Risk reduction and diversification in UK commercial property portfolios

The issue of diversification in direct real estate investment portfolios has been widely studied in academic and practitioner literature. Most work, however, has been done using either partially aggregated data or data for small samples of individual properties. This paper reports results from tests of both risk reduction and diversification that use the records of 10,000+ UK properties tracked by Investment Property Databank. It provides, for the first time, robust estimates of the diversification gains attainable given the returns, risks and cross‐correlations across the individual properties available to fund managers. The results quantify the number of assets and amount of money needed to construct both ‘balanced’ and ‘specialist’ property portfolios by direct investment. Target numbers will vary according to the objectives of investors and the degree to which tracking error is tolerated. The top‐level results are consistent with previous work, showing that a large measure of risk reduction can be achieved with portfolios of 30–50 properties, but full diversification of specific risk can only be achieved in very large portfolios. However, the paper extends previous work by demonstrating on a single, large dataset the implications of different methods of calculating risk reduction, and also by showing more disaggregated results relevant to the construction of specialist, sector‐focussed funds.

Olive leaf phenolics and cardiovascular risk reduction: Physiological effects and mechanisms of action

Olive oil, an important component of the Mediterranean diet, is rich in polyphenols and is known to possess positive health effects relative to other dietary fats. In addition, the leaves of the olive plant (Olea europaea) contain similar phenolics (oleuropein, luteolin-7-glucoside, apigenin-7-glucoside, verbascoside and hydroxytyrosol) to those of olives and olive oil, although at higher concentrations. For example, the most abundant is the secoiridoid, oleuropein, representing 1–14% of olive leaf weight vs. 0.005–0.12% in olive oil. Although currently considered a waste product of the olive oil industry, recent research has suggested beneficial effects of phenolic-rich olive leaf extracts (OLE) in modifying cardiovascular risk biomarkers such as blood pressure, hyperglycaemia, oxidative stress and inflammation, as well as improving vascular function and lipid profiles. Despite this, data regarding the biological actions of OLE has mostly derived from animal, in vitro and ex vivo studies, with limited evidence deriving from human trials. Although the absorption and metabolism of olive oil phenolics has been investigated, less is known about the bioavailability of phenolics from OLE, limiting the interpretation of existing in vitro and ex vivo data. The current review will begin by describing the phenolic composition of olive leaves in comparison with that of the better studied olive oil. It will then review the effects of OLE on cardiovascular risk factors, covering both animal and human studies and will end by considering potential mechanisms of action

Modelling the impact of land use change on water quality in agricultural catchments

Export coefficient modelling was used to model the impact of agriculture on nitrogen and phosphorus loading on the surface waters of two contrasting agricultural catchments. The model was originally developed for the Windrush catchment where the highly reactive Jurassic limestone aquifer underlying the catchment is well connected to the surface drainage network, allowing the system to be modelled using uniform export coefficients for each nutrient source in the catchment, regardless of proximity to the surface drainage network. In the Slapton catchment, the hydrological path-ways are dominated by surface and lateral shallow subsurface flow, requiring modification of the export coefficient model to incorporate a distance-decay component in the export coefficients. The modified model was calibrated against observed total nitrogen and total phosphorus loads delivered to Slapton Ley from inflowing streams in its catchment. Sensitivity analysis was conducted to isolate the key controls on nutrient export in the modified model. The model was validated against long-term records of water quality, and was found to be accurate in its predictions and sensitive to both temporal and spatial changes in agricultural practice in the catchment. The model was then used to forecast the potential reduction in nutrient loading on Slapton Ley associated with a range of catchment management strategies. The best practicable environmental option (BPEO) was found to be spatial redistribution of high nutrient export risk sources to areas of the catchment with the greatest intrinsic nutrient retention capacity.

Evaluation and management of the impact of land use change on the nitrogen and phosphorus load delivered to surface waters: the export coefficient modelling approach

A manageable, relatively inexpensive model was constructed to predict the loss of nitrogen and phosphorus from a complex catchment to its drainage system. The model used an export coefficient approach, calculating the total nitrogen (N) and total phosphorus (P) load delivered annually to a water body as the sum of the individual loads exported from each nutrient source in its catchment. The export coefficient modelling approach permits scaling up from plot-scale experiments to the catchment scale, allowing application of findings from field experimental studies at a suitable scale for catchment management. The catchment of the River Windrush, a tributary of the River Thames, UK, was selected as the initial study site. The Windrush model predicted nitrogen and phosphorus loading within 2% of observed total nitrogen load and 0.5% of observed total phosphorus load in 1989. The export coefficient modelling approach was then validated by application in a second research basin, the catchment of Slapton Ley, south Devon, which has markedly different catchment hydrology and land use. The Slapton model was calibrated within 2% of observed total nitrogen load and 2.5% of observed total phosphorus load in 1986. Both models proved sensitive to the impact of temporal changes in land use and management on water quality in both catchments, and were therefore used to evaluate the potential impact of proposed pollution control strategies on the nutrient loading delivered to the River Windrush and Slapton Ley

The Natural History of Slapton Ley Nature Reserve XVIII: nitrogen and phosphorus losses from the catchment - an export coefficient modelling approach

Nitrogen and phosphorus losses from the catchment of Slapton Ley, a small coastal lake in SW England, were calculated using an adaptation of a model developed by Jorgensen (1980). A detailed survey of the catchment revealed that its land use is dominated by both permanent and temporary grassland (respectively 38 and 32% of its total area), and that the remainder is made up of the cultivation of cereals and field vegetables, and market gardening. Livestock numbers in the catchment constitute ca. 6600 head of cattle, 10,000 sheep, 590 pigs, 1700 poultry and 58 horses. The permanent human population of the area is ca. 2000, served by two small gravity-fed sewage treatment works (STWs). Inputs to, and losses from, farmland in the catchment were computed using Jorgensen’s model, and coefficients derived from the data of Cooke (1976), Gostick (1982), Rast and Lee (1983) and Vollenweider (1968). Allowing for outputs from STWs, the total annual external load of N and P upon Slapton Ley is 160 t (35 kg ha-1) a-1 N, and 4.8 t (1.05 kg ha-1) a-1 P. Accordingly to Vollenweider (1968, 1975), such loadings exceed OECD permissible level by a factor of ca. 50 in the case of N, and ca. 5 in that of P. In order to reduce nutrient loads, attention would need to be paid to both STW and agricultural sources.

"The ladder that sends us to wealth" : artisanal mining and poverty reduction in Tanzania

This article explores the contribution that artisanal and small-scale mining (ASM) makes to poverty reduction in Tanzania, based on data on gold and diamond mining in Mwanza Region. The evidence suggests that people working in mining or related services are less likely to be in poverty than those with other occupations. However, the picture is complex; while mining income can help reduce poverty and provide a buffer from livelihood shocks, peoples inability to obtain a formal mineral claim, or to effectively exploit their claims, contributes to insecurity. This is reinforced by a context in which ASM is peripheral to large-scale mining interests, is only gradually being addressed within national poverty reduction policies, and is segregated from district-level planning.

Adoption of green revolution services and poverty reduction in Ghana

In Sub-Saharan Africa (SSA) the technological advances of the Green Revolution (GR) have not been very successful. However, the efforts being made to re-introduce the revolution call for more socio-economic research into the adoption and the effects of the new technologies. The paper discusses an investigation on the effects of GR technology adoption on poverty among households in Ghana. Maximum likelihood estimation of a poverty model within the framework of Heckman's two stage method of correcting for sample selection was employed. Technology adoption was found to have positive effects in reducing poverty. Other factors that reduce poverty include education, credit, durable assets, living in the forest belt and in the south of the country. Technology adoption itself was also facilitated by education, credit, non-farm income and household labour supply as well as living in urban centres. Inarguably, technology adoption can be taken seriously by increasing the levels of complementary inputs such as credit, extension services and infrastructure. Above all, the fundamental problems of illiteracy, inequality and lack of effective markets must be addressed through increasing the levels of formal and non-formal education, equitable distribution of the 'national cake' and a more pragmatic management of the ongoing Structural Adjustment Programme.

Isomap nonlinear dimensionality reduction and bimodality of Asian monsoon convection

It is known that the empirical orthogonal function method is unable to detect possible nonlinear structure in climate data. Here, isometric feature mapping (Isomap), as a tool for nonlinear dimensionality reduction, is applied to 1958–2001 ERA-40 sea-level pressure anomalies to study nonlinearity of the Asian summer monsoon intraseasonal variability. Using the leading two Isomap time series, the probability density function is shown to be bimodal. A two-dimensional bivariate Gaussian mixture model is then applied to identify the monsoon phases, the obtained regimes representing enhanced and suppressed phases, respectively. The relationship with the large-scale seasonal mean monsoon indicates that the frequency of monsoon regime occurrence is significantly perturbed in agreement with conceptual ideas, with preference for enhanced convection on intraseasonal time scales during large-scale strong monsoons. Trend analysis suggests a shift in concentration of monsoon convection, with less emphasis on South Asia and more on the East China Sea.

The effect of class size on student achievement: evidence from Bangladesh

This study examines the effect of class size on student achievement in Bangladesh using national secondary school survey data. A Ministry of Education rule regarding allocation of teachers to secondary grades is exploited to construct an instrument for class size. This rule causes a discontinuity between grade enrolment and class size thereby generating exogenous variation in the latter. It is found that OLS and IV estimates of class size effects have perverse signs: both yield a positive coefficient on the class size variable. The results suggest that reduction in class size in secondary grades is not efficient in a developing country like Bangladesh. Last, as by-product, some evidence is found suggesting that greater competition among schools improve student achievement.

Determination of the gas diffusion coefficient of a peat grassland soil

Peatland habitats are important carbon stocks that also have the potential to be significant sources of greenhouse gases, particularly when subject to changes such as artificial drainage and application of fertilizer. Models aiming to estimate greenhouse gas release from peatlands require an accurate estimate of the diffusion coefficient of gas transport through soil (Ds). The availability of specific measurements for peatland soils is currently limited. This study measured Ds for a peat soil with an overlying clay horizon and compared values with those from widely available models. The Ds value of a sandy loam reference soil was measured for comparison. Using the Currie (1960) method, Ds was measured between an air-filled porosity (ϵ) range of 0 and 0.5 cm3 cm−3. Values of Ds for the peat cores ranged between 3.2 × 10−4 and 4.4 × 10−3 m2 hour−1, for loamy clay cores between 0 and 4.7 × 10−3 m2 hour−1 and for the sandy reference soil they were between 5.4 × 10−4 and 3.4 × 10−3 m2 hour−1. The agreement of measured and modelled values of relative diffusivity (Ds/D0, with D0 the diffusion coefficient through free air) varied with soil type; however, the Campbell (1985) model provided the best replication of measured values for all soils. This research therefore suggests that the use of the Campbell model in the absence of accurately measured Ds and porosity values for a study soil would be appropriate. Future research into methods to reduce shrinkage of peat during measurement and therefore allow measurement of Ds for a greater range of ϵ would be beneficial.

Potential reduction of concrete deterioration through controlled DEF in hydrated concrete

Delayed ettringite formation (DEF) is a chemical reaction with proven damaging effects on hydrated concrete. Ettringite crystals can cause cracks and their widening due to pressure on cracked walls caused by the positive volume difference in the reaction. Concrete may show improvements in strength at early ages but further growth of cracks causes widening and spreading through the concrete structure. In this study, finely dispersed crystallization nuclei achieved by adding air-entraining agent (AEA) and short vibration of specimens is presented as the main prerequisite for reducing DEF-induced deterioration of hydrated concrete. The study presents the method and mechanism for obtaining the required nucleation. Controlling long-term DEF by providing AEA-induced crystallisation nuclei, prevented excessive and rapid initial strength improvements, and resulted in a slight increase of compressive strength of fine grained concrete with only marginally lower density.

A comparative review of dimension reduction methods in approximate Bayesian computation

Approximate Bayesian computation (ABC) methods make use of comparisons between simulated and observed summary statistics to overcome the problem of computationally intractable likelihood functions. As the practical implementation of ABC requires computations based on vectors of summary statistics, rather than full data sets, a central question is how to derive low-dimensional summary statistics from the observed data with minimal loss of information. In this article we provide a comprehensive review and comparison of the performance of the principal methods of dimension reduction proposed in the ABC literature. The methods are split into three nonmutually exclusive classes consisting of best subset selection methods, projection techniques and regularization. In addition, we introduce two new methods of dimension reduction. The first is a best subset selection method based on Akaike and Bayesian information criteria, and the second uses ridge regression as a regularization procedure. We illustrate the performance of these dimension reduction techniques through the analysis of three challenging models and data sets.

Do smart grids offer a new incentive for SME carbon reduction?

Collectively small and medium sized enterprises (SMEs) are significant energy users although many are unregulated by existing policies due to their low carbon emissions. Carbon reduction is often not a priority but smart grids may create a new opportunity. A smart grid will give electricity suppliers a picture of real-time energy flows and the opportunity for consumers to receive financial incentives for engaging in demand side management. As well as creating incentives for local carbon reduction, engaging SMEs with smart grids has potential for contributing to wider grid decarbonisation. Modelling of buildings, business activities and technology solutions is needed to identify opportunities for carbon reduction. The diversity of the SME sector complicates strategy development. SMEs are active in almost every business area and occupy the full range of property types. This paper reviews previous modelling work, exposing valuable data on floor space and energy consumption associated with different business activities. Limitations are seen with the age of this data and an inability to distinguish SME energy use. By modelling SME energy use, electrical loads are identified which could be shifted on demand, in a smart network. Initial analysis of consumption, not constrained by existing policies, identifies heating and cooling in retail and commercial offices as having potential for demand response. Hot water in hotel and catering and retail sectors may also be significant because of the energy storage potential. Areas to consider for energy efficiency schemes are also indicated.