47/
1
5XQQLQJ+HDG0RUSKRORJ\DQG)UHTXHQF\
0RUSKRORJ\DQG)UHTXHQF\&RQWUDVWLQJ0HWKRGRORJLHV
0LFKDHO$)RUG
:LOOLDP'0DUVOHQ:LOVRQ
0DWWKHZ+'DYLV
05&&RJQLWLRQDQG%UDLQ6FLHQFHV8QLW
&KDXFHU5RDG&DPEULGJH8.
0LFKDHO$)RUG
7HO
05&&RJQLWLRQDQG%UDLQ6FLHQFHV8QLW
)D[
&KDXFHU5RDG
(PDLOPLNHIRUG#PUFFEXFDPDFXN
&DPEULGJH
&%()
8.
47/
2
$EVWUDFW
(IIHFWVRIURRWPRUSKHPHDQGZKROHZRUGIUHTXHQF\LQOH[LFDOGHFLVLRQKDYHEHHQXVHG
WRFRQVWUDLQWKHRULHVRIWKHUHSUHVHQWDWLRQDQGSURFHVVLQJRIPRUSKRORJLFDOO\FRPSOH[
ZRUGV+RZHYHUUHVXOWVIURPWKHVHVWXGLHVDUHXQFOHDUDQGVRPHZKDWFRQWUDGLFWRU\
ZKLFKPD\LQSDUWEHGXHWRDQRYHUUHOLDQFHRQIDFWRULDOGHVLJQV:HSUHVHQWGDWDIURP
H[SHULPHQWVWKDWVKRZWKHXWLOLW\RIXVLQJFRUUHODWLRQDOGHVLJQVLQDGGLWLRQWRIDFWRULDO
GHVLJQV([SHULPHQWXVHGDUHJUHVVLRQGHVLJQWRH[SORUHZKLFKRIWKHPDQ\FRXQWVRI
ZRUGDQGPRUSKHPHIUHTXHQF\EHVWSUHGLFWVOH[LFDOGHFLVLRQUHVSRQVHWLPHVWR
PRQRPRUSKHPLFZRUGV5HVXOWVVKRZHGWKDWZRUGIRUPIUHTXHQF\ZDVWKHEHVW
SUHGLFWRUWKRXJKVLJQLILFDQWHIIHFWVRIPRUSKRORJLFDOIDPLO\VL]HFXPXODWLYHPRUSKHPH
IUHTXHQF\DQGWKHVHPDQWLFFRKHUHQFHRIWKHPRUSKRORJLFDOIDPLO\ZHUHDOVRREVHUYHG
,QFRQWUDVWWRSUHYLRXVIDFWRULDOO\GHVLJQHGH[SHULPHQWVQRFOHDUHIIHFWVRIOHPPD
IUHTXHQF\ZHUHIRXQG([SHULPHQWXVHGERWKIDFWRULDODQGUHJUHVVLRQGHVLJQVWRSUREH
GLUHFWO\IRUOHPPDIUHTXHQF\HIIHFWVXVLQJFRPSDUDWLYHHJVWURQJHUDQGVXSHUODWLYH
HJVWURQJHVWDGMHFWLYHV7KHXVHRIWKHFRPSDUDWLYHDOVRWHVWHGIRUDIIL[KRPRQ\P\
HIIHFWVVLQFHHULVDOVRDQDJHQWLYHVXIIL[1RHIIHFWVRIDIIL[KRPRQ\P\ZHUHIRXQG
EXWFOHDUOHPPDIUHTXHQF\HIIHFWVZHUHIRXQGLQWKHUHJUHVVLRQV(IIHFWVRIPRUHWKDQ
RQHIUHTXHQF\FRXQWRQUHVSRQVHODWHQFLHVDUHLQWHUSUHWHGDVUHIOHFWLQJWKHPXOWLSOH
VRXUFHVRILQIRUPDWLRQWKDWDUHXVHGLQPDNLQJOH[LFDOGHFLVLRQV
47/
3
,QWURGXFWLRQ
)UHTXHQF\DQGFRJQLWLRQ
)UHTXHQF\KDVEHHQVKRZQWRVWURQJO\DIIHFWUHVSRQVHWLPHVLQDYDULHW\RIOLQJXLVWLF
WDVNV:LWKZRUGVIRUH[DPSOHWKHPRUHIUHTXHQWDZRUGLVWKHIDVWHUVXEMHFWVFDQ
FODVVLI\LWDVZRUG,QOH[LFDOGHFLVLRQVXEMHFWVDUHSUHVHQWHGZLWKZRUGVDQGQRQZRUGV
HLWKHUYLVXDOO\RUDXGLWRULO\DQGPXVWPDNHDVSHHGHGGHFLVLRQDVWRZKHWKHUZKDWWKH\
VHHRUKHDULVDUHDOZRUGRUQRW6WURQJHIIHFWVRIZRUGIUHTXHQF\KDYHEHHQ
FRQVLVWHQWO\IRXQGLQWKLVWDVNHJ+RZHV,QGHHGWKLVLVRQHRIWKHPRVWUREXVW
UHVXOWVLQH[SHULPHQWDOSV\FKROLQJXLVWLFVDQGKDVSOD\HGDFUXFLDOUROHLQWKHGHYHORSPHQW
RIWKHRULHVRIOH[LFDOUHSUHVHQWDWLRQDQGSURFHVVLQJ0RUWRQ%URDGEHQW
)RUVWHU
)UHTXHQF\DQGPRUSKRORJ\
+RZHYHUWKHUHLVDSUREOHPZLWKZRUGIUHTXHQF\LQWKDWLWLVXQFOHDUZKDWWKHFRUUHFW
PHDVXUHRIIUHTXHQF\LV7KHUHH[LVWVDQXPEHURIGLIIHUHQWZD\VRIFRXQWLQJZRUG
IUHTXHQF\DQGWKHVHDUHQRWWKHRU\QHXWUDO:RUGIRUPIUHTXHQF\LVWKHVLPSOHVWDQG
PRVWREYLRXVRIWKHVHFRXQWVDVLPSOHPHDVXUHRIWKHWRWDOQXPEHURIWRNHQVRIDJLYHQ
ZRUGIRXQGLQDODQJXDJHFRUSXV7KHRWKHUFRXQWVDUHPRUSKHPLFWKDWLVWKH\FRXQW
WKHRFFXUUHQFHRIURRWPRUSKHPHVDVRSSRVHGWRVXUIDFHZRUGIRUPV6XFKFRXQWVZLOO
EHHPSKDVLVHGE\PRGHOVLQZKLFKPRUSKRORJLFDOO\FRPSOH[IRUPVDUHGHFRPSRVHGDQG
WKHUHIRUHUHSUHVHQWHGLQWHUPVRIURRWPRUSKHPHV
4
2QHH[DPSOHLVOHPPDIUHTXHQF\WKLVLVWKHFXPXODWLYHIUHTXHQF\RIDOOWKHZRUGIRUP
IUHTXHQFLHVRIZRUGVZLWKLQDQLQIOHFWLRQDOSDUDGLJP7KHOHPPDIUHTXHQF\RIWKHYHUE
KHOSIRUH[DPSOHLVWKHVXPRIWKHZRUGIRUPIUHTXHQFLHVRIKHOSKHOSVKHOSHGDQGKHOSLQJ
,QDFFRXQWVRIODQJXDJHSURFHVVLQJLQZKLFKUHJXODULQIOHFWLRQDOIRUPVDUHGHFRPSRVHG
DQGPDSRQWRURRWPRUSKHPHVZHZRXOGH[SHFWWKHIUHTXHQF\RIWKHURRWWREHPRUH
FULWLFDOIRUGHWHUPLQLQJUHVSRQVHODWHQFLHVWKDQZRUGIRUPIUHTXHQF\DQGKHQFHWKH
OHPPDIUHTXHQF\ZRXOGSOD\DSURPLQHQWUROH
$FFRXQWVLQZKLFKRWKHUFRPSOH[IRUPVDUHDOVRGHFRPSRVHGHJLQIOHFWLRQV
GHULYDWLRQVDQGFRPSRXQGVZLOOLQVWHDGHPSKDVLVHWKHFXPXODWLYHPRUSKHPHIUHTXHQF\
ZKLFKLVWKHVXPRIWKHIUHTXHQFLHVRIDOOWKHFRPSOH[ZRUGVLQZKLFKDURRWPRUSKHPH
DSSHDUV)RUH[DPSOHWKHFXPXODWLYHPRUSKHPHIUHTXHQF\RIKHOSZRXOGEHWKHVXPRI
WKHOHPPDIUHTXHQF\RIKHOSSOXVWKHOHPPDIUHTXHQFLHVRIKHOSIXOKHOSOHVVKHOSOHVVQHVVHWF
$QRWKHUPHDVXUHIDPLO\VL]HLVWKHQXPEHURIZRUGW\SHVLQZKLFKDPRUSKHPHRFFXUV
UDWKHUWKDQWKHQXPEHURIWRNHQVRILW7KHZRUG¶KHOS·KDVDIDPLO\VL]HRIWHQ$OORI
WKHVHFRXQWVKDYHEHHQIRXQGWRLQIOXHQFHUHDFWLRQWLPHVLQOH[LFDOGHFLVLRQ%UDGOH\
0HXQLHU6HJXL&ROH6HJXL7DIW%HDXYLOODLQ%DD\HQ
'LMNVWUD6FKUHXGHU7DIW%HUWUDP+\|Ql/DLQH6FKUHXGHU
%DD\HQ'H-RQJ6FKUHXGHU%DD\HQ*LUDXGR*UDLQJHU
+RZHYHULWLVFRPPRQIRUDXWKRUVWRHPSKDVLVHWKHLQIOXHQFHRIRQHPHDVXUHDORQH
WLHGDIDYRXUHGOH[LFDOSURFHVVLQJDFFRXQW
)UHTXHQF\DQGPRGHOVRIOH[LFDOUHSUHVHQWDWLRQ
47/
5
7KHGLIIHUHQWIUHTXHQF\FRXQWVDUHOLQNHGZLWKSDUWLFXODUPRGHOVRIPRUSKRORJLFDO
SURFHVVLQJ0RGHOVRIOH[LFDODFFHVVGLIIHULQUHVSHFWWRZKLFKLIDQ\ZRUGVZLOOEH
GHFRPSRVHGLQWRFRQVWLWXHQWPRUSKHPHVDQGVRZKLFKIUHTXHQF\FRXQWZLOOGHWHUPLQH
UHVSRQVHWLPHV0DQ\PRGHOVPDNHDGLVWLQFWLRQEHWZHHQLQIOHFWLRQDODQGGHULYDWLRQDO
PRUSKRORJ\&ODKVHQPDNHVDFOHDUGLVWLQFWLRQEHWZHHQLQIOHFWLRQDODQG
GHULYDWLRQDOSURFHVVHVUHJXODULQIOHFWLRQDOSURFHVVHVDUHV\PEROLFZKHUHDVGHULYDWLRQDO
IRUPVDUHVWRUHGLQWKHOH[LFRQDVZKROHIRUPV/DXGDQQD%DGHFNHUDQG&DUDPD]]D
FODLPWKDWLQIOHFWLRQDOLQIRUPDWLRQLVSURFHVVHGEHIRUHGHULYDWLRQDO
,QIOHFWLRQDOPRUSKRORJ\LVW\SLFDOO\VHHQDVEHLQJUHJXODUKLJKO\SURGXFWLYHDQG
JRYHUQHGE\V\QWD['HULYDWLRQDOPRUSKRORJ\LVOHVVSDUDGLJPDWLFDQGJHQHUDOO\LVXVHG
IRUFUHDWLQJQHZOH[LFDOLWHPVRIWHQLQYROYLQJDFKDQJHLQZRUGFODVVHJGDUNGDUNQHVV
7KHH[DFWPHDQLQJRIDGHULYDWLRQDOIRUPLVQRWQHFHVVDULO\DVWUDQVSDUHQWDVWKDWRIDQ
LQIOHFWLRQDOIRUPDQGGHULYDWLRQDOPRUSKRORJ\LVIDUOHVVSURGXFWLYHWKDQLQIOHFWLRQDO
$OWKRXJKEHKDYLRXUDOGLIIHUHQFHVEHWZHHQLQIOHFWLRQDODQGGHULYDWLRQDOPRUSKRORJ\KDYH
EHHQIRXQG)HOGPDQ/DXGDQQDHWDOWKLVGLYLVLRQRIPRUSKRORJLFDO
SURFHVVLVDWEHVWSURWRW\SLFDODVWKHUHDUHFDVHVZKHUHWKHFDWHJRULVDWLRQRIDSDUWLFXODU
SURFHVVDVHLWKHULQIOHFWLRQDORUGHULYDWLRQDOLVQRWVWUDLJKWIRUZDUG)RUH[DPSOHWKHUHLV
VRPHGHEDWHRYHUWKHVWDWXVRIFRPSDUDWLYHDQGVXSHUODWLYHDGMHFWLYHVDQGVRPHKDYH
HYHQTXHVWLRQHGZKHWKHUWKHGLVWLQFWLRQEHWZHHQLQIOHFWLRQDQGGHULYDWLRQLVMXVWLILHG
HJ/LHEHU%HUWUDPDQG%DD\HQDFFHSWWKHQRWLRQWKDWVRPHZRUGVDUH
SURFHVVHGDVIXOOIRUPVDQGVRPHDUHSDUVHGKRZHYHUWKH\HVFKHZWKHQRWLRQRID
FDWHJRULFDOGLVWLQFWLRQEHWZHHQLQIOHFWLRQDQGGHULYDWLRQ,QVWHDGWKH\SURSRVHWKDWWKH
GHJUHHWRZKLFKDQDIIL[DOWHUVWKHPHDQLQJRIDVWHPWKHSURGXFWLYLW\RIDQDIIL[DQGWKH
H[LVWHQFHRUQRWRIDQRWKHUFRPSHWLQJKRPRQ\PLFDIIL[IRUPDUHWKHIDFWRUVWKDW
47/
6
GHWHUPLQHZKHWKHUDZRUGLVSDUVHGRUQRWDQGQRWDQ\VLPSOHGLVWLQFWLRQEHWZHHQ
LQIOHFWLRQDQGGHULYDWLRQ
6HUHQRDQG-RQJPDQSURSRVHDVLQJOHV\VWHPDVVRFLDWLRQLVWDFFRXQWRI
PRUSKRORJ\LQZKLFKFRPSOH[IRUPVDUHUHSUHVHQWHGDVIXOOIRUPVLQWKHPHQWDOOH[LFRQ
$VZRUGVDUHSURFHVVHGDVZKROHIRUPVDQGQRWGHFRPSRVHGRQO\ZRUGIRUPIUHTXHQF\
LVSURSRVHGWRLQIOXHQFHUHDFWLRQWLPHWRZRUGV
2WKHUVLQJOHV\VWHPDFFRXQWVWDNHWKHRSSRVLQJSRVLWLRQWKDWWKHUHLVDVLQJOHSURFHVVLQJ
V\VWHPZLWKDQREOLJDWRU\PRUSKRORJLFDOOD\HUDOWKRXJKQRWDOOIRUPVDUHGHFRPSRVHG
,IDOOFRPSOH[IRUPVLQIOHFWLRQVGHULYDWLRQVDQGFRPSRXQGVDUHUHSUHVHQWHGLQWHUPVRI
WKHLUURRWPRUSKHPHVWKHQRQHZRXOGH[SHFWWKHIUHTXHQF\RIWKHURRWWRDIIHFW
SURFHVVLQJWLPH0HXQLHUDQG6HJXLVKRZHGWKDWVXIIL[HGIRUPVLQ)UHQFKZLWK
KLJKFXPXODWLYHPRUSKHPHIUHTXHQF\ZHUHUHVSRQGHGWRIDVWHUWKDQWKRVHZLWKORZ
FXPXODWLYHPRUSKHPHIUHTXHQF\EXWVHH%DD\HQ7ZHHGLH6FKUHXGHUIRUD
LQKLELWRU\HIIHFWRIFXPXODWLYHPRUSKHPHIUHTXHQF\
'XDOURXWHPRGHOVRIOH[LFDOSURFHVVLQJLQIOXHQFHGE\OLQJXLVWLFDFFRXQWVSURSRVHWKDW
UHJXODULQIOHFWLRQDOIRUPVDUHQRWVWRUHGEXWDUHGHFRPSRVHGRQOLQHDVWKH\DUH
FRPSOHWHO\SUHGLFWDEOHLQIRUPPHDQLQJDQGV\QWDFWLFUROH3LQNHU&ODKVHQ
,QVXFKDFFRXQWVUHJXODUO\LQIOHFWHGQRXQVDQGYHUEVVXFKDVFDWVDQGKHOSHGDUHQRW
VWRUHGDVIXOOIRUPVEXWDUHPDSSHGRQWRDEVWUDFWURRWPRUSKHPHV$VWKHVHDEVWUDFW
PRUSKHPHVDUHDFWLYDWHGZKHQHYHUDQ\UHJXODUO\LQIOHFWHGIRUPLVHQFRXQWHUHGHJKHOS
KHOSVKHOSHGDQGKHOSLQJLWLVWKHIUHTXHQF\RIWKLVURRWPRUSKHPHLWVOHPPDIUHTXHQF\
WKDWZLOOLQIOXHQFHUHVSRQVHWLPHVWRDOOWKHLQIOHFWLRQDOIRUPVLQFOXGLQJVWHPV,QVXFK
DQDFFRXQWLUUHJXODULQIOHFWLRQVDQGGHULYHGIRUPVDUHSURFHVVHGLQDGLIIHUHQWPDQQHU
47/
7
(LWKHUWKH\DUHVWRUHGDVZKROHIRUPVRUWKH\KDYHDPRUHFRPSOH[UHSUHVHQWDWLRQRI
VXEQRGHVVXEUXOHVWKDWJLYHWKHUHODWLRQVKLSEHWZHHQWKHVWHPDQGLUUHJXODUO\LQIOHFWHG
IRUP:XQGHUOLFK)DEUL:KDWVXFKPRGHOVZRXOGSUHGLFWLQWHUPVRI
FXPXODWLYHPRUSKHPHIUHTXHQF\DQGIDPLO\VL]HHIIHFWVLVXQFOHDU$OWKRXJK'H-RQJHW
DOVKRZHGWKDWLUUHJXODULW\GLGQRWDIIHFWIDPLO\VL]HHIIHFWVSURSRQHQWVRIGXDO
URXWHPRGHOVKDYHDV\HWQRWVSHFLILFDOO\DGGUHVVHGWKHVHSKHQRPHQD
5DFHPRGHOVRIPRUSKRORJ\DUHDGLIIHUHQWNLQGRIGXDOURXWHDFFRXQW6FKUHXGHU
%DD\HQ%XUDQL&DUDPD]]D,QWKHVHDFFRXQWVWKHUHDUHDJDLQWZR
SURFHVVLQJURXWHVEXWERWKDUHVLPXOWDQHRXVO\LQYROYHGLQSURFHVVLQJ2QHURXWH
SURFHVVHVWKHZRUGDVDZKROHIRUPDQGWKHRWKHUURXWHGHFRPSRVHVLWLQWRLWV
FRQVWLWXHQWPRUSKHPHV7KHURXWHVZRUNLQSDUDOOHODQGIRUDQ\JLYHQZRUGRQHRU
RWKHUURXWHZLOOZLQRXW,QOH[LFDOGHFLVLRQUHVSRQVHVZLOOEHPDGHRQWKHEDVLVRI
ZKLFKURXWHZLQVRXWLQWKHUDFH,IWKHIXOOIRUPURXWHZLQVRXWWKHQZRUGIRUP
IUHTXHQF\HIIHFWVVKRXOGEHH[SHFWHGLIWKHGHFRPSRVLWLRQDOURXWHZLQVRXWWKHQ
PRUSKHPLFIUHTXHQF\HIIHFWVVKRXOGEHH[SHFWHG6XFKPRGHOVDUHDQDORJRXVWRGXDO
URXWHPRGHOVLQRWKHUODQJXDJHGRPDLQVHJ&XWOHU1RUULV·VUDFHPRGHORI
SKRQHPHGHWHFWLRQ$VWKHGHFRPSRVLWLRQDOURXWHLPSRVHVH[WUDSURFHVVLQJFRVWVKLJK
IUHTXHQF\FRPSOH[ZRUGVZLOOEHSURFHVVHGDVZKROHIRUPVVRWKHVHVKRXOGVKRZZRUG
IRUPIUHTXHQF\HIIHFWV/RZIUHTXHQF\FRPSOH[ZRUGVZLOOEHGHFRPSRVHGDQGDUH
H[SHFWHGWRVKRZPRUSKHPLFIUHTXHQF\HIIHFWVZLWKIRUH[DPSOHORZIUHTXHQF\UHJXODU
LQIOHFWLRQDOIRUPVVKRZLQJOHPPDHIIHFWV
7KHGLVWULEXWHGFRQQHFWLRQLVWDSSURDFKWRODQJXDJHSURFHVVLQJSRVLWVDOH[LFRQUDGLFDOO\
GLIIHUHQWIURPWKDWXVXDOO\FRQFHSWXDOLVHGE\SV\FKROLQJXLVWV:RUGVDVVXFKGRQRWH[LVW
LQWKHFRQQHFWLRQLVWYLHZRIWKHOH[LFRQ,QVXFKDFFRXQWVHJ3ODXW*RQQHUPDQ
47/
8
ZRUGVDUHQRWVLQJOHQRGHVEXWWKHFRDFWLYDWLRQRIGLVWULEXWHGSKRQRORJLFDO
RUWKRJUDSKLFDQGVHPDQWLFIHDWXUHV7KHZRUGELUGLVWKHFRDFWLYDWLRQRIWKH
SKRQHPHVE“«DQGGDORQJZLWKVHPDQWLFIHDWXUHVIRUH[DPSOH´KDVZLQJVµ
´IOLHVµ´KDVIHDWKHUVµHWF:KHQGLVWULEXWHGFRQQHFWLRQLVWVLPXODWLRQVDUHWUDLQHGRQ
FRPSOH[IRUPVWKHVHPDQWLFDQGIRUPFRQVLVWHQF\LQPRUSKRORJLFDOO\UHODWHGZRUGVKDV
EHHQVKRZQWRFDXVHWKHKLGGHQXQLWVZKLFKPHGLDWHEHWZHHQIRUPDQGVHPDQWLFVLQ
VXFKPRGHOVWRUHSUHVHQWWKHPRUSKRORJLFDOVWUXFWXUHLQWKHWUDLQLQJVHW5XHFNO
5DYHK$VPRGHOVRIWKLVW\SHDUHLQKHUHQWO\VHQVLWLYHWRIUHTXHQF\6HLGHQEHUJ
0F&OHOODQGWKHIUHTXHQF\RIURRWPRUSKHPHVZRXOGWKHUHIRUHEHFDSWXUHGE\
VXFKDPRGHOVRDOORZLQJIRUVLPXODWLRQRIPRUSKRORJLFDOIUHTXHQF\HIIHFWV,QGHHG
'DYLVHWDO7KLV9ROXPHVXFFHVVIXOO\PRGHO%DD\HQHWDO·VGDWDVKRZLQJZRUG
IRUPDQGOHPPDIUHTXHQF\HIIHFWVLQVLQJXODUDQGSOXUDOQRXQVZLWKLQDVLQJOHV\VWHP
GLVWULEXWHGFRQQHFWLRQLVWPRGHO
([SHULPHQWDOLQYHVWLJDWLRQVRIPRUSKRORJ\DQGIUHTXHQF\
+DYLQJGHVFULEHGYDULRXVDFFRXQWVRIPRUSKRORJLFDOUHSUHVHQWDWLRQDQGSURFHVVLQJ
ZKLFKPDNHGLIIHUHQWSUHGLFWLRQVUHJDUGLQJWKHHIIHFWRIZRUGDQGPRUSKHPHIUHTXHQF\
RQUHVSRQVHWLPHVLQOH[LFDOGHFLVLRQZHQRZGLVFXVVPHWKRGRORJLFDOLVVXHVZKLFKPD\
H[SODLQZK\H[SHULPHQWDOHYLGHQFHWRUHVROYHWKLVGHEDWHKDYHVRIDUSURYHGVRPHZKDW
LQFRQFOXVLYHDQGLQFRQVLVWHQW7KHVHSUREOHPVH[LVWDWOHDVWLQSDUWEHFDXVHWKHGLIIHUHQW
FRXQWVRIIUHTXHQF\DUHKLJKO\LQWHUFRUUHODWHG
0HWKRGRORJLFDOLVVXHVZLWKIDFWRULDOGHVLJQV
9
0RVWZRUNRQPRUSKRORJ\DQGIUHTXHQF\KDVXVHGIDFWRULDOGHVLJQVZKLFKWHVWIRU
VLJQLILFDQWGLIIHUHQFHVEHWZHHQVHWVRIZRUGVWKDWGLIIHURQDVLQJOHIUHTXHQF\YDULDEOH
ZKLOHFRQWUROOLQJIRURWKHUIUHTXHQF\YDULDEOHV)RUH[DPSOHRQHPLJKWFUHDWHWZRVHWV
RIZRUGVPDWFKHGIRUOHPPDIUHTXHQF\FXPXODWLYHPRUSKHPHIUHTXHQF\DQGIDPLO\VL]H
EXWGLIIHULQJLQZRUGIRUPIUHTXHQF\WRH[DPLQHZKHWKHUZRUGIRUPIUHTXHQF\DIIHFWV
UHVSRQVHWLPHVZKHQRWKHUFRUUHODWHGFRXQWVDUHKHOGFRQVWDQW6XFKGHVLJQVDUHXVHGDV
WKH\PD[LPLVHWKHFKDQFHRIILQGLQJDQHIIHFW
$QLQWULQVLFSUREOHPRIWKLVDSSURDFKLVWKDWLWFDQUHTXLUHWKHXVHRILWHPVWKDWDUH
XQUHSUHVHQWDWLYHRIWKHODQJXDJHDVDZKROH$ZRUGWKDWGRHVQRWUHVSHFWWKH
FRUUHODWLRQVFRPPRQO\IRXQGEHWZHHQWKHIUHTXHQF\YDULDEOHVLVE\GHILQLWLRQDW\SLFDO
1HYHUWKHOHVVLQRUGHUWRFUHDWHLWHPVHWVIRUIDFWRULDOH[SHULPHQWVRQZRUGIRUPDQG
OHPPDIUHTXHQF\H[SHULPHQWHUVPXVWVHHNLWHPVIURPWKHH[WUHPHHQGVRIWKH
GLVWULEXWLRQ7KLVDSSURDFKWKHUHIRUHPD\RYHUVWDWHWKHLPSRUWDQFHRIDSDUWLFXODU
YDULDEOH/HPPDIUHTXHQF\DQGVLQJXODUZRUGIRUPIUHTXHQF\DUHH[WUHPHO\KLJKO\
FRUUHODWHGU SWKHUHIRUHZRUGVZKHUHWKHVHYDULDEOHVDUHQRWFORVHO\
PDWFKHGDUHOLNHO\DOWKRXJKQRWQHFHVVDULO\WREHXQUHSUHVHQWDWLYHDVWKH\DUHDWWKH
H[WUHPHVRIWKHGLVWULEXWLRQRIWKLVFRUUHODWLRQEHWZHHQWKHWZRIUHTXHQF\FRXQWV
7KLVSUREOHPRIXVLQJH[WUHPHLWHPVLVFOHDUO\LOOXVWUDWHGE\%DLOH\+DKQZKR
H[DPLQHGWKHUROHRISKRQRWDFWLFDQGOH[LFDOQHLJKERXUKRRGYDULDEOHVLQWKHZRUG
OLNHQHVVRIQRQZRUGV&RPSDUHGWRSUHYLRXVZRUNWKHLUUHVXOWVVKRZHGVXEVWDQWLDOO\
ZHDNHUHIIHFWVRIWULJUDPIUHTXHQF\+RZHYHUWKHLUVWLPXOLVHWFRQWUDVWHGVKDUSO\ZLWK
WKRVHRIRWKHUUHVHDUFKHUVDVWKH\XVHGDODUJHUDQGRPVHOHFWLRQRIQRQZRUGVZKHUHDV
SUHYLRXVZRUNKDGXVHGLWHPVIURPWKHHQGVRIWKHWULJUDPIUHTXHQF\GLVWULEXWLRQ,Q
47/
10
DQDO\VHVRIDVXEVHWRIWKHLUVWLPXOLIURPWKHH[WUHPHVRIWKHLULWHPV·GLVWULEXWLRQWKH\
VKRZHGUHVXOWVWKDWZHUHFRQVLVWHQWZLWKSUHYLRXVZRUN
)XUWKHUPRUHWKHVHDW\SLFDOLWHPVIRUZKLFKWKHIUHTXHQF\FRXQWVDUHRQO\ZHDNO\UHODWHG
QDWXUDOO\WHQGWREHGLIILFXOWWRILQGVRWKHQXPEHURILWHPVLQWKHH[SHULPHQWLVRIWHQ
VPDOOUHGXFLQJVWDWLVWLFDOSRZHU&ODKVHQIRXQGQRGLIIHUHQFHLQUHDFWLRQWLPHVWR
KLJKDQGORZZRUGIRUPIUHTXHQF\*HUPDQUHJXODUSDVWSDUWLFLSOHVZKLFKZHUHPDWFKHG
IRUOHPPDIUHTXHQF\7KLVQXOOILQGLQJZDVLQWHUSUHWHGDVVKRZLQJWKDWIRUUHJXODU
LQIOHFWHGIRUPVRQO\WKHOHPPDIUHTXHQF\LVLPSRUWDQW+RZHYHUWKHFHOOVL]HLQWKLV
H[SHULPHQWZDVRQO\LWHPVZKLFKFRXOGEHZK\QRVLJQLILFDQWGLIIHUHQFHZDVIRXQG
6LPLODUO\6HUHQRDQG-RQJPDQIRXQGQRHIIHFWRIOHPPDIUHTXHQF\LQWZR
H[SHULPHQWVRQ(QJOLVKVLQJXODUDQGSOXUDOQRXQVEDVHGRQDVPDOOVDPSOHVL]HRI
LWHPVSHUFHOO
$UHODWHGSUREOHPIRUIDFWRULDOGHVLJQVLVWKDWRIVDPSOLQJHUURULQFRUSXVIUHTXHQF\
FRXQWV7RFUHDWHWKHRUWKRJRQDOL]HGFHOOVQHFHVVDU\IRUIDFWRULDOGHVLJQVLWLVQHFHVVDU\
WRVDPSOHIURPWKHH[WUHPHVRIGLVWULEXWLRQV+RZHYHUDVRQHWHQGVWRZDUGWKH
H[WUHPHRIGLVWULEXWLRQVSRWHQWLDOVDPSOLQJHUURULQFUHDVHV$ZRUGDWWKHH[WUHPHRIWKH
GLVWULEXWLRQRIDFRUSXVIUHTXHQF\FRXQWKLJKRUORZLVPRUHOLNHO\LQDQRWKHUFRUSXV
FRXQWWREHFORVHUWRWKHPHDQ*HUQVEDFKHU7KDWLVLIRQHZHUHWRORRNDW
DQRWKHUFRUSXVLWLVOLNHO\WKDWWKHORZIUHTXHQF\ZRUGVZLOOKDYHDKLJKHUIUHTXHQF\WKDW
LVWKHUHZLOOEHUHJUHVVLRQWRWKHPHDQ
7KLVSUREOHPLVRQHWKDWFRXOGDIIHFWDQXPEHURIH[SHULPHQWVLQZKLFKVWURQJFODLPV
DERXWWKHQDWXUHRIOH[LFDOSURFHVVLQJKDYHEHHQEDVHGRQLWHPVHWVZKLFKKDYH
IUHTXHQFLHVRIOHVVWKDQSHUPLOOLRQHJ'H-RQJHWDO%DD\HQHWDO7KH
47/
11
PDWFKLQJRIIUHTXHQFLHVDFURVVFRQGLWLRQVLQWKHVHH[SHULPHQWVFRXOGKDYHEHHQOHVV
DFFXUDWHWKDQWKHH[SHULPHQWHUVEHOLHYHGGXHWRVDPSOLQJHUURURIWKHW\SHGLVFXVVHG
DERYH
$IXUWKHUSUREOHPLVWKDWUHVXOWVDUHRIWHQLQWHUSUHWHGLQDQRYHUO\FDWHJRULFDOPDQQHU
%DD\HQHWDOLQWHUSUHWWKHLUILQGLQJVRIZRUGIRUPIUHTXHQF\HIIHFWVIRUSOXUDO
QRXQVEXWOHPPDHIIHFWVIRUVLQJXODUVDVVKRZLQJWKDWWKHIUHTXHQF\RIWKHVLQJXODUIRUP
KDVQRHIIHFWRQWKHSOXUDOIRUP:LWKLQWKH0RUSKRORJLFDO5DFH0RGHOWKHUHDUHIXOO
IRUPDFFHVVUHSUHVHQWDWLRQVDQGDVWKHVLQJXODULVHPEHGGHGZLWKLQWKHSOXUDODFWLYDWLRQ
RIWKHSOXUDOZLOOIHHGEDFNWRWKHVLQJXODUEXWQRWYLFHYHUVD+RZHYHU%DD\HQHWDO·V
UHVXOWVFDQQRWH[FOXGHWKHSRVVLELOLW\RIWKHUHEHLQJDUHODWLYHHIIHFWRIWKHVLQJXODUIRUP
IUHTXHQF\RQSOXUDOV7KDWLVWRVD\WKHHIIHFWRIWKHIUHTXHQF\RIPRUSKRORJLFDOO\
UHODWHGZRUGVQHHGQRWEHVWULFWO\DGGLWLYH,Q'DYLVHWDO·V7KLV9ROXPHFRQQHFWLRQLVW
PRGHORI%DD\HQHWDO·VGDWDDOWKRXJKWKH\VKRZWKHGLIIHUHQWLDOZRUGIRUPDQGOHPPD
IUHTXHQF\HIIHFWVIRXQGLQWKHEHKDYLRXUDOGDWDWKHVHDUHUHODWLYHHIIHFWVZLWKERWK
FRXQWVSOD\LQJDUROHLQUHDFWLRQWLPHVWRERWKIRUPV7KHFRQVLVWHQF\RIIRUPDQG
PHDQLQJEHWZHHQVWHPVDQGSOXUDOVZLOOPHDQWKDWLQDGLVWULEXWHGPRGHOWKH\ZLOOVKDUH
UHSUHVHQWDWLRQDOVSDFHVRWKHIUHTXHQF\RIRQHIRUPZLOOQHFHVVDULO\LQIOXHQFHWKH
SURFHVVLQJRIWKHRWKHU
)XUWKHUPRUH%DD\HQ7ZHHGLH6FKUHXGHUILQGWKDWERWKZRUGIRUPDQGOHPPD
IUHTXHQF\DUHSUHGLFWLYHRIUHVSRQVHWLPHVLQUHDQDO\VLVRIGDWDIURP6FKUHXGHU%DD\HQ
XVLQJOLQHDUPL[HGHIIHFWVPRGHOOLQJWRLQFUHDVHWKHVWDWLVWLFDOSRZHURIWKHLU
DQDO\VHV3LQKHLUR%DWHV
47/
12
,WLVFOHDUWKHQWKDWLWZRXOGEHEHQHILFLDOWRRXUXQGHUVWDQGLQJRIWKHUROHVRIGLIIHUHQW
IUHTXHQF\FRXQWVLQOH[LFDOGHFLVLRQWRXVHPRUHW\SLFDOLWHPV7KLVGRHVQRWQHFHVVDULO\
PHDQWKDWZHFDQQRWPDNHXVHRIWKHVHPRUHH[WUHPHLWHPVEXWLWGRHVPHDQWKDWZH
VKRXOGEHZDU\RIVWURQJFODLPVEDVHGRQVXFKLWHPV
%\XVLQJFRUUHODWLRQDOGHVLJQVVXFKDVPXOWLSOHUHJUHVVLRQZHFDQH[DPLQHWKHGHJUHHRI
LQIOXHQFHRIHDFKRIWKHIUHTXHQF\YDULDEOHV0RUHRYHUE\XVLQJDFRUUHODWLRQDO
DSSURDFKZHFDQDYRLGVRPHRIWKHPHWKRGRORJLFDOSUREOHPVRIIDFWRULDOGHVLJQV
0RWLYDWLRQIRU([SHULPHQW
$OWKRXJKIDFWRULDOGHVLJQVDUHJRRGWRROVIRULQYHVWLJDWLQJZKHWKHUDSDUWLFXODUYDULDEOH
LQIOXHQFHVUHDFWLRQWLPHWKH\FDQQRWWHOOXVDERXWWKHGHJUHHRILQIOXHQFHRIWKLVYDULDEOH
$OOWKHIUHTXHQF\YDULDEOHVPD\LQIOXHQFHUHDFWLRQWLPHEXWWRGLIIHUHQWH[WHQWVZLWKRQH
FRXQWEHLQJPRVWSUHGLFWLYHRIUHDFWLRQWLPH%\XVLQJDFRUUHODWLRQDODSSURDFKZHFDQ
TXDQWLI\ZKLFKYDULDEOHVKDYHWKHJUHDWHVWLQIOXHQFHRQUHDFWLRQWLPH0RUHRYHUE\
XVLQJWKLVNLQGRIGHVLJQZHGRQRWQHHGWRWU\WRPD[LPLVHWKHGLIIHUHQFHEHWZHHQ
OHPPDDQGZRUGIRUPIUHTXHQFLHVLQRUGHUWRLQFUHDVHWKHOLNHOLKRRGRIILQGLQJDQHIIHFW
DOORZLQJIRUWKHXVHRIDODUJHUDQGPRUHW\SLFDOLWHPVHW
,QH[SHULPHQWZHZLOOH[DPLQHKRZZHOODQXPEHURIYDULDEOHVSUHGLFWUHVSRQVHWLPHV
WRZRUGVOHPPDIUHTXHQF\ZRUGIRUPIUHTXHQF\FXPXODWLYHPRUSKHPHIUHTXHQF\
GLIIHUHQWPHDVXUHVRIIDPLO\VL]HDQGDPHDVXUHRIWKHVHPDQWLFFRKHUHQFHRIWKH
PRUSKRORJLFDOIDPLO\RIDZRUG:HFODLPWKDWWKHXVHRISRVVLEO\DW\SLFDOLWHPVDQGRU
H[WUHPHLWHPVZKLFKDUHSUREDEO\VXEMHFWWRVDPSOLQJHUURUKDVSRVVLEO\FDXVHGWKH
47/
13
RYHUVWDWLQJRIWKHLPSRUWDQFHRIVRPHYDULDEOHV)RUH[DPSOH'H-RQJHWDO
IRXQGWKDWIRUDVHWRILQIOHFWHGYHUEVIDPLO\VL]HDFFRXQWHGIRURIYDULDQFHLQ
UHVSRQVHWLPHV7KHVHZHUHDVXEVHWRIWKHVHWRISRVVLEOHLWHPVDQGZHUHVHOHFWHGVXFK
WKDWIDPLO\VL]HDQGWKHWZRIUHTXHQF\FRXQWVGLGQRWFRUUHODWHVLJQLILFDQWO\7KH
DGYDQWDJHRIWKLVZDVWKDWLWDOORZHG'H-RQJHWDOWRH[DPLQHWKHLQIOXHQFHRIIDPLO\VL]H
XQFRQWDPLQDWHGE\WKHXVXDOFRUUHODWLRQZLWKIUHTXHQF\KRZHYHULWPD\EHWKHFDVHWKDW
IRUPRVWVXFKLWHPVIDPLO\VL]HZRXOGQRUPDOO\DFFRXQWIRUOHVVYDULDQFH
$VQRDWWHPSWZDVPDGHWRRUWKRJRQDOL]HWKHYDULRXVIUHTXHQF\YDULDEOHVWKHLWHPV
IROORZWKHODQJXDJHLQKDYLQJDKLJKGHJUHHRILQWHUFRUUHODWLRQEHWZHHQFRXQWV7KHKLJK
GHJUHHRIFRUUHODWLRQEHWZHHQWKHIUHTXHQF\FRXQWVFRXOGEHDSUREOHPLQDUHJUHVVLRQ
HTXDWLRQDVLWPD\FDXVHPXOWLFROOLQHDULW\&KDWWHUMHH+DGLDQG3ULFH
+RZHYHUPXOWLYDULDWHWHFKQLTXHVHJSULQFLSDOFRPSRQHQWVDQDO\VLVFDQLQSDUW
RYHUFRPHWKLVSUREOHPVHHEHORZ,WLVLPSRUWDQWWRQRWHWKDWWKLVH[SHULPHQWDO
DSSURDFKLVPHDQWWRFRPSOHPHQWDQGQRWWRUHSODFHWKHIDFWRULDOGHVLJQV
,Q([SHULPHQWERWKIDFWRULDODQGFRUUHODWLRQDOVWDWLVWLFVDUHXVHGLQDWWHPSWWRGHWHFW
OHPPDIUHTXHQF\ZLWKRSWLPDOVHQVLWLYLW\
([SHULPHQW
0HWKRGV
3DUWLFLSDQWV
47/
14
YROXQWHHUVIURPWKH05&&%8YROXQWHHUSDQHOSDUWLFLSDWHGLQ([SHULPHQW$OO
ZHUHQDWLYHVSHDNHUVRI%ULWLVK(QJOLVKDJHG\HDUVDQGUHSRUWHGQRODQJXDJH
SUREOHPV$OOYROXQWHHUVKDGQRUPDOKHDULQJDQGQRUPDORUFRUUHFWHGWRQRUPDO
H\HVLJKW
0DWHULDOV
PRQRPRUSKHPLF(QJOLVKQRXQVZHUHVHOHFWHGVXFKWKDWWKH\ZHUHHLWKHU
XQHTXLYRFDOO\QRXQVQRRWKHUIRUPH[LVWHGRUKDGJUHDWHUIUHTXHQF\DVQRXQVWKDQDV
RWKHUIRUPVPHDQQRXQYHUEIUHTXHQF\UDWLRLQWKH&(/(;GDWDEDVH%DD\HQ
3LHSHQEURFNYDQ5LMQ6HH$SSHQGL[IRUVWLPXOL+RPRSKRQLFZRUGVZHUH
H[FOXGHGE\FKHFNLQJDOOZRUGVLQWKH:RUGVP\WKRQOLQHGLFWLRQDU\$OOZRUGV
ZHUHFKDUDFWHUVLQOHQJWKDQGZHUHSUHGRPLQDQWO\PRQRV\OODELF)UHTXHQF\GDWDIRU
WKHZRUGVZDVREWDLQHGIURPWKH&(/(;GDWDEDVH)RUHDFKZRUGWKH&XPXODWLYH
0RUSKHPH)UHTXHQF\/HPPD)UHTXHQF\DQG:RUG)RUP)UHTXHQF\ZDVREWDLQHG
)RXUIDPLO\VL]HPHDVXUHVZHUHDOVRREWDLQHG)6DFRXQWRIDOOWKHGHULYDWLRQDOIRUPV
RIHDFKWHVWLWHP)6DFRXQWRIDOOGHULYDWLRQDODQGFRPSRXQGIRUPV)6DFRXQWRI
GHULYDWLRQDOIRUPVDQGWKHLQIOHFWLRQVRIWKHVHGHULYDWLRQVDQG)6DFRXQWRI
GHULYDWLRQVFRPSRXQGVDQGDOOWKHLQIOHFWLRQDOYDULDQWVRIWKHVHFRPSOH[IRUPV%RWK
VHPDQWLFDOO\WUDQVSDUHQWDQGRSDTXHPRUSKRORJLFDOIDPLO\PHPEHUVZHUHLQFOXGHG)6
KDVSUHYLRXVO\EHHQWKHSUHGRPLQDQWPHDVXUHRIIDPLO\VL]H6FKUHXGHU%DD\HQ
+RZHYHUDVZLWKWKHRWKHUIUHTXHQF\FRXQWVZKDWLVLQFOXGHGLQIDPLO\VL]HFRXQWVLVQRW
WKHRU\QHXWUDO:KHWKHULQIOHFWLRQDOYDULDQWVVKRXOGEHLQFOXGHGLQDFRXQWRIIDPLO\VL]H
LVLQSDUWGHSHQGHQWRQKRZVXFKIRUPVPD\EHUHSUHVHQWHGLQWKHOH[LFRQ0RUHRYHU
PRVWZRUNRQIDPLO\VL]HKDVEHHQLQ'XWFKZKHUHFRPSRXQGLQJLVDPRUHSURGXFWLYH
IHDWXUHRIWKHODQJXDJHWKDQLQ(QJOLVK2WKHUFRXQWVPD\EHPRUHSUHGLFWLYHIRU
15
(QJOLVK7KHFRXQWRIFRPSRXQGVGLGQRWLQFOXGHFRPSRXQGVZLWKVSDFHVEHWZHHQWKH
ZRUGV'H-RQJ)HOGPDQ6FKUHXGHU3DVWL]]R%DD\HQIRXQGWKDWIDPLO\VL]H
FRXQWVWKDWH[FOXGHGVXFKLWHPVEHWWHUSUHGLFWHGUHVSRQVHWLPHV
7RSURYLGHDQHVWLPDWHRIVDPSOLQJHUURUDQDOWHUQDWLYHIUHTXHQF\FRXQWZDVDOVR
REWDLQHGIURPWKH%ULWLVK1DWLRQDO&RUSXV%LJUDPDQGWULJUDPIUHTXHQFLHVDV
ZHOODVRUWKRJUDSKLFQHLJKERXUKRRGGHQVLW\&ROWKHDUW·V1ZHUHDOVRFDOFXODWHGIRUHDFK
LWHPXVLQJWKH&(/(;GDWDEDVH&ROWKHDUW
'H-RQJHWDO7KLV9ROXPHSUHVHQWGDWDLQGLFDWLQJWKDWWKHIDPLO\VL]HHIIHFWKDVD
VWURQJVHPDQWLFFRPSRQHQW7RH[SORUHVHPDQWLFDVSHFWVRIIDPLO\VL]HZHLQFOXGHGD
YDULDEOHWKDWPHDVXUHVWKHGHJUHHRIUHODWHGQHVVRIRXULWHPVWRWKHLUPRUSKRORJLFDO
IDPLOLHV*LYHQWKDWPDQ\RIRXULWHPVKDYHH[WUHPHO\KLJKIDPLO\VL]HVLWZDVLQIHDVLEOH
WRJHWVXEMHFWLYHVHPDQWLFUHODWHGQHVVUDWLQJVRIHDFKVWHPWRDOOLWVIDPLO\PHPEHUV
,QVWHDGZHXVHGDPHDVXUHEDVHGRQ/DWHQW6HPDQWLF$QDO\VLV/6$YHFWRUV/DQGDXHU
'XPDLV/6$YHFWRUVDUHGHULYHGIURPFRUSXVEDVHGFRRFFXUUHQFHPDWULFHV
WKDWLVKRZOLNHO\VHWVRIZRUGVDUHWRRFFXULQWKHVDPHGLVFRXUVHFRQWH[W7KHFRVLQH
RIDQDQJOHEHWZHHQYHFWRUVUHSUHVHQWLQJPRUSKRORJLFDOO\UHODWHGZRUGVLQ/6$VSDFH
FRUUHODWHVZHOOZLWKVXEMHFWLYHVHPDQWLFUHODWHGQHVVUDWLQJVRIZRUGSDLUV5DVWOH'DYLV
0DUVOHQ:LOVRQ7\OHU)RUHDFKZRUGLQWKHH[SHULPHQWDPHDQIDPLO\/6$
VFRUHZDVFDOFXODWHGE\WDNLQJWKHPHDQRIWKLV/6$FRVLQHPHDVXUHEHWZHHQWKHVWHP
SDLUHGZLWKHDFKRILWVIDPLO\PHPEHUV
7DEOH$ERXW+HUH!
! 16
7DEOHJLYHVGHWDLOVRIWKHZRUGVXVHGLQWKHH[SHULPHQW:RUGVZHUHFKRVHQWR
UHSUHVHQWDZLGHUDQJHRIIUHTXHQFLHVDQGIDPLO\VL]HVLQRUGHUWRPD[LPLVHWKHVHQVLWLYLW\
RIWKHUHJUHVVLRQGHVLJQ
$VWKHUHLVDKLJKGHJUHHRIFRUUHODWLRQZLWKLQRXUIUHTXHQF\DQGIDPLO\VL]HYDULDEOHV
ZKLFKFRXOGFDXVHSUREOHPVRIFROOLQHDULW\LQUHJUHVVLRQDQDO\VHVZHFROODSVHGWKHVHLQWR
DVLQJOHIUHTXHQF\DQGDVLQJOHIDPLO\VL]HYDULDEOHXVLQJSULQFLSDOFRPSRQHQWVDQDO\VHV
3&$2EOLTXHURWDWLRQGLUHFWREOLPLQZDVXVHGDQGIRUHDFKDQDO\VLVWKHUHZDVD
VLQJOHFRPSRQHQWZLWKDQHLJHQYDOXHJUHDWHUWKDQRQH.DLVHU7KHLWHP
ZHLJKWLQJVIRUHDFKRIWKHFRPSRQHQWVZHUHVDYHGIRUXVHDVYDULDEOHVLQWKHDQDO\VHV
$OWKRXJKIDPLO\VL]HPHDVXUHVDQGIUHTXHQFLHVDOVRFRUUHODWHSUHYLRXVZRUNKDVVKRZQ
WKDWIUHTXHQF\DQGIDPLO\VL]HHIIHFWVDUHGXHWRVHSDUDWHDQGGLIIHUHQWXQGHUO\LQJFDXVHV
:HKDYHXVHGWKLVWKHRU\GULYHQDSSURDFKWRFRQVWUDLQLQJRXUXVHRI3&$&KDWWHUMHHHW
DO0RUHRYHU3&$RQDOOWKHIDPLO\VL]HDQGIUHTXHQF\YDULDEOHVWRJHWKHU
SURGXFHGWZRFRPSRQHQWVRQHZHLJKWHGWRWKHIUHTXHQF\YDULDEOHVDQGRQHWRIDPLO\
VL]HYDULDEOHVVRMXVWLI\LQJRXUXVHRIWZRVHSDUDWH3&$DQDO\VHV
QRQZRUGVZHUHFUHDWHGWKDWZHUHPDWFKHGLQOHQJWKDQGELJUDPIUHTXHQF\WRUHDO
ZRUGV$OOQRQZRUGVZHUH´PRQRPRUSKHPLFµWKDWLVWKH\GLGQRWLQFOXGHDQ\DIIL[HV
3URFHGXUH
47/
17
$VLQJOHZRUGOH[LFDOGHFLVLRQWDVNZDVXVHG,WHPVZHUHSUHVHQWHGWRYROXQWHHUVRQD
FRPSXWHUPRQLWRUXVLQJWKH'0';H[SHULPHQWDOVRIWZDUHGHYHORSHGDW0RQDVK
8QLYHUVLW\DQGDWWKH8QLYHUVLW\RI$UL]RQDE\.,)RUVWHUDQG-&)RUVWHU(DFKLWHP
ZDVSUHFHGHGIRUPVZLWKD´µIL[DWLRQSRLQWIROORZHGDWRIIVHWE\WKHLWHPLWVHOI
IRUPVLQXSSHUFDVHSRLQW$ULDOIRQW3DUWLFLSDQWVZHUHLQVWUXFWHGWRPDNHD
OH[LFDOGHFLVLRQWRLWHPVDVTXLFNO\DQGDFFXUDWHO\DVWKH\FRXOG5HVSRQVHVZHUH
LQGLFDWHGE\PHDQVRISUHVVLQJRQHRIWZRNH\VRQDEXWWRQER[7KH¶\HV·UHVSRQVHNH\
ZDVDOZD\VSUHVVHGZLWKWKHGRPLQDQWKDQGWKH¶QR·ZLWKWKHQRQGRPLQDQWKDQG
6XEMHFWVKDGPLOOLVHFRQGVWRUHVSRQGEHIRUHWKHV\VWHPWLPHGRXWDQGZHQWRQWR
WKHQH[WLWHP7KHUHZDVDPLQLPXPLQWHUWULDOLQWHUYDORIPLOOLVHFRQGV
(DFKVXEMHFWVDZDGLIIHUHQWSVHXGRUDQGRPLVHGRUGHURIWKHOLVWDUUDQJHGLQWRWKLUW\
WZHQW\LWHPEORFNV(DFKEORFNKDGDIL[HGRUGHUDFURVVVXEMHFWVEXWWKHEORFNV
WKHPVHOYHVZHUHSUHVHQWHGLQDUDQGRPRUGHUIRUHDFKVXEMHFW7KLVDOORZHGIRUDQHTXDO
VSUHDGRIH[SHULPHQWDOVWLPXOLDFURVVWKHOHQJWKRIWKHOLVWZKLOHDYRLGLQJSRVVLEOHRUGHU
HIIHFWV
5HVXOWV
VXEMHFWVZHUHUHPRYHGIURPWKHDQDO\VHVGXHWRKLJKHUURUUDWHVRYHU'DWD
IURPZRUGVZDVUHPRYHGIURPWKHDQDO\VHVGXHWRKLJKHUURUUDWHVRYHU7KLV
OHIWVXEMHFWVDQGZRUGV0HDQUHDFWLRQWLPHVZHUHORJWUDQVIRUPHGDQGHQWHUHGLQ
DQDO\VHV
$QDO\VHV
47/
18
:KHUHSRVVLEOHYDULDEOHVZHUHFHQWUHGWRUHGXFHSRVVLEOHPXOWLFROOLQHDULW\&KDWWHUMHHHW
DO+RZHYHUWKHKLJKLQWHUFRUUHODWLRQRIDQXPEHURIYDULDEOHVVWLOOFUHDWHG
SUREOHPVRIPXOWLFROOLQHDULW\LQWKHUHJUHVVLRQVZKHQDOOWKHYDULDEOHVZHUHLQFOXGHG
7KLVZDVRYHUFRPHE\FDUU\LQJRXWDVHULHVRIPXOWLSOHUHJUHVVLRQVZLWKWKHUHGXFHG
QXPEHURIYDULDEOHVFUHDWHGE\SULQFLSDOFRPSRQHQWVDQDO\VLVDQGDOVRE\H[FOXGLQJ
FHUWDLQYDULDEOHVWKDWZHUHQHLWKHUVLJQLILFDQWSUHGLFWRUVQRUWKHRUHWLFDOO\LQWHUHVWLQJWR
WKLVZRUNEXWFDXVHGSUREOHPVRIFROOLQHDULW\IRUH[DPSOHWULJUDPIUHTXHQF\
)UHTXHQF\DQGIDPLO\VL]HYDULDEOHVZHUHORJJHG&XPXODWLYHPRUSKHPHIUHTXHQF\DV
QRUPDOO\PHDVXUHGWKDWLVWKHORJRIWKHVXPRIDOOWKHPRUSKRORJLFDOIDPLO\PHDVXUHV
ZDVSDUWLFXODUO\VXVFHSWLEOHWRPXOWLFROOLQHDULW\5LGJHUHJUHVVLRQDWHFKQLTXHWKDW
H[DPLQHVWKHVWDELOLW\RIUHJUHVVLRQFRHIILFLHQWVVKRZHGWKDWWKHVWDQGDUGPHDVXUHRI
FXPXODWLYHPRUSKHPHIUHTXHQF\WREHXQVWDEOH7KHDGGLWLRQRIDFRQVWDQWWRWKH
UHJUHVVLRQHTXDWLRQFDXVHGODUJHFKDQJHVLQWKHUHJUHVVLRQFRHIILFLHQWIRUFXPXODWLYH
PRUSKHPHIUHTXHQF\+RZHYHUE\ORJJLQJWKHIUHTXHQFLHVRIWKHIDPLO\PHPEHUVDQG
WKHQVXPPLQJWKHORJVDVLQJOHVWDEOHYDULDEOHZDVFUHDWHGWKDWZDVQRWFROOLQHDUZLWK
RWKHUYDULDEOHV%\ORJJLQJDQGWKHPVXPPLQJWKLVPHDVXUHZLOOHQKDQFHWKHLQIOXHQFH
RIWKHORZHUIUHTXHQF\LWHPVRIDPRUSKRORJLFDOIDPLO\7KLVFXPXODWLYHORJJHG
IUHTXHQF\YDULDEOHZDVFHQWUHGDQGHQWHUHGLQWRWKHUHJUHVVLRQV
7KHPRGHOWKDWDFFRXQWHGIRUWKHJUHDWHVWWRWDOYDULDQFHZDVDVIROORZV:RUGIRUP
IUHTXHQF\ZDVWKHVWURQJHVWSUHGLFWRUUHVSRQVHWLPHV5 &XPXODWLYHORJJHG
PRUSKHPHIUHTXHQF\DGGHGWRWKHH[SODQDWRU\SRZHURIWKHDQDO\VLVFKDQJHLQ5
VLJQLILFDQFHRI)FKDQJH+RZHYHUWKLVZDVDSRVLWLYHFRUUHODWLRQWKDWLV
WKHKLJKHUWKHFXPXODWLYHORJJHGIUHTXHQF\WKHVORZHUWKHUHDFWLRQWLPH)DPLO\6L]H
WKHPHDVXUHEDVHGRQDW\SHFRXQWRIDOOWKHGHULYHGDQGFRPSRXQGPHPEHUVRIDIDPLO\
47/
19
ZDVDOVRDVLJQLILFDQWSUHGLFWRURIUHVSRQVHWLPHV5 VLJQLILFDQFHRI)FKDQJH
7KH/6$VHPDQWLFYDULDEOHDJDLQDGGHGWRWKHH[SODQDWRU\SRZHURIWKHPRGHO
FRUUHODWLQJQHJDWLYHO\ZLWKUHVSRQVHWLPHVFKDQJHLQ5 VLJQLILFDQFHRI)FKDQJH
7KHUHZDVQRHYLGHQFHRIVHULRXVPXOWLSOHFROOLQHDULW\LQWKHVHGDWDZLWKDOO
YDULDEOHVKDYLQJYDULDEOHLQIODWLRQIDFWRUVFRUHVRIOHVVWKDQDQGWKHFRQGLWLRQLQGH[
IRUWKHPRGHOHTXDOWR&KDWWHUMHHHWDO
)RUWKHIUHTXHQF\YDULDEOHVHYHQDIWHUFHQWULQJPXOWLFROOLQHDULW\ZDVVWLOOSUHVHQWZKHQ
DOORULJLQDOIUHTXHQF\FRXQWVZHUHLQFOXGHG,QVHSDUDWHUHJUHVVLRQVLQZKLFKWKHRWKHU
IUHTXHQF\YDULDEOHVZHUHILWWHGLQGLYLGXDOO\/HPPD)UHTXHQF\%1&ZRUGIRUP
IUHTXHQF\DQGWKH3&$YDULDEOHPDGHIURPWKHWKUHHIUHTXHQF\YDULDEOHVDOODFFRXQWHG
IRUOHVVYDULDQFHWKDQGLG:RUG)RUP)UHTXHQF\ZKHQLWZDVILWWHG,QPRGHOVLQZKLFK
WKHRWKHUIDPLO\VL]HYDULDEOHVZHUHXVHGWKHVHZHUHQRWVLJQLILFDQWSUHGLFWRUVRIUHDFWLRQ
WLPH$VLQJOHIDPLO\VL]HYDULDEOHFUHDWHGXVLQJSULQFLSDOFRPSRQHQWVDQDO\VLVZDVD
VLJQLILFDQWSUHGLFWRURIUHVSRQVHWLPHVEXWH[SODLQHGOHVVYDULDQFHWKDQWKH)DPLO\6L]H
YDULDEOHRQLWV·RZQ
,QRUGHUWRLQFOXGHERWKZRUGIRUPDQGOHPPDIUHTXHQF\ZLWKLQWKHVDPHPRGHODIRUP
RI
SDUWLDORUWKRJRQDOL]DWLRQ
ZDVXVHG'UDSHUDQG6PLWK:RUGIRUP
IUHTXHQF\ZDVUHJUHVVHGDJDLQVWOHPPDIUHTXHQF\DQGWKHUHVLGXDOYDOXHVVDYHGDV
PHDVXUHRIZRUGIRUPIUHTXHQF\DGMXVWHGIRUOHPPDIUHTXHQF\/LNHZLVHOHPPD
IUHTXHQF\ZDVUHJUHVVHGDJDLQVWZRUGIRUPIUHTXHQF\WRJLYHDPHDVXUHRIOHPPD
IUHTXHQF\DGMXVWHGIRUZRUGIRUPIUHTXHQF\5HVSRQVHWLPHVZHUHWKHQDQDO\VHGXVLQJ
KLHUDUFKLFDOVHTXHQWLDOO\VWUXFWXUHGUHJUHVVLRQPRGHOV%\DGGLQJWKHDGMXVWHGDQG
XQDGMXVWHGSUHGLFWRUVLQGLIIHUHQWRUGHUVZHH[SORUHGWKHUHODWLYHH[SODQDWRU\YDOXHRI
:RUG)RUPDQG/HPPD)UHTXHQF\ZKLOHPLQLPLVLQJDPELJXLW\WKDWPLJKWDULVHIURP
20
FROOLQHDULW\:KHQZRUGIRUPIUHTXHQF\ZDVILWWHGILUVWDGGLQJOHPPDIUHTXHQF\
DGMXVWHGIRUZRUGIRUPIUHTXHQF\GLGQRWVLJQLILFDQWO\LQFUHDVHWKHPRGHO
VH[SODQDWRU\
SRZHUFKDQJHLQ5 VLJQLILFDQFHRI)&KDQJH ,QWKHVHFRQGPRGHO
ZKHQOHPPDIUHTXHQF\ZDVILWWHGILUVWDGGLQJZRUGIRUPIUHTXHQF\DGMXVWHGIRUOHPPD
IUHTXHQF\VLJQLILFDQWO\LQFUHDVHGWKHH[SODQDWRU\SRZHURIWKHPRGHOFKDQJHLQ5
VLJQLILFDQFHRI)FKDQJH$JDLQWKHUHZDVQRHYLGHQFHRIVHULRXV
SUREOHPVRIFROOLQHDULW\LQWKHVHGDWDZLWKQRYDULDEOHLQIODWLRQIDFWRU9,)JUHDWHUWKDQ
LQHLWKHUPRGHODQGDFRQGLWLRQLQGH[RIIRUERWK7KHVHGDWDVXJJHVWWKDWZRUG
IRUPIUHTXHQF\LVDEHWWHUSUHGLFWRURIUHVSRQVHWLPHVWKDQOHPPDIUHTXHQF\DQGWKDW
WKHVLJQLILFDQWHIIHFWVRIOHPPDIUHTXHQF\ZKHQLQFOXGHGLQWKHDEVHQFHRIZRUGIRUP
IUHTXHQF\DUHGXHWRLWVFRUUHODWLRQZLWKZRUGIRUPIUHTXHQF\
'LVFXVVLRQ
([SHULPHQWVKRZHGWKDWZRUGIRUPIUHTXHQF\LVWKHVWURQJHVWVLQJOHSUHGLFWRURI
OH[LFDOGHFLVLRQUHDFWLRQWLPHVEXWWKHVHDUHDOVRFRGHWHUPLQHGE\FXPXODWLYHPRUSKHPH
IUHTXHQF\IDPLO\VL]HDQGWKHVHPDQWLFFRKHUHQFHRIWKHPRUSKRORJLFDOIDPLO\
:LWKLQWKHIUHTXHQF\GRPDLQWKHZRUGIRUPIUHTXHQF\LVDEHWWHUSUHGLFWRURIUHVSRQVH
WLPHVWKDQOHPPDIUHTXHQF\%RWKDPRGHOZLWKWKLVYDULDEOHDORQHDQGDPRGHOWKDW
LQFOXGHVD3&$YDULDEOHFUHDWHGIURPDOOWKHIUHTXHQF\FRXQWVDFFRXQWIRUPRUHYDULDQFH
WKDQWKHPRGHOZLWKOHPPDIUHTXHQF\DORQH+LHUDUFKLFDOUHJUHVVLRQVVXJJHVWOHPPD
IUHTXHQF\DGGVQRH[SODQDWRU\SRZHUWRWKHPRGHOVEXWDVWKHUHDUHSUREOHPVRI
PXOWLFROOLQHDULW\ZKHQERWKPHDVXUHVDUHLQFOXGHGLQDQDO\VHVWKLVPXVWUHPDLQD
WHQWDWLYHFRQFOXVLRQ
47/
21
7KHILQGLQJRIDSRVLWLYHFRUUHODWLRQRIFXPXODWLYHPRUSKHPHIUHTXHQF\ZLWKUHVSRQVH
WLPHVLVLQOLQHZLWK%DD\HQHWDO%\XVLQJOLQHDUPL[HGHIIHFWVPRGHOOLQJ
3LQKHLUR%DWHVWKH\LQFUHDVHGWKHSRZHURIWKHLUDQDO\VHVDQGZHUHDEOHWRILQG
DQHIIHFWRIFXPXODWLYHPRUSKHPHIUHTXHQF\WKDWKDGEHHQXQGHWHFWHGE\WKHLURULJLQDO
DQDO\VHVRIWKHVHGDWD6FKUHXGHU%DD\HQ7KHXVHRILWHPVLQRXU
UHJUHVVLRQDQDO\VLVJDYHXVDKLJKGHJUHHRIVWDWLVWLFDOSRZHUPDNLQJWKHHIIHFWGHWHFWDEOH
KHUH%DD\HQHWDOLQWHUSUHWHGWKHQHJDWLYHHIIHFWRIFXPXODWLYHPRUSKHPHIUHTXHQF\DV
GHULYLQJIURPOH[LFDOFRPSHWLWLRQEHWZHHQDFFHVVUHSUHVHQWDWLRQVRIIDPLO\PHPEHUV
0HXQLHUDQG6HJXLIRXQGWKDWWKHUHODWLYHIUHTXHQF\RIIDPLO\PHPEHUVSOD\HGD
UROHLQOH[LFDOGHFLVLRQODWHQFLHVWRDXGLWRU\VWLPXOL:RUGVZLWKPRUHIUHTXHQW
PRUSKRORJLFDOIDPLO\PHPEHUVZHUHUHVSRQGHGWRVORZHUWKDQWKRVHZLWKORZHU
IUHTXHQF\ZRUGV$OWKRXJKIRUDVPDOOQXPEHURILWHPVWKHUHZDVDGHULYHGIRUPZLWK
KLJKHUIUHTXHQF\WKDQWKHVWHPIRUWKHLWHPVLQWKLVH[SHULPHQWWKHVWHPZDVWKH
KLJKHVWIUHTXHQF\IRUPLQWKHPRUSKRORJLFDOIDPLO\0RUHRYHUZLWKDORJJHGWKHQ
VXPPHGFXPXODWLYHPRUSKHPHIUHTXHQF\FRXQWWKHORZHUIUHTXHQFLHVIDPLO\PHPEHUV
ZLOOKDYHDJUHDWHULQIOXHQFHFRPSDUHGWRWKHPHDVXUHXVHGE\0HXQLHUDQG6HJXLZKLFK
ZLOOEHGRPLQDWHGE\WKHKLJKHVWIUHTXHQF\PHPEHUV8QOLNHWKHPRGHOSURSRVHGE\
0HXQLHUDQG6HJXLPRUSKRORJLFDOO\UHODWHGIRUPVGRQRWQHHGWREHKLJKHULQIUHTXHQF\
WKDQWKHIDPLO\PHPEHUWRFDXVHFRPSHWLWLRQ
,WLVXQFOHDUDV\HWZKHWKHUWKLVLVPRUSKRORJLFDORUDOH[LFDOHIIHFW7KDWLVLVLW
FRPSHWLWLRQLQDOH[LFDOFRKRUWZLWKDOOZRUGIRUPVFRQWDLQLQJWKHURRWZKHWKHU
PRUSKRORJLFDOO\UHODWHGRUQRWDFWLYDWHGDQGFRPSHWLQJZLWKHDFKRWKHUHJIRUWKH
47/
22
URRWODZERWKODZQDQGODZIXORULVFRPSHWLWLRQUHVWULFWHGWRPRUSKRORJLFDOO\UHODWHG
IRUPV"7KLVLVFOHDUO\VRPHWKLQJWKDWFDQEHWHVWHG
7KHVHGDWDDGGWRWKHJURZLQJERG\RIZRUNVKRZLQJWKDWPRUSKRORJLFDOIDPLO\VL]HLVD
VLJQLILFDQWSUHGLFWRURIOH[LFDOGHFLVLRQUHVSRQVHWLPHV)RUDQ\JLYHQZRUGWKHW\SH
FRXQWRIRWKHUFRPSOH[ZRUGVVKDULQJDURRWPRUSKHPHLVSUHGLFWLYHRIUHVSRQVHWLPHWR
WKDWZRUG1RWHWKDWLWZDVWKH)DPLO\6L]HWKHFRXQWWKDWLQFOXGHVRQO\GHULYDWLRQV
DQGFRPSRXQGVWKDWZDVVLJQLILFDQWLQOLQHZLWK6FKUHXGHU%DD\HQ,QFOXGLQJ
LQIOHFWLRQDOYDULDQWVLQWKHIDPLO\VL]HFRXQWGRHVQRWVHHPZDUUDQWHGEDVHGRQRXUGDWD
7KHDSSUR[LPDWHO\RIYDULDQFHH[SODLQHGE\IDPLO\VL]HZDVKRZHYHUVXEVWDQWLDOO\
OHVVWKDQWKDWIRXQGE\'H-RQJHWDO+RZHYHULQFRQWUDVWWRWKHLUVWLPXOXVWKHUH
ZDVDVWURQJFRUUHODWLRQKHUHEHWZHHQZRUGIRUPIUHTXHQF\DQGIDPLO\VL]HZKLFKPD\
KDYHOHGWRDQXQGHUHVWLPDWLRQRIWKHSUHGLFWLYHSRZHURIIDPLO\VL]H1HYHUWKHOHVVLWLV
FOHDUWKDWZRUGIRUPIUHTXHQF\LVDVWURQJHUSUHGLFWRURIUHVSRQVHWLPHVWKDQIDPLO\VL]H
'H-RQJHWDO7KLV9ROXPHIRXQGVWURQJVHPDQWLFHIIHFWVLQWKHLUZRUNRQIDPLO\
VL]H$VLQIOHFWLRQVDGGOLWWOHWRWKHVHPDQWLFVRIWKHLUURRWIRUPVFRPSDUHGWR
GHULYDWLRQVDQGFRPSRXQGVWKHLUGDWDVXSSRUWDVWURQJUROHIRUVHPDQWLFVLQIDPLO\VL]H
HIIHFWV,QVXSSRUWRIWKLVZHIRXQGLQDGGLWLRQWRWKHIDPLO\VL]HHIIHFWVWKDWWKH
VHPDQWLFFRKHUHQFHZLWKLQWKHPRUSKRORJLFDOIDPLOLHVDOVRVLJQLILFDQWO\DGGHGWRWKH
SUHGLFWLYHSRZHURIWKHUHJUHVVLRQHTXDWLRQZLWKVHSDUDEOHHIIHFWVRIVHPDQWLFVDQG
PRUSKRORJLFDOIDPLO\VL]H+RZHYHUWKLVHIIHFWDOWKRXJKUHOLDEOHZDVTXLWHVPDOODQG
PD\VXIIHUIURPVDPSOLQJHUURU7KHUHODWLYHO\VPDOOVL]HRIWKHFRUSXVXVHGIRU/6$
FRXOGKDYHFDXVHGWKHQXPEHURIPLVVLQJIDPLO\PHPEHUVWRYDU\RYHULWHPV
1RQHWKHOHVVWKLVUHVXOWVXJJHVWVWRROVOLNH/6$PD\SURYHXVHIXOLQIXWXUHLQYHVWLJDWLRQ
RIWKHUROHRIVHPDQWLFUHODWLRQVKLSVZLWKLQPRUSKRORJLFDOIDPLOLHV
23
,QFRQWUDVWWRSUHYLRXVZRUN%DD\HQHWDO7DIWZKLFKIRXQGFOHDUHIIHFWV
RIOHPPDIUHTXHQF\ZHIRXQGWKDWZRUGIRUPIUHTXHQF\EHVWSUHGLFWHGUHVSRQVHWLPHV
WRVLQJXODUQRXQV7KLVVHHPVWRVXSSRUWIXOOOLVWLQJPRGHOVRIPRUSKRORJ\DVGRHVWKH
DSSDUHQWFRPSHWLWLRQEHWZHHQPRUSKRORJLFDOUHODWLYHVDVLQGLFDWHGE\WKHFXPXODWLYH
PRUSKHPHGDWD+RZHYHULILQGHHGZHKDYHDVHSDUDWHSXUHVHPDQWLFHIIHFWDQGD
IDPLO\VL]HHIIHFWEDVHGVROHO\RQWKHVKDULQJRIDURRWPRUSKHPHWKHQWKHVHGDWDVLWEHVW
ZLWKDPRGHORIWKHOH[LFRQLQZKLFKWKHUHDUHPRUSKHPLFUHSUHVHQWDWLRQV0RUHRYHUDV
ZHGLGQRWRUWKRJRQDOL]HRXUOHPPDDQGZRUGIRUPIUHTXHQF\YDULDEOHVWKHH[SHULPHQW
ZDVQRWLGHDOO\GHVLJQHGWRILQGVHSDUDEOHHIIHFWVRIWKHVHFRXQWV,IDV'DYLVHWDO·V7KLV
9ROXPHPRGHOVXJJHVWVWKHUHVSRQVHWLPHVWRZRUGVDOWKRXJKGRPLQDWHGE\HLWKHU
OHPPDRUZRUGIRUPIUHTXHQF\DUHLQIDFWDSURGXFWRIERWKFRXQWVWKHQIRUW\SLFDO
QRXQVLWPD\EHGLIILFXOWWRILQGOHPPDIUHTXHQF\HIIHFWV)RUW\SLFDOQRXQVWKHZRUG
IRUPIUHTXHQF\RIWKHSOXUDODGGVUHODWLYHO\OLWWOHWRWKHOHPPDIUHTXHQF\RIWKHZRUG
WKHDYHUDJHIUHTXHQF\UDWLRVLQJXODUWRSOXUDOLVDSSUR[LPDWHO\*LYHQWKDW
UHJUHVVLRQDQDO\VHVZHUHXVHGDVPDOOOHPPDHIIHFWWKDWLVKLJKO\FRUUHODWHGZLWKDVWURQJ
ZRUGIRUPHIIHFWIRUVLQJXODUQRXQVLVXQOLNHO\WREHVLJQLILFDQWHYHQLISUREOHPVRI
FROOLQHDULW\ZHUHGHDOWZLWK0RUHRYHUWKLVLPSOLHVWKDWFRQWUDU\WR%DD\HQHWDO
IRUW\SLFDOQRXQVDQ\OHPPDIUHTXHQF\HIIHFWVDUHPRUHOLNHO\WREHIRXQGRQLQIOHFWHG
IRUPV)LUVWO\WKHFRUUHODWLRQEHWZHHQZRUGIRUPDQGOHPPDIUHTXHQF\LVOHVVIRU
SOXUDOVU WKDQVLQJXODUVU 6HFRQGO\WKHGLIIHUHQFHEHWZHHQOHPPDDQG
ZRUGIRUPIUHTXHQF\LVJUHDWHUZLWKSOXUDOV,IWKHUHDUHRQO\VPDOOQRQDGGLWLYHHIIHFWV
RIOHPPDIUHTXHQF\WKHQLWZLOOEHVWDWLVWLFDOO\HDVLHUWRGLVWLQJXLVKWKHVHIURPZRUG
IRUPIUHTXHQF\HIIHFWVE\XVLQJQRXQSOXUDOV
24
([SHULPHQW
$OWKRXJK([SHULPHQWVKRZHGQRFOHDUHIIHFWVRIOHPPDDQGZRUGIRUPIUHTXHQF\LQ
WKHSURFHVVLQJRIVLPSOHQRXQVWKHLWHPVXVHGLQWKLVH[SHULPHQWPD\QRWEHLGHDO
WRILQGVXFKHIIHFWV,QRUGHUWRH[SORUHGLIIHUHQWLDOHIIHFWVRIWKHVHFRXQWVUHVHDUFKHUV
KDYHJHQHUDOO\PDGHXVHRILWHPVZKHUHWKHUHLVDODUJHGLYHUJHQFHEHWZHHQOHPPDDQG
ZRUGIRUPIUHTXHQF\+RZHYHUDVGLVFXVVHGDERYHWKHLWHPVZLWKPD[LPDOGLYHUJHQFH
DUHVPDOOLQQXPEHUOLNHO\WREHVXVFHSWLEOHWRVDPSOLQJHUURUDQGSRVVLEO\DW\SLFDOVR
PDNLQJWKHXVHRIQRXQVKHUHSRVVLEO\SUREOHPDWLF,Q([SHULPHQWZHDYRLGWKHVH
SRWHQWLDOSUREOHPVE\XVLQJFRPSDUDWLYHDQGVXSHUODWLYHDGMHFWLYHVIRUZKLFKWKHW\SLFDO
SDWWHUQLVWKDWWKH\KDYHPXFKORZHUZRUGIRUPIUHTXHQF\WKDQWKHLUVWHPV2QDYHUDJH
WKHUDWLRRIVWHPWRFRPSDUDWLYHLVDQGVWHPWRVXSHUODWLYHLVDSSUR[LPDWHO\
$VWKLVLVWKHW\SLFDOSDWWHUQLWLVQRWQHFHVVDU\WRVHOHFWIURPWKHH[WUHPHHQGVRIWKH
IUHTXHQF\GLVWULEXWLRQVDQGZHDUHOHVVUHVWULFWHGLQQXPEHURILWHPV
,QFKRRVLQJWRXVHDGMHFWLYHVRIGHJUHHKRZHYHUZHKDYHFKDQJHGWKHZRUGFODVVIURP
QRXQVWRDGMHFWLYHVDQGIURPVLPSOHWRFRPSOH[IRUPV+RZHYHUWKHJRDORIWKLV
H[SHULPHQWLVWRH[SORUHZKHWKHUZHFDQILQGFOHDUHYLGHQFHRIOHPPDIUHTXHQF\ZLWKRXW
KDYLQJWRXVHDW\SLFDOLWHPVVRDGMHFWLYHVRIGHJUHHDUHZHOOVXLWHGIRUWKLV6\PEROLF
WKHRULHVRIODQJXDJHHJ&ODKVHQ3LQNHUSURSRVHWKDWDVLQJOHPHFKDQLVP
XQGHUOLHVDOOUHJXODULQIOHFWLRQDOSURFHVVLQJ&ODKVHQSURYLGHVHYLGHQFHWRVXSSRUW
WKLVE\VKRZLQJVLPLODUSULPLQJUHVXOWVDQGIUHTXHQF\HIIHFWUHVXOWVIRUERWKYHUEDODQG
QRPLQDOUHJXODULQIOHFWLRQV%\H[WHQVLRQWKHVDPHNLQGRISURFHVVLQJVKRXOGRFFXUIRU
DGMHFWLYDOLQIOHFWLRQV$OWKRXJKIRUFRPSOH[LWHPVWKHUHPD\EHVRPHSURFHVVLQJWLPH
IRUVWULSSLQJRIIWKHVXIIL[HVWKLVVKRXOGEHWKHVDPHIRUERWKIRUPVRIWKHDGMHFWLYH
47/
25
%HUWUDP6FKUHXGHU%DD\HQVHWRXWDVHULHVRIFULWHULDE\ZKLFKRQHFDQSUHGLFW
ZKHWKHUDFRPSOH[IRUPZLOOVKRZOHPPDRUZRUGIRUPIUHTXHQF\7KH\SURSRVHWKDW
FRPSOH[IRUPVWKDWDUHSURGXFWLYHGRQRWFKDQJHWKHPHDQLQJRIWKHVWHPDQGGRQRW
KDYHDFRPSHWLQJKRPRQ\PLFDIIL[VKRXOGVKRZOHPPDIUHTXHQF\HIIHFWV%RWKIRUPV
RIWKHDGMHFWLYHIXOILOWKHILUVWWZRFULWHULDEXWDVWKHFRPSDUDWLYHKDVDFRPSHWLQJ
KRPRQ\PLFIRUPLWVKRXOGVKRZZRUGIRUPIUHTXHQF\HIIHFWVVRPDNLQJWKHVHLWHPV
ZHOOVXLWHGWRH[SORUHOHPPDDQGZRUGIRUPIUHTXHQF\HIIHFWV
+RZHYHUWKHUHLVVRPHGHEDWHZKHWKHUFRPSDUDWLYHVDQGVXSHUODWLYHVDUHLQGHHG
LQIOHFWLRQDO$OWKRXJKWKH\IXOILOVRPHRIWKHFULWHULDXVXDOO\JLYHQIRULQIOHFWLRQWKH\DUH
RIWHQDUJXHGWRIDOODWWKHERUGHUOLQHEHWZHHQWKHLQIOHFWLRQDODQGGHULYDWLRQDOFDWHJRULHV
2QHFULWHULRQIRULQIOHFWLRQWKDWLVFRPPRQO\XVHGLVWKDWLQIOHFWLRQDOVXIIL[HVVKRXOG
RFFXUDIWHUGHULYDWLRQDO3HUOPXWWHUDQGLQVRPHODQJXDJHVHJ,WDOLDQ
GHULYDWLRQDODIIL[HVFDQDWWDFKDIWHUWKHFRPSDUDWLYHVXIIL[+RZHYHUWKLVLVQRWWKHFDVH
IRU(QJOLVKLQZKLFKFRPSDUDWLYHDQGVXSHUODWLYHVXIIL[HVFRPHDIWHUDQ\GHULYDWLRQDO
DIIL[HJGLUWLHUGLUW\HUDVGRYHUEDODQGQRPLQDOLQIOHFWLRQVHJGDUNHQ
HGJRYHUQPHQWV0RUHRYHUDGMHFWLYHVRIGHJUHHVHUYHWRUHODWHRWKHUV\QWDFWLF
FRQVWLWXHQWVZLWKLQDQXWWHUDQFHWKDWLVWKH\HQFRGHDEVWUDFW´SKUDVHOHYHOSURSHUWLHV
DQGUHODWLRQVKLSVµEHWZHHQV\QWDFWLFFRQVWLWXHQWV6WXPS3ODQN$OWKRXJK
WKHUHDUHWZRIRUPVRIWKHDGMHFWLYHVRIGHJUHHWKHLUXVHLVREOLJDWRU\LQWKHUHOHYDQW
V\QWDFWLFFRQWH[WVDQGFDQQRWEHUHSODFHGE\DPRUSKRORJLFDOO\VLPSOHIRUP0RUHRYHU
WKHFKRLFHRIZKHWKHUWRXVHWKHDIIL[DORUSHULSKUDVWLFIRUPPRUHPRVWSOXVDGMHFWLYH
RIWKHDGMHFWLYHVRIGHJUHHLVQRWDUELWUDU\EXWUDWKHUV\VWHPDWLF3ODQNSURSRVHV
WKDWLQIOHFWLRQDOPRUSKRORJLFDOYDULDQWVVKRXOGUHSUHVHQWWKHVDPHEDVLFFRQFHSWDVWKH
EDVHIRUP7KHDGMHFWLYHVRIGHJUHHVHUYHWRUHSUHVHQWWKHVDPHFRQFHSWLQDUHODWLRQDO
47/
26
PDQQHU,QGHHGGLFWLRQDULHVGRQRWOLVWFRPSDUDWLYHDQGVXSHUODWLYHDGMHFWLYHVDVWKHLU
PHDQLQJDQGIRUPLVFRPSOHWHO\SUHGLFWDEOHDVZLWKSOXUDOVSDVWWHQVHVHWF
)XUWKHUPRUHLQEHKDYLRXUDOZRUNXQSXEOLVKHGGDWDE\0DUVOHQ:LOVRQ)RUGVKRZV
WKHPWRSDWWHUQOLNHLQIOHFWLRQDOLWHPV0DUVOHQ:LOVRQ)RUG2OGHU=KRX
VKRZHGFOHDUSULPLQJEHWZHHQSURGXFWLYHGHULYDWLRQDODIIL[HVVXFKDV²QHVVDQGUHWKDW
LVGDUNQHVVSULPHGWRXJKQHVVUHEXLOGSULPHGUHUHDG0DUVOHQ:LOVRQ)RUGIXUWKHU
H[DPLQHGZKHWKHUWKLVZRXOGDOVREHWKHFDVHIRULQIOHFWLRQDODIIL[HVLQSDUWLFXODUWKH
SDVWWHQVH²HGDQGVXSHUODWLYH²HVWDVNLQJZKHWKHUMXPSHGZRXOGSULPHPHQGHGRUKDSSLHVW
ZRXOGSULPHGDUNHVW,QGLIIHUHQWSULPLQJVWXGLHVQRSULPLQJEHWZHHQSDVWWHQVHVDQG
VXSHUODWLYHVZDVIRXQG,QDGGLWLRQ.\W|5RPDLQHIRXQGWKDWLQWKH%ULWLVK
1DWLRQDO&RUSXVWKHDIIL[DOIRUPRIWKHDGMHFWLYHVRIGHJUHHZHUHIDUPRUHIUHTXHQWWKDQ
WKHSHULSKUDVWLFIRUPVFRPSULVLQJRIFRPSDUDWLYHVDQGRIVXSHUODWLYHV
0RUHRYHULQFRPSDULQJXVDJHLQWKH%1&ZLWKDQXPEHURIKLVWRULFDOFRUSRUDRI(QJOLVK
LWDSSHDUVWKDWWKHUHLVDGLDFKURQLFWUHQGWRZDUGWKHLQIOHFWLRQDOIRUPVRIWKHDGMHFWLYHV
RIGHJUHHLPSO\LQJWKDWVXFKLWHPVDUHEHFRPLQJPRUHSURGXFWLYH,QVXPPDU\
DOWKRXJKWKHGLYLVLRQRIPRUSKRORJ\LQWRLQIOHFWLRQDQGGHULYDWLRQLVQRWZLWKRXW
SUREOHPVWKHDYDLODEOHEHKDYLRXUDODQGOLQJXLVWLFHYLGHQFHOHDGVXVWRFRQFOXGHWKDWWKH
FRPSDUDWLYHDQGVXSHUODWLYHDGMHFWLYHVILWEHVWZLWKLQWKHLQIOHFWLRQDOFDWHJRU\
7KHVHDGMHFWLYDOHQGLQJVDUHDOVRRILQWHUHVWEHFDXVHWKHFRPSDUDWLYH²HULVKRPRQ\PLF
ZLWKWKHGHYHUEDODJHQWLYH²HUZKHUHDVWKHVXSHUODWLYH²HVWLVDXQLTXHIRUP%HUWUDP
6FKUHXGHUDQG%DD\HQVXUYH\HGIUHTXHQF\HIIHFWVIRUDQXPEHURIVXIIL[HGIRUPV
LQ'XWFK7KH\UHSRUWHGWKDWHIIHFWVRIZRUGIRUPIUHTXHQF\ZHUHSULPDULO\REVHUYHG
IRULWHPVZLWKKRPRQ\PRXVDIIL[HVVXFKDV²HUZKLFKSHUIRUPVWKHVDPHIXQFWLRQVLQ
'XWFKDVLQ(QJOLVK7KHDIIL[HVWKDWVKRZHGHIIHFWVRIOHPPDIUHTXHQF\ZHUH
47/
27
FRQVLVWHQWO\WKRVHZLWKRXWFRPSHWLQJKRPRQ\PLFLQWHUSUHWDWLRQHJWKHGHDGMHFWLYDO
VXIIL[KHLG
%HUWUDPHWDODUJXHWKDWWKHDPELJXLW\GXHWRDIIL[KRPRQ\P\FDXVHVWKHSDUVLQJURXWHWR
EHVORZHGDOORZLQJZRUGIRUPIUHTXHQF\HIIHFWVWRHPHUJH2QWKHEDVLVRIWKLV
SUHGLFWLRQRQHZRXOGH[SHFWWKHFRPSDUDWLYHWRVKRZRQO\ZRUGIRUPHIIHFWVEXWWKH
VXSHUODWLYHWRVKRZHIIHFWVRILWVOHPPDIUHTXHQF\$VZLWK%HUWUDPHWDO·V
UHSOLFDWLRQLQ)LQQLVKRIWKHLUILQGLQJVLQ'XWFKWKHEDODQFHEHWZHHQWKHFRPSHWLQJ
KRPRQ\PLFLQWHUSUHWDWLRQRI(QJOLVK²HULVIDLUO\HTXDOZLWKRQHIRUPEHLQJLQIOHFWLRQDO
DQGWKHRWKHUGHULYDWLRQDODQGWKHIXOOIRUPVEHORQJLQJWRDGLIIHUHQWV\QWDFWLFFODVV
$OWKRXJKWKHFRPSDUDWLYHLVPRUHIUHTXHQWLQWHUPVRIWRNHQVFRPSDUDWLYH
PLOOLRQVXSHUODWLYHWRNHQV PLOOLRQWKH\DUHDSSUR[LPDWHO\HTXDOLQWHUPVRI
PHDQLWHPIUHTXHQF\FRPSDUDWLYH PLOOLRQVXSHUODWLYH PLOOLRQ$OVRWKH
FRPSDUDWLYHQRWRQO\KDVDFRPSHWLQJKRPRSKRQLFDIIL[IRUPEXWLWDOVRKDVDODUJH
QXPEHURISVHXGRDIIL[HGIRUPVDSSUR[LPDWHO\WHQWLPHVWKHQXPEHURISVHXGRDIIL[HG
²HVWIRUPVSVHXGRDIIL[HG²HUYHUVXVIRUPV²HVWIRUPV7KHH[LVWHQFHRIPDQ\
SVHXGRDIIL[HGIRUPVKDVDOVREHHQVXJJHVWHGDVDIDFWRUWKDWPDNHVIXOOIRUPSURFHVVLQJ
PRUHOLNHO\/DXGDQQD%XUDQL&HUPHOH7KLVPDNHVWKHVHLWHPVLGHDOWRWHVW
%HUWUDPHWDO·VFODLP
0RUHRYHUWKHFRUUHODWLRQEHWZHHQWKHFRPSDUDWLYHZRUGIRUPDQGOHPPDIUHTXHQF\LVU
DQGEHWZHHQWKHVXSHUODWLYHZRUGIRUPDQGOHPPDIUHTXHQF\LVU 7KHVH
ORZHUFRUUHODWLRQVVKRXOGDOORZXVWRXVHERWKIUHTXHQF\FRXQWVDVUHJUHVVRUYDULDEOHV
ZLWKRXWVXFKDFXWHSUREOHPVRIPXOWLFROOLQHDULW\
47/
28
,Q([SHULPHQWWZRZHXVHERWKEHWZHHQDQGZLWKLQLWHPVIDFWRULDODQDO\VHVDQG
UHJUHVVLRQDQDO\VHVWRH[SORUHIUHTXHQF\HIIHFWVZLWKWKHDGMHFWLYHVRIGHJUHH
0HWKRGV
3DUWLFLSDQWV
SDUWLFLSDQWVIURPWKH05&&%89ROXQWHHU3DQHOWRRNSDUWLQWKHH[SHULPHQW$OO
VXEMHFWVZHUHQDWLYH%ULWLVK(QJOLVKVSHDNHUVDQGUHSRUWHGQRODQJXDJHSUREOHPV$OO
VXEMHFWVKDGQRUPDOKHDULQJDQGQRUPDORUFRUUHFWHGWRQRUPDOH\HVLJKW
0DWHULDOV
$QHVWHGUHSHDWHGPHDVXUHVGHVLJQZDVXVHGZLWKH[SHULPHQWDOFRQGLWLRQV&RQGLWLRQ
FRQWDLQHGFRPSDUDWLYHVXSHUODWLYHSDLUVHJGDUNHUGDUNHVW$VWKLVPDQLSXODWLRQ
ZDVZLWKLQLWHPVWKHVHLWHPVZHUHQHFHVVDULO\PDWFKHGIRUOHPPDIUHTXHQF\DQGURRW
PRUSKHPHIDPLO\VL]HYDULDEOHV6HH$SSHQGL[IRUVWLPXOL$OOZRUGVZHUHELV\OODELF
DQGWKHPHDQOHQJWKIRUWKHFRPSDUDWLYHVZDVFKDUDFWHUVDQGIRUWKHVXSHUODWLYHV
&(/(;OHPPDIUHTXHQF\IRUWKHDGMHFWLYHVZDVPLOOLRQDQGPHDQZRUGIRUP
IUHTXHQF\SHUPLOOLRQZDVPLOOLRQIRUWKHFRPSDUDWLYHVDQGPLOOLRQIRUWKH
VXSHUODWLYHV
7ZRRWKHUFRQGLWLRQVZHUHLQFOXGHGRQHPDWFKHGWRWKHOHPPDIUHTXHQF\RIWKH
FRPSDUDWLYHDQGVXSHUODWLYHDGMHFWLYHVDQGRQHPDWFKHGWRWKHLUZRUGIRUP,QRUGHUWR
PDWFKWKHVHLWHPVWRWKHIUHTXHQFLHVDQGQXPEHURIFKDUDFWHUVLQ&RQGLWLRQWKHVH
FRQGLWLRQVFRQWDLQHGZRUGVRIGLIIHUHQWZRUGFODVVHV&RQGLWLRQFRQWDLQHG
47/
29
PRQRPRUSKHPLFELV\OODELFZRUGVPDWFKHGLQ&(/(;OHPPDIUHTXHQF\WRWKHDGMHFWLYHV
PHDQOHPPDIUHTXHQF\ PLOOLRQPHDQZRUGIRUPIUHTXHQF\ PHDQIDPLO\
VL]H DQGLQOHQJWKWRWKHFRPSDUDWLYHVPHDQQXPEHURIFKDUDFWHUV QRXQVYHUEVDGMHFWLYHV&RQGLWLRQFRQWDLQHGPRQRPRUSKHPLFELV\OODELF
ZRUGVPDWFKHGLQ&(/(;ZRUGIRUPIUHTXHQF\RIWKHDGMHFWLYHVPHDQOHPPD
IUHTXHQF\ PLOOLRQPHDQZRUGIRUPIUHTXHQF\ PLOOLRQPHDQIDPLO\VL]H DQGLQOHQJWKWRWKHFRPSDUDWLYHVPHDQQXPEHURIFKDUDFWHUV QRXQVYHUEV
DGMHFWLYHV7KHVHFRQGLWLRQVZHUHLQFOXGHGWRFRPSDUHUHVSRQVHWLPHVWR
PRQRPRUSKHPLFLWHPPDWFKHGWRWKHGLIIHUHQWIUHTXHQFLHVZLWKRXUDGMHFWLYHVDOORZLQJ
XVWRHVWLPDWHKRZIDVWZHPLJKWH[SHFWWKHDGMHFWLYHVVKRXOGEHUHVSRQGHGWRLIHLWKHU
OHPPDRUZRUGIUHTXHQF\DORQHGHWHUPLQHGUHVSRQVHWLPHV
,QDGGLWLRQWRWKHWHVWFRQGLWLRQVWKHUHZHUHDOVRUHDOZRUGILOOHUVFRQVLVWLQJRI
SDVWWHQVHLQIOHFWHGYHUEVSOXUDOLQIOHFWHGQRXQVDQGPRQRV\OODELFVLPSOHZRUGV
QRQZRUGVZHUHLQFOXGHGDQGZHUHFUHDWHGE\FKDQJLQJRQHRUWZROHWWHUVRIUHDO
ZRUGV7KHVHZHUHPDWFKHGLQOHQJWKDQGV\OODEOHVWRWKHUHDOZRUGV7KHUHZHUH
SVHXGRFRPSDUDWLYHDQGSVHXGRVXSHUODWLYHIRLOV,QDGGLWLRQWRWKLVWKHUHZHUH
ELV\OODELFQRQZRUGVPDWFKHGWRFRQGLWLRQVDQGSVHXGRSDVWWHQVHSVHXGR
SOXUDODQGPRQRV\OODELF´VLPSOHµQRQZRUGVZHUHDOVRLQFOXGHG&RQGLWLRQZDV
URWDWHGWRIRUPWZROLVWVZLWKFRPSDUDWLYHDQGVXSHUODWLYHLWHPVLQHDFKOLVW$OO
RWKHULWHPVZHUHLGHQWLFDODFURVVWKHWZROLVWV,WHPVZHUHSVHXGRUDQGRPLVHG$
SUDFWLFHEORFNRIUHDOZRUGVDQGQRQZRUGVSUHFHGHGWKHPDLQSDUWRIWKH
H[SHULPHQW7KHH[SHULPHQWZDVGLYLGHGLQWREORFNVRILWHPVZLWKHDFKEORFN
EHJLQQLQJZLWKGXPP\LWHPVZRUGVQRQZRUGV
30
3URFHGXUH
7KHSURFHGXUHZDVDVLQ([SHULPHQW
5HVXOWV
'DWDIURPSDUWLFLSDQWVZHUHUHPRYHGGXHWRKLJKHUURUUDWHVRYHUIURPHDFK
YHUVLRQZKLFKOHIWLQYHUVLRQDQGLQYHUVLRQ6L[LWHPVZHUHUHPRYHGIURPWKH
DQDO\VHVGXHWRKLJKHUURUUDWHVRYHURQERWKYHUVLRQVRURYHULQRQHYHUVLRQ
IURP&RQGLWLRQDQGIURP&RQGLWLRQ$VEHIRUHWKHUHPDLQLQJPHDQUHVSRQVH
WLPHVZHUHORJWUDQVIRUPHGDQGHQWHUHGLQWRDQDO\VHV
,QVHUW7DEOHDERXWKHUH!
$QDO\VHV
7DEOHVKRZVPHDQ57DQGHUURUUDWHVIRUWKHWKUHHFRQGLWLRQV7KHE\VXEMHFWV
DQDO\VLVXVHGDVWDQGDUGUHSHDWHGPHDVXUHVPXOWLYDULDWHDQDO\VLVRIYDULDQFH5HSHDWHG
PHDVXUHVDQDO\VHVRIYDULDQFHRQWKHDGMHFWLYHFRQGLWLRQDORQHVKRZHGQRHIIHFWRIDIIL[
KRPRQ\P\RQUHVSRQVHWLPHVWRFRPSDUDWLYHVDQGVXSHUODWLYHV))
+RZHYHUWKLVZDVQRWWKHFDVHZLWKWKHHUURUVZLWKVLJQLILFDQWO\PRUHHUURUVIRUWKH
FRPSDUDWLYHVWKDQIRUWKHVXSHUODWLYHV) 3 ) 3
47/
31
$VFRQGLWLRQRQHLQFOXGHGDZLWKLQLWHPVFRPSDULVRQWKDWGRHVQRWRFFXULQFRQGLWLRQV
DQGLWHPVDQDO\VHVZHUHGRQHE\PHDQVRIDQHVWHGUHSHDWHGPHDVXUHVGHVLJQ7KHUH
ZDVDPDLQHIIHFWRIFRQGLWLRQLQGLFDWLQJWKDWWKHFRQGLWLRQVZHUHUHVSRQGHGWR
GLIIHUHQWO\) 3) 37KLVZDVDOVR
VLJQLILFDQWLQWKHHUURUVDQDO\VHVE\VXEMHFWV) 3DQGPDUJLQDOE\
LWHPV) 3 3RVWKRFWHVWVRQUHDFWLRQWLPHZLWKIDPLO\VL]HDVDFRYDULDWHRQWKHLWHPVGDWDVKRZHG
WKDWWKHFRPSDUDWLYHVDQGWKHVXSHUODWLYHVZHUHUHVSRQGHGWRVLJQLILFDQWO\PRUHVORZO\
WKDQWKHOHPPDPDWFKHGFRQGLWLRQ3EXWGLGQRWGLIIHUIURPWKHZRUGIRUP
PDWFKHGFRQGLWLRQ3!
$OWKRXJKDUHODWLYHO\VPDOOQXPEHURIDGMHFWLYHVZHUHXVHGLQWKHH[SHULPHQWDSRZHU
DQDO\VLVVKRZHGWKDWWKHUHZHUHHQRXJKLWHPVWRSURGXFHUHOLDEOHUHVXOWVIRUDUHJUHVVLRQ
PRGHO$JDLQIUHTXHQF\DQGIDPLO\VL]HYDULDEOHVZHUHFHQWUHG$VLQ([SHULPHQW
KLHUDUFKLFDOVHTXHQWLDOO\VWUXFWXUHGUHJUHVVLRQPRGHOVZHUHFDUULHGRXW$JDLQZHDGGHG
WKHDGMXVWHGDQGXQDGMXVWHGSUHGLFWRUVLQGLIIHUHQWRUGHUVWRH[SORUHWKHUHODWLYH
H[SODQDWRU\YDOXHRI:RUG)RUPDQG/HPPD)UHTXHQF\ZKLOHPLQLPLVLQJDPELJXLW\WKDW
PLJKWDULVHIURPFROOLQHDULW\)RUERWKWKHFRPSDUDWLYHVDQGVXSHUODWLYHVZKHQOHPPD
IUHTXHQF\ZDVILWWHGILUVWDGGLQJZRUGIRUPIUHTXHQF\DGMXVWHGIRUOHPPDIUHTXHQF\GLG
QRWDGGWRWKHH[SODQDWRU\SRZHURIWKHPRGHOFRPSDUDWLYHVFKDQJHLQ5
VLJQLILFDQFHRI)FKDQJH!VXSHUODWLYHVFKDQJHLQ5VLJQLILFDQFHRI)
FKDQJH!&RQYHUVHO\ZKHQZHILWZRUGIRUPIUHTXHQF\ILUVWDGGLQJOHPPD
IUHTXHQF\DGMXVWHGIRUZRUGIRUPIUHTXHQF\GRHVVLJQLILFDQWO\DGGWRWKHH[SODQDWRU\
SRZHURIWKHPRGHOFRPSDUDWLYHVFKDQJHLQ5 VLJQLILFDQFHRI)FKDQJH
47/
32
VXSHUODWLYHVFKDQJHLQ5 VLJQLILFDQFHRI)FKDQJH,QDOOWKH
DQDO\VHVQRYDULDEOHLQIODWLRQIDFWRUVZDVJUHDWHUWKDQDQGQRFRQGLWLRQLQGH[ZDV
JUHDWHUWKDQ7KHVHGDWDVXJJHVWWKDWIRUWKHFRPSDUDWLYHVDQGVXSHUODWLYHVLWLV
OHPPDIUHTXHQF\WKDWLVWKHEHVWSUHGLFWRURIUHVSRQVHWLPHV
'LVFXVVLRQ
7KLVH[SHULPHQWH[DPLQHGZKHWKHUUHVSRQVHWLPHVWRORZZRUGIRUPIUHTXHQF\
VXSHUODWLYHDQGFRPSDUDWLYHDGMHFWLYHVZRXOGEHGLIIHUHQWLDOO\DIIHFWHGE\WKHLUKLJK
OHPPDIUHTXHQF\7KHH[LVWHQFHRIDIIL[KRPRQ\P\IRUWKHFRPSDUDWLYHVGLGQRW
LQIOXHQFHWKHLUUHDFWLRQWLPHVUHODWLYHWRWKHVXSHUODWLYHVDOWKRXJKWKHHUURUGDWDLVLQOLQH
ZLWK%HUWUDPHWDO
7KHEHWZHHQLWHPVFRPSDULVRQZLWKUHVSRQVHWLPHVWR&RQGLWLRQVDQGVKRZWKDWWKH
VXSHUODWLYHDGMHFWLYHVZHUHUHVSRQGHGWRVLJQLILFDQWO\VORZHUWKDQPLJKWEHSUHGLFWHGRQ
WKHEDVLVRIWKHLUOHPPDIUHTXHQF\DORQHEXWQRWVLJQLILFDQWO\GLIIHUHQWWRLWHPVPDWFKHG
LQZRUGIRUPIUHTXHQF\+RZHYHUUHJUHVVLRQDQDO\VHVVKRZHGWKDWUHVSRQVHWLPHVWR
ERWKWKHFRPSDUDWLYHVDQGVXSHUODWLYHVZHUHEHVWH[SODLQHGE\WKHLUOHPPDIUHTXHQF\
7KHVHGDWDDUHLQFRQWUDVWWR%HUWUDPHWDORQWKH'XWFKFRPSDUDWLYH²HUVXIIL[
IRUZKLFKWKH\IRXQGLQWKHLUUHJUHVVLRQDQDO\VHVWKDWUHVSRQVHVZHUHSUHGLFWHGRQO\E\
ZRUGIRUPIUHTXHQF\7KHUHDVRQIRUWKHGLIIHUHQFHLVXQFOHDU2QHSRVVLELOLW\LVWKDWWKH
LWLVGXHWRGLIIHUHQFHVEHWZHHQ'XWFKDQG(QJOLVKEXWDV%HUWUDPHWDOIRXQGVLPLODU
UHVXOWVIRUDVHWRI)LQQLVKVXIIL[HVZKHUHWKHUHDUHPXFKJUHDWHUODQJXDJHGLIIHUHQFHV
WKLVZRXOGVHHPXQOLNHO\,QGHHGWKH²HUVXIIL[HVDUHXVHGLGHQWLFDOO\LQ'XWFKDQG
(QJOLVKZLWKWKHGHYHUEDODJHQWLYH²HUEHLQJSURGXFWLYHLQERWKODQJXDJHV+RZHYHU
WKHUHPD\EHVXEWOHGLIIHUHQFHVLQOH[LFDOVWDWLVWLFVV\QWD[RUVHPDQWLFVEHWZHHQ(QJOLVK
47/
33
DQG'XWFK7KHFULWHULDXVHGE\%HUWUDPHWDOWRSUHGLFWIXOOIRUPRUSDUVLQJDUH
VFDODUEXWQRWQHFHVVDULO\OLQHDU6PDOOGLIIHUHQFHVRQWKHVHVFDOHVFRXOGOHDGWRODUJH
GLIIHUHQFHVLQSURFHVVLQJ
7KHGLVFUHSDQF\EHWZHHQWKH$129$UHVXOWVLVPLJKWEHWKRXJKWVRPHZKDWFXULRXV
+RZHYHU&RQGLWLRQVDQGFRQWDLQHGVLPSOHZRUGVSUHGRPLQDQWO\QRXQV,QIOHFWHG
IRUPVWKDWDUHPDUNHGIRUDJUHHPHQWZLWKRWKHUZRUGVRUHQFRGHUHODWLRQVKLSVEHWZHHQ
RWKHUZRUGVDUHSHUKDSVVRPHZKDWVWUDQJHZKHQSUHVHQWHGLQLVRODWLRQ0RUHRYHULIDV
WKHOHPPDIUHTXHQF\HIIHFWVZLWKWKHDGMHFWLYHVVXJJHVWWKHVHLWHPVDUHEHLQJSDUVHG
WKHQWKLVSDUVLQJSURFHVVPD\VORZUHVSRQVHWLPHVUHODWLYHWRVLPSOHIRUPV7KLVLV
FOHDUO\VRPHWKLQJWKDWFDQEHIXUWKHUH[SORUHG
*HQHUDO'LVFXVVLRQ
([SHULPHQWVKRZHGWKDWIRUVLQJXODUQRXQVLQYLVXDOOH[LFDOGHFLVLRQWKDWWKHVWURQJHVW
SUHGLFWRURIUHVSRQVHWLPHVLVZRUGIUHTXHQF\)XUWKHUPRUHLWZDVZRUGIRUPIUHTXHQF\
DQGQRWOHPPDIUHTXHQF\WKDWDSSHDUHGWRILWUHVSRQVHWLPHVEHVW+RZHYHUFRQVLGHULQJ
WKHGDWDDQGDQDO\VHVXVHGWKHVHGDWDFDQQRWUXOHRXWOHPPDIUHTXHQF\HIIHFWVRQ
VLQJXODUQRXQV%RWKIDPLO\VL]HDQGFXPXODWLYHPRUSKHPHIUHTXHQF\ZHUHDOVR
VLJQLILFDQWSUHGLFWRUVRIUHVSRQVHWLPHVLQOLQHZLWKRWKHUZRUN%DD\HQHWDO
6FKUHXGHUDQG%DD\HQ7KHVHPDQWLFFRKHUHQFHRIWKHPRUSKRORJLFDOIDPLO\ZDV
DOVRDVLJQLILFDQWSUHGLFWRURIUHDFWLRQWLPH ([SHULPHQWVKRZHGQRGLIIHUHQFHLQUHVSRQVHWLPHVWRFRPSDUDWLYHDQGVXSHUODWLYH
DGMHFWLYHV7KHH[LVWHQFHRIDFRPSHWLQJKRPRQ\PLFIRUPIRUWKHFRPSDUDWLYHGLGQRW
FDXVHDGLIIHUHQFHLQUHVSRQVHWLPHVUHODWLYHWRWKHVXSHUODWLYHDOWKRXJKWKHUHZHUH
47/
34
HIIHFWVRIWKLVLQWKHHUURUV5HVSRQVHWLPHVWRERWKWKHVHIRUPVZHUHQRWGLIIHUHQWIURP
DFRPSDULVRQFRQGLWLRQPDWFKHGWRWKHZRUGIRUPIUHTXHQF\RIWKHDGMHFWLYHVDOWKRXJK
WKH\ZHUHVLJQLILFDQWO\VORZHUWKDQWKHFRQGLWLRQPDWFKHGWRWKHDGMHFWLYHVLQOHPPD
IUHTXHQF\<HWUHVSRQVHWLPHVWRERWKW\SHVRIDGMHFWLYHVZHUHSUHGLFWHGE\OHPPD
IUHTXHQF\
([SHULPHQWVDQGVKRZIUHTXHQF\LVE\IDUWKHVWURQJHVWSUHGLFWRURIUHVSRQVHWLPHV
FI:KDOH\$OWKRXJKWKHIDPLO\VL]HWKHVHPDQWLFYDULDEOHDQGFXPXODWLYH
PRUSKHPHIUHTXHQF\LQ([SHULPHQWWKH\DGGVLJQLILFDQWO\WRWKHH[SODLQHGYDULDQFHRI
WKHUHJUHVVLRQVFRPSDUHGWRWKHIUHTXHQF\DORQHWKH\DGGUHODWLYHO\OLWWOH%\VHOHFWLQJ
GDWDVHWVWKDWRQO\GLIIHURQRQHRIWKHVHWZRYDULDEOHVRQHPLJKWILQGVLJQLILFDQW
GLIIHUHQFHVLQUHVSRQVHWLPHV1HYHUWKHOHVVWKHGDWDSUHVHQWHGKHUHVXJJHVWFDXWLRQLQ
LQWHUSUHWLQJVXFKGDWDWRRVWURQJO\5HOLDQFHRQIDFWRULDOGHVLJQVDORQHPD\OHDGRQHWR
RYHUVWDWLQJRIWKHLPSRUWDQFHRIYDULDEOHV
7KHSRVLWLYHFRUUHODWLRQRIFXPXODWLYHPRUSKHPHIUHTXHQF\ZLWKUHVSRQVHWLPHVLQERWK
H[SHULPHQWVVXSSRUWV%DD\HQHWDO,WZRXOGDSSHDUWKDWZHKDYHVLPXOWDQHRXV
IDFLOLWDWLRQIURPPRUSKHPLFDQGVHPDQWLFOHYHOVRIUHSUHVHQWDWLRQZKLOHDWWKHVDPHWLPH
WKHUHLVFRPSHWLWLRQEHWZHHQZRUGIRUPUHSUHVHQWDWLRQV,WHPVZLWKPDQ\IUHTXHQW
PRUSKRORJLFDOIDPLO\PHPEHUVZHUHVORZHGUHODWLYHWRWKRVHZLWKIHZ
([SHULPHQWVKRZHGDQHZDQGLQWHUHVWLQJUHVXOWWKDWLVDVPDOOEXWVLJQLILFDQWHIIHFWRI
WKHVHPDQWLFFRKHUHQFHRIWKHPRUSKRORJLFDOIDPLO\LQDGGLWLRQWRIDPLO\VL]H'H-RQJ
HWDOSURSRVHGWKDWWKHIDPLO\VL]HHIIHFWLVERWKVHPDQWLFDQGPRUSKRV\QWDFWLFLQ
WKDWWKHW\SHRIDIIL[DWWDFKHGWRWKHVWHPJRYHUQVZKLFKIDPLO\PHPEHUVDUHDFWLYDWHG
)RUH[DPSOHLQWKHFRQWH[WRIWKHYHUEDOLQIOHFWLRQDOVXIIL[²WRQO\YHUEDOIDPLO\
47/
35
PHPEHUVDUHDFWLYDWHG2XUGDWDVXJJHVWWKDWWKHXVHRIPHDVXUHVRIVHPDQWLFFRKHUHQFH
ZLWKLQDPRUSKRORJLFDOIDPLO\PD\DOORZXVHWRSDUWLDORXWVHPDQWLFIURPPRUSKRORJLFDO
HIIHFWVLQIDPLO\VL]HHIIHFWV
7KHIDPLO\VL]HHIIHFWFRPHVIURPWKHIDFWWKDWWKHH[LVWHQFHRIPDQ\KLJKO\UHODWHG
IRUPVPDSSLQJRQWRDSSUR[LPDWHO\WKHVDPHVHPDQWLFVVSHHGVUHVSRQVHWLPHV
,QWHUHVWLQJO\WKLVFRXOGEHUHODWHGWRVLPLODUHIIHFWVIRXQGZLWKZRUGVZLWKPDQ\VHQVHV
5RGG*DVNHOO0DUVOHQ:LOVRQ3UHYLRXVZRUNH[DPLQLQJWKHHIIHFWVRI
KRPRSKRQ\KDVSURGXFHGFRQIOLFWLQJUHVXOWVDOWKRXJKVRPHUHVHDUFKHUVKDYHIRXQGWKDW
UHVSRQVHWLPHVWRKRPRSKRQHVUHODWLYHWRQRQKRPRSKRQLFIRUPVZHUHVSHHGHGRWKHUV
KDYHIRXQGWKHPVORZHG5XEHQVWHLQ*DUILHOG0LOOLNDQ$]XPDYDQ2UGHQ
5RGGHWDOH[DPLQHGOH[LFDOGHFLVLRQWRKRPRSKRQHV+RZHYHULQ
FRQWUDVWWRSUHYLRXVZRUNWKH\GLVWLQJXLVKHGEHWZHHQWUXHKRPRSKRQHVZKHUHZRUGV
KDYHWZRFOHDUDQGXQUHODWHGPHDQLQJVHJEDUNRIDGRJRIDWUHHDQGZRUGVZLWK
PXOWLSOHUHODWHGVHQVHVHJOHWWHUZKLFKKDVPDQ\UHODWHGPHDQLQJVOLQNHGWRDFRUH
PHDQLQJDVVRFLDWHGZLWKZULWLQJ:RUGVZLWKPDQ\VHQVHVZHUHUHVSRQGHGWRIDVWHUWKDQ
RWKHUZLVHPDWFKHGZRUGVZLWKIHZVHQVHV$GLVWULEXWHGFRQQHFWLRQLVWPRGHORIWKHVH
GDWD5RGG*DVNHOO0DUVOHQ:LOVRQVXJJHVWHGWKDWVXFKZRUGVKDGZLGH
VKDOORZDWWUDFWRUEDVLQVDOORZLQJIRUUDSLGOH[LFDOGHFLVLRQV+RZHYHU5RGGHWDO
IRXQGWKHVDPHHIIHFWLQDXGLWRU\OH[LFDOGHFLVLRQZKHUHDV'H-RQJHWDOGRHVQRW
ILQGWKHIDPLO\VL]HHIIHFWLQWKHDXGLWRU\GRPDLQ7KHGHJUHHWRZKLFKWKHVHWZRHIIHFWV
DUHVLPLODUDQGZKHWKHUDPRGHOVLPLODUWR5RGGHWDOFRXOGPRGHOIDPLO\VL]H
HIIHFWVZRXOGEHLQWHUHVWLQJWRH[SORUH
6WURQJFODLPVDERXWWKHQDWXUHRIOH[LFDOUHSUHVHQWDWLRQKDYHEHHQPDGHRQWKHEDVLVRI
H[SHULPHQWVWKDWPDQLSXODWHOHPPDDQGZRUGIRUPIUHTXHQF\FRXQWV&ODKVHQ
47/
36
FODLPHGWKDWUHJXODUO\LQIOHFWHGLWHPVVKRXOGVKRZRQO\OHPPDHIIHFWV+RZHYHUZRUN
KDVVKRZQWKDWVRPHIRUPVWKRXJKWRIDVW\SLI\LQJLQIOHFWLRQFDQVKRZFOHDUHIIHFWVRI
ZRUGIRUPIUHTXHQF\FRXQWVRUVHSDUDWHHIIHFWVRIERWKOHPPDDQGZRUGIRUPIUHTXHQF\
%DD\HQHWDO%HUWUDPHWDO%HUWUDPHWDO7KHGDWDSUHVHQWHGKHUH
IXUWKHUVXSSRUWWKHLGHDWKDWWKHXVHRIFDWHJRULHVRIGHULYDWLRQDODQGLQIOHFWLRQDO
PRUSKRORJ\DORQHWRSUHGLFWIUHTXHQF\HIIHFWVLQOH[LFDOGHFLVLRQLVQRWDGHTXDWH
7KHODFNRIOHPPDIUHTXHQF\HIIHFWVLQ([SHULPHQWGRHVQRWUXOHRXWDUROHIRUOHPPD
IUHTXHQF\LQVXFKZRUGV5DWKHULWVXJJHVWVWKDWWKHHIIHFWPD\EHUHODWLYHO\VPDOOIRU
ZRUGVWKDWVKRZWKHW\SLFDOSDWWHUQRIDKLJKFRUUHODWLRQEHWZHHQOHPPDIUHTXHQF\DQG
ZRUGIRUPIUHTXHQF\DQGDUDWLRRIWKHVHIUHTXHQFLHVRIDERXW:KHQWKHUHLVDODUJH
GLYHUJHQFHLQWKHIUHTXHQFLHVDVLQ([SHULPHQWOHPPDIUHTXHQF\HIIHFWVVKRZXS
VLJQLILFDQWO\LQUHJUHVVLRQDQDO\VHV$OWKRXJKDIIL[KRPRQ\P\KDVEHHQVKRZQWRFDXVH
ZRUGIRUPIUHTXHQF\HIIHFWVWRGRPLQDWH'DYLVHWDO7KLV9ROXPHVKRZWKDWGRPLQDQW
HIIHFWVRIDVLQJOHIUHTXHQF\FRXQWGRQRWQHFHVVDULO\LPSO\XQLTXHHIIHFWV0RUHRYHU
%DD\HQ7ZHHGLH6FKUHXGHUIXUWKHUVKRZWKDWWKHUHPD\EHLQGLYLGXDO
GLIIHUHQFHVLQZKLFKYDULDEOHVDUHUHVSRQVLEOHIRUUHVSRQVHWLPHV7KHFRQWULEXWLRQRI
WKHIUHTXHQF\RIPRUSKRORJLFDOYDULDQWVPD\DOVRYDU\ERWKDFURVVZRUGW\SHDQGZLWKLQ
ZRUGW\SHGHSHQGHQWRQWKHUHODWLYHIUHTXHQFLHVRIWKHPRUSKRORJLFDOIDPLO\
/H[LFDOGHFLVLRQUHVSRQVHWLPHVDUHQRWVLPSO\WKHUHVXOWRIWKHUHVWLQJDFWLYDWLRQOHYHORI
DVLQJOHUHSUHVHQWDWLRQEXWUDWKHUDUHVXOWRIDGHFLVLRQSURFHVVLQZKLFKDQXPEHURI
VRXUFHVRILQIRUPDWLRQIRUPPRUSKRORJ\DQGVHPDQWLFVDUHXWLOLVHG7KHVHVRXUFHVRI
LQIRUPDWLRQFDQFOHDUO\EHVXEGLYLGHGIXUWKHUZLWKPRUSKRORJLFDOLQIRUPDWLRQ
FRPSULVLQJWKHYDULRXVIUHTXHQF\IDPLO\VL]HYDULDEOHVWKDWKDYHEHHQVKRZQWRDIIHFW
UHVSRQVHWLPHV,WZRXOGEHXVHIXOWRWU\WRLQWHJUDWHZKDWZHNQRZDERXWWKHUROHRI
47/
37
PRUSKRORJ\LQOH[LFDOGHFLVLRQZLWKWKHFRQVLGHUDEOHOLWHUDWXUHRQWKHPRGHOOLQJRI
OH[LFDOGHFLVLRQZKLFKKDVW\SLFDOO\LJQRUHGPRUSKRORJ\*RPH]5DWFOLII0F.RRQ
$VKE\,WZRXOGDOVREHRIYDOXHWRH[SORUHIXUWKHUWKHWLPHFRXUVHRI
DFFHVVWRWKHVHVRXUFHVRILQIRUPDWLRQFI'H-RQJHWDO5DVWOH'DYLV0DUVOHQ
:LOVRQ7\OHU
,QFRQFOXVLRQWKHVHUHVXOWVGHPRQVWUDWHWKHEHQHILWVRIXVLQJFRUUHODWLRQDODQGIDFWRULDO
GHVLJQVLQFRQMXQFWLRQWRGHWHFWERWKWKHH[LVWHQFHDQGWKHVWUHQJWKRIIUHTXHQF\DQG
IDPLO\VL]HHIIHFWVDQGWRSUHYHQWWKHRYHUO\VWURQJLQWHUSUHWDWLRQWKDWPLJKWUHVXOWIURP
WKHXVHRIDVLQJOHGHVLJQLQLVRODWLRQ
47/
38
5HIHUHQFHV
$VKE\)*$VWRFKDVWLFYHUVLRQRI*HQHUDO5HFRJQLWLRQ7KHRU\-RXUQDORI
0DWKHPDWLFDO3V\FKRORJ\
$]XPD79DQ2UGHQ*&:K\6$)(LVEHWWHUWKDQ)$677KHUHODWHGQHVV
RIDZRUG
VPHDQLQJVDIIHFWVOH[LFDOGHFLVLRQWLPHV-RXUQDORI0HPRU\DQG/DQJXDJH
%DD\HQ5+'LMNVWUD76FKUHXGHU56LQJXODUVDQGSOXUDOVLQ'XWFK
(YLGHQFHIRUDSDUDOOHOGXDOURXWHPRGHO-RXUQDORI0HPRU\DQG/DQJXDJH
%DD\HQ5+3LHSHQEURFNYDQ5LMQ7KH&(/(;OH[LFDOGDWDEDVH&'
520/LQJXLVWLF'DWD&RQVRUWLXP8QLYHUVLW\RI3HQQV\OYDQLD3KLODGHOSKLD3$
%DD\HQ+57ZHHGLH)-6FKUHXGHU57KH6XEMHFWVDVD6LPSOH5DQGRP
(IIHFW)DOODF\6XEMHFW9DULDELOLW\DQG0RUSKRORJLFDO)DPLO\(IIHFWVLQWKH0HQWDO/H[LFRQ%UDLQ
DQG/DQJXDJHSSGRLEUOQ
%DLOH\70+DKQ8'HWHUPLQDQWVRIZRUGOLNHQHVV3KRQRWDFWLFVRUOH[LFDO
QHLJKERUKRRGV"-RXUQDORI0HPRU\DQG/DQJXDJH
%HDXYLOODLQ&7KHLQWHJUDWLRQRIPRUSKRORJLFDODQGZKROHZRUGIRUPLQIRUPDWLRQ
GXULQJH\HIL[DWLRQVRQSUHIL[HGDQGVXIIL[HGZRUGV-RXUQDORI0HPRU\DQG/DQJXDJH
%HUWUDP5+\|Ql-/DLQH07KHUROHRIFRQWH[WLQPRUSKRORJLFDOSURFHVVLQJ
(YLGHQFHIURP)LQQLVK/DQJXDJHDQG&RJQLWLYH3URFHVVHV
%HUWUDP5/DLQH0%DD\HQ5+6FKUHXGHU5+\RQD-$IIL[DO
+RPRQ\P\WULJJHUVIXOOIRUPVWRUDJHHYHQZLWKLQIOHFWHGZRUGVHYHQLQDPRUSKRORJLFDOO\ULFKODQJXDJH
&RJQLWLRQ%%
%HUWUDP56FKUHXGHU5%DD\HQ5+7KHEDODQFHRIVWRUDJHDQG
FRPSXWDWLRQLQPRUSKRORJLFDOSURFHVVLQJ7KHUROHRIZRUGIRUPDWLRQW\SHDIIL[DOKRPRQ\P\DQG
47/
39
SURGXFWLYLW\-RXUQDORI([SHULPHQWDO3V\FKRORJ\/HDUQLQJ0HPRU\DQG&RJQLWLRQ
%UDGOH\'&/H[LFDOUHSUHVHQWDWLRQRIGHULYDWLRQDOUHSUHVHQWDWLRQ,Q$URQRII
0.HDQ0/(GV-XQFWXUHSS6DUDVRWD&$$QPD/LEUL
%ULWLVK1DWLRQDO&RUSXV2[IRUG2[IRUG8QLYHUVLW\&RPSXWLQJ6HUYLFHV
%URDGEHQW'(:RUGIUHTXHQF\HIIHFWDQGUHVSRQVHELDV3V\FKRORJLFDO5HYLHZ
%XUDQL&&DUDPD]]D$5HSUHVHQWDWLRQDQGSURFHVVLQJRIGHULYHGZRUGV
/DQJXDJHDQG&RJQLWLYH3URFHVVHV9RO
&ODKVHQ+/H[LFDOHQWULHVDQGUXOHVRIODQJXDJH$PXOWLGLVFLSOLQDU\VWXG\RI
*HUPDQLQIOHFWLRQ%HKDYLRUDODQG%UDLQ6FLHQFHV
&KDWWHUMHH6+DGL$63ULFH%5HJUHVVLRQ$QDO\VLVE\([DPSOH
7/
(GLWLRQ:LOH\1HZ<RUN
&ROH6HJXL-7DIW0:RUGVDQG0RUSKHPHVDV8QLWVIRU/H[LFDO$FFHVV
-RXUQDORIPHPRU\DQG/DQJXDJH
&ROWKHDUW0'DYHODDU(-RQDVVRQ-7%HVQHU'$FFHVVWRWKHLQWHUQDO
OH[LFRQ,Q'RUQLF6(G$WWHQWLRQDQG3HUIRUPDQFH9,+LOOVGDOH1HZ-HUVH\
/DZUHQFH(UOEDXP$VVRFLDWHV
&XWOHU$1RUULV'0RQLWRULQJ6HQWHQFH&RPSUHKHQVLRQ,Q6HQWHQFH
3URFHVVLQJ3V\FKROLQJXLVWLF6WXGLHV3UHVHQWHGWR0HUULOO*DUUHWWHG:&
&RRSHU(&7:DONHUHGVSS(UOEDXP
'H-RQJ1+6FKUHXGHU5%DD\HQ5+7KHPRUSKRORJLFDOIDPLO\VL]HHIIHFW
DQGPRUSKRORJ\/DQJXDJHDQG&RJQLWLYH3URFHVVHV
'H-RQJ1+)HOGPDQ/%6FKUHXGHU53DVWL]]R0%DD\HQ5+
7KH3URFHVVLQJDQG5HSUHVHQWDWLRQRI'XWFKDQG(QJOLVK&RPSRXQGV3HULSKHUDO0RUSKRORJLFDODQG
&HQWUDO2UWKRJUDSKLF(IIHFWV%UDLQDQG/DQJXDJHGRLEUOQ
47/
40
'UDSHU156PLWK+$SSOLHGUHJUHVVLRQDQDO\VLV3/(GLWLRQ:LOH\
1HZ<RUN
)HOGPDQ/%%H\RQGRUWKRJUDSK\DQGSKRQRORJ\²GLIIHUHQFHVEHWZHHQLQIOHFWLRQV
DQGGHULYDWLRQV-RXUQDORI0HPRU\DQG/DQJXDJH
)HOGPDQ/%$UHPRUSKRORJLFDOHIIHFWVGLVWLQJXLVKDEOHIURPWKHHIIHFWVRIVKDUHG
PHDQLQJDQGVKDUHGIRUP"-RXUQDORIH[SHULPHQWDOSV\FKRORJ\OHDUQLQJPHPRU\DQG
FRJQLWLRQ
)RUVWHU.,$FFHVVLQJWKHPHQWDOOH[LFRQ,Q:DOHV5-:DONHU((GV
1HZDSSURDFKHVWRODQJXDJHPHFKDQLVPV1RUWK+ROODQG3XEOLVKLQJ&RPSDQ\
*HUQVEDFKHU0$5HVROYLQJ\HDUVRILQFRQVLVWHQWLQWHUDFWLRQVEHWZHHQOH[LFDO
IDPLOLDULW\DQGRUWKRJUDSK\FRQFUHWHQHVVDQGSRO\VHP\-RXUQDORI([SHULPHQWDO3V\FKRORJ\
*HQHUDO
*LUDXGR+*UDLQJHU-(IIHFWVRISULPHZRUGIUHTXHQF\DQGFXPXODWLYHURRW
IUHTXHQF\LQPDVNHGPRUSKRORJLFDOSULPLQJ/DQJXDJHDQG&RJQLWLYH3URFHVVHV
*RPH]35DWFOLII50F.RRQ*0RGHOOLQJWKHGHFLVLRQSURFHVVLQWKH
OH[LFDOGHFLVLRQWDVN-RXUQDORI0DWKHPDWLFDO3V\FKRORJ\
+RZHV'2QWKHLQWHUSUHWDWLRQRIZRUGIUHTXHQF\DVDYDULDEOHRIDIIHFWLQJVSHHGRI
UHFRJQLWLRQ-RXUQDORI([SHULPHQWDO3V\FKRORJ\
.DLVHU+)7KHYDULPD[FULWHULRQIRUDQDO\WLFURWDWLRQLQIDFWRUDQDO\VLV
3\URPHWULFDO
.\W|05RPDLQH6&RPSHWLQJ)RUPVRI$GMHFWLYHFRPSDULVRQLQ0RGHUQ
(QJOLVK:KDWFRXOGEHPRUHTXLFNHUDQGHDVLHUDQGPRUHHIIHFWLYH",Q1HYDODLQHQ7.DKODV
7DUNND/(GV7R([SODLQWKH3UHVHQW6WXGLHVLQWKH&KDQJLQJ(QJOLVK/DQJXDJHLQ
+RQRXURI0DWWLH5LVVDQHQ+HOVLQNL
47/
41
/DXGDQQD$%DGHFNHU:&DUDPD]]D$3URFHVVLQJLQIOHFWLRQDODQG
GHULYDWLRQDOPRUSKRORJ\-RXUQDORI0HPRU\DQG/DQJXDJH
/DXGDQQD$%XUDQL&&HUPHOH$3UHIL[HVDVSURFHVVLQJXQLWV/DQJXDJH
DQG&RJQLWLYH3URFHVVHV
/DQGDXHU7.'XPDLV67$VROXWLRQWR3ODWR
VSUREOHP7KHODWHQWVHPDQWLF
DQDO\VLVWKHRU\RIDFTXLVLWLRQLQGXFWLRQDQGUHSUHVHQWDWLRQRINQRZOHGJH3V\FKRORJLFDO5HYLHZ
/LHEHU52QWKHRUJDQLVDWLRQRIWKHOH[LFRQ3K'GLVVHUWDWLRQ0,7
%ORRPLQJWRQ,QGLDQD8QLYHUVLW\/LQJXLVWLFV&OXE
0DUVOHQ:LOVRQ:')RUG02OGHU/=KRX;7KHFRPELQDWRULDO
OH[LFRQ3ULPLQJGHULYDWLRQDODIIL[HV3URFHHGLQJVRIWKHWK$QQXDO&RQIHUHQFHRIWKH
&RJQLWLYH6FLHQFH6RFLHW\
0DUVOHQ:LOVRQ:7\OHU/.:DNVOHU52OGHU/0RUSKRORJ\DQG
PHDQLQJLQWKH(QJOLVKPHQWDOOH[LFRQ3V\FKRORJLFDO5HYLHZ
0HXQLHU)6HJXL-)UHTXHQF\HIIHFWVLQDXGLWRU\ZRUGUHFRJQLWLRQ-RXUQDORI
PHPRU\DQG/DQJXDJH
0RUWRQ,QWHUDFWLRQLQZRUGUHFRJQLWLRQ3V\FKRORJLFDO5HYLHZ
05&3V\FKROLQJXLVWLF'DWDEDVH0DFKLQH8VDEOH'LFWLRQDU\9HUVLRQ
,QIRUPDWLFV'LYLVLRQ6FLHQFHDQG(QJLQHHULQJ5HVHDUFK&RXQFLO5XWKHUIRUG$SSOHWRQ
/DERUDWRU\&KLOWRQ'LGFRW2[RQ2;4;0LFKDHO:LOVRQ
3DUNV55D\-%ODQG6:RUGVP\WK(QJOLVKGLFWLRQDU\WKHVDXUXV
>21/,1(@$YDLODEOHKWWSZZZZRUGVP\WKQHW>)HEUXDU\@8QLYHUVLW\RI
&KLFDJR
3HUOPXWWHU'7KHVSOLWPRUSKRORJ\K\SRWKHVLVHYLGHQFHIURP<LGGLVK,Q
+DQQDQ1RRQDQ(GV7KHRUHWLFDO0RUSKRORJ\&XUUHQW$SSURDFKHVLQ/LQJXLVWLFV
$FDGHPLF3UHVV1HZ<RUN
47/
42
3LQKHLUR-&%DWHV'00L[HGHIIHFWVPRGHOVLQ6DQG63/861HZ
<RUN6SULQJHU
3LQNHU65XOHVRI/DQJXDJH6FLHQFH
3ODQN),QIOHFWLRQDQGGHULYDWLRQ,Q$VKHU5((G(QF\FORSHGLDRI
/DQJXDJHDQG/LQJXLVWLFV2[IRUG1HZ<RUN3HUJDPRQ3UHVV
3ODXW'*RQQHUPDQ/0$UHQRQVHPDQWLFPRUSKRORJLFDOHIIHFWVLQFRPSDWLEOH
ZLWKDGLVWULEXWHGFRQQHFWLRQLVWDSSURDFKWROH[LFDOSURFHVVLQJ"/DQJXDJHDQG&RJQLWLYH3URFHVVHV
5DVWOH.'DYLV0+0DUVOHQ:LOVRQ:'7\OHU/.0RUSKRORJLFDO
DQGVHPDQWLFHIIHFWVLQYLVXDOZRUGUHFRJQLWLRQ$WLPHFRXUVHVWXG\/DQJXDJHDQG&RJQLWLYH
3URFHVVHV
5RGG-0*DVNHOO0*0DUVOHQ:LOVRQ::K\DUHZRUGVZLWKPDQ\
VHQVHVUHFRJQLVHGIDVWHU",QWHUQDWLRQDO-RXUQDORI3V\FKRORJ\
5RGG-0*DVNHOO0*DQG0DUVOHQ:LOVRQ:')RU%HWWHURI
:RUVH0RGHOOLQJ(IIHFWVRI6HPDQWLF$PELJXLW\3URFHHGLQJVRIWKH7ZHQW\7KLUG
$QQXDO&RQIHUHQFHRIWKH&RJQLWLYH6FLHQFH6RFLHW\0DKZDK1HZ-HUVH\/DZUHQFH
(UOEDXP$VVRFLDWHV
5RVHQWKDO2)XVL6+RFKVWHLQ6)RUPLQJFODVVHVE\VWLPXOXVIUHTXHQF\
%HKDYLRUDQGWKHRU\3URFHHGLQJVRIWKH1DWLRQDO$FDGHP\RI6FLHQFHV
5XEHQVWHLQ+*DUILHOG/0LOOLNDQ-$+RPRJUDSKLFHQWULHVLQWKHLQWHUQDO
OH[LFRQ-RXUQDORI9HUEDO/HDUQLQJDQG9HUEDO%HKDYLRU
5XHFNO-*5DYHK07KHLQIOXHQFHRIPRUSKRORJLFDOUHJXODULWLHVRQWKHG\QDPLFV
RIDFRQQHFWLRQLVWQHWZRUN%UDLQDQG/DQJXDJH
6HLGHQEHUJ060DF&OHOODQG-/$GLVWULEXWHGGHYHORSPHQWDOPRGHORIZRUG
UHFRJQLWLRQDQGQDPLQJ3V\FKRORJLFDO5HYLHZ
47/
43
6HUHQR-$-RQJPDQ$3URFHVVLQJRI(QJOLVKLQIOHFWLRQDOPRUSKRORJ\
0HPRU\DQG&RJQLWLRQ
6FKUHXGHU5%DD\HQ5++RZFRPSOH[VLPSOH[ZRUGVFDQEH-RXUQDORI
PHPRU\DQG/DQJXDJH
6WXPS*7,QIOHFWLRQ,Q6SHQFHU$DQG=ZLFN\$0(GV7KH
+DQGERRNRI0RUSKRORJ\%ODFNZHOO2[IRUG
7DIW07KHUHFRJQLWLRQRIDIIL[HGZRUGVDQGWKHZRUGIUHTXHQF\HIIHFW0HPRU\
DQG&RJQLWLRQ
:KDOH\&3:RUG1RQZRUG&ODVVLILFDWLRQ7LPH-RXUQDORI9HUEDO/HDUQLQJ
DQG%HKDYLRU
:XQGHUOLFK')DEUL50LQLPDOLVWPRUSKRORJ\$QDSSURDFKWR
LQIOHFWLRQ=HLWVFKULIWIU6SUDFKZLVVHQVFKDIW²
:XUP/+$XGLWRU\SURFHVVLQJRISUHIL[HG(QJOLVKZRUGVLVERWKFRQWLQXRXVDQG
GHFRPSRVLWLRQDO-RXUQDORI0HPRU\DQG/DQJXDJH
47/
44
7DEOH([SHULPHQW6XPPDU\RI6WLPXOL
0HDQ
&0)
)6
)6
)6
)6
/)
:)
/HQ
1
%)
7)
/6$
&1&
)$0
,0*
0HGLDQ
0LQ
0D[
6WDQGDUG
'HYLDWLRQ
&0) &(/(;FXPXODWLYHPRUSKHPHIUHTXHQF\)6 )DPLO\6L]H)6 )DPLO\
6L]H)6 )DPLO\6L]H)6 )DPLO\6L]H/) &(/(;/HPPD)UHTXHQF\:)
&(/(;:RUG)RUP)UHTXHQF\/HQ QXPEHURIOHWWHUV1 QXPEHURIQHLJKERXUV
%) %LJUDP)UHTXHQF\7) 7ULJUDP)UHTXHQF\/6$ PHDQRI/6$6HPDQWLF
PHDVXUH&1& &RQFUHWHQHVV)$0 )DPLOLDULW\,0* ,PDJHDELOLW\
$OO&(/(;)UHTXHQFLHVDUHSHUPLOOLRQ&RQFUHWHQHVVIDPLOLDULW\DQGLPDJHDELOLW\
UDWLQJVIURPWKH05&3V\FKROLQJXLVWLF'DWDEDVH
&RPSDUDWLYH
6XSHUODWLYH
"$
"$
"$
/)0DWFKHG
:)0DWFKHG
$GMHFWLYHV
47/
45
$SSHQGL[²([SHULPHQW6WLPXOL
IULOO
OHDVK
SUDQN
KHOP
ELJRW
NLOW
WXVN
JHP
MRW
VZLJ
FORW
JUXE
SXQN
IXUURZ
GXQJ
JOXH
FDQRH
IUHQ]\
EXQ
PDWURQ
KRRI
FUHVW
FDUURW
KHUDOG
VDQGDO
VSXU
GHQ
MXJ
EDOORW
ULEERQ
LYRU\
FRUH
OLG
WRPE
HUD
FOLII
UDLG
SRHP
EHDUG
FOLHQW
FDIH
FDPHO
PDUEOH
FKDUP
ODZQ
P\WK
WKLJK
SXE
ULYDO
HUURU
WURXW
KLQW
IHH
JUDLQ
VORSH
DXQW
DFUH
SULGH
IXHO
PRRG
FKHTXH
ILQFK
FODP
FRUN
PLPH
SRSH
EDUJH
SODQN
SURVH
VZDQ
MD]]
SRUN
JHUP
JXW
D[H
FKDON
FRG
JRUJH
ERRWK
OLO\
EDUQ
EUHH]H
SUREH
KHUE
UXJ
ODGGHU
OLQHQ
FDQDO
LQGH[
FDJH
KHDS
VDODG
EDUUHO
IXVV
ODPE
FKDSHO
HOERZ
JROI
JXLOW
URG
JDS
OXFN
IXQ
FKHVW
EHHU
FHOO
QRLVH
OLS
OLQN
EHDFK
SDLQ
PHPRU\
WHDP
VFHQH
PHWKRG
PLOH
FKDQFH
FKXUFK
FLW\
IRRG
YHUE
TXHVW
EHUU\
LQN
VZRUG
KHUG
EHOO\
GUXP
EHDQ
EDVNHW
WXEH
DUFK
FRWWRQ
EHOW
FKHHVH
QDLO
SUL]H
VODYH
VWULQJ
F\FOH
ERRW
VKHHS
EULFN
URSH
HDVH
VHHG
VLOYHU
FKDLQ
ORDG
ZLQJ
VKLUW
SDWK
WUDFN
PHDW
VSRW
VKRH
VN\
UDGLR
JUDVV
FRIIHH
NLQJ
HGJH
VTXDUH
VHDW
KDOO
PXVLF
JDUGHQ
WHVW
SULFH
DUW
YDOXH
JDPH
ZDOO
OHYHO
IURQW
XQLRQ
IRUFH
JURXS
PRWKHU
\HDU
FDUW
HDVW
FRDW
JROG
WRRWK
ERG\
PLON
ZLQGRZ
ODZ
KRUQ
FHQWUH
NQLIH
ZRUP
SRZGHU
IDUP
FRDO
47/
VDOW
ZLUH
QDWXUH
KHDW
GXVW
FORFN
EDWK
EUDLQ
VXLW
ERPE
FRXUW
PRWRU
IORZHU
OHJ
VSDFH
FKDLU
VXJDU
ODPS
KDW
WUDGH
SHUVRQ
VLJKW
DJHQW
SLSH
JLUO
VWDU
46
ZRUG
PRRQ
EORFN
VDQG
FXS
JODVV
VH[
QHFN
OHDI
SDUW\
EHOO
WRZQ
QRVH
QRWH
IUXLW
SLJ
NH\
VWRUP
QXW
SLQ
FDNH
WDLO
ZHVW
SODWH
ERQH
VRXWK
ERDW
JDV
EDJ
QRUWK
WHD
KROH
ZRRG
JXQ
ELUG
VNLQ
FURVV
ERDUG
GRJ
VWRQH
RLO
KRUVH
VKRS
EORRG
VXQ
KHDUW
VLJQ
WUHH
ILVK
ILHOG
KDLU
ILUH
SDSHU
WDEOH
URDG
DLU
EHG
FODVV
ODQG
IRRW
FDU
ZDU
GRRU
PLQG
IRUP
ERRN
VLGH
QLJKW
ZDWHU
URRP
KRPH
KHDG
SRLQW
IDFH
KRXVH
KDQG
OLIH
WLPH
SRRUHU
SURXGHU
TXLFNHU
UDUHU
UHGGHU
ULFKHU
URXQGHU
VDGGHU
VDIHU
VKDUSHU
VKRUWHU
VLFNHU
VPDOOHU
VPDUWHU
VRIWHU
VWHHSHU
VWLIIHU
VWULFWHU
VXUHU
VZHHWHU
WDOOHU
WKLFNHU
WLJKWHU
WRXJKHU
YDJXHU
ZHWWHU
ZKLWHU
ZLOGHU
ZLVHU
\RXQJHU
$SSHQGL[²([SHULPHQW6WLPXOL
&RQGLWLRQ
&RPSDUDWLYH
ELJJHU
EODFNHU
EUDYHU
EULJKWHU
EURDGHU
FROGHU
FUXGHU
FUXHOOHU
GDUNHU
GUXQNHU
IDLUHU
IDWWHU
ILHUFHU
IRQGHU
JUDQGHU
6XSHUODWLYH
JUH\HU
JURVVHU
KDUGHU
KDUVKHU
KRWWHU
NHHQHU
PDGGHU
PLOGHU
QHDWHU
QHZHU
QLFHU
RGGHU
ROGHU
SDOHU
SLQNHU
47/
ELJJHVW
EODFNHVW
EUDYHVW
EULJKWHVW
EURDGHVW
FROGHVW
FUXGHVW
FUXHOOHVW
GDUNHVW
GUXQNHVW
IDLUHVW
IDWWHVW
ILHUFHVW
IRQGHVW
JUDQGHVW
47
JUH\HVW
JURVVHVW
KDUGHVW
KDUVKHVW
KRWWHVW
NHHQHVW
PDGGHVW
PLOGHVW
QHDWHVW
QHZHVW
QLFHVW
RGGHVW
ROGHVW
SDOHVW
SLQNHVW
SRRUHVW
SURXGHVW
TXLFNHVW
UDUHVW
UHGGHVW
ULFKHVW
URXQGHVW
VDGGHVW
VDIHVW
VKDUSHVW
VKRUWHVW
VLFNHVW
VPDOOHVW
VPDUWHVW
VRIWHVW
VWHHSHVW
VWLIIHVW
VWULFWHVW
VXUHVW
VZHHWHVW
WDOOHVW
WKLFNHVW
WLJKWHVW
WRXJKHVW
YDJXHVW
ZHWWHVW
ZKLWHVW
ZLOGHVW
ZLVHVW
\RXQJHVW
EDWWOH
PLGGOH
SRFNHW
WUDYHO
DQJHO
VROLG
VXJDU
SUREOHP
FDUU\
DJUHH
SUDFWLFH
PHUFKDQW
ODQJXDJH
FKDOOHQJH
DWWDFN
FULVLV
HQJLQH
PLVVLOH
SOHQW\
VSLULW
YDOOH\
\HOORZ
JDUOLF
OL]DUG
VKRYHO
FROHVODZ
PHUU\
SHWDO
UD]RU
IHHEOH
VXOOHQ
ZDOOHW
UHSWLOH
UDLVLQ
SXGGOH
SDUURW
SRUULGJH
VFDYHQJH
FKDPSLRQ
VDOXWH
PDJQHW
WDUWDQ
FDUSHW
EXFNOH
&RQGLWLRQ
ZRPDQ
PDUNHW
YLFWLP
ELVKRS
FRWWRQ
PXVHXP
VSOHQGLG
UHDVRQ
&RQGLWLRQ
FKHUU\
JXUJOH
SDGGOH
HOERZ
S\ORQ
ULIOH
VWUDGGOH
FRXUJHWWH