Long memory and chaotic models of prices on the London Metal Exchange

Many financial time series exhibit irregular behaviour. Economic theory suggests that this irregular behaviour might be due to the existence of nonlinear dependence in the markets. Thus, economic time series are governed by nonlinear dynamics.The purpose of this paper is to investigate price behaviour in the London Metal Exchange market. Thus, this study will test the two most attractive nonlinear models—long memory and chaos—on six metal commodities to ascertain which model is consistent with the observed metal price nonlinear dynamics.Application of long memory and chaos analysis provides new approaches for assessing the behaviour of metal prices. We identified, in tin, a case of chaos. Our empirical results in the case of aluminium support the long memory hypothesis. A short memory model explains the underlying processes of the nickel and lead returns series, while zinc returns reflect an anti-persistent process. To our knowledge, this is one of the first attempts to apply long memory and chaos analysis in the evaluation of the behaviour of metal prices.     

COMPARING THE PALMER DROUGHT INDEX AND THE STANDARDIZED PRECIPITATION INDEX1

ABSTRACT: The Palmer Drought Index (PDI) is used as an indicator of drought severity, and a particular index value is often the signal to begin or discontinue elements of a drought contingency plan. The Standardized Precipitation Index (SPI) was recently developed to quantify a precipitation deficit for different time scales. It was designed to be an indicator of drought that recognizes the importance of time scales in the analysis of water availability and water use. This study compares historical time series of the PDI with time series of the corresponding SPI through spectral analysis. Results show that the spectral characteristics of the PDI vary from site to site throughout the U.S., while those of the SPI do not vary from site to site. They also show that the PDI has a complex structure with an exceptionally long memory, while the SPI is an easily interpreted, simple moving average process.     

Natural resource dependence and the accumulation of physical and human capital in Latin America

In a simultaneous model of human and physical capital accumulation for 17 Latin American countries from 1975 to 2004, we show that overall resource dependence has no significant direct effect on physical and human capital. When disaggregating the natural resource variable into sub-categories, we find that petroleum export dependence has a significant positive direct effect on physical capital, but a significant negative direct effect on human capital. Agricultural export dependence shows a significant negative direct effect on physical capital. Petroleum exports have a long run positive effect on physical capital but a negative long run effect on human capital. Agricultural exports have a negative long run effect on physical and human capital.     

The macroeconomic determinants of volatility in precious metals markets

This paper models the monthly price volatilities of four precious metals (gold, silver, platinum and palladium prices) and investigates the macroeconomic determinants (business cycle, monetary environment and financial market sentiment) of these volatilities. Gold volatility is shown to be explained by monetary variables, but this is not true for silver. Overall, there is limited evidence that the same macroeconomic factors jointly influence the volatility processes of the four precious metal price series, although there is evidence of volatility feedback between the precious metals. These results are consistent with the view that precious metals are too distinct to be considered a single asset class, or represented by a single index. This finding is of importance for portfolio managers and investors.     

The costs and benefits of reforestation in Liping County, Guizhou Province, China

Reducing greenhouse gases in the atmosphere is becoming a pressing issue for the global community. Afforestation and reforestation are promoted worldwide as an effective means of sequestering carbon. For its national interest and global concerns, China has made great efforts to protect its existing forests and develop programs of afforestation and reforestation. Based on two surveys recently conducted in Liping County, Guizhou province, this paper investigates the economic changes associated with the implementation of the "Grain For Green" policy. Based on the analytical framework of benefit cost analysis, this paper concludes that the implementation of the reforestation of sloping agricultural land policy would not be possible if there were no government subsidies for the peasants. The short term economic returns of land and labour from forestation are substantially lower than those generated from grain or cash crop production on the steep slope lands. The government subsidies provide great economic incentives for peasants to take part in the project. The subsidies in fact have elevated peasant income in rural Liping. The estimated potential economic returns of plantations over the long run indicate that the removal of the government financial subsidies would not create an economic crisis for the peasants if the current market conditions continue.     

Climate adaptation management and institutional erosion: insights from a major Canadian port

This paper performs an institutional analysis of the adaptation to climate change by ports, through a case study of the port of Vancouver, Canada. While previous literature has demonstrated the value of informal institutions for filling gaps left by formal institutions, the role of failed informal institutions has received less attention. Our analysis reveals how, in the case of an unprecedented challenge like climate adaptation, relying on informal institutions with less agency can actually erode the strength of existing institutions in a form of negative institutional plasticity. In this case, emerging polycentric governance was unsuccessful, unable to construct clearly demarcated responsibilities due to impedance by the path dependence of the current federalist system. The latter works well for traditional infrastructure investments with a closed pool of stakeholders, but not for ports where multiple scales of embeddedness, both horizontally and vertically, produce a collective action problem with no mechanism for resolution.     

EFFECTS OF SCALE ON LAND USE AND WATER QUALITY RELATIONSHIPS: A LONGITUDINAL BASIN‐WIDE PERSPECTIVE1

ABSTRACT: Human land use is a major source of change in catchments in developing areas. To better anticipate the long‐term effects of growth, land use planning requires estimates of how changes in land use will affect ecosystem processes and patterns across multiple scales of space and time. The complexity of biogeochemical and hydrologic interactions within a basin makes it difficult to scale up from process‐based studies of individual reaches to watershed scales over multiple decades. Empirical models relating land use/land cover (LULC) to water quality can be useful in long‐term planning, but require an understanding of the effects of scale on apparent land use‐water quality relationships. We empirically determined how apparent relationships between water quality and LULC data change at different scales, using LIJLC data from the Willapa Bay watershed (Washington) and water quality data collected along the Willapa and North Rivers. Spatial scales examined ranged from the local riparian scale to total upstream catchment. The strength of the correlations between LTJLC data and longitudinal water quality trends varied with scale. Different water quality parameters also varied in their response to changes in scale. Intermediate scales of land use data generally were better predictors than local riparian or total catchment scales. Additional data from the stream network did not increase the strength of relationships significantly. Because of the likelihood of scale‐induced artifacts, studies quantifying land use‐water quality relationships performed at single scales should be viewed with great caution.     

Information Network Topologies for Enhanced Local Adaptive Management

We examined the principal effects of different information network topologies for local adaptive management of natural resources. We used computerized agents with adaptive decision algorithms with the following three fundamental constraints: (1) Complete understanding of the processes maintaining the natural resource can never be achieved, (2) agents can only learn by experimentation and information sharing, and (3) memory is limited. The agents were given the task to manage a system that had two states: one that provided high utility returns (desired) and one that provided low returns (undesired). In addition, the threshold between the states was close to the optimal return of the desired state. We found that networks of low to moderate link densities significantly increased the resilience of the utility returns. Networks of high link densities contributed to highly synchronized behavior among the agents, which caused occasional large-scale ecological crises between periods of stable and high utility returns. A constructed network involving a small set of experimenting agents was capable of combining high utility returns with high resilience, conforming to theories underlying the concept of adaptive comanagement. We conclude that (1) the ability to manage for resilience (i.e., to stay clear of the threshold leading to the undesired state as well as the ability to re-enter the desired state following a collapse) resides in the network structure and (2) in a coupled social–ecological system, the systemwide state transition occurs not because the ecological system flips into the undesired state, but because managers lose their capacity to reorganize back to the desired state. An erratum to this article can be found at .     

Investigating urban migrants' sense of place through a multi-scalar perspective

This paper investigates the interconnections between sense-of-place dimensions across different geographical scales. While existing knowledge on sense of place has demonstrated that place meanings rest at various scales, little attention has been devoted to exploring how sense-of-place dimensions at different geographical scales can be interconnected in forming a multi-scalar construction of place meanings. In this paper, we approach this under-theorization of multi-scalarity of sense of place by looking at urban migrants’ sense of place at two geographical scales - a community culture center and the city of Guangzhou, China. In so doing, we also contribute to the scholarship on Chinese urban migrant, particularly in terms of how urban migrants reestablish their psychological connections with place of destination through specific place experiences. Our research methodology combines both quantitative (structural equation modeling analysis with 104 questionnaires) and qualitative (12 in-depth interviews) approaches. Quantitative study reaches a structural model that has not been observed by existing research, while qualitative data provide strong empirical evidence in support of the statistical relations in the structural model. Major findings in this research include: 1. at the scale of culture center, place dependence contributes strongly to both place identity and place attachment, while the latter two dimensions can be seen as parallel constructs; 2. at the scale of Guangzhou, place dependence is a dimension independent of both place identity and place attachment, and on the other hand, it is place identity that has a strong impact on place attachment; 3. migrants’ place dependence on the culture center significantly influences their place identity to Guangzhou, which further contributes to the migrants’ place attachment to the city. Although the scope of this research is limited in its sampling and research location, the empirical evidence in this paper provides a basis to argue that the construction of sense of place involves the working of sense-of-place constructs at various geographical scales. Particularly, we also argue that connecting different places across geographical scales requires a delicate network that involves various sense-of-place constructs that work both within and across scales.     

Exploring Persistence in Streamflow Forecasting

In this study, the authors explore three persistence approaches in streamflow forecasting motivated by the need for forecasting model skill evaluation. The authors use streamflow observations with 15 min resolution from the year 2008 to 2017 at 140 United States Geological Survey streamflow gauges monitoring the streams and rivers over the State of Iowa. The spatial scale of the basins ranges from about 7 to 37,000 km². The study explores three approaches: simple persistence, gradient persistence, and anomaly persistence. The study shows that persistence forecasts skill has strong dependence on basin scales and weaker but non‐negligible dependence on geometric properties of the river network for a given basin. Among the three approaches explored, anomaly persistence shows highest skill especially for small basins, under about 500 km². The anomaly persistence can serve as a benchmark for model evaluations considering the effect of basin scales and geometric properties of river network of the basin. This study further reiterates that persistence forecasts are hard‐to‐beat methods for larger basin scales at short to medium forecast range.     

Market reactions to Australian boutique resource investor presentations

This paper examines the market reactions to 817 investor presentations by 326 Australian resource firms and finds evidence suggesting these events are informative. Furthermore, the positive returns do not reverse over the following 15 days, which contrasts with previous investor presentation research. However, consistent with the prior literature, extended long run cumulative abnormal returns are not significantly different from zero. This paper also documents stronger reactions to first time presenting firms, presentations that are announced to the market and firms exhibiting at the Africa Downunder and Excellence in Oil & Gas conferences. There are also stronger reactions for firms with lower ownership concentration. Examining boutique resource firm investor presentations adds to the existing disclosure and dissemination literature due to the presence of relatively high information asymmetry in the extractive industries, a unique setting, which contrasts with previous studies.     

Short-term field observations of nitrous oxide saturations in Lake Taihu, China: the need for high temporal resolution studies

The incomplete understanding of the processes which control aquatic nitrous oxide (N2O) production is partially due to a lack of onsite data with which to describe the temporal resolution of N2O production. To help resolve this, we directly measured the N2O saturation (relative to atmospheric partial pressure) on an hourly basis over two survey periods (July and September 2003) in Lake Taihu, a large eutrophic lake in eastern China. July N2O saturations displayed a distinct diurnal pattern, opposite to those observed by others in subtropical streams, but similar to N2O emissions observed from incubated estuarine sediments. Correlative analyses indicate that biogeochemical processes operate as important controls on N2O production over very short time scales. Nitrous oxide production processes are not only regulated by O2 dynamics related to microalgal photosynthesis, but also closely related to organic matter decay at the sediment-water interface. While large-scale changes (approximately 25-fold) in N2O fluxes in Lake Taihu are a function of variable N loading, biogeochemical processes concerning O2 and N transformation at the sediment-water interface have significant (-twofold) impacts on the regulation of N2O production over very short time scales. Further, high temporal resolution research focused on developing a comprehensive understanding of lacustrine N2O production, including natural and anthropogenic loading and biogeochemical transformation processes, is clearly needed.     

ROLE OF IRRIGATION WATER IN AGRICULTURAL PRODUCTION: SOME RESOURCE USE ISSUES1

ABSTRACT: A partial production function for corn that considers the time and amount of water applications is determined. Examples are worked out by using data on site specific parameters for nine soil sites in the Great Plains Region repesenting various combinations of water holding capacity, pan evaporation, and average rainfall. It is found that soils with a low water holding capacity are more water and energy intensive in crop production and thus more vulnerable to fluctuations in net returns due to declining water tables or energy shortages. Despite this, farmers of low water holding capacity soils are likely to opt for irrigation. This points to the existence of a necessary, but sufficient, condition for socially inefficient use of ground water resources. This calls to question the property right concept in water created through the appropriation doctrine and the “law of capture.” This paper indicates the type of analysis that must be undertaken in order to make appropriate changes in laws governing water use.     

Reducing phosphorus runoff from dairy farms

Phosphorus (P) runoff from manure can lead to eutrophication of surface water and algae growth. This study evaluates the impacts of alternative P reduction practices on dairy farm net returns and on potential P runoff. The P control practices include dairy herd nutrient management, crop nutrient management, and runoff and erosion control. Four farms representative of dairies in the Virginia Shenandoah Valley are simulated including dairies with and without supplementary broiler enterprises and with average and below average land area. A mathematical programming model was developed to predict farm production and net returns and the GLEAMS model was used to predict potential P runoff. The farms are evaluated under four scenarios: Scenario 1, no constraint on P runoff with access to crop nutrient, runoff and erosion control strategies but no access to dairy herd nutrient control strategies; Scenario 2, no constraint on P runoff with access to all crop and dairy herd nutrient control strategies; Scenario 3, constraint on P runoff with access to crop nutrient, runoff and erosion control strategies but no access to dairy herd nutrient control strategies; and Scenario 4, constraint on P runoff with access to all crop and dairy herd nutrient control strategies. Under Scenario 2, the herd nutrient control strategies increase milk output per cow and net returns on both farms and reduce P content of manure and P runoff. Under Scenario 3, limiting P runoff reduces farm returns by 1 and 3% on the average and small farms, respectively. Under Scenario 4, the P runoff constraint is less costly, reducing returns by less than 1% on both farms. Animal nutrient control strategies should be an important part of pollution control policies and programs for livestock intensive watersheds.     

RELATION OF NITRATE CONCENTRATIONS TO BASEFLOW IN THE RACCOON RIVER,IOWA1

ABSTRACT: Excessive nitrate‐nitrogen (nitrate) export from the Raccoon River in west central Iowa is an environmental concern to downstream receptors. The 1972 to 2000 record of daily streamflow and the results from 981 nitrate measurements were examined to describe the relation of nitrate to streamflow in the Raccoon River. No long term trends in streamflow and nitrate concentrations were noted in the 28‐year record. Strong seasonal patterns were evident in nitrate concentrations, with higher concentrations occurring in spring and fall. Nitrate concentrations were linearly related to streamflow at daily, monthly, seasonal, and annual time scales. At all time scales evaluated, the relation was improved when baseflow was used as the discharge variable instead of total streamflow. Nitrate concentrations were found to be highly stratified according to flow, but there was little relation of nitrate to streamflow within each flow range. Simple linear regression models developed to predict monthly mean nitrate concentrations explained as much as 76 percent of the variability in the monthly nitrate concentration data for 2001. Extrapolation of current nitrate baseflow relations to historical conditions in the Raccoon River revealed that increasing baseflow over the 20th century could account for a measurable increase in nitrate concentrations.     

Evaluation of a Three‐Dimensional Hydrodynamic Model Applied to Chesapeake Bay Through Long‐Term Simulation of Transport Processes

A numerical model, the Curvilinear Hydrodynamics in 3‐Dimensions, Waterway Experiment Station version (CH3D‐WES), was applied to represent transport processes of the Chesapeake Bay. Grid resolution and spatial coverage, tied with realistic bathymetry, ensured dynamic responses along the channel and near the shoreline. The model was run with the forcing ranges from high frequency astronomical tides to lower frequency meteorological forcing, given by surface wind and heat flux, as well as hydrological forcing given by fresh water inflows both from upstream and distributed sources along the shoreline. To validate the model, a long‐term simulation over seven‐year time period between 1994 and 2000 was performed. The model results were compared with existing observation data including water level time series, which spans over a wide spectrum of time scales, and long‐term variations in salinity structures over varying parts of the Bay. The validated model is set to provide an appropriate transport mechanism to the water quality model through linkage, warranting that the model takes into account the complexity in time and spatial scales associated with the dynamic processes in the Chesapeake.     

TEMPORAL VARIABILITY OF WATER QUALITY IN THE ST. LUCIE ESTUARY,SOUTH FLORIDA1

ABSTRACT: Four years of monthly freshwater discharge and constituent concentration data from three tributaries were related to a concurrent series of data for three segments of the St. Lucie Estuary in South Florida using multiple regression and time-series analysis techniques. Water quality parameters examined were dissolved inorganic and total nitrogen and phosphorus, chlorophyll a, total suspended solids, turbidity, and color. On monthly time scales, a multiple regression, which included freshwater discharge, freshwater constituent concentration, and dilution with ocean water (salinity) as independent variables, explained 50 percent or less of the variability in estuarine constituents. No single independent variable explained more variation than another. By contrast, on seasonal (wet, dry) time scales, freshwater discharge explained the bulk of variation in estuarine water quality (up to 93 percent). On monthly time scales, variability in concentrations of nutrients and other constituents may be largely controlled by processes internal to the system. At seasonal time scales, freshwater discharge appears to drive variability in most estuarine water quality parameters examined. Results indicate that management of tributary input on a seasonal basis, with the expectation of achieving seasonal concentration goals in the estuary, would have a higher probability of success than managing on a monthly basis.     

Commodity futures and market efficiency: A fractional integrated approach

In financial time series, persistence or inertia is a feature usually observable in absolute returns, i.e., a proxy for volatility. Moreover, asset return series should be essentially unpredictable according to the efficiency market hypothesis (EMH) in its weak form. Surprisingly, recent literature has found evidence of anti-persistence in technology stocks and commodity futures returns. Anti-persistence would be indicative of an overreaction of asset prices to incoming information.     

Biological Connectivity of Seasonally Ponded Wetlands across Spatial and Temporal Scales

Many species that inhabit seasonally ponded wetlands also rely on surrounding upland habitats and nearby aquatic ecosystems for resources to support life stages and to maintain viable populations. Understanding biological connectivity among these habitats is critical to ensure that landscapes are protected at appropriate scales to conserve species and ecosystem function. Biological connectivity occurs across a range of spatial and temporal scales. For example, at annual time scales many organisms move between seasonal wetlands and adjacent terrestrial habitats as they undergo life‐stage transitions; at generational time scales, individuals may disperse among nearby wetlands; and at multigenerational scales, there can be gene flow across large portions of a species’ range. The scale of biological connectivity may also vary among species. Larger bodied or more vagile species can connect a matrix of seasonally ponded wetlands, streams, lakes, and surrounding terrestrial habitats on a seasonal or annual basis. Measuring biological connectivity at different spatial and temporal scales remains a challenge. Here we review environmental and biological factors that drive biological connectivity, discuss implications of biological connectivity for animal populations and ecosystem processes, and provide examples illustrating the range of spatial and temporal scales across which biological connectivity occurs in seasonal wetlands.