Green noise or green value? Measuring the price effects of environmental certification in commercial buildings

This paper investigates the price effects of environmental certification on commercial real estate assets. It is argued that there are likely to be three main drivers of price differences between certified and non-certified buildings. First, certified buildings offer a bundle of benefits to occupiers relating to business productivity, image and occupancy costs. Second, due to these occupier benefits, certified buildings can result in higher rents and lower holding costs for investors. Third, certified buildings may require a lower risk premium. Drawing upon the CoStar database of US commercial real estate assets, hedonic regression analysis is used to measure the effect of certification on both rent and price. We first estimate the rental regression for a sample of 110 LEED and 433 Energy Star as well as several thousand benchmark buildings to compare the sample to. The results suggest that, compared to buildings in the same metropolitan region, certified buildings have a rental premium and that the more highly rated that buildings are in terms of their environmental impact, the greater the rental premium. Furthermore, based on a sample of transaction prices for 292 Energy Star and 30 LEED-certified buildings, we find price premia of 10% and 31% respectively compared to non-certified buildings in the same metropolitan area

The division of labour under uncertainty

Reductions in the division of labour are a significant feature of modern developments in work organisation. It has been recognised that a reduced division of labour can have the advantages of job enrichment and lower coordination costs. In this paper it is shown how advantages from a lesser division of labour can stem from the flow of work between different sets of resources where the work rates of individual production stages are subject to uncertainties. Both process and project-based work are considered. Implications for the boundaries of the firm and for innovation processes are noted.

Variation in the global-scale impacts of climate change on crop productivity due to climate model uncertainty and adaptation

Crop production is inherently sensitive to fluctuations in weather and climate and is expected to be impacted by climate change. To understand how this impact may vary across the globe many studies have been conducted to determine the change in yield of several crops to expected changes in climate. Changes in climate are typically derived from a single to no more than a few General Circulation Models (GCMs). This study examines the uncertainty introduced to a crop impact assessment when 14 GCMs are used to determine future climate. The General Large Area Model for annual crops (GLAM) was applied over a global domain to simulate the productivity of soybean and spring wheat under baseline climate conditions and under climate conditions consistent with the 2050s under the A1B SRES emissions scenario as simulated by 14 GCMs. Baseline yield simulations were evaluated against global country-level yield statistics to determine the model's ability to capture observed variability in production. The impact of climate change varied between crops, regions, and by GCM. The spread in yield projections due to GCM varied between no change and a reduction of 50%. Without adaptation yield response was linearly related to the magnitude of local temperature change. Therefore, impacts were greatest for countries at northernmost latitudes where warming is predicted to be greatest. However, these countries also exhibited the greatest potential for adaptation to offset yield losses by shifting the crop growing season to a cooler part of the year and/or switching crop variety to take advantage of an extended growing season. The relative magnitude of impacts as simulated by each GCM was not consistent across countries and between crops. It is important, therefore, for crop impact assessments to fully account for GCM uncertainty in estimating future climates and to be explicit about assumptions regarding adaptation.

The distribution of London residential property prices and the role of spatial lock-in

Much of mainstream economic analysis assumes that markets adjust smoothly, through prices, to changes in economic conditions. However, this is not necessarily the case for local housing markets, whose spatial structures may exhibit persistence, so that conditions may not be those most suited to the requirements of modern-day living. Persistence can arise from the existence of transaction costs. The paper tests the proposition that housing markets in Inner London exhibit a degree of path dependence, through the construction of a three-equation model, and examines the impact of variables constructed for the 19th and early 20th centuries on modern house prices. These include 19th-century social structures, slum clearance programmes and the 1908 underground network. Each is found to be significant. The tests require the construction of novel historical datasets, which are also described in the paper.

A normative method to analyse workarounds in a healthcare environment: motivations, consequences, and constraints

Healthcare information systems have the potential to enhance productivity, lower costs, and reduce medication errors by automating business processes. However, various issues such as system complexity and system abilities in a relation to user requirements as well as rapid changes in business needs have an impact on the use of these systems. In many cases failure of a system to meet business process needs has pushed users to develop alternative work processes (workarounds) to fill this gap. Some research has been undertaken on why users are motivated to perform and create workarounds. However, very little research has assessed the consequences on patient safety. Moreover, the impact of performing these workarounds on the organisation and how to quantify risks and benefits is not well analysed. Generally, there is a lack of rigorous understanding and qualitative and quantitative studies on healthcare IS workarounds and their outcomes. This project applies A Normative Approach for Modelling Workarounds to develop A Model of Motivation, Constraints, and Consequences. It aims to understand the phenomenon in-depth and provide guidelines to organisations on how to deal with workarounds. Finally the method is demonstrated on a case study example and its relative merits discussed.

Area-wide development viability appraisals: the concept of threshold land value within a UK planning context

Area-wide development viability appraisals are undertaken to determine the economic feasibility of policy targets in relation to planning obligations. Essentially, development viability appraisals consist of a series of residual valuations of hypothetical development sites across a local authority area at a particular point in time. The valuations incorporate the estimated financial implications of the proposed level of planning obligations. To determine viability the output land values are benchmarked against threshold land value and therefore the basis on which this threshold is established and the level at which it is set is critical to development viability appraisal at the policy-setting (area-wide) level. Essentially it is an estimate of the value at which a landowner would be prepared to sell. If the estimated site values are higher than the threshold land value the policy target is considered viable. This paper investigates the effectiveness of existing methods of determining threshold land value. They will be tested against the relationship between development value and costs. Modelling reveals that threshold land value that is not related to shifts in development value renders marginal sites unviable and fails to collect proportionate planning obligations from high value/low cost sites. Testing the model against national average house prices and build costs reveals the high degree of volatility in residual land values over time and underlines the importance of making threshold land value relative to the main driver of this volatility, namely development value.

Distraction control processes in free recall: benefits and costs to performance

How is semantic memory influenced by individual differences under conditions of distraction? This question was addressed by observing how visual target words—drawn from a single category—were recalled whilst ignoring spoken distracter words that were either members of the same, or members of a different (single) category. Working memory capacity (WMC) was related to disruption only with synchronous, not asynchronous, presentation and distraction was greater when the words were presented synchronously. Subsequent experiments found greater negative priming of distracters amongst individuals with higher WMC but this may be dependent on targets and distracters being comparable category exemplars. With less dominant category members as distracters, target recall was impaired – relative to control – only amongst individuals with low WMC. The results highlight the role of cognitive control resources in target-distracter selection and the individual-specific cost implications of such cognitive control.

Excitation and decay of solar-wind driven flows in the magnetosphere-ionosphere system

Basic concepts of the form of high-latitude ionospheric flows and their excitation and decay are discussed in the light of recent high time-resolution measurements made by ground-based radars. It is first pointed out that it is in principle impossible to adequately parameterize these flows by any single quantity derived from concurrent interplanetary conditions. Rather, even at its simplest, the flow must be considered to consist of two basic time-dependent components. The first is the flow driven by magnetopause coupling processes alone, principally by dayside reconnection. These flows may indeed be reasonably parameterized in terms of concurrent near-Earth interplanetary conditions, principally by the interplanetary magnetic field (IMF) vector. The second is the flow driven by tail reconnection alone. As a first approximation these flows may also be parameterized in terms of interplanetary conditions, principally the north-south component of the IMF, but with a delay in the flow response of around 30-60 min relative to the IMF. A delay in the tail response of this order must be present due to the finite speed of information propagation in the system, and we show how "growth" and "decay" of the field and flow configuration then follow as natural consequences. To discuss the excitation and decay of the two reconnection-driven components of the flow we introduce that concept of a flow-free equilibrium configuration for a magnetosphere which contains a given (arbitrary) amount of open flux. Reconnection events act either to create or destroy open flux, thus causing departures of the system from the equilibrium configuration. Flow is then excited which moves the system back towards equilibrium with the changed amount of open flux. We estimate that the overall time scale associated with the excitation and decay of the flow is about 15 min. The response of the system to both impulsive (flux transfer event) and continuous reconnection is discussed in these terms.

An evidence-based review on the likely economic and environmental impact of genetically modified cereals and oilseeds for UK agriculture

An evidence-based review of the potential impact that the introduction of genetically-modified (GM) cereal and oilseed crops could have for the UK was carried out. The inter-disciplinary research project addressed the key research questions using scenarios for the uptake, or not, of GM technologies. This was followed by an extensive literature review, stakeholder consultation and financial modelling. The world area of canola, oilseed rape (OSR) low in both erucic acid in the oil and glucosinolates in the meal, was 34M ha in 2012 of which 27% was GM; Canada is the lead producer but it is also grown in the USA, Australia and Chile. Farm level effects of adopting GM OSR include: lower production costs; higher yields and profits; and ease of farm management. Growing GM OSR instead of conventional OSR reduces both herbicide usage and environmental impact. Some 170M ha of maize was grown in the world in 2011 of which 28% was GM; the main producers are the USA, China and Brazil. Spain is the main EU producer of GM maize although it is also grown widely in Portugal. Insect resistant (IR) and herbicide tolerant (HT) are the GM maize traits currently available commercially. Farm level benefits of adopting GM maize are lower costs of production through reduced use of pesticides and higher profits. GM maize adoption results in less pesticide usage than on conventional counterpart crops leading to less residues in food and animal feed and allowing increasing diversity of bees and other pollinators. In the EU, well-tried coexistence measures for growing GM crops in the proximity of conventional crops have avoided gene flow issues. Scientific evidence so far seems to indicate that there has been no environmental damage from growing GM crops. They may possibly even be beneficial to the environment as they result in less pesticides and herbicides being applied and improved carbon sequestration from less tillage. A review of work on GM cereals relevant for the UK found input trait work on: herbicide and pathogen tolerance; abiotic stress such as from drought or salinity; and yield traits under different field conditions. For output traits, work has mainly focussed on modifying the nutritional components of cereals and in connection with various enzymes, diagnostics and vaccines. Scrutiny of applications submitted for field trial testing of GM cereals found around 9000 applications in the USA, 15 in Australia and 10 in the EU since 1996. There have also been many patent applications and granted patents for GM cereals in the USA for both input and output traits;an indication of the scale of such work is the fact that in a 6 week period in the spring of 2013, 12 patents were granted relating to GM cereals. A dynamic financial model has enabled us to better understand and examine the likely performance of Bt maize and HT OSR for the south of the UK, if cultivation is permitted in the future. It was found that for continuous growing of Bt maize and HT OSR, unless there was pest pressure for the former and weed pressure for the latter, the seed premia and likely coexistence costs for a buffer zone between other crops would reduce the financial returns for the GM crops compared with their conventional counterparts. When modelling HT OSR in a four crop rotation, it was found that gross margins increased significantly at the higher levels of such pest or weed pressure, particularly for farm businesses with larger fields where coexistence costs would be scaled down. The impact of the supply of UK-produced GM crops on the wider supply chain was examined through an extensive literature review and widespread stakeholder consultation with the feed supply chain. The animal feed sector would benefit from cheaper supplies of raw materials if GM crops were grown and, in the future, they might also benefit from crops with enhanced nutritional profile (such as having higher protein levels) becoming available. This would also be beneficial to livestock producers enabling lower production costs and higher margins. Whilst coexistence measures would result in increased costs, it is unlikely that these would cause substantial changes in the feed chain structure. Retailers were not concerned about a future increase in the amount of animal feed coming from GM crops. To conclude, we (the project team) feel that the adoption of currently available and appropriate GM crops in the UK in the years ahead would benefit farmers, consumers and the feed chain without causing environmental damage. Furthermore, unless British farmers are allowed to grow GM crops in the future, the competitiveness of farming in the UK is likely to decline relative to that globally.

Improving productivity and water use efficiency: a case study of farms in England

The idea of Sustainable Intensification comes as a response to the challenge of avoiding resources such as land, water and energy being overexploited while increasing food production for an increasing demand from a growing global population. Sustainable Intensification means that farmers need to simultaneously increase yields and sustainably use limited natural resources, such as water. Within the agricultural sector water has a number of uses including irrigation, spraying, drinking for livestock and washing (vegetables, livestock buildings). In order to achieve Sustainable Intensification measures are needed that enable policy makers and managers to inform them about the relative performance of farms as well as of possible ways to improve such performance. We provide a benchmarking tool to assess water use (relative) efficiency at a farm level, suggest pathways to improve farm level productivity by identifying best practices for reducing excessive use of water for irrigation. Data Envelopment Analysis techniques including analysis of returns to scale were used to evaluate any excess in agricultural water use of 66 Horticulture Farms based on different River Basin Catchments across England. We found that farms in the sample can reduce on average water requirements by 35% to achieve the same output (Gross Margin) when compared to their peers on the frontier. In addition, 47% of the farms operate under increasing returns to scale, indicating that farms will need to develop economies of scale to achieve input cost savings. Regarding the adoption of specific water use efficiency management practices, we found that the use of a decision support tool, recycling water and the installation of trickle/drip/spray lines irrigation system has a positive impact on water use efficiency at a farm level whereas the use of other irrigation systems such as the overhead irrigation system was found to have a negative effect on water use efficiency.

When innovation becomes inefficient: reexamining Britain's radio industry

I examine the factors underpinning the British radio-equipment sector's particularly poor interwar productivity performance relative to the United States. Differences in socio-legal environments were crucial in allowing key players in the British industry to derive higher monopoly rents than their American counterparts. Higher British rents in turn, had the unintended outcome of stimulating innovation around restrictive patents, initiating a path-dependent process of technical change in favor of expensive multifunctional valves. These valves both raised direct production costs and prevented British firms from following the American path of broadening the radio market beyond the household's prime receiver.

R&D offshoring and the productivity growth of European regions

The recent increase in R&D offshoring has raised fears that knowledge and competitiveness in advanced countries may be at risk of ‘hollowing out’. At the same time, economic research has stressed that this process is also likely to allow some reverse technology transfer and foster growth at home. This paper addresses this issue by investigating the extent to which R&D offshoring is associated with productivity dynamics of European regions. We find that offshoring regions have higher productivity growth, but this positive effect fades with the number of investment projects carried out abroad. A large and positive correlation emerges between the extent of R&D offshoring and the home region productivity growth, supporting the idea that carrying out R&D abroad strengthens European competitiveness.

Productivity and the international firm: dissecting heterogeneity

Higher productivity of multinational firms and exporters has been widely documented in the literature, but the sources of this heterogeneity are still a black box. Using an original dataset on Italian firms, we show that higher total factor productivity of international firms can be to some extent explained by higher R&D intensity and managerial capabilities. However, our results suggest that heterogeneity is more in the slope than in the constant of the production function. In particular, allowing international firms to have different return to labour and capital inputs, we are able to account for their entire productivity premium. This has implications for both labour and capital market reforms.

Variation on the effects of the 2003 CAP reform and regional differences in the Italian olive oil sector

This paper analyses the impacts of the 2003 CAP reform on the production of Italian olive oil controlling for the regional differences in olive oil production as well as for the differences between years. Italian olive oil production time series data from the Farm Accountancy Data Network for the 2000-2010 period at regional level is used to examine the effect of the 2003 Fischler reform on the production of olive oil. Production costs and payments received by farmers to support their income are considered. The data were collected at micro level based on a sample of farms representative of the production systems in the country. In order to consider the differences in production among the regions, eight representative regions in terms of surveyed farms are considered: Liguria, Toscana, Umbria, Lazio, Campania, Calabria, Puglia and Sicilia. We found that the most important factors affecting the production of olive oil are the area under olive groves and labour productivity. Results also show no evidence that the level of payments have an impact to the level of production, however, the type of payments has. Future work should explore the impact of the 2003 reform into the technical and production efficiency of the Italian olive oil farmers. It would be interesting to link the measures introduced by the cross compliance and the management practices of the different farms to have a more complete picture of the various parameters influencing the production of olive oil.

Gender and the business cycle: an analysis of labour markets in the US and UK

Starting from an improved understanding of the relationship between gender labour market stocks and the business cycle, we analyse the contributing role of flows in the US and UK. Focusing on the post 2008 recession period, the subsequent greater rise in male unemployment can mostly be explained by a less cyclical response of flows between employment and unemployment for women, especially the entry into unemployment. Across gender and country, the inactivity rate is generally not sensitive to the state of the economy. However, a flows based analysis reveals a greater importance of the participation margin over the cycle. Changes in the rates of flow between unemployment and inactivity can each account for around 0.8-1.1 percentage points of the rise in US male and female unemployment rates during the latest downturn. For the UK, although the participation flow to unemployment similarly contributed to the increase of the female unemployment rate, this was not the case for men. The countercyclical flow rate from inactivity to employment was also more significant for women, especially in the US, where it accounted for approximately all of the fall in employment, compared with only 40% for men.