Capital market expectations and the London office market

The analysis of office market dynamics has generally concentrated on the impact of underlying fundamental demand and supply variables. This paper takes a slightly different approach to many previous examinations of rental dynamics. Within a Vector-Error-Correction framework the empirical analysis concentrates upon the impact of economic and financial variables on rents in the City of London and West End of London office markets. The impulse response and variance decomposition reveal that while lagged rental values and key demand drivers play a highly important role in the dynamics of rents, financial variables are also influential. Stock market performance not only influences the City of London market but also the West End, whilst the default spread plays an important role in recent years. It is argued that both series incorporate expectations about future economic performance and that this is the basis of their influence upon rental values.

The impact of energy performance certificates on the rental and capital values of commercial property assets: some preliminary evidence from the UK

This paper focuses on the effect of energy performance ratings on the capital values, rental values and equivalent yields of UK commercial property assets. Of which a small number are also BREEAM rated, the study is based upon 708 commercial property assets held in the IPD UK Universe drawn from across all PAS segments. Incorporating a range of controls such as unexpired lease term, vacancy rate and tenant credit risk, hedonic regression procedures are used to estimate the effect of EPC rating. The study finds no evidence of a strong relationship between environmental and/or energy performance and rental and capital value. Bearing in mind the small number of BREEAM rated assets, there was a small but statistically significant effect on equivalent yield only. Similarly, there was no evidence that the EPC rating had any effect on Market Rent or Market Value with only minor effects of EPC ratings on equivalent yields. The preliminary conclusion is that energy labelling is not yet having the effects on Market Values and Market Rents that provide incentives for market participants to improve the energy efficiency of their commercial real estate assets.

The Finance Act 1998: can the owners of agricultural land continue to gain from their capital disposals?

This paper seeks to analyse and discuss, from the perspective of the owners of agricultural land, the main changes to the Capital Gains Tax regime introduced in the Budget of March 1998 and contained in the Finance Act 1998. The immediate replacement of indexation with a new Taper relief is examined, along with the phasing out of Retirement relief, and the interaction of Taper relief with Rollover relief.

Language capital and development: the case of African language publishing for children in South Africa

In recognizing 11 official languages, the 1996 South African Constitution provides a context for the management of diversity with important implications for the redistribution of wealth and power. The development and implementation of the language-in-education policies which might be expected to flow from the Constitution, however, have been slow and ineffective. One of the casualties of government procrastination has been African language publishing. In the absence of well-resourced bilingual education, most learners continue to be taught through the medium of English as a second language. Teachers are reluctant to use more innovative pedagogies without the support of adequate African language materials and publishers are cautious about producing such materials. Nonetheless, activity in this sector offers many opportunities for African language speakers. This paper explores the challenges and constraints for African language publishing for children and argues that market forces and language policy need to work in mutually reinforcing ways. Further progress is necessarily dependent on the political will to implement language-in-education policies that promote additive bilingualism and, in the process, guarantee sales for risk-averse publishers.

Varieties of capitalism and investments in human capital

This paper explores the relationship between national institutional archetypes and investments in training and development. A recent trend within the literature on comparative capitalism has been to explore the nature and extent of heterogeneity within the coordinated market economies (CMEs) of Europe. Based on a review of the existing comparative literature on training and development, and comparative firm-level survey evidence of differences in training and development practices, we both support and critique existing country clusters and argue for a more nuanced and flexible categorization.

Development appraisal in practice: some evidence from the planning system

Due to the requirement to demonstrate financial feasibility of policy proposals and scheme-specific planning obligations, development viability and development appraisal have become core themes in the English planning system. The objective of this paper is to evaluate the application of development appraisal in practice. The paper reviews the literature and the models available to assess the viability of development and analyses a sample 19 development viability appraisals to identify practice. The paper concludes that the practice of development appraisal deviates significantly from the tenets of capital budgeting theory. In particular, in addition to a propensity to oversimplify the timing of income and expenditure, the way in which debt, developer’s return and value and cost change are handled in practice illustrates a major gap between mainstream capital budgeting theory and development appraisal in practice.

Human capital and growth under political uncertainty

In this paper we show how political uncertainty may impede economic growth by reducing public investment in the formation of human capital, and how this negative effect of political uncertainty can be offset by a government contract. We present a model of growth with accumulation of human capital and government investment in education. We show that in a country with an unstable political system the government is reluctant to invest in human capital. Low government spending on education negatively affects productivity and slows growth. Furthermore, a politically unstable economy may be trapped in a stagnant equilibrium. We also demonstrate the role of a government retirement contract. Public investment in education and economic growth are higher when the future retirement compensation of the government depends on the future national income, in comparison with investment under zero or fixed retirement compensation.

Social capital and the role of trust in aspirations for higher education

This paper considers the role of social capital and trust in the aspirations for higher education of a group of socially disadvantaged girls. Drawing on data from a longitudinal, ethnographic case study of an underperforming secondary school, the paper considers current conceptualisations of social capital and its role in educational ambitions. The paper concludes by tentatively suggesting that whilst social capital is extremely helpful in explaining differences within groups, trust appears to be a pre-requisite for the investment and generation of social capital, as opposed to the other way around. The paper also suggests that young people are not necessarily dependent on their families for their social capital but are able to generate capital in their own right.

From projects into operations: lessons for data handover

Data from civil engineering projects can inform the operation of built infrastructure. This paper captures lessons for such data handover, from projects into operations, through interviews with leading clients and their supply chain. Clients are found to value receiving accurate and complete data. They recognise opportunities to use high quality information in decision-making about capital and operational expenditure; as well as in ensuring compliance with regulatory requirements. Providing this value to clients is a motivation for information management in projects. However, data handover is difficult as key people leave before project completion; and different data formats and structures are used in project delivery and operations. Lessons learnt from leading practice include defining data requirements at the outset, getting operations teams involved early, shaping the evolution of interoperable systems and standards, developing handover processes to check data rather than documentation, and fostering skills to use and update project data in operations

Cross-country effects of regulatory capital arbitrage

One reason for the recent asset price bubbles in many developed countries could be regulatory capital arbitrage. Regulatory and legal changes can help traditional banks to move their assets off their balance sheets into the lightly regulated shadows and thus enable regulatory arbitrage through the securitized sector. This paper adopts a global vector autoregression (GVAR) methodology to assess the effects of regulatory capital arbitrage on equity prices, house prices and economic activity across 11 OECD countries/ regions. A counterfactual experiment disentangles the effects of regulatory arbitrage following a change in the net capital rule for investment banks in April 2004 and the adoption of the Basel II Accord in June 2004. The results provide evidence for the existence of an international finance multiplier, with about half of the countries overshooting U.S. impulse responses. The counterfactual shows that regulatory arbitrage via the U.S. securitized sector may enhance the cross-country reallocation of capital from housing markets towards equity markets.

Habitual energy expenditure modifies the association between NOS3 gene polymorphisms and blood pressue

BACKGROUND: The endothelial nitric-oxide synthase (NOS3) gene encodes the enzyme (eNOS) that synthesizes the molecule nitric oxide, which facilitates endothelium-dependent vasodilation in response to physical activity. Thus, energy expenditure may modify the association between the genetic variation at NOS3 and blood pressure. METHODS: To test this hypothesis, we genotyped 11 NOS3 polymorphisms, capturing all common variations, in 726 men and women from the Medical Research Council (MRC) Ely Study (age (mean +/- s.d.): 55 +/- 10 years, body mass index: 26.4 +/- 4.1 kg/m(2)). Habitual/non-resting energy expenditure (NREE) was assessed via individually calibrated heart rate monitoring over 4 days. RESULTS: The intronic variant, IVS25+15 [G-->A], was significantly associated with blood pressure; GG homozygotes had significantly lower levels of diastolic blood pressure (DBP) (-2.8 mm Hg; P = 0.016) and systolic blood pressure (SBP) (-1.9 mm Hg; P = 0.018) than A-allele carriers. The interaction between NREE and IVS25+15 was also significant for both DBP (P = 0.006) and SBP (P = 0.026), in such a way that the effect of the GG-genotype on blood pressure was stronger in individuals with higher NREE (DBP: -4.9 mm Hg, P = 0.02. SBP: -3.8 mm Hg, P= 0.03 for the third tertile). Similar results were observed when the outcome was dichotomously defined as hypertension. CONCLUSIONS: In summary, the NOS3 IVS25+15 is directly associated with blood pressure and hypertension in white Europeans. However, the associations are most evident in the individuals with the highest NREE. These results need further replication and have to be ideally tested in a trial before being informative for targeted disease prevention. Eventually, the selection of individuals for lifestyle intervention programs could be guided by knowledge of genotype.

A word of caution on calculating market-based minimum capital risk requirements

This paper demonstrates that the use of GARCH-type models for the calculation of minimum capital risk requirements (MCRRs) may lead to the production of inaccurate and therefore inefficient capital requirements. We show that this inaccuracy stems from the fact that GARCH models typically overstate the degree of persistence in return volatility. A simple modification to the model is found to improve the accuracy of MCRR estimates in both back- and out-of-sample tests. Given that internal risk management models are currently in widespread usage in some parts of the world (most notably the USA), and will soon be permitted for EC banks and investment firms, we believe that our paper should serve as a valuable caution to risk management practitioners who are using, or intend to use this popular class of models.

Emotions and the habitus: Young people with socio-emotional differences (re)producing social, emotional and cultural capital in family and leisure space-times

In this paper we explore the importance of emotionally inter-dependent relationships to the functioning of embodied social capital and habitus. Drawing upon the experiences of young people with socio-emotional differences, we demonstrate how emotionally inter-dependent and relatively nurturing relationships are integral to the acquisition of social capital and to the co-construction and embodiment of habitus. The young people presented in this paper often had difficulties in forging social relationships and in acquiring symbolic and cultural capital in school spaces. However, we outline how these young people (re)produce and embody alternative kinds of habitus, based on emotionally reciprocal relationships forged through formal and informal leisure activities and familial and fraternal social relationships. These alternative forms of habitus provide sites of subjection, scope for acquiring social and cultural capital and a positive sense of identity in the face of problematic relations and experiences in school spaces.