Bio-folio: applying portfolio theory to biodiversity

Genes, species and ecosystems are often considered to be assets. The need to ensure a sufficient diversity of this asset is being increasingly recognised today. Asset managers in banks and insurance companies face a similar challenge. They are asked to manage the assets of their investors by constructing efficient portfolios. They deliberately make use of a phenomenon observed in the formation of portfolios: returns are additive, while risks diversify. This phenomenon and its implications are at the heart of portfolio theory. Portfolio theory, like few other economic theories, has dramatically transformed the practical work of banks and insurance companies. Before portfolio theory was developed about 50 years ago, asset managers were confronted with a situation similar to the situation the research on biodiversity faces today. While the need for diversification was generally accepted, a concept that linked risk and return on a portfolio level and showed the value of diversification was missing. Portfolio theory has closed this gap. This article first explains the fundamentals of portfolio theory and transfers it to biodiversity. A large part of this article is then dedicated to some of the implications portfolio theory has for the valuation and management of biodiversity. The last section introduces three development openings for further research.

Evolutionary agglomeration theory: increasing returns, diminishing returns, and the industry life cycle

According to Marshall’s agglomeration theory, Krugman’s New Economic Geography models, and Porter’s cluster policies, firms should receive increasing returns from a trinity of agglomeration economies: a local pool of skilled labour, local supplier linkages, and local knowledge spillovers. Recent evolutionary theories suggest that whether agglomeration economies generate increasing returns or diminishing returns depends on time, and especially the evolution of the industry life cycle. At the start of the twenty-first century, we re-examine Marshall’s trinity of agglomeration economies in the city-region where he discovered them. The econometric results from our multivariate regression models are the polar opposite of Marshall’s. During the later stages of the industry life cycle, Marshall’s agglomeration economies decrease the economic performance of firms and create widespread diminishing returns for the economic development of the city-region, which has evolved to become one of the poorest city-regions in Europe.

Increasing Returns and Competitive Equilibrium--The Content and Development of Marshall's Theory

This paper reviews Alfred Marshall's attempts to reconcile increasing returns and competition from the early economic writings to the later editions of his Principles. It is shown that while Marshall's final solution to the problem involved naming external economies the cause of increasing returns in a regime of competition , both the life cycle of the firm and internal economies remained necessary to his argument. Their function was to give some operation al content to the elusive concept of external economies.

Dynamic pricing model and algorithm for perishable products with fuzzy demand (ABS 2* Journal)

This paper studies the dynamic pricing problem of selling fixed stock of perishable items over a finite horizon, where the decision maker does not have the necessary historic data to estimate the distribution of uncertain demand, but has imprecise information about the quantity demand. We model this uncertainty using fuzzy variables. The dynamic pricing problem based on credibility theory is formulated using three fuzzy programming models, viz.: the fuzzy expected revenue maximization model, a-optimistic revenue maximization model, and credibility maximization model. Fuzzy simulations for functions with fuzzy parameters are given and embedded into a genetic algorithm to design a hybrid intelligent algorithm to solve these three models. Finally, a real-world example is presented to highlight the effectiveness of the developed model and algorithm.

Why do people non-demand reveal in hypothetical double referenda for public goods?

Hypothetical contingent valuation surveys used to elicit values for environmental and other public goods often employ variants of the referendum mechanism due to the cognitive simplicity and familiarity of respondents with this voting format. One variant, the double referendum mechanism, requires respondents to state twice how they would vote for a given policy proposal given their cost of the good. Data from these surveys often exhibit anomalies inconsistent with standard economic models of consumer preferences. There are a number of published explanations for these anomalies, mostly focusing on problems with the second vote. This article investigates which aspects of the hypothetical task affect the degree of nondemand revelation and takes an individual-based approach to identifying people most likely to non-demand reveal. A clear profile emerges from our model of a person who faces a negative surplus i.e. a net loss in the second vote and invokes non self-interested, non financial motivations during the decision process.

Vulnerability and multiple deprivation perspectives on economic exclusion in Europe: A latent class analysis

In this paper we address issues relating to vulnerability to economic exclusion and levels of economic exclusion in Europe. We do so by applying latent class models to data from the European Community Household Panel for thirteen countries. This approach allows us to distinguish between vulnerability to economic exclusion and exposure to multiple deprivation at a particular point in time. The results of our analysis confirm that in every country it is possible to distinguish between a vulnerable and a non-vulnerable class. Association between income poverty, life-style deprivation and subjective economic strain is accounted for by allocating individuals to the categories of this latent variable. The size of the vulnerable class varies across countries in line with expectations derived from welfare regime theory. Between class differentiation is weakest in social democratic regimes but otherwise the pattern of differentiation is remarkably similar. The key discriminatory factor is life-style deprivation, followed by income and economic strain. Social class and employment status are powerful predictors of latent class membership in all countries but the strength of these relationships varies across welfare regimes. Individual biography and life events are also related to vulnerability to economic exclusion. However, there is no evidence that they account for any significant part of the socio-economic structuring of vulnerability and no support is found for the hypothesis that social exclusion has come to transcend class boundaries and become a matter of individual biography. However, the extent of socio-economic structuring does vary substantially across welfare regimes. Levels of economic exclusion, in the sense of current exposure to multiple deprivation, also vary systematically by welfare regime and social class. Taking both vulnerability to economic exclusion and levels of exclusion into account suggests that care should be exercised in moving from evidence on the dynamic nature of poverty and economic exclusion to arguments relating to the superiority of selective over universal social policies.

Green Political Theory

Ecologism or green political theory is the most recent of schools of political thinking. On the one hand, it focuses on issues that are extremely old in politics and philosophical inquiry – such as the relationship between the human and nonhuman worlds, the moral status of animals, what is the ‘good life’, and the ethical and political regulation of technological innovation. Yet on the other, it is also characterised as dealing with some specifically contemporary issues such as the economic and political implications of climate change, peak oil, overconsumption, resource competition and conflicts, and rising levels of global and national inequalities. It is also an extremely broad school of political thought covering a wide variety of concerns, contains a number of distinct sub-schools of green thought (here sharing a similarity with other political ideologies) and combines normative and empirical scientific elements in a unique manner making it distinctive from other political ideologies.

Family, state, class and solidarity: re-conceptualising intergenerational solidarity through the grounded theory approach

The relationship between class and intergenerational solidarities in the public and private spheres calls for further conceptual and theoretical development. This article discusses the findings from the first wave of a qualitative longitudinal study entitled Changing Generations, conducted in Ireland in 2011–2012, comprising 100 in-depth interviews with men and women across the age and socioeconomic spectrums. Constructivist grounded theory analysis of the data gives rise to the following postulates: (1) intergenerational solidarity at the family level is strongly contoured by socioeconomic status (SES); (2) intergenerational solidarity evolves as family generations observe each others’ practices and adjust their expectations accordingly; (3) intergenerational solidarity within families is also shaped by the public sphere (the welfare state) that generates varying expectations and levels of solidarity regarding State supports for different age groups, again largely dependent on SES; (4) the liberal welfare state context, especially at a time of economic crisis, enhances the significance of intergenerational solidarity within families. We conclude by calling for research that is attuned to age/generation, gender and class, and how these operate across the family and societal levels.

‘Emergent reconstruction’ in grounded theory: learning from team-based interview research

Constructivist grounded theory (CGT) methods render an interpretive portrayal, a construction of reality, strengthened when the process of construction is acknowledged. An Irish team study uses CGT to explore intergenerational solidarity at individual, familial and societal levels, and their interface. The study data comprise interviews with 100 people from diverse socio-economic and
age groups. The article contributes insights on applying CGT in team-based interview research on a topic with such breadth of scope. This contrasts with the more usual focused inquiry with a defined population. Adapting the method’s guidelines to the specific inquiry involved challenges in: framing the topic conceptually; situating research participants in contrasting social contexts to
provide interpretive depth; and generating interview data with which to construct theory. We argue that interrogating the very premise of the inquiry allowed for emergent reconstruction, a goal at the heart of the method.

Towards groundwater security in coastal East Africa: initiating a regional research network and integrated hydrogeologic, climatic & socio-economic observatories in coastal aquifers of the Comoros Islands, Kenya and Tanzania

African coastal regions are expected to experience the highest rates of population growth in coming decades. Fresh groundwater resources in the coastal zone of East Africa (EA) are highly vulnerable to seawater intrusion. Increasing water demand is leading to unsustainable and ill-planned well drilling and abstraction. Wells supplying domestic, industrial and agricultural needs are or have become, in many areas, too saline for use. Climate change, including weather changes and sea level rise, is expected to exacerbate this problem. The multiplicity of physical, demographic and socio-economic driving factors makes this a very challenging issue for management. At present the state and probable evolution of coastal aquifers in EA are not well documented. The UPGro project 'Towards groundwater security in coastal East Africa' brings together teams from Kenya, Tanzania, Comoros Islands and Europe to address this knowledge gap. An integrative multidisciplinary approach, combining the expertise of hydrogeologists, hydrologists and social scientists, is investigating selected sites along the coastal zone in each country. Hydrogeologic observatories have been established in different geologic and climatic settings representative of the coastal EA region, where focussed research will identify the current status of groundwater and identify future threats based on projected demographic and climate change scenarios. Researchers are also engaging with end users as well as local community and stakeholder groups in each area in order to understanding the issues most affecting the communities and searching sustainable strategies for addressing these.

Discursive Control, Non-Domination and Hegelian Recognition Theory: Marrying Pettit’s Account(s) of Freedom with a Pippinian/Brandomian Reading of Hegelian Agency

The aim of this article is to combine Pettit’s account(s) of freedom, both his work on discursive control and on non-domination, with Pippin’s and Brandom’s reinterpretation of Hegelian rational agency and the role of recognition theory within it. The benefits of combining these two theories lie, as the article hopes to show, in three findings: first, re-examining Hegelian agency in the spirit of Brandom and Pippin in combination with Pettit’s views on freedom shows clearly why and in which way a Hegelian account of rational agency can ground an attractive socio-political account of freedom; second, the reconciling of discursive control and non-domination with Hegelian agency shows how the force and scope of recognition become finally tangible, without either falling into the trap of overburdening the concept, or merely reducing it to the idea of simple respect; third, the arguments from this article also highlight the importance of freedom as non-domination and how this notion is, indeed, as Pettit himself claims, an agency-freedom which aims at successfully securing the social, political, economic and even (some) psychological conditions for free and autonomous agency.

Recessionary Bundles: HR Practices in the Irish Economic Crisis

The HR practices adopted by firms in response to the current deep and prolonged recession have received little attention in the literature. There are reasons for supposing that firms will adopt HR practices in bundles in responding to the recession in order to benefit from technical and behavioural complementarities. Drawing on a nationally representative survey, the article investigates the bundles of HR practices adopted by firms during the Irish recession and examines influences on the bundles that are evident. The article contributes to HRM theory by testing different views on HR bundles likely to be adopted in recessionary conditions and by moving beyond the prevailing focus in HRM on HR bundles adopted by firms in steady-state business conditions.

Green Political Economy: beyond orthodox undifferentiated economic growth as a permanent feature of the economy

This chapter outlines the main features of green political economy and the principal ways in which it differs from dominant mainstream or orthodox neoclassical economics. Neoclassical economics is critiqued on the grounds of denying its normative and ideological commitments in its false presentation of itself as ‘objective’ and ‘value neutral’. It is also critiqued for its ecologically irrational commitment to the imperative of orthodox economic growth as a permanent feature of the economy, compromising its ability to offer realistic or normatively compelling guides to how we might make the transition to a sustainable economy. Green political economy is presented as an alternative or heterodox form of economic thinking but one which explicitly expresses its normative/ideological value bases (hence it represents a return to ‘political economy’, the origins of modern economics). Green political economy also challenges the commitment to undifferentiated economic growth as a permanent objective of the human economy. In its place, green political economy promotes ‘economic security’ as a better objective for a sustainable, post-growth economy. The latter includes the transition to a low-carbon energy economy, and is also one which maximises quality of life (as oppose to formal employment, income and wealth), and actively seeks to lower socio-economic inequality. Green political economy views orthodox economic growth as having passed the threshold in most ‘advanced’ capitalist societies beyond which it has undermined quality of life and at best manages rather than reduces socially and ecologically damaging inequalities.