Irreversible Investment, Real Options, and Competition: Evidence from Real Estate Development

We examine the extent to which uncertainty delays investment and the effect of competition on this relationship using a sample of 1,214 condominium developments in Vancouver, Canada built from 1979-1998. We find that increases in both idiosyncratic and systematic risk lead developers to delay new real estate investments. Empirically, a one-standard deviation increase in the return volatility reduces the probability of investment by 13 percent, equivalent to a 9 percent decline in real prices. Increases in the number of potential competitors located near a project negate the negative relationship between idiosyncratic risk and development. These results support models in which competition erodes option values and provide clear evidence for the real options framework over alternatives such as simple risk aversion.

Pattern recognition of satellite cloud imagery for improved weather prediction

The major accomplishment was the successful development of a method for extracting time derivative information from geostationary meteorological satellite imagery. This research is a proof-of-concept study which demonstrates the feasibility of using pattern recognition techniques and a statistical cloud classification method to estimate time rate of change of large-scale meteorological fields from remote sensing data. The cloud classification methodology is based on typical shape function analysis of parameter sets characterizing the cloud fields. The three specific technical objectives, all of which were successfully achieved, are as follows: develop and test a cloud classification technique based on pattern recognition methods, suitable for the analysis of visible and infrared geostationary satellite VISSR imagery; develop and test a methodology for intercomparing successive images using the cloud classification technique, so as to obtain estimates of the time rate of change of meteorological fields; and implement this technique in a testbed system incorporating an interactive graphics terminal to determine the feasibility of extracting time derivative information suitable for comparison with numerical weather prediction products

Observational and Modeling Studies of Clouds and the Hydrological Cycle

Our approach involved validating parameterizations directly against measurements from field programs, and using this validation to tune existing parameterizations and to guide the development of new ones. We have used a single-column model (SCM) to make the link between observations and parameterizations of clouds, including explicit cloud microphysics (e.g., prognostic cloud liquid water used to determine cloud radiative properties). Surface and satellite radiation measurements were used to provide an initial evaluation of the performance of the different parameterizations. The results of this evaluation will then used to develop improved cloud and cloud-radiation schemes, which were tested in GCM experiments

The nature of the ISM in galaxies during the star-formation activity peak of the Universe

We combine a semi-analytic model of galaxy formation, tracking atomic and molecular phases of cold gas, with a three-dimensional radiative-transfer and line tracing code to study the sub-mm emission from atomic and molecular species (CO, HCN, [CI], [CII], [OI]) in galaxies. We compare the physics that drives the formation of stars at the epoch of peak star formation (SF) in the Universe (z = 2.0) with that in local galaxies. We find that normal star-forming galaxies at high redshift have much higher CO-excitation peaks than their local counterparts and that CO cooling takes place at higher excitation levels. CO line ratios increase with redshift as a function of galaxy star-formation rate, but are well correlated with H2 surface density independent of redshift. We find an increase in the [OI]/[CII] line ratio in typical star-forming galaxies at z = 1.2 and z = 2.0 with respect to counterparts at z = 0. Our model results suggest that typical star-forming galaxies at high redshift consist of much denser and warmer star-forming clouds than their local counterparts. Galaxies belonging to the tail of the SF activity peak at z = 1.2 are already less dense and cooler than counterparts during the actual peak of SF activity (z = 2.0). We use our results to discuss how future ALMA surveys can best confront our predictions and constrain models of galaxy formation.Comment: 19 pages, 14 figures, accepted for publication in MNRA

Numerical experiments on short-term meteorological effects on solar variability

A set of numerical experiments was conducted to test the short-range sensitivity of a large atmospheric general circulation model to changes in solar constant and ozone amount. On the basis of the results of 12-day sets of integrations with very large variations in these parameters, it is concluded that realistic variations would produce insignificant meteorological effects. Any causal relationships between solar variability and weather, for time scales of two weeks or less, rely upon changes in parameters other than solar constant or ozone amounts, or upon mechanisms not yet incorporated in the model