On the performance of the tick test

In financial research, the sign of a trade (or identity of trade aggressor) is not always available in the transaction dataset and it can be estimated using a simple set of rules called the tick test. In this paper we investigate the accuracy of the tick test from an analytical perspective by providing a closed formula for the performance of the prediction algorithm. By analyzing the derived equation, we provide formal arguments for the use of the tick test by proving that it is bounded to perform better than chance (50/50) and that the set of rules from the tick test provides an unbiased estimator of the trade signs. On the empirical side of the research, we compare the values from the analytical formula against the empirical performance of the tick test for fifteen heavily traded stocks in the Brazilian equity market. The results show that the formula is quite realistic in assessing the accuracy of the prediction algorithm in a real data situation.

Hydrology and geomorphology of the Upper White Nile lakes and their relevance for water resources management in the Nile basin

Remote sensing data and digital elevation models were utilized to extract the catchment hydrological parameters and to delineate storage areas for the Ugandan Equatorial Lakes region. Available rainfall/discharge data are integrated with these morphometric data to construct a hydrological model that simulates the water balance of the different interconnected basins and enables the impact of potential management options to be examined. The total annual discharges of the basins are generally very low (less than 7% of the total annual rainfall). The basin of the shallow (5 m deep) Lake Kioga makes only a minor hydrological contribution compared with other Equatorial Lakes, because most of the overflow from Lake Victoria basin into Lake Kioga is lost by evaporation and evapotranspiration. The discharge from Lake Kioga could be significantly increased by draining the swamps through dredging and deepening certain channel reaches. Development of hydropower dams on the Equatorial Lakes will have an adverse impact on the annual water discharge downstream, including the occasional reduction of flow required for filling up to designed storage capacities and permanently increasing the surface areas of water that is exposed to evaporation. On the basis of modelling studies, alternative sites are proposed for hydropower development and water storage schemes

A reprocessing for climate of sea surface temperature from the Along-Track Scanning Radiometers: a new retrieval scheme

We present a new coefficient-based retrieval scheme for estimation of sea surface temperature (SST) from the Along Track Scanning Radiometer (ATSR) instruments. The new coefficients are banded by total column water vapour (TCWV), obtained from numerical weather prediction analyses. TCWV banding reduces simulated regional retrieval biases to < 0.1 K compared to biases ~ 0.2 K for global coefficients. Further, detailed treatment of the instrumental viewing geometry reduces simulated view-angle related biases from ~ 0.1 K down to < 0.005 K for dual-view retrievals using channels at 11 and 12 μm. A novel analysis of trade-offs related to the assumed noise level when defining coefficients is undertaken, and we conclude that adding a small nominal level of noise (0.01 K) is optimal for our purposes. When applied to ATSR observations, some inter-algorithm biases appear as TCWV-related differences in SSTs estimated from different channel combinations. The final step in coefficient determination is to adjust the offset coefficient in each TCWV band to match results from a reference algorithm. This reference uses the dual-view observations of 3.7 and 11 μm. The adjustment is independent of in situ measurements, preserving independence of the retrievals. The choice of reference is partly motivated by uncertainty in the calibration of the 12 μm of Advanced ATSR. Lastly, we model the sensitivities of the new retrievals to changes to TCWV and changes in true SST, confirming that dual-view SSTs are most appropriate for climatological applications

Computer simulations of pyroclastic flows from dome collapse

We present a method of simulating both the avalanche and surge components of pyroclastic flows generated by lava collapsing from a growing Pelean dome. This is used to successfully model the pyroclastic flows generated on 12 May 1996 by the Soufriere Hills volcano, Montserrat. In simulating the avalanche component we use a simple 3-fold parameterisation of flow acceleration for which we choose values using an inverse method. The surge component is simulated by a 1D hydraulic balance of sedimentation of clasts and entrainment of air away from the avalanche source. We show how multiple simulations based on uncertainty of the starting conditions and parameters, specifically location and size (mass flux), could be used to map hazard zones.

The influence of ocean flow on newly forming sea ice

The heat and mass balance of the Arctic Ocean is very sensitive to the growth and decay of sea ice and the interaction between the heat and salt fields in the oceanic boundary layer. The hydraulic roughness of sea ice controls the detailed nature of turbulent fluxes in the boundary layer and hence is an important ingredient in model parameterizations. We describe a novel mechanism for the generation of corrugations of the sea ice–ocean interface, present a mathematical analysis elucidating the mechanism, and present numerical calculations for geophysically relevant conditions. The mechanism relies on brine flows developing in the sea ice due to Bernoulli suction by flow of ocean past the interface. For oceanic shears at the ice interface of 0.2 s−1, we expect the corrugations to form with a wavelength dependent upon the permeability structure of the sea ice which is described herein. The mechanism should be particularly important during sea ice formation in wind-maintained coastal polynyas and in leads. This paper applies our earlier analyses of the fundamental instability to field conditions and extends it to take account of the anisotropic and heterogeneous permeability of sea ice.

Ecophysiological and bioclimatic foundations for a global plant functional classification

Question: What plant properties might define plant functional types (PFTs) for the analysis of global vegetation responses to climate change, and what aspects of the physical environment might be expected to predict the distributions of PFTs? Methods: We review principles to explain the distribution of key plant traits as a function of bioclimatic variables. We focus on those whole-plant and leaf traits that are commonly used to define biomes and PFTs in global maps and models. Results: Raunkiær's plant life forms (underlying most later classifications) describe different adaptive strategies for surviving low temperature or drought, while satisfying requirements for reproduction and growth. Simple conceptual models and published observations are used to quantify the adaptive significance of leaf size for temperature regulation, leaf consistency for maintaining transpiration under drought, and phenology for the optimization of annual carbon balance. A new compilation of experimental data supports the functional definition of tropical, warm-temperate, temperate and boreal phanerophytes based on mechanisms for withstanding low temperature extremes. Chilling requirements are less well quantified, but are a necessary adjunct to cold tolerance. Functional traits generally confer both advantages and restrictions; the existence of trade-offs contributes to the diversity of plants along bioclimatic gradients. Conclusions: Quantitative analysis of plant trait distributions against bioclimatic variables is becoming possible; this opens up new opportunities for PFT classification. A PFT classification based on bioclimatic responses will need to be enhanced by information on traits related to competition, successional dynamics and disturbance.

Dust sources and deposition during the last glacial maximum and current climate: a comparison of model results with paleodata from ice cores and marine sediments

Mineral dust aerosols in the atmosphere have the potential to affect the global climate by influencing the radiative balance of the atmosphere and the supply of micronutrients to the ocean. Ice and marine sediment cores indicate that dust deposition from the atmosphere was at some locations 2–20 times greater during glacial periods, raising the possibility that mineral aerosols might have contributed to climate change on glacial-interglacial time scales. To address this question, we have used linked terrestrial biosphere, dust source, and atmospheric transport models to simulate the dust cycle in the atmosphere for current and last glacial maximum (LGM) climates. We obtain a 2.5-fold higher dust loading in the entire atmosphere and a twenty-fold higher loading in high latitudes, in LGM relative to present. Comparisons to a compilation of atmospheric dust deposition flux estimates for LGM and present in marine sediment and ice cores show that the simulated flux ratios are broadly in agreement with observations; differences suggest where further improvements in the simple dust model could be made. The simulated increase in high-latitude dustiness depends on the expansion of unvegetated areas, especially in the high latitudes and in central Asia, caused by a combination of increased aridity and low atmospheric [CO2]. The existence of these dust source areas at the LGM is supported by pollen data and loess distribution in the northern continents. These results point to a role for vegetation feedbacks, including climate effects and physiological effects of low [CO2], in modulating the atmospheric distribution of dust.

Costing conservation: an expert appraisal of the pollinator habitat benefits of England’s entry level stewardship

Pollination services provided by insects play a key role in English crop production and wider ecology. Despite growing evidence of the negative effects of habitat loss on pollinator populations, limited policy support is available to reverse this pressure. One measure that may provide beneficial habitat to pollinators is England’s entry level stewardship agri-environment scheme. This study uses a novel expert survey to develop weights for a range of models which adjust the balance of Entry Level Stewardship options within the current area of spending. The annual costs of establishing and maintaining these option compositions were estimated at £59.3–£12.4 M above current expenditure. Although this produced substantial reduction in private cost:benefit ratios, the benefits of the scheme to pollinator habitat rose by 7–140 %; significantly increasing the public cost:benefit ratio. This study demonstrates that the scheme has significant untapped potential to provide good quality habitat for pollinators across England, even within existing expenditure. The findings should open debate on the costs and benefits of specific entry level stewardship management options and how these can be enhanced to benefit both participants and biodiversity more equitably.

Measuring the impacts of distortions in the European Union cotton sector: a partial equilibrium analysis using the ATPSM model framework

The “cotton issue” has been a topic of several academic discussions for trade policy analysts. However the design of trade and agricultural policy in the EU and the USA has become a politically sensitive matter throughout the last five years. This study utilizing the Agricultural Trade Policy Simulation Model (ATPSM) aims to gain insights into the global cotton market, to explain why domestic support for cotton has become an issue, to quantify the impact of the new EU agricultural policy on the cotton sector, and to measure the effect of eliminating support policies on production and trade. Results indicate that full trade liberalization would lead the four West African countries to better terms of trade with the EU. If tariff reduction follows the so-called Swiss formula, world prices would increase by 3.5%.

Coase and international business: the origin and development of internalisation theory

The internalisation theory of the multinational enterprise is a significant intellectual legacy of Ronald Coase. US direct investment in Europe became highly political in the 1960s, and neoclassical trade theory had no explanation. A theory of the multi-plant enterprise was required, and internalisation theory filled this gap. Using Coasian economics to explain the ownership of production plants, and the geography of trade to explain their location, internalisation theory offered a comprehensive account of MNEs and their role in the international economy. This paper outlines the development of the theory, explains the Coasian contribution, and examines in detail the early work of Hymer, McManus and Buckley and Casson. It then reviews the current state of internalisation theory and suggests some future developments.

The impact of monsoon intraseasonal variability on renewable power generation in India

India is increasingly investing in renewable technology to meet rising energy demands, with hydropower and other renewables comprising one-third of current installed capacity. Installed wind-power is projected to increase 5-fold by 2035 (to nearly 100GW) under the International Energy Agency’s New Policies scenario. However, renewable electricity generation is dependent upon the prevailing meteorology, which is strongly influenced by monsoon variability. Prosperity and widespread electrification are increasing the demand for air conditioning, especially during the warm summer. This study uses multi-decadal observations and meteorological reanalysis data to assess the impact of intraseasonal monsoon variability on the balance of electricity supply from wind-power and temperature-related demand in India. Active monsoon phases are characterised by vigorous convection and heavy rainfall over central India. This results in lower temperatures giving lower cooling energy demand, while strong westerly winds yield high wind-power output. In contrast, monsoon breaks are characterised by suppressed precipitation, with higher temperatures and hence greater demand for cooling, and lower wind-power output across much of India. The opposing relationship between wind-power supply and cooling demand during active phases (low demand, high supply) and breaks (high demand, low supply) suggests that monsoon variability will tend to exacerbate fluctuations in the so-called demand-net-wind (i.e., electrical demand that must be supplied from non-wind sources). This study may have important implications for the design of power systems and for investment decisions in conventional schedulable generation facilities (such as coal and gas) that are used to maintain the supply/demand balance. In particular, if it is assumed (as is common) that the generated wind-power operates as a price-taker (i.e., wind farm operators always wish to sell their power, irrespective of price) then investors in conventional facilities will face additional weather-volatility through the monsoonal impact on the length and frequency of production periods (i.e. their load-duration curves).

A traceable physical calibration of the vertical advection-diffusion equation for modelling ocean heat uptake

The classic vertical advection-diffusion (VAD) balance is a central concept in studying the ocean heat budget, in particular in simple climate models (SCMs). Here we present a new framework to calibrate the parameters of the VAD equation to the vertical ocean heat balance of two fully-coupled climate models that is traceable to the models’ circulation as well as to vertical mixing and diffusion processes. Based on temperature diagnostics, we derive an effective vertical velocity w∗ and turbulent diffusivity k∗ for each individual physical process. In steady-state, we find that the residual vertical velocity and diffusivity change sign in mid-depth, highlighting the different regional contributions of isopycnal and diapycnal diffusion in balancing the models’ residual advection and vertical mixing. We quantify the impacts of the time-evolution of the effective quantities under a transient 1%CO2 simulation and make the link to the parameters of currently employed SCMs.

Full effects of land use change in the representative concentration pathways

Future land use change (LUC) is an important component of the IPCC representative concentration pathways (RCPs), but in these scenarios' radiative forcing targets the climate impact of LUC only includes greenhouse gases. However, climate effects due to physical changes of the land surface can be as large. Here we show the critical importance of including non-carbon impacts of LUC when considering the RCPs. Using an ensemble of climate model simulations with and without LUC, we show that the net climate effect is very different from the carbon-only effect. Despite opposite signs of LUC, all the RCPs assessed here have a small net warming from LUC because of varying biogeophysical effects, and in RCP4.5 the warming is outside of the expected variability. The afforestation in RCP4.5 decreases surface albedo, making the net global temperature anomaly over land around five times larger than RCPs 2.6 and 8.5, for around twice the amount of LUC. Consequent changes to circulation in RCP4.5 in turn reduce Arctic sea ice cover. The small net positive temperature effect from LUC could make RCP4.5's universal carbon tax, which incentivizes retaining and growing forest, counter productive with respect to climate. However, there are spatial differences in the balance of impacts, and potential climate gains would need to be assessed against other environmental aims.

The determinants of a cross market arbitrage opportunity: theory and evidence for the European bond market

This paper examines the determinants of cross-platform arbitrage profits. We develop a structural model that enables us to decompose the likelihood of an arbitrage opportunity into three distinct factors: the fixed cost to trade the opportunity, the level at which one of the platforms delays a price update and the impact of the order flow on the quoted prices (inventory and asymmetric information effects). We then investigate the predictions from the theoretical model for the European Bond market with the estimation of a probit model. Our main finding is that the results found in the empirical part corroborate strongly the predictions from the structural model. The event of a cross market arbitrage opportunity has a certain degree of predictability where an optimal ex ante scenario is represented by a low level of spreads on both platforms, a time of the day close to the end of trading hours and a high volume of trade.

Seafood safety and quality: an analysis of the supply chain in the Sultanate of Oman

The globalization of trade in fish has created many challenges for the developing world specifically with regard to food safety and quality. International organisations have established a good basis for standards in international trade. Whilst these requirements are frequently embraced by the major importers (such as Japan, the EU and the USA), they often impose additional safety requirements and regularly identify batches which fail to meet their strict standards. Creating an effective national seafood control system which meets both the internal national needs as well the requirements for the export market can be challenging. Many countries adopt a dual system where seafood products for the major export markets are subject to tight control whilst the majority of the products (whether for the local market or for more regional trade) are less tightly controlled. With regional liberalization also occurring, deciding on appropriate controls is complex. In the Sultanate of Oman, fisheries production is one of the countries' chief sources of economic revenue after oil production and is a major source of the national food supply. In this paper the structure of the fish supply chain has been analysed and highlighted the different routes operating for the different markets. Although much of the fish are consumed within Oman, there is a major export trade to the local regional markets. Much smaller quantities meet the more stringent standards imposed by the major importing countries and exports to these are limited. The paper has considered the development of the Omani fish control system including the key legislative documents and the administrative structures that have been developed. Establishing modern controls which satisfy the demands of the major importers is possible but places additional costs on businesses. Enhanced controls such as HACCP and other management standards are required but can be difficult to justify when alternative markets do not specify these. These enhanced controls do however provide additional consumer protection and can bring benefits to local consumers. The Omani government is attempting to upgrade the system of controls and has made tremendous progress toward the implementation of HACCP and introducing enhanced management systems into its industrial sector. The existence of strengthened legislative and government support, including subsidies, has encouraged some businesses to implement HACCP. The current control systems have been reviewed and a SWOT analysis approach used to identify key factors for their future development. The study shows that seafood products in the supply chain are often exposed to lengthy handling and distribution process before reaching the consumers, a typical issue faced by many developing countries. As seafood products are often perishable, they safety is compromised if not adequately controlled. The enforcement of current food safety laws in the Sultanate of Oman is shared across various government agencies. Consequently, there is a need to harmonize all regulatory requirements, enhancing the domestic food protection and to continue to work towards a fully risk-based approach in order to compete successfully in the global market.