A stochastic discount factor approach to asset pricing using panel data asymptotics

Using the Pricing Equation in a panel-data framework, we construct a novel consistent estimator of the stochastic discount factor (SDF) which relies on the fact that its logarithm is the "common feature" in every asset return of the economy. Our estimator is a simple function of asset returns and does not depend on any parametric function representing preferences. The techniques discussed in this paper were applied to two relevant issues in macroeconomics and finance: the first asks what type of parametric preference-representation could be validated by asset-return data, and the second asks whether or not our SDF estimator can price returns in an out-of-sample forecasting exercise. In formal testing, we cannot reject standard preference specifications used in the macro/finance literature. Estimates of the relative risk-aversion coefficient are between 1 and 2, and statistically equal to unity. We also show that our SDF proxy can price reasonably well the returns of stocks with a higher capitalization level, whereas it shows some difficulty in pricing stocks with a lower level of capitalization.

Recognizing a Single-Issue Spatial Election

A single-issue spatial election is a voter preference profile derived from an arrangement of candidates and voters on a line, with each voter preferring the nearer of each pair of candidates. We provide a polynomial-time algorithm that determines whether a given preference profile is a single-issue spatial election and, if so, constructs such an election. This result also has preference representation and mechanism design applications.

Evaluating viewpoint entropy for ribbon representation of protein structure

While many measures of viewpoint goodness have been proposed in computer graphics, none have been evaluated for ribbon representations of protein secondary structure. To fill this gap, we conducted a user study on Amazon’s Mechanical Turk platform, collecting human viewpoint preferences from 65 participants for 4 representative su- perfamilies of protein domains. In particular, we evaluated viewpoint entropy, which was previously shown to be a good predictor for human viewpoint preference of other, mostly non-abstract objects. In a second study, we asked 7 molecular biology experts to find the best viewpoint of the same protein domains and compared their choices with viewpoint entropy. Our results show that viewpoint entropy overall is a significant predictor of human viewpoint preference for ribbon representations of protein secondary structure. However, the accuracy is highly dependent on the complexity of the structure: while most participants agree on good viewpoints for small, non-globular structures with few secondary structure elements, viewpoint preference varies considerably for complex structures. Finally, experts tend to choose viewpoints of both low and high viewpoint entropy to emphasize different aspects of the respective structure.

Predictive neural coding of reward preference involves dissociable responses in human ventral midbrain and ventral striatum.

Food preferences are acquired through experience and can exert strong influence on choice behavior. In order to choose which food to consume, it is necessary to maintain a predictive representation of the subjective value of the associated food stimulus. Here, we explore the neural mechanisms by which such predictive representations are learned through classical conditioning. Human subjects were scanned using fMRI while learning associations between arbitrary visual stimuli and subsequent delivery of one of five different food flavors. Using a temporal difference algorithm to model learning, we found predictive responses in the ventral midbrain and a part of ventral striatum (ventral putamen) that were related directly to subjects' actual behavioral preferences. These brain structures demonstrated divergent response profiles, with the ventral midbrain showing a linear response profile with preference, and the ventral striatum a bivalent response. These results provide insight into the neural mechanisms underlying human preference behavior.

Stated preference methods and landscape ecology indicators: an example of transdisciplinarity in landscape economic valuation

This paper addresses the representation of landscape complexity in stated preferences research. It integrates landscape ecology and landscape economics and conducts the landscape analysis in a three-dimensional space to provide ecologically meaningful quantitative landscape indicators that are used as variables for the monetary valuation of landscape in a stated preferences study. Expected heterogeneity in taste intensity across respondents is addressed with a mixed logit model in Willingness to Pay space. Our methodology is applied to value, in monetary terms, the landscape of the Sorrento Peninsula in Italy, an area that has faced increasing pressure from urbanization affecting its traditional horticultural, herbaceous, and arboreal structure, with loss of biodiversity, and an increasing risk of landslides. We find that residents of the Sorrento Peninsula would prefer landscapes characterized by large open views and natural features. Residents also appear to dislike heterogeneous landscapes and the presence of lemon orchards and farmers' stewardship, which are associated with the current failure of protecting the traditional landscape. The outcomes suggest that the use of landscape ecology metrics in a stated preferences model may be an effective way to move forward integrated methodologies to better understand and represent landscape and its complexity.

Can wavelets improve the representation of forecast error covariances in variational data assimilation?

Two wavelet-based control variable transform schemes are described and are used to model some important features of forecast error statistics for use in variational data assimilation. The first is a conventional wavelet scheme and the other is an approximation of it. Their ability to capture the position and scale-dependent aspects of covariance structures is tested in a two-dimensional latitude-height context. This is done by comparing the covariance structures implied by the wavelet schemes with those found from the explicit forecast error covariance matrix, and with a non-wavelet- based covariance scheme used currently in an operational assimilation scheme. Qualitatively, the wavelet-based schemes show potential at modeling forecast error statistics well without giving preference to either position or scale-dependent aspects. The degree of spectral representation can be controlled by changing the number of spectral bands in the schemes, and the least number of bands that achieves adequate results is found for the model domain used. Evidence is found of a trade-off between the localization of features in positional and spectral spaces when the number of bands is changed. By examining implied covariance diagnostics, the wavelet-based schemes are found, on the whole, to give results that are closer to diagnostics found from the explicit matrix than from the nonwavelet scheme. Even though the nature of the covariances has the right qualities in spectral space, variances are found to be too low at some wavenumbers and vertical correlation length scales are found to be too long at most scales. The wavelet schemes are found to be good at resolving variations in position and scale-dependent horizontal length scales, although the length scales reproduced are usually too short. The second of the wavelet-based schemes is often found to be better than the first in some important respects, but, unlike the first, it has no exact inverse transform.

Neural correlates of cognitive dissonance and choice-induced preference change

According to many modern economic theories, actions simply reflect an individual's preferences, whereas a psychological phenomenon called “cognitive dissonance” claims that actions can also create preference. Cognitive dissonance theory states that after making a difficult choice between two equally preferred items, the act of rejecting a favorite item induces an uncomfortable feeling (cognitive dissonance), which in turn motivates individuals to change their preferences to match their prior decision (i.e., reducing preference for rejected items). Recently, however, Chen and Risen [Chen K, Risen J (2010) J Pers Soc Psychol 99:573–594] pointed out a serious methodological problem, which casts a doubt on the very existence of this choice-induced preference change as studied over the past 50 y. Here, using a proper control condition and two measures of preferences (self-report and brain activity), we found that the mere act of making a choice can change self-report preference as well as its neural representation (i.e., striatum activity), thus providing strong evidence for choice-induced preference change. Furthermore, our data indicate that the anterior cingulate cortex and dorsolateral prefrontal cortex tracked the degree of cognitive dissonance on a trial-by-trial basis. Our findings provide important insights into the neural basis of how actions can alter an individual's preferences.

Computing the numerical scale of the linguistic term set for the 2-tuple fuzzy linguistic representation model

When using linguistic approaches to solve decision problems, we need the techniques for computing with words (CW). Together with the 2-tuple fuzzy linguistic representation models (i.e., the Herrera and Mart´ınez model and the Wang and Hao model), some computational techniques for CW are also developed. In this paper, we define the concept of numerical scale and extend the 2-tuple fuzzy linguistic representation models under the numerical scale.We find that the key of computational techniques
based on linguistic 2-tuples is to set suitable numerical scale with
the purpose of making transformations between linguistic 2-tuples
and numerical values. By defining the concept of the transitive
calibration matrix and its consistent index, this paper develops an optimization model to compute the numerical scale of the linguistic term set. The desired properties of the optimization model are also presented. Furthermore, we discuss how to construct the transitive calibration matrix for decision problems using linguistic preference relations and analyze the linkage between the consistent index of the transitive calibration matrix and one of the linguistic preference relations. The results in this paper are pretty helpful to complete the fuzzy 2-tuple representation models for CW.

Unifying approaches to consensus across different preference representations

© 2015 Elsevier B.V. All rights reserved. Consensus measures can be useful in group decision making problems both to guide users toward more reasonable judgments and to give an overall indication of the support for the final decision. The level of consensus between decision makers can be measured in contexts where preferences over alternatives are expressed either as evaluations or scores, pairwise preferences, and weak orders, however these different representations often call for different approaches to consensus measurements. In this paper, we look at the distance metrics used to construct consensus measures in each of these settings and how consistent these are for preference profiles when they are converted from one representation to another. We develop some methods for consistent approaches across decision making settings and provide an example to help investigate differences between some of the commonly used distances.

Noradrenergic modulatoins of odor learning and odor representation in the rat

How experience alters neuronal ensemble dynamics and how locus coeruleus-mediated norepinephrine release facilitates memory formation in the brain are the topics of this thesis. Here we employed a visualization technique, cellular compartment analysis of temporal activity by fluorescence in situ hybridization (catFISH), to assess activation patterns of neuronal ensembles in the olfactory bulb (OB) and anterior piriform cortex (aPC) to repeated odor inputs. Two associative learning models were used, early odor preference learning in rat pups and adult rat go-no-go odor discrimination learning. With catFISH of an immediate early gene, Arc, we showed that odor representation in the OB and aPC was sparse (~5-10%) and widely distributed. Odor associative learning enhanced the stability of the rewarded odor representation in the OB and aPC. The stable component, indexed by the overlap between the two ensembles activated by the rewarded odor at two time points, increased from ~25% to ~50% (p = 0.004-1.43E⁻4; Chapter 3 and 4). Adult odor discrimination learning promoted pattern separation between rewarded and unrewarded odor representations in the aPC. The overlap between rewarded and unrewarded odor representations reduced from ~25% to ~14% (p = 2.28E⁻⁵). However, learning an odor mixture as a rewarded odor increased the overlap of the component odor representations in the aPC from ~23% to ~44% (p = 0.010; Chapter 4). Blocking both α- and β-adrenoreceptors in the aPC prevented highly similar odor discrimination learning in adult rats, and reduced OB mitral and granule ensemble stability to the rewarded odor. Similar treatment in the OB only slowed odor discrimination learning. However, OB adrenoceptor blockade disrupted pattern separation and ensemble stability in the aPC when the rats demonstrated deficiency in discrimination (Chapter 5). In another project, the role of α₂-adrenoreceptors in the OB during early odor preference learning was studied. OB α2-adrenoceptor activation was necessary for odor learning in rat pups. α₂-adrenoceptor activation was additive with β-adrenoceptor mediated signalling to promote learning (Chapter 2). Together, these experiments suggest that odor representations are highly adaptive at the early stages of odor processing. The OB and aPC work in concert to support odor learning and top-down adrenergic input exerts a powerful modulation on both learning and odor representation.

Equitable representation in councils: theory and an application to the United Nations Security Council

We analyze democratic equity in council voting games (CVGs). In a CVG, a voting body containing all members delegates decision-making to a (time-varying) subset of its members, as describes, e.g., the relationship between the United Nations General Assembly and the United Nations Security Council (UNSC). We develop a theoretical framework for analyzing democratic equitability in CVGs at both the country and region levels, and for different assumptions regarding preference correlation. We apply the framework to evaluate the equitability of the UNSC, and the claims of those who seek to reform it. We find that the individual permanent members are overrepresented by between 21.3 times (United Kingdom) and 3.8 times (China) from a country-level perspective, while from a region perspective Eastern Europe is the most heavily overrepresented region with more than twice its equitable representation, and Africa the most heavily underrepresented. Our equity measures do not preclude some UNSC members from exercising veto rights, however.

On the Incorporation of Psychologically-Driven 'Music' Preference Models for Music Recommendation

There are hundreds of millions of songs available to the public, necessitating the use of music recommendation systems to discover new music. Currently, such systems account for only the quantitative musical elements of songs, failing to consider aspects of human perception of music and alienating the listener’s individual preferences from recommendations. Our research investigated the relationships between perceptual elements of music, represented by the MUSIC model, with computational musical features generated through The Echo Nest, to determine how a psychological representation of music preference can be incorporated into recommendation systems to embody an individual’s music preferences. Our resultant model facilitates computation of MUSIC factors using The Echo Nest features, and can potentially be integrated into recommendation systems for improved performance.

Muslim women and sport: participation, consumption, representation

This paper proposes a new framework for approaching Muslim women in sport, beyond the oft-utilised framework of sports development. In preference to a deficit model of sports participation, where marginalized groups and individuals are incorporated into mainstream culture as players of sport, we bring together three domains that remain under-investigated in terms of Muslim women and sport in Australia and internationally – participation, consumption and representation. By shifting the research focus toward the contribution of both active and passive sports participation to fostering pleasure, enjoyment and self-determination for Muslim women, possibilities emerge to expand on the narrow priority formulation and policy fields of ‘ethnicity’ and ‘well-being’ focused on physical health outcomes through which Muslim women and sports-based interventions are commonly framed.

Perceptions of individuals living with spinal cord injury toward preference-based quality of life instruments : a qualitative exploration

BACKGROUND: Generic preference-based health-related quality of life instruments are widely used to measure health benefit within economic evaluation. The availability of multiple instruments raises questions about their relative merits and recent studies have highlighted the paucity of evidence regarding measurement properties in the context of spinal cord injury (SCI). This qualitative study explores the views of individuals living with SCI towards six established instruments with the objective of identifying 'preferred' outcome measures (from the perspective of the study participants). METHODS: Individuals living with SCI were invited to participate in one of three focus groups. Eligible participants were identified from Vancouver General Hospital's Spine Program database; purposive sampling was used to ensure representation of different demographics and injury characteristics. Perceptions and opinions were solicited on the following questionnaires: 15D, Assessment of Quality of Life 8-dimension (AQoL-8D), EQ-5D-5L, Health Utilities Index (HUI), Quality of Well-Being Scale Self-Administered (QWB-SA), and the SF-36v2. Framework analysis was used to analyse the qualitative information gathered during discussion. Strengths and limitations of each questionnaire were thematically identified and managed using NVivo 9 software. RESULTS: Major emergent themes were (i) general perceptions, (ii) comprehensiveness, (iii) content, (iv) wording and (v) features. Two sub-themes pertinent to content were also identified; 'questions' and 'options'. All focus group participants (n = 15) perceived the AQoL-8D to be the most relevant instrument to administer within the SCI population. This measure was considered to be comprehensive, with relevant content (i.e. wheelchair inclusive) and applicable items. Participants had mixed perceptions about the other questionnaires, albeit to varying degrees. CONCLUSIONS: Despite a strong theoretical underpinning, the AQoL-8D (and other AQoL instruments) is infrequently used outside its country of origin (Australia). Empirical comparative analyses of the favoured instruments identified in this qualitative study are necessary within the context of spinal cord injury.