MIAMI -- Storm watchers, listen up. If you think you have the weather knowledge and financial fortitude, you'll soon have the chance to bet for -- or against -- the coastline nearest you.
A trio of professors at the University of Miami is launching an electronic futures market to forecast where a hurricane will make landfall in the United States.
Traders who buy or sell the right spot at the right time can cash in, maybe clearing enough profit to buy a small generator.
Aptly called MAHEM, the Miami Hurricane Event Market isn't open for trading yet. Organizers are still refining the prospectus and plugging holes in their Web site, mahem.miami .edu, but MAHEM is slated to debut any day now -- in the name of research and education.
"We are not gamblers. We are scientists," said David Kelly, an economics professor and one of MAHEM's co-founders, who acknowledges that some people will consider the market tasteless. "But if you go down that road, you could say buying stock in a pharmaceutical company is hoping people get cancer. I choose to look at this as a benefit to society by helping research on how to make a better forecast."
Anyone who opens a trading account can invest in MAHEM shares, which will consist of segments of U.S. coastline. But the hope is experts will make up the bulk of traders, bringing a knowledge of hurricanes and an incentive to grow their investment to the electronic trading pit.
Kelly and his collaborators define experts rather loosely -- from actuaries in the reinsurance industry to Key West bar owners who have watched their share of tropical tempests. They will, however, recruit meteorologists.
"We're not trying to beat the National Hurricane Center at their game," said David Letson, another UM professor who came up with the MAHEM idea. "There's no way we'll do that, but what we want to do is improve our understanding of how people use forecast information."
.........cont'
http://www.orlandosentinel.com/news/weather/hurricane/orl-asecmahem16071605jul16,0,7272366.story
A trio of professors at the University of Miami is launching an electronic futures market to forecast where a hurricane will make landfall in the United States.
Traders who buy or sell the right spot at the right time can cash in, maybe clearing enough profit to buy a small generator.
Aptly called MAHEM, the Miami Hurricane Event Market isn't open for trading yet. Organizers are still refining the prospectus and plugging holes in their Web site, mahem.miami .edu, but MAHEM is slated to debut any day now -- in the name of research and education.
"We are not gamblers. We are scientists," said David Kelly, an economics professor and one of MAHEM's co-founders, who acknowledges that some people will consider the market tasteless. "But if you go down that road, you could say buying stock in a pharmaceutical company is hoping people get cancer. I choose to look at this as a benefit to society by helping research on how to make a better forecast."
Anyone who opens a trading account can invest in MAHEM shares, which will consist of segments of U.S. coastline. But the hope is experts will make up the bulk of traders, bringing a knowledge of hurricanes and an incentive to grow their investment to the electronic trading pit.
Kelly and his collaborators define experts rather loosely -- from actuaries in the reinsurance industry to Key West bar owners who have watched their share of tropical tempests. They will, however, recruit meteorologists.
"We're not trying to beat the National Hurricane Center at their game," said David Letson, another UM professor who came up with the MAHEM idea. "There's no way we'll do that, but what we want to do is improve our understanding of how people use forecast information."
.........cont'
http://www.orlandosentinel.com/news/weather/hurricane/orl-asecmahem16071605jul16,0,7272366.story
