Often repeated diet and health recommendations from the public health community are to increase consumption of fruits and dark green leafy vegetables, reduce intake of added sugars, trans-fats, saturated fats, cholesterol, salt, and alcohol while maintaining bodyweight by aligning caloric intake with one’s level of physical activity. The impetus for such advice is that scientific evidence suggests obesity leads to an increased risk of premature death, type II diabetes, heart disease, stroke, hypertension, gallbladder disease, osteoarthritis, and many other maladies (U.S. Department of Health and Human Services, 2001). Regardless, recent statistics on obesity and dietary intake show that the majority of Americans are far from complying with this advice: the majority of Americans are overweight; approximately one third are obese; and the average diet is too high in calories, added sugars and saturated fat. To meet the 2005 Dietary Guidelines, the typical American would need to more than double their current intake of vegetables and whole grain foods while halving their intake of solid fats and added sugars (Hedley, et al., 2004; United States Department of Health and Human Services and United States Department of Agriculture, 2005).
This increasing prevalence of obesity and iet-related illnesses begs the question why so many people are putting themselves at risk of such serious illnesses. There must be something that compensates for accepting such risks a tradeoff that makes the risks worth accepting. Clearly, many Americans still eat too much food and choose those that are too high in fat, salt refined grains and added sugar. Given these strong preferences, the task the public health community has set for it self changing American’s diets is extremely difficult. Here, we offer a quantitative perspective on just how difficult it will be to realize a substantial improvement. We focus attention on the subset of consumers who have strong incentives to choose a healthful diet, those who have been diagnosed with diabetes, and show that they embrace opportunities to resist any change.
In this paper, we consider a general approach for classifying objects and explain it with credit cards scoring problem. Classification can be defined by a classification function assigning to each object some categorical value called the class number. However, this classification function has a very inconvenient property it is discontinuous (impossible to use it for classifying new objects). We reduce the classification problem to evaluating a continuous utility function from some general class of functions. This function is used for separating objects belonging to different sets. Values of utility functions for objects from one class should be in the same range. “The best” utility function in some class is found by minimizing the error of misclassification.
Depending upon the class of utility function, it may be a quite difficult problem from optimization point of view. However, if one is looking for a utility function, which is a linear combination of some other functions (possibly nonlinear in indicator variables), it can be formulated as a linear programming problem. Mangasarian, et al. (1995) used this approach for failure discriminant analysis with linear utility functions (applications to breast cancer diagnosis). This function is linear in control parameters and indicator variables. Zopounidis, et al. (1997, 1998), Pardalos, et al. (1997) used a linear utility function for trichotomous classifications of credit card applications. Konno, et al. (2000a, 2000b) considered utility functions which are quadratic in indicator prameters and linear in control variables.
Since the late 1980s national authorities from the G-10 and some other countries have engaged in increasingly complex national and international regulatory reforms in the banking sector (Simmons 1999; Lütz 2000). The aim of regulatory activity, a large part of which concentrates on bank capital-asset ratios (CAR), has been to mitigate bank solvency problems that may destabilize national and international financial systems. The motivation behind the proliferation of regulatory activity is found in the presumption that the banks, if left alone, would select to remain undercapitalized relative to the socially optimal level.
In this paper we attempt to explicitly evaluate the validity of this popular presumption. We first construct a model that explains how banks select their capital-asset ratios. The model explains why and how competition among banks can support high capital-asset ratios. It suggests that "market discipline" (competitive forces) can not only assist the implementation of capital adequacy regulations but may even substitute for such regulations.
