Beyond Risk Profiling: Achieving better investment outcomes for consumers and industry

In the wake of the Retail Distribution Review, there remain fundamental questions about how best to support consumers to make sound investment decisions, particularly those with modest amounts of money to invest, for whom a poor investment decision may have a disproportionate adverse impact. The advent of new pension freedoms from April 2015, which give people more choice and flexibility about how they use their retirement savings, adds further impetus to the issue. To help inform policy and practice on this important subject, in June 2015 we brought together consumer and industry experts to explore possible new approaches to improve risk profiling and investment decision-making

A Textual Taylor Rule: Estimating Central Bank Preferences Combining Topic and Scaling Methods

Scholars often use voting data to estimate central bankers' policy preferences but consensus voting is commonplace. To get around this, we combine topic-based text analysis and scaling methods to generate theoretically motivated comparative measures of central bank preferences on the U.S. Federal Open Market Committee leading up to the financial crisis in a way that does not depend on voting behavior. We apply these measures to a number of applications in the literature. For example, we find that FOMC members that are Federal Reserve Bank Presidents from districts experiencing higher unemployment are also more likely to emphasize unemployment in their speech. We also confirm that committee members on schedule to vote are more likely to express consensus opinion than their off schedule voting counterparts and show that it is Dovish rather than Hawkish members who are more likely to want to amend the official monetary policy statement

An Automated Information Extraction Tool for International Conflict Data with Performance as Good as Human Coders: A Rare Events Evaluation Design

Governmen

How Might We Create a Secondary Annuity Market that Works for Pensioners?

In April 2015 the government’s pension freedoms came into effect, removing the requirement for pensioners to turn their pension pot into an annuity in order to retain the tax benefits. Later last year they announced plans to extend these freedoms to pensioners who had already bought annuities from April 2017, by creating a secondary market and allowing pensioners to sell their annuities on it. The government’s expressed aims were to “achieve parity between those who are able to access their pension savings flexibly… and those with existing annuities” by developing a secondary annuity market that “best suits the interests of pensioners” (HM Treasury, 2015b). Creating a secondary annuities market that works well will be a difficult task. It is an unusual and complex market, with ‘consumers’ as the sellers, firms as the buyers, prices that are individual to each pensioner, legal complexities with the original annuity provider having to agree to any sale, and the product being one of the most important we ever purchase – an income for life. There is huge potential for it to go very wrong, with the details of government policy and regulatory action likely to play a big role in whether or not the market works for pensioners. To inform the debate, and help the government and regulator decide how best to intervene, we have conducted a study of the secondary annuity market: how one might function, what problems are likely to require addressing, and which policies appear most promising in doing so. A secondary annuity market must function on two axes if it is to deliver good outcomes for pensioners: Competition must be effective in driving value-for-money Pensioners must be adequately protected from harm. Neither of these axes is as simple as they may seem. The role and potential advantages of the original annuity provider in the secondary market may present a barrier to the emergence of competition, and the behaviour of pensioners and information difficulties may render it ineffective. Preventing harm to pensioners involves not just regulation to protect the most vulnerable, but also stopping ordinary people from making significant mistakes. Our analysis suggests there are fundamental problems that need addressing, which the government and regulators have underestimated when designing their proposals, including a real risk that there will be no functioning market at all when the laws come into force next year. Normally a study such as this would analyse how the market is currently working and look for evidence of market failure, however this market does not yet exist. Instead we have focused on how the market might develop and the potential impacts policies may have on our two axes – effective competition and consumer protection – both of which there is considerable uncertainty about. We therefore caution against overconfidence in any particular option, and strongly recommend that the government and regulator review the market carefully once it has launched and reconsider what intervention is necessary and beneficial in light of that evidence

The Direct Route: Mediated Priming in Semantic Space

Proceedings of COGSCI'00McKoon and Ratcliff (1992) presented a theory of mediated priming where the priming effect is due to a direct but weak relatedness between prime and target. They also introduced a quantitative measure of word relatedness based on pointwise mutual information (Church and Hanks; 1990), and showed that stimuli chosen with the measure produced graded priming effects as predicted by their theory. Using stimuli from Balota and Lorch (1986), Livesay and Burgess (Livesay and Burgess; 1997, 1998) replicated the mediated priming effect in humans, but found that in HAL, a corpus-derived semantic space (Lund, Burgess and Atchley; 1995), mediated primes were in fact further from their targets than unrelated words. They concluded from this that mediated priming is not due to direct but weak relatedness. In this paper we present an alternative semantic space model based on earlier work (McDonald and Lowe; 1998). We show how this space allows a) a detailed replication of Ratcliff and McKoon's experimental results using their stimuli and b) a replication of Livesay and Burgess's human experimental results showing mediated priming. We discuss the implications for McKoon and Ratcliff's theory of mediated priming

Estimating Central Bank Preferences Combining Topic and Scaling Methods

Scholars often use Federal Open Market Committee (FOMC) votes to estimate the preferences of central bankers. However, rarely do committee members on the FOMC cast dissenting votes. This article demonstrates the usefulness of using what central bankers say in FOMC meetings rather than how they vote to better measure central bank preferences. Using automated text analysis tools and scaling methods, we develop a new measure of central bank preferences on the FOMC leading up to the financial crisis (2005 - 2008)

Chen Shui-bian: on independence

Chen Shui-bian achieved an international reputation for his promotion of Taiwan independence. Whilst that reputation may have been well earned, the analyses on which this conclusion is based are frequently flawed in two ways. First, by using an undifferentiated notion of independence, they tend to conflate sovereignty with less threatening expressions of Taiwanese identity and pro-democracy discourse. Second, by failing to take into account the impact of immediate strategic context, analysts ignore a fundamental element of democratic political communication. In our empirical analysis of more than 2,000 of Chen’s speeches, we seek to avoid both flaws by unpacking the concept of independence and taking into account Chen’s strategic relationship with his primary audiences. Our findings challenge popular portrayals of Chen, but more importantly they have strong implications for policy makers and students of political rhetoric with regard to current and future ROC presidents

Dental treatment and risk of variant CJD - a case control study

Abstract Objective: Knowledge of risk factors for variant CJD (vCJD) remains limited, but transmission of prion proteins via re-useable medical devices, including dental instruments, or enhanced susceptibility following trauma to the oral cavity is a concern. This study aimed to identify whether previous dental treatment is a risk factor for development of vCJD. Design: Case control study Methods: Risk factor questionnaires completed by interview with relatives of 130 vCJD patients and with relatives of 66 community and 53 hospital controls were examined by a dental surgeon. Responses regarding dental treatments were analysed. Results: We did not find a statistically significant excess of risk of vCJD associated with dental treatments with the exception of extractions in an unmatched analysis of vCJD cases with community controls (p=0.02). However, this result may be explained by multiple testing. Conclusions: This is the first published study to date to examine potential links between vCJD and dental treatment. There was no convincing evidence found of an increased risk of variant CJD associated with reported dental treatment. However, the power of the study is restricted by the number of vCJD cases to date and does not preclude the possibility that some cases have resulted from secondary transmission via dental procedures. Due to the limitations of the data available, more detailed analyses of dental records are required to fully exclude the possibility of transmission via dental treatment

Effective ecosystem monitoring requires a multi-scaled approach

Ecosystem monitoring is fundamental to our understanding of how ecosystem change is impacting our natural resources and is vital for developing evidence-based policy and management. However, the different types of ecosystem monitoring, along with their recommended applications, are often poorly understood and contentious. Varying definitions and strict adherence to a specific monitoring type can inhibit effective ecosystem monitoring, leading to poor program development, implementation and outcomes. In an effort to develop a more consistent and clear understanding of ecosystem monitoring programs, we here review the main types of monitoring and recommend the widespread adoption of three classifications of monitoring, namely, targeted, surveillance and landscape monitoring. Landscape monitoring is conducted over large areas, provides spatial data, and enables questions relating to where and when ecosystem change is occurring to be addressed. Surveillance monitoring uses standardised field methods to inform on what is changing in our environments and the direction and magnitude of that change, whilst targeted monitoring is designed around testable hypotheses over defined areas and is the best approach for determining the causes of ecosystem change. The classification system is flexible and can incorporate different interests, objectives, targets and characteristics as well as different spatial scales and temporal frequencies, while also providing valuable structure and consistency across distinct ecosystem monitoring programs. To support our argument, we examine the ability of each monitoring type to inform on six key types of questions that are routinely posed for ecosystem monitoring programs, such as where and when change is occurring, what is the magnitude of change, and how can the change be managed? As we demonstrate, each type of ecosystem monitoring has its own strengths and weaknesses, which should be carefully considered relative to the desired results. Using this scheme, scientists and land managers can design programs best suited to their needs. Finally, we assert that for our most serious environmental challenges, it is essential that we include information from each of these monitoring scales to inform on all facets of ecosystem change, and this is best achieved through close collaboration between the scales. With a renewed understanding of the importance of each monitoring type, along with greater commitment to monitor cooperatively, we will be well placed to address some of our greatest environmental challenges