Optimal Asset Allocation in Asset Liability Management

We study the impact of regulations on the investment decisions of a defined benefits pension plan. We assess the influence of ex ante (preventive) and ex post (punitive) risk constraints on the gains to dynamic, as opposed to myopic, decision making. We find that preventive measures, such as Value-at-Risk constraints, tend to decrease the gains to dynamic investment. In contrast, punitive constraints, such as mandatory additional contributions from the sponsor when the plan becomes underfunded, lead to very large utility gains from solving the dynamic program. We also show that financial reporting rules have real effects on investment behavior. For example, the current requirement to discount liabilities at a rolling average of yields, as opposed to at current yields, induces grossly suboptimal investment decisions.

Good-Specific Habit Formation and the Cross-Section of Expected Returns

I study asset prices in a general equilibrium framework in which agents form habits over individual varieties of goods rather than over an aggregate consumption bundle. Goods are produced by monopolistically competitive firms whose elasticities of demand depend on consumers\u27 habit formation. Firms that produce goods with a high habit level relative to consumption have low demand elasticities, set high prices for their product, have low expected returns on their stock and have low asset pricing betas and stock return volatilities. I find supportive evidence for these predictions in the data

Clearing the Air on Radon Testing: The Duty of Real Estate Brokers to Protect Prospective Homebuyers

This Note recommends that the federal government create legislation that will impose a duty on real estate brokers to test homes for radon and to disclose the results to prospective purchasers. Based on a common law negligence theory, such a duty would become part of the current obligation of a real estate broker: (1) to conduct a reasonably diligent and competent search of property for sale; and (2) to disclose to prospective homebuyers all material defects affecting the value or desirability of the home. In his investigation, the broker must use the expertise and knowledge that derive from his training and experience as a professional. Initially, the Note addresses the dilemma of the homebuyer who discovers radon only after occupying the home and who has no formally defined cause of action based on common law precedent or statute. Part II traces the development of a real estate broker\u27s liability in negligence to the recently imposed duty to discover and disclose latent defects. Part III analyzes the duty to discover and disclose latent defects with respect to radon and concludes that real estate brokers should have an affirmative duty to test for radon and to disclose the results to prospective purchasers. Finally, part IV recommends legislation to protect the unwary homebuyer who otherwise would take possession of the home and suffer potential economic loss and exposure to a carcinogenic substance

Review of VSF-Belgium's 'Turkana emergency livestock off-take' intervention 2005

The 2005 'Turkana Emergency Livestock Off-take' (TELO) intervention contributed to VSFBelgium's overall goal to 'improve the socio-economic status of the pastoral communities living in arid areas of Kenya by creating markets for their livestock and improving the nutritional status of identified target populations'. The six outputs/objectives of the intervention are to increase household income (cash economy) among pastoralists; reduce pressure on water and pasture resources; increase food security for vulnerable school children; improve utilization of assets with livestock owners gaining benefit from vulnerable livestock before the condition of the livestock deteriorates beyond the point of selling; increase access to funds made available to livestock owners for future restocking and; use money saved from the school feeding program for school fees and/or other relevant projects for the pastoralists' school children. Viewed as a significant success, and used as a model for subsequent destocking interventions, it is the aim of this report to evaluate the efficiency and effectiveness of this destocking intervention to highlight both strengths and weaknesses of the approach used and to suggest improvements for future destocking interventions

Livestock market access and opportunities in Turkana, Kenya

This study assesses the livestock market access and opportunities in Turkana, Kenya. Section one is introduction and it characterises traditional nomadic pastoralism in Turkana and discusses the changing character of nomadic pastoralism in the contemporary period. Section two characterizes people and livestock in Turkana. It determines the human and livestock populations and estimates the spread of both human and livestock populations as well as livestock numbers per household. This is followed by a section that estimates the livestock carrying capacity of distinct bio-physical zones (rangeland units). This is followed by a section that introduces the traditional livestock marketing systems in Turkana. The livestock marketing systems were characterized through an extensive literature review and field research during the first quarter of 2006. Then the report focuses specifically on the problems associated with livestock marketing in Turkana, including the subsistence of pastoralists, weak market infrastructure, structural inefficiencies and high transaction costs, low and variable producer prices, and the lack of political capital amongst both livestock producers and livestock traders. Then it characterizes contemporary livestock marketing in Turkana. It begins by outlining a relational typology of livestock markets and then goes on to characterize the main markets and local demand focusing on a detailed characterization of livestock flows, both within and outside the district. A range of options/recommendations that have the potential to increase the number of pastoralists profitably accessing livestock markets in Turkana are presented. This section stresses the need for quality research to underpin rational and sustainable interventions in livestock marketing in Turkana. It addresses the need to fill key knowledge gaps

Livelihood diversification opportunities for pastoralists in Turkana, Kenya

The main purpose of this report is to characterize the extent of livelihood diversification in Turkana and, through the application of a case study approach, illustrate some of the existing activities and identify their associated strengths and weaknesses. The report also highlights both constraints and opportunities associated with the future expansion of these activities. This section is comprised of two parts. The first part, based on a literature review and two extremely knowledgeable key informants (Ann Kirya and Margret Nabuin-both belong to the Turkana District Chamber of Commerce), briefly outlines the range of diversification opportunities currently being exploited in Turkana. The second part, using insights gained through Focus Group Discussions (FGDs), highlights some of the most promising and widespread commercial diversifi cation activities in Turkana

Livestock marketing in Turkana District, Kenya: opportunities and constraints

This report focuses on the issues surrounding livestock marketing in Turkana District. The report 's authors undertook an extensive literature review and conducted field work in Turkana in early 2006. They characterized and described the livestock marketing systems operating in the district, identified problems and constraints, and made a series of recommendations intended to increase the number of pastoralists profitably accessing livestock markets. Finally, they identified researchable issues which would enable a better understanding of livestock marketing in Turkana District. Topics of discussion include pastoralism in Turkana: then and now; failed livestock interventions; is Turkana District overstocked? How many people and livestock? Reluctance to sell or slaughter; livestock marketing and consumption in Turkana; problems associated with livestock marketing in Turkana including subsistence orientation, marketing infrastructure, transport, trader cartels and brokers, insecurity, taxes and bribes, lack of cash, quarantine restrictions, and information

Life beyond pastoralism: livelihood diversification opportunities for pastoralists in Turkana District, Kenya

This report characterises the extent of livelihood diversification in Turkana District, briefly surveys a range of options, identifies their relative strengths and weaknesses, and makes recommendations for supportive interventions by development actors. It relies on three main sources of information: a literature review, key informant interviews, and focus group discussions. A case study approach was used to gain further insights into selected diversification opportunities. The study team, however, noted that, when applying an agreed selection criteria (i.e. showcase the most important livelihood diversification opportunities in operation in Turkana), the case studies had a distinct gender and geographical bias: they were biased towards women's groups and urban centres, Turkwel and Kerio rivers and Lake Turkana. The report discusses drivers for diversification, the main being drought. Then it examines impact of gender and wealth and outlines some potential livelihood diversification options for Turkana District which includes poultry and egg production; trading of small-stock by women's groups; fresh milk, dried milk and dried meat sales; forage trees; collection and sale of wild fruits; aloe production; gum arabic production; charcoal production; ecotourism; gold mining; and casual and waged labour. The brief then presents diversification case studies including honey production and marketing; fishing in Lake Turkana; irrigated agriculture; handicrafts; hides and skins; and small-scale business

Destocking as an emergency drought mitigation measure: lessons learned from the 2005 'Turkana emergency livestock off-take' intervention

This report describes an emergency drought mitigation program executed by the non-governmental organization (NGO) Vétérinaires Sans Frontières Belgium (VSF-Belgium) in Turkana District, northwestern Kenya, in early 2005. It consisted of purchasing drought-affected goats from pastoralists in the worse affected parts of the district and donating them to local schools and health centres, where the resulting meat was to be used to supplement the diet of students and in-patients. The International Livestock Research Institute (ILRI) was invited by VSF-Belgium to carry out an independent evaluation study of the intervention and to make recommendations for the improvement of future destocking programs. The evaluation study forms the core of this report. The brief starts with a discussion on previous destocking initiatives and the current intervention: the drought of 2005 of Turkana District. Then it continues with the evaluation of TELO: The Actor Network Theory. The TELO intervention had six specific objectives and the results are presented in relation to each in turn - to increase household cash income among pastoralists; to reduce pressure on water and pasture resources; to increase food security for vulnerable school children; to improve utilisation of assets with livestock owners gaining benefit from vulnerable livestock before the condition of the livestock deteriorates beyond the point of selling; to increase access to funds made available to livestock owners for future restocking; to use the money saved from school feeding program for school fees and/or other relevant projects for pastoralists' schools children. In addition the results are also considered in relation to the four stages of ANT, namely identification of problems and driving forces; identification of each agent's interests; enrolment of the actors and actants; and mobilization. The report ends with summaries of other issues and constraints, and recommendations for improvement of future destocking programs