• Title/Summary/Keyword: Feature Management

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A Study on The RFID/WSN Integrated system for Ubiquitous Computing Environment (유비쿼터스 컴퓨팅 환경을 위한 RFID/WSN 통합 관리 시스템에 관한 연구)

  • Park, Yong-Min;Lee, Jun-Hyuk
    • Journal of the Institute of Electronics Engineers of Korea TC
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    • v.49 no.1
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    • pp.31-46
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    • 2012
  • The most critical technology to implement ubiquitous health care is Ubiquitous Sensor Network (USN) technology which makes use of various sensor technologies, processor integration technology, and wireless network technology-Radio Frequency Identification (RFID) and Wireless Sensor Network (WSN)-to easily gather and monitor actual physical environment information from a remote site. With the feature, the USN technology can make the information technology of the existing virtual space expanded to actual environments. However, although the RFID and the WSN have technical similarities and mutual effects, they have been recognized to be studied separately, and sufficient studies have not been conducted on the technical integration of the RFID and the WSN. Therefore, EPCglobal which realized the issue proposed the EPC Sensor Network to efficiently integrate and interoperate the RFID and WSN technologies based on the international standard EPCglobal network. The proposed EPC Sensor Network technology uses the Complex Event Processing method in the middleware to integrate data occurring through the RFID and the WSN in a single environment and to interoperate the events based on the EPCglobal network. However, as the EPC Sensor Network technology continuously performs its operation even in the case that the minimum conditions are not to be met to find complex events in the middleware, its operation cost rises. Moreover, since the technology is based on the EPCglobal network, it can neither perform its operation only for the sake of sensor data, nor connect or interoperate with each information system in which the most important information in the ubiquitous computing environment is saved. Therefore, to address the problems of the existing system, we proposed the design and implementation of USN integration management system. For this, we first proposed an integration system that manages RFID and WSN data based on Session Initiation Protocol (SIP). Secondly, we defined the minimum conditions of the complex events to detect unnecessary complex events in the middleware, and proposed an algorithm that can extract complex events only when the minimum conditions are to be met. To evaluate the performance of the proposed methods we implemented SIP-based integration management system.

Experimental and Numerical Study on the Effect of the Rain Infiltration with the Increase of Surface Temperature (지표면 온도상승이 빗물의 토양침투에 미치는 영향에 대한 실험 및 수치 해석적 연구)

  • Shin, Nara;Shin, Mi Soo;Jang, Dong Soon
    • Journal of Korean Society of Environmental Engineers
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    • v.35 no.6
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    • pp.422-429
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    • 2013
  • It is generally known that the increase of the Earth surface temperature due to the global warming together with the land desertification by rapid urban development has caused severe climate and weather change. In desert or desertification land, it is observed that there are always severe flooding phenomena, even if desert sand has the high porosity, which could be believed as the favorable condition of rain water infiltration into ground water. The high runoff feature causes possibly another heavy rain by quick evaporation with the depletion of underground water due to the lack of infiltration. The basic physics of desert flooding is reasonably assumed due to the thermal buoyancy of the higher temperature of the soil temperature than that of the rain drop. Considering the importance of this topic associated with water resource management and climate disaster prevention, no systematic investigation has, however, been reported in literature. In this study, therefore, a laboratory scale experiment together with the effort of numerical calculation have been performed to evaluate quantitatively the basic hypothesis of run-off mechanism caused by the increase of soil temperature. To this end, first, of all, a series of experiment has been made repeatedly with the change of soil temperature with well-sorted coarse sand having porosity of 35% and particle diameter, 2.0 mm. In specific, in case 1, the ground surface temperature was kept at $15^{\circ}C$, while in case 2 that was high enough at $70^{\circ}C$. The temperature of $70^{\circ}C$ was tested as this try since the informal measured surface temperature of black sand in California's Coachella Valley up to at 191 deg. $^{\circ}F$ ($88^{\circ}C$). Based on the experimental study, it is observed that the amount of runoff at $70^{\circ}C$ was higher more than 5% compared to that at $15^{\circ}C$. Further, the relative amount of infiltration by the decrease of the surface temperature from 70 to $15^{\circ}C$ is about more than 30%. The result of numerical calculation performed was well agreed with the experimental data, that is, the increase of runoff in calculation as 4.6%. Doing this successfully, a basic but important research could be made in the near future for the more complex and advanced topic for this topic.

Water Landscape Displaying Techinques of Traditional Gardens between China and Korea - With Soswaewon and ZhuozhengYuan - (한.중 전통원림의 수경관 연출기법 비교 연구 - 소쇄원과 졸정원을 중심으로 -)

  • Lee, Hang Lyoul;Kim, Sun Rye
    • Journal of the Korean Institute of Traditional Landscape Architecture
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    • v.30 no.4
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    • pp.1-13
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    • 2012
  • Landscape Garden tradition of excellent examples of places that are focused on hydroponics management. South Korea and China, this thing was noticeable among them South Korea which emphasizes the natural contours of the natural streams in accordance with the basic idea to use examples that feature will do. Gardens in China by constructing a flat terrain also naturally expect to find examples of conscious ideas depending on the water and the mountains are characterized. These differences and similarities through the Gardens of the tradition of separating the two countries to build their Garden by site Soswaewon and Zolzengwon appear in the target hand is to identify the characteristics between the director. Research methods literature survey, field survey of the natural environment through the plantation, background history, the people who intend to study, to configure the ground water space, Jian, construction and management has been studied in hydroponics. As a result, Damyang-gun, Jeollanam-do, South Korea in the Garden of the Soswaewon(瀟灑園) organization with inner garden and outer garden of a small, but the scale of production to Yang San-Bo's 'eunilgwan' implement security based rock mooring takes the form of a linear channel and the water came down from riding pending to avoid artifacts gathered again took the form of streams flowing into that. Hutton was a rubble pile structure Jian. Building an Gwangpunggak, Jewoldang, as Daebongdae consist, respectively, depending on the purpose of the mooring was deployed by focusing. The other hand, is located at Suzhou, Jiangsu of China Zolzengwon(拙政園) flat terrain is located on. Largely divided eastern gardens, Central Gardens and the Gardens of the West was conducted by five thirds of the total area of Water accounted for. Pavilion the center of the pond, Seokgasan achieve a variety of landscapes and architectural features that are most of the Ming. The two countries, each region's natural environment and human environment, different, unique characteristics to each other in the implementation of a unique hydroponic Garden tube and ideological backgrounds, but especially the 'eunilgwan' and the terrain that is divided according to the conditions of this study, so fulfilling Garden was conducted.

A Study of the Conservation Policy and Management Status of Historic Gardens in England - Focused on the National Trust - (영국 역사정원 보전정책과 관리현황에 대한 연구 - 내셔널 트러스트를 중심으로 -)

  • Yoon, Sang-Jun;Kwon, Jin-Wook
    • Journal of the Korean Institute of Traditional Landscape Architecture
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    • v.28 no.3
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    • pp.131-143
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    • 2010
  • This paper investigates the history, policy and status of the conservation of historic gardens in the National Trust in England and its implications for Korea. It was conducted in three phases as follows: First, related literature data was collected to understand the National Trust and its role in the conservation of historic gardens. Second, The National Trust Policy Papers: Gardens and Landscape Parks in 1996 was reviewed and analyzed into eight categories with a review of 216 gardens and interviews with gardener-in-charge via e-mail. Finally an understanding of the policy for the conservation of historic gardens was formed from the results of the previous phases, and implications were drawn from the integrated analysis guidelines of the policy and status. The key feature of the conservation of the National Trust's historic gardens is that the conservation process has been conducted systematically through acquisition, management, upkeep, advice and so on. Furthermore, the conservation principles are defined in a concise and accessible form. According to their practical conservation process and principles, the results of the National Trust activities are to appreciate the significance of the gardens and act with accountability; integration; managing change; access and participation; and training gardener and partnership. According to the results of its activities under the premise that the purpose of the conservation and the meaning of a garden do not differ significantly among nations, implications for Korea can be primarily suggested by three points as follows: First of all, a flexible approach to change in historic gardens should be managed. In response to inevitable and desirable change, anything that is added or transferred should be recorded for the future as much as possible. Therefore, everything must be recorded and any change should be managed. Second, is to provide sustainable access for the benefit for the people and visitors. The aim of conserving the gardens is for human's to eventually understand that the present generation just borrows the historic gardens before they are passed down. The ensuing implication is that people may enjoy the gardens educationally, aesthetically, and physically, and children can be continuously interested in historic gardens as apart of educating the future generation. Finally, the National Trust educates apprentice gardeners who will maintain the historic gardens and continuously keep the current garden staff up to date with workshops. This is in contrast to the day laborers who work for historic gardens in Korea. In practice, the maintenance of historic gardens is not a simple process. The gardener must understand the past, reflect the present, and prepare for the future. Therefore, gardeners deliver culture from generation to generation.

The Intelligent Determination Model of Audience Emotion for Implementing Personalized Exhibition (개인화 전시 서비스 구현을 위한 지능형 관객 감정 판단 모형)

  • Jung, Min-Kyu;Kim, Jae-Kyeong
    • Journal of Intelligence and Information Systems
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    • v.18 no.1
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    • pp.39-57
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    • 2012
  • Recently, due to the introduction of high-tech equipment in interactive exhibits, many people's attention has been concentrated on Interactive exhibits that can double the exhibition effect through the interaction with the audience. In addition, it is also possible to measure a variety of audience reaction in the interactive exhibition. Among various audience reactions, this research uses the change of the facial features that can be collected in an interactive exhibition space. This research develops an artificial neural network-based prediction model to predict the response of the audience by measuring the change of the facial features when the audience is given stimulation from the non-excited state. To present the emotion state of the audience, this research uses a Valence-Arousal model. So, this research suggests an overall framework composed of the following six steps. The first step is a step of collecting data for modeling. The data was collected from people participated in the 2012 Seoul DMC Culture Open, and the collected data was used for the experiments. The second step extracts 64 facial features from the collected data and compensates the facial feature values. The third step generates independent and dependent variables of an artificial neural network model. The fourth step extracts the independent variable that affects the dependent variable using the statistical technique. The fifth step builds an artificial neural network model and performs a learning process using train set and test set. Finally the last sixth step is to validate the prediction performance of artificial neural network model using the validation data set. The proposed model is compared with statistical predictive model to see whether it had better performance or not. As a result, although the data set in this experiment had much noise, the proposed model showed better results when the model was compared with multiple regression analysis model. If the prediction model of audience reaction was used in the real exhibition, it will be able to provide countermeasures and services appropriate to the audience's reaction viewing the exhibits. Specifically, if the arousal of audience about Exhibits is low, Action to increase arousal of the audience will be taken. For instance, we recommend the audience another preferred contents or using a light or sound to focus on these exhibits. In other words, when planning future exhibitions, planning the exhibition to satisfy various audience preferences would be possible. And it is expected to foster a personalized environment to concentrate on the exhibits. But, the proposed model in this research still shows the low prediction accuracy. The cause is in some parts as follows : First, the data covers diverse visitors of real exhibitions, so it was difficult to control the optimized experimental environment. So, the collected data has much noise, and it would results a lower accuracy. In further research, the data collection will be conducted in a more optimized experimental environment. The further research to increase the accuracy of the predictions of the model will be conducted. Second, using changes of facial expression only is thought to be not enough to extract audience emotions. If facial expression is combined with other responses, such as the sound, audience behavior, it would result a better result.

Pilot and Feasibility Study of a Management Program for Elementary School Students with Asthma (우리나라에서 학교 중심의 소아천식관리사업의 적용가능성과 발전 방향: 일부 학교의 시범사업 평가결과를 중심으로)

  • Seo, He-Jin;Lee, Weon-Yong
    • Journal of the Korean Society of School Health
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    • v.22 no.1
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    • pp.1-16
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    • 2009
  • Purposes: The objective of this study was to develop a management program for Korean elementary school students suffering from asthma, which would be based on the Australian Asthma-Friendly Schools (AFS) program. Methods: On the basis of the AFS program, we designed a 6-month pilot project for asthmatic students in two elementary schools in a rural area and one elementary school in an urban area of Korea. The pilot project consisted of the following processes: identifying students with asthma in a school, educating school staffs and the parents of an asthmatic child, registering those with asthma, and installing emergency kits for asthma attacks in school health rooms. In order to evaluate these processes, group discussions were held between project team members and school staffs in each area. In addition, we conducted a postal survey of 144 households having an asthmatic child. Results: The screening process adopted in this program resulted in the early diagnosis in asthma; however, it needs to be evaluated economically due to expensive diagnostic test for asthma. For the school nurses, asthma lessons were evaluated as being very helpful for their tasks, while teachers tended to take less interest in the program with only 45% of all teachers attending these lessons. Almost all participating parents reported that such lessons would be beneficial for the care of their child, even though only 24.2% of the survey respondents (122 households) attended the lessons. Installing emergency kits in school health rooms was regarded as a key feature of this project. The introduction of a register card containing more specific health records of asthmatic students was considered necessary to replace the existing list of students with asthma. Conclusion: This study has merit in that a Korean asthma-friendly schools program was developed for the first time, despite the many obstacles to such programs becoming more common.

A Comparative Study on Hydraulic Jump and Specific Energy Losses at Downstream According to the Weir Discharge Types (보 유출형태에 따른 하류부 도수 및 비에너지 손실에 관한 비교 연구)

  • Park, Hyo-Seon;Yoon, Geun-Ho;Koo, Bon-Jin;Choi, Gye-Woon
    • Journal of Wetlands Research
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    • v.15 no.1
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    • pp.149-157
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    • 2013
  • The weirs built so far are mainly overflow type weirs overflowing to the upstream. Main advantages of overflow type weirs are, effective water resources management and easy design, construction and maintenance due to many accumulated studies. However, due to the special feature of the overflow type weir where water overflows through the upstream of the weir, the silt coming from the upstream is not discharged to the downstream of the weir. This increases the river bed and reduces the reservoir capacity, and as a result, the weir loses its function. A underflow type weir with a water gate has been implemented in order to solve such sediment deposit and weir maintenance problems. However due to the design problem of recently constructed underflow type weirs, the river bed of the downstream of a weir has been scoured. And this leds to a structural problem. In this study, the flow characteristics of overflow type weirs and underflow type weir, hydraulic jump length analysis depending on change of water depth and the amount of specific energy loss generated per unit length depending on a weir type have been compared and analyzed, for the effective design and management of the weirs. The experiment results show that, when identical upstream conditions of underflow type weir and an overflow type weir were maintained, the hydraulic jump length was up to twice longer with Fr(Froude number) 3.5 of the hydraulic jump length at the underflow type weir, and the hydraulic jump length gradually decreased as the downstream water depth increased. The comparative analysis result of the amount of specific energy loss generated per unit length showed that the amount of energy loss per unit length was twice higher for an overlfow type weir than a underflow type weir. Therefore, in case of a underflow type facility, an additional energy reduction facility is determined to be necessary for safety of water construction structures.

Automatic gasometer reading system using selective optical character recognition (관심 문자열 인식 기술을 이용한 가스계량기 자동 검침 시스템)

  • Lee, Kyohyuk;Kim, Taeyeon;Kim, Wooju
    • Journal of Intelligence and Information Systems
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    • v.26 no.2
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    • pp.1-25
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    • 2020
  • In this paper, we suggest an application system architecture which provides accurate, fast and efficient automatic gasometer reading function. The system captures gasometer image using mobile device camera, transmits the image to a cloud server on top of private LTE network, and analyzes the image to extract character information of device ID and gas usage amount by selective optical character recognition based on deep learning technology. In general, there are many types of character in an image and optical character recognition technology extracts all character information in an image. But some applications need to ignore non-of-interest types of character and only have to focus on some specific types of characters. For an example of the application, automatic gasometer reading system only need to extract device ID and gas usage amount character information from gasometer images to send bill to users. Non-of-interest character strings, such as device type, manufacturer, manufacturing date, specification and etc., are not valuable information to the application. Thus, the application have to analyze point of interest region and specific types of characters to extract valuable information only. We adopted CNN (Convolutional Neural Network) based object detection and CRNN (Convolutional Recurrent Neural Network) technology for selective optical character recognition which only analyze point of interest region for selective character information extraction. We build up 3 neural networks for the application system. The first is a convolutional neural network which detects point of interest region of gas usage amount and device ID information character strings, the second is another convolutional neural network which transforms spatial information of point of interest region to spatial sequential feature vectors, and the third is bi-directional long short term memory network which converts spatial sequential information to character strings using time-series analysis mapping from feature vectors to character strings. In this research, point of interest character strings are device ID and gas usage amount. Device ID consists of 12 arabic character strings and gas usage amount consists of 4 ~ 5 arabic character strings. All system components are implemented in Amazon Web Service Cloud with Intel Zeon E5-2686 v4 CPU and NVidia TESLA V100 GPU. The system architecture adopts master-lave processing structure for efficient and fast parallel processing coping with about 700,000 requests per day. Mobile device captures gasometer image and transmits to master process in AWS cloud. Master process runs on Intel Zeon CPU and pushes reading request from mobile device to an input queue with FIFO (First In First Out) structure. Slave process consists of 3 types of deep neural networks which conduct character recognition process and runs on NVidia GPU module. Slave process is always polling the input queue to get recognition request. If there are some requests from master process in the input queue, slave process converts the image in the input queue to device ID character string, gas usage amount character string and position information of the strings, returns the information to output queue, and switch to idle mode to poll the input queue. Master process gets final information form the output queue and delivers the information to the mobile device. We used total 27,120 gasometer images for training, validation and testing of 3 types of deep neural network. 22,985 images were used for training and validation, 4,135 images were used for testing. We randomly splitted 22,985 images with 8:2 ratio for training and validation respectively for each training epoch. 4,135 test image were categorized into 5 types (Normal, noise, reflex, scale and slant). Normal data is clean image data, noise means image with noise signal, relfex means image with light reflection in gasometer region, scale means images with small object size due to long-distance capturing and slant means images which is not horizontally flat. Final character string recognition accuracies for device ID and gas usage amount of normal data are 0.960 and 0.864 respectively.

A study on the improvement of distribution system by overseas agricultural investment (해외농업투자에 따른 유통체계 개선방안에 관한 연구)

  • Sun, Il-Suck;Lee, Dong-Ok
    • Journal of Distribution Science
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    • v.8 no.3
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    • pp.17-26
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    • 2010
  • Recently concerns have been raised due to the unbalanced supply of crops: the price of crops has been unstable and at one point the price went up so high that the word Agflation(agriculture+ inflation) was coined. Korea, in particular, is a small-sized country and needs to secure the stable supply of crops by investing in the produce importation at a national level. Investment in foreign produce importation is becoming more important as a measure for sufficient supply of crops, limited supply of domestic crops, weakened farming conditions worldwide, as well as recent changes in the use of crops due to the development of bio-fuels, influence of carbon emission on crops, the price increase in crops, and influx of foreign hot money. However, there are many problems with investing in foreign produce importation: lack of support from the government; lack of farming information and technology; difficulty in securing the capital; no immediate pay-off from the investment and insufficient management. Although foreign produce is originally more price-competitive than domestic produce, it loses its competiveness in the process of importation (due to high tariffs) and poor distribution system, which makes it difficult to sell in Korea. Therefore, investment in foreign produce importation is being questioned for feasibility; to make it possible, foreign produce must maintain the price-competitiveness. Especially, harvest of agricultural products depends on natural and geographical conditions of each country and those products have indigenous properties, so distribution system according to import and export of agricultural products should be treated more carefully than that of other industries. Distribution costs are differentiated into each item and include cost of sorting and wrapping, cost of wrapping materials, cost of domestic transport, cost of international transport and cost of clearing customs for import and export. So transporting and storing agricultural products generates considerable costs compared with other products. Also, due to upgrade of dietary life, needs for stability, taste and visible quality toward food including agricultural products are being raised and wrong way of storage causes decomposition of food and loss of freshness, making the storage more difficult than that in room temperature, so storage and transport in distribution of agricultural products needs specialty. In addition, because lack of specialty in distribution and circulation such as storage and wrapping does not solve limit factors in distance, the distribution and circulation has been limited to a form of import and export within short-distant region. Therefore, need for distribution out-sourcing which can satisfy specialty in managing distribution and circulation and it is needed to establish more effective distribution system. However, existing distribution system of agricultural products is exposed to various problems including problems in distribution channel, making distribution and strategy for distribution and those problems are as follows. First, in case of investment in overseas agricultural industry, stable supply of the products is difficult because areas of production are dispersed widely and influenced by outer factors due to including overseas distribution channels. Also, at the aspect of quality, standardization of products is difficult, distribution system is quite complicated and unreasonable due to long distribution channels according to international trade and financial and institutional support is not enough. Especially, there are quite a lot of ineffective factors including multi level distribution process, dramatic gap between production cost and customer's cost, lack of physical distribution facilities and difficulties in storage and transport due to lack of wrapping containers. Besides, because import and export of agricultural products has been manages under the company's own distribution according to transaction contract between manufacturers and exporting company, efficiency is low due to excessive investment in fixed costs and lack of specialty in dealing with agricultural products causes fall of value of products, showing the limit to lose price-competitiveness. Especially, because lack of specialty in distribution and circulation such as storage and wrapping does not solve limit factors in distance, the distribution and circulation has been limited to a form of import and export within short-distant region. Therefore, need for distribution out-sourcing which can satisfy specialty in managing distribution and circulation and it is needed to establish more effective distribution system. Second, among tangible and intangible services which promote the efficiency of the whole distribution, a function building distribution environment which includes distribution information, system for standard and inspection, distribution finance, system for diversification of risks, education and training, distribution administration and tax system is wanted. In general, such a function building distribution environment is difficult to be changed and supplement innovatively because its effect compared with investment does not appear immediately despite of its necessity. Especially, in case of distribution of agricultural products, as a function of collecting and distributing is performed individually through various channels, the importance of distribution information and standardization is getting more focus due to the problem of repetition of work and lack of specialty. Also, efficient management of distribution is quite difficult due to lack of professionals in distribution, so support to professional education is needed. Third, though effort to keep self-sufficiency ratio of staple food, rice is regarded as important at the government level, level of dependency on overseas of others crops is high. Therefore, plan for stable securing food resources aside from staple food is also necessary. Especially, governmental organizations of agricultural products distribution in Korea are production-centered and have unreasonable structure whose function at the aspect of distribution and consumption is quite insufficient. And development of new distribution channels which can deal with changes in distribution environment and they do not achieve actual results of strategy for distribution due to non-positive strategy for price distribution. That is, it implies the possibility that base for supply will become vulnerable because it does not mediate appropriate interests on total distribution channels such as manufacturers, wholesale dealers and vendors by emphasizing consumer protection excessively in the distribution of agricultural products. Therefore, this study examined fundamental concept and actual situation for our investment to overseas agriculture, drew necessities, considerations, problems, etc. of overseas agricultural investment and suggested improvements at the level of distribution for price competitiveness of agricultural products cultivated in overseas under five aspects; government's indirect support, distribution's modernization and distribution information function's strengthening, government's political support for distribution facility, transportation route, load and unloading works' improvement, price competitiveness' securing, professional manpower's cultivation by education and training, etc. Here are some suggestions for foreign produce importation. First, the government should conduct a survey on the current distribution channels and analyze the situation to establish a measure for long-term development plans. By providing each agricultural area with a guideline for planning appropriate production of crops, the government can help farmers be ready for importation, and prevent them from producing same crops all at the same time. Government can sign an MOU with the foreign government and promote the importation so that the development of agricultural resources can be stable and steady. Second, the government can establish a strategy for an effective distribution system by providing farmers and agriculture-related workers with the distribution information such as price, production, demand, market structure and location, feature of each crop, and etc. In order for such distribution system to become feasible, the government needs to reconstruct the current distribution system, designate a public organization for providing distribution information and set the criteria for level of produce quality, trade units, and package units. Third, the government should provide financial support and a policy to seek an efficient distribution channel for foreign produce to be delivered fresh: the government should expand distribution facilities (for selecting, packaging, storing, and processing) and transportation vehicles while modernizing old facilities. There should be another policy to improve the efficiency of unloading, and to lower the cost of distribution. Fourth, it is necessary to enact a new law covering exceptional cases for importing produce in order to maintain the price competitiveness; currently the high tariffs is keeping the imported produce from being distributed domestically. However, the new adjustment should be made carefully within the WTO regulations since it can create a problem from giving preferential tariffs. The government can also simplify the distribution channels in order to reduce the cost in the distribution process. Fifth, the government should educate distributors to raise the efficiency and to modernize the distribution system. It is necessary to develop human resources by educating people regarding the foreign agricultural environment, the produce quality, management skills, and by introducing some successful cases in advanced countries.

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A Study on Industries's Leading at the Stock Market in Korea - Gradual Diffusion of Information and Cross-Asset Return Predictability- (산업의 주식시장 선행성에 관한 실증분석 - 자산간 수익률 예측 가능성 -)

  • Kim Jong-Kwon
    • Proceedings of the Safety Management and Science Conference
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    • 2004.11a
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    • pp.355-380
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    • 2004
  • I test the hypothesis that the gradual diffusion of information across asset markets leads to cross-asset return predictability in Korea. Using thirty-six industry portfolios and the broad market index as our test assets, I establish several key results. First, a number of industries such as semiconductor, electronics, metal, and petroleum lead the stock market by up to one month. In contrast, the market, which is widely followed, only leads a few industries. Importantly, an industry's ability to lead the market is correlated with its propensity to forecast various indicators of economic activity such as industrial production growth. Consistent with our hypothesis, these findings indicate that the market reacts with a delay to information in industry returns about its fundamentals because information diffuses only gradually across asset markets. Traditional theories of asset pricing assume that investors have unlimited information-processing capacity. However, this assumption does not hold for many traders, even the most sophisticated ones. Many economists recognize that investors are better characterized as being only boundedly rational(see Shiller(2000), Sims(2201)). Even from casual observation, few traders can pay attention to all sources of information much less understand their impact on the prices of assets that they trade. Indeed, a large literature in psychology documents the extent to which even attention is a precious cognitive resource(see, eg., Kahneman(1973), Nisbett and Ross(1980), Fiske and Taylor(1991)). A number of papers have explored the implications of limited information- processing capacity for asset prices. I will review this literature in Section II. For instance, Merton(1987) develops a static model of multiple stocks in which investors only have information about a limited number of stocks and only trade those that they have information about. Related models of limited market participation include brennan(1975) and Allen and Gale(1994). As a result, stocks that are less recognized by investors have a smaller investor base(neglected stocks) and trade at a greater discount because of limited risk sharing. More recently, Hong and Stein(1999) develop a dynamic model of a single asset in which information gradually diffuses across the investment public and investors are unable to perform the rational expectations trick of extracting information from prices. Hong and Stein(1999). My hypothesis is that the gradual diffusion of information across asset markets leads to cross-asset return predictability. This hypothesis relies on two key assumptions. The first is that valuable information that originates in one asset reaches investors in other markets only with a lag, i.e. news travels slowly across markets. The second assumption is that because of limited information-processing capacity, many (though not necessarily all) investors may not pay attention or be able to extract the information from the asset prices of markets that they do not participate in. These two assumptions taken together leads to cross-asset return predictability. My hypothesis would appear to be a very plausible one for a few reasons. To begin with, as pointed out by Merton(1987) and the subsequent literature on segmented markets and limited market participation, few investors trade all assets. Put another way, limited participation is a pervasive feature of financial markets. Indeed, even among equity money managers, there is specialization along industries such as sector or market timing funds. Some reasons for this limited market participation include tax, regulatory or liquidity constraints. More plausibly, investors have to specialize because they have their hands full trying to understand the markets that they do participate in

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