Derek Deadman

Speculative bubbles with stochastic explosive roots: The failure of unit root testing

Abstract This paper analyses the possibility of using unit root tests for testing for the presence of multiplicative processes which have a stochastic explosive root. It is shown that such processes encompass a large class of non-negative processes used in the analysis of financial markets, such as the geometric unit root process and the non-negative version of the Diba-Grossman speculative bubble process. Simulation analysis shows that the results of Evans which indicated the weakness of unit root tests for detecting periodically collapsing bubbles also extend to the class of stochastic explosive root bubbles.

Forecasting Residential Burglary

Abstract Following the work of Dhiri et al. [ Modelling and predicting property crime trends . Home Office Research Study 198 (1999). London: HMSO] at the Home Office predicting recorded burglary and theft for England and Wales to the year 2001, econometric and time series models were constructed for predicting recorded residential burglary to the same date. A comparison between the Home Office econometric predictions and the less alarming econometric predictions made in this paper identified the differences as stemming from the particular set of variables used in the models. However, the Home Office and one of our econometric models adopted an error correction form which appeared to be the main reason why these models predicted increases in burglary. To identify the role of error correction in these models, time series models were built for the purpose of comparison, all of which predicted substantially lower numbers of residential burglaries. The years 1998–2001 appeared to offer an opportunity to test the utility of error correction models in the analysis of criminal behaviour. Subsequent to the forecasting exercise carried out in 1999, recorded outcomes have materialised, which point to the superiority of time series models compared to error correction models for the short-run forecasting of property crime. This result calls into question the concept of a long-run equilibrium relationship for crime.

The relationship between crime, punishment and economic conditions: is reliable inference possible when crimes are under-recorded?

We investigate the estimation of dynamic models of criminal activity, when there is significant under-recording of crime. We give a theoretical analysis and use simulation techniques to investigate the resulting biases in conventional regression estimates. We find the biases to be of little practical significance. We develop and apply a new simulated maximum likelihood procedure that estimates simultaneously the measurement error and crime processes, using extraneous survey data. This also confirms that measurement error biases are small. Our estimation results for data from England and Wales imply a significant response of crime to both the economic and the enforcement environment.

Rational and intrinsic bubbles: a reinterpretation of empirical results

Generally, the empirical evaluation of rational and intrinsic bubbles in stock markets cannot be approached by the use of unit root tests, since the appropriate null hypothesis in such cases is that of the bubble rather than of a unit root process. In this paper, rational and intrinsic bubble processes are simulated using parameter values suggested by previous research. This suggests the possibility of testing bubbles by customized testing, i.e. through simulation of the process under the null hypothesis conditional on assumed a priori parameters of the process.

Why has Crime Fallen? An Economic Perspective

In this paper we consider the reasons why the general level of recorded crime has been falling in the United States and many European countries in the last ten years. We review the time-series statistical evidence on the determinants of crime, and investigate the extent to which these determinants are matched with survey evidence on the offending behaviour of young people. This survey evidence is particularly revealing on the perceptions of young people to various sorts of deterrents, and it also highlights a strong association between illicit drug use and involvement in crime.

Recycling of secondary materials: An econometric study of the U.K. aluminium industry

Abstract This paper examines the opportunities for increased recycling of aluminium in the U.K. from an econometric standpoint. The relationship between the primary and secondary industries is outlined and some econometric results on the demand and supply relationships in the secondary market are presented. The castings and the motor industries appear to be the major determinants of the demand for recycled aluminium. Overall a fairly discouraging picture is presented in terms of the potential for increased aluminium recycling rates, given current technological capabilities.

A circadian rhythm of locomotor activity in newly emerged Ceratophyllus sciurorum

Abstract Circadian rhythm in newly emerged individuals of the Red Squirrel (Scuirus vulgaris) flea C.s. sciurorum was studied in a constant environment, using an insect activity monitor. Trials were run over 7 days using two start times (08.00 and 17.00 hours). The results show that, regardless of start time, the fleas display a 24 h activity rhythm. The presence of a rhythm under constant conditions gives a strong indication that C. s.sciurorum has a self‐sustaining clock which is started by disturbance and is most likely to be linked to host activity patterns.

Forecasting fertilizer consumption and production: Long- and short-run models

Abstract The aims of this paper are two-fold. First, we present a survey of recent extrapolative long-run forecasts of world fertilizer production and consumption to the year 2000, including our own forecasts for this period. Second, we examine critically the various approaches that have been suggested in the study of short-run fluctuations in demand and supply for individual countries which have a great bearing on short-run economic policy. In particular, the models due to Griliches and Timmer are discussed and evaluated, and an alternative approach is suggested.