Design, implementation and testing of an integrated branch and bound algorithm for piecewise linear and discrete programming problems within an LP framework

A number of discrete variable representations are well accepted and find regular use within LP systems. These are Binary variables, General Integer variables, Variable Upper Bounds or Semi Continuous variables, Special Ordered Sets of type One and type Two. The FortLP system has been extended to include these representations. A Branch and Bound algorithm is designed in which the choice of sub-problems and branching variables are kept general. This provides considerable scope of experimentation with tree development heuristics and the tree search can then be guided by search parameters specified by user subroutines. The data structures for representing the variables and the definition of the branch and bound tree are described. The results of experimental investigation for a few test problems are reported

How wide are European borders? : On the integration effects of monetary unions

We use consumer price data for 81 European cities (in Germany, Austria, Finland, Italy, Spain, Portugal and Switzerland) to study the impact of the introduction of the euro on goods market integration. Employing both aggregated and disaggregated consumer price index (CPI) data we confirm previous results which showed that the distance between European cities explains a significant amount of the variation in the prices of similar goods in different locations. We also find that the variation of relative prices is much higher for two cities located in different countries than for two equidistant cities in the same country. Under the EMU, the elimination of nominal exchange rate volatility has largely reduced these border effects, but distance and border still matter for intra-European relative price volatility

Conservation Prioritization Problems and their Shadow Prices

Systematic conservation planning is an essential part of biodiversity preservation

The Regional Multi-Agent Simulator (RegMAS): an open-source spatially explicit model to assess the impact of agricultural policies

RegMAS (Regional Multi Agent Simulator) is an open-source spatially explicit multi-agent model framework specifically designed for long-term simulations of the effects of policies on agricultural systems. Using iterated conventional optimisation problems as agents’ behavioural rules, it allows for a bidirectional integration between geophysical and social models where spatially-distributed characteristics are taken into account in the programming problem of the optimising agents. With RegMAS it is possible to simulate the local specific response to a given policy (or scenario), where policies, together with macro and regional characteristics, are read into the program in specially formatted spreadsheets and standard GIS files. The paper presents the model logic and structure and describes its functioning by applying it to a case-study, where RegMAS results are compared with conventional agent-based modelling to demonstrate the advantages of spatial explicitness. The simulation refers to the impact of the recent “Health Check” of the CAP on farm structures, income and land use in a hilly area of a central Italian region (Marche).Agent-Based Modelling; Mathematical Programming; Explicit Spatial Analysis; Common Agricultural Policy

“Value Added Taxes, Chain Effects and Informality”, Second Version

This paper investigates determinants of informal economic activity. We present an equilibrium model of informality and test its implications using a survey of 48,000+ small firms in Brazil. We define informality as tax avoidance; firms in the informal sector avoid tax payments but suffer other limitations. A novel theoretical contribution in this model is the role of value added taxes in transmitting informality. It predicts that the informality of a firm is correlated to the informality of firms from which it buys or sells. The model also implies that higher tolerance for informal firms in one production stage increases tax avoidance in downstream and upstream stages. Empirical analysis shows that, in fact, various measures of formality of suppliers and purchasers (and its enforcement) are correlated with the formality of a firm. Even more interestingly, when we look at sectors where Brazilian firms are not subject to the credit system of value added tax, but instead the value added tax is applied at some stage of production at a rate that is estimated by the tax authorities, this chain effect vanishes.Informal Sector, VAT, Tax Avoidance

A generalized optimal power flow program for distribution system analysis and operation with distributed energy resources and solid state transformers

The present distribution system is gradually trending towards a smart grid paradigm with massive development of distributed energy resources (DER), advanced power electronics interfaces, and a digitalized communication platform. Such profound changes bring challenges as well as opportunities for an entity like the distribution network operator (DNO) to optimally operate DERs and other controllable elements to achieve higher levels of energy efficiency, economic benefits, supply reliability and power quality. The major contribution of this dissertation is in the development of a generalized three-phase optimal power flow (OPF) program in a novel control scheme for future distribution system optimization and economic operation. It is developed based on primal-dual interior point method (PDIPM). The program is general enough to model comprehensive system components and topologies. The program can also be customized by user-defined cost functions, system constraints, and new device, such as solid state transformers (SST). An energy storage optimal control using dynamic programming is also proposed to coordinate with the OPF based on a pricing signal called the distribution locational marginal price (DLMP). The proposed OPF program can be used by the DNO in an open access competitive control scheme to optimally aggregate the energy mix by combining the profitability of each resource while satisfying system security constraints --Abstract, page iv

Essays on Banking and the Transmission of Monetary Policy

The purpose of this paper is to shed light on why Portuguese banks hold significant capital buffers above the required regulatory minimum, despite the fact that capital is a relatively expensive source of financing compared to deposits or bonds. The level of banks’ capital buffers is found to be positively influenced by several broad risk measures, indicating that banks tend to hold extra capital in order to cover for increased risk. Loan loss provisions and high and stable profitability are found to be substitutes for capital buffers. Larger banks seem to hold less excess capital, which could be linked with higher portfolio diversification and technological advantages in screening and monitoring activities, but also with moral hazard associated with higher expectations of public support against the background of the “too-big-to-fail” hypothesis. A negative business cycle effect is also found, suggesting that the lending cycle may be pro-cyclical

Optimal resource allocation: Convex quantile regression approach

Optimal allocation of resources across sub-units in the context of centralized decision-making systems such as bank branches or supermarket chains is a classical application of operations research and management science. In this paper, we develop quantile allocation models to examine how much the output and productivity could potentially increase if the resources were efficiently allocated between units. We increase robustness to random noise and heteroscedasticity by utilizing the local estimation of multiple production functions using convex quantile regression. The quantile allocation models then rely on the estimated shadow prices instead of detailed data of units and allow the entry and exit of units. Our empirical results on Finland's business sector reveal a large potential for productivity gains through better allocation, keeping the current technology and resources fixed

Evaluating drug law enforcement interventions directed towards methamphetamine in Australia

This report presents a preliminary analysis comparing the costs and impacts different types of law enforcement have on methamphetamine use. Methamphetamine belongs in the class of stimulant drugs referred to as Amphetamine Type Stimulants (ATS). The category of ATS includes ecstasy, amphetamine and methamphetamine. This research project concerned itself with the amphetamine and methamphetamine class and excluded ecstasy (and henceforth we use the generic term methamphetamine). In Australia, methamphetamine is available in three forms—powder, base and crystal. Methamphetamine is associated with significant harms and is an important drug policy priority. The National Amphetamine-Type Stimulants Strategy (2008–2011) articulates the following priority areas in relation to methamphetamine: improve community awareness and understanding of amphetamine-type stimulant use and related problems; reduce the supply of amphetamine-type stimulants; develop specific strategies to prevent and reduce amphetamine type stimulant use; and develop organisational and system capacity to prevent and respond to amphetamine-type stimulant problems This research concerns the second priority area—reducing the supply of methamphetamine. The specific aims of the research were twofold: to provide a rich description of the Australian methamphetamine supply chains in order to inform drug law enforcement interventions; and to conduct an initial economic evaluation comparing law enforcement interventions directed at the methamphetamine market. The work focused on the methamphetamine market(s) and supply chains in Australia above the retail level. Previous research has examined retail methamphetamine markets in Australia. Governments and policymakers are interested in determining which interventions are more or less effective than others, such that the scarce funding resources can be allocated in the most efficient manner possible. There is scant research available to law enforcement to guide such decisions. The main impediments to such research are the fundamental methodological challenges inherent in such an undertaking. This project is an attempt to conduct a preliminary analysis comparing the costs and impacts of different types of law enforcement. It is a ground-breaking study as this has not been previously attempted and it should be seen as the initial development of a methodological approach that can be improved upon with subsequent research. The project aimed to determine the relative cost-to-impact ratios of different law enforcement strategies aimed at reducing methamphetamine production and distribution. In an environment focused on efficiency in resource allocation, it is hoped that this research will provide the impetus for further research on the effectiveness of drug law enforcement. As the results of such research accumulate, it is hoped that policymakers will be able to use the information to improve decision making on law enforcement investment

Sex, drugs, and bitcoin:How much illegal activity Is financed through cryptocurrencies?

© The Author(s) 2019. Cryptocurrencies are among the largest unregulated markets in the world. We find that approximately one-quarter of bitcoin users are involved in illegal activity.We estimate that around 76 billion of illegal activity per year involve bitcoin (46% of bitcoin transactions), which is close to the scale of the U.S. and European markets for illegal drugs. The illegal share of bitcoin activity declines with mainstream interest in bitcoin and with the emergence of more opaque cryptocurrencies. The techniques developed in this paper have applications in cryptocurrency surveillance. Our findings suggest that cryptocurrencies are transforming the black markets by enabling black e-commerce. (JEL G18, O31, O32, O33)