Value Principle Research Articles

Possibilità dell’aura tra arte e musica. Appunti su Benjamin e Adorno

In Paris, metropolis of xix century, Benjamin traces the new paradigm of modernity: the modern theatrical dimension corresponds to the artistic innovations and to the reproduction of aesthetical requests. Entfremdung and Neutralisierung are the main characters of the Ästhetisierung and they are one with the distraction as principle of reception and the conformism as principle of valuation. This is the context of the aura’s decline. The Adorno’s critical essay on the radio (1963) analyses the transformation of works of art in cultural gifts and, in particular, the loss of autonomy of the musical work of art in the radio listening. The Adorno’s remarks recognize the historical character of aura and a new possibility that it can re-emerge in a new historical dimension of the music.

Valuing Installment Loan Receivables

Following the recent financial crisis, many banks are finding it increasingly difficult to book earning assets. To this end, many larger organizations are attempting to expand their consumer operations because of their relatively high promised returns. One dramatic move is to focus on the historically under-banked customers who do not have banking relationships. Another is to either create or purchase traditional consumer loan portfolios to achieve higher yields and to potentially transfer these assets to off-balance-sheet vehicles for capital requirement purposes. When purchasing these portfolios, regulatory approval is required, using an approved valuation method. Two alternative methods of valuing a portfolio of small, high-risk, high-overhead expense loans are presented and compared in this article. The first method, one approved by federal bank regulators in private examination cases, uses the accounting principle of valuation of an intangible asset. The present value of identifiable valuables (book value of the loan portfolio in this case) is added to the present value of the unidentifiable valuables (the above average rate of return of the risky cash flows in this case). The second method uses a “certainty equivalent” or “expected value” approach in which the certainty equivalent factors are estimated from historical data. The two methods produce similar but different values of the loan portfolio. The similarities and difference between the two approaches should shed light on the usefulness of the two alternatives in meeting government regulations as well as accurately valuing bank assets.

The Hotelling Valuation Principle: Evidence from the Six Super Majors

This paper applies the Hotelling Valuation Principle developed by Miller and Upton to the six super majors, multinational oil companies and extends their model by adding an explanatory variable as in world oil and gas inventory. The results do not support the Hotelling Valuation Principle and in fact the study finds that the in ground reserves of the six super majors are worth about twice as less as these same reserves once extracted. In addition, it is found that world stock effect has a significant impact on the value of oil and gas reserves and provides additional explanatory power to the Hotelling Valuation Principle.

Rethinking public ownership and participation

PurposeThis paper seeks to challenge the simplistic formulation of public ownership in terms of centralized planning and state bureaucracy. Instead, drawing on the works of Dewey and Veblen the paper aims to argue that public ownership is a critical aspect of forging progressive change through enhancing democratic participation in economic decision making.Design/methodology/approachThe paper presents a conceptual analysis of public ownership types and employs case examples to further illuminate the argument.FindingsThe conceptual analysis challenges the supposition of market superiority in standard economic approaches and in neoliberalism. Drawing from the instrumental valuation principle a wide corpus of public ownership modes can offer the prospect of enhanced democratic participation that challenges existing power structures.Originality/valueBy emphasising the association between ownership and democracy the paper challenges the assumption that markets necessarily offer the only route to democratic participation. It also identifies and challenges the market fundamentalism of standard economic approaches.

Martingale methods for pricing inventory penalties under continuous replenishment and compound renewal demands

This paper addresses the problem of inventory penalty pricing under the risk-neutral valuation principle. The underlying production-inventory system has a constant replenishment rate and a compound renewal demand stream (i.e., iid demand interarrival times are independent of iid demand sizes), and is subject to underage and overage penalties. Our pricing approach treats the penalties as a series of perpetual American options, and constructs auxiliary martingale processes in term of the inventory process. We provide a necessary and sufficient martingale condition for general compound renewal demands. Explicit expressions of penalty functions for underage and overage are obtained for the case where demand arrivals follow a Poisson process.

Coherent Price Systems and Uncertainty-Neutral Valuation

We consider fundamental questions of arbitrage pricing arising when the uncertainty model incorporates volatility uncertainty. The resulting ambiguity motivates a new principle of preference-free valuation. By establishing a microeconomic foundation of sublinear price systems, the principle of ambiguity-neutral valuation imposes the novel concept of equivalent symmetric martingale measures. Such measures exist when the asset price with uncertain volatility is driven by Peng's G-Brownian motion.

Economic vulnerability of timber resources to forest fires

The temporal-spatial planning of activities for a territorial fire management program requires knowing the value of forest ecosystems. In this paper we extend to and apply the economic valuation principle to the concept of economic vulnerability and present a methodology for the economic valuation of the forest production ecosystems. The forest vulnerability is analyzed from criteria intrinsically associated to the forest characterization, and to the potential behavior of surface fires. Integrating a mapping process of fire potential and analytical valuation algorithms facilitates the implementation of fire prevention planning. The availability of cartography of economic vulnerability of the forest ecosystems is fundamental for budget optimization, and to help in the decision making process.

An axiomatic approach to the valuation of cash flows

We model a stream of cash flows as an optional stochastic process, and value the cash flows by using a continuous and strictly positive linear functional. By applying a representation theorem from the general theory of stochastic processes we are able to study this valuation principle, as well as properties of the stochastic discount factor it implies. This approach to valuation is useful in the non-presence of a financial market, as is often the case when valuing cash flows arising from insurance contracts and in the application of real options.

Does A Trading Simulation Exercise Enhance Financial Learning?

This study investigates whether a bond trading simulation enhances student learning. Using traditional instructional methods, two groups of students are taught the basic principles of bond valuation. One of the two groups also participates in a simulation exercise. Both groups are given a test to assess their learning. The study does not find evidence that a bond simulation exercise has any significant impact on student learning, as measured by the test. The study, however, does find a significant relationship between a students GPA and his/her performance on the test.

Valuing Broadband Benefits: A Selective Report on Issues and Options

This report looks at some of the methodological considerations in valuing the benefits of broadband. It has a particular focus on these considerations in the context of the planned National Broadband Network (NBN) project in Australia and in the context of any social cost benefit analysis of the NBN or other broadband project. While the underlying principles of valuation are transferable to a variety of project settings, here they are discussed primarily with reference to the planned NBN.

Technical note: Forest valuation: a primer

Summary Forest valuation has become increasingly important. More and more forests are changing ownership and Australian corporations law requires companies owning and managing forests to incorporate the annual change in forest value into their profit and loss statement. This brief technical note summarises the key principles of forest valuation under the current accounting standards.

Financial distress and going concern disclosure: the case of Italian listed companies

?Going concern? refers to a company?s ability to continue functioning as a business entity. This principle, provided by accounting standards, is the basis of valuation principles applied to individual items of the financial statement and is particularly at stake in times of financial distress like the current one. Consequently, supervisory bodies specifically require information on the going concern risk and the relative assessments made by management. Moreover, going concern appears to be closely related to revenue management issues since, for instance, financially constrained firms are more susceptible to revenue management problems. A consistent stream of research has recently been devoted to a number of revenue management issues directly related to the going concern assumption (such as economic concerns, customer perception, competition, etc.). That said, the purpose of this paper is to understand ? through a qualitative analysis of the consolidated financial statements of Italian listed companies ? how Italian listed companies that declared themselves as going concerns provide going concern disclosure and whether their disclosure reflects their real economic and financial situation (so-called management disclosure behavior).

CREDIT RISK PREMIA AND QUADRATIC BSDEs WITH A SINGLE JUMP

This paper is concerned with the determination of credit risk premia of defaultable contingent claims by means of indifference valuation principles. Assuming exponential utility preferences we derive representations of indifference premia of credit risk in terms of solutions of Backward Stochastic Differential Equations (BSDE). The class of BSDEs needed for that representation allows for quadratic growth generators and jumps at random times. Since the existence and uniqueness theory for this class of BSDEs has not yet been developed to the required generality, the first part of the paper is devoted to fill that gap. By using a simple constructive algorithm, and known results on continuous quadratic BSDEs, we provide sufficient conditions for the existence and uniqueness of quadratic BSDEs with discontinuities at random times.

La patrimonialización como protección contra la mercantilización: paradojas de las sanciones culturales de lo igual y lo diferente

Este texto afirma que el patrimonio es un tipo de producción cultural que, en sus esfuerzos por proteger otras producciones culturales, ha usado de manera sostenida lógicas y modelos de aislamiento, oposición y valoración propios de la esfera de los intercambios económicos. En el patrimonio opera una suerte de economía cultural y, por tanto, estudiarlo desde esta perspectiva puede ser útil para pensar su definición, sus límites y sus determinaciones. Por otra parte, este texto plantea que el mercado contemporáneo se ordena sobre un modelo cultural, que he decidido llamar “producción de singularidad cultural”, tendiendo una red de producción de valor que, de forma paradójica, encuentra su principio de valoración en la defensa de lo invaluable, en su protección. De allí que patrimonialización y mercantilización aparezcan fuertemente asociadas aquí.

Socialism, knowledge, the instrumental valuation principle and the enhancement of individual dignity

Socialism is frequently associated with central planning, public ownership, anathema to markets and the emasculation of the individual. Recent market socialist contributions attempt to overcome socialism's seeming resistance to markets. However, such contributions are frequently undermined by Hayek's invocation of fragmented knowledge. This article endeavours to contribute to a broadly conceived socialism that is not grounded in a particular array of institutions, but one which, via the instrumental valuation principle, the capabilities approach and Dewey's conceptualization of knowledge, offers the prospect of enhancing individual dignity. The instrumental valuation principle is viewed as key to socialism's engagement with dignity as it provides the framework for the enhancement of egalitarianism, democracy and the undermining of invidious institutional arrangements.

Business and Science Valuation in Life Sciences A Practical Guide

“Valuation in Life Sciences” (A Practical Guide) : Reviewed by Ajeet Agnihotry and Neel Kamal Sharma. Published by Springer, pp. 370, Price : $71.96 (Hardcover) Valuation is a hot topic among life sciences professionals. This book deals specifically with Valuation in Life Science. As this is the focus issue for anyone involved in business development like: industry professionals, investors, and academics. This book will be of immense value to strategic planning, licensing and business development, corporate finance professionals and senior managers in all sectors of the life sciences industry. This book is structured in five parts. In first part that is in introduction, Author discuss the role of players in life sciences industry and describe why valuation is important to them. The second part deals with the input parameters required for valuation in life sciences. In the third part author discuss the principles of valuation. The fourth part is the core of book and guides the readers through theoretical aspects and practical applications of valuation in life sciences. In the fifth part of the book contain exercises which reader can use as a template for future valuation. In this book, author has written that what is sure to become the industry standard reference for valuation of pharmaceutical and biotechnology projects and companies. This book provides an introduction both to the development of new medicines and to the techniques of financial investment appraisal. The combined talents of both the authors have produced an brilliant synthesis of the parameters and stakes of the Life Sciences field, integrating them successfully in the most sophisticated economic evaluation models. According to the authors, traditional approaches to assessing investment opportunities fall short in the pharmaceutical industry. At a time when the healthcare industry is placing increasing emphasis on licensing as a core strategy this book provides a firm understanding of the way in which products and businesses can be valued at all stages of their development, while their thorough treatment of quantitative approaches to the valuation of companies provides a solid theoretical and practical framework for all of those involved in financing the new generation of biotechnology companies. This book has quickly become the standard reference in the industry. Both the authors introduce the characteristics of medical device development and drug, explain how to translate these into the valuation, and provide valuable industry data. The book also contains abundant case studies and exercises which clearly exemplify the most difficult theories. Methods and models for the evaluation of projects and companies are carefully described and explained and will thus provide a practical and rational basis for negotiations. More sophisticated evaluation techniques are necessary, particularly in respect of the drug development process, intellectual property evaluation, licensing and sublicensing. The book presents a number of innovative ideas, illustrated with practical examples, that should improve decision–making in these areas. The authors make a convincing case for the use of advanced techniques and the section on worked–examples should be particularly interesting to practitioners. Unique importance is put on the practicability of the projected methods by including many hands–on examples, without compromising on practical results. There is no doubt that this book will become an essential reference tool for professionals in technology transfer, business developers and biotech companies, as well as the pharmaceutical industry and Life science investors.

Can the concept of ecosystem services be practically applied to improve natural resource management decisions?

Applying ecosystem service valuation principles to natural resources management has the potential to encourage the efficient use of resources, but can decision support systems built on these principles be made both practical and robust? The limitations to building such systems are the practical limits on managers' time to develop or learn tools and the state of the science to support decision-making components. We address this question by applying a cost-effectiveness analysis framework and optimization model to support the targeting of restoration funds to control an invasive grass (Bromus tectorum) in agro-ecosystems. The optimization aims to maximize benefits derived from a suite of ecosystem services that may be enhanced through site restoration. The model combines a spatially-varying cost function with ecosystem service benefit functions that are risk-adjusted to capture the probability of successful restoration. We demonstrate that our approach generates roughly three times the level of ecosystem service benefits (as measured through indicators) compared to the current management strategy of selecting restoration sites that are superlative producers of one ecosystem service. The results showed that spatial (GIS) data and ecosystem understanding were sufficient to formally capture the managers' informal decisions and that cost-effectiveness of restoration could be improved by considering the ability of sites to jointly produce multiple ecosystem services and adjusting expected benefits by the probability of success.

Risk-Adjusted Damages Calculation in Breach of Contract Disputes: A Case Study

Risk-adjusted valuation is well established in both theory and business practice. However, its implications are not always immediately apparent or intuitive in legal disputes such as breach of contract lawsuits. In particular, damages are often calculated by discounting the differences in cash flows between but-for (no breach) and actual (breach) worlds by a single discount rate. While widely used, this approach can produce incorrect valuation results. This paper provides a case study of a breach of an electricity tolling agreement to illustrate the more general valuation principle of discounting but-for and actual cash flows using two discount rates.

A CRITICAL ANALYSIS OF CTLA'S DEPRECIATION FACTORS—DO INHERENT INCONSISTENCIES OF METHOD COMPLICATE THE SIMPLICITY OF PROCESS?

CTLA methods follow a cost approach to value. Their adherence to DRC* methodology is perhaps fortuitous, but nonetheless confers some authenticity to the methods, in so far as they are grounded upon universal valuation principles. Strength lies in the closeness of fit. However, because CTLA methods were not designed specifically for this purpose, there are anomalies in the system that warrant reconsideration. A common criticism of CTLA methods is that they are overly complicated. DRC theory is complex, but essentially simple by comparison: the lines of process are clean and uncluttered. It is the anomalies within the CTLA methods that complicate matters; stricter realignment with DRC theory could achieve greater simplicity without sacrificing complexity. Specifically, the efficiency of a tree's function (its site suitability) should be considered under the Species factor, not Location, and the Site Rating, within the Location factor, should be altered to Site Occupancy Rating.

Equity Valuation in the Coal Seam Gas Industry

The coal seam gas industry is an important and rapidly developing sector of the Australian mining industry and the economy as a whole. This sector provides an excellent site to test the relevance of the Hotelling Valuation Principle (HVP) in explaining the market capitalisation of this industry sector. In addition, the test enabled the test of which reserve classification best explains the market capitalisation of firms in the industry.Currently, the majority of listed firms in this sector do not have positive cash flows from the sale of gas. The HVP posits that market values are a function of company reserves. We test five measures of firm reserves as explanations of market capitalisation. After controlling for scale differences, we find that 2P Reserves have the highest explanatory power. No other measure of reserves or resources plays any significant role in explaining market capitalisation. We conclude that the effort and cost undertaken by the industry in arriving at classification below the reserves category, the contingent and possible resource classification, has no meaning to capital markets.