Coastal community hazard mitigation and community rating system of NFIP

Storm force flooding continues to be a major concern in the hurricane season and causes considerable loss to the coastal communities. National Flood Insurance Program (NFIP) provides recovery resources for the flood disaster and dissuades uneconomic uses from locating in flood hazard area. In order to motivate flood insurance purchase and promote increased flood hazard mitigation, the Community Rating System (CRS) that is a part of NFIP, credits 18 community floodplain management activities. However, CRS has been marked by a lack of active participation since its inception limiting its potential effectiveness. As of January 2008, 1080 communities, representing only 5% of all the NFIP communities have enrolled in CRS. Little empirical evidence exists to shed light on what factors influence the establishment of local hazard mitigation projects. To fill this gap, we propose to analyze flood hazard mitigation projects in 37 North Carolina coastal counties between 2002 and 2008. Specifically, we will examine the influence of physical, risk, and socioeconomic factors on coastal community hazard mitigation decisions as reflected in the CRS score. Ultimately, our project will forge a better understanding of community decision making, as related to natural hazards. (PDF contains 4 pages)

Does rating shopping exist in spanish securitization issues?

[EN] Debt issue credit ratings can lead to conflicts of interest as the issuer itself is entrusted with contracting and compensating the rating agency. Into the bargain, the credit rating agency may be involved in designing the issues that the same agency subsequently rates. Credit rating agencies thus could have incentives to rate issues advantageously. Given the economic importance of this issue, in this paper we have proposed to analyze this phenomenon, known as rating shopping in academic literature, for Spanish market securitization issues for the period of time comprehensive from January 1993 to December 2011. In sum 3,665 published ratings are been analysed, for an issued nominal amount of 791,090 million Euros. The results show an association between the credit rating agency contracted and the mean rating awarded. Significant differences are observed in the ratings associated to the contracting manager (or special purpose vehicle SPV- manager firm), to the number of ratings or to the type of collateral. Furthermore, a pattern compatible with rating shopping was observed for some types of collateral: abnormally high market shares associated with certain agencies awarding unusually generous ratings. However, this phenomenon is not seen to be widespread on the rating market associated to Spanish securitization issues.

Value of information in product recovery decisions: A Bayesian approach

There is a widespread recognition of the need for better information sharing and provision to improve the viability of end-of-life (EOL) product recovery operations. The emergence of automated data capture and sharing technologies such as RFID, sensors and networked databases has enhanced the ability to make product information; available to recoverers, which will help them make better decisions regarding the choice of recovery option for EOL products. However, these technologies come with a cost attached to it, and hence the question 'what is its value?' is critical. This paper presents a probabilistic approach to model product recovery decisions and extends the concept of Bayes' factor for quantifying the impact of product information on the effectiveness of these decisions. Further, we provide a quantitative examination of the factors that influence the value of product information, this value depends on three factors: (i) penalties for Type I and Type II errors of judgement regarding product quality; (ii) prevalent uncertainty regarding product quality and (iii) the strength of the information to support/contradict the belief. Furthermore, we show that information is not valuable under all circumstances and derive conditions for achieving a positive value of information. © 2010 Taylor & Francis.