Decision theory and real estate development: a note on uncertainty

Real estate development appraisal is a quantification of future expectations. The appraisal model relies upon the valuer/developer having an understanding of the future in terms of the future marketability of the completed development and the future cost of development. In some cases the developer has some degree of control over the possible variation in the variables, as with the cost of construction through the choice of specification. However, other variables, such as the sale price of the final product, are totally dependent upon the vagaries of the market at the completion date. To try to address the risk of a different outcome to the one expected (modelled) the developer will often carry out a sensitivity analysis on the development. However, traditional sensitivity analysis has generally only looked at the best and worst scenarios and has focused on the anticipated or expected outcomes. This does not take into account uncertainty and the range of outcomes that can happen. A fuller analysis should include examination of the uncertainties in each of the components of the appraisal and account for the appropriate distributions of the variables. Similarly, as many of the variables in the model are not independent, the variables need to be correlated. This requires a standardised approach and we suggest that the use of a generic forecasting software package, in this case Crystal Ball, allows the analyst to work with an existing development appraisal model set up in Excel (or other spreadsheet) and to work with a predetermined set of probability distributions. Without a full knowledge of risk, developers are unable to determine the anticipated level of return that should be sought to compensate for the risk. This model allows the user a better understanding of the possible outcomes for the development. Ultimately the final decision will be made relative to current expectations and current business constraints, but by assessing the upside and downside risks more appropriately, the decision maker should be better placed to make a more informed and “better”

Generalized Hoeffding-Sobol Decomposition for Dependent Variables -Application to Sensitivity Analysis

In this paper, we consider a regression model built on dependent variables. This regression modelizes an input output relationship. Under boundedness assumptions on the joint distribution function of the input variables, we show that a generalized Hoeffding-Sobol decomposition is available. This leads to new indices measuring the sensitivity of the output with respect to the input variables. We also study and discuss the estimation of these new indices

Quantifying dependencies for sensitivity analysis with multivariate input sample data

We present a novel method for quantifying dependencies in multivariate datasets, based on estimating the R\'{e}nyi entropy by minimum spanning trees (MSTs). The length of the MSTs can be used to order pairs of variables from strongly to weakly dependent, making it a useful tool for sensitivity analysis with dependent input variables. It is well-suited for cases where the input distribution is unknown and only a sample of the inputs is available. We introduce an estimator to quantify dependency based on the MST length, and investigate its properties with several numerical examples. To reduce the computational cost of constructing the exact MST for large datasets, we explore methods to compute approximations to the exact MST, and find the multilevel approach introduced recently by Zhong et al. (2015) to be the most accurate. We apply our proposed method to an artificial testcase based on the Ishigami function, as well as to a real-world testcase involving sediment transport in the North Sea. The results are consistent with prior knowledge and heuristic understanding, as well as with variance-based analysis using Sobol indices in the case where these indices can be computed

Cortisol patterns are associated with T cell activation in HIV.

ObjectiveThe level of T cell activation in untreated HIV disease is strongly and independently associated with risk of immunologic and clinical progression. The factors that influence the level of activation, however, are not fully defined. Since endogenous glucocorticoids are important in regulating inflammation, we sought to determine whether less optimal diurnal cortisol patterns are associated with greater T cell activation.MethodsWe studied 128 HIV-infected adults who were not on treatment and had a CD4(+) T cell count above 250 cells/µl. We assessed T cell activation by CD38 expression using flow cytometry, and diurnal cortisol was assessed with salivary measurements.ResultsLower waking cortisol levels correlated with greater T cell immune activation, measured by CD38 mean fluorescent intensity, on CD4(+) T cells (r = -0.26, p = 0.006). Participants with lower waking cortisol also showed a trend toward greater activation on CD8(+) T cells (r = -0.17, p = 0.08). A greater diurnal decline in cortisol, usually considered a healthy pattern, correlated with less CD4(+) (r = 0.24, p = 0.018) and CD8(+) (r = 0.24, p = 0.017) activation.ConclusionsThese data suggest that the hypothalamic-pituitary-adrenal (HPA) axis contributes to the regulation of T cell activation in HIV. This may represent an important pathway through which psychological states and the HPA axis influence progression of HIV

Integrative analysis identifies candidate tumor microenvironment and intracellular signaling pathways that define tumor heterogeneity in NF1

Neurofibromatosis type 1 (NF1) is a monogenic syndrome that gives rise to numerous symptoms including cognitive impairment, skeletal abnormalities, and growth of benign nerve sheath tumors. Nearly all NF1 patients develop cutaneous neurofibromas (cNFs), which occur on the skin surface, whereas 40-60% of patients develop plexiform neurofibromas (pNFs), which are deeply embedded in the peripheral nerves. Patients with pNFs have a ~10% lifetime chance of these tumors becoming malignant peripheral nerve sheath tumors (MPNSTs). These tumors have a severe prognosis and few treatment options other than surgery. Given the lack of therapeutic options available to patients with these tumors, identification of druggable pathways or other key molecular features could aid ongoing therapeutic discovery studies. In this work, we used statistical and machine learning methods to analyze 77 NF1 tumors with genomic data to characterize key signaling pathways that distinguish these tumors and identify candidates for drug development. We identified subsets of latent gene expression variables that may be important in the identification and etiology of cNFs, pNFs, other neurofibromas, and MPNSTs. Furthermore, we characterized the association between these latent variables and genetic variants, immune deconvolution predictions, and protein activity predictions