Analysis of the intermediate housing market mechanism in the UK

Government policies have backed intermediate housing market mechanisms like shared equity, intermediate rented and shared ownership (SO) as potential routes for some households, who are otherwise squeezed between the social housing and the private market. The rhetoric deployed around such housing has regularly contained claims about its social progressiveness and role in facilitating socio-economic mobility, centring on a claim that SO schemes can encourage people to move from rented accommodation through a shared equity phase and into full owner-occupation. SO has been justified on the grounds of it being transitional state, rather than a permanent tenure. However SO buyers may be laden with economic cost-benefit structures that do not stack up evenly and as a consequence there may be little realistic prospect of ever reaching a preferred outcome. Such behaviours have received little empirical attention as yet despite, the SO model arguably offers a sub-optimal solution towards homeownership, or in terms of wider quality of life. Given the paucity of rigorous empirical work on this issue, this paper delineates the evidence so far and sets out a research agenda. Our analysis is based on a large dataset of new shared owners, observing an information base that spans the past decade. We then set out an agenda to further examine the behaviours of the SO occupants and to examine the implications for future public policy based on existing literature and our outline findings. This paper is particularly opportune at a time of economic uncertainty and an overriding ‘austerity’ drive in public funding in the UK, through which SO schemes have enjoyed support uninterruptedly thus far.

The appraisal of data centres: deconstructing the cash flow

This paper analyses the appraisal of a specialized form of real estate - data centres - that has a unique blend of locational, physical and technological characteristics that differentiate it from conventional real estate assets. Market immaturity, limited trading and a lack of pricing signals enhance levels of appraisal uncertainty and disagreement relative to conventional real estate assets. Given the problems of applying standard discounted cash flow, an approach to appraisal is proposed that uses pricing signals from traded cash flows that are similar to the cash flows generated from data centres. Based upon ‘the law of one price’, it is assumed that two assets that are expected to generate identical cash flows in the future must have the same value now. It is suggested that the expected cash flow of assets should be analysed over the life cycle of the building. Corporate bond yields are used to provide a proxy for the appropriate discount rates for lease income. Since liabilities are quite diverse, a number of proxies are suggested as discount and capitalisation rates including indexed-linked, fixed interest and zero-coupon bonds.

Valuation 'accuracy' within the Right to Buy process

Based on surveys undertaken with local authorities and valuers who provide the valuations on which purchase prices for local authority houses under the Right to Buy are based, this paper reports on research which aims to establish the reasons for the differences between the initial valuations provided by the local authority valuers and those provided by the District Valuer on appeal. The paper reports on the reasons why tenants appeal the initial valuation and discusses issues of valuation accuracy, uncertainty and the different and imperfect data available to valuers employed by the organisations involved, as well as the factors within the valuation process, including the absence of any requirement to agree a value, which contribute to the different outcomes.

Evaluation of climate models using palaeoclimatic data.

There is large uncertainty about the magnitude of warming and how rainfall patterns will change in response to any given scenario of future changes in atmospheric composition and land use. The models used for future climate projections were developed and calibrated using climate observations from the past 40 years. The geologic record of environmental responses to climate changes provides a unique opportunity to test model performance outside this limited climate range. Evaluation of model simulations against palaeodata shows that models reproduce the direction and large-scale patterns of past changes in climate, but tend to underestimate the magnitude of regional changes. As part of the effort to reduce model-related uncertainty and produce more reliable estimates of twenty-first century climate, the Palaeoclimate Modelling Intercomparison Project is systematically applying palaeoevaluation techniques to simulations of the past run with the models used to make future projections. This evaluation will provide assessments of model performance, including whether a model is sufficiently sensitive to changes in atmospheric composition, as well as providing estimates of the strength of biosphere and other feedbacks that could amplify the model response to these changes and modify the characteristics of climate variability.

Identifying uncertainties in Arctic climate change projections

Wide ranging climate changes are expected in the Arctic by the end of the 21st century, but projections of the size of these changes vary widely across current global climate models. This variation represents a large source of uncertainty in our understanding of the evolution of Arctic climate. Here we systematically quantify and assess the model uncertainty in Arctic climate changes in two CO2 doubling experiments: a multimodel ensemble (CMIP3) and an ensemble constructed using a single model (HadCM3) with multiple parameter perturbations (THC-QUMP). These two ensembles allow us to assess the contribution that both structural and parameter variations across models make to the total uncertainty and to begin to attribute sources of uncertainty in projected changes. We find that parameter uncertainty is an major source of uncertainty in certain aspects of Arctic climate. But also that uncertainties in the mean climate state in the 20th century, most notably in the northward Atlantic ocean heat transport and Arctic sea ice volume, are a significant source of uncertainty for projections of future Arctic change. We suggest that better observational constraints on these quantities will lead to significant improvements in the precision of projections of future Arctic climate change.

Nonlinear stability of multilayer quasi-geostrophic flow

New nonlinear stability theorems are derived for disturbances to steady basic flows in the context of the multilayer quasi-geostrophic equations. These theorems are analogues of Arnol’d's second stability theorem, the latter applying to the two-dimensional Euler equations. Explicit upper bounds are obtained on both the disturbance energy and disturbance potential enstrophy in terms of the initial disturbance fields. An important feature of the present analysis is that the disturbances are allowed to have non-zero circulation. While Arnol’d's stability method relies on the energy–Casimir invariant being sign-definite, the new criteria can be applied to cases where it is sign-indefinite because of the disturbance circulations. A version of Andrews’ theorem is established for this problem, and uniform potential vorticity flow is shown to be nonlinearly stable. The special case of two-layer flow is treated in detail, with particular attention paid to the Phillips model of baroclinic instability. It is found that the short-wave portion of the marginal stability curve found in linear theory is precisely captured by the new nonlinear stability criteria.

Building climate resilience: lessons of early warning in Africa

Given the high levels of uncertainty and substantial variability in local weather and climate, what constitutes successful adaptation for the 800 million food-insecure people in Africa? In this context there is a need for building climate resilience through effective early warning systems, bringing real-time monitoring and decision-making together with stakeholders. The chapter presents two effective operational early warning systems in Africa: The Radio and Internet (RANET) network and the Rainwatch project. These examples were developed in partnership with local climate scientists and tailored to local development needs, enabled and encouraged with only modest international support. They deliver important lessons about how to prepare for crises using simple real-time monitoring. They also help us identify characteristics of managing for resilience in practice. The chapter concludes that successful adaptation requires adaptive, flexible, linked institutions, together with ground-based collaboration and practical tools. In the context of early warning three features stand out that make these systems successful: effective communication of current weather and climate information, a key individual within a bridging organization with the ability to navigate the governance systems, and sufficient time for innovation development.

The lottery-panel task for bi-dimensional parameter-free elicitation of risk attitudes

We propose first, a simple task for the eliciting attitudes toward risky choice, the SGG lottery-panel task, which consists in a series of lotteries constructed to compensate riskier options with higher risk-return trade-offs. Using Principal Component Analysis technique, we show that the SGG lottery-panel task is capable of capturing two dimensions of individual risky decision making i.e. subjects’ average risk taking and their sensitivity towards variations in risk-return. From the results of a large experimental dataset, we confirm that the task systematically captures a number of regularities such as: A tendency to risk averse behavior (only around 10% of choices are compatible with risk neutrality); An attraction to certain payoffs compared to low risk lotteries, compatible with over-(under-) weighting of small (large) probabilities predicted in PT and; Gender differences, i.e. males being consistently less risk averse than females but both genders being similarly responsive to the increases in risk-premium. Another interesting result is that in hypothetical choices most individuals increase their risk taking responding to the increase in return to risk, as predicted by PT, while across panels with real rewards we see even more changes, but opposite to the expected pattern of riskier choices for higher risk-returns. Therefore, we conclude from our data that an “economic anomaly” emerges in the real reward choices opposite to the hypothetical choices. These findings are in line with Camerer's (1995) view that although in many domains, paid subjects probably do exert extra mental effort which improves their performance, choice over money gambles is not likely to be a domain in which effort will improve adherence to rational axioms (p. 635). Finally, we demonstrate that both dimensions of risk attitudes, average risk taking and sensitivity towards variations in the return to risk, are desirable not only to describe behavior under risk but also to explain behavior in other contexts, as illustrated by an example. In the second study, we propose three additional treatments intended to elicit risk attitudes under high stakes and mixed outcome (gains and losses) lotteries. Using a dataset obtained from a hypothetical implementation of the tasks we show that the new treatments are able to capture both dimensions of risk attitudes. This new dataset allows us to describe several regularities, both at the aggregate and within-subjects level. We find that in every treatment over 70% of choices show some degree of risk aversion and only between 0.6% and 15.3% of individuals are consistently risk neutral within the same treatment. We also confirm the existence of gender differences in the degree of risk taking, that is, in all treatments females prefer safer lotteries compared to males. Regarding our second dimension of risk attitudes we observe, in all treatments, an increase in risk taking in response to risk premium increases. Treatment comparisons reveal other regularities, such as a lower degree of risk taking in large stake treatments compared to low stake treatments and a lower degree of risk taking when losses are incorporated into the large stake lotteries. Results that are compatible with previous findings in the literature, for stake size effects (e.g., Binswanger, 1980; Antoni Bosch-Domènech & Silvestre, 1999; Hogarth & Einhorn, 1990; Holt & Laury, 2002; Kachelmeier & Shehata, 1992; Kühberger et al., 1999; B. J. Weber & Chapman, 2005; Wik et al., 2007) and domain effect (e.g., Brooks and Zank, 2005, Schoemaker, 1990, Wik et al., 2007). Whereas for small stake treatments, we find that the effect of incorporating losses into the outcomes is not so clear. At the aggregate level an increase in risk taking is observed, but also more dispersion in the choices, whilst at the within-subjects level the effect weakens. Finally, regarding responses to risk premium, we find that compared to only gains treatments sensitivity is lower in the mixed lotteries treatments (SL and LL). In general sensitivity to risk-return is more affected by the domain than the stake size. After having described the properties of risk attitudes as captured by the SGG risk elicitation task and its three new versions, it is important to recall that the danger of using unidimensional descriptions of risk attitudes goes beyond the incompatibility with modern economic theories like PT, CPT etc., all of which call for tests with multiple degrees of freedom. Being faithful to this recommendation, the contribution of this essay is an empirically and endogenously determined bi-dimensional specification of risk attitudes, useful to describe behavior under uncertainty and to explain behavior in other contexts. Hopefully, this will contribute to create large datasets containing a multidimensional description of individual risk attitudes, while at the same time allowing for a robust context, compatible with present and even future more complex descriptions of human attitudes towards risk.

Bootstrapping prediction intervals for autoregressive models

Methods of improving the coverage of Box–Jenkins prediction intervals for linear autoregressive models are explored. These methods use bootstrap techniques to allow for parameter estimation uncertainty and to reduce the small-sample bias in the estimator of the models’ parameters. In addition, we also consider a method of bias-correcting the non-linear functions of the parameter estimates that are used to generate conditional multi-step predictions.

Assessment of plant uptake models used in exposure assessment tools for soils contaminated with organic pollutants

The aim of this study was to evaluate and improve the accuracy of plant uptake models for neutral hydrophobic organic pollutants (1 < logKOW < 9, −8 < logKAW < 0) used in regulatory exposure assessment tools, using uncertainty and sensitivity analyses. The models considered were RAIDAR, EUSES, CSOIL, CLEA, and CalTOX. In this research, CSOIL demonstrated the best performance of all five exposure assessment tools for root uptake from polluted soil in comparison with observed data, but no model predicted shoot uptake well. Recalibration of the transpiration and volatilisation parameters improved the performance of CSOIL and CLEA. The dominant pathway for shoot uptake simulated differed according to the properties of the chemical under consideration; those with a higher air–water partition coefficient were transported into shoots via the soil-air-plant pathway, while chemicals with a lower octanol–water partition coefficient and air–water partition coefficient were transported via the root. The soil organic carbon content was a particularly sensitive parameter in each model and using a site specific value improved model performance.

Thermal remote sensing of sea surface temperature

Sea surface temperature has been an important application of remote sensing from space for three decades. This chapter first describes well-established methods that have delivered valuable routine observations of sea surface temperature for meteorology and oceanography. Increasingly demanding requirements, often related to climate science, have highlighted some limitations of these ap-proaches. Practitioners have had to revisit techniques of estimation, of characterising uncertainty, and of validating observations—and even to reconsider the meaning(s) of “sea surface temperature”. The current understanding of these issues is reviewed, drawing attention to ongoing questions. Lastly, the prospect for thermal remote sens-ing of sea surface temperature over coming years is discussed.

Determination of the absolute accuracy of UK chamber facilities used in measuring methane emissions from livestock

Respiration chambers are one of the primary sources of data on methane emissions from livestock. This paper describes the results from a coordinated set of chamber validation experiments which establishes the absolute accuracy of the methane emission rates measured by the chambers, and for the first time provides metrological traceability to international standards, assesses the impact of both analyser and chamber response times on measurement uncertainty and establishes direct comparability between measurements made across different facilities with a wide range of chamber designs. As a result of the validation exercise the estimated combined uncertainty associated with the overall capability across all facilities reduced from 25.7% (k = 2, 95% confidence) before the validation to 2.1% (k = 2, 95% confidence) when the validation results are applied to the facilities’ data.

Releasing of pheasants for shooting in the UK alters woodland invertebrate communities

The management of pheasants (Phasianus colchicus) in pens and their subsequent release within woodland for game shoots is widely practised in Britain. With the exception of ground flora and songbirds, the impacts on other taxa have not been well documented. We investigated the effects of pheasants on invertebrate abundance and community composition, using pitfall trapping. We compared release pens with control plots located in the same woods and in woods where no pheasant releasing had occurred for at least 25 years. Conditions for invertebrates within release pens were altered, with more annual plants and disturbance-tolerant perennials and a reduced leaf litter layer. No major differences in invertebrate abundance, or Carabidae or Staphylinidae richness, were found in spring at either the pen scale or the wood scale. However, pheasant release pens resulted in significant changes in the species composition of Carabidae, with shifts towards species typical of arable fields and grassland. Carabid species active in spring and those that are very large (N17.0 mm) declined at pheasant release densities higher than 1000 birds/ha. Both effects are likely to be due to predation by pheasants at the peak of release in July–August, operating separately on larvae and adults respectively. There was an overall increase in the abundance of detritivores, including Diplopoda, Oniscoidea, Gastropoda (snails), at higher release densities. Mean release density in our study was 1489 ± 126 birds/ha (range 174–3409, n = 37 pens) and we suggest that detrimental effects on specialist woodland invertebrates would be minimized if releasing was conducted at the recommended density of 700 birds/ha.

The calculative turn in land value capture: lessons from the English planning system

For over three decades, negotiated planning obligations have been the primary form of land value capture in England. Diffusing and evolving over the last decade, a significant policy innovation has been the use of financial calculations to estimate the extent to which policies on planning obligations for actual, proposed development projects and in plan making affect the financial viability of development. This paper assesses the extent to which the use of financial appraisals has provided a robust, just and practical procedure to support land value capture. It is concluded that development viability appraisals are saturated with intrinsic uncertainty and that land value capture that is based on such calculations is, to some extent, capricious. In addition, clear incentives for developers and land owners to bias viability calculations, the economic dependence of many viability consultants on developers and land owners, a lack of transparency, contested or ambiguous guidance and the opportunities created by input uncertainty for bias are further failings. It is argued that how viability calculations are applied has been, is being and will continue to be shaped by power relations.

How much flower-rich habitat is enough for wild pollinators? Answering a key policy question with incomplete knowledge

In 2013, an opportunity arose in England to develop an agri-environment package for wild pollinators, as part of the new Countryside Stewardship scheme launched in 2015. It can be understood as a 'policy window', a rare and time-limited opportunity to change policy, supported by a narrative about pollinator decline and widely supported mitigating actions. An agri-environment package is a bundle of management options that together supply sufficient resources to support a target group of species. This paper documents information that was available at the time to develop such a package for wild pollinators. Four questions needed answering: (1) Which pollinator species should be targeted? (2) Which resources limit these species in farmland? (3) Which management options provide these resources? (4) What area of each option is needed to support populations of the target species? Focussing on wild bees, we provide tentative answers that were used to inform development of the package. There is strong evidence that floral resources can limit wild bee populations, and several sources of evidence identify a set of agri-environment options that provide flowers and other resources for pollinators. The final question could only be answered for floral resources, with a wide range of uncertainty. We show that the areas of some floral resource options in the basic Wild Pollinator and Farmland Wildlife Package (2% flower-rich habitat and 1 km flowering hedgerow), are sufficient to supply a set of six common pollinator species with enough pollen to feed their larvae at lowest estimates, using minimum values for estimated parameters where a range was available. We identify key sources of uncertainty, and stress the importance of keeping the Package flexible, so it can be revised as new evidence emerges about how to achieve the policy aim of supporting pollinators on farmland.