Optimal Farm Size under an Uncertain Land Market: the Case of Kyrgyz Republic

The paper illustrates a theoretical model of real option value applied to the problem of land development. Making use of the 1998-2001 Kyrgyz Household Budget Survey, we show that when the hypothesis of decreasing return to scale holds, the relation between the threshold value of revenue per hectare and the amount of land cultivated is positive. In addition to that, the relation between the threshold and the amount of land owned is positive in the case of continuous supply of land and negative when there is discontinuous supply of land. The direct consequence is that, in the first case, smaller farms will be more willing to rent land and exercise the option where, in the second case, larger farms will exercise first. The results corroborate the findings of the theoretical model and suggest three main conclusions: (i) the combination of uncertainty and irreversibility is a significant factor in the land development decisions, (ii) farmers’ behaviour is consistent with the continuous profit maximization model, (iii) farming unit revenue tends to be positively related to farm size, once uncertainty is properly accounted for.Option value theory, Farm size, Uncertainty, irreversibility, Agricultural and Food Policy, Land Economics/Use, Resource /Energy Economics and Policy, O13, Q12, Q15, Q18,

Can portfolio diversification increase systemic risk? evidence from the U.S and European mutual funds market

This paper tests the hypothesis that portfolio diversification can increase the threat of systemic financial risk. The paper provides first a theoretical rationale for the possibility that systemic risk may be increased by the proliferation of financial instruments that lead operators to hold increasingly similar portfolios. Secondly, the paper tests the hypothesis that diversification may result in increasing systematic risk, by analyzing the portfolio dynamics of some of the major world open funds.Systemic Risk, Portfolio Diversification, Mutual Funds, CAPM

A PES System for Azerbaijan (Preliminary Report)

An ecosystem (ES) is a group of plants, animals and micro-organisms in combination with the non-living physical components of their environment. All the biotic and abiotic components of ecosystems are interrelated and create unique nutrient cycles and energy flows. An ES may be considered a completely independent area with its own interdependent organisms (Flores and Abbasov, 2014). All the organisms in the ecosystems are interrelated and share same living space. ESs are the sources of many vital products and services used by human beings (Daily et al., 1997). They are the only sources of resources, which are very important to human wellbeing and survival (Costanza et al., 1997;, Flores and Adeishvili, 2011). ES provided resources include a broad basket of goods and services used in people’s daily life (Pearce and Atkinson, 1993). Goods and services provided by ecosystems will be simply called “ecosystem services” or ESS

A PES System for Azerbaijan (Preliminary Report)

An ecosystem (ES) is a group of plants, animals and micro-organisms in combination with the non-living physical components of their environment. All the biotic and abiotic components of ecosystems are interrelated and create unique nutrient cycles and energy flows. An ES may be considered a completely independent area with its own interdependent organisms (Flores and Abbasov, 2014). All the organisms in the ecosystems are interrelated and share same living space. ESs are the sources of many vital products and services used by human beings (Daily et al., 1997). They are the only sources of resources, which are very important to human wellbeing and survival (Costanza et al., 1997;, Flores and Adeishvili, 2011). ES provided resources include a broad basket of goods and services used in people’s daily life (Pearce and Atkinson, 1993). Goods and services provided by ecosystems will be simply called “ecosystem services” or ESS

Can portfolio diversification increase systemic risk? evidence from the U.S and European mutual funds market

This paper tests the hypothesis that portfolio diversification can increase the threat of systemic financial risk. The paper provides first a theoretical rationale for the possibility that systemic risk may be increased by the proliferation of financial instruments that lead operators to hold increasingly similar portfolios. Secondly, the paper tests the hypothesis that diversification may result in increasing systematic risk, by analyzing the portfolio dynamics of some of the major world open funds

Privatising the forests

Does privatisation have a role in world forestry sustainable management? Is privatisation policy valid for the forestry sector? This paper is aimed to the identification of opportunities and risks of forests privatisation in developing countries. Given the above background, privatisation may be defined as the problem of delimiting the extent of what is privately and what is publicly owned by creating social institutions to regulate the distribution of contingent rights and responsibilities. These social institutions include specific arrangements to transfer property rights (such as explicit or implicit auction mechanisms), as well as rules and regulations concerning the extent and the mode in which the rights may be exercised (the "governance" of the privatisation process). The evidence shows that, if done right, the privatisation (of resources and productive processes) produces benefits of economic efficiency and innovation. Because of its world-wide importance and prominent place among natural resources, privatisation of forests appears a research issue of great potential significance

Economic evaluation in the age of uncertainty

Supporting value judgements about policies and programmes is a central task in evaluation. There is, however, little consensus on how evaluators are to accomplish this task.The traditional cost-benefit approaches were found wanting and yet valuation as promoted by checklists or qualitative stakeholder interviews is not anchored to an economic theory and thus inspires little confidence. While no single methodology is likely to be accepted by all, recent developments in economic theory support a new interpretation. This proposed approach is a variant of social cost benefit analysis (SCBA); it retains the representation of stakeholder values while avoiding the more dogmatic, and even mechanical, underpinnings of traditional economic analysis. In this article we trace the development of this new ‘options-based’ approach and chart out the path for further research. It warrants, we believe, a voice in the dialogue on economic evaluation