The University of Rwanda Launch Agribusiness Program in Rwanda

                                                                   Image Credit: MSU
Michigan State University and the University of Rwanda recently launched a new Master of Science degree program in agribusiness in Kigali, Rwanda.  The gender-sensitive degree program will enroll its first cohort of students in February 2015.

The degree program was jointly developed with funding provided by the U.S. Agency for International Development through the Women’s Leadership Program, implemented globally by Higher Education for Development.

The graduate program prioritizes accessibility to women and midcareer professionals and will incorporate extensive experiential learning opportunities for students. The structure of the program requires all students to partake in an internship, thus better preparing them for leadership and entrepreneurial roles in agriculture in Rwanda. 

“Agriculture is vital to the people and economy of Rwanda, and many of those involved in agriculture are women,” said James McWha, UR professor emeritus and vice chancellor. “Their input to the business of agriculture is essential. It is also important that agriculture adopts a modern business strategy because it is a business and all those involved must learn the relevant skills. This program brings together all the components necessary for a major development of the future of the agriculture and food industries in Rwanda.” 

Using a collaborative approach, the Women’s Leadership Program is designed to support access of women to higher education and advanced degrees, strengthen institutional capacity in research and education on women’s leadership and promote women’s leadership through higher education extension/outreach efforts in underserved communities. 

“The empowerment of women through the expansion of their leadership opportunities and spaces for their voices to be heard is a top priority for USAID globally, including in Rwanda,” said Joseph Lessard, USAID/Rwanda economic growth director. “We really believe this program will give women rich opportunities to share their expertise and play major roles in the country’s economic development. We congratulate the University of Rwanda and Michigan State University on this achievement, and look forward to seeing how it will benefit Rwanda into the future.” 

MSU has a rich history of working collaboratively with the Rwandan government and its institutions of higher education. 

“It has been a great honor to continue the tradition of our two universities working together to advance the agriculture sector in Rwanda,” said Gretchen Neisler, principal investigator on this project from MSU.  “Working collaboratively on the Rwanda Women’s Leadership Program has been very rewarding. I look forward to strengthening our partnership with the UR through the continued development of this degree program.  I am also excited to explore new and innovative ways for our two universities to work together to educate the next generation of thought leaders at both Michigan State University and the University of Rwanda.”

Source: MSU

WHACK! Study measures head blows in girls' lacrosse

Trey Crisco invited lacrosse-playing girls to the lab to measure the impact of their blows as they whacked the head of a laboratory dummy — and to evaluate the performance of protective headgear. Credit: Mike Cohea/Brown University

Lacrosse players swing hard, which is why errant stick blows are the leading cause of concussion in girls' and women's lacrosse. In a new study, researchers measured how much the worst blows accelerate the head and how much different kinds of headgear could reduce those accelerations.

Girls' and women's lacrosse is a different game from the version played by males, said Joseph Crisco, the Henry Frederick Lippitt Professor of Orthopaedic Research in the Alpert Medical School of Brown University and a researcher at Rhode Island Hospital. Females wear far less protective equipment than males do, and injuries -- especially severe head injuries -- are comparatively rare. But recently the debate about whether female players should wear headgear has gained prominence.

Coming to blows

The girls delivered peak performance averaging 60 times the acceleration of Earth's gravity (60g) when they struck the headforms with their lacrosse sticks.

"The goal of our study was to answer the question of what types of head accelerations would you see if you were hit in the head with a stick," said Crisco, who used to coach his daughters in girls lacrosse and also sits on the Sports Science and Safety Committee of US Lacrosse, the national governing body of lacrosse.

To conduct the study, published online in the Journal of Applied Biomechanics, Crisco's team asked seven female lacrosse players aged 12 to 14 to deliver at least 36 whacks each, as hard as they possibly could, to various places on two dummy headforms in the lab.

"The kinds of hits recorded were basically aggressive street fights," Crisco said. "They were really whacking at it, every shaft was broken by the end of the study, which would never happen in a game. The goal was just to give US Lacrosse and the manufacturers some baseline information on the types of accelerations they could expect to see in a worst-case scenario."

They used six different sticks, each outfitted with motion capture markers. The headforms had embedded accelerometers. In a second set of experiments the headforms donned one of four different kinds of protective headgear.

On average across 508 successful blows in the first experiment, the girls swung their sticks about 18 miles an hour, enough to complete two revolutions in less than a second. (One of Crisco's prior studies showed, perhaps not surprisingly, that high school and college players swung their sticks even faster). The peak acceleration the girls delivered to the headforms when they struck them with the shafts of their sticks averaged 60 times the acceleration of Earth's gravity (60g).

That's about three times more force than, say, football players with the kind of celebratory head butt that teammates exchange after a big play, Crisco said.

Headgear dampens blows

The second set of experiments examined what effect headgear might have on the girls' harder whacks (those with speeds around 23 miles an hour). Crisco's team measured the accelerations delivered by 20 whacks from the shaft of each volunteer's stick on both the back and the side of each headform. The headforms wore either nothing, a hard-sided men's lacrosse helmet, a rugby scrum cap, mixed martial arts headgear, or soft headgear designed for girls' and women's field hockey and lacrosse.

The average peak accelerations measured on bare headgear were 81.6g for blows to the side and 150.7g for blows to the back. The men's lacrosse helmet brought the average peak acceleration all the way down to 28.2g on the side and 23.1g on the back. The martial arts and girls lacrosse/field hockey headgear each reduced the accelerations significantly as well, but not nearly as much as the men's helmet. The rugby cap failed to reduce acceleration for blows to the side but dampened blows to the back a little better than the martial arts or lacrosse/field hockey gear.

Headgear, therefore, significantly reduced head accelerations. But Crisco cautioned against a run on headgear at the sporting goods store based on the study.

Generally research has shown that helmets do not protect against concussion -- only against skull fractures and traumatic brain injury. Indeed very little data connects accelerations to concussion risk, and individual susceptibility varies widely. Though some research hints at a figure around 100g, only the hard-sided men's helmet brought accelerations for blows to the back significantly below that figure. And in many game situations, given how little other protective equipment female players wear, Crisco said, a hard-sided helmet could easily cause more injuries that it prevents.

"It could actually make the game more aggressive," Crisco said.

Source: Brown University

The economy of bitcoins: New ways to study social action on markets

ETH's researchers decipher the dynamics behind the cryptocurrency Bitcoin.
Credit: © ulchik74 / Fotolia

Anyone who strolls around the Kreuzberg district of Berlin, can't help but notice them -- the small signs on the doors of shops and cafes "Bitcoins accepted." Customers pay for their shirt or their cappuccino with their Smartphone instead of with bank notes or credit cards. The digital currency Bitcoin makes all this possible.

"The image of Bitcoin has changed fundamentally," explains David Garcia, a post-doctoral researcher with the Chair of Systems Design held by Professor Frank Schweitzer. "Bitcoins used to be the reserve of hackers and computer nerds. Today, hipsters pay for drinks with them and they are accepted in the online shops of large companies." Garcia, together with his colleagues Claudio Tessone, Pavlin Mavrodiev and Nicolas Perony, has just published a study on the social dynamics of the Bitcoin economy in the Journal of the Royal Society: Interface.

Internet activity determines exchange rates

For research the success of the digital currency (see box) is a stroke of luck as all data on every transaction carried out in Bitcoin are available in anonymised form on the Internet. Consequently, Garcia and his colleagues are able to study the Bitcoin economy using corresponding algorithms. This idea saw the light of day when they noticed that the 50,000-fold market value increase in the digital currency in just three and a half years went hand in hand with a 10,000 percent increase in Google searches for Bitcoin. The researchers hypothesise that the increase in the value of Bitcoins is markedly accelerated by activities on the Internet, in particular the search for information and interaction in the social media.

To test their hypothesis the researchers examined four different socio-economic parameters: the development of the Bitcoin user base, the price developments of the currency over time, the search for information about Bitcoin on Google and in Wikipedia (more than six million inquiries) and the exchange of information about Bitcoin on Twitter (almost seven million Tweets). In fact, over the past three the researchers established years major correlations between price developments, the number of new Bitcoin users, searches on the Internet and Tweets.

At the same time, they discovered two positive feedback loops which basically reproduced the laws of the "analogous" economy. The growing popularity of Bitcoins on the Internet leads to growing demand which, in turn, encourages activity in the social media. This all results in a higher price for Bitcoins. The second feedback concerns the user base: the more users become part of the Bitcoin transaction network, the higher the price because Bitcoins are not issued in line with demand but in an automated fashion at regular intervals. This means it is possible to calculate the available amount at any time. One negative feedback is, however, surprising. Prior to a major slump in the price of the currency, there was a dramatic increase in Bitcoin activity on the Internet. "Big changes in Internet and social media activities lead to substantial price fluctuations," comments Nicolas Perony, co-author of the article.

Understanding markets and social dynamics

Perony is convinced that the quantitative analysis of social phenomena on the Internet has major potential. "With digital currencies we can observe aspects of the economy that we didn't have access to with cash. This gives us greater understanding of how markets actually function." According to the authors, the methodology described in the article could be applied to other areas in society, too. The Bitcoin mining network, which issues the currency, already harnesses computing power today which is three hundred times bigger than that of the 500 most powerful supercomputers together. "The big question is how such a high-performance system could be used for collaborative activities which go beyond the production of money," comments Perony. One possibility would be, for instance, collaborative research in a global network or the decentralised ownership of specific goods managed by a global network. Bitcoms do not belong to anyone. Buyers merely acquire the right to use a specific amount of them. This study already outlines today the tools for accurately quantifying and analysing the social dynamics of collaborative systems of this kind in the future.

The meteoric rise of Bitcoin

The Bitcoin success story began in 2008 with an article about an alternative, digital currency published under the pseudonym Satoshi Nakamoto. In July 2010 Bitcoins were traded for the first time on the Internet exchange Mt. Gox at a rate of US$ 0.06 for 1 Bitcoin. The total value of all Bitcoins was US$ 277,000. By the end of 2013 the market value of all issued Bitcoins had climbed to more than US$ 14 billion whereby during spikes more than US$ 1,000 were paid for one Bitcoin. Today, over four million people use the digital currency. 

Bitcoins are traded in euros, dollars and in Chinese renminbi. Unlike conventional currencies there is no central bank for Bitcoins which has a monopoly for printing money. New Bitcoins are generated by what is known as mining via a global computer network -- currently at a rate of 25 Bitcoins every ten minutes. Transactions are likewise verified and carried out on this network. Even the bankruptcy of important Bitcoin trading exchanges and negative headlines about money laundering and drug purchases on the Internet were not able to undermine confidence in the currency. A few days ago the PC giant Dell announced that it will henceforth accept Bitcoins as payment for products in its online shop.

Source: ETH Zurich

How widespread is tax evasion? Cost of 'round-tripping,' a method investors use to avoid the tax collector

A new study puts a cost on "round-tripping," a method investors use to avoid the tax collector.
Credit: Illustration: Jose-Luis Olivares/MIT

Tax evasion is widely assumed to be an eternal problem for governments -- but how widespread is it? For the first time, a new study, co-authored by an MIT professor, has put a cost on a particular kind of tax evasion, known as "round-tripping," that the U.S. government has been trying to thwart.

In round-tripping, U.S. investors move funds to offshore tax havens, then invest in U.S. equity and debt markets with these "foreign" funds. In essence, the U.S. investors are disguising themselves as foreign investors, who are not subject to the same tax rates on capital gains and interest income. The money is said to have made a "round trip" since it originates in the U.S., and winds up back in U.S. markets.

According to the study, published in the Journal of Finance, every 1 percent increase in the top U.S. tax rate leads to an increase of 2.1 percent to 2.8 percent in foreign portfolio investment (FPI) from tax havens. As of 2008, some $34 billion to $109 billion of FPI from those havens appears to have been invested in the U.S. via round-tripping, leading to a loss of $8 billion to $27 billion in tax revenue.

"The higher the tax rate, the more securities appear to be purchased from tax haven jurisdictions," says Michelle Hanlon, a professor of accounting at MIT. "This seems to indicate that U.S. individuals are pretending to be foreigners who then invest in the U.S. markets."

The paper, "Taking the Long Way Home: U.S. Tax Evasion and Offshore Investments in U.S. Equity and Debt Markets," is co-authored by Hanlon, Edward L. Maydew of the University of North Carolina, and Jacob R. Thornock of the University of Washington.

Hanlon and her co-authors have presented their findings to the staff of the U.S. Senate's Permanent Subcommittee on Investigations, among other groups interested in the results.

A subtle strategy for identifying evaders

To be sure, not all investments from tax havens are dubious, so the study employed a multiprong strategy. First, it looked at changes in investment levels from tax havens after changes in U.S. tax rates. Second, the study evaluated these changes in investment with an eye to whether or not the U.S. has a bilateral Tax Information Exchange Agreement (TIEA) with the offshore sovereignty in question. TIEAs potentially allow the U.S. to find out considerably more information about the investments being made from those locations.

Sure enough, the researchers found that there is a decrease of up to 32 percent, in both equity and debt investments, when the U.S. creates a TIEA with other sovereign parties.

"The reverse effect we see is that when the U.S. enters into an exchange agreement, we see less investment from tax havens," adds Hanlon, who is the Howard W. Johnson Professor of Accounting at the MIT Sloan School of Management.

To be clear, Hanlon says, "It's very hard to identify tax evasion, because obviously people are trying to hide it." However, she adds, "Once we started seeing the data, we realized we could try to tackle this problem. We had to do a lot of tests to try to isolate the effect we're looking for, [and] we think it's a big step to try to put some numbers around this phenomenon."

The conclusions come from data collected by both the U.S. Federal Reserve and the U.S. Treasury, which allowed the researchers to piece together monthly flows of foreign investment into U.S. equity and debt markets.

Policy changes: What can be done?

Hanlon suggests that greater international cooperation will at least make this type of tax evasion more difficult and riskier. Additional TIEAs, for instance, would force some investors to go to greater lengths to engage in round-tripping.

"People always try to evade taxes, but [more TIEAs] will make it harder," Hanlon suggests. "And the more costly and risky it becomes, the costs will outweigh the benefits, at least on the margin, and the less likely people are to do it."

On the academic front, Hanlon recognizes that the study's findings present a wide range for the total cost of this tax evasion, but hopes the paper will be a spur to other scholars who may want to delve into the same topic.

"We felt it was important enough that someone try to do research like this, to get people thinking about other data sources and other ways to examine [tax evasion]," Hanlon says. 

"Our hope was that it would lead to more research and that people would take more risks to look at things like this."

Source: Massachusetts Institute of Technology

Study of brokers' potential conflict of interest in routing limit orders leaked to Wall Street

A new academic paper about potential conflict of interest in large retail brokers' routing of limit orders has stirred controversy on Wall Street and caught regulators' attention -- even before the paper has been submitted to a journal.

While some in the industry have compared the study's possible impact to an earlier one that reformed Nasdaq trading, the authors caution that the paper is not yet final and the findings should be taken in proper context.

The authors, professors at Indiana University's Kelley School of Business and the University of Notre Dame Mendoza College of Business, found that some large retail brokers regularly route clients' limit orders to the exchange that pays them the highest rebates. Under certain circumstances, this can lead to some clients' trades not being executed at the best possible times -- or not being executed at all.

"Certain brokers, led by Ameritrade and including E*Trade, Scott Trade and Fidelity, were bifurcating the order flow -- sending market and limit orders to different exchanges -- but seemed to send all their limit orders to one place," said Robert Jennings, the Gregg T. and Judith A. Summerville Professor of Finance at Kelley.

"Brokers were paid for almost every order received; the conflict of interest occurs because some exchanges will pay brokers more to route limit order flows there, even if the chance that the limit order gets executed is lower on that exchange than somewhere else."

U.S. equity exchanges typically charge traders taking liquidity -- such as market orders -- and pay traders making liquidity -- such as limit orders. The payments, or rebates, are funded by take fees, so exchanges with the highest liquidity rebates also have the highest take fees. Brokers can generate revenue from customers' order flow.

According to the paper, "Can Brokers Have It All? On the Relation Between Make Take Fees & Limit Order Execution Quality," study results also indicate that, under some market conditions and for certain stocks:

-- Fill rates for displayed limit orders are lower on exchanges with higher fees. -- Limit orders executed on venues with high fees take longer to execute than those with low fees. -- On average, limit orders executed on venues with low/negative take fees are more likely to fill at the most opportune time for the limit order customer.

"Our results suggest that order routing decisions have an important impact of at least some measures of limit order execution quality and routing decisions based primarily on rebates/fees appear to be inconsistent with best execution," Jennings said. "Even if fees/rebates are passed directly through to the investor, the decision to use a single venue that offers the highest liquidity rebates does not appear to be consistent with the objective of obtaining best execution."

Paper leaked to financial community; FINRA asks brokers for data

The authors presented the paper to relevant industry representatives, including several brokerages, the Securities and Exchange Commission and the National Association of Securities Dealers. This common practice is generally accepted by all parties to be a confidential forum to test and refine study hypotheses and findings.

However in this case, the paper was leaked to the broader financial community without the authors' knowledge or permission. This led some to suggest the paper's impact could equal that of a 1994 study by Bill Christie of Vanderbilt University and Paul Schultz of Notre Dame showing implicit collusion among Nasdaq market makers; it led to sweeping reform of Nasdaq market (and a billion-dollar legal settlement).

The paper's leak -- and the Financial Industry Regulatory Authority's subsequent request for routing data from the 50 largest brokers -- has the authors concerned that the findings about brokers' maximizing liquidity rebates might be oversimplified.

Routing limit orders to maximize make rebates reduces fill rates, produces less profitable limit order executions -- and might be inconsistent with a broker's fiduciary responsibility to obtain best execution, the authors concluded.

"This is a classic case of adverse selection. If there's really bad news about the stock, everybody gets filled. If there's good news about the stock, then only the places where the order gets filled first get filled," Jennings said. "We are not alleging that the use of such rebates is illegal or that it violates securities laws, but there is a need for further transparency for consumers."

The authors expect to publish the revised and final version of the paper in the near future, after incorporating feedback they received.

"Given the competitive nature of the retail brokerage business, if brokers can get exchanges to pay for their orders, they could charge lower commissions," Jennings said. "Thus, customers may be slightly better off; if the payment was eliminated, commissions might have to be higher."

Commissions may be based on the total revenue that brokers receive, "but lower commissions do not compensate those investors who miss out on profitable limit order executions," Jennings and his colleagues concluded. "Brokers cannot have it all."

Jennings co-authored "Can Brokers Have It All?" with Robert Battalio, a professor of finance; and Shane Corwin, an associate professor of finance, both at Notre Dame. Battalio earned his doctorate at Kelley.

Source: Indiana University