided T. spinipes pheromone in preference tests, while the subordinate T. spinipes showed neither attraction to nor avoidance of T. hyalinata pheromone. We suggest that stingless bees may seek to avoid conflict through their eavesdropping behavior, incorporating expected costs associated with a choice into the decision-making process.

What are the economic prospects of developing aquaculture in Queensland to supply the low price white fillet market? Lessons from the US channel catfish industry

The farming of channel catfish (Ictalurus punctatus) is the largest (by volume and value) and most successful (in terms of market impact) aquaculture industry in the United States of America. Farmed channel catfish is the most consumed (in terms of volume per capita) fish fillet in the U.S. market. Within Australia, it has long been suggested by researchers and industry that silver perch (Bidyanus bidyanus) and possibly other endemic teraponid species possess similar biological attributes for aquaculture as channel catfish and may have the potential to generate a similar industry. The current teraponid industry in Australia, however, shows very little resemblance to the catfish industry, either in production style or market philosophy. A well established budget framework from the literature on U.S. channel catfish farming has been adapted for cost and climate conditions of the Burdekin region, Queensland, Australia. Breakeven prices for the hypothetical teraponid farms were found to be up to 50% higher than those published for catfish farms however were much lower than those reported for silver perch production in Australia using current, endemic styles of production. The breakeven prices for the hypothetical teraponid farms were most sensitive (in order of significance) to feed prices, production rates, interest rates, fingerling prices and electricity prices. At equivalent feed costs the costs of production between the hypothetical catfish farms in the Mississippi, U.S. and the hypothetical teraponid farms in the Burdekin, Australia were remarkably similar. The cost of feeds suitable for teraponid production in Australia are currently around double that of catfish feeds in the U.S. Issues currently hindering the development of a large scale teraponid industry in Australia are discussed.

The Y2K Scare: Causes, costs and cures.

The worldwide scare over the 'Y2K bug result in the expenditure of hundreds of billions of dollars on Y2K compliance and conversion policies. Most of this can be seen, in retrospect, to have been unproductive or, at least, misdirected. In this paper, the technological and institutional factors leading to the adoption of these policies are considered, along with suggestions as to how such policy failures could be avoided in future.

The currency of case management: benefits and costs

Case management models evolved as the mental health care system shifted hospital to community settings. The research evidence underscores the efficacy of certain case management models under 'ideal' conditions; what is less clear, is how these models perform in day to day clinical practice. Moreover, the economic perspective adopted by most studies is relatively narrow thus limiting a proper understanding of the costs and benefits of such models. This paper reviews recent work in the field and highlights gaps in both method and application as a focus for future work. Curr Opin Psychiatry 12:195-199, (C) 1999 Lippincott Williams & Wilkins.

Size-based predation by kookaburras (Dacelo novaeguineae) on lizards (Eulamprus tympanum : Scincidae): what determines prey vulnerability?

Lizards and birds are both popular model organisms in behavioural ecology, but the interactions between them have attracted little study. Given the putative importance of birds as predators of diurnal Lizards, it is of considerable interest to know which traits (of lizards as well as birds) influence the outcome of a predatory attempt. We studied predation by giant terrestrial kingfishers (kookaburras, Dacelo novaeguineae: Alcedinidae) on heliothermic diurnal lizards (highland water skinks, Eulamprus tympanum: Scincidae), with particular reference to the role of prey (lizard) size. Our approach was twofold: to gather direct evidence (sizes of lizards consumed in the field, compared to those available) and indirect evidence rite-related shifts in lizard behaviour). We quantified the size structure of a natural population of skinks (determined by an extensive mark-recapture program), and compared it to the sizes of wild lizards taken by kookaburras (determined by analysis of prey remains left at the birds' nests,. Kookaburras showed size-based predation: they preyed mainly on small and medium-sized rather than large lizards in the field. However, the mechanism producing this bias remains elusive. It is not due to any distinctive behavioural attributes (locomotor ability, activity level, habitat usage) of the lizards of the size class disproportionately taken by the kookaburras. The greater vulnerability of subadult lizards may reflect subtle ontogenetic shifts in ecological and behavioural traits, but our data suggest that great caution is needed in inferring patterns of vulnerability to predation from indirect measures based on either the prey or the predator alone. Instead, we need direct observations on the interaction between the two.