CONFLICT RESOLUTION IN INVESTMENT DECISIONS: IMPLEMENTATION OF GOAL PROGRAMMING METHODOLOGY FOR DUAL-PURPOSE FUNDS*

Goal programming (GP) is designed to resolve allocation problems with conflicting goals. Both goals and constraints are incorporated in the allocational decision, and the objective function is stated in a way that, upon solution, yields a result “as close as possible” to the priority-weighted goals. The present paper applies GP methodology to the investment decision of dual-purpose funds (DPFs), that are required by law to pursue allocational decisions with potentially conflicting objectives. It provides an empirical demonstration that DPF managers could have improved their investment selection and subsequent performance by the use of GP methodology. Finally the paper stresses the importance of sensitivity analysis to improve both the goal-ranking and target-selection aspects of the methodology and provides a limited but illuminating empirical demonstration of post-optimality analysis.     

DETERMINING THE APPROPRIATE DISCOUNT RATES IN PURE CAPITAL RATIONING

This paper proposes an interpretation of the pure capital rationing problem as it is faced by many managers in decentralized firms in which budgets serve as the principal means of control. It is argued that the appropriate objective for situations such as these is the maximization of either undiscounted earnings over the planning horizon or total value of the investments at the horizon. When either objective function is used in conjunction with the frequently encountered linear programming models for the capital rationing problem, shadow prices result which give rise to discount rates that will reproduce the optimal solution using discounted cash flow as a criterion. These results are then used as a means for clarifying several confusing and misleading statements that have appeared in the literature.     

AUTOCORRELATED CASH FLOWS AND THE SELECTION OF A PORTFOLIO OF CAPITAL ASSETS *

Capital budgeting models for analyzing real assets typically are based on a set of restrictive assumptions that influence financial managers' decisions and may prevent optimization of the firm's objectives. This research examines the common restrictive assumption that cash flows are intertemporally independent by first developing an economic state and simulation model based on a Markov process for including autocorrelated cash flows in the capital budgeting decision process and then demonstrating why managers should include autocorrelated cash flows in capital budgeting models by empirically testing the impact of assuming intertemporally independent cash flows on capital budgeting decisions. The results indicate that ignoring autocorrelated cash flows seriously limits the ability of capital budgeting models to provide optimal investment decisions. The model also is very attractive for practical application because it can be implemented with a minimum number of estimates and provides the set of input data required by a number of capital budgeting models. A discussion of the implementation of the model is included.     

DYNAMIC OPERATING RULES FOR MOTEL RESERVATIONS

When customers call a motel or a hotel to reserve a particular room (large, small, suites, single-bed, double-bed, etc.) decisions have to be made concerning the allocation of the available rooms. This paper presents a model for determining the maximum number of specific bookings that should be made for each type of room. The objective is to maximize the expected contribution to profit per rental day. The model considers the distribution of requests for reservations over time as well as cancellations. Also included are the effects of late (unbooked) arrivals and overbookings.     

Policy relevant heterogeneity in the value of statistical life: New evidence from panel data quantile regressions

We examine differences in the value of statistical life (VSL) across potential wage levels in panel data using quantile regressions with intercept heterogeneity. Latent heterogeneity is econometrically important and affects the estimated VSL. Our findings indicate that a reasonable average cost per expected life saved cut-off for health and safety regulations is 7 million to7 million to 8 million per life saved, but the VSL varies considerably across the labor force. Our results reconcile the previous discrepancies between hedonic VSL estimates and the values implied by theories linked to the coefficient of relative risk aversion. Because the VSL varies elastically with income, regulatory agencies should regularly update the VSL used in benefit assessments, increasing the VSL proportionally with changes in income over time.     

'I made some mistakes . . . but I love them dearly' the views of parents of children in informal kinship care

In-depth semi-structured interviews with 30 parents of children living with relatives in informal kinship care arrangements revealed the parents' views of the reasons for the informal kinship care arrangements, quality of their relationships with the children and their caregivers, their current and future roles in their children's lives, feelings experienced when with and away from the children, positive and negative aspects of kinship care, future goals and dreams for their children, and their assessments of their own strengths and challenges. Results of these interviews suggest several implications for social work practice and research.     

Dose‐Response Models Incorporating Aerosol Size Dependency for Francisella tularensis

The effect of bioaerosol size was incorporated into predictive dose‐response models for the effects of inhaled aerosols of Francisella tularensis (the causative agent of tularemia) on rhesus monkeys and guinea pigs with bioaerosol diameters ranging between 1.0 and 24 μm. Aerosol‐size‐dependent models were formulated as modification of the exponential and β‐Poisson dose‐response models and model parameters were estimated using maximum likelihood methods and multiple data sets of quantal dose‐response data for which aerosol sizes of inhaled doses were known. Analysis of F. tularensis dose‐response data was best fit by an exponential dose‐response model with a power function including the particle diameter size substituting for the rate parameter k scaling the applied dose. There were differences in the pathogen's aerosol‐size‐dependence equation and models that better represent the observed dose‐response results than the estimate derived from applying the model developed by the International Commission on Radiological Protection (ICRP, 1994) that relies on differential regional lung deposition for human particle exposure.     

A Comparative Pharmacokinetic Estimate of Mercury in U.S. Infants Following Yearly Exposures to Inactivated Influenza Vaccines Containing Thimerosal

The use of thimerosal preservative in childhood vaccines has been largely eliminated over the past decade in the United States because vaccines have been reformulated in single‐dose vials that do not require preservative. An exception is the inactivated influenza vaccines, which are formulated in both multidose vials requiring preservative and preservative‐free single‐dose vials. As part of an ongoing evaluation by USFDA of the safety of biologics throughout their lifecycle, the infant body burden of mercury following scheduled exposures to thimerosal preservative in inactivated influenza vaccines in the United States was estimated and compared to the infant body burden of mercury following daily exposures to dietary methylmercury at the reference dose established by the USEPA. Body burdens were estimated using kinetic parameters derived from experiments conducted in infant monkeys that were exposed episodically to thimerosal or MeHg at identical doses. We found that the body burden of mercury (AUC) in infants (including low birth weight) over the first 4.5 years of life following yearly exposures to thimerosal was two orders of magnitude lower than that estimated for exposures to the lowest regulatory threshold for MeHg over the same time period. In addition, peak body burdens of mercury following episodic exposures to thimerosal in this worst‐case analysis did not exceed the corresponding safe body burden of mercury from methylmercury at any time, even for low‐birth‐weight infants. Our pharmacokinetic analysis supports the acknowledged safety of thimerosal when used as a preservative at current levels in certain multidose infant vaccines in the United States.