The uncertainty of valuation

Valuation is often said to be “an art not a science” but this relates to the techniques employed to calculate value not to the underlying concept itself. Valuation is the process of estimating price in the market place. Yet, such an estimation will be affected by uncertainties. Uncertainty in the comparable information available; uncertainty in the current and future market conditions and uncertainty in the specific inputs for the subject property. These input uncertainties will translate into an uncertainty with the output figure, the valuation. The degree of the uncertainties will vary according to the level of market activity; the more active a market, the more credence will be given to the input information. In the UK at the moment the Royal Institution of Chartered Surveyors (RICS) is considering ways in which the uncertainty of the output figure, the valuation, can be conveyed to the use of the valuation, but as yet no definitive view has been taken. One of the major problems is that Valuation models (in the UK) are based upon comparable information and rely upon single inputs. They are not probability based, yet uncertainty is probability driven. In this paper, we discuss the issues underlying uncertainty in valuations and suggest a probability-based model (using Crystal Ball) to address the shortcomings of the current model.

An elastic net orthogonal forward regression algorithm

In this paper we propose an efficient two-level model identification method for a large class of linear-in-the-parameters models from the observational data. A new elastic net orthogonal forward regression (ENOFR) algorithm is employed at the lower level to carry out simultaneous model selection and elastic net parameter estimation. The two regularization parameters in the elastic net are optimized using a particle swarm optimization (PSO) algorithm at the upper level by minimizing the leave one out (LOO) mean square error (LOOMSE). Illustrative examples are included to demonstrate the effectiveness of the new approaches.

Steady state and dynamic modelling of nitrogen in the River Kennet: impacts of land use change since the 1930s

Steady state and dynamic models have been developed and applied to the River Kennet system. Annual nitrogen exports from the land surface to the river have been estimated based on land use from the 1930s and the 1990s. Long term modelled trends indicate that there has been a large increase in nitrogen transport into the river system driven by increased fertiliser application associated with increased cereal production, increased population and increased livestock levels. The dynamic model INCA Integrated Nitrogen in Catchments. has been applied to simulate the day-to-day transport of N from the terrestrial ecosystem to the riverine environment. This process-based model generates spatial and temporal data and reproduces the observed instream concentrations. Applying the model to current land use and 1930s land use indicates that there has been a major shift in the short term dynamics since the 1930s, with increased river and groundwater concentrations caused by both non-point source pollution from agriculture and point source discharges. �

Online bayesian inference in some time-frequency representations of non-stationary processes

The use of Bayesian inference in the inference of time-frequency representations has, thus far, been limited to offline analysis of signals, using a smoothing spline based model of the time-frequency plane. In this paper we introduce a new framework that allows the routine use of Bayesian inference for online estimation of the time-varying spectral density of a locally stationary Gaussian process. The core of our approach is the use of a likelihood inspired by a local Whittle approximation. This choice, along with the use of a recursive algorithm for non-parametric estimation of the local spectral density, permits the use of a particle filter for estimating the time-varying spectral density online. We provide demonstrations of the algorithm through tracking chirps and the analysis of musical data.

Forecasting with vector autoregressive models of data vintages: US output growth and inflation

Vintage-based vector autoregressive models of a single macroeconomic variable are shown to be a useful vehicle for obtaining forecasts of different maturities of future and past observations, including estimates of post-revision values. The forecasting performance of models which include information on annual revisions is superior to that of models which only include the first two data releases. However, the empirical results indicate that a model which reflects the seasonal nature of data releases more closely does not offer much improvement over an unrestricted vintage-based model which includes three rounds of annual revisions.

Adapting wheat in Europe for climate change

Increasing cereal yield is needed to meet the projected increased demand for world food supply of about 70% by 2050. Sirius, a process-based model for wheat, was used to estimate yield potential for wheat ideotypes optimized for future climatic projections (HadCM3 global climate model) for ten wheat growing areas of Europe. It was predicted that the detrimental effect of drought stress on yield would be decreased due to enhanced tailoring of phenology to future weather patterns, and due to genetic improvements in the response of photosynthesis and green leaf duration to water shortage. Yield advances could be made through extending maturation and thereby improve resource capture and partitioning. However the model predicted an increase in frequency of heat stress at meiosis and anthesis. Controlled environment experiments quantify the effects of heat and drought at booting and flowering on grain numbers and potential grain size. A current adaptation of wheat to areas of Europe with hotter and drier summers is a quicker maturation which helps to escape from excessive stress, but results in lower yields. To increase yield potential and to respond to climate change, increased tolerance to heat and drought stress should remain priorities for the genetic improvement of wheat.

Assessing the quality of modelled 3D protein structures using the ModFOLD server

Model quality assessment programs (MQAPs) aim to assess the quality of modelled 3D protein structures. The provision of quality scores, describing both global and local (per-residue) accuracy are extremely important, as without quality scores we are unable to determine the usefulness of a 3D model for further computational and experimental wet lab studies.Here, we briefly discuss protein tertiary structure prediction, along with the biennial Critical Assessment of Techniques for Protein Structure Prediction (CASP) competition and their key role in driving the field of protein model quality assessment methods (MQAPs). We also briefly discuss the top MQAPs from the previous CASP competitions. Additionally, we describe our downloadable and webserver-based model quality assessment methods: ModFOLD3, ModFOLDclust, ModFOLDclustQ, ModFOLDclust2, and IntFOLD-QA. We provide a practical step-by-step guide on using our downloadable and webserver-based tools and include examples of their application for improving tertiary structure prediction, ligand binding site residue prediction, and oligomer predictions.

Landscape structure mediates the effects of a stressor on field vole populations

Spatio-temporal landscape heterogeneity has rarely been considered in population-level impact assessments. Here we test whether landscape heterogeneity is important by examining the case of a pesticide applied seasonally to orchards which may affect non-target vole populations, using a validated ecologically realistic and spatially explicit agent-based model. Voles thrive in unmanaged grasslands and untreated orchards but are particularly exposed to applied pesticide treatments during dispersal between optimal habitats. We therefore hypothesised that vole populations do better (1) in landscapes containing more grassland and (2) where areas of grassland are closer to orchards, but (3) do worse if larger areas of orchards are treated with pesticide. To test these hyposeses we made appropriate manipulations to a model landscape occupied by field voles. Pesticide application reduced model population sizes in all three experiments, but populations subsequently wholly or partly recovered. Population depressions were, as predicted, lower in landscapes containing more unmanaged grassland, in landscapes with reduced distance between grassland and orchards, and in landscapes with fewer treated orchards. Population recovery followed a similar pattern except for an unexpected improvement in recovery when the area of treated orchards was increased. Outside the period of pesticide application, orchards increase landscape connectivity and facilitate vole dispersal and so speed population recovery. Overall our results show that accurate prediction of population impact cannot be achieved without taking account of landscape structure. The specifics of landscape structure and habitat connectivity are likely always important in mediating the effects of stressors.

Effects of noise and by-catch on a Danish harbour porpoise population

Ships and wind turbines generate noise, which can have a negative impact on marine mammal populations by scaring animals away. Effective modelling of how this affects the populations has to take account of the location and timing of disturbances. Here we construct an individual-based model of harbour porpoises in the Inner Danish Waters. Individuals have their own energy budgets constructed using established principles of physiological ecology. Data are lacking on the spatial distribution of food which is instead inferred from knowledge of time-varying porpoise distributions. The model produces plausible patterns of population dynamics and matches well the age distribution of porpoises caught in by-catch. It estimates the effect of existing wind farms as a 10% reduction in population size when food recovers fast (after two days). Proposed new wind farms and ships do not result in further population declines. The population is however sensitive to variations in mortality resulting from by-catch and to the speed at which food recovers after being depleted. If food recovers slowly the effect of wind turbines becomes negligible, whereas ships are estimated to have a significant negative impact on the population. Annual by-catch rates ≥10% lead to monotonously decreasing populations and to extinction, and even the estimated by-catch rate from the adjacent area (approximately 4.1%) has a strong impact on the population. This suggests that conservation efforts should be more focused on reducing by-catch in commercial gillnet fisheries than on limiting the amount of anthropogenic noise. Individual-based models are unique in their ability to take account of the location and timing of disturbances and to show their likely effects on populations. The models also identify deficiencies in the existing database and can be used to set priorities for future field research.

Processes controlling atmospheric dispersion through city centres

We develop a process-based model for the dispersion of a passive scalar in the turbulent flow around the buildings of a city centre. The street network model is based on dividing the airspace of the streets and intersections into boxes, within which the turbulence renders the air well mixed. Mean flow advection through the network of street and intersection boxes then mediates further lateral dispersion. At the same time turbulent mixing in the vertical detrains scalar from the streets and intersections into the turbulent boundary layer above the buildings. When the geometry is regular, the street network model has an analytical solution that describes the variation in concentration in a near-field downwind of a single source, where the majority of scalar lies below roof level. The power of the analytical solution is that it demonstrates how the concentration is determined by only three parameters. The plume direction parameter describes the branching of scalar at the street intersections and hence determines the direction of the plume centreline, which may be very different from the above-roof wind direction. The transmission parameter determines the distance travelled before the majority of scalar is detrained into the atmospheric boundary layer above roof level and conventional atmospheric turbulence takes over as the dominant mixing process. Finally, a normalised source strength multiplies this pattern of concentration. This analytical solution converges to a Gaussian plume after a large number of intersections have been traversed, providing theoretical justification for previous studies that have developed empirical fits to Gaussian plume models. The analytical solution is shown to compare well with very high-resolution simulations and with wind tunnel experiments, although re-entrainment of scalar previously detrained into the boundary layer above roofs, which is not accounted for in the analytical solution, is shown to become an important process further downwind from the source.

Enhanced Australian carbon sink despite increased wildfire during the 21st century

Climate projections show Australia becoming significantly warmer during the 21st century, and precipitation decreasing over much of the continent. Such changes are conventionally considered to increase wildfire risk. Nevertheless, we show that burnt area increases in southern Australia, but decreases in northern Australia. Overall the projected increase in fire is small (0.72–1.31% of land area, depending on the climate scenario used), and does not cause a decrease in carbon storage. In fact, carbon storage increases by 3.7–5.6 Pg C (depending on the climate scenario used). Using a process-based model of vegetation dynamics, vegetation–fire interactions and carbon cycling, we show increased fire promotes a shift to more fire-adapted trees in wooded areas and their encroachment into grasslands, with an overall increase in forested area of 3.9–11.9%. Both changes increase carbon uptake and storage. The increase in woody vegetation increases the amount of coarse litter, which decays more slowly than fine litter hence leading to a relative reduction in overall heterotrophic respiration, further reducing carbon losses. Direct CO2 effects increase woody cover, water-use efficiency and productivity, such that carbon storage is increased by 8.5–14.8 Pg C compared to simulations in which CO2 is held constant at modern values. CO2 effects tend to increase burnt area, fire fluxes and therefore carbon losses in arid areas, but increase vegetation density and reduce burnt area in wooded areas.

Long term individual load forecast under different electrical vehicles uptake scenarios

More and more households are purchasing electric vehicles (EVs), and this will continue as we move towards a low carbon future. There are various projections as to the rate of EV uptake, but all predict an increase over the next ten years. Charging these EVs will produce one of the biggest loads on the low voltage network. To manage the network, we must not only take into account the number of EVs taken up, but where on the network they are charging, and at what time. To simulate the impact on the network from high, medium and low EV uptake (as outlined by the UK government), we present an agent-based model. We initialise the model to assign an EV to a household based on either random distribution or social influences - that is, a neighbour of an EV owner is more likely to also purchase an EV. Additionally, we examine the effect of peak behaviour on the network when charging is at day-time, night-time, or a mix of both. The model is implemented on a neighbourhood in south-east England using smart meter data (half hourly electricity readings) and real life charging patterns from an EV trial. Our results indicate that social influence can increase the peak demand on a local level (street or feeder), meaning that medium EV uptake can create higher peak demand than currently expected.

The response of northern hemisphere extratropical climate and vegetation to orbitally-induced changes in insolation during the last interglaciation

The last interglaciation (substage 5e) provides an opportunity to examine the effects of extreme orbital changes on regional climates. We have made two atmospheric general circulation model experiments: P+T+ approximated the northern hemisphere seasonality maximum near the beginning of 5e; P-T- approximated the minimum near the end of 5e. Simulated regional climate changes have been translated into biome changes using a physiologically based model of global vegetation types. Major climatic and vegetational changes were simulated for the northern hemisphere extratropics, due to radiational effects that were both amplified and modified by atmospheric circulation changes and sea-ice feedback. P+T+ showed mid-continental summers up to 8°C warmer than present. Mid-latitude winters were 2-4°C cooler than present but in the Arctic, summer warmth reduced sea-ice extent and thickness, producing winters 2-8°C warmer than present. The tundra and taiga biomes were displaced poleward, while warm-summer steppes expanded in the mid latitudes due to drought. P-T- showed summers up to 5°C cooler than present, especially in mid latitudes. Sea ice and snowpack were thicker and lasted longer; polar desert, tundra, and taiga biomes were displaced equatorward, while cool-summer steppes and semideserts expanded due to the cooling. A slight winter warming in mid latitudes, however, caused warm-temperate evergreen forests and scrub to expand poleward. Such qualitative contrasts in the direction of climate and vegetation change during 5e should be identifiable in the paleorecord

Engineering a plant community to deliver multiple ecosystem services

The sustainable delivery of multiple ecosystem services requires the management of functionally diverse biological communities. In an agricultural context, an emphasis on food production has often led to a loss of biodiversity to the detriment of other ecosystem services such as the maintenance of soil health and pest regulation. In scenarios where multiple species can be grown together, it may be possible to better balance environmental and agronomic services through the targeted selection of companion species. We used the case study of legume-based cover crops to engineer a plant community that delivered the optimal balance of six ecosystem services: early productivity, regrowth following mowing, weed suppression, support of invertebrates, soil fertility building (measured as yield of following crop), and conservation of nutrients in the soil. An experimental species pool of 12 cultivated legume species was screened for a range of functional traits and ecosystem services at five sites across a geographical gradient in the United Kingdom. All possible species combinations were then analyzed, using a process-based model of plant competition, to identify the community that delivered the best balance of services at each site. In our system, low to intermediate levels of species richness (one to four species) that exploited functional contrasts in growth habit and phenology were identified as being optimal. The optimal solution was determined largely by the number of species and functional diversity represented by the starting species pool, emphasizing the importance of the initial selection of species for the screening experiments. The approach of using relationships between functional traits and ecosystem services to design multifunctional biological communities has the potential to inform the design of agricultural systems that better balance agronomic and environmental services and meet the current objective of European agricultural policy to maintain viable food production in the context of the sustainable management of natural resources.

In the mood: the dynamics of collective sentiments on Twitter

We study the relationship between the sentiment levels of Twitter users and the evolving network structure that the users created by @-mentioning each other. We use a large dataset of tweets to which we apply three sentiment scoring algorithms, including the open source SentiStrength program. Specifically we make three contributions. Firstly we find that people who have potentially the largest communication reach (according to a dynamic centrality measure) use sentiment differently than the average user: for example they use positive sentiment more often and negative sentiment less often. Secondly we find that when we follow structurally stable Twitter communities over a period of months, their sentiment levels are also stable, and sudden changes in community sentiment from one day to the next can in most cases be traced to external events affecting the community. Thirdly, based on our findings, we create and calibrate a simple agent-based model that is capable of reproducing measures of emotive response comparable to those obtained from our empirical dataset.