Relationships of Efficiency to Reproductive Disorders in Danish Milk Production: A Stochastic Frontier Analysis

Relationships of various reproductive disorders and milk production performance of Danish dairy farms were investigated. A stochastic frontier production function was estimated using data collected in 1998 from 514 Danish dairy farms. Measures of farm-level milk production efficiency relative to this production frontier were obtained, and relationships between milk production efficiency and the incidence risk of reproductive disorders were examined. There were moderate positive relationships between milk production efficiency and retained placenta, induction of estrus, uterine infections, ovarian cysts, and induction of birth. Inclusion of reproductive management variables showed that these moderate relationships disappeared, but directions of coefficients for almost all those variables remained the same. Dystocia showed a weak negative correlation with milk production efficiency. Farms that were mainly managed by young farmers had the highest average efficiency scores. The estimated milk losses due to inefficiency averaged 1142, 488, and 256 kg of energy-corrected milk per cow, respectively, for low-, medium-, and high-efficiency herds. It is concluded that the availability of younger cows, which enabled farmers to replace cows with reproductive disorders, contributed to high cow productivity in efficient farms. Thus, a high replacement rate more than compensates for the possible negative effect of reproductive disorders. The use of frontier production and efficiency/ inefficiency functions to analyze herd data may enable dairy advisors to identify inefficient herds and to simulate the effect of alternative management procedures on the individual herd's efficiency.

Canonical valuation of options in the presence of stochastic volatility

Proposed by M. Stutzer (1996), canonical valuation is a new method for valuing derivative securities under the risk-neutral framework. It is non-parametric, simple to apply, and, unlike many alternative approaches, does not require any option data. Although canonical valuation has great potential, its applicability in realistic scenarios has not yet been widely tested. This article documents the ability of canonical valuation to price derivatives in a number of settings. In a constant-volatility world, canonical estimates of option prices struggle to match a Black-Scholes estimate based on historical volatility. However, in a more realistic stochastic-volatility setting, canonical valuation outperforms the Black-Scholes model. As the volatility generating process becomes further removed from the constant-volatility world, the relative performance edge of canonical valuation is more evident. In general, the results are encouraging that canonical valuation is a useful technique for valuing derivatives. (C) 2005 Wiley Periodicals, Inc.

Phase-space analysis of bosonic spontaneous emission

We present phase-space techniques for the modelling of spontaneous emission in two-level bosonic atoms. The positive-P representation is shown to give a full and complete description within the limits of our model. The Wigner representation, even when truncated at second order, is shown to need a doubling of the phase-space to allow for a positive-definite diffusion matrix in the appropriate Fokker-Planck equation and still fails to agree with the full quantum results of the positive-P representation. We show that quantum statistics and correlations between the ground and excited states affect the dynamics of the emission process, so that it is in general non-exponential. (c) 2005 Elsevier B.V. All rights reserved.