Exploring the link between In-store physical shopping behavior and purchases

Only little research investigates the relationship between consumer purchases and in-store physical shopping behavior, largely because of the difficulty involved with reconciling a precise observation of in-store behavior with a robust statistical analyses of the data. Using an innovative data collection method, this article determines that physical shopping behavior manifests itself along two main dimensions: shopping width (behavioral scope throughout the store) and shopping depth (specific store elements). Both dimensions have strong impacts on purchases: the former tends to influence the number of items bought, and the latter affects the price of purchased items, depending on the product category.

Making energy service companies (ESCOS) future fit

Energy service companies (ESCOs) are faced with a range of challenges and opportunities associated with the rapidly changing and flexible requirements of energy customers (end users) and rapid improvements in technologies associated with energy and ICT. These opportunities for innovation include better prediction of energy demand, transparency of data to the end user, flexible and time dependent energy pricing and a range of novel finance models. The liberalisation of energy markets across the world has leads to a very small price differential between suppliers on the unit cost of energy. Energy companies are therefore looking to add additional layers of value using service models borrowed from the manufacturing industry. This opens a range of new product and service offerings to energy markets and consumers and has implications for the overall efficiency, utility and price of energy provision.

Option Pricing by Branching Process

2000 Mathematics Subject Classification: 60J80, 62P05.

International cooperation against climate change: institutions, policies and their efficiency

In the 20th century nature of the world economy has started to change significantly, and the former state-centric constellation disappeared. Several development factors that induced the change are still active and nowadays we live in a much different world. The world economy consists of transnational networks; these complicated systems have a great impact on the world of states. The transnational actors’ (multinational corporations, non-governmental organizations etc) influence became very essential as they are able to mobilize the society, have high expertise (think tanks), but it is also important to note their financial strength and moral effects (norm entrepreneurs).

Climate change in game theory

The study provides an overview of the application possibilities of game theory to climate change. The characteristics of games are adapted to the topics of climate and carbon. The importance of uncertainty, probability, marginal value of adaptation, common pool resources, etc. are tailored to the context of international relations and the challenge of global warming.

Mitigation and adaptation to climate change

Climate change produces significant social and economic impacts in most parts of the world, thus global action is needed to address climate change. In this chapter, the different possibilities of mitigation are explored from different points of view, and analyse the possibilities of adaptation to climate change. First, substantial reduction of GHG emission is needed, on the other hand adaptation action must deal with the inevitable impacts. According to the assessment of the chapter, it is essential that coordinated actions be taken at an EU level. In our argumentation, a macroeconomic model is used for the cost- benefit analysis of GHG gas emissions reduction. The GHG emission structure is analysed on European and global level. Even in the case of a successful mitigation strategy there rest the long-term effects of climate change which will need a coherent adaptation strategy to be dealt with. Although certain adaptation measures already have been taken, these initiatives are still very modest, and insufficient to deal with the economic effects of climate change properly.

Carbon pricing: theory and practice

Carbon pricing policy is a fundamental humanly devised theoretical and practical cornerstone in the fight against climate change. It involves short term and long term policies, theoretical and practical considerations. A quantitative global stabilisation target range for the stock of greenhouse gases in the atmosphere is needed, because it is an important and useful foundation in the shaping of a comprehensive climate pricing policy. A global stabilisation target range is obviously a long term policy to control climate change and events ensuing excessive increase in temperature. Setting long term objectives in the fight against climate change are substantial in avoiding catastrophic consequences therefore short term policies, which aim advances in emission reductions, have to be consistent with the pre-defined long term stabilisation goals. Short term policy reaction means using price-driven instruments like taxes and tradable quotas. These instruments allow broad flexibility in the parameters of emission reduction, and provide opportunities and incentives wherewith the cost of mitigation and abatement can be kept down. Taxes and tradable quotas give the flexibility in how, where and when emission reduction can be accomplished thereby reaching agreements between states and companies may result an appropriate and environment-conscious emission scheme, that can fit into the long term objectives.

Climate change impacts on migration and labour market

Floods, droughts and monsoons have always disturbed human settlements, but there are more settlements now and more people in the world. Therefore, if a natural disaster happens, more will suffer than ever before. Moreover, climate in the past several decades has been greatly degraded by anthropogenic activity. In some cases, the chain of causality of human influence on the climate is direct and unambiguous (e.g. the effects of irrigation on local humidity), though there are instances where it is less clear. Presently, the scientific consensus (IPCC, 2007) on climate change is that human activity is very likely the cause for the rapid increase of global average temperatures, more generally known as global warming.

Solvency risk minimizing guaranteed returns in life insurance

Return guarantee constitutes a key ingredient of classical life insurance premium calculation. In the current low interest rate environment insurers face increasingly strong financial incentives to reduce guaranteed returns embedded in life insurance contracts. However, return guarantee lowering efforts are restrained by associated demand effects, since a higher guaranteed return makes the net price of the insurance cover lower. This tradeoff between possibly higher future insurance obligations and the possibility of a larger demand for life insurance products can theoretically also be considered when determining optimal guaranteed returns. In this paper, optimality of return guarantee levels is analyzed from a solvency point of view. Availability and some other properties of optimal solutions for guaranteed returns are explored and compared in a simple model for two measures of solvency risk (company-level and contract-level VaR). The paper concludes that a solvency risk minimizing optimal guaranteed return may theoretically exist, although its practical availability can be impeded by economic and regulatory constraints.

Three essays on asset pricing

In this dissertation, I investigate three related topics on asset pricing: the consumption-based asset pricing under long-run risks and fat tails, the pricing of VIX (CBOE Volatility Index) options and the market price of risk embedded in stock returns and stock options. These three topics are fully explored in Chapter II through IV. Chapter V summarizes the main conclusions. In Chapter II, I explore the effects of fat tails on the equilibrium implications of the long run risks model of asset pricing by introducing innovations with dampened power law to consumption and dividends growth processes. I estimate the structural parameters of the proposed model by maximum likelihood. I find that the stochastic volatility model with fat tails can, without resorting to high risk aversion, generate implied risk premium, expected risk free rate and their volatilities comparable to the magnitudes observed in data. In Chapter III, I examine the pricing performance of VIX option models. The contention that simpler-is-better is supported by the empirical evidence using actual VIX option market data. I find that no model has small pricing errors over the entire range of strike prices and times to expiration. In general, Whaley’s Black-like option model produces the best overall results, supporting the simpler-is-better contention. However, the Whaley model does under/overprice out-of-the-money call/put VIX options, which is contrary to the behavior of stock index option pricing models. In Chapter IV, I explore risk pricing through a model of time-changed Lvy processes based on the joint evidence from individual stock options and underlying stocks. I specify a pricing kernel that prices idiosyncratic and systematic risks. This approach to examining risk premia on stocks deviates from existing studies. The empirical results show that the market pays positive premia for idiosyncratic and market jump-diffusion risk, and idiosyncratic volatility risk. However, there is no consensus on the premium for market volatility risk. It can be positive or negative. The positive premium on idiosyncratic risk runs contrary to the implications of traditional capital asset pricing theory.

Recreational Food Service is Big Business

In the analysis - Recreational Food Service Is Big Business - by Gary Horvath, President, Recreational Foodservice Division, Service America Corporation and Mickey Warner, Associate Professor School of Hospitality Management at Florida International University, Horvath and Warner initially state: “Recreational food service is very different from routine food service management. The authors review the market and the management planning and challenges that create that difference.” Recreational food is loosely defined by the authors as food for special events. These can be one-time events, repeated events that are not on a fixed schedule [i.e. concerts], weekly events such as football-baseball-or basketball games, or other similar venues. Concessions are a large part of these fan based settings. “An anticipated 101,000 fans at a per capita spending of $5-6 [were expected]. A typical concessions menu of hot dogs, popcorn, soda, beer, snacks, novelty foods, candy, and tobacco products comprises this market segment,” say Horvath and Warner in reference to the Super-Bowl XXI football championship game, held in Rose Bowl stadium in Pasadena, California, on January 25, 1987. Some of the article is based upon that event. These food service efforts focus on the individual fan, but do extend to the corporate-organizational level as well. Your authors will have you know that catering is definitely a part of this equation. The monies spent and earned are phenomenal. “Special events of this type attract numerous corporate catering opportunities for companies entertaining VIP guest lists,” the authors inform. “Hospitality tents usually consist of a pregame cocktail party and buffet and a post-game celebration with musical entertainment held in lavishly decorated tents erected at the site. In this case a total of 5,000 covers, at a price of $200 each, for 12-15 separate parties were anticipated.” Horvath and Warner also want you to know that novelties and souvenirs make up an essential part of this, the recreational food service market. “Novelties and souvenirs are a primary market and source of revenue for every stadium food service operator,” say Horvath and Warner. The term, “per capita spending is the measurement used by the industry to evaluate sales potential per attendee at an event,” say the authors. Of course, with the solid revenue figures involved as well as the number of people anticipated for such events, planning is crucial, say Horvath and Warner. Training of staff, purchasing and supply, money and banking, facility access, and equipment, are a few of the elements to be negotiated. Through both graphs and text, Horvath and Warner do provide a fairly detailed outline of what a six-step event plan consists of.

Global Pricing Strategy for a Quick-Service Restaurant Chain

The purpose of this paper is to compare prices for a popular quick-service restaurant chain (i.e. McDonalds’) across countries throughout the world using the “Big Mac Index” published by “The Economist.” The index was originally developed to measure the valuation of international currencies against the U.S. dollar. The analysis in this study examines the relationship between the price of a Big Mac and other variables such as the cost of beef, price elasticity, and income. Finally, these relationships are reviewed to draw inferences concerning the use of demand, costs, and competition in setting prices.

Three Essays on Asset Pricing

In this dissertation, I investigate three related topics on asset pricing: the consumption-based asset pricing under long-run risks and fat tails, the pricing of VIX (CBOE Volatility Index) options and the market price of risk embedded in stock returns and stock options. These three topics are fully explored in Chapter II through IV. Chapter V summarizes the main conclusions. In Chapter II, I explore the effects of fat tails on the equilibrium implications of the long run risks model of asset pricing by introducing innovations with dampened power law to consumption and dividends growth processes. I estimate the structural parameters of the proposed model by maximum likelihood. I find that the stochastic volatility model with fat tails can, without resorting to high risk aversion, generate implied risk premium, expected risk free rate and their volatilities comparable to the magnitudes observed in data. In Chapter III, I examine the pricing performance of VIX option models. The contention that simpler-is-better is supported by the empirical evidence using actual VIX option market data. I find that no model has small pricing errors over the entire range of strike prices and times to expiration. In general, Whaley’s Black-like option model produces the best overall results, supporting the simpler-is-better contention. However, the Whaley model does under/overprice out-of-the-money call/put VIX options, which is contrary to the behavior of stock index option pricing models. In Chapter IV, I explore risk pricing through a model of time-changed Lévy processes based on the joint evidence from individual stock options and underlying stocks. I specify a pricing kernel that prices idiosyncratic and systematic risks. This approach to examining risk premia on stocks deviates from existing studies. The empirical results show that the market pays positive premia for idiosyncratic and market jump-diffusion risk, and idiosyncratic volatility risk. However, there is no consensus on the premium for market volatility risk. It can be positive or negative. The positive premium on idiosyncratic risk runs contrary to the implications of traditional capital asset pricing theory.

Recanto do vale do pium: condomínio de habitações com ênfase no baixo impacto ambiental e no desempenho térmico do ambiente construído

This work describes the design process of a small recreational gated community in Pium, Nísia Floresta/RN, from concept to final design stages, with emphasis on low environmental impact, thermal comfort and the spatial quality of housing. The process consisted in a review of the literature and relevant standards, studies of design references and architectural programming. The project development was initially focused on the project’s feasibility, with the definition of the number of units, implantation, size and location of the dwellings and the common areas of the development. Two types of houses (four low rise and five duplex units) have been proposed in order to attend the premises of architectural programming. The conception of the architectural design began with the rooms’ zoning according to the lots. This resulted in the pre-selection of three alternatives that were evaluated in terms of spatial quality and environmental performance. The development of sketches focused on the envelope consistent with the bioclimatic guidelines and on the language of the compatible proposal with the lowest possible environmental impact of the building system, which resulted in the selection of the eucalyptus wood type. During the working drawings, the Quality Technical Regulation for the Level of Energy Efficiency Residential Buildings (RTQ -R) was adopted for the evaluation of the envelope, which resulted in "B" level of efficiency for the first case. After minor adjustments, mainly in frames, the efficiency level rose to "A", demonstrating that early project decisions contributed to the envelope energy performance. Besides the design of the two types of units, the final proposal of the gated community includes the design of the equipment for the common areas (entrance, multipurpose room and support and service sector), and the descriptive texts explaining the project and construction’s details.

Essays in Macro Finance

I study the link between capital markets and sources of macroeconomic risk. In chapter 1 I show that expected inflation risk is priced in the cross section of stock returns even after controlling for cash flow growth and volatility risks. Motivated by this evidence I study a long run risk model with a built-in inflation non-neutrality channel that allows me to decompose the real stochastic discount factor into news about current and expected cash flow growth, news about expected inflation and news about volatility. The model can successfully price a broad menu of assets and provides a setting for analyzing cross sectional variation in expected inflation risk premium. For industries like retail and durable goods inflation risk can account for nearly a third of the overall risk premium while the energy industry and a broad commodity index act like inflation hedges. Nominal bonds are exposed to expected inflation risk and have inflation premiums that increase with bond maturity. The price of expected inflation risk was very high during the 70's and 80's, but has come down a lot since being very close to zero over the past decade. On average, the expected inflation price of risk is negative, consistent with the view that periods of high inflation represent a "bad" state of the world and are associated with low economic growth and poor stock market performance. In chapter 2 I look at the way capital markets react to predetermined macroeconomic announcements. I document significantly higher excess returns on the US stock market on macro release dates as compared to days when no macroeconomic news hit the market. Almost the entire equity premium since 1997 is being realized on days when macroeconomic news are released. At high frequency, there is a pattern of returns increasing in the hours prior to the pre-determined announcement time, peaking around the time of the announcement and dropping thereafter.