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Automated condition surveys have been recently introduced for condition assessment of highway infrastructures worldwide. Accurate predictions of the current state, median life (ML) and future state of highway infrastructures are crucial for developing appropriate inspection and maintenance strategies for newly created as well as existing aging highway infrastructures. The paper aims to discuss these issues.

This paper proposes Markov Chain based deterioration modelling using a linear transition probability (LTP) matrix method and a median life expectancy (MLE) algorithm. The proposed method is applied and evaluated using condition improvement between the two successive inspections from the Surface Condition Assessment of National Network of Roads survey of the UK Pavement Management System.

The proposed LTP matrix model utilises better insight than the generic or decoupling linear approach used in estimating transition probabilities formulated in the past. The simulated LTP predicted conditions are portrayed in a deterioration profile and a pairwise correlation. The MLs are computed statistically with a cumulative distribution function plot.

The paper concludes that MLE is ideal for projecting half asset life, and the LTP matrix approach presents a feasible approach for new maintenance regime when more certain deterioration data become available.

Labor force transitions are empirically examined using Current Population Survey (CPS) data matched across months from 1996 to 2012 for Hispanics, African-Americans, and whites. Transition probabilities are contrasted prior to the Great Recession and afterward. Estimates indicate that minorities are more likely to be fired as business cycle conditions worsen. Estimates also show that minorities are usually more likely to be hired when business cycle conditions are weak. During the Great Recession, the odds of losing a job increased for minorities although cyclical sensitivity of the transition declined. Odds of becoming re-employed declined dramatically for blacks, by 2–4%, while the probability was unchanged for Hispanics.

This chapter estimates a regime switching Taylor Rule for the European Central Bank (ECB) in order to investigate some potential nonlinearities in the forward-looking policy reaction function within a real-time framework. In order to compare observed and predicted policy behavior, the chapter estimates Actual and Perceived regime switching Taylor Rules for the ECB. The former is based on the refi rate set by the Governing Council while the latter relies on the professional point forecasts of the refi rate performed by a large investment bank before the upcoming policy rate decision. The empirical evidence shows that the Central Bank’s main policy rate has switched between two regimes: in the first one the Taylor Principle is satisfied and the ECB stabilizes the economic outlook, while in the second regime the Central Bank cuts rates more aggressively and puts a higher emphasis on stabilizing real output growth expectations. Second, the results point out that the professional forecasters have broadly well predicted the actual policy regimes. The estimation results are also robust to using consensus forecasts of inflation and real output growth. The empirical evidence from the augmented Taylor Rules shows that the Central Bank has most likely not responded to the growth rates of M3 and the nominal effective exchange rate and the estimated regimes are robust to including these additional variables in the regressions. Finally, after the bankruptcy of Lehman Brothers the policy rate has switched to a crisis regime as the ECB has focused on preventing a further decline in economic activity and on securing the stability of the financial system.

I survey applications of Markov switching models to the asset pricing and portfolio choice literatures. In particular, I discuss the potential that Markov switching models have to fit financial time series and at the same time provide powerful tools to test hypotheses formulated in the light of financial theories, and to generate positive economic value, as measured by risk-adjusted performances, in dynamic asset allocation applications. The chapter also reviews the role of Markov switching dynamics in modern asset pricing models in which the no-arbitrage principle is used to characterize the properties of the fundamental pricing measure in the presence of regimes.

I review the burgeoning literature on applications of Markov regime switching models in empirical finance. In particular, distinct attention is devoted to the ability of Markov Switching models to fit the data, filter unknown regimes and states on the basis of the data, to allow a powerful tool to test hypotheses formulated in light of financial theories, and to their forecasting performance with reference to both point and density predictions. The review covers papers concerning a multiplicity of sub-fields in financial economics, ranging from empirical analyses of stock returns, the term structure of default-free interest rates, the dynamics of exchange rates, as well as the joint process of stock and bond returns.

We compare the finite sample power of short- and long-horizon tests in nonlinear predictive regression models of regime switching between bull and bear markets, allowing for time varying transition probabilities. As a point of reference, we also provide a similar comparison in a linear predictive regression model without regime switching. Overall, our results do not support the contention of higher power in longer horizon tests in either the linear or nonlinear regime switching models. Nonetheless, it is possible that other plausible nonlinear models provide stronger justification for long-horizon tests.

Negative effects of habitat isolation that arise from landscape fragmentation can be mitigated, by connecting natural areas through a network of habitat corridors. To increase the permeability of a given network, i.e. to decrease the resistance to animal movements through this network, often many developments can be made. The available financial resources being limited, the most effective developments must be chosen. This optimization problem, suggested in Finke and Sonnenschein, can be treated by heuristics and simulation approaches, but the method is heavy and the obtained solutions are sub‐optimal. The aim of the paper is to show that the problem can be efficiently solved to optimality by mathematical programming.

The moves of the individual in the network are modeled by an absorbing Markov chain and the development problem is formulated as a mixed‐integer quadratic program, then this program is linearized, and the best developments to make are determined by mixed‐integer linear programming.

First, the approach allows the development problem to be solved to optimality contrary to other methods. Second, the definition of the mathematical program is relatively simple, and its implementation is immediate by using standard, commercially available, software. Third, as it is well known with mixed‐integer linear programming formulation it is possible to add new constraints easily if they are linear (or can be linearized).

With a view to propose a simple and efficient tool to solve a difficult combinatorial optimization problem arising in the improvement of permeability across habitat networks, the approach has been tested on simulated habitat networks. The research does not include the study of some precise species movements in a real network.

The results provide a simple and efficient decision‐aid tool to try to improve the permeability of habitat networks.

The joint use of mathematical programming techniques and Markov chain theory is used to try to lessen the negative effects of landscape fragmentation.

Develops an original 12‐step management of technology protocol and applies it to 51 applications which range from Du Pont’s failure in Nylon to the Single Online Trade Exchange for Auto Parts procurement by GM, Ford, Daimler‐Chrysler and Renault‐Nissan. Provides many case studies with regards to the adoption of technology and describes seven chief technology officer characteristics. Discusses common errors when companies invest in technology and considers the probabilities of success. Provides 175 questions and answers to reinforce the concepts introduced. States that this substantial journal is aimed primarily at the present and potential chief technology officer to assist their survival and success in national and international markets.

Probability of Default (PD) is a crucial credit risk parameter. International accords have motivated banks and credit institutions to adopt objective systems of evaluating and monitoring the PD. This study examines retail unsecured loans of a major Greek bank during the period of the financial crisis. It focusses on the stochastic behaviour of the financial states of the loans. It is tested whether a first-order Markov chain (MC) model describes sufficiently the transitions from one state to another. Moreover, Poisson regression models are estimated in order to calculate the limiting transition matrix, the limiting state probabilities and the PD. It is proved that the MC of the financial states of loans is non-homogeneous suggesting that the transition probabilities from one financial state to another are not constant across time. From the Poisson regression models, the transition probability matrix is estimated from one state to another in alternative time periods. From the limiting transition matrix, it is shown that if a loan is delayed then it is very likely to move towards the next worst case. The findings of this research could be useful for bank management.

The purpose of this paper is to study repairable consecutive‐k‐out‐of‐n: systems with r repairmen and a sensing device.

The system can either be a circular C(k, n: G) system or a linear C(k, n: G) system. The working time and the repair time of each component in the system and the sensor detection time are exponentially distributed. Every component after repair is perfect. Each component is classified as either a key component, or an ordinary one according to its priority role to system's repair. A sensing device is introduced to detect the failure of each component in the system in advance and completion of repair of components. If the repair is completed, the sensor will send the component to standby according to its priority. The state transition probabilities of the system are derived using the definition of generalized transition probability. To obtain the reliability and availability Laplace transform techniques have been used.

The Kolmogorov‐Feller forward equations are derived for both linear and circular systems. Reliability and MTTF of both the systems are derived using Laplace transforms. Numerical examples are given in detail to demonstrate the theoretical results and these verify the validity of the studied system.

A consecutive‐k‐out‐of‐n system consists of a sequence of n‐ordered components along a line or a circle such that the system is good if and only if at least k consecutive components in the system are good. Each component in the system is classified as key component or ordinary component according to its priority in system functioning. By using a sensing device the failure can be detected in advance.

This study indicates that by using a sensing device we can detect the failure in advance. Thus, the reliability and MTTF of the system can be improved.