Sex, lies and self-reported counts: Bayesian mixture models for heaping in longitudinal count data via birth-death processes

Surveys often ask respondents to report nonnegative counts, but respondents may misremember or round to a nearby multiple of 5 or 10. This phenomenon is called heaping, and the error inherent in heaped self-reported numbers can bias estimation. Heaped data may be collected cross-sectionally or longitudinally and there may be covariates that complicate the inferential task. Heaping is a well-known issue in many survey settings, and inference for heaped data is an important statistical problem. We propose a novel reporting distribution whose underlying parameters are readily interpretable as rates of misremembering and rounding. The process accommodates a variety of heaping grids and allows for quasi-heaping to values nearly but not equal to heaping multiples. We present a Bayesian hierarchical model for longitudinal samples with covariates to infer both the unobserved true distribution of counts and the parameters that control the heaping process. Finally, we apply our methods to longitudinal self-reported counts of sex partners in a study of high-risk behavior in HIV-positive youth.Comment: Published at http://dx.doi.org/10.1214/15-AOAS809 in the Annals of Applied Statistics (http://www.imstat.org/aoas/) by the Institute of Mathematical Statistics (http://www.imstat.org

Index-Based Futures and Options Markets in Real Estate

Most institutional and individual portfolios are very undiversified in real estate: many hold no real estate at all, many have holdings highly concentrated in certain regions or types of real estate. The risk of these concentrated holdings is not hedged. We propose here that cash-settled futures and options markets be opened on real estate to better allow diversification and hedging, and show that these markets solve problems that have hampered other real estate hedging media in the past. Related institutions, such as home equity insurance, might develop around the futures and options markets. The establishment of these markets is likely to increase the quantity of reproducible real estate, and lower rents on real estate. It may also reduce the amplitude of speculative real estate price movements and dampen the business cycle

Mortgage Default Risk and Real Estate Prices: The Use of Index-Based Futures and Options in Real Estate

Evidence is shown, using US foreclosure data by state 1975-93, that periods of high default rates on home mortgages strongly tend to follow real estate price declines or interruptions in real estate price increase. The relation between price decline and foreclosure rates is modelled using a distributed lag. Using this model, holders of residential mortgage portfolios could hedge some of the risk of default by taking positions in futures or options markets for residential real estate prices, were such markets to be established