Non-normal real estate return distributions by property type in the UK

Investment risk models with infinite variance provide a better description of distributions of individual property returns in the IPD UK database over the period 1981 to 2003 than normally distributed risk models. This finding mirrors results in the US and Australia using identical methodology. Real estate investment risk is heteroskedastic, but the characteristic exponent of the investment risk function is constant across time – yet it may vary by property type. Asset diversification is far less effective at reducing the impact of non‐systematic investment risk on real estate portfolios than in the case of assets with normally distributed investment risk. The results, therefore, indicate that multi‐risk factor portfolio allocation models based on measures of investment codependence from finite‐variance statistics are ineffective in the real estate context

Non-normal real estate return distributions by property type in the U.K.

Investment risk models with infinite variance provide a better description of distributions of individual property returns in the IPD database over the period 1981 to 2003 than Normally distributed risk models, which mirrors results in the U.S. and Australia using identical methodology. Real estate investment risk is heteroscedastic, but the Characteristic Exponent of the investment risk function is constant across time yet may vary by property type. Asset diversification is far less effective at reducing the impact of non-systematic investment risk on real estate portfolios than in the case of assets with Normally distributed investment risk. Multi-risk factor portfolio allocation models based on measures of investment codependence from finite-variance statistics are ineffectual in the real estate context.

The effect of cleft lip on cognitive development in school-aged children: a paradigm for examining sensitive period effects

Background:  Our previous investigation showed that infants with cleft lip who had undergone late (three-month) surgical repair (but not those with early, neonatal, repair) had significantly poorer cognitive development at 18 months than a group of unaffected control children. These differences were mediated by the quality of early mother–infant interactions. The present study examined whether this pattern persisted into later childhood. Method:  At 7 years, 93 index (44 early, and 49 late repair) and 77 control children were followed up and their cognitive development assessed (IQ, language and school achievements). Results:  Index children (particularly those with late lip repair) scored significantly lower than controls on tests of cognitive development. Group differences in Verbal IQ were mediated by 2 months’ maternal sensitivity; this was associated with 7-year Verbal IQ, even after controlling for later mother–child interactions. Conclusions:  Social interactions in the first few months may be of especial importance for child cognitive development. Interventions for infants with cleft lip should be directed at fostering the best possible parental care in infancy.