Stepwise Green Investment under Policy Uncertainty

We analyse how market price and policy uncertainty, in the form of random provision or retraction of a subsidy, interact to affect the optimal time of investment and the size of a renewable energy (RE) project that can be completed in either a single (lumpy investment) or multiple stages (stepwise investment). The subsidy takes the form of a fixed premium on top of the electricity price, and, therefore, investment is subject to electricity price uncertainty. We show that the risk of a permanent retraction (provision) of a subsidy increases (decreases) the incentive to invest, yet lowers (raises) the amount of installed capacity, and that this result is more pronounced as the size of the subsidy increases. Additionally, we show that increasing the number of policy interventions lowers the expected value of a subsidy and the size of the project. Furthermore, we illustrate that, although an increase in the size of a subsidy lowers the relative value of the stepwise investment strategy, the expected value of a lumpy investment strategy is still lower than that of stepwise investment

Reliability of sickness certificates in detecting potential sick leave reduction by modifying working conditions: a clinical epidemiology study

BACKGROUND: Medical sickness certificates are generally the main source for information when scrutinizing the need for aimed intervention strategies to avoid or reduce the individual and community side effects of sick leave. This study explored the value of medical sickness certificates related to daily work in Norwegian National Insurance Offices to identify sick-listed persons, where modified working conditions might reduce the ongoing sick leave. METHODS: The potential for reducing the ongoing sick leave by modifying working conditions was individually assessed on routine sickness certificates in 999 consecutive sick leave episodes by four Norwegian National Insurance collaborators, two with and two without formal medical competence. The study took place in Northern Norway in 1997 and 1998. Agreement analysed with differences against mean, kappa, and proportional-agreement analysis within and between groups of assessors was used in the judgement. Agreements between the assessors and the self-assessment of sick-listed subjects were additionally analysed in 159 sick-leave episodes. RESULTS: Both sick-listed subjects and National Insurance collaborators anticipated a potential reduction in sick leave in 20–30% of cases, and in another 20% the potential was assessed as possible. The chance corrected agreements, however, were poor (k < 0.20) within and between groups of National Insurance collaborators. The agreement between National Insurance collaborators and the sick-listed subjects was no better than chance. Neither extended medical information nor formal medical competence increased agreement in cases where modified working conditions might have reduced sick leave. CONCLUSION: Information in medical sickness certificates proved ineffective in detecting cases where modified working conditions may reduce sick leave, and focusing on medical certificates may prevent identification of needed interventions. Strategies on how to communicate directly with sick-listed subjects would enable social authorities to exploit more of the sick leave reduction potential by modifying the working conditions than strategies on improving medical information

A Polynomial Optimization Approach to Constant Rebalanced Portfolio Selection

We address the multi-period portfolio optimization problem with the constant rebalancing strategy. This problem is formulated as a polynomial optimization problem (POP) by using a mean-variance criterion. In order to solve the POPs of high degree, we develop a cutting-plane algorithm based on semidefinite programming. Our algorithm can solve problems that can not be handled by any of known polynomial optimization solvers.

Overlapping political budget cycles in the legislative and the executive

We advance the literature on political budget cycles by testing separately for cycles in expenditures for elections in the legislative and the executive. Using municipal data, we can separately identify these cycles and account for general year effects. For the executive branch, we show that it is important whether the incumbent re-runs. To account for the potential endogeneity associated with this decision, we apply a unique instrumental variables approach based on age and pension eligibility rules. We find sizable and significant effects in expenditures before council elections and before joint elections when the incumbent re-runs

Vote buying or (political) business (cycles) as usual?

We study the short-run effect of elections on monetary aggregates in a sample of 85 low and middle income democracies (1975-2009). We find an increase in the growth rate of M1 during election months of about one tenth of a standard deviation. A similar effect can neither be detected in established OECD democracies nor in other months. The effect is larger in democracies with many poor and uneducated voters, and in Sub-Saharan Africa, Latin America, and in East-Asia and the Pacific. We argue that the election month monetary expansion is related to systemic vote buying which requires significant amounts of cash to be disbursed right before elections. The finely timed increase in M1 is consistent with this; is inconsistent with a monetary cycle aimed at creating an election time boom; and it cannot be, fully, accounted for by alternative explanations