Scribd Logo
Upload

Welcome to Scribd!

  • Urban Model For Kathmandu-Article

    Uploaded by

    Amul Shrestha
    18 views89 pages
    This thesis examines modeling urban growth in Kathmandu Valley, Nepal. It uses remote sensing and GIS techniques to analyze land cover change from 1989, 1999, and 2010 Landsat images. Binary logistic regression models are constructed to identify relationships between urban growth and driving factors, and to forecast future urban growth patterns. Three models are made to examine drivers of overall urban growth, infill growth, and expansion. Population densities, proportion of built-up area in surroundings, and land value are found to be strongest predictors of overall growth. Infill growth is best explained by distance to urban center, proportion of built-up area, distance to roads, and population density. Land value and proportion of built-up area best predict expansion.

    Original Description:

    Original Title

    Urban model for Kathmandu-Article

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    This thesis examines modeling urban growth in Kathmandu Valley, Nepal. It uses remote sensing and GIS techniques to analyze land cover change from 1989, 1999, and 2010 Landsat images. Binary logistic regression models are constructed to identify relationships between urban growth and driving factors, and to forecast future urban growth patterns. Three models are made to examine drivers of overall urban growth, infill growth, and expansion. Population densities, proportion of built-up area in surroundings, and land value are found to be strongest predictors of overall growth. Infill growth is best explained by distance to urban center, proportion of built-up area, distance to roads, and population density. Land value and proportion of built-up area best predict expansion.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    18 views89 pages

    Urban Model For Kathmandu-Article

    Uploaded by

    Amul Shrestha
    This thesis examines modeling urban growth in Kathmandu Valley, Nepal. It uses remote sensing and GIS techniques to analyze land cover change from 1989, 1999, and 2010 Landsat images. Binary logistic regression models are constructed to identify relationships between urban growth and driving factors, and to forecast future urban growth patterns. Three models are made to examine drivers of overall urban growth, infill growth, and expansion. Population densities, proportion of built-up area in surroundings, and land value are found to be strongest predictors of overall growth. Infill growth is best explained by distance to urban center, proportion of built-up area, distance to roads, and population density. Land value and proportion of built-up area best predict expansion.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 89

    

    
    
    02'(//,1* 85%$1 *52:7+ ,1
    
    
    .$7+0$1'89$//(<
    
    
    
    
    
    
    
    
    
    681,7$'8:$/
    
     )HEUXDU\
    
    
    
     683(59,6256
    
    'U6KHULI$PHU
    
    0V0RQLND.XIIHU06F
    
    

    
    
    

    
    
    
    
    
    
    
    
    

    02'(//,1* 85%$1*52:7+ ,1


    
    

    .$7+0$1'89$//(<
    
    
    
    
    
    
    
    
    
    
    
    681,7$'8:$/
    
    (QVFKHGH7KH1HWKHUODQGV)HEUXDU\
    
    7KHVLV VXEPLWWHG WR WKH )DFXOW\ RI *HR,QIRUPDWLRQ 6FLHQFH DQG (DUWK
    2EVHUYDWLRQ RI WKH 8QLYHUVLW\ RI 7ZHQWH LQ SDUWLDO IXOILOPHQW RI WKH
    UHTXLUHPHQWVIRUWKHGHJUHHRI0DVWHURI6FLHQFHLQ*HRLQIRUPDWLRQ6FLHQFH
    DQG(DUWK2EVHUYDWLRQ
    6SHFLDOL]DWLRQ8UEDQ3ODQQLQJDQG0DQDJHPHQW
    
    
    
    683(59,6256
    'U6KHULI$PHU
    0V0RQLND.XIIHU06F
    
    7+(6,6$66(660(17%2$5'
    3URI'U,U0)$0YDQ0DDUVHYHHQ &KDLU 
    0V2OHQD'XERY\N06F ([WHUQDO([DPLQHU8QLYHUVLW\RI%RQQ 
    'U6KHULI$PHU VW6XSHUYLVRU 
    0V0RQLND.XIIHU06F QG6XSHUYLVRU 
    
    
     

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ',6&/$,0(5
    7KLVGRFXPHQWGHVFULEHVZRUNXQGHUWDNHQDVSDUWRIDSURJUDPPHRIVWXG\DWWKH)DFXOW\RI*HR,QIRUPDWLRQ6FLHQFHDQG
    (DUWK2EVHUYDWLRQRIWKH8QLYHUVLW\RI7ZHQWH$OOYLHZVDQGRSLQLRQVH[SUHVVHGWKHUHLQUHPDLQWKHVROHUHVSRQVLELOLW\RIWKH
    DXWKRUDQGGRQRWQHFHVVDULO\UHSUHVHQWWKRVHRIWKH)DFXOW\
    
    $%675$&7
    .DWKPDQGXYDOOH\KDVZLWQHVVHGUDSLGXUEDQL]DWLRQZLWKDQDQQXDOSRSXODWLRQJURZWKUDWHRI'XH
    WR WKLV WKH FLW\ LV H[SDQGLQJ IXUWKHU DQG IXUWKHU RXW FDXVLQJ YDULRXV HQYLURQPHQWDO LPSDFWV VXFK DV
    GHFUHDVH LQ IHUWLOH DQG SURGXFWLYH DJULFXOWXUDO ODQG ORVV RI IRUHVW DUHDV UHGXFWLRQ RI ZDWHU TXDOLW\ DQG
    ODQGVFDSH IUDJPHQWDWLRQ 7R XQGHUVWDQG WKH VSDWLDO DQG WHPSRUDO G\QDPLFV RI WKHVH SURFHVVHV DQG WR
    PRQLWRU WKH JURZWK IDFWRUV WKDW GULYH XUEDQ JURZWK VKRXOG EH LGHQWLILHG DQG DQDO\]HG HVSHFLDOO\ WKRVH
    IDFWRUVZKLFKFDQEHXVHGWRIRUHFDVWWKHIXWXUHXUEDQJURZWK7KHPDLQDLPRIWKLVUHVHDUFKLVWRLGHQWLI\
    DQGTXDQWLI\WKHUHODWLRQVKLSEHWZHHQXUEDQJURZWK DQGLWV GULYLQJIDFWRUVDQGWRIRUHFDVW IXWXUHXUEDQ
    JURZWK EDVHG RQ KLVWRULFDO XUEDQ JURZWK SDWWHUQ IRU .DWKPDQGX YDOOH\ 7KLV LQYROYHV WKH ODQG FRYHU
    FKDQJH DQDO\VLV IURP /DQGVDW LPDJHV IRU   DQG  E\ XVLQJ 56*,6 WHFKQLTXHV DQG WKHQ
    TXDQWLILFDWLRQDQGLGHQWLILFDWLRQRIVSDWLRWHPSRUDOSURFHVVRIXUEDQJURZWKUHYLHZRIGULYLQJIDFWRUVRI
    XUEDQJURZWKIURPGLIIHUHQWOLWHUDWXUHFRQVWUXFWLRQRIELQDU\ORJLVWLFUHJUHVVLRQ /5 PRGHOXVLQJXUEDQ
    DJDLQVW QRQXUEDQ DV D GHSHQGHQW YDULDEOH IRU  DQG IRUHFDVW IXWXUH XUEDQ JURZWK SDWWHUQ E\
    XVLQJWKH/5PRGHO
    
    7RLQYHVWLJDWHWKHPDMRUGULYLQJIRUFHVRIGLIIHUHQWSDWWHUQVRIXUEDQJURZWKWKUHHPRGHOV RYHUDOOXUEDQ
    JURZWKLQILOOJURZWKDQGH[SDQVLRQ DUHFRQVWUXFWHG7KHRYHUDOOXUEDQJURZWKPRGHOFRUUHFWO\SUHGLFWHG
     RI WKH REVHUYHG XUEDQ JURZWK IRU  ZKLOH LQILOO JURZWK PRGHO DQG H[SDQVLRQ PRGHO
    SUHGLFWHGDQGRIXUEDQJURZWKZLWKKXJHDPRXQWRIRYHUSUHGLFWLRQDQGXQGHUSUHGLFWLRQIRU
    EXLOWXSDUHDV3RSXODWLRQGHQVLWLHVSURSRUWLRQRIEXLOWXSDUHDLQWKHVXUURXQGLQJDQGODQGYDOXHZHUHWKH
    VWURQJHVW SUHGLFWRUV RI RYHUDOO XUEDQ JURZWK 2WKHU GULYLQJ IRUFHV ZHUH OHVV VLJQLILFDQW LQ H[SODLQLQJ
    RYHUDOOXUEDQJURZWKSURFHVV7KHPRVWVLJQLILFDQWGULYLQJIRUFHVRILQILOOJURZWKZHUHGLVWDQFHWRXUEDQ
    FHQWUHSURSRUWLRQRIEXLOWXSDUHDLQVXUURXQGLQJGLVWDQFHWRPDMRUURDGDQGSRSXODWLRQGHQVLW\ZKHUHDV
    ODQG YDOXH DQG SURSRUWLRQ RI EXLOWXS DUHD LQ WKH VXUURXQGLQJ DUH WKH PDMRU GULYLQJ IRUFHV IRU XUEDQ
    H[SDQVLRQ
    
    7KH UHVXOWV VKRZHG WKDW WKH LQWHJUDWLRQ RI UHPRWH VHQVLQJ *,6 DQG /5 PRGHO SURYLGH LPSRUWDQW
    LQIRUPDWLRQUHJDUGLQJWKHSDWWHUQDQGSURFHVVRIODQGFRYHUFKDQJHUHODWLRQVKLSEHWZHHQXUEDQJURZWK
    DQGLWVGULYLQJIDFWRUVDQGWUHQGRIIXWXUHXUEDQJURZWK7KLVLQIRUPDWLRQFDQEHDWDNHQDVDUHIHUHQFH
    IRUXUEDQSODQQHUDQGGHFLVLRQPDNHUVWRPDNHSODQQLQJGHFLVLRQLQJXLGLQJIXWXUHXUEDQJURZWKRIWKH
    .DWKPDQGXYDOOH\
    
    .H\ZRUGVODQGFRYHUFKDQJHXUEDQJURZWKGULYLQJIDFWRUVLQILOOH[SDQVLRQORJLVWLFUHJUHVVLRQPRGHO.DWKPDQGXYDOOH\
    
    
    

    i
    $&.12:/('*(0(176

    ,ZRXOGOLNHWRDFNQRZOHGJHDOOWKHSHUVRQQHODQGRUJDQL]DWLRQVWKDWGLUHFWO\RULQGLUHFWO\VXSSRUWHGPHWR
    FRQGXFWWKLVUHVHDUFK
    
    0\ IRUHPRVW JUDWLWXGH JRHV WR WKH 1HWKHUODQGV RUJDQL]DWLRQ IRU LQWHUQDWLRQDO FRRSHUDWLRQ LQ KLJKHU
    HGXFDWLRQ 18)),&  IRU JUDQWLQJ PH VFKRODUVKLS WR VWXG\ LQ ,7& DQG DFTXLUH WKH NQRZOHGJH RQ *HR
    LQIRUPDWLRQVFLHQFHDQG(DUWKREVHUYDWLRQ
    
    ,ZRXOGOLNHWRH[SUHVVP\VLQFHUHJUDWLWXGHDQGDFNQRZOHGJHPHQWWRP\ILUVWVXSHUYLVRU'U6KHULI$PHU
    DQG VHFRQG VXSHUYLVRU 0V 0RQLND .XIIHU IRU WKHLU FRQVWDQW JXLGDQFH DQG FULWLFDO VXJJHVWLRQV WLOO WKH
    FRPSOHWLRQRIWKLVWKHVLV7KHUHVHDUFKZRXOGQRWKDYHEHHQSRVVLEOHWRJRLQULJKWGLUHFWLRQZLWKRXWWKHLU
    FDUH DQG YDOXDEOH VXJJHVWLRQV 7KHLU DFDGHPLF DQG PRUDO VXSSRUW LQGHHG LQVSLUHG PH D ORW WR ZRUN
    LQGHSHQGHQWO\WKURXJKRXWWKHVWXG\SHULRG
    
    ,ZRXOGDOVROLNHWRH[SUHVVP\HVSHFLDOWKDQNVWR'UV(PLOH-0'RSKHLGHIRUKLVYDOXDEOHVXJJHVWLRQV
    HVSHFLDOO\ WR LPSURYH P\ VWDWLVWLFDO WKLQNLQJ LQ WKLV VWXG\ 0\ DSSUHFLDWLRQ DQG WKDQNV WR 'U 5LFKDUG
    6OLX]DVDQG'U-RKDQQHV)ODFNHIRUWKHLUVXSSRUWGXULQJWKHKDUGWLPHRIWKHUHVHDUFK
    
    , DOVR GHHSO\ DFNQRZOHGJH WR 3URI +XDQJ %R ZKR DFFHVVHG PH WKH &KDQJH $QDO\VW VRIWZDUH ZLWK
    HVVHQWLDO PDWHULDOV ZLWKRXW ZKLFK WKLV UHVHDUFK ZRXOG QRW KDYH EHHQ SRVVLEOH WR WKLV VWDJH $OVR P\
    DFNQRZOHGJPHQW ZLOO QRW EH FRPSOHWHG ZLWKRXW WKDQNLQJ 0U 'DL]L VWXGHQW RI 3URI+XDQJ %R ZKR
    SDWLHQWO\KHOSHGPHWRUHVROYHWKHSUREOHPUHODWHGWRVRIWZDUH
    
    ,PXVWH[WHQGP\DSSUHFLDWLRQWR'U5DMHVK%DKDGXU7KDSDDQG3URI%DUU\+DDFNIRUSURYLGLQJPHWKHLU
    VLPXODWHG XUEDQ JURZWK PDS ZKLFK LQGHHG KHOSHG PH D ORW WR JHW DQ LQVLJKW RI GLIIHUHQW PRGHOOLQJ
    DSSURDFKHV LQ FDVH VWXG\ DUHD , DP JUDWHIXO WR 0U $QLVK -RVKL IRU KLV NLQG DVVLVWDQFH GXULQJ P\ ILHOG
    ZRUN SURYLGLQJ PH HVVHQWLDO GDWD DQG PDWHULDOV $OVR , ZRXOG OLNH WR H[WHQG P\ JUDWLWXGH WR DOO WKRVH
    SHUVRQQHOZKRWRRNSDUWLQLQWHUYLHZDQGVKDUHWKHLULGHDVDQGNQRZOHGJH
    
    ,DPYHU\WKDQNIXOWRP\IHOORZVWXGHQW*H]DKDJQ'HEHEH)XUDIRUKLVFRQWLQXRXVKHOSHQFRXUDJHPHQW
    DQGYDOXDEOHVXJJHVWLRQV,ZRXOGDOVROLNHWRWKDQN6DEULQD5HVKPD$LGDQDQG,VODPIRUWKHLUJXLGDQFH
    GXULQJWRXJKVWDJHVRIWKHUHVHDUFK0DQ\WKDQNVJRHVWRP\IHOORZ830VWXGHQWVIRUVKDULQJIUXLWIXO
    PRQWKV WRJHWKHU ZLWK IXQ DQG HQWHUWDLQPHQW GHVSLWHV RI FRQWLQXRXV VWXG\ SUHVVXUH , KLJKO\ DSSUHFLDWH
    1HSDOHVHVRFLHW\IRUSURYLGLQJKRPHO\HQYLURQPHQWGXULQJWKHVWD\ZLWKWKHIHHOLQJRIWRJHWKHUQHVV
    
    0\KHDUWIHOWWKDQNVJRWRP\SDUHQWVIRUWKHLUORYHFDUHDQGLQVSLUDWLRQWKURXJKRXWP\OLIH,ZRXOGQRW
    KDYH UHDFK DW WKLV VWDJH ZLWKRXW WKHLU FDULQJ VXSSRUW DQG HQFRXUDJHPHQW )LQDOO\ P\ ORYH DQG JUDWLWXGH
    JRHVWRP\EHORYHG+DULVKZKRKDVEHHQP\VRXUFHRILQVSLUDWLRQ+LVNLQGDWWHQWLRQKDVDOZD\VERRVWHG
    PHXSIRUWKHFRPSOHWLRQRIWKLVWKHVLV
    
    6XQLWD'XZDO
    )HEUXDU\

    ii
    7$%/(2)&217(176
     ,QWURGXFWLRQ
     %DFNJURXQGDQG-XVWLILFDWLRQ
     5HVHDUFKSUREOHP
     2EMHFWLYHVDQGUHVHDUFKTXHVWLRQV
     &RQFHSWXDOIUDPHZRUN
     5HVHDUFKPHWKRGRORJ\
     7KHVLVRXWOLQH
     /LWHUDWXUHUHYLHZ
     8UEDQJURZWKDQGLWVVSDWLDOFKDUDFWHULVWLFV
     'HWHFWLQJXUEDQJURZWKXVLQJUHPRWHVHQVLQJWHFKQLTXHV
     'ULYLQJIDFWRUVRIXUEDQJURZWK
     8UEDQJURZWKPRGHOV
     0RGHOLQJXUEDQJURZWKXVLQJ/RJLVWLFUHJUHVVLRQPRGHO
     ([DPSOHRIUHVHDUFKHVXVLQJORJLVWLFUHJUHVVLRQPRGHO
     &RQFOXGLQJUHPDUNV
     6WXG\DUHDDQG0HWKRGRORJ\
     6WXG\$UHD
     8UEDQSURVSHFWLQ.DWKPDQGXYDOOH\
     3ODQVDQGSURJUDPV
     'DWDVRXUFHV
     ,GHQWLI\LQJXUEDQJURZWKSDWWHUQ
     0RGHOLQJXUEDQJURZWKXVLQJORJLVWLFUHJUHVVLRQ
     3RVVLELOLW\RIHUURUV
     6RIWZDUHXVHG
     5HVXOWVDQG'LVFXVVLRQ
     ,GHQWLI\LQJVSDWLRWHPSRUDOSDWWHUQRIXUEDQJURZWK
     ,GHQWLI\LQJGULYLQJIDFWRUVRIXUEDQJURZWK
     0RGHOHYDOXDWLRQ
     3UREDEOHDUHDVRIIXWXUHXUEDQJURZWK
     'LVFXVVLRQ
     &RQFOXVLRQV
     &RQFOXVLRQV
     )XUWKHUUHVHDUFKGLUHFWLRQV
    $QQH[HV
    , 7DEOHV
    ,, )LJXUHV
    ,,, ([SHUWLQWHUYLHZ
    ,9 7UDLQLQJ6HW6XUYH\6KHHW
    
    

    iii
    /,672)),*85(6
    )LJXUH8UEDQSRSXODWLRQJURZWKDQGH[SDQVLRQRIEXLOWXSDUHDLQ.DWKPDQGXYDOOH\  
    )LJXUH&RQFHSWXDOIUDPHZRUN
    )LJXUH5HVHDUFKPHWKRGRORJ\
    )LJXUH6SDWLDOFKDUDFWHUVRIXUEDQJURZWK D,QILOOLQJE([SDQVLRQDQGF6FDWWHUJURZWK 
    )LJXUH6WXG\DUHDEDVHGRQZDWHUVKHGERXQGDU\
    )LJXUH/RFDWLRQRI.DWKPDQGXYDOOH\
    )LJXUH'LIIHUHQWODQGFRYHUVRIWKHVWXG\DUHD
    )LJXUH/DQGFRYHUFODVVLILFDWLRQPDSVRI.DWKPDQGXYDOOH\
    )LJXUH6SDWLDOSDWWHUQRIXUEDQJURZWKGXULQJ
    )LJXUH$UHDRIODQGFRYHUFODVVHVLQNPDWWKHWLPHRIDQDO\VLV
    )LJXUH0HWKRGIRUGHWHUPLQLQJLQILOODQGH[SDQVLRQ
    )LJXUH,QILOOGHYHORSPHQWDQGRXWZDUGH[SDQVLRQEHWZHHQ OHIW DQG ULJKW 
    )LJXUH)DFWRUPDSVRI
    )LJXUH)DFWRUPDSVRI
    )LJXUH2EVHUYHGDQGSUHGLFWHGXUEDQJURZWKDW OHIW DQG3UREDELOLW\PDSIRU ULJKW 
    )LJXUH5DQJHRISUREDELOLW\YDOXHVIRUXQGHUSUHGLFWLRQ OHIW DQGRYHUSUHGLFWLRQ ULJKW IRU
    )LJXUH+LVWRJUDPVVKRZLQJUDQJHRISUREDELOLW\YDOXHVIRU
    )LJXUH&RPSDULVRQRIREVHUYHGDQGSUHGLFWHGLQILOOJURZWKLQ
    )LJXUH5DQJHRISUREDELOLW\YDOXHVIRUXQGHUSUHGLFWLRQ OHIW DQGRYHUSUHGLFWLRQ ULJKW IRU
    )LJXUH+LVWRJUDPVVKRZLQJUDQJHRISUREDELOLW\YDOXHVIRU
    )LJXUH&RPSDULVRQRIREVHUYHGDQGSUHGLFWHGXUEDQH[SDQVLRQLQ
    )LJXUH5DQJHRISUREDELOLW\YDOXHVIRUXQGHUSUHGLFWLRQ OHIW DQGRYHUSUHGLFWLRQ ULJKW IRU
    )LJXUH+LVWRJUDPVVKRZLQJUDQJHRISUREDELOLW\YDOXHVIRU
    )LJXUH3URMHFWHGXUEDQJURZWKIRU /HIW DQG 5LJKW 
    )LJXUH7UHQGRIXUEDQJURZWKLQNP  
    )LJXUH3URMHFWHGXUEDQJURZWKSDWWHUQLQDQG
    )LJXUH).DSSDVWDWLVWLFVEDVHGRQREVHUYHGXUEDQJURZWKLQ
    )LJXUH)'LIIHUHQWW\SHVRIXUEDQJURZWK
    

    iv
    /,672)7$%/(6
    7DEOH2YHUYLHZRIGULYLQJIDFWRUV
    7DEOH0HWKRGXVHGWRGHWHUPLQHGULYLQJIDFWRUV
    7DEOH$GYDQWDJHVDQGGLVDGYDQWDJHVRIXUEDQJURZWKPRGHOV
    7DEOH5HPRWHO\VHQVHGGDWD
    7DEOH9HFWRUGDWDVHW
    7DEOH6WDWLVWLFDOGDWDIRUSRSXODWLRQDQGODQGYDOXH
    7DEOH/DQGFRYHUFODVVLILFDWLRQVFKHPH
    7DEOH)DFWRUVWKDWZHUHLQFOXGHGLQ/5PRGHO
    7DEOH3RSXODWLRQGLVWULEXWLRQVFKHPH
    7DEOH/DQGVDWLPDJHFODVVLILFDWLRQDFFXUDFLHV  EHIRUHSRVWSURFHVVLQJ
    7DEOH/DQGVDWLPDJHFODVVLILFDWLRQDFFXUDFLHV  DIWHUSRVWSURFHVVLQJ
    7DEOH$QQXDOUDWHRIODQGFRYHUFKDQJH XQLWNP\HDU 
    7DEOH7KHFRQYHUVLRQPDWUL[RIODQGFRYHUFKDQJHIURPWR XQLWNP 
    7DEOH7KHFRQYHUVLRQPDWUL[RIODQGFRYHUFKDQJHIURPWR XQLWNP 
    7DEOH7KHFRQYHUVLRQ0DWUL[RIODQGFRYHUFKDQJHIURPWR XQLWNP 
    7DEOH7\SHVRIXUEDQJURZWK XQLWNP 
    7DEOH/LVWRIYDULDEOHVDQGGHVFULSWLRQV
    7DEOH0XOWLFROOLQHDULW\UHVXOWIRULQGHSHQGHQWYDULDEOHV 6WHS 
    7DEOH0XOWLFROOLQHDULW\UHVXOWIRULQGHSHQGHQWYDULDEOHV 6WHS 
    7DEOH6WDWLVWLFDOWHVWRI/50VRIGLIIHUHQWVDPSOLQJZLQGRZVL]H
    7DEOH0RGHOSDUDPHWHUVIRURYHUDOOXUEDQJURZWK
    7DEOH'HJUHHRILQIOXHQFHRIGULYLQJIDFWRUVRQXUEDQJURZWKDFFRUGLQJWRH[SHUW·VLQWHUYLHZ
    7DEOH6WDWLVWLFDOWHVWRI,QILOOJURZWKPRGHO
    7DEOH0RGHOSDUDPHWHUVIRU,QILOOJURZWK
    7DEOH6WDWLVWLFDOWHVWRI([SDQVLRQPRGHO
    7DEOH0RGHOSDUDPHWHUVIRU2XWZDUGH[SDQVLRQ
    7DEOH0RGHOHYDOXDWLRQIRURYHUDOOXUEDQJURZWK
    7DEOH0RGHODFFXUDF\IRUZKROHVWXG\DUHDDWGLIIHUHQWFODVVLILFDWLRQWKUHVKROGV
    7DEOH0RGHOHYDOXDWLRQIRULQILOOJURZWK
    7DEOH0RGHOHYDOXDWLRQIRUXUEDQH[SDQVLRQ
    7DEOH$9DULDEOHVLQWKH[/5PRGHO
    7DEOH$9DULDEOHVLQWKH[/5PRGHO
    7DEOH$9DULDEOHVLQWKH[/5PRGHO
    7DEOH$9DULDEOHVLQWKH[/5PRGHO
    7DEOH$9DULDEOHVLQWKH[/5PRGHO
    7DEOH$5HVXOWRIORJLVWLFUHJUHVVLRQIRURYHUDOOJURZWK
    7DEOH$5HVXOWRIORJLVWLFUHJUHVVLRQIRU,QILOOJURZWK
    7DEOH$5HVXOWRIORJLVWLFUHJUHVVLRQIRU([SDQVLRQ

    v
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

     ,1752'8&7,21
    7KLVUHVHDUFKIRFXVHVRQGHWHUPLQLQJGULYLQJIDFWRUVRIXUEDQJURZWKLQ.DWKPDQGXYDOOH\DQGIRUHFDVW
    IXWXUH XUEDQ JURZWK E\ XVLQJ D ORJLVWLF UHJUHVVLRQ PRGHO .DWKPDQGX YDOOH\ LV D IDVW JURZLQJ
    DJJORPHUDWLRQDUHDZKHUHGULYLQJIDFWRUVFDQSOD\DPDMRUUROHIRUXUEDQODQGFRYHUFKDQJH7KHUHIRUHLW
    LVDQHHGWRLGHQWLI\DQGTXDQWLI\WKHSURFHVVRIXUEDQODQGFRYHUFKDQJHWRGHWHUPLQHLWVGULYLQJIDFWRUV
    DQGWRXQGHUVWDQGWKHUHODWLRQVKLSEHWZHHQXUEDQJURZWKDQGGULYLQJIDFWRUV7KLVUHVHDUFKKDVDSSOLHG
    UHPRWHVHQVLQJ DQG *,6WHFKQLTXHV FRXSOHGZLWK D ORJLVWLF UHJUHVVLRQPRGHO WR DQDO\VH VSDWLRWHPSRUDO
    SURFHVVRIWKHXUEDQJURZWKDQGLGHQWLI\LWVGULYLQJIDFWRUVWRPRGHOIXWXUHXUEDQJURZWK

     %DFNJURXQGDQG-XVWLILFDWLRQ
    
    8UEDQL]DWLRQ LV D SURFHVV WKDW OHDGV WR D VSDWLDO FRQFHQWUDWLRQ RI KRXVHKROGV DQG HFRQRPLF DFWLYLWLHV
    ZLWKLQDOLPLWHGDUHD,WLVWKHUHVXOWRIVRFLDOHFRQRPLFDQGSROLWLFDOGHYHORSPHQWV .LYHOO%ODFN 
    +HQGHUVRQ+DOO 7HZGZU-RQHV WKDWOHDGVWRWKHODQGXVHDQGODQGFRYHUFKDQJH %HODO 
    0RJKDQP   DQG VSDWLDO H[SDQVLRQ RI WKH FLWLHV 8UEDQL]DWLRQ LV DOVR DVVRFLDWHG ZLWK KLJKHU
    SRSXODWLRQ FRQFHQWUDWLRQ ZKLFK UHVXOWV LQ UDSLG FKDQJHV RI XUEDQ ODQGVFDSH SDWWHUQ FDXVLQJ
    WUDQVIRUPDWLRQ RI QDWXUDO ODQGV 7KDSD  0XUD\DPD   7KHUHIRUH D JURZLQJ SRSXODWLRQ DQG
    FKDQJLQJ KRXVHKROG FKDUDFWHULVWLFV LQIOXHQFH WKH GHPDQG IRU ODQG WKDW OHDGV WR WKH FRQYHUVLRQ RI QRQ
    XUEDQODQGLQWRXUEDQODQG
    
     
    DUHDLQVTNP
    
    SRSXODWLRQ 
    
    3RSLQPLOOLRQV

    
    $UHDLQVTNP

    
     
    
    
    
    
    
     
      
    <HDU
    
    )LJXUH8UEDQSRSXODWLRQJURZWKDQGH[SDQVLRQRIEXLOWXSDUHDLQ.DWKPDQGXYDOOH\  

    6RXUFH&%6  
    
    .DWKPDQGXYDOOH\WKHFDSLWDOFLW\RI1HSDOKDVDQHVWLPDWHGSRSXODWLRQRIPLOOLRQLQZLWKDQ
    DQQXDOJURZWKUDWHRI &%6 7KLVVKRZVWKDWWKHYDOOH\LVXQGHUJRLQJXUEDQL]DWLRQLQDYHU\
    KLJK UDWH 6XFK DQ XUEDQL]DWLRQ UHVXOWV LQ JUDGXDO FKDQJH RI SUHGRPLQDQWO\ DJULFXOWXUDO DQG QDWXUDO
    ODQGVFDSHWRDQXUEDQODQGVFDSH)URP)LJXUHLWFDQEHREVHUYHGWKDWERWKSRSXODWLRQDQGEXLOWXS
    DUHDV DUH LQFUHDVLQJ IURP  WR  'XULQJ WKLV WLPH SHULRG DURXQG  NP RI ODQG KDV EHHQ

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    FRQYHUWHGWRXUEDQEXLOWXSDUHDVDQGLWLVH[SHFWHGWKDWWKLVWUHQGZLOODFFHOHUDWHLQQH[WGHFDGHV 7KDSD
    0XUD\DPD 6LPLODUO\WKHVL]HRISRSXODWLRQKDVDOPRVWWULSOHGIURPDSSUR[PLOOLRQLQ
    WRDURXQGPLOOLRQLQ,PSRUWDQWWRVWDWHLVWKDWWKHFLW\LVIDFLQJFRQVLGHUDEOHXQSODQQHGXUEDQ
    VSUDZODQGKDSKD]DUGJURZWKSDUWLFXODUO\LQWKHXUEDQIULQJHDUHD,WLVOLNHO\WKDWVXFKDQXQFRQWUROOHG
    JURZWKZLOO HYHQWXDOO\ WKUHDWHQ DJULFXOWXUDO DQG IRUHVW DUHDV DURXQGWKH FLW\ 6R WRGHYHORSWKH FLW\ LQD
    PRUHVXVWDLQDEOHZD\XUEDQJURZWKKDVWREHEHWWHUPDQDJHG
    
    0RQLWRULQJRIODQGFRYHUFKDQJHLVFUXFLDOWRXQGHUVWDQGDQGIRUHFDVWWKHIXWXUHXUEDQL]DWLRQWUHQGVDQG
    XUEDQODQGFRYHUSDWWHUQ5HPRWHVHQVLQJLVRQHRIWKHPRVWFRPPRQO\XVHGWHFKQLTXHVWRPRQLWRUXUEDQ
    ODQG FRYHU FKDQJHV ,W SURYLGHV PXOWLWHPSRUDO DQG PXOWLVSHFWUDO GDWD IRU PRQLWRULQJ ODQG XVH SDWWHUQV
    DQGSURFHVVHV 2OXVH\L $QXPEHURIUHVHDUFKHUVLQFOXGLQJ+HUROGHWDO  'H$OPHLGDHWDO
     0DNWDY (UEHN  %HODO 0RJKDQP  DQG;LDRHWDO  KDYHXVHGPXOWLVSHFWUDO
    UHPRWHVHQVLQJ GDWD RIGLIIHUHQW VSDWLDO UHVROXWLRQWR HYDOXDWH ODQG XVHFRYHU FKDQJHV $OO WKHVH VWXGLHV
    KDYHH[DPLQHGFKDQJHVLQODQGXVHSDWWHUQRYHUDJLYHQSHULRG6DWHOOLWHUHPRWHVHQVLQJWHFKQLTXHVKDYH
    WKHUHIRUHEHHQZLGHO\XVHGLQGHWHFWLQJDQGPRQLWRULQJXUEDQODQGFRYHUFKDQJH
    
    ,QUHFHQWGHFDGHVDQXPEHURIVWXGLHVKDYHEHHQGRQHWRPRGHOWKHXUEDQJURZWKRI.DWKPDQGXYDOOH\
    XVLQJ (DUWK REVHUYDWLRQ DQG *,6 WHFKQLTXHV )RU LQVWDQFH 7KDSD  0XUD\DPD   DQG +DDFN 
    5DIWHU  XVHGFHOOXODUDXWRPDWD &$ PRGHOOLQJDQGVSDWLDODQDO\VLVWRROVUHVSHFWLYHO\WRPRGHOWKH
    XUEDQJURZWKLQ.DWKPDQGXYDOOH\%\HPSOR\LQJD&$DSSURDFK7KDSDHWDO  IRXQGWKDWDOOWKH
    PXQLFLSDOLWLHVZLOOEHDJJUHJDWHGLQWRDJUHDWHUPHWURSROLWDQUHJLRQE\7KH\IXUWKHUFRQFOXGHGWKDW
    XUEDQ JURZWK LQ .DWKPDQGX YDOOH\ ZLOO FRQWLQXH WKURXJK ERWK LQILOOLQJ LQ YDFDQW SRFNHWV RI H[LVWLQJ
    XUEDQ DUHDVDQGRXWZDUGH[SDQVLRQWRZDUGVWKH HDVWVRXWKDQGZHVW GLUHFWLRQVLQ WKHIXWXUH6LPLODUO\
    +DDFN 5DIWHU  FRQFOXGHGWKDWWKH H[WHQVLYH JURZWKZLOOOHDGWRYDULRXVQHJDWLYHHQYLURQPHQWDO
    LPSDFWVVXFKDVORVVRIYDOXDEOHDJULFXOWXUDOODQGVDQGLQFUHDVHGDLUDQGZDWHUSROOXWLRQ1HLWKHURIWKHVH
    UHVHDUFKHV KRZHYHU LQYHVWLJDWHG WKH GHJUHH RI LQIOXHQFH RI GULYLQJ IDFWRUV RQ XUEDQ JURZWK $PRQJ
    RWKHU PRGHOOLQJ WHFKQLTXHV ORJLVWLF UHJUHVVLRQ PRGHO KDV EHHQ FODLPHG WR EH DQ HIIHFWLYH WRRO IRU
    XQGHUVWDQGLQJ WKH UHODWLRQVKLS EHWZHHQ XUEDQ ODQG FRYHU FKDQJH DQG LWV GULYHUV VHH VHFWLRQ  
    +RZHYHUORJLVWLFUHJUHVVLRQPRGHOKDYHQHYHUEHHQDSSOLHGLQ.DWKPDQGXYDOOH\WRPRGHOXUEDQJURZWK
    7KHUHIRUH LQ RUGHU WR FRQWULEXWH WR WKH XQGHUVWDQGLQJ RI G\QDPLF SURFHVVHV RI XUEDQ JURZWK DQG LWV
    GULYHUVWKLVUHVHDUFKKDVXVHGDVWDWLVWLFDODSSURDFKE\PHDQVRIORJLVWLFUHJUHVVLRQPRGHOWRIRUHFDVWWKH
    IXWXUHXUEDQJURZWK

     5HVHDUFKSUREOHP
    
    $GHWDLOVWXG\KDVEHHQGRQHWRLQYHVWLJDWHGULYLQJIDFWRUVRIXUEDQJURZWKLQ.DWKPDQGXYDOOH\E\7KDSD
    0XUD\DPD  <HWWKHGHJUHHRILQIOXHQFHRIWKRVHIDFWRUVRQIXWXUHXUEDQJURZWKLQWKHYDOOH\KDV
    QRWEHHQH[SORUHG,QDGGLWLRQDQXPEHURIVWXGLHVKDYHPRGHOOHGWKHXUEDQJURZWKXVLQJVSDWLDODQDO\VLV
    WRROV DQG FHOOXODU DXWRPDWD OLNH+DDFN  5DIWHU   DQG 7KDSD  0XUD\DPD   %XW D ORJLVWLF
    UHJUHVVLRQPRGHOKDVQHYHUEHHQDSSOLHGWRPRGHOXUEDQJURZWKRIWKHYDOOH\EHVLGHVLWVPDQ\DGYDQWDJHV
    VHH 7DEOH  LQ VHFWLRQ   6R WKLV UHVHDUFK KDV XVHG D ORJLVWLF UHJUHVVLRQ PRGHO WR XQGHUVWDQG WKH
    UHODWLRQVKLSEHWZHHQGULYLQJIDFWRUVRIXUEDQJURZWKDVZHOODVWRIRUHFDVWWKHIXWXUHXUEDQJURZWK
    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

     2EMHFWLYHVDQGUHVHDUFKTXHVWLRQV

     $LP
    7KHPDLQDLPRIWKHUHVHDUFKLVWRLGHQWLI\WKHSULPDU\GULYHUVRIXUEDQJURZWKLQ.DWKPDQGXYDOOH\DQG
    WRIRUHFDVWIXWXUHXUEDQJURZWKSDWWHUQE\XVLQJORJLVWLFUHJUHVVLRQ /5 PRGHO

     2EMHFWLYHVDQGUHVHDUFKTXHVWLRQV
     7R DSSO\ *, DQG (DUWK 2EVHUYDWLRQ WHFKQLTXHV IRU LGHQWLI\LQJ WKH XUEDQ JURZWK SDWWHUQ RI
    .DWKPDQGXYDOOH\GXULQJWKHSHULRGDQG
    • :KDW DUH WKH DFFXUDFLHV REWDLQHG E\ XVLQJ LPDJH FODVVLILFDWLRQ WHFKQLTXHV IRU
    H[WUDFWLQJODQGFRYHUFKDQJH"
    • :KLFKW\SHVRIODQGFRYHUFKDQJHDUHWKHPRVWSURPLQHQWLQ.DWKPDQGXYDOOH\"
    • :KDWLVWKHUDWHRIXUEDQODQGFRYHUFKDQJHVGXULQJWKHSHULRGDQG
    "
    • :KDW LV WKH SDWWHUQ RI XUEDQ ODQG FRYHU FKDQJH GXULQJ WKH SHULRG  DQG
    "
     7RGHWHUPLQHWKHPDLQGULYHUVRIXUEDQJURZWKXVLQJDORJLVWLFUHJUHVVLRQPRGHO
    • :KDWDUHWKHIDFWRUVWKDWSOD\DNH\UROHLQXUEDQJURZWKLQWKHVFLHQWLILFOLWHUDWXUH"
    • :KDWDUHWKHPDLQIDFWRUVWKDWDUHUHVSRQVLEOHIRUXUEDQJURZWKLQ.DWKPDQGXYDOOH\
    DQGZKDWLVWKHLUUHODWLYHLPSRUWDQFHDFFRUGLQJWRWKHORFDOH[SHUWV"
    • $UHWKH/5PHWKRGDQGWKHH[SHUWNQRZOHGJHDUULYLQJDWWKHVDPHFRQFOXVLRQDERXW
    WKHPDLQGULYLQJIDFWRUV"
     7RIRUHFDVWWKHIXWXUHXUEDQJURZWKSDWWHUQLQ.DWKPDQGXYDOOH\
    • :KLFK ORJLVWLF EDVHG DSSURDFKHV KDYH EHHQ XVHG WR PRGHO XUEDQ JURZWK LQ
    OLWHUDWXUHV"
    • :KHUHDUHWKHSUREDEOHDUHDVRIIXWXUHXUEDQJURZWK"

     &RQFHSWXDOIUDPHZRUN
    
    8UEDQL]DWLRQ FDQ OHDG WR D JUDGXDO WUDQVIRUPDWLRQ RI UXUDO ODQGVFDSH LQWR XUEDQEXLOW IRUP LQ WHUP RI
    LQILOOLQJH[SDQVLRQDQGVFDWWHUHGJURZWK VHHVHFWLRQ 7KHLQIRUPDWLRQDERXWWUHQGVDQGSDWWHUQVRI
    XUEDQ JURZWK LV FRPPRQO\ GHWHUPLQHG E\ XVLQJ PXOWLVSHFWUDO DQG PXOWL WHPSRUDO UHPRWH VHQVLQJ
    WHFKQLTXHV%XWRQO\KDYLQJWKHNQRZOHGJHRIWUHQGDQGSDWWHUQRIODQGFRYHUFKDQJHLVQRWVXIILFLHQWWR
    SURMHFWIXWXUHXUEDQJURZWK,WLVYHU\LPSRUWDQWWRXQGHUVWDQGWKHNH\GULYLQJIDFWRUVWKDWOHDGWRODQG
    FRYHUFRQYHUVLRQ$PRQJGLIIHUHQWPRGHOLQJDSSURDFKHVORJLVWLFUHJUHVVLRQ /5 LVRQHRIWKHFRPPRQ
    VWDWLVWLFDOPRGHOVWKDWGHWHUPLQHVWKHNH\GULYHUVRIXUEDQJURZWKDQGSURMHFWVWKHIXWXUHXUEDQJURZWK,W
    DOVR KHOSV WR XQGHUVWDQG UHODWLRQVKLS EHWZHHQ XUEDQ JURZWK DQG LWV GULYHUV TXDQWLILHV WKHLU GHJUHH RI
    LQIOXHQFHDQGLGHQWLILHVWKHPRVWVLJQLILFDQWGULYHUVRIXUEDQJURZWK
    

    )LJXUHVKRZVWKHFRQFHSWXDOIUDPHZRUNWRPRGHOXUEDQJURZWKDQGLWVGULYLQJIDFWRUV
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    
    

    )LJXUH&RQFHSWXDOIUDPHZRUN

     5HVHDUFKPHWKRGRORJ\
    
    7KHPHWKRGRORJ\RIWKLVUHVHDUFKLVGLYLGHGLQWRILYHSKDVHVDVVKRZQLQ)LJXUH
    
    7KHILUVWSKDVHLV SUREOHPLGHQWLILFDWLRQZKLFKZDVFRQFHUQHGZLWKWKHHVWDEOLVKPHQWRIDWKHRUHWLFDOFRQFHSW
    DERXWXUEDQJURZWKDQGLWVFRQVHTXHQFHVXQGHUVWDQGLQJIDFWRUVWKDWGULYHXUEDQJURZWKDQGPHWKRGVRI
    PRGHOLQJWKHXUEDQJURZWK
    
    7KHVHFRQGSKDVHLV GDWDDFTXLVLWLRQWKURXJKSULPDU\DQGVHFRQGDU\VRXUFHV$OOHVVHQWLDOLQIRUPDWLRQZDV
    JDWKHUHG IURP GLIIHUHQW LQVWLWXWLRQV DQG ILHOG REVHUYDWLRQ 3ULPDU\ GDWD OLNH WUDLQLQJ VDPSOH VHW
    YHULILFDWLRQVZHUHJDWKHUHGYLDILHOGREVHUYDWLRQDQGVHFRQGDU\GDWDOLNHLPDJHVVSDWLDOGDWDSRSXODWLRQ
    GDWDHWFZHUHJDWKHUHGIURPGLIIHUHQWLQVWLWXWLRQV
    
    7KHWKLUGSKDVHLVFRQFHUQHGZLWK GDWDSUHSDUDWLRQZKLFKZDVDERXWSUHSDULQJODQGFRYHUPDSVDQGIDFWRU
    PDSVIRUSUREDEOHGULYLQJIDFWRUV7KHODQGFRYHUPDSVZHUHSUHSDUHGIURP/DQGVDWLPDJHULHVIRUWKUHH
    GLIIHUHQWWLPHSHULRGVDQGXVLQJ56WHFKQLTXHV7KHVHPDSVZHUHIXUWKHUXVHGWRSUHSDUH
    ELQDU\PDSVRIXUEDQDQGQRQXUEDQ,QWKHVDPHSKDVHIDFWRUVPDSVRIGLIIHUHQWGULYLQJIRUFHVZHUHDOVR
    SUHSDUHGIURPVSDWLDODQGVRFLRHFRQRPLFGDWD
    
    7KHIRXUWKSKDVHLV 0RGHOOLQJSKDVHZKLFKZDVDERXWFRQVWUXFWLQJD/5PRGHOXVLQJ*,6WRROVDQGGDWD
    SUHSDUHG LQ WKH WKLUG SKDVH 7R DYRLG WKH PXOWLFROOLQHDULW\ DPRQJ GLIIHUHQW GULYLQJ IDFWRUV D
    PXOWLFROOLQHDULW\WHVWZDVGRQHWRHOLPLQDWHKLJKO\FRUUHODWHGIDFWRUVDQGRQO\WKHUHPDLQLQJIDFWRUVZHUH
    SDUWLFLSDWHG LQ WKH /5 PRGHOLQJ 6WDWLVWLFDO WHVW RI WKH PRGHO ZDV GRQH WR HYDOXDWH WKH VLJQLILFDQFH RI
    UHPDLQLQJIDFWRUV7KHQPRGHOSDUDPHWHUVZHUHVHWWRJHWDILQDO/5PRGHOZKLFKZDVXVHGWRIRUHFDVW
    XUEDQ JURZWK LQ WKH YDOOH\ $W WKH VDPH WLPH NH\ GULYLQJ IDFWRUV RI XUEDQ JURZWK LQ WKH YDOOH\ ZDV
    GHWHUPLQHG
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    7KH ODVW SKDVH LV &RPPXQLFDWLRQ RI UHVXOW WKDW LQFOXGHV TXDQWLWDWLYH DQDO\VLV RI WKH UHVXOW 7KH PRGHO ZDV
    HYDOXDWHG WR DVVHVV LWV SHUIRUPDQFH XVLQJ VWDWLVWLFDO PHDVXUH VXFK DV 3HUFHQWDJH RI &RUUHFW 3UHGLFWLRQ
    3&3 DQG.DSSDVWDWLVWLFV
    
    7KH UHVXOW RI WKLV UHVHDUFK FDQ EH KHOSIXO IRU XUEDQ RU UHJLRQDO SODQQHUV DQG GHFLVLRQ PDNHUV VLQFH LW
    SURYLGHV LQIRUPDWLRQ OLNH UDWH WUHQGV DQG SDWWHUQV DQG GLUHFWLRQ RI XUEDQ JURZWK DORQJ ZLWK SUREDEOH
    DUHD RI IXWXUH XUEDQ JURZWK ,Q DGGLWLRQ WKLV UHVHDUFK SURYLGHVNQRZOHGJH RI GULYLQJ IDFWRUV WKDW KDYH
    VLJQLILFDQWLQIOXHQFHRQWKHXUEDQJURZWKRIWKHYDOOH\VRWKDWSROLF\PDNHUVFDQGHWHUPLQHZKLFKIDFWRU
    QHHGVPRUHFRQFHQWUDWLRQWRPDQDJHIXWXUHXUEDQJURZWKRIWKHYDOOH\
    

    
    )LJXUH5HVHDUFKPHWKRGRORJ\

    
    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

     7KHVLVRXWOLQH
    &KDSWHU,QWURGXFWLRQ
    7KLVFKDSWHUSURYLGHVJHQHUDOLQIRUPDWLRQDERXWWKHXUEDQL]DWLRQWUHQGLQ.DWKPDQGXYDOOH\IROORZHGE\
    UHVHDUFK SUREOHP UHVHDUFK REMHFWLYHV UHVHDUFK TXHVWLRQV DQG FRQFHSWXDO IUDPHZRUN ,W DOVR SUHVHQWV D
    EULHIPHWKRGRORJ\RIWKHUHVHDUFK
    
    &KDSWHU/LWHUDWXUHUHYLHZ
    7KLVFKDSWHUUHYLHZVWKHWKHRUHWLFDOEDFNJURXQGRQXUEDQJURZWKDQGLWVVSDWLDOSDWWHUQGULYLQJIRUFHVRI
    XUEDQ JURZWK PHWKRGV DQG WHFKQLTXHV WR PRGHO DQG IRUHFDVW XUEDQ JURZWK ,W DOVR SUHVHQWV D EULHI
    LQWURGXFWLRQWRGLIIHUHQWW\SHVRIXUEDQJURZWKPRGHOVLQFOXGLQJWKHLUVWUHQJWKDQGZHDNQHVVHV
    
    &KDSWHU0HWKRGRORJ\
    7KLV FKDSWHU JLYHV D VKRUW LQWURGXFWLRQ WR WKH VWXG\ DUHD IROORZHG E\ RYHUYLHZ RI GDWD FROOHFWLRQ DQG
    PHWKRGRORJLFDODSSURDFKWRDQVZHUWKHUHVHDUFKTXHVWLRQV,WPDLQO\IRFXVHVRQWKHPHWKRGVIRUDQDO\VLQJ
    DQG TXDQWLI\LQJ VSDWLRWHPSRUDO SURFHVV RI XUEDQ JURZWK LGHQWLI\LQJ PDMRU GULYLQJ IDFWRUV RI XUEDQ
    JURZWKDQGPRGHOLQJIXWXUHXUEDQJURZWKE\XVLQJORJLVWLFUHJUHVVLRQPRGHO
    
    &KDSWHU5HVXOWVDQGGLVFXVVLRQ
    &KDSWHU  SUHVHQWV WKH PDLQ ILQGLQJV IURP WKH UHVHDUFK ,W LQFOXGHV WKH UHVXOWV IURP VSDWLRWHPSRUDO
    DQDO\VLVRIODQGFRYHUPDSVUHODWLRQVKLSEHWZHHQXUEDQJURZWKDQGGULYLQJIDFWRUVDQGSUREDEOHDUHDRI
    IXWXUHXUEDQJURZWK,WFRQWLQXHVZLWKGLVFXVVLRQVRIWKHUHVXOWVDQGDORQJZLWKWKHSROLF\LPSOLFDWLRQV
    
    &KDSWHU&RQFOXVLRQV
    7KLVFKDSWHUFRQFOXGHVWKHUHVHDUFKE\VXPPDUL]LQJWKHPDLQILQGLQJVIURPWKHUHVHDUFKDQGSRLQWLQJRXW
    IXWXUHUHVHDUFKGLUHFWLRQV
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

     /,7(5$785(5(9,(:
    7KLV FKDSWHU GHDOV ZLWK WKH FRQFHSW RI XUEDQ JURZWK GULYLQJ IDFWRUV PHWKRGV DQG WHFKQLTXHV RI
    PRGHOLQJ DQG IRUHFDVWLQJ WKH XUEDQ JURZWK ,W VWDUWV ZLWK JHQHUDO FRQFHSW DERXW XUEDQ JURZWK LWV
    VSDWLDO FKDUDFWHULVWLFV DQG UHPRWH VHQVLQJ WHFKQLTXH WR GHWHFW XUEDQ JURZWK IROORZHG E\ GULYLQJ
    IDFWRUV RIXUEDQ JURZWK LQWKH OLWHUDWXUH ,W SUHVHQWV GLIIHUHQW W\SHVRI XUEDQ JURZWK PRGHOV DORQJ
    ZLWK WKHLUVWUHQJWK DQGZHDNQHVVHV JLYLQJ DQ LQVLJKW LQWR WKH PRGHOV ZKLFK DVVLVWLQ XQGHUVWDQGLQJ
    WKHUHODWLRQVKLSEHWZHHQXUEDQJURZWKDQGGULYLQJIDFWRUV)LQDOO\LWKLJKOLJKWVWKHORJLVWLFUHJUHVVLRQ
    /5  PRGHO LQ GHWDLO DV ZHOO DV JLYHV IHZ H[DPSOHV RI UHVHDUFKHV WKDW KDYH DSSOLHG /5 PRGHO IRU
    GHWHUPLQLQJGULYLQJIDFWRUVRIXUEDQJURZWK

     8UEDQJURZWKDQGLWVVSDWLDOFKDUDFWHULVWLFV
    
    8UEDQJURZWKLVDEURDGFRQFHSWWKDWKDVEHHQGHILQHGLQVHYHUDOZD\VE\PDQ\DXWKRUV,QJHQHUDOLW
    LV UHFRJQL]HG DV SK\VLFDO DQG IXQFWLRQDO FKDQJHV RI XUEDQ ODQGVFDSH GXH WR VRFLDO HFRQRPLF DQG
    SROLWLFDO GHYHORSPHQW .LYHOO  %ODFN  +HQGHUVRQ  +DOO  7HZGZU-RQHV   WKDW
    OHDGVWRWUDQVIRUPDWLRQRIUXUDOODQGVFDSHWRXUEDQIRUPV,WOHDGVWRWKHFKDQJHRIODQGXVHDQGODQG
    FRYHU %HODO 0RJKDQP WKDWFRQVLVWRILQWHUDFWLRQEHWZHHQVHYHUDOIDFWRUVOLNHWRSRJUDSK\
    ULYHU SRSXODWLRQ HFRQRP\ SODQ DQG SROLFLHV LQIUDVWUXFWXUH HWF 7KHVH IDFWRUV FDQ KDYH D JUHDW
    LQIOXHQFHRQWKHQDWXUHRIXUEDQJURZWKOHDGLQJWRWKHGLIIHUHQWW\SHVRIXUEDQJURZWK
    
    8UEDQ JURZWK FDQ RFFXU LQ D VHYHUDO ZD\V VXFK DV VSUDZOLQJ RU FRPSDFW VFDWWHUHG RU FOXVWHUHG
    FRQWLQXRXV RU OHDSIURJ SODQQHG RU RUJDQLF &KHQJ   6SUDZOLQJ LV JHQHUDOO\ GHILQHG DV
    GHYHORSPHQWRIUXUDOODQGLQRXWVNLUWRIWKHFLW\LQWRXUEDQODQGLQDGLVSHUVHGPDQQHU $UEXU\ 
    ZKHUHDV FRPSDFW JURZWK RFFXUV ZLWKLQ WKH FLW\ LQ LQILOOLQJ DQG GHQVLILFDWLRQ PDQQHU 6FDWWHUHG RU
    OHDSIURJJURZWK PHDQVWKHIRUPDWLRQRIQHZXUEDQSDWFKHVWKDW DUHLVRODWHGIURP WKHH[LVWLQJFLW\
    ZKLOHFOXVWHUHGRUFRQWLQXRXVJURZWKLVGHILQHGDVQHZJURZWKWKDWDUHJURXSHGWRJHWKHUWRIRUPD
    XUEDQ FOXVWHU 2UJDQLF JURZWK VSUHDGV RXWZDUGV IURP WKH H[LVWLQJ XUEDQ FHQWUHV WKDW WHQGV FLW\ WR
    H[SDQG &ODUNH HW DO   ZKLOH SODQQHG JURZWK DOZD\V DLPV WR DFKLHYH RUJDQLVHG RU PDQDJHG
    JURZWK

    &DPDJQLHW DO   KDYHGLVWLQJXLVKHGILYHW\SHVRIXUEDQJURZWKVXFKDVLQILOOH[SDQVLRQOLQHDU


    GHYHORSPHQWVSUDZODQGODUJHVFDOHSURMHFWV:KHUHDV:LOVRQHWDO  KDYHLGHQWLILHGILYHW\SHV
    RIXUEDQJURZWKOLNHLQILOOH[SDQVLRQLVRODWHGOLQHDUEUDQFKDQGFOXVWHUHGEUDQFK%HUOLQJ:ROII 
    :X  KDYHGLVWLQJXLVKHGIRXUGLIIHUHQWW\SHVRIXUEDQJURZWKVSRQWDQHRXVGLIIXVLYHRUJDQLF
    DQG URDG LQIOXHQFHG 7KH FODVVLILFDWLRQV PHQWLRQHG KHUH SULPDULO\ IRFXV RQ VSDWLDO SDWWHUQ RI WKH
    JURZWK,QVRPHFDVHVWKH\DUHLQWHUUHODWHGDVZHOO)RUWKLVUHVHDUFKWKHXUEDQJURZWKLVFDWHJRULVHG
    DVIROORZV VHH)LJXUH 
    
    D ,QILOOLQJ,QILOOLQJPHDQVFRQYHUVLRQRIQRQXUEDQDUHDVZKLFKLVVXUURXQGHGE\XUEDQDUHDV
    LQWREXLOWXS ;XHWDO ,WRFFXUVRQYDFDQWODQGSDUFHOVZLWKLQH[LVWLQJGHYHORSHGDUHDV
    WKDWUHPDLQHGVRIDUDVQRQEXLOWXS7KLVW\SHRIJURZWKLVYHU\FRPPRQLQFRUHDUHDVDQG
    DOUHDG\GHYHORSHGQHZDUHDV

    
    02'(
    (/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    
    E ([SDQVLRQ7KLVW\SHRIJUURZWKRFFXUVLQWKHDGMDFHQWXUEDQIULQJH7KHQHZO\\GHYHORSHG
    XUEDQDUHDVLQWKHIULQJHVSUHHDGRXWZDUGVLQDGMDFHQF\WRH[LVWLQJXUEDQDUHDV7KHUHIRUHLWLV
    DOVRFDOOHGXUEDQIULQJHGHYHHORSPHQW &DPDJQLHWDO;XHWDO /LQHDUJURZWKFDQ
    DOVREHLQFOXGHGLQWKLVJURZ ZWKW\SH%HFDXVHLQOLQHDUJURZWKXUEDQJURZWKH[SDQGDORQJ
    URDGFRUULGRUVZKLFKVWLPXODDWHVWKHGHYHORSPHQWRIQHZDUHDV %HUOLQJ:ROII : :X 
    
    F 6FDWWHUHGJURZWK6FDWWHUHGGJURZWKPHDQVWKHIRUPDWLRQRIQHZXUEDQSDWFKHVZ ZKLFKKDYH
    QR GLUHFW VSDWLDO FRQQHFWLRQQ ZLWK WKH H[LVWLQJ XUEDQ SDWFKHV %HUOLQJ:ROII  :X
    :  
    7KLV W\SH RI JURZWK XVXDOO\\ RFFXUV DZD\ IURP WKH H[LVWLQJ XUEDQ DUHD E\ IRUPLLQJ LVRODWHG
    XUEDQSDWFKHV
    

    
    )LJXUH6SDWLDOFKDUDFWHUVRIXUEDQJURZWK D,QILOOLQJE([SDQVLRQDQGF6FDWWHUJURZ
    ZWK 

     'HWHFWLQJXUEDQJURZWKXVLQJJUHPRWHVHQVLQJWHFKQLTXHV
    
    5HPRWH VHQVLQJ 56  LV WKH SURFHVV RI GDWD DFTXLVLWLRQ WKURXJK DLUERUQH RU VSDFH VHQVR RUV ZLWKRXW
    KDYLQJDQ\FRQWDFWZLWKWKHREMHFWLQ QWKHHDUWKVXUIDFH 5LFKDUGV ,WDOORZVDFTXLVLWLR RQRIPXOWL
    WHPSRUDO PXOWLVSHFWUDO DQG PXOWLUHHVROXWLRQ GDWD WKDW DUH UHTXLUHG IRU DQDO\VLQJ DQG P PRGHOOLQJ RI
    ODQG FRYHU FKDQJHV %HFDXVH RI WKKHLU FRVW HIIHFWLYHQHVV DQG WHPSRUDO IUHTXHQF\ 566 GDWD DQG
    WHFKQLTXHVDUHZLGHO\XVHGLQXUEDQ VWXGLHVWRGHWHFWPRQLWRUDQGVLPXODWHXUEDQODQGX XVHFKDQJHV
    <XDQHWDO$UD\D &DEUDO 7KHVWUHQJWKRIUHPRWHVHQVLQJWHFKQLTXHVLVWRH[WUDFWWKH
    SK\VLFDOJURZWKZKLOH*,6KDVFDSDFLLW\WRDQDO\VHRWKHUDVSHFWVRIXUEDQJURZWK
    
    7KHUHDUHPDQ\UHVHDUFKHVWKDWDUHEEDVHGRQ56SULPDULO\IRFXVVHGRQLPDJHFODVVLILFDWLRQLQFOXGLQJ
    <XDQ HW DO   /X  :HQJ   $UD\D  &DEUDO   %HODO  0RJKDQP   ,PDJH
    FODVVLILFDWLRQLVWKHSURFHVVRIDVVLJQ QLQJSL[HOVRIDFRQWLQXRXVUDVWHULPDJHWRSUHGHILQHG ODQGFRYHU
    FODVVHV $UD\D  &DEUDO 7KHUHVXOWRI LPDJHFODVVLILFDWLRQLVOLNHO\WR EHDIIHFWHG E\YDULRXV
    IDFWRUVIRUHJQDWXUHRILQSXWLPDJHHVFODVVLILFDWLRQPHWKRGVDOJRULWKPHWF,QRUGHUWRLP PSURYHWKH
    FODVVLILFDWLRQ DFFXUDF\ DQG WR HQDEOHH DQ DQDO\VW WR GHWHFW FKDQJHV VXFFHVVIXOO\ WKH VHOHFFWLRQ RI DQ
    DSSURSULDWHFODVVLILFDWLRQPHWKRGLV YHU\HVVHQWLDO%DVLFDOO\WKHUHDUHWZRFODVVLILFDWLRQV SDUDGLJPV
    3L[HOEDVHGDQG2EMHFWEDVHG $UD\DD &DEUDO 3L[HOEDVHGLPDJHFODVVLILFDWLRQLV DSRZHUIXO
    WHFKQLTXH ZKHUH HDFK SL[HO LV DVVLJJQHG WR FHUWDLQ VSHFWUDO FODVV ZKLFK LV EDVHG XSRQ WKH
    W VXUIDFH
    FKDUDFWHULVWLFV DQG WUDLQLQJ GDWD :KKLOH DQ REMHFW EDVHG LPDJH FODVVLILFDWLRQ LV DQ DSSURRDFK ZKHUH
    FODVVLILFDWLRQLVEDVHGRQKRPRJHQHR RXVVHJPHQWVWKDWFRUUHVSRQGVWRGLIIHUHQWREMHFWVVXFFKDVILHOGV
    WUHHVEXLOGLQJVHWF ,7& $QRREMHFWEDVHGDSSURDFKLVSDUWLFXODUO\VXLWDEOHIRULPDJJHVRIKLJK
    VSDWLDOUHVROXWLRQ)RUWKHXUEDQVWXXGLHVDWFLW\VFDOHLWLVUDWKHUH[SHQVLYHWRDFTXLUHKLJK KUHVROXWLRQ
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    LPDJHVIRUDQHQWLUHFLW\DVZHOODVYHU\KLJKUHVROXWLRQVDWHOOLWHLPDJHVDUHRQO\DYDLODEOHIRUUHFHQW
    \HDUV 0RUHRYHU PRVW RI WKH XUEDQ VWXGLHV DUH XVLQJ PRGHUDWH UHVROXWLRQ LPDJHV DQG SL[HO EDVHG
    FODVVLILFDWLRQPHWKRGVWRDQDO\VHWKHODQGFRYHUXVHFKDQJH <XDQHWDO2OXVH\L%HODO 
    0RJKDQP=DNLHWDO +HQFHWKLVVWXG\KDVXVHGVXSHUYLVHGFODVVLILFDWLRQDWSL[HOOHYHO

     6XSHUYLVHGFODVVLILFDWLRQXVLQJPD[LPXPOLNHOLKRRG
    6XSHUYLVHGFODVVLILFDWLRQLVGHYHORSHGIRUVDWHOOLWHLPDJHSURFHVVLQJDQGLWKDVEHHQZLGHO\DSSOLHGWR
    FODVVLI\WKHVSHFWUDOOD\HUV,QVXSHUYLVHGFODVVLILFDWLRQRQHRIWKHXQGHUO\LQJUHTXLUHPHQWLVWKDWWKH
    DQDO\VWVKRXOGKDYHVXIILFLHQWQXPEHURINQRZQSL[HOVWRDOORZFRUUHFWFODVVLILFDWLRQ 5LFKDUGV 
    ,W LV GHSHQGHQW RQ WKH H[SHULHQFH DQG DELOLW\ RI WKH XVHU LQ GHWHFWLQJ WKH VLJQDWXUH GLIIHUHQFHV
    DFFXUDWHO\EHWZHHQYDULRXVODQGFRYHUVLQWKHVDWHOOLWHLPDJHXVLQJKLVKHUEDUHH\HV =DNLHWDO 
    0RUHRYHUVHOHFWLRQRIJURXQG WUXWKSRLQWVDQGORFDONQRZOHGJH RQODQGFRYHUVDUHDOVR LPSRUWDQW
    UHTXLUHPHQWVRIVXSHUYLVHGFODVVLILFDWLRQ
    
    7KH PD[LPXP OLNHOLKRRG FODVVLILHU LV FRPPRQO\ XVHG LQ SUDFWLFH EHFDXVH RI LWV UREXVWQHVV DQG LWV
    HDV\ DYDLODELOLW\ LQ DOPRVW DQ\ LPDJHSURFHVVLQJVRIWZDUH /X :HQJ  6RPH UHVHDUFKHV OLNH
    %RRWK 2OGILHOG  /X :HQJ  KDYHFRPSDUHGGLIIHUHQWLPDJHFODVVLILFDWLRQPHWKRGV
    DQGXVHGPD[LPXPFODVVLILFDWLRQDVDQVWDQGDUGDOJRULWKP WRFRPSDUHWKHUHVXOWRIGLIIHUHQWRWKHU
    DOJRULWKPV %RRWK  2OGILHOG   FRQFOXGH WKDW  PD[LPXP OLNHOLKRRG FODVVLILHU LV WKH PRVW
    DFFXUDWHDOJRULWKPLQFRPSDULVLRQWRGLFLVLRQWUHHPLQLPXPGLVWDQFHDQGGHYLDQWGLVWDQFHDOWKRXJK
    LW UHTXLUHV UHODWLYHO\ PRUH SURFHVVLQJ WLPH 6LPLODUO\ PDQ\ XUEDQ JURZWK VWXGLHV OLNH 0DNWDY 
    (UEHN  <XDQHWDO  2OXVH\L  ;LDRHWDO  %HODO 0RJKDQP  =DNLHW
    DO  KDYH DSSOLHG WKLVPHWKRG WR FODVVLI\ PXOWLWHPSRUDO LPDJHVWR JHW ODQGFRYHU FODVVHV6R
    PD[LPXPOLNHOLKRRGLVRQHRIWKHFRPPRQPHWKRGVLQWKHSUDFWLFH

     $FFXUDF\DVVHVVPHQWRIFODVVLILHGLPDJHULHV
    2QH RI WKH LPSRUWDQW VWHSV DIWHU SHUIRUPLQJ DQ LPDJH FODVVLILFDWLRQ LV WKH HYDOXDWLRQ RI WKH
    FODVVLILFDWLRQUHVXOWV&RQJDOWRQ  FLWHGE\=DNLHWDO  GHILQHGWKHDFFXUDF\DVVHVVPHQWDV
    WKH DJUHHPHQW EHWZHHQ WKHUHPRWH VHQVLQJ GDWD DQG WKH UHIHUHQFH LQIRUPDWLRQ 7KHUH DUH GLIIHUHQW
    DSSURDFKHVRIDFFXUDF\DVVHVVPHQWUDQJLQJIURPDTXDOLWDWLYHHYDOXDWLRQEDVHGRQH[SHUWNQRZOHGJH
    WRDTXDQWLWDWLYHDFFXUDF\DVVHVVPHQWEDVHGRQVDPSOLQJVWUDWHJLHV /X :HQJ $PRQJWKHP
    DQ HUURU PDWUL[ DSSURDFK LV WKH FRPPRQO\ XVHG LQ DFFXUDF\ DVVHVVPHQW )RRG\   7KH HUURU
    PDWUL[FRPSDUHVLQIRUPDWLRQIURPDFODVVLILHGLPDJHRUODQGFRYHUPDSWRNQRZQUHIHUHQFH WUXWK 
    VLWHVIRUDQXPEHURIVDPSOHSRLQWV =DNLHWDO ,WWDEXODWHVWKHRYHUDOODFFXUDF\DQGGHWHUPLQHV
    HUURUV GXH WR RPLVVLRQ SURGXFHU DFFXUDF\  DQG HUURU GXH WR FRPPLVVLRQ XVHU DFFXUDF\  (UURU RI
    RPLVVLRQLQGLFDWHV KRZPDQ\SL[HOVRQWKHPDSIRUDJLYHQFODVVDUHDFWXDOO\ZKDWWKH\DUHRQWKH
    JURXQG,WLVFDOFXODWHGE\GLYLGLQJWKHQXPEHURIFRUUHFWUHIHUHQFHVLWHIRUDFODVVE\WRWDOQXPEHURI
    UHIHUHQFHVLWHVWKDWZHUHFODVVLILHGLQWKDWFODVV(UURURIFRPPLVVLRQLQGLFDWHVKRZPDQ\SL[HOVRQ
    WKHPDSIRUDJLYHQFODVVDUHFRUUHFWO\FODVVLILHGRXWRIWRWDOUHIHUHQFHVLWHV,WLVFDOFXODWHGE\GLYLGLQJ
    WKH WRWDO QXPEHU RI FRUUHFWO\ FODVVLILHG SL[HOV E\ WKH WRWDO QXPEHU RI UHIHUHQFH VLWHV IRU HDFK ODQG
    FRYHUFODVV
    
    $ QXPEHU RI UHVHDUFKHUV KDYH XVHG WKH HUURU PDWUL[ WR DVVHVV WKH DFFXUDF\ OHYHO RI FODVVLILHG
    LPDJHULHV)RULQVWDQFH0DNWDY (UEHN  <XDQHWDO  2OXVH\L  ;XHWDO  
    %HODO 0RJKDQP  =DNLHWDO  KDYHXVHGPXOWLWHPSRUDO/DQGVDWLPDJHULHVWRH[DPLQH
    WKHFKDQJHVLQODQGFRYHUSDWWHUQRYHUDFHUWDLQSHULRGDQGDOOWKHVHZRUNVKDYHREWDLQHGDFFXUDF\
    OHYHOVEHWZHHQWRDIWHUFODVVLILFDWLRQXVLQJWRODQGFRYHUFODVVHV

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

     &KDQJHGHWHFWLRQ
    &KDQJHGHWHFWLRQLVWKHSURFHVVRIGHWHUPLQLQJRUDQDO\VLQJFKDQJHLQODQGFRYHUSURSHUWLHVEDVHGRQ
    FRUHJLVWHUHGPXOWLWHPSRUDOUHPRWHVHQVLQJGDWD %HODO 0RJKDQP 7KHUHDUHORWVRIFKDQJH
    GHWHFWLRQPHWKRGVVXFKDV,PDJHGLIIHUHQFLQJ,PDJHUHJUHVVLRQ,PDJHUDWLRQLQJ9HJHWDWLRQLQGH[
    GLIIHUHQFLQJ3ULQFLSDOFRPSRQHQWVDQDO\VLV 3&$ DQG3RVWFODVVLILFDWLRQFRPSDULVRQ 6LQJK 
    $PRQJWKHPSRVWFODVVLILFDWLRQFRPSDULVRQLVRQHRIWKHPRVWFRPPRQO\XVHGPHWKRGVRIFKDQJH
    GHWHFWLRQ 6LQJK  <XDQ HW DO  %HODO  0RJKDQP  =DNL HW DO   7KH SRVW
    FODVVLILFDWLRQ DSSURDFK SURYLGHV ¶¶IURP²WR·· FKDQJH LQIRUPDWLRQ DQG WKH NLQG RI ODQG FRYHU
    WUDQVIRUPDWLRQVWKDWKDYHRFFXUUHGFDQEHHDVLO\FDOFXODWHGDQGPDSSHG <XDQHWDO 

     'ULYLQJIDFWRUVRIXUEDQJURZWK
    8UEDQ JURZWK DQG ODQG XVH FKDQJH FDXVH YDULRXV LPSDFWV RQ VRFLDO HFRQRPLF DQG HQYLURQPHQWDO
    DVSHFWV6RLWLVYHU\LPSRUWDQWWRXQGHUVWDQGWKHVSDWLDODQGWHPSRUDOG\QDPLFVRIWKHVHSURFHVVHV
    ,QRUGHUWRXQGHUVWDQGWKHVHSURFHVVHVWKHIDFWRUVWKDWGULYHXUEDQGHYHORSPHQWPXVWEHLGHQWLILHG
    DQGDQDO\]HGHVSHFLDOO\WKRVHIDFWRUVWKDWFDQEHXVHGWRIRUHFDVWIXWXUHFKDQJHV $JXD\RHWDO 
    )URP WKH OLWHUDWXUH RI $OOHQ  /X  )DQJ HW DO  +X  /R  3UL\DQWR   DQG
    7KDSD 0XUD\DPD  VLPLODUGULYLQJIDFWRUVFDQEHHQIRXQGZKLFKDUHJURXSHGWRJHWKHULQWR
    VHYHQ PDMRU W\SHV LQFOXGLQJ ELRSK\VLFDO IDFWRUV SRSXODWLRQ JURZWK HFRQRPLF SUR[LPDWH FDXVHV
    H[LVWLQJFRQGLWLRQVSODQVDQGSROLFLHVDQGWKHSROLWLFDOVLWXDWLRQDVVKRZQLQ7DEOH7KHGHJUHHWR
    ZKLFKWKH\FRQWULEXWHWRXUEDQJURZWKGHSHQGVXSRQWKHORFDOFRQWH[WKRZHYHULWFDQEHVHHQWKDWDOO
    WKHGULYLQJIDFWRUVDIIHFWWKHXUEDQODQGFRYHUWRDFHUWDLQH[WHQW
    
    %LRSK\VLFDO IDFWRUV UHIHU WR FKDUDFWHULVWLFV DQG SURFHVVHV RI WKH QDWXUDO HQYLURQPHQW VXFK DV FOLPDWH
    YDULDWLRQODQGIRUPWRSRJUDSK\VRLOW\SHVGUDLQDJHSDWWHUQVDQGWKHDYDLODELOLW\RIQDWXUDOUHVRXUFHV
    7KHVHFKDUDFWHULVWLFVXVXDOO\DIIHFWWKHXUEDQJURZWKSDWWHUQEDVHGRQVXLWDELOLW\RIODQGIRUVSHFLILF
    SXUSRVH (FRQRPLF IDFWRUV LQFOXGH D ZLGH UDQJH RI HFRQRPLF DFWLYLWLHV VXFK DV MRE DQG EXVLQHVV
    RSSRUWXQLWLHV LQGXVWULHV HWF 3UL\DQWR  7KDSD  0XUD\DPD   *HQHUDOO\ QHZ HFRQRPLF
    DFWLYLWLHV HPHUJH DURXQG H[LVWLQJ HFRQRPLF FHQWUH IRU WKH VDNH RI HFRQRPLF DJJORPHUDWLRQ DQG
    PDUNHW FRPSHWLWLRQ ZKHUHDV FRPSDQLHV WKDW QHHG VSDFLRXV VLWHV VXFK DV XQLYHUVLW\ FDPSXVHV DQG
    LQGXVWULHVRIWHQVHWWOHLQXUEDQIULQJHV .LYHOO 3UR[LPDOFDXVHVDUHZLGHO\PHQWLRQHGLQPRVWRI
    WKH OLWHUDWXUH 7KH DUHD ZKLFK LV ORFDWHG LQ WKH SUR[LPLW\ RI LQIUDVWUXFWXUH PDMRU URDGV DQG ULYHUV
    FHQWUDO EXVLQHVV GLVWULFWV SXEOLF VHUYLFHV HWFWHQGV WR JURZLQ IXWXUH GXH WR SRWHQWLDO EHQHILWV OLNH
    HDVHRIDFFHVVHFRQRPLFRSSRUWXQLWLHVVRFLDOVHUYLFHVHWF3RSXODWLRQJURZWKLVDOVRVHHQDVRQHRIWKH
    PDMRU GULYLQJ IDFWRUV WKDW JXLGH XUEDQ H[SDQVLRQ GXH WR QHZ VHWWOHPHQW GHYHORSPHQW DURXQG WKH
    PDLQFLW\FHQWUH )DQJHWDO2OXVH\L;LDRHWDO 3ODQVDQGSROLFLHVLQFOXGLQJODQGXVH
    ]RQLQJ WUDQVSRUWDWLRQ SROLF\ GHYHORSPHQW FRQWURO DQG LQYHVWPHQW SODQV DUH DOVR FRQVLGHUHG DV
    GULYLQJ IDFWRUV WKDW KDYH KLJK FDSDELOLW\ WR GLUHFW WKH IXWXUH JURZWK SDWWHUQ .LYHOO   7KH
    SURSRUWLRQRIH[LVWLQJXUEDQDUHDDOVRKDVDELJLQIOXHQFHRQIXWXUHODQGXVH7KHSUREDELOLW\RIODQGXVH
    FKDQJHDWDFHUWDLQORFDWLRQLVKLJKO\GHWHUPLQHGE\SURSRUWLRQRIEXLOWXSDUHDLQWKHVXUURXQGLQJ
    )RUH[DPSOHH[LVWLQJHFRORJLFDOFXOWXUDOZDWHUDQGWUDQVSRUWQHWZRUNVKLJKO\LQIOXHQFHWKHFKRLFHRI
    ORFDWLRQ IRU QHZ GHYHORSPHQWV 3ROLWLFDO VLWXDWLRQ LGHQWLILHG E\ 7KDSD  0XUD\DPD   DOVR FDQ
    LQIOXHQFHRQ VDIHW\RIWKHUHJLRQZKLFK FDQDIIHFWWKHXUEDQJURZWKDVZHOO,WLVKXPDQQDWXUHWR
    FKRRVHWKHVDIHORFDWLRQWREXLOGWKHLUKRXVHWKHUH6RLIWKHFLW\LVSROLWLFDOO\XQVWDEOHDQGWKHUHLVWKH
    SUREOHP RI VRFLDO VDIHW\ DQG VHFXULW\ XUEDQ JURZWK WHQGV WR GHFUHDVH &RQYHUVHO\ XUEDQ JURZWK
    WHQGV WR LQFUHDVH LQ VDIHU ORFDWLRQV 7KHUHIRUH WKH LQIOXHQFH RI GULYLQJ IDFWRUV RQ XUEDQ JURZWK
    GHSHQGVXSRQWKHFRQWH[W

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    
    ,Q RUGHU WR DFTXLUH D JRRG XQGHUVWDQGLQJ RI WKH UHODWLRQVKLS EHWZHHQ GULYLQJ IDFWRUV DQG ODQG XVH
    FKDQJH$OOHQ /X  )DQJHWDO  +X /R  DQG3UL\DQWR  KDYHDQDO\VHGWKH
    VSDWLRWHPSRUDO FKDQJHV LQ XUEDQ ODQG XVH E\ XVLQJ ORJLVWLF UHJUHVVLRQ PRGHO VHH 7DEOH   )RU
    LQVWDQFH3UL\DQWR  XVHGTXDOLWDWLYHDVZHOODVTXDQWLWDWLYHDSSURDFKWRLGHQWLI\DQGDQDO\VHWKH
    GULYLQJ IDFWRUV 7KH TXDOLWDWLYH DSSURDFK ZDV XVHG WR LGHQWLI\ WKH XQGHUO\LQJ IDFWRUV RI ODQG XVH
    FKDQJH E\ DQDO\VLQJ FDXVHHIIHFW LQWHUUHODWLRQVKLS EHWZHHQ GULYLQJ IRUFHV SUHVVXUH VWDWHV LPSDFWV
    DQGUHVSRQVHV '63,5 7KLVDSSURDFKLVWKHQIROORZHGE\ORJLVWLFUHJUHVVLRQDQDO\VLVZKLFKLVXVHG
    WRH[DPLQHWKHUHODWLRQEHWZHHQODQGXVHDQGSRVVLEOHGULYLQJIDFWRUV6LPLODUO\7KDSD 0XUD\DPD
      FRQVLGHUHG WKH ORFDO UHVLGHQWV UHVHDUFKHUV XUEDQ DQG UHJLRQDO SODQQHUV DQG DFDGHPLFV
    ZRUNLQJLQGLYHUVLILHGGLVFLSOLQHVDV ORFDOH[SHUWVDQGFRQGXFWHGJURXSGLVFXVVLRQVLQWHUYLHZVDQG
    OLWHUDWXUHUHYLHZIRULGHQWLI\LQJWKHGULYLQJIDFWRUVRIXUEDQJURZWKLQWKHODVWGHFDGHLQ.DWKPDQGX
    YDOOH\7KHUHODWLYHLPSRUWDQFHRIHDFKIDFWRUZDVHYDOXDWHGXVLQJWKH$QDO\WLFDO+LHUDUFK\SURFHVV
    $+3 IUDPHZRUN$+3LVZLGHO\XVHGPXOWLFULWHULDHYDOXDWLRQWHFKQLTXHZKLFKLVXVHGIRUGHFLVLRQ
    PDNLQJSURFHVVLQFOXGLQJPXOWLSOHDFWRUVVFHQDULRVDQGFULWHULD %DJKHULHWDO ,WFRQVWUXFWVD
    UDWLRVFDOHDVVRFLDWHGZLWKSULRULWLHVIRUWKHYDULRXVIDFWRUVFRPSDUHG
    
    7DEOHVKRZVWKDWGLIIHUHQWDXWKRUVKDYHXVHGGLIIHUHQWVSDWLDOUHVROXWLRQGHSHQGLQJRQWKHVL]HRI
    VWXG\DUHDWRDQDO\VHWKHXUEDQJURZWKRIWKHVWXG\DUHD7KHUHVROXWLRQYDULHVIURPP[PWR
    P[PSL[HOVL]HDQGWKHVWXG\DUHDYDULHVIURPNPWRNP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    
    
    
    
    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    7DEOH2YHUYLHZRIGULYLQJIDFWRUV

    )DFWRUV $OOHQ /X  )DQJHWDO  +X /R  3UL\DQWR  7KDSD 0XUD\DPD


     
    %LRSK\VLFDO 6ORSHIRUHVWZHWODQG 'HJUHHRIVWHHSQHVVIRUHVW 6ORSHSHUFHQWDJH (OHYDWLRQ 6ORSHVRLOULYHU
    FKDUDFWHU ZDWHUIURQW ULYHUVDQGODNHV
    3RSXODWLRQJURZWK 3RSXODWLRQGHQVLW\ 3RSXODWLRQGHQVLW\ 3RSXODWLRQGHQVLW\ $QQXDOSRSXODWLRQJURZWK +LJK3RSXODWLRQLQIOX[
    3ODQVDQGSROLFLHV &RUSRUDWHERXQGDU\DQG &LW\GHYHORSPHQWSROLF\   =RQLQJODQGUHIRUP
    SURWHFWHGODQGV 3ROLF\WRSUHVHUYHIDUPODQG LQYHVWPHQWSODQVODQG
    GHYHORSPHQWSODQV
    3UR[LPDWHFDXVHV 'LVWDQFHWRPDMRUURDGV 3UR[LPLW\WRFRXQWU\URDG 'LVWDQFHWR&%' 3ULPDU\URDGSUR[LPLW\ 3XEOLFVHUYLFH
     'LVWDQFHWRPDMRUQRGHV 3UR[LPLW\WRPDMRUURDG 'LVWDQFHWRDFWLYHHFRQRPLF 6HFRQGDU\URDGSUR[LPLW\ DFFHVVLELOLW\OLNH
     $FFHVVLELOLW\WRZDWHUOLQHV LQWHUVHFWLRQ FHQWUHV 3XEOLFIDFLOLWLHVSUR[LPLW\ WUDQVSRUWDWLRQ
     DQGVHZHUOLQH 3UR[LPLW\WRVWDWHKLJKZD\  (GXFDWLRQDOIDFLOLWLHV HOHFWULFLW\HGXFDWLRQ
     'LVWDQFHWR&%' 3UR[LPLW\WRVHZDJHZDWHU SUR[LPLW\ GULQNLQJZDWHUKHDOWK
     VXSSO\DQGHOHFWULFLW\ +HDOWKIDFLOLWLHVSUR[LPLW\ VHUYLFHVFRPPHUFLDO
     &HQWUDOEXVLQHVVGLVWULFW VHUYLFHVZDVWHGLVSRVDO
    DFFHVVLELOLW\ RSHQVSDFHVDQG
    0DMRUULYHUSUR[LPLW\ UHFUHDWLRQDOIDFLOLWLHV

    ([LVWLQJFRQGLWLRQV 'LVWDQFHWRH[LVWLQJXUEDQ 1RRILPPHGLDWHKRXVHV 'LVWDQFHWRQHDUHVWXUEDQFOXVWHU ([LVWLQJXUEDQDUHDV 


    FOXVWHU 1RRIXUEDQFHOOVZLWKLQE\FHOO ([LVWLQJDJULFXOWXUDODUHDV
    ZLQGRZ ([LVWLQJSRQGV
    (FRQRPLFIDFWRUV   3HUFDSLWDLQFRPH(PSOR\PHQW  -REVDQGEXVLQHVV
    UDWH3RYHUW\UDWH RSSRUWXQLWLHVLQGXVWULHV
    3ROLWLFDOVLWXDWLRQ     6DIHW\
    
    7DEOH0HWKRGXVHGWRGHWHUPLQHGULYLQJIDFWRUV
    $XWKRUV $OOHQ /X  )DQJHWDO +X /R  3UL\DQWR  7KDSD 0XUD\DPD
     
    0HWKRGV ,QWHJUDWHG*,6PRGHO /RJLVWLFUHJUHVVLRQDQDO\VLV /RJLVWLFUHJUHVVLRQDQDO\VLV /RJLVWLF UHJUHVVLRQ DQDO\VLV $QDO\WLFDO KLHUDUFK\
    DQG'63,5 SURFHVV
    6SDWLDOUHVROXWLRQ [PHWUHV PïPSL[HO PïPSL[HO PïPSL[HO PïPSL[HO
    6WXG\6LWHDUHD  VTNP VTNP VTNP VTNP
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

     8UEDQJURZWKPRGHOV
    
    $QLPSRUWDQWVWHSWRXQGHUVWDQGWKHXUEDQJURZWKSDWWHUQRIWKHFLWLHVLVWRTXDQWLI\WKHXUEDQJURZWK
    DQG LWV VSDWLRWHPSRUDO G\QDPLFV %HUOLQJ:ROII  :X   8UEDQ JURZWK PRGHOV FDQ SOD\ DQ
    LPSRUWDQW UROH LQ WKLV SURFHVV 6HYHUDO PRGHOV KDYH EHHQ GHYHORSHG VLQFH V E\ XUEDQ SODQQHUV
    JHRJUDSKHUV DQG HFRORJLVW %HUOLQJ:ROII  :X   )RU LQVWDQFH &HOOXODU $XWRPDWD &$  VSDWLDO
    VWDWLVWLFDOPRGHOVDJHQWEDVHGPRGHOV $%0 DUWLILFLDOQHXWUDOQHWZRUN $11 IUDFWDOEDVHGPRGHOLQJ
    DQG&KDRWLFDQG&DWDVWURSKHPRGHOLQJ &KHQJHWDO DUHVRPHRIWKHVHPRGHOLQJWHFKQLTXHVWKDW
    DUH FRQFHUQHG ZLWK VLPXODWLQJ DQG IRUHFDVWLQJ IXWXUH XUEDQ JURZWK :X HW DO    %DVLFDOO\ WKHVH
    PRGHOV FDQ EH URXJKO\ JURXSHG WRJHWKHU LQWR WKUHH W\SHV HPSLULFDO HVWLPDWLRQ PRGHOV G\QDPLF
    VLPXODWLRQ PRGHOV DQG UXOH EDVHG VLPXODWLRQ PRGHOV +X  /R  =HQJ HW DO   7KH EULHI
    H[SODQDWLRQV RI WKH PRVW FRPPRQO\ XVHG PRGHOOLQJ WHFKQLTXHV DUH GHVFULEHG EHORZ DORQJ ZLWK WKHLU
    VWUHQJWKDQGZHDNQHVV
    
    D  5XOH EDVHG VLPXODWLRQ PRGHO $PRQJ UXOH EDVHG PRGHOV &HOOXODU DXWRPDWD &$  LV RQH RI WKH
    ZLGHO\ XVHG VLPXODWLRQ PRGHO WKDW FRQVLVWV RI D ODWWLFH RI GLVFUHWH FHOOV %DVHG RQ WUDQVLWLRQ UXOHV DQG
    QHLJKERXUKRRGFHOOVWDWHWKHFHOOGHWHUPLQHVZKHWKHURUQRWWRFKDQJHIURPRQHVWDWHWRDQRWKHU2QH
    RIWKHDGYDQWDJHVRI&$PRGHOVLVWKDWWKH\DUHLQKHUHQWO\VSDWLDODQGG\QDPLF :KLWH (QJHOHQ 
    ,QDGGLWLRQWKH\DUHVLPSOHDQGKLJKO\DGDSWDEOH+RZHYHU:XHWDO  DUJXHWKDW&$PRGHOVIRFXV
    RQWKHVLPXODWLRQRIVSDWLDOSDWWHUQUDWKHUWKDQLQWHUSUHWDWLRQRIVSDWLRWHPSRUDOSURFHVVHVRIODQGXVH
    FKDQJH7KHRXWSXWIURPWKLVW\SHRIPRGHOVJLYHVDPDSVKRZLQJVLPXODWHGODQGFRYHUSDWWHUQ
    
    E '\QDPLFVLPXODWLRQPRGHOV 6\VWHPG\QDPLFVPRGHOLQJ 6'  LV RQHRIWKHFRPPRQWHFKQLTXHV
    XVHG IRU XQGHUVWDQGLQJ FRPSOH[ SKHQRPHQRQ DQG SUREOHPV WKURXJK G\QDPLF VLPXODWLRQ ,W LV DQ
    DSSURDFKWKDWFDQKHOSWKHXUEDQSODQQHUVDQGPDQDJHUVWRPHHWWKHFKDOOHQJHVRIGHFLVLRQPDNLQJDQG
    SROLF\ IRUPXODWLRQ IRU WKH GHYHORSPHQW RI D V\VWHP 6RQDU   7KH PRGHO FDQ DUUDQJH DV ZHOO DV
    GHVFULEH WKH FRPSOH[ FRQQHFWLRQV DPRQJ HDFK HOHPHQW LQ GLIIHUHQW OHYHOV DQG LW FDQ DOVR GHDO ZLWK
    G\QDPLFSURFHVVHVZLWKIHHGEDFNLQDV\VWHP +HHWDOD +RZHYHU6'PRGHO·VDELOLW\WRUHSUHVHQW
    WKH VSDWLDO SURFHVV RI ODQG XVH LV ZHDN EHFDXVH LW FDQ QRW GHDO ZLWK VSDWLDO GDWD ZHOO DQG FDQ QRW
    HIIHFWLYHO\GHVFULEHWKHGHWDLOHGGLVWULEXWLRQDQGVLWXDWLRQVRIWKHVSDWLDOIDFWRUVLQWKHODQGV\VWHP *XR
    HW DO   ,W FRQWDLQV D ODUJH DPRXQW RI XQFHUWDLQW\ EHFDXVH RI WRR PDQ\ DVVXPSWLRQV DQG
    JHQHUDOLVDWLRQ RI IDFWRUV ZKLOH SUHGLFWLQJ FRPSOH[ XUEDQ SUREOHPV ZKLFK PD\ OHDG WR ZURQJ
    LQWHUSUHWDWLRQ RI WKH UHVXOW ,W KHOSV WR SUHGLFW IXWXUH GHYHORSPHQW VFHQDULRV RI XUEDQ ODQG XVH
    SKHQRPHQRQDQGJLYHVRXWSXWLQWKHIRUPRIVLPXODWHGODQGFRYHUPDS
    
    F  (PSLULFDO HVWLPDWLRQ PRGHOV 7KHVH PRGHOV XVH VWDWLVWLFDO WHFKQLTXHV WR PRGHO WKH UHODWLRQVKLS
    EHWZHHQ ODQG XVH FKDQJH DQG WKH GULYHUV EDVHG RQ KLVWRULFDO GDWD +X  /R   $V DQ HPSLULFDO
    HVWLPDWLRQ PRGHO WKH ORJLVWLF UHJUHVVLRQ PHWKRGV KDYH EHHQ FODLPHG DV DQ HIIHFWLYH WRRO IRU
    XQGHUVWDQGLQJ ODQG XVH FKDQJH GXH WR LWV H[SODQDWRU\ SRZHU DQG VSDWLDO H[SOLFLWQHVV ,W FDQ UHDGLO\
    LGHQWLI\WKHGULYLQJIDFWRUVRIODQGXVHFKDQJHDQGSURYLGHVLQIRUPDWLRQDERXWWKHGHJUHHRIFRQILGHQFH
    UHJDUGLQJ WKHLU FRQWULEXWLRQ +X  /R   ,Q DGGLWLRQ FRPSXWDWLRQ UHTXLUHPHQWV IRU WKLV W\SH RI
    PRGHOV DUH QRW DV LQWHQVLYH DV IRU &$ PRGHOV DQG LQSXW GDWD UHTXLUHPHQW DUH UHODWLYHO\ HDV\ WR IXOILO
    PDNLQJWKHPHVSHFLDOO\XVHIXOLQWKRVHSODFHVZKHUHGDWDLVVFDUH 'XERY\NHWDO +RZHYHURQH
    RIWKHPDMRUGUDZEDFNVRIWKHVHPRGHOVLVWKDWWKH\ODFNWKHXQGHUVWDQGLQJRQVLPXODWLRQSURFHVVWKDW

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    LQIOXHQFHVWKHODQGXVHSURFHVV7KHRXWSXWIURPWKLVW\SHRIPRGHOVJLYHVDPDSVKRZLQJSUREDELOLW\RI
    ODQGXVHFRYHUFKDQJH
    
    7DEOH$GYDQWDJHVDQGGLVDGYDQWDJHVRIXUEDQJURZWKPRGHOV

    0RGHOV $GYDQWDJHV 'LVDGYDQWDJHV


    &HOOXODUDXWRPDWD 6LPSOHDQGKLJKO\DGDSWDEOH 'RHVQRWLQWHUSUHWVSDWLRWHPSRUDO
    :KLWH (QJHOHQ:XHW ,QKHUHQWO\VSDWLDODQGG\QDPLF SURFHVVHVRIODQGXVHFKDQJH
    DO 
    6\VWHPG\QDPLFPRGHO 8QGHUVWDQGVFRPSOH[SKHQRPHQRQDQG &DQ QRW HIIHFWLYHO\ GHVFULEH WKH
    *XR HW DO  +H HW DO SUREOHPVWKURXJKG\QDPLFVLPXODWLRQ GHWDLOHG GLVWULEXWLRQ DQG VLWXDWLRQV
    E6RQDU  $UUDQJHDVZHOODVGHVFULEHWKHFRPSOH[ RI WKH VSDWLDO IDFWRUV LQ WKH ODQG
    FRQQHFWLRQV DPRQJ HDFK HOHPHQW LQ V\VWHP
    GLIIHUHQWOHYHOV /DUJH DPRXQW RI XQFHUWDLQW\ ZKLOH
    SUHGLFWLQJFRPSOH[XUEDQSUREOHPV
    /RJLFDOUHJUHVVLRQ 5HTXLUHVUHODWLYHO\OHVVGDWD /DFN WKH XQGHUVWDQGLQJ RQ
    +X  /R  'XERY\N HW *LYHV DQ XQGHUVWDQGLQJ RI UHODWLRQVKLS VLPXODWLRQ SURFHVV WKDW LQIOXHQFHV
    DO  EHWZHHQ XUEDQ JURZWK DQG GULYLQJ WKHODQGXVHSURFHVV
    IDFWRUV  'RHV QRW LQFRUSRUDWH WHPSRUDO
    &RPSXWDWLRQ   UHTXLUHPHQWV IRU WKLV G\QDPLFVRIXUEDQJURZWK
    W\SH RI PRGHO DUH QRW DV LQWHQVLYH DV LQ
    &$PRGHO
    
    $FFRUGLQJWR7DEOHVWDWLVWLFDOPRGHOVHHPVWREHDQHIIHFWLYHWRROWRPRGHOXUEDQJURZWKLQVSLWHRI
    VRPHOLPLWDWLRQEHFDXVHLWJLYHVWKHNQRZOHGJHRIPRVWVLJQLILFDQWGULYLQJIDFWRUVRIXUEDQJURZWKWKHLU
    GHJUHHRILQIOXHQFHDQGWKHLUUHODWLRQVKLSZLWKXUEDQJURZWK6RLQRUGHUWRXQGHUVWDQGWKHUHODWLRQVKLS
    EHWZHHQ XUEDQ JURZWK DQG GULYLQJ IDFWRUV WKLV UHVHDUFK ZLOO XVH VWDWLVWLFDO EDVHG ORJLVWLF UHJUHVVLRQ
    PRGHO7KHIROORZLQJVHFWLRQSURYLGHVGHWDLOH[SODQDWLRQRIWKLVPRGHO

     0RGHOLQJXUEDQJURZWKXVLQJ/RJLVWLFUHJUHVVLRQPRGHO
    
    /RJLVWLF UHJUHVVLRQ PRGHO LV D W\SH RI PXOWLYDULDWH DQDO\VLV PRGHOZKLFKZDV GHYHORSHG E\ 0F)DGGHQ
      7KLV PRGHO LV FRQFHSWXDOO\ EDVHG RQ WKH UDQGRP XWLOLW\ WKHRU\ DQG GLVFUHWH FKRLFH WKHRU\ LQ
    XUEDQHFRQRPLFVDQGEHKDYLRXUVFLHQFH $OOHQ /X ,QJHQHUDOWKHUHDUHWZRPRGHOVRIORJLVWLF
    UHJUHVVLRQQDPHO\PXOWLQRPLDOORJLVWLFUHJUHVVLRQDQGELQRPLDOELQDU\ORJLVWLFUHJUHVVLRQ
    
    D 0XOWLQRPLDOORJLVWLFUHJUHVVLRQ
    0XOWLQRPLDO ORJLVWLF UHJUHVVLRQ LV W\SLFDOO\ XVHG ZKHQ GHSHQGHQW YDULDEOH FRPSULVH RI PRUH WKDQ WZR
    SRVVLEOHFDVHV $QGHUVRQ 7KHWHUPGHSHQGHQWYDULDEOHPHDQVRXWFRPHYDULDEOHVZKLFKDUHJRLQJ
    WREHDQDO\]HGIRUH[DPSOHW\SHVRIODQGFRYHUVLQODQGFRYHUFKDQJHDQDO\VLV7KLVPRGHOLVDOVRUHIHUUHG
    DV/RJLWUHJUHVVLRQPRGHO0XOWLQRPLDOORJLVWLFUHJUHVVLRQKDVYHU\VLPLODUUHVXOWVWRELQDU\ORJLVWLFUHJUHVVLRQ
    $QGHUVRQ 
    
    E %LQRPLDO%LQDU\ORJLVWLFUHJUHVVLRQ
    :KHQ WKH GHSHQGHQW YDULDEOH LV GLFKRWRPRXV FDWHJRULFDO  DQG WKH LQGHSHQGHQW YDULDEOHV DUH HLWKHU
    FRQWLQXRXVRUFDWHJRULFDOWKHQELQDU\ORJLVWLFUHJUHVVLRQLVXVHG $QGHUVRQ ,WLVXVHGIRUELQDU\
    UHVSRQVHYDULDEOHVKDYLQJRQO\WZRSRVVLEOHRXWFRPHVIRU HJ<HVRU1R8UEDQRU1RWXUEDQ3UHVHQW
    RU$EVHQWHWF7KHWHUPLQGHSHQGHQWYDULDEOHVPHDQH[SODQDWRU\YDULDEOHVRUSUHGLFWRUYDULDEOHV
     

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

     ([DPSOHRIUHVHDUFKHVXVLQJORJLVWLFUHJUHVVLRQPRGHO
    
    +X /R  LQKLVUHVHDUFKKDYHDSSOLHGELQRPLDOORJLVWLFUHJUHVVLRQPRGHOWRPRGHOXUEDQJURZWK
    DQG WR GLVFRYHU WKH UHODWLRQVKLS EHWZHHQ XUEDQ JURZWK DQG WKH GULYLQJ IDFWRUV LQ WKH $WODQWD
    0HWURSROLWDQ $UHD  7KH\ IRXQG WZR JURXSV RI IDFWRUV DIIHFWLQJ XUEDQ JURZWK LQ WKH UHJLRQ  
    SRSXODWLRQGHQVLW\GLVWDQFHVWRQHDUHVWXUEDQFOXVWHUVDFWLYLW\FHQWUHVDQGURDGVDQGKLJKORZGHQVLW\
    XUEDQXVHVDQG  GLVWDQFHWRWKH&%'QXPEHURIXUEDQFHOOVZLWKLQD[FHOOZLQGRZEDUHODQG
    FURSJUDVV ODQG DQG IRUHVW 7KH PRGHO ZDV  DFFXUDWH ZKLFK ZDV HYDOXDWHG E\ 5HODWLYH RSHUDWLQJ
    FKDUDFWHULVWLF 52&  FXUYH 7KH\ KDYH FRQFOXGHG WKDW ORJLVWLF UHJUHVVLRQ DOORZV PXFK GHHSHU
    XQGHUVWDQGLQJRIWKHIRUFHVGULYLQJWKHJURZWKDQGWKHIRUPDWLRQRIXUEDQVSDWLDOSDWWHUQ
    
    $QRWKHUH[DPSOHRIPRGHOLQJXUEDQJURZWKLVUHVHDUFKFRQGXFWHGE\)DQJHWDO  7KHVWXG\ZDV
    FRQGXFWHG RQ WKH VRXWKHDVW VLGH RI 3HRULD ,OOLQRLV 86$ 7KH PDLQ DLP RI VWXG\ ZDV WR GHWHUPLQH
    LQIOXHQFH RI LQGLYLGXDO IDFWRUV LQ WKH SUHGLFWLRQ RI WKH SUREDELOLW\ RI XUEDQ VSUDZO ,W DOVR WHVWHG WKH
    HIIHFW RI FRPELQLQJ D PXOWLQRPLDO ORJLVWLF PRGHO DQG FHOOXODU DXWRPDWD 7KH\ XVHG IDFWRUV VXFK DV
    ZHLJKWHG WUDYHO WLPH WR FLW\ FRXQWU\ URDG SUR[LPLW\ WR IRUHVW VORSH SUR[LPLW\ WR PDMRU URDG
    LQWHUVHFWLRQ SUR[LPLW\ WR ODNHV DQG ULYHUV XWLOLWLHV KLVWRULFDO JURZWK WUHQG QXPEHU RI LPPHGLDWH
    QHLJKERXUVDQGDJULFXOWXUDOSURWHFWLRQLQWKHORJLVWLFUHJUHVVLRQPRGHO$OWKRXJKWKHPRGHOVKRZHGWKDW
    WKHSUR[LPLW\WRURDGDQGKLVWRULFDOJURZWKWUHQGZHUHWKHPRVWVLJQLILFDQWIDFWRUVLWKDVDOVRYHULILHG
    WKDW DOO RWKHU IDFWRUV DUH JRRG WR H[SODLQ XUEDQ VSUDZO RI WKH UHJLRQ 7KH PRGHO ZDV HYDOXDWHG XVLQJ
    52&FXUYHDQGLWZDVDFFXUDWH
    
    $JXD\RHWDO  DOVRFRQVWUXFWHGPXOWLQRPLDOORJLVWLFUHJUHVVLRQPRGHOWRTXDQWLI\WKHUHODWLRQVKLS
    EHWZHHQXUEDQJURZWKDQGLWVGULYLQJIDFWRUVDQGWRSUHGLFWVSDWLDOJURZWKSDWWHUQIRUWKHFLW\RI/RV
    $QJHOHV LQ FHQWUDO &KLOH 7KUHH GLIIHUHQW PRGHOV ZHUH FRQVWUXFWHG IRU SUHGLFWLYH YDULDEOHV WKDW ZHUH
    JURXSHG WRJHWKHU LQWR WKUHH FDWHJRULHV   'LVWDQFH YDULDEOHV   1HLJKERXUKRRG YDULDEOHV DQG  
    (QYLURQPHQWDO YDULDEOHV 'LVWDQFH YDULDEOHV LQFOXGHG SUR[LPLW\ WR URDG QHWZRUNULYHUV DPHQLWLHV DQG
    VHUYLFHVUDLOZD\OLQHHWF1HLJKERXUKRRGYDULDEOHVLQFOXGHGGHQVLW\RIXUEDQURDGQHWZRUNXUEDQDUHD
    LQGXVWULDO DUHD HWF DQG HQYLURQPHQWDO YDULDEOHV LQFOXGHG HOHYDWLRQ VORSH DQG VRLO W\SH 7KH PRGHOV
    VKRZHG WKDW XUEDQ JURZWK RI /RV $QJHOHV LV KHDYLO\ GHSHQGHQW RQ GLVWDQFH IDFWRUV 6LPLODUO\ LW DOVR
    VKRZHGWKDWPRVWRIWKHJURZWKVDUHH[WHQGLQJIURPDOUHDG\H[LVWLQJXUEDQDUHDVLQDQLQILOOLQJPDQQHU
    7KHDFFXUDFLHVRIWKHVHPRGHOVZHUHHYDOXDWHGIURPFRHIILFLHQWRIGHWHUPLQDQW 5 WKDWVFRUHGDERYH
    

     &RQFOXGLQJUHPDUNV
    8UEDQJURZWKDQGLWVVSDWLDOSDWWHUQFDQEHHIIHFWLYHO\PRGHOOHGE\56DQG*,6WHFKQLTXHV,WKHOSVWR
    LGHQWLI\ DQG TXDQWLI\ WKH VSDWLRWHPSRUDO SURFHVV RI WKH XUEDQ JURZWK 0RUHRYHU WKHUH DUH GLIIHUHQW
    GULYHUVRIXUEDQJURZWKZKLFKFDQKDYHPDMRUDQGPLQRULQIOXHQFHLQWKHXUEDQJURZWK8UEDQJURZWK
    PRGHO SOD\V D VLJQLILFDQW UROH WR VWUXFWXUH WKH UHODWLRQVKLS EHWZHHQ GULYLQJ IDFWRUV RI XUEDQ JURZWK
    $PRQJVHYHUDOXUEDQJURZWKPRGHO/5FDQEHXVHGWRH[DPLQHWKHUHODWLRQVKLSEHWZHHQXUEDQJURZWK
    DQG GULYLQJIDFWRUVLQFOXGLQJWKHLUGHJUHHRILQIOXHQFH6RWKLVPRGHOKDVEHHQXVHGWRVXSSRUWXUEDQ
    JURZWKDQDO\VLVRIWKHVWXG\DUHD
    
    
    
    
     

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

     678'<$5($$1'0(7+2'2/2*<
    7KLV FKDSWHU LQWURGXFHV WKH VWXGG\ DUHD DQG SURYLGHV WKH LQIRUPDWLRQ DERXW GDWD VRXUFHV
    V DQG WKHLU
    PHWDGDWD,WSUHVHQWVPHWKRGVDQGGWRROVXVHGLQWKLVUHVHDUFKLQFOXGLQJWKHDSSURDFKR RITXDQWLI\LQJWKH
    XUEDQJURZWKWKHZD\WRGHWHUPLLQHGULYLQJIDFWRUVRIXUEDQJURZWKDQGWKHLGHQWLILFDDWLRQRISUREDEOH
    DUHDVRIIXWXUHXUEDQJURZWKXVLQJJORJLVWLFUHJUHVVLRQPRGHOLQGHWDLO

     6WXG\$UHD
    
    .DWKPDQGXYDOOH\LVVLWXDWHGEHWZ ZHHQƒȨȩWRƒȨȩ1RUWKODWLWXGHVDQGƒȨȩWRƒȨȩ
    (DVWORQJLWXGHV7KHYDOOH\PHDVXXUHVDERXWNPLQOHQJWKDQGNPLQZLGWKZLWKDQ QDYHUDJHDOWLWXGH
    RIPDERYHPHDQVHDOHYHO,WFRQVLVWVRIWKUHHGLVWULFWV.DWKPDQGXGLVWULFW/DWWLWSXUGLVWULFWDQG
    %KDNWDSXU GLVWULFWFRYHULQJ DQ DUUHD RI  NP 7KH YDOOH\ FRQVLVWV RI ILYH PXQLFLSDO XUEDQ FHQWHUV
    .DWKPDQGX/DWLWSXU%KDNWDSXU0DGK\DSXU7KLPLDQG.LUWLSXU7KHUHPDLQLQJDUHDDLVPDGHXSRID
     9LOODJH 'HYHORSPHQW &RPP PLWWHHV 9'&V  7KH RQO\ ULYHU GUDLQLQJ RXW WKH YDOOHH\ LV WKH%DJPDWL
    5LYHUZKLFKKDVEHHQVHUYLQJDVP PDMRUVRXUFHVRIGULQNLQJZDWHUDQGLUULJDWLRQWKURXJKR RXWWKH\HDU
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
     
     )LJXUH6WXG\DUHDEDVHGRQZDWHUV KHGERXQGDU\
    )LJXUH/RFDWLRQRI.DWKPDQGXYYDOOH\
    
    
    
    .DWKPDQGXYDOOH\KDVORQJEHHQ FHQWUHRISRZHUSROLWLFVFXOWXUHDQGFRPPHUFH,Q UHFHQW\HDUVWKH
    YDOOH\ LV LQKDELWHG E\ PRUH WKDDQ  PLOOLRQ SHRSOH 7KH PHWURSROLWDQ UHJLRQ LVV VXUURXQGHG E\
    PRXQWDLQRXVWHUUDLQDQGVWHHSKLOOOVZLWKYHU\OLPLWHGODQGIRUXUEDQH[SDQVLRQ7KHH[WWHQWRIVWXG\DUHD
    LQWKLVVWXG\LVEDVHGRQSUHYLRXVWZRUHVHDUFKHV+DDFN 5DIWHU  DQG7KDSD 0 0XUD\DPD  
    ZKLFKDUHGHOLQHDWHGDFFRUGLQJWRRZDWHUVKHGERXQGDU\RIWKHYDOOH\FRYHULQJDQDUHDVTNP%DVHG
    RQWKLVERXQGDU\WKHSUHVHQWVWXXG\DUHDFRYHUVPXQLFLSDOXUEDQFHQWHUVDQG9' '&V )LJXUH 
    )LJXUHLVWKHORFDWLRQPDSRIWWKH.DWKPDQGXYDOOH\
    
    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

     8UEDQSURVSHFWLQ.DWKPDQGXYDOOH\
    7KH JURZWK RI VHWWOHPHQWV LQ WKH YDOOH\ LV JHQHUDOO\ XQUHJXODWHG DQG WKHUH LV YHU\ OLWWOH SODQQLQJ
    LQWHUYHQWLRQ E\ WKH JRYHUQPHQW 5DQD   7KH JRYHUQPHQW GRHV QRW KDYH ILQDQFLDO UHVRXUFHV WR
    DFTXLUH D KXJH DPRXQW RI ODQG ZKHUH SODQQHG XUEDQ GHYHORSPHQW FDQ EH SURPRWHG 7KH FXUUHQW
    FRQVWLWXWLRQDOSURYLVLRQGRHVQRWDOORZWKHJRYHUQPHQWWRLPSRVHDQ\NLQGRIUHVWULFWLRQRQWKHXVHRI
    SULYDWH SURSHUW\ +HQFH PDQ\ DUHDV KDV EHHQ FRQYHUWHG LQWR EXLOWXS ZKLFK DUH GHFODUHG DV UHVWULFWHG
    DUHDVIRUWKHGHYHORSPHQW 6KUHVWKD 
    
    %HVLGHVSULYDWHGHYHORSHUVIDFHGLIILFXOWLHVLQDVVHPEOLQJODQGSDUFHOVGXHWRODQGFHLOLQJSURYLVLRQVODLG
    GRZQ E\ WKH /DQG 5HIRUP $FW RI  6KUHVWKD   /DQG FHLOLQJ LV WKH IL[HG DPRXQW RI WKH
    RZQHUVKLS RI WKH ODQG KROGLQJV ,Q .DWKPDQGX YDOOH\ DQ\ LQGLYLGXDO FDQ KROG WKH RZQHUVKLS RI
    PD[LPXP  KD DFFRUGLQJ WR ODQG FHLOLQJ SURSRVHG LQ  $GKLNDUL   'HYHORSHUV DOVR IDFH
    GLIILFXOWLHV LQ SURFXULQJ ODQG SDUFHOV IURP VSHFXODWLYH ODQGRZQHUV ZKR HLWKHU GHPDQG KLJK SULFHV RU
    VLPSO\UHIXVHWRVHOOWKHODQG7KHUHLVQROHJDOWRROWKDWFDQEHXVHGWRDFTXLUHLVRODWHGODQGSDUFHOVIURP
    ODQGRZQHUV 1RWZLWKVWDQGLQJ GHYHORSHUV FDQQRW EX\ VXIILFLHQW ODQG LQ .DWKPDQGX YDOOH\ GXH WR WKH
    ODQGFHLOLQJ 6KUHVWKD5DQD 
    
    .DWKPDQGX9DOOH\7RZQ'HYHORSPHQW&RPPLWWHH .97'& ZKLFKLVUHVSRQVLEOHIRURYHUDOOSODQQLQJ
    DQGUHJXODWLRQRIXUEDQGHYHORSPHQWLVRSHUDWLQJZLWKDODQGXVHSODQDGRSWHGLQ6HYHUDOHIIRUWV
    ZHUHPDGHWRUHYLVHWKHODQGXVHSODQDIWHUZKLFKZHUHQRWVXFFHVVIXO.97'&LVLQYROYHGLQVHYHUDO
    ODQGSRROLQJSURMHFWVDQGJXLGHGODQGGHYHORSPHQWSURJUDPPHV,WDOVRORRNVDIWHUFRXUWFDVHVLQYROYHG
    LQYLRODWLRQRIEXLOGLQJE\HODZVDQGRWKHULVVXHVUHODWHGWRSODQQLQJ/RFDOERGLHVOLNHPXQLFLSDOLWLHVDQG
    YLOODJHGHYHORSPHQWFRPPLWWHHVDUHLVVXLQJEXLOGLQJSHUPLWVPDLQO\IRUUHYHQXHJHQHUDWLRQUDWKHUWKDQ
    UHJXODWLQJXUEDQGHYHORSPHQW7KHWHFKQLFDOFDSDELOLW\RIORFDODXWKRULWLHVWRGHOLYHUEDVLFXUEDQVHUYLFHV
    LVUHODWLYHO\ORZDQGSHRSOHORRNXSRQFHQWUDOJRYHUQPHQWDJHQFLHVIRUVXFKVHUYLFHV 6KUHVWKD 

     3ODQVDQGSURJUDPV

     .DWKPDQGXYDOOH\WRZQGHYHORSPHQWSODQ  

    .DWKPDQGXYDOOH\WRZQGHYHORSPHQWSODQZDVSUHSDUHGXQGHUWKH'HSDUWPHQWRI8UEDQ'HYHORSPHQW
    DQG %XLOGLQJ &RQVWUXFWLRQ '8'%&  LQ  WKDW FRQVWLWXWH WKUHH FRPSRQHQWV]RQLQJ SROLF\
    FRPSRQHQWVDQGODQGXVHUHJXODWLRQ7KHVWDWXWRU\SODQIRUFRQWUROOLQJGHYHORSPHQWZLWKLQWKHYDOOH\LV
    ]RQLQJ SURSRVDOV SUHSDUHG LQ  HQWLWOHG ´,QVWUXFWLRQV IRU YDULRXV DFWLRQV WR EH WDNHQ LQ GLIIHUHQW
    DUHDVLQ.DWKPDQGXYDOOH\WRZQGHYHORSPHQWSODQµ7KHVHLQVWUXFWLRQVODFNSUHFLVH]RQLQJGHPDUFDWLRQ
    IRUXVHVZKLFKDUHQRWVXIILFLHQWO\GHILQHGLQWHUPVRISHUPLWWHGRUUHVWULFWHGDFWLYLW\ZLWKOLWWOHRUQR
    UHIHUHQFHWRLQIUDVWUXFWXUHSURYLVLRQVWDQGDUGVRUSURJUDPPLQJ0RUHRYHUWKH]RQLQJGRHVQRWH[WHQG
    EH\RQGWKHLQQHUULQJURDG 5DQD 

     .DWKPDQGXYDOOH\SK\VLFDOGHYHORSPHQWSODQ  


    7KH .DWKPDQGX YDOOH\ ORQJ WHUP GHYHORSPHQW SODQ LQFOXGHV SURSRVHG ]RQLQJ UHJXODWLRQV WKDW DUH
    DOPRVWLGHQWLFDOWRWKHLQVWUXFWLRQV7KHPDLQLPSURYHPHQWE\WKLVODWHVWHIIRUWLVWKHSUHSDUDWLRQ
    RI]RQLQJPDSFDOOHGSURSRVHGODQGXVHFRYHULQJWKHDUHDZLWKLQWKHULQJURDG7KHPDSFRQWDLQVVRPH
    LQFRQVLVWHQFLHV+RZHYHULWUHSUHVHQWVWKHILUVWDWWHPSWWRWKLQNWKURXJKVSDWLDOGLVWULEXWLRQRIGHVLUHG
    ODQGXVHLQ.DWKPDQGX&LW\ 6KUHVWKD 
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    7KH  GHYHORSPHQW FRQFHSW DGGUHVVHV VRPH RI WKH PDLQ LVVXHV DIIHFWLQJ ODQG XVH LQ WKH YDOOH\
    LQFOXGLQJRSHQDFNQRZOHGJHPHQWRIWKHFXUUHQWV\VWHPRIXQSODQQHGGHYHORSPHQWE\ERWKJRYHUQPHQW
    DQGSULYDWHVHFWRUVWKHLPSRUWDQFHRIWUDQVSRUWDWLRQLQJRYHUQLQJWKHODQGXVHWKHQHHGWRNHHSLQPLQG
    DYLVLRQRIWKHHFRQRPLFUROHRIWKH.DWKPDQGXYDOOH\PDLQO\DVDQDGPLQLVWUDWLYHFXOWXUDOWRXULVWLFDQG
    DJULFXOWXUDO DUHD DQG QRW DV D PDMRU LQGXVWULDO DUHD DQG WKH UHDOLW\ WKDW ILQDQFLDO UHVRXUFHV DUH OLPLWHG
    UHVWULFWLQJZKDWFDQUHDOLVWLFDOO\DFKLHYHGLQWKHVKRUWWRPHGLXPUXQ 6KUHVWKD 

     1DWLRQDOXUEDQSROLF\

    7KH SURSRVHG 1DWLRQDO XUEDQL]DWLRQ SROLF\ LV H[SHFWHG WR EH D ODQG PDUN WRZDUGV IUDPLQJ SRVLWLYH
    GLUHFWLRQVLQDSODQQHGLQWHJUDWHGDQGFRRUGLQDWHGZD\LQVROYLQJWKHXQSODQQHGXUEDQL]DWLRQSURFHVV
    DQG LWV FKDOOHQJHV 6KUHVWKD   7KLV SROLF\ KDV PDLQWDLQHG WKUHH REMHFWLYHV ILUVW REWDLQ QDWLRQDO
    XUEDQ IHDWXUH E\ GHYHORSLQJ LQIUDVWUXFWXUH VHUYLFHV DQG GLUHFW WKH LQYHVWPHQW VHFRQGO\ LPSURYH WKH
    OLYLQJ VWDQGDUG RI WKH FLW\ LQKDELWDQWV E\ GHYHORSLQJ KHDOWK\ VHFXUHG DQG ZHOIDUH FLW\ HQYLURQPHQW
    7KLUGO\ E\ FRQVROLGDWLQJ ORFDO DJHQFLHV LQ OHJDO DQG LQVWLWXWLRQDO ZD\ DQG GHYHORS WKH FLWLHV LQ D
    FRRUGLQDWHZD\DQGGHYHORSWKHVHQVHRISDUWQHUVKLSDPRQJWKHFRQFHUQHGDJHQFLHVDQGPDNHWKHFLW\
    PDQDJHPHQWLQIOXHQWLDO

     .DWKPDQGXYDOOH\ORQJWHUPGHYHORSPHQWSODQ

    7KH ORQJ WHUP GHYHORSPHQW SODQ LV SUHSDUHG E\ .DWKPDQGX 9DOOH\ 7RZQ 'HYHORSPHQW &RPPLWWHH
    .97'&  DQG 'HSDUWPHQW RI 8UEDQ 'HYHORSPHQW DQG %XLOGLQJ &RQVWUXFWLRQ '8'%&  LQ WKH \HDU
    7KHGHYHORSPHQWSODQRI.DWKPDQGXYDOOH\WHQGVWRSURYLGHJXLGHOLQHVWRPLQLPLVHWKHH[WHUQDO
    LQIOXHQFH LQ WKH SURFHVV RI XUEDQ H[SDQVLRQ DQG GHYHORSPHQW 5DQD   $FFRUGLQJ WR WKH VHQLRU
    XUEDQSODQQHULQ%KDNWDSXUPXQLFLSDOLW\SODQLVRQO\DSODQWKDWVSHOOVRXWVRPHDVSHFWVLQXUEDQ
    JURZWK PDQDJHPHQW LQ .DWKPDQGX YDOOH\ WKURXJK RUGHUO\ UXUDOXUEDQ WUDQVLWLRQ UXUDOXUEDQ ODQG
    GHOLQHDWLRQDJULFXOWXUDOODQGSUHVHUYDWLRQDQGODQGWHQXUHVKLS
    
    7KH 'LUHFWRU *HQHUDO RI '8'%& VWDWHV ´7KH  SODQ PDLQO\ IRFXVHV LQ XUEDQ JURZWK FRQWURO
    WKURXJKWKHGHPDUFDWLRQRIWKHXUEDQDQGUXUDOERXQGDU\DVZHOODVWKHSUHVHUYDWLRQRIDJULFXOWXUDOODQG
    7KLVZLOOPDNHODQGPDQDJHPHQWHDVLHUDQGHIIHFWLYHLQWKHXUEDQDQGUXUDOFRQWH[Wµ
    
    $OOWKHVHSROLF\HYHQWXDOO\DIIHFWWKHIXWXUHVSDWLDOSDWWHUQRIXUEDQL]DWLRQ7KHVHSROLFLHVDQGVWUDWHJLHV
    XQGHUWDNHQ E\ JRYHUQPHQW FDQ KHOS WR FRXQWHU QHJDWLYH LPSDFWV RI XUEDQ VSUDZO DQG SURYLGH VRPH
    IXWXUHSHUVSHFWLYHVDVZHOOLIWKH\DUHLPSOHPHQWHGLQSURSHUZD\

     'DWDVRXUFHV

     3ULPDU\GDWDFROOHFWLRQ
    3ULPDU\ GDWD ZHUH FROOHFWHG WKURXJK LQWHUYLHZV DQG ILHOG GDWD FROOHFWLRQ ,QWHUYLHZ ZDV FRQGXFWHG WR
    XQGHUVWDQGWKHNH\GULYLQJIDFWRUVRIXUEDQJURZWKLQWKH.DWKPDQGXYDOOH\WKURXJKWKHORFDOH[SHUWV·
    NQRZOHGJH 7KH FRPSRVLWLRQ RI H[SHUWV ZDV GRQH LQ VXFK D ZD\ WKDW LW LQFRUSRUDWHG DFDGHPLFLDQV
    SODQQHUV LQ 0LQLVWU\ RI XUEDQ SODQQLQJ DQG EXLOGLQJ FRQVWUXFWLRQV SODQQHUV LQ ORFDO PXQLFLSDOLW\ DQG
    SULYDWH FRQVXOWDQWV GHDOLQJ ZLWK XUEDQ SODQQLQJ LVVXHV $Q DSSRLQWPHQW ZDV WDNHQ IRU  H[SHUWV IRU
    LQWHUYLHZ $QG D TXHVWLRQ JXLGHOLQH ZDV SUHSDUHG IRU WKH LQWHUYLHZZKLFK FRQVLVWHG RI WKUHH VHFWLRQV
    7KHILUVWVHFWLRQZDVSUHSDUHGWRXQGHUVWDQGWKHPRVWSURPLQHQWW\SHRIXUEDQJURZWKLQ.DWKPDQGX
    YDOOH\DQGWKHGULYLQJIDFWRUV6HFRQGVHFWLRQZDVSUHSDUHGWRUDWHWKHGULYLQJIDFWRUVRIXUEDQJURZWK

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    GHULYHG IURP WKH OLWHUDWXUH DQG WKH WKLUG VHFWLRQ ZDV SUHSDUHG WR XQGHUVWDQG WKH SODQV DQG SROLFLHV
    UHODWHGWRXUEDQGHYHORSPHQWLQ.DWKPDQGXYDOOH\ 6HH$QQH[HV,,, 
    
    )LHOG GDWD FROOHFWLRQ ZDV GRQH WR YHULI\ WKH WUDLQLQJ VDPSOHV IRU WKH DFFXUDF\ DVVHVVPHQW RI WKH ODQG
    FRYHUFODVVLILFDWLRQ$OWRJHWKHUVDPSOHSRLQWVZHUHVHOHFWHGIURPZRUOGYLHZLPDJHIRU6DPH
    VHWV ZHUH XVHG IRU  DQG  DIWHU YHULI\LQJ IURP RUWKRUHFWLILHG DHULDO LPDJH  DQG ,NRQRV
    LPDJH7KH,NRQRVLPDJHIRULVRQO\DYDLODEOHIRUOLPLWHGDUHDVLQWKHYDOOH\WKHUHIRUHILHOG
    YHULILFDWLRQ RI WUDLQLQJ VDPSOHV ZHUH GRQH IRU  XUEDQ SRLQWV DQG  EDUH SRLQWV XVLQJ D KDQGKHOG
    *36 XQLW
    

     6HFRQGDU\GDWDFROOHFWLRQ
    6HFRQGDU\GDWDUHTXLUHGIRUWKHVWXG\ZHUHREWDLQHGIURPYDULRXVVRXUFHV$FFRUGLQJWRWKHW\SHWKHVH
    GDWD ZHUH JURXSHG LQWR WKUHH FDWHJRULHV5HPRWHO\ VHQVHG GDWD 9HFWRU GDWDVHW DQG 6WDWLVWLFDO GDWD DV
    VKRZQLQ7DEOH7DEOHDQG7DEOHUHVSHFWLYHO\EHORZ

     5HPRWHO\VHQVHGGDWD
    /DQGVDW LPDJHULHV ZLWK PRGHUDWH UHVROXWLRQ ZHUH DFTXLUHG IURP ZHEVLWH RI 86 *HRORJLFDO 6XUYH\
    86*6 ZKLFKZHUHSURMHFWHGWR:*6870=RQH7KHKLJKUHVROXWLRQLPDJHULHVIRU
    DQGZHUHDFTXLUHGIURP.DWKPDQGXYDOOH\WRZQGHYHORSPHQWFRPPLWWHH .97'& 

     9HFWRUGDWDVHW
    9HFWRUGDWDVHWVZHUHREWDLQHGIURP'HSDUWPHQWRI6XUYH\ '26 DQG.97'&IRUWKH\HDUDQG
     UHVSHFWLYHO\ 'DWDVHW IURP 'HSDUWPHQW RI VXUYH\ ZHUH SUHSDUHG IURP WRSRJUDSKLF PDS RI VFDOH
     DQG GDWDVHW IURP .97'& ZHUH GLJLWL]HG IURP WRSRJUDSKLF PDS RI VFDOH  7KH
    FRRUGLQDWHVLQYHFWRUGDWDVHWZHUHEDVHGRQWKH0RGLILHG8703URMHFWLRQRQ(YHUHVW6SKHURLG
    VHPLPDMRUD[LVD PDQGVHPLPLQRUD[LVE P KDYLQJ]RQHZLGWKRI
    GHJUHHV(DVWZHVWZLWK&HQWUDO0HULGLDQGHJUHHORQJLWXGH7KHXQLWRIPHDVXUHPHQWLVPHWUH

     6WDWLVWLFDOGDWD
    6WDWLVWLFDOGDWDFRQVLVWRISRSXODWLRQGDWDIRUWKH\HDUDW9'&DQGPXQLFLSDOOHYHOZKLOHGDWDIRU
    DQGZHUHDWZDUGOHYHO7KHVH GDWDZHUHFROOHFWHGIURP&HQWUDO%XUHDX RI6WDWLVWLFV &%6 
    1HSDO,QDGGLWLRQLWDOVRFRPSULVHGRI/DQGYDOXHGDWDIRUDQGDWZDUGOHYHOZKLFKZDVIL[HG
    DFFRUGLQJWRHDFKURDGFDWHJRU\ UHIHUVHFWLRQ 
    
    
    
    
    
    
    
    
    
    
    
    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    7DEOH5HPRWHO\VHQVHGGDWD

    'DWDVHW $FTXLVLWLRQ 6FDOH5HVROXWLRQ 6RXUFH 3URMHFWLRQ 3XUSRVH


    \HDU

    /DQGVDW70  PHWHU 86*6 870 ]RQH /DQGVDW,PDJHVZHUH


    /DQGVDW(70  PHWHU 86*6  :*6  XVHGIRUSUHSDULQJODQG
    /DQGVDW(70  PHWHU 86*6 FRYHUPDSV
    2UWKRUHFWLILHG  PHWHU .97'& (YHUHVW +LJK UHVROXWLRQ LPDJHV
    DULDOLPDJH    0RGLILHG ZHUH XVHG IRU
        870 YHULILFDWLRQ RI WUDLQLQJ
    ,NRQRVLPDJH  PHWHU .97'& 870]RQH VDPSOHVHWV
    :*6 
    :RUOGYLHZ  PHWHU .97'& 870]RQH
    LPDJH :*6 
    

    
    7DEOH9HFWRUGDWDVHW

    'DWD <HDU 6FDOH 6RXUFH 'HVFULSWLRQ 3XUSRVH

    $GPLQLVWUDWLYH   6XUYH\GHSDUWPHQW 9DOOH\ 'LVWULFW 'HOLQHDWLQJ VWXG\ DUHD


    ERXQGDU\ 0XQLFLSDOLW\ :DUG H[WHQW
    9'&
    5RDGQHWZRUN   6XUYH\GHSDUWPHQW 5RDG FHQWUHOLQHV 5RDGPDSZDVXVHGDV
    FDWHJRULHVG DV QDWLRQDO GULYLQJ IDFWRUV RI
       KLJKZD\ ULQJ URDG XUEDQJURZWK E\XVLQJ
      .97'& IHHGHUURDGXUEDQURDG SUR[LPLW\DQDO\VLV
    DQGGLVWULFWURDG
    5LYHUV   6XUYH\GHSDUWPHQW 5LYHUFHQWUHOLQHV 5LYHUPDSZDVXVHGDV
    GULYLQJ IDFWRUV RI
    XUEDQJURZWK E\XVLQJ
    SUR[LPLW\DQDO\VLV
    3XEOLFVHUYLFHV   6XUYH\GHSDUWPHQW )DFLOLWLHV OLNH VFKRRO )DFLOLWLHV PDS ZDV
    KRVSLWDO SRVW RIILFH XVHG DV GULYLQJ IDFWRU
    SHWURO SXPS WHPSOH RI XUEDQ JURZWK E\
      .97'&
    HWF XVLQJ SUR[LPLW\
    DQDO\VLV
    6ORSH   6XUYH\GHSDUWPHQW 'LJLWDO HOHYDWLRQ PDS 6ORSHPDSZDVXVHGDV
    RIFHOOVL]HP GULYLQJIDFWRURIXUEDQ
    JURZWK
    'HVLJQDWHG   6XUYH\GHSDUWPHQW &RQVHUYDWLRQ DUHDV ,W ZDV XVHG DV IDFWRU
    DUHDV FDWHJRULVHG DV ZLOG OLIH RIXUEDQJURZWK
    UHVHUYH DQG QDWLRQDO
    SDUNV
    /DQGXVH   6XUYH\GHSDUWPHQW /DQG XVH PDS ZLWK ,W ZDV XVHG DV D
    FDWHJRULHVDLUSRUW UHIHUHQFHIRUSUHSDULQJ
    ZDWHUERGLHV SRQGV ODQGFRYHUFDWHJRULHV
    EXLOWXSHWF
    
    

    
    02'(
    (/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    7DEOH6WDWLVWLFDOGDWDIRUSRSXODWLRQDQGGODQGYDOXH

    'DWD <HDU 6RXUFH 'HVFULSWLRQ 3XUSRVHH

    3RSXODWLRQ    &%6 3RSXODWLRQSHUZDUGDQG9'& 7R SURGXFH SRSXODDWLRQ GHQVLW\


     1HSDO PDSDWZDUGOHYHO
    /DQG DQG .97'& /DQG YDOXH IRU HDFK URDG 7RSURGXFHODQGYDOXXHPDS
    YDOXH FDWHJRU\LQZDUGV
    

     ,GHQWLI\LQJXUEDQJURZWKSDWWHUUQ
    7KH PDLQ FRQFHUQ RI WKH VWXG\ ZDV WR ILQG XUEDQ JURZWK SDWWHUQ RI WKH .DWKPDQGX YYDOOH\ 6R DQ
    HPSKDVLVZDVJLYHQWRGHWHFWEXLOWXS DUHDXVLQJLPDJHFODVVLILFDWLRQ,QRUGHUWRTXDQWLI\DDQGPDSWKH
    XUEDQJURZWKIROORZLQJPHWKRGVZHUHDGRSWHG
    
    D 6XSHUYLVHGFODVVLILFDWLRQ
    8VLQJ(UGDV,PDJLQH9HUVLRQWKUHHHPXOWLWHPSRUDO/DQGVDWGDWDVHWV /DQGVDW70DQG( (70 ZLWK
    PRGHUDWHUHVROXWLRQZHUHSURFHVVHGWR RLGHQWLI\WKHFKDQJHVLQWKHODQGFRYHUSDWWHUQRIWKHYYDOOH\IRUWKH
    \HDUV   DQG  7KHVH GGDWD ZHUH FODVVLILHG VHSDUDWHO\ XVLQJ D VXSHUYLVHG FODVVLILFDWLRQ
    F
    WHFKQLTXHWDNLQJDOOEDQGVH[FHSWWKHWWKHUPDOEDQG)RXUJHQHUDOODQGFRYHUFODVVHVXUEDQZ ZDWHUIRUHVW
    DQGDUDEOHODQGVZHUHXVHGWRDQDO\]HWWKHFKDQJHVLQODQGFRYHUSDWWHUQDVVKRZQLQ7DEOH0D[LPXP
    OLNHOLKRRG VXSHUYLVHG FODVVLILFDWLRQ ZDDV HPSOR\HG LQ WKH SURGXFWLRQ RI ODQG FRYHU PDSV IIRU WKH VWXG\
    DUHD)LJXUHVKRZVVRPHSLFWXUHVIRRUWKHODQGFRYHUFODVVHVLQWKHVWXG\DUHD
    

    8UEDQ :DWHU

    )RUHVW $UDDEOHODQG
    
    )LJXUH'LIIHUHQWODQGFRYHUVRIWKHVWXG\DUHD
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    7DEOH/DQGFRYHUFODVVLILFDWLRQVFKHPH

    &RGH /DQGFRYHUFODVVHV 'HVFULSWLRQ


     8UEDQ 7KLV FODVV FRQVLVWV RI XUEDQ IDEULFV LQGXVWULDO FRPPHUFLDO
    WUDQVSRUWDWLRQDQGRWKHUEXLOWXSDUHDV
     :DWHUERGLHV ,W FRQVLVWV RI ZDWHU UHODWHG IHDWXUHV VXFK DV ULYHU VWUHDP
    ODNHSRQGVHWF
     )RUHVW ,W FRQVLVWV RI GLIIHUHQW W\SHV RI IRUHVW VXFK DVGHFLGXRXV
    IRUHVWHYHUJUHHQIRUHVWVPL[HGIRUHVWHWF
     $UDEOHODQG 7KLVODQGFRYHUFODVVFRPSULVHVRILUULJDWHGDQGQRQLUULJDWHG
    FXOWLYDEOHODQGVDORQJZLWKEDUHDUHDV
    
    
    E 3RVWFODVVLILFDWLRQUHILQHPHQW
    7R LPSURYH WKH DFFXUDF\ RI WKH FODVVLILHG UHVXOWV SRVW FODVVLILFDWLRQ UHILQHPHQWV ZDV FRQGXFWHG ,W
    IROORZHGWZRVWHSVWKHILUVWVWHSXVHGDPDMRULW\ILOWHUXVLQJ[ZLQGRZVL]HWRHOLPLQDWHWKHQRLVHVRI
    PLVFODVVLILHGSL[HOV,QVHFRQGVWHSULYHUQHWZRUNDQGRWKHUZDWHUERGLHVZHUHRYHUODLGZLWKWKHILOWHUHG
    LPDJHWRUHWDLQWKHZDWHUERGLHVLQODQGFRYHUPDSV UHIHUVHFWLRQ $IWHUDSSO\LQJSRVWFODVVLILFDWLRQ
    UHILQHPHQWVHYHUDOPLVFODVVLILFDWLRQVZHUHFRUUHFWHG
    
    F $FFXUDF\DVVHVVPHQW
    7KHJURXQGWUXWKSRLQWVXVHGIRUDVVHVVLQJWKHDFFXUDF\RIWKHFODVVLILFDWLRQVZHUHVHOHFWHGXVLQJKLJK
    UHVROXWLRQ RUWKRUHFWLILHG DHULDO LPDJH RI  ,NRQRV LPDJH  DQG :RUOG YLHZ LPDJH  VHH
    VHFWLRQ,, 7KHDFFXUDF\DVVHVVPHQWRIWKHODQGFRYHUPDSVLQFOXGHWKHJHQHUDWLRQRIUDQGRP
    UHIHUHQFHSRLQWVIRUDQGODQGFRYHUPDSIURPHDFKKLJKUHVROXWLRQLPDJHV$IWHUWKH
    SRVWFODVVLILFDWLRQUHILQHPHQWVDFFXUDF\DVVHVVPHQWRIWKHODQGFRYHUPDSVZDVSHUIRUPHG
    
    G &KDQJHGHWHFWLRQ
    /DQG FRYHU FKDQJH ZDV GHWHUPLQHG E\ XVLQJ WKUHH LQGHSHQGHQW UHVXOWV RI ODQG FRYHU FODVVLILFDWLRQ E\
    XVLQJ SRVWFODVVLILFDWLRQ DSSURDFK 7KH ¶IURPWR· FKDQJH LQIRUPDWLRQ ZDV FDOFXODWHG LQ $UF*,6
    HQYLURQPHQWIRUHDFKODQGFRYHUDQGWKHUDWHRIFKDQJHZDVTXDQWLILHG$UHDVRIFKDQJHDQGQRFKDQJH
    ZHUHWKHQPDSSHGIRUWKHEXLOWXSFODVV
    
    ,QRUGHUWRH[DPLQHWKHXUEDQJURZWKLQWHQVLW\DQLQGLFDWRUFDOOHGDQQXDOXUEDQJURZWKUDWH $*5 ZDV
    DGDSWHGIRUHYDOXDWLQJWKHUDWHRIJURZWKSHUXQLWDUHD7KHIRUPXODIRU$*5LVH[SUHVVHGDVIROORZV
    
    ୙୅௡ା௜Ȃ୙୅௜
    
     ൌ ൈ ͳͲͲΨ (1)
    ௡୘୅௡ା௜

    :KHUH UAn+i and UAi are XUEDQDUHDVLQWDUJHWXQLWDWWLPH i+n DQG i UHVSHFWLYHO\n LVQXPEHURI\HDUDQG
    TAn+i LV WKH WRWDO ODQG DUHD RI WKH WDUJHW XQLW WR EH FDOFXODWHG DW WKH WLPH RI i+n ;LDR HW DO  
    $FFRUGLQJWR;LDRHWDO  WKHWDUJHWFDOFXODWLQJXQLWLVJHQHUDOO\VHWWRWKHDGPLQLVWUDWLYHGLVWULFWVR
    DVWROLQNZLWKDGPLQLVWUDWLRQRUHFRQRPLFVWDWLVWLFV

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

     0RGHOLQJXUEDQJURZWKXVLQJORJLVWLFUHJUHVVLRQ

     ,GHQWLI\LQJSUREDEOHGULYLQJIDFWRUVRIXUEDQJURZWK
    7KHSUHOLPLQDU\DVVHVVPHQWRIGULYLQJIDFWRUVRIXUEDQJURZWKZDVEDVHGRQOLWHUDWXUHUHYLHZ)URPWKH
    OLWHUDWXUH UHYLHZ DQ RYHUYLHZ RI GULYLQJ IDFWRUV RI XUEDQ JURZWK ZDV OLVWHG ZKLFK ZHUH JURXSHG LQWR
    VHYHQ FDWHJRULHV VHH 7DEOH   7KHVH IDFWRUV ZHUH XVHG DV LQSXW YDULDEOHV IRU ORJLVWLF UHJUHVVLRQ
    PRGHOLQJ+RZHYHUVDIHW\IDFWRUGLVWDQFHWRHOHFWULFLW\DQGGLVWDQFHWRVHZHUDJHZHUHQRWLQFRUSRUDWHG
    LQWKHPRGHOLQJGXHWRGDWDXQDYDLODELOLW\

     3UHSDUDWLRQRILQSXWGDWDIRUORJLVWLFUHJUHVVLRQPRGHO
    7KHLQSXWGDWDFDOOHGIDFWRUPDSVZHUHSUHSDUHGIRUDQGLQ$UF*,6HQYLURQPHQW%HFDXVHRI
    WKHXQDYDLODELOLW\RIGDWDIRUWKH/5PRGHOLQJZDVGRQHEDVHGRQDQGGDWDRQO\7KH
    GDWDVHWRI IURP'HSDUWPHQWRI6XUYH\ZDVXVHGWRSUHSDUHIDFWRUPDSVIRUDQGGDWDVHWRI
    IURP.97'&ZDVXVHGWRSUHSDUHIDFWRUPDSVRI%HFDXVHRIWLPHGLIIHUHQFHEHWZHHQVWXG\
    SHULRGDQGGDWDDFTXLUHGWKHUHPLJKWEHVRPHGHJUHHRIXQFHUWDLQW\GXULQJPRGHOLQJ9HFWRUGDWDRI
    URDGQHWZRUNDQGSXEOLFIDFLOLWLHVVXFKDVKHDOWKDQGHGXFDWLRQDOLQVWLWXWLRQVIRUZDVDYDLODEOHIRU
    9'&VDQGPXQLFLSDOLWLHVRQO\6RIRUUHPDLQLQJ9'&VRIWKHYDOOH\LWZDVGHULYHGIURP
    GDWDVHW7DEOHVKRZVWKHOLVWRIGULYLQJIDFWRUV IDFWRUPDSV IRUDQGWKDWZHUHXVHGLQ/5
    PRGHO
    
    7DEOH)DFWRUVWKDWZHUHLQFOXGHGLQ/5PRGHO

    &DWHJRU\ )DFWRUV ϭϵϵϵ  ϮϬϭϬ


    %LRSK\VLFDOFKDUDFWHULVWLFV 'HJUHHRIVORSH 
    =RQLQJ IRUHVWQRWIRUHVW 
    3RSXODWLRQGHQVLW\ 3RSXODWLRQGHQVLW\ SHUVRQVTNP  ʀ ʀ
    'LVWDQFHWRPDMRUURDGV P  ʀ ʀ
    'LVWDQFHWRPLQRUURDGV P  ʀ ʀ
    'LVWDQFHWRZDWHUVXSSO\OLQHV P
    'LVWDQFHWR&%' P  
    3UR[LPDWHFDXVHV 'LVWDQFHWRLQGXVWULDODUHD P  
    'LVWDQFHWRPDMRUULYHUV P 
    'LVWDQFHWRXUEDQFHQWUHV P  
    'LVWDQFHWRKHDOWKIDFLOLWLHV P  ʀ ʀ
    'LVWDQFHWRHGXFDWLRQDOIDFLOLWLHV P  ʀ ʀ
    3URSRUWLRQRIXUEDQDUHDLQWKH
    VXUURXQGLQJ DUHFWDQJXODUQHLJKERXUKRRG ʀ ʀ
    ([LVWLQJXUEDQFOXVWHU 
    RI[ 
    'LVWDQFHWRH[LVWLQJXUEDQFOXVWHU P  ʀ ʀ
    (FRQRPLFIDFWRU /DQGYDOXH ʀ  ʀ
    ʀDVVXPHGWREHGLIIHUHQWIRUHDFK\HDU
    DVVXPHWRKDYHVDPHYDOXHLQHDFK\HDU
    
    7KHIDFWRUPDSVZHUHXVHGDVLQGHSHQGHQWRUH[SODQDWRU\YDULDEOHVWKDWFDQEHHLWKHUGLFKRWRPRXVRU
    FRQWLQXRXV'HSHQGHQWYDULDEOHRIWKHPRGHOZDVELQDU\RXWSXWPDSWKDWVKRZHGXUEDQRUQRQXUEDQ
    IRUDQG$OOGDWDZHUHUHSUHVHQWHGLQUDVWHUIRUPDWZLWKFHOOVL]HRIP7KHFHOOVL]HZDV

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    GHWHUPLQHGE\WKHVSDWLDOUHVROXWLRQRIODQGFRYHUPDSVWKDWZHUHSUHSDUHGIURP/DQGVDWLPDJHVZLWK
    PUHVROXWLRQ$QDSSURDFKRIFRQVWUXFWLQJIDFWRUPDSVLVEULHIO\GHVFULEHGEHORZ
    
    %LRSK\VLFDOFKDUDFWHULVWLFV
    'HJUHHRIVORSHZDVFDOFXODWHGIURPHOHYDWLRQJULG'(0RIPZKLFKZDVUHVDPSOHGLQWRPFHOO
    VL]H
    
    =RQLQJ
    /DQG XVH ]RQLQJ RI .DWKPDQGX YDOOH\ ZDV QRW DYDLODEOH LQ GLJLWDO IRUPDW +RZHYHU GHVLJQDWHG DUHDV
    VXFKDVIRUHVWZHUHGHULYHGIURPODQGXVHPDSRIDQGDVVXPHGWKDWLWUHPDLQVFRQVWDQWWKURXJKRXW
    WKHVWXG\SHULRG7KHGHVLJQDWHGDUHDVRIIRUHVWZHUHFOLSSHGIURPODQGXVHPDSDQGZHUHSUHSDUHG
    DVGLFKRWRPRXVPDSRIIRUHVWQRIRUHVW
    
    3RSXODWLRQGHQVLW\
    3RSXODWLRQGHQVLW\PDSSLQJLVJHQHUDOO\GRQHDWDQDJJUHJDWHOHYHOIRUDGPLQLVWUDWLYH]RQHVSULPDULO\WR
    SURWHFWFRQILGHQWLDOLW\DQGWRUHGXFHGDWDYROXPH%XWLQUHDOLVPSRSXODWLRQGHQVLW\LVKLJKO\GHSHQGHQW
    RQ WKH JHRJUDSKLF QDWXUH RI DQ DUHD 6R LQ RUGHU WR JHW DQ DFFXUDWH LQIRUPDWLRQ DERXW SRSXODWLRQ
    GLVWULEXWLRQ WKH UHODWLRQVKLS EHWZHHQ SRSXODWLRQ GHQVLW\ DQG JHRJUDSKLF QDWXUH RI  DUHD VKRXOG EH
    LQFRUSRUDWHG /DQJIRUG ,QWKLVVWXG\WKHSRSXODWLRQGDWDZHUHGLVDJJUHJDWHGLQWRWKHPFHOOV
    XVLQJ ODQG FRYHU PDSV 7KLV DSSURDFK ZDV DGRSWHG IURP  /DQJIRUG   ZKLFK XVHG WKH IROORZLQJ
    SRSXODWLRQGLVWULEXWLRQVFKHPH VHH7DEOH 7KXVDOOXUEDQFHOOVZLWKDQDGPLQLVWUDWLYHXQLWUHFHLYHG
    RIWKHSRSXODWLRQ
    7DEOH3RSXODWLRQGLVWULEXWLRQVFKHPH

    8UEDQ 
    :DWHUERGLHV 
    )RUHVW 
    $UDEOHODQG 
    
    7KH SRSXODWLRQ GDWD ZDV DYDLODEOH IRU  DQG  LQ WDEXODU IRUPV ZKLFK ZDV MRLQHG ZLWK ZDUG
    ERXQGDULHV RI WKH YDOOH\  :DUG ERXQGDU\ ZLWK SRSXODWLRQ GDWD ZDV WKHQ LQWHUVHFWHG ZLWK ODQG FRYHU
    PDSVRIDQGVHSDUDWHO\WRJHWODQGFRYHULQIRUPDWLRQLQHDFKZDUG7KHQHDFKODQGFRYHUZDV
    DVVLJQHG ZLWK GLIIHUHQW ZHLJKW IDFWRUV DV VKRZQ LQ 7DEOH  WR JHW WKH LQIRUPDWLRQ RI QXPEHU RI
    SRSXODWLRQ OLYLQJ LQ FHUWDLQ ODQG FRYHU W\SHV SHU ZDUG 7KLV SRSXODWLRQ PDS ZDV WKHQ FRQYHUWHG LQWR
    UDVWHUZLWKPFHOOVL]H,QVWHDGRIDEVROXWHSRSXODWLRQDWZDUGOHYHOUHODWLYHSRSXODWLRQGHQVLW\ZDV
    FDOFXODWHGSHUVTNP
    
    3UR[LPDWHFDXVHV
    3UR[LPLW\ ZDV GHWHUPLQHG E\ GLVWDQFH WR PDMRU URDGV PLQRU URDGV ZDWHU VXSSO\ FHQWUDO EXVLQHVV
    GLVWULFW XUEDQ FHQWHUV PDMRU ULYHUV KHDOWK IDFLOLWLHV DQG HGXFDWLRQDO IDFLOLWLHV )RU HDFK FHOO SUR[LPLW\
    ZDVFDOFXODWHGDVWKH(XFOLGHDQGLVWDQFHWRWKHVSHFLILFWDUJHWORFDWLRQ
    
    5RDG ZHUH FODVVLILHG LQWR PDMRU URDGV DQG PLQRU URDGV 7KLV FODVVLILFDWLRQ ZDV EDVHG XSRQ URDG PDS
    VKRZQLQ¶/RQJWHUPGHYHORSPHQWSODQIRU.DWKPDQGXYDOOH\·0DMRUURDGVDQGULQJURDGZHUH
    DVVXPHGWRUHPDLQFRQVWDQWWKURXJKRXWWKHVWXG\WLPHSHULRG0LQRUURDGVKDGVOLJKWFKDQJHVEHWZHHQ
    WKHWLPHSHULRGV
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    8UEDQ FHQWHUV DUH WKH FRUH DUHDV RI WKH YDOOH\ WKDW KDYH EHHQ SHUIRUPLQJ DV FHQWUH RI EXVLQHVV
    FRPPHUFH DGPLQLVWUDWLYH DQG SROLWLFDO FHQWHUV 0DQ\ VHUYLFHV DUH GHOLYHUHG WKURXJK WKHVH FHQWUHV DQG
    WKXV WKH\ DUH FHQWUHV RI DWWUDFWLRQ IRU SHRSOH 6R LW LV H[SHFWHG WKDW WKHVH XUEDQ FHQWHUV ZLOO KDYH
    VLJQLILFDQWLQIOXHQFHRQXUEDQJURZWKRIWKHYDOOH\7RSUHSDUHGLVWDQFHPDSRIXUEDQFHQWUHVILUVWRIDOO
    FRUH XUEDQ FHQWUHV ZHUH GLJLWL]HG IURP .DWKPDQGX YDOOH\ ODQG XVH ]RQLQJ PDS RI VFDOH  DQG
    (XFOLGHDQGLVWDQFHWRWKHVHFHQWUHVZDVFDOFXODWHGIRUDOOFHOOV
    
    'LVWDQFH WR 0DMRU 5LYHU ZDV DOVR FRQVLGHUHG DV DQ LPSRUWDQW IDFWRU VLQFH WKHVH DUH WKH VRXUFH RI
    GULQNLQJZDWHUDQGLUULJDWLRQIRUPDQ\LQKDELWDQWV&ODVVLILFDWLRQRI0DMRU5LYHUZDVEDVHGRQODQGXVH
    PDSRIIURPWKH'HSDUWPHQWRI6XUYH\
    
    0DQ\ OLWHUDWXUHXVH DFFHVVWRIDFLOLWLHVVXFKDVKHDOWKFHQWUHV DQGHGXFDWLRQDO FHQWUHVDVNH\IDFWRUVRI
    XUEDQJURZWKLQFOXGLQJ&KHQJ  $JXD\RHWDO  3UL\DQWR  6RWKHVHIDFWRUVZHUHDOVR
    LQFOXGHGLQWKHVWXG\
    
    7R FUHDWH WKH IDFWRU PDS VKRZLQJ WKH GLVWDQFH WR WKH LQGXVWULDO ]RQHV LQGXVWULDO DUHDV ZHUH H[WUDFWHG
    IURPWKHODQGXVHPDSRIDVVXPLQJWKDWWKHUHZHUHQRVLJQLILFDQWFKDQJHVLQLQGXVWULDODUHDVGXULQJ
     7KLV LV WUXH LQ WKH FRQWH[WVLQFH LQGXVWULDODUHDV UHPDLQ FRQVWDQW WKURXJKRXW WKH \HDUV 7R
    FUHDWH IDFWRU PDS VKRZLQJ GLVWDQFH WR WKH &%' ILUVW WKH ORFDWLRQ RI FHQWUDO EXVLQHVV GLVWULFW ZDV
    GHWHUPLQHG IURP WKH ULVNVHQVLWLYH ODQG XVH SODQ UHSRUW (0,   DQG WKHQ WKH GLVWDQFH IURP WKH
    &%'ZDVFDOFXODWHGIRUDOOFHOOV
    
    3URSRUWLRQRIXUEDQDUHDLQWKHVXUURXQGLQJ
    )URP DQ XUEDQ GHYHORSPHQW SHUVSHFWLYH WKH VSDWLDO LQIOXHQFH SULQFLSDOO\ FRPHV IURP VSDWLDO
    DJJORPHUDWLRQ &KHQJ 0DVVHU 7KLVPHDQVSURSRUWLRQRIXUEDQDUHDVDURXQGFHUWDLQORFDWLRQ
    LQIOXHQFHWKHJURZWKRIWKDWORFDWLRQ,QRUGHUWRLQFRUSRUDWHWKLVVSDWLDOLQWHUDFWLRQHIIHFWVWKHIDFWRU
    PDSV VKRZLQJ SURSRUWLRQ RI XUEDQ ODQG LQ WKH VXUURXQGLQJ DUHD ZDV SUHSDUHG 7KHVH PDSV VKRZIRU
    HDFKFHOOWKHSURSRUWLRQRIXUEDQFHOOLQD[UHFWDQJXODUQHLJKERUKRRG7KHVL]HRIQHLJKERUKRRGLV
    GHWHUPLQHG E\ XVLQJ GLIIHUHQW DOWHUQDWLYHV VXFK DV [ [ DQG [  DV VXJJHVWHG E\ 9HUEXUJ HW DO
     ;LHHWDO  +X /R  'XERY\NHWDO  
    
    (FRQRPLFIDFWRUV
    (FRQRPLF IDFWRUV DUH DOVR PDLQ GULYLQJ IRUFHV RI XUEDQ JURZWK &KHQJ  0DVVHU   7KLV VWXG\
    LQFRUSRUDWHV WKH ODQG YDOXH DV DQ HFRQRPLF YDULDEOH /DQG YDOXH LQ .DWKPDQGX YDOOH\ LV JHQHUDOO\
    GHWHUPLQHG E\ DFFHVVLELOLW\ WR URDG 7KH DUHDV ZKLFK DUH DW FORVHU SUR[LPLW\ WR URDG KDYH KLJKHU ODQG
    YDOXH WKDQ WKRVH ZKLFK DUH IXUWKHU DZD\ 6R IRU HDFK ZDUG WKH ODQG YDOXH ZDV GHWHUPLQHG E\ URDG
    FDWHJRU\ +LJKZD\ EODFNWRS JUDYHO HDUWKHQ VWRQH SDYHG EULFN SDYHG WUDLO VWDLU DQG RWKHUV  /DQG
    YDOXH ZDV DVVLJQHG WR HDFK URDG W\SHV WR JHW ODQG YDOXH FRQWRXU 7KH ZKROH URDG QHWZRUN ZDV WKHQ
    FRQYHUWHGWRUDVWHUXVLQJODQGYDOXHDWWULEXWH,WPHDQVFHOOFORVHUWRWKHURDGZRXOGDFKLHYHKLJKHUYDOXH
    DQGFHOOIDUWKHUDZD\IURPWKHURDGZRXOGUHFHLYHORZHUYDOXHV

     'DWDQRUPDOL]DWLRQ
    $OOLQSXWGDWDZHUHFUHDWHGLQUDVWHUIRUPDW7KHVHGDWDDUHHLWKHUGLFKRWRPRXVRUFRQWLQXRXVW\SH7KH
    FRQWLQXRXVGDWDZHUHQRUPDOL]HGLQWRWKHUDQJHRI1RUPDOL]DWLRQZDVGRQHE\PLQLPXPPD[LPXP
    OLQHDU WUDQVIRUPDWLRQ RI LQSXW UDVWHU WR DFKLHYH VLPLODU GDWD UDQJH 7KLV PHWKRG LV LPSRUWDQW VLQFH LQ
    PXOWLYDULDWHVWDWLVWLFDODQDO\VLVVXFKDVORJLVWLFUHJUHVVLRQDOOFRQWLQXRXVYDULDEOHVVKRXOGKDYHWKHVDPH

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    WKH VFDOH WR FRPSDUH WKH YDOXH ZLWKLQ WKH VDPH UDQJH &KHQJ  0DVVHU  +XDQJ HW DO 
    3UL\DQWR 

     0XOWLFROOLQHDULW\DQDO\VLV
    'HSHQGHQFLHVEHWZHHQWKHH[SODQDWRU\YDULDEOHVDUHDQLPSRUWDQWLVVXHWRDFFRXQWIRULQDOOPXOWLYDULDWH
    PHWKRGV &KHQJ/HVVFKHQHWDO %HIRUHDQ\UHJUHVVLRQDQDO\VLVGDWDKDVWREHFKHFNHGRQ
    PXOWLFROOLQHDULW\,IWKHUHLVDQ\FRUUHODWLRQDPRQJWKHLQGHSHQGHQWYDULDEOHVWKHQLWLVDQLQGLFDWLRQRI
    FROOLQHDULW\ $V FROOLQHDULW\ LQFUHDVHV DPRQJ WKH LQGHSHQGHQW YDULDEOHV WKH OHYHO RI HIILFLHQF\ RI WKH
    HVWLPDWHV PD\ EHFRPH SRRU /HVVFKHQ HW DO   0RUHRYHU YHU\ KLJK OHYHOV RI FROOLQHDULW\ PD\
    GHILQLWHO\UHVXOWLQFRHIILFLHQWVWKDWDUHQRWVWDWLVWLFDOO\VLJQLILFDQW7KHUHIRUHLWLVSUHUHTXLVLWHWR FKHFN
    IRUPXOWLFROOLQHDULW\RILQGHSHQGHQWIDFWRUVSULRUWRPRGHOLQJLQDQ\UHJUHVVLRQDQDO\VLV
    
    7KHUHDUHWZRZD\VWRGHWHFWPXOWLFROOLQHDULW\2QHZD\LVWRFRPSXWHFRUUHODWLRQV U EHWZHHQDOOSDLUVRI
    SUHGLFWRUV,IULVYHU\FORVHWRRUWKHQRQHRIWKHWZRFRUUHODWHGSUHGLFWRUVVKRXOGEHUHPRYHG
    IURP WKH PRGHO $QRWKHU ZD\ LV WR FDOFXODWH YDULDQFH LQIODWLRQ IDFWRU IRU HDFK SUHGLFWRU 9DULDQFH
    ,QIODWLRQ )DFWRU 9,)  SURYLGHV D UHDVRQDEOH LQGLFDWLRQ RI PXOWLFROOLQHDULW\ EHWZHHQ WKH YDULDEOHV
    2·EULHQ 0DWKHPDWLFDOO\
    ଵ
        ܸ‫ ݅ܨܫ‬ൌ         
    ଵିୖమ౟

    ZKHUHܴ௜ଶLVWKHFRHIILFLHQWRIGHWHUPLQDWLRQRIWKHPRGHOWKDWLQFOXGHVDOOWKHSUHGLFWRUVH[FHSWWKHLWK
    SUHGLFWRU7KHPRVWFRPPRQO\XVHGUXOHRIWKXPEIRUWROHUDQFHRI9,)LVWKH¶UXOHRI·:KHQDQ\
    LQGHSHQGHQWYDULDEOHH[FHHGV9,)YDOXHWKHQLWVKRXOGEHHOLPLQDWHGIURPWKHDQDO\VLV )LHOG 
    7KHUHIRUHRQO\WKRVHYDULDEOHVZLWK9,)ZHUHSDUWLFLSDWHGLQ/5PRGHO$IWHUUHPRYLQJRQHYDULDEOH
    ZLWK9,)!LWLVQHFHVVDU\WRFDOFXODWHWKH9,)IRUWKHUHPDLQLQJYDULDEOHV7KLVSURFHVVQHHGVWREH
    UHSHDWHGXQWLO9,)LVORZHUWKDQIRUDOOWKHYDULDEOHV

     6SDWLDODXWRFRUUHODWLRQDQGVDPSOLQJVFKHPH
    6SDWLDO DXWRFRUUHODWLRQ LV GHVLJQHG WR PHDVXUH FRUUHODWLRQV ZLWKLQ YDULDEOHV DFURVV VSDFH ,W PD\ EH
    GHILQHGDV´WKHSURSHUW\RIUDQGRPYDULDEOHVWRWDNHYDOXHVRYHUGLVWDQFHWKDWDUHPRUHVLPLODURUOHVV
    VLPLODU WKDQ H[SHFWHG IRU UDQGRPO\ DVVRFLDWHG SDLUV RI REVHUYDWLRQV GXH WR JHRJUDSKLF SUR[LPLW\µ
    /HVVFKHQ HW DO   ,W LV D PHWKRG WR PHDVXUH KRZ FOXVWHUHGGLVSHUVHG SRLQWV DUH LQ VSDFH ZLWK
    UHVSHFWWRWKHLUDWWULEXWHYDOXHV 3UL\DQWR 
    
    6SDWLDO DXWRFRUUHODWLRQ FDQ REVFXUH WKH UHVXOWV RI D UHJUHVVLRQ DQDO\VLV .RN  9HOGNDPS   ,I
    DXWRFRUUHODWLRQ LV GHWHFWHG RQ WKH UHJUHVVLRQ UHVLGXDOV WKLV FDQ LPSO\ WKDW QRQOLQHDU UHODWLRQVKLSV
    EHWZHHQ WKH GHSHQGHQW DQG WKH LQGHSHQGHQW YDULDEOHV DUH SUHVHQW RU WKDW RQH RU PRUH LPSRUWDQW
    SUHGLFWRU YDULDEOHV DUH PLVVLQJ 2YHUPDUV HW DO   0DQ\ VWXGLHV KDYH H[DPLQHG VSDWLDO
    DXWRFRUUHODWLRQ LQFOXGLQJ.RN 9HOGNDPS  &KHQJ  2YHUPDUV HWDO  ZKLFK KDYH
    IRXQG WKDW WKH UHJUHVVLRQ FRHIILFLHQW DQG VLJQLILFDQFH RI WKH FRQWULEXWLRQ RI LQGLYLGXDO YDULDEOHV DUH
    VHQVLWLYH IRU WKH SUHVHQFH RI DXWRFRUUHODWLRQ 6R LI DXWRFRUUHODWLRQ LV LJQRUHG LW ZLOO OHDG WR SRRU
    HVWLPDWLRQRISDUDPHWHUVDQGOHDGVWRIDOVHFRQFOXVLRQ
    
    ,QORJLVWLFUHJUHVVLRQPRGHOLQJRQHRIWKHPRVWFRPPRQPHWKRGVWRUHGXFHVSDWLDODXWRFRUUHODWLRQLVE\
    GHVLJQLQJVSDWLDOVDPSOLQJVFKHPH7KHPRVWIUHTXHQWO\XVHGVDPSOLQJVFKHPHDFFRUGLQJWROLWHUDWXUHDUH
    HLWKHU VWUDWLILHG UDQGRP VDPSOLQJ DQG V\VWHPDWLF VDPSOLQJ &KHQJ   ´6\VWHPDWLF VDPSOLQJ LV
    HIIHFWLYHWRUHGXFHVSDWLDOGHSHQGHQFHEXWPD\ORVHVRPHLPSRUWDQWLQIRUPDWLRQOLNHUHODWLYHO\LVRODWHG
    VLWHVZKHQSRSXODWLRQLVQRWVSDWLDOO\KRPRJHQHRXV&RQYHUVHO\VWUDWLILHGUDQGRPVDPSOLQJLVHIILFLHQW

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    LQ UHSUHVHQWLQJ SRSXODWLRQ EXW ORZ LQ HIILFLHQF\ LQ UHGXFLQJ VSDWLDO GHSHQGHQFH HVSHFLDOO\ ORFDO VSDWLDO
    GHSHQGHQFHµ &KHQJ  SJ   ,Q WKLV VWXG\ V\VWHPDWLF VDPSOLQJ VFKHPH ZDV DSSOLHG WR
    LQFRUSRUDWH WKH HIIHFW RI VSDWLDO DXWRFRUUHODWLRQ ,Q RWKHU XUEDQ VWXGLHV ZLWK VLPLODU DUHDO H[WHQW DQG
    UHVROXWLRQVDPSOLQJZLQGRZRI[DQG[LVSURYHGWREHHIIHFWLYHWRUHGXFHVSDWLDODXWRFRUUHODWLRQ
    $JXD\R HW DO:X HWDO   ,Q WKLV VWXG\ GLIIHUHQW VDPSOHV VXFK DV[ [[[ DQG
    [ ZHUH WHVWHG DQG ILQDO VDPSOLQJ ZDV SHUIRUPHG E\ DSSO\LQJ [ ZLQGRZ VL]H LQ &KDQJH DQDO\VW
    VRIWZDUHDVLWJDYHVLJQLILFDQWSYDOXHVIRUPRVWRIWKHGULYLQJIDFWRUV VHH7DEOHLQVHFWLRQ 
    
    2QH VWDWLVWLF IRU GHWHFWLQJ VSDWLDO DXWRFRUUHODWLRQ LQ /5 PRGHO LV 0RUDQ· , ZKLFK PHDVXUHV VSDWLDO
    GHSHQGHQF\7KHYDOXHRI0RUDQ·V,YDULHVEHWZHHQSRVLWLYHDXWRFRUUHODWLRQLQWKHGDWDSURGXFHV
    SRVLWLYHYDOXHVRI,LQGLFDWLQJWHQGHQF\RIFOXVWHULQJQHJDWLYHDXWRFRUUHODWLRQSURGXFHVQHJDWLYHYDOXHV
    LQGLFDWLQJWHQGHQF\WRZDUGVGLVSHUVLRQDQGQRDXWRFRUUHODWLRQUHVXOWVLQDYDOXHFORVHWR]HUR 2YHUPDUV
    HW DO  /HVVFKHQ HW DO   7R H[DPLQH WKH SUHVHQFH RI VSDWLDO DXWRFRUUHODWLRQ LQ WKH PRGHO
    0RUDQ·V,LQGH[ZDVFDOFXODWHGRQWKHPDSRIPRGHOVUHVLGXDOV,QORJLVWLFUHJUHVVLRQDQDO\VLVUHVLGXDOLV
    GHILQHGDVWKHGLIIHUHQFHEHWZHHQREVHUYHG<YDOXHVDQGSUHGLFWHGSUREDELOLW\

     /RJLVWLFUHJUHVVLRQPRGHO
    /5 KDV EHHQ ZLGHO\ DSSOLHG WR H[DPLQH WKH LQIOXHQFH RI GLIIHUHQW IDFWRUV RQ WKH SDWWHUQ RI ODQG
    FRYHUXVH FKDQJH ,W SUHGLFWV WKH SUREDELOLW\ RI ODQG FRYHU FKDQJH IURP QRQEXLOWXS WR EXLOWXS DQG
    HVWLPDWHVWKH HPSLULFDO UHODWLRQVKLS EHWZHHQ XUEDQ JURZWK DQG GULYLQJ IDFWRUV WKDW DVVXPHG WRIROORZ
    WKH ORJLVWLF FXUYH +XDQJ  6LQ   7KH GHSHQGHQW YDULDEOHV XUEDQ JURZWK  LQ /5 PRGHO DUH
    GLFKRWRPRXV DQG WKH LQGHSHQGHQW YDULDEOHV GULYLQJ IDFWRUV  DUH SUHGLFWRUV RI WKH GHSHQGHQW YDULDEOH
    ZKLFK FDQ EH PHDVXUHG RQ D QRPLQDO RUGLQDO LQWHUYDO RU UDWLR VFDOH 7KH JHQHUDO IRUP RI ORJLVWLF
    UHJUHVVLRQLVH[SUHVVHGDV
    ‫ ݕ‬ൌ ሺܾ଴ ൅ ܾଵ‫ݔ‬ଵ ൅ ܾଶ‫ݔ‬ଶ ൅ ‫ ڮ‬൅ ܾ௡ ‫ݔ‬௡ ሻ         
    
    ௉
    › ൌ Ž‘‰ ቀ ቁ            
    ଵି௉
    
    ௉
    Ž‘‰ ቀ
    ଵି௉
    ቁ ൌ ሺܾ଴ ൅ ܾଵ ‫ݔ‬ଵ ൅ ܾଶ‫ݔ‬ଶ ൅ ‫ ڮ‬൅ ܾ௡ ‫ݔ‬௡ ሻ       
    
    :KHUH[ [«[QDUHGULYLQJIDFWRUVRUH[SODQDWRU\YDULDEOHV\LVDOLQHDUFRPELQDWLRQIXQFWLRQRIWKH
    H[SODQDWRU\YDULDEOHVUHSUHVHQWLQJDOLQHDUUHODWLRQVKLS HT  ELVDQLQWHUFHSWRIWKHPRGHOEE«EQ
    DUHUHJUHVVLRQFRHIILFLHQWRUPRGHOSDUDPHWHUVZKLFKDUHWREHHVWLPDWHG3LVSUREDELOLW\RIWUDQVLWLRQRI
    FHOOIURPQRQXUEDQWRXUEDQ 9HUEXUJHWDO&KHQJ 0DVVHU )XQFWLRQ\LVUHSUHVHQWHGDV
    WKHORJRIWKHRGGVRUOLNHOLKRRGUDWLRWKDWWKHGHSHQGHQWYDULDEOHLV HT  7KHYDOXHIURPHTXDWLRQ
    UDQJHVIURPWR,IWKHYDOXHLVFORVHWRWKHSUREDELOLW\RIWUDQVLWLRQRIFHOOIURPQRQXUEDQWR
    XUEDQLVYHU\KLJKDQGLILWLVFORVHWRWKHSUREDELOLW\RIWUDQVLWLRQLVYHU\ORZ7KHSUHGLFWHGRXWFRPH
    LVEDVHGRQWKHSUHGLFWHGSUREDELOLWLHVLQZKLFKSUREDELOLW\YDOXHJUHDWHUDQGHTXDOWRLVFODVVLILHGDV
    DQG SUREDELOLW\ YDOXH OHVV WKDQ  LV FODVVLILHG DV  5HJUHVVLRQ FRHIILFLHQWV b b«bn LQGLFDWH WKH
    FRQWULEXWLRQRIHDFKGULYLQJIDFWRUVRQSUREDELOLW\YDOXH3$SRVLWLYHVLJQLQGLFDWHVWKDWWKHSDUWLFXODU
    IDFWRUZLOOKHOSWRLQFUHDVHWKHSUREDELOLW\RIFKDQJHDQGQHJDWLYHVLJQLQGLFDWHVWKDWWKHSDUWLFXODUIDFWRU
    ZLOOGHFUHDVHWKHSUREDELOLW\RIFKDQJH &KHQJ 0DVVHU )RUHJLIGLVWDQFHWRPDMRUURDGKDV
    QHJDWLYHFRHIILFLHQWWKHQLWLQGLFDWHVWKDWIXUWKHUDZD\IURPWKHPDMRUURDGLHKLJKGLVWDQFHYDOXHORZHU
    WKHSUREDELOLW\RIXUEDQJURZWKLHORZSUREDELOLW\YDOXH7KXVDVDPXOWLYDULDWHHVWLPDWLRQPHWKRGWKLV
    WHFKQLTXHKHOSVWRH[DPLQHWKHGLUHFWLRQRIUHODWLRQVKLSDQGVLJQLILFDQFHRIWKHGULYLQJIDFWRUV

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    ,QWKLVVWXG\ELQRPLDOELQDU\ORJLVWLFUHJUHVVLRQPRGHOLVVHOHFWHGDVLWIRFXVHVRQGLFKRWRPRXVUHVXOWRI
    ¶XUEDQ·RU¶QRQXUEDQ·$YDOXHRIFRUUHVSRQGVWRWKHFKDQJHRIODQGFRYHUIURPQRQXUEDQWRXUEDQ
    DQG D YDOXH RI  FRUUHVSRQGV WR QR FKDQJH IURP QRQXUEDQ WR XUEDQ 7KH GHSHQGHQW YDULDEOH LV
    FRQVWUXFWHG IURP REVHUYHG JURZWK SDWWHUQ XVLQJ  DQG  ODQG FRYHU PDSV 7KH XQNQRZQ
    SDUDPHWHUV E E EQ  DUH HVWLPDWHG E\ XVLQJ PD[LPXP OLNHOLKRRG DOJRULWKP ZKLFK ILWV WKH JUHDWHVW
    SUREDELOLW\ RIREVHUYHG JURZWK &]HSLHO+XDQJHWDO:XHWDO  7KH PRGHOLQJZDV
    SHUIRUPHGLQ&KDQJHDQDO\VWH[WHQVLRQWRROLQ$UF*,6
    
    7R LQWHUSUHW HVWLPDWHG SDUDPHWHUV 2GGVUDWLR 25 ZDV XVHG 2GG UDWLR LV DQ LQGLFDWRU RI FKDQJH LQ
    RGGVUHVXOWLQJIURPDXQLWFKDQJHLQWKHSUHGLFWRU )LHOG ,WLVVLPSO\FDOFXODWHGDVIROORZV
    
    ௢ௗௗ௦௔௙௧௘௥௔௨௡௜௧௖௛௔௡௚௘௜௡௧௛௘௣௥௘ௗ௜௖௧௢௥
      ο‫ ݏ݀݀݋‬ൌ       
    ௢௥௜௚௜௡௔௟௢ௗௗ௦

    7KLVSURSRUWLRQDWHFKDQJHLQRGGVLVFDOOHGRGGUDWLR,IWKHYDOXHLVJUHDWHUWKDQWKHQLWLQGLFDWHVWKDW
    DVWKHYDOXHRISUHGLFWRULQFUHDVHWKHRGGVRIRXWFRPHRFFXUULQJLQFUHDVHDQGLIWKHYDOXHLVVPDOOHUWKDQ
    LWLQGLFDWHVWKDWDVSUHGLFWRULQFUHDVHVWKHRGGVRIWKHRXWFRPHRFFXUULQJGHFUHDVH )LHOG  

    7KHJRRGQHVVRIILWRI/5PRGHOZDVEDVHGRQWKH&KLVTXDUHWHVW (T &KLVTXDUHLVDVWDWLVWLFDOWHVW


    WKDWLVFRPPRQO\XVHGWRPHDVXUHWKHILWRIWKHREVHUYHGYDOXHVWRWKHH[SHFWHGYDOXHV,WWHVWVWKHQXOO
    K\SRWKHVLV ZKLFK VWDWHV WKDW LQGHSHQGHQW YDULDEOHV KDYH QR LQIOXHQFH RQ WKH PRGHO RXWFRPH
    &KULVWHQVHQ+XDQJHWDO 7KHIRUPXODIRUFDOFXODWLQJ&KLVTXDUHLV

    ሺ௢௕௦௘௥௩௘ௗ௩௔௟௨௘ି௘௫௣௘௖௧௘ௗ௩௔௟௨௘ሻమ
    ‫ ݄݅ܥ‬െ ‫݁ݎܽݑݍݏ‬ሺ߯ʹሻ ൌ σ ௘௫௣௘௖௧௘ௗ௩௔௟௨௘
    (7)

    ,QRUGHUWRDFFHSWRUUHMHFWWKHQXOOK\SRWKHVLVSYDOXHLVHVWLPDWHGDQGFRPSDUHGZLWKVLJQLILFDQWOHYHO
    ,IWKHHVWLPDWHGSYDOXHLVOHVVWKDQWKHQQXOOK\SRWKHVLVLVUHMHFWHGZKLFKSURYHVWKDWWKHUHLV
    VLJQLILFDQWLQIOXHQFHRILQGHSHQGHQWYDULDEOHVRQWKHPRGHORXWSXW

    7R GHWHUPLQH ZKHWKHU D YDULDEOH LV VLJQLILFDQW SUHGLFWRU RI WKH PRGHO 7:DOG VWDWLVWLFV ]YDOXH  ZDV
    XVHG (T  :DOG VWDWLVWLFV WHOOV ZKHWKHU WKH HVWLPDWHG FRHIILFLHQWV IRU WKH SUHGLFWRU YDULDEOHV DUH
    VLJQLILFDQWO\ GLIIHUHQW IURP ]HUR ,I WKH FRHIILFLHQW LV VLJQLILFDQWO\ GLIIHUHQW IURP ]HUR WKHQ LW FDQ EH
    DVVXPHGWKDWWKHSUHGLFWRULVPDNLQJDVLJQLILFDQWFRQWULEXWLRQWRWKHSUHGLFWLRQRIWKHRXWFRPH &KHQJ
    0DVVHU)LHOG :DOGVWDWLVWLFLVFDOFXODWHGDVIROORZV
    ௕
        ܹ݈ܽ݀ሺ‫ݖ‬ሻ ൌ ௌா        
    ್
    
    :KHUHELVDFRHIILFLHQWRILQGHSHQGHQWYDULDEOHDQG6(ELVDVWDQGDUGHUURU
    
    7ZRPHWKRGVH[LVWIRUWKHVHOHFWLRQRIVLJQLILFDQWYDULDEOHVEDFNZDUGHOLPLQDWLRQDQGIRUZDUGLQFOXVLRQ
    /HVVFKHQ HW DO   ,Q IRUZDUG LQFOXVLRQ SURFHGXUH WKH LQGHSHQGHQW YDULDEOHV DUH LQFOXGHG LQ WKH
    SURFHVVRQHE\RQHXQWLODOOWKHYDULDEOHVDUHLQYROYHGLQWKHLWHUDWLRQSURFHVVDQGDOOVLJQLILFDQWYDULDEOHV
    DUH DXWRPDWLFDOO\ VHOHFWHG :KHUHDV LQ EDFNZDUG HOLPLQDWLRQ SURFHGXUH DOO LQGHSHQGHQW YDULDEOHV DUH
    LQFOXGHG LQ WKH SURFHVV DW ILUVW DQG WKH LQVLJQLILFDQW YDULDEOHV DUH UHPRYHG RQH E\ RQH XQWLO DOO WKH
    UHPDLQLQJYDULDEOHVDUHVLJQLILFDQW8VXDOO\ERWKPHWKRGVSURGXFHWKHVDPHUHVXOW /HVVFKHQHWDO 
    +RZHYHUDFFRUGLQJWR'DOODO  EDFNZDUGHOLPLQDWLRQKDVDQDGYDQWDJHRYHUIRUZDUGHOLPLQDWLRQ
    EHFDXVHLQEDFNZDUGHOLPLQDWLRQMRLQWSUHGLFWLYHFDSDELOLW\RIWKHYDULDEOHVFDQEHQRWLFHGDVLWVWDUWVZLWK
    DOO YDULDEOHV LQ WKH PRGHO ZKHUHDV IRUZDUG HOLPLQDWLRQ IDLOV WR LGHQWLI\ WKLV HIIHFW 6R D EDFNZDUG
    HOLPLQDWLRQSURFHGXUHZDVDSSOLHGWRREWDLQWKH/5PRGHOZLWKVLJQLILFDQWYDULDEOHV

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    
    2QWKHEDVLVRI:DOGVWDWLVWLFVWKHVLJQLILFDQFHRIHDFKSUHGLFWRUYDULDEOHZDVGHWHUPLQHG,IWKHSYDOXH
    RIWKHYDULDEOHZDVJUHDWHUWKDQWKHFRQILGHQFHLQWHUYDOWKHQWKHYDULDEOHZLWKKLJKHVWVLJQLILFDQWYDOXH
    ZDV UHPRYHG DQG WKH PRGHO SDUDPHWHUV ZHUH UHHVWLPDWHG 7KLV SURFHVV ZDV UHSHDWHG XQWLO DOO WKH
    YDULDEOHVKDGORZHUSYDOXHVWKDQWKDWRIFRQILGHQFHLQWHUYDO
    
    $VVXPSWLRQVRI5HJUHVVLRQ
    7KHUH DUH QXPEHU RI DVVXPSWLRQV WKDW QHHG WR EH VDWLVILHG WR XVH WKH ORJLVWLF UHJUHVVLRQ PRGHO
    /HVVFKHQHWDO DVOLVWHGEHORZ
     $OOLQGHSHQGHQWYDULDEOHVDUHLQWHUYDOUDWLRRUGLFKRWRPRXVDQGWKHDOOGHSHQGHQWYDULDEOHVDUH
    FRQWLQXRXV
     6SHFLILFDWLRQD DOOUHOHYDQWSUHGLFWRUVRIWKHGHSHQGHQWYDULDEOHVDUHLQFOXGHGLQWKHDQDO\VLVE 
    QRLUUHOHYDQWSUHGLFWRUVDUHLQFOXGHGLQWKHDQDO\VLVDQGF WKHIRUPRIWKHUHODWLRQVKLSDPRQJ
    WKHLQGHSHQGHQWDQGGHSHQGHQWYDULDEOHVLVOLQHDU
     ([SHFWHGYDOXHRIHUURULV]HUR
     (UURUVDUHQRUPDOO\GLVWULEXWHGIRUHDFKVHWRIYDOXHVRIWKHLQGHSHQGHQWYDULDEOHV
     7KHUHLVQRDXWRFRUUHODWLRQDPRQJWKHHUURUWHUPVSURGXFHGE\GLIIHUHQWYDOXHVRILQGHSHQGHQW
    YDULDEOHV
     1RQHRILQGHSHQGHQWYDULDEOHVKDYHSHUIHFWFROOLQHDULW\EHWZHHQHDFKRWKHU

     0RGHOHYDOXDWLRQ
    7KHHYDOXDWLRQRIPRGHOZDVSHUIRUPHGIRUWKHWLPHVSDQRI)LUVWWKHGHYHORSPHQWVWDWXVRI
    VDPSOH FHOOV IRU  DQG  ZDV GHWHUPLQHG 7KHQ IRU HDFK FHOO WKH SUREDELOLW\ RI FKDQJH ZDV
    FRPSXWHGZLWKWKHHVWLPDWHGSDUDPHWHUV7KHPRGHOZDVWKHQHYDOXDWHGRQWKHEDVLVRISHUFHQWDJHRI
    FRUUHFWSUHGLFWLRQ 3&3 DQG.DSSDVWDWLVWLFV

    ‡”…‡–ƒ‰‡‘ˆ…‘””‡…–’”‡†‹…–‹‘ȋȌ
    3&3 LV RQH RI WKH HIILFLHQW ZD\ WR DVVHVV WKH JRRGQHVV RI ILW RI WKH /5 PRGHO WKDW FURVV WDEXODWH
    SUHGLFWLRQZLWKWKHREVHUYDWLRQV ;LHHWDO ,WLVGHILQHGDVWKHSHUFHQWDJHRIREVHUYDWLRQVWKDWDUH
    FRUUHFWO\SUHGLFWHGLH
    ே௨௠௕௘௥௢௙௖௢௥௥௘௖௧௣௥௘ௗ௜௖௧௜௢௡௦
     ܲ‫ ܲܥ‬ൌ ்௢௧௔௟௡௨௠௕௘௥௢௙௣௥௘ௗ௜௖௧௜௢௡௦
    šͳͲͲ      
    
    $OWKRXJK3&3LVDQHIILFLHQWZD\WRPHDVXUHPRGHOILWLWKDVDQLVVXHRIFODVVLILFDWLRQUXOH,WDUELWUDULO\
    XVH WKH FODVVLILFDWLRQ UXOH WKDW 3L•Ⱥ DQG 3LȺ WKLV FXWRII YDOXH WUHDWV DQ REVHUYDWLRQ ZLWK
    3L DVVDPHDVDQREVHUYDWLRQZLWK3L GHVSLWHWKHIDFWWKDWWKHIRUPHUYDOXHH[SODLQPXFKOHVV
    WKDQWKHODWWHU7KLVFDQRYHUVWDWHVWKHSUHFLVLRQRI3&3 0DWW 6RLWLVDGYLVDEOHWRXVHDOWHUQDWLYH
    PHDVXUHWRHYDOXDWHWKHJRRGQHVVRIPRGHOILW 'XERY\NHWDO 
    
    .DSSDVWDWLVWLFLVDQDOWHUQDWLYHPHWKRGWRPHDVXUHWKHDFFXUDF\RIWKHPRGHOSUHGLFWLRQZKLFKUDQJHV
    EHWZHHQDQG /HVVFKHQHWDO LVFRPSOHWHO\GLVDJUHHPHQWEHWZHHQREVHUYHGDQGH[SHFWHG
    DJUHHPHQWLVSUHIHFWDJUHHPHQWDQGLVH[DFWO\ZKDWZRXOGEHH[SHFWHGE\FKDQFH7KHFDOFXODWLRQLV
    EDVHG RQ WKH GLIIHUHQFH EHWZHHQ KRZ PXFK DJUHHPHQW LV DFWXDOO\ SUHVHQW REVHUYHG DJUHHPHQW 

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    FRPSDUHG WR KRZ PXFK DJUHHPHQW ZRXOG EH H[SHFWHG WR EH SUHVHQW E\ FKDQFH DORQH H[SHFWHG
    DJUHHPHQW  9LHUD *DUUHWW )RUPXODIRU.DSSDVWDWLVWLFVLV
    
    ௉೚ ି௉೐
       ‫ܽ݌݌ܽܭ‬ሺ‫ܭ‬ሻ ൌ ଵି௉೐
            
    
    ZKHUH୭ VWDQGVIRUREVHUYHGDJUHHPHQWDQGୣ IRUH[SHFWHG DJUHHPHQW,Q DGGLWLRQWRWKHVWDQGDUGV
    NDSSD LQGH[ /HVVFKHQ HW DO   GHILQHV WKUHH YDULDWLRQV RI .DSSD .DSSD IRU QR LQIRUPDWLRQ . 
    .DSSDIRUORFDWLRQ .ORF DQG.DSSDIRUTXDQWLW\ .+LVWR .LVDQRYHUDOOLQGH[RIDJUHHPHQW.ORFLVDQ
    LQGH[ WKDW PHDVXUHV WKH DJUHHPHQW LQ WHUPV RI ORFDWLRQ RQO\ DQG .+LVWR LV WKH DJUHHPHQW LQ WHUPV RI
    TXDQWLW\$FFRUGLQJWR3RQWLXV  D.DSSDYDOXHKLJKHUWKDQFDQEHFRQVLGHUHGDVVDWLVIDFWRU\
    IRUODQGXVHFKDQJHPRGHOOLQJ

     3UHGLFWLQJIXWXUHXUEDQJURZWK
    7KH SUREDELOLW\ PDS RI XUEDQ JURZWK IRU  DQG  ZHUH SURGXFHG E\ ILWWLQJ HVWLPDWHG PRGHO
    SDUDPHWHUVDQGXVLQJIDFWRUVRILQHTXDWLRQ

     3RVVLELOLW\RIHUURUV
    7KH PDLQ SUREDEOH VRXUFH RI HUURU LV GXH WR WKH DVVXPSWLRQ WKDW XUEDQ JURZWK RI WKH VWXG\ DUHD LV
    H[SODLQHG RQO\ E\ WKH IDFWRUV WKDW DUH FRQVLGHUHG LQ WKH PRGHOLQJ 2WKHUV SRVVLEOH LQIOXHQFHV VXFK DV
    SHUVRQDOSUHIHUHQFHIRUKRXVHKROGORFDWLRQSROLWLFDOIDFWRUVDIHW\IDFWRUODQG XVHSROLFLHV HWF DUH QRW
    FRQVLGHUHG $QRWKHU VRXUFH LV GXH WR DFFXPXODWHG HUURU GXULQJ *,6 RSHUDWLRQV VXFK DV FDOFXODWLQJ
    (XFOLGHDQGLVWDQFHWKUHVKROGYDOXHIRUGHWHUPLQLQJZLQGRZVL]HJHQHUDOL]DWLRQRISRSXODWLRQGDWDDQG
    ODQGYDOXH$QRWKHUSRVVLEOHVRXUFHLVODFNRIUHFHQWGDWDWRYDOLGDWHWKHSUHGLFWLRQVRIXUEDQJURZWK

     6RIWZDUHXVHG
    7KHVRIWZDUHXVHGLQWKLVVWXG\ZDV(UGDV,PDJLQH$UF*,6&KDQJHDQDO\VWVRIWZDUH +XDQJHWDO
     0DSFRPSDULVRQ.LW,%06366VWDWLVWLFVDQG0LFURVRIWRIILFHSDFNDJHV
     

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

     5(68/76$1'',6&866,21
    7KLV FKDSWHU GHDOV ZLWK WKH PDLQ ILQGLQJV RI WKH UHVHDUFK LQFOXGLQJ XUEDQ JURZWK DQDO\VLV DQDO\VLQJ
    GULYLQJ IDFWRUV RI XUEDQ JURZWK XVLQJ D ORJLVWLF UHJUHVVLRQ /5  PRGHO DQG SURMHFWLQJ IXWXUH XUEDQ
    JURZWKSDWWHUQ7KHRYHUDOOUHVXOWRIWKHDQDO\VLVDUHSUHVHQWHGLQILYHVHFWLRQVWKHILUVWVHFWLRQH[SODLQV
    DERXWLGHQWLILFDWLRQDQGTXDQWLILFDWLRQRIVSDWLRWHPSRUDOSDWWHUQRIXUEDQJURZWKWKHVHFRQGVHFWLRQ
    GHPRQVWUDWHVWKHXVHRI/5PRGHOLQJWRH[DPLQHWKHUHODWLRQVKLSEHWZHHQXUEDQJURZWKDQGLWVGULYLQJ
    IDFWRUVWKHWKLUGVHFWLRQSUHVHQWVHYDOXDWLRQRI/5PRGHOVWKHIRXUWKVHFWLRQGHPRQVWUDWHVIRUHFDVWLQJ
    RIIXWXUHXUEDQJURZWKDQGWKHODVWVHFWLRQSUHVHQWVGLVFXVVLRQDQGSRVVLEOHLPSOLFDWLRQRIWKHUHVXOW

     ,GHQWLI\LQJVSDWLRWHPSRUDOSDWWHUQRIXUEDQJURZWK
    ,Q RUGHU WR H[DPLQH WKH VSDWLRWHPSRUDO FKDQJH LQ XUEDQ JURZWK GLIIHUHQW ODQG FRYHUPDSV DQG ODQG
    FRYHUVWDWLVWLFVZHUHSURGXFHGZKLFKDUHSUHVHQWHGLQWKHIROORZLQJVXEVHFWLRQV7KHLGHQWLILHGVSDWLR
    WHPSRUDOSDWWHUQRIXUEDQJURZWKLVGHSHQGHQWRQVFDOHRIDQDO\VLV UHVROXWLRQ DQGGDWDDYDLODELOLW\,W
    ZRXOGEHPRUHUHOLDEOHLI/DQGVDWLPDJHULHVZHUHDYDLODEOHIRUVDPHVHDVRQDWHTXDOWLPHLQWHUYDOIRUWKH
    H[DFWTXDQWLILFDWLRQRIJURZWK%XWEHFDXVHRIGDWDFRQVWUDLQWVWKLVVWXG\KDVXVHGLPDJHVIURPGLIIHUHQW
    VHDVRQ DQG WLPH LQWHUYDO ZKLFK LQWURGXFH FHUWDLQ GHJUHH RI XQFHUWDLQW\ GXH WR VHDVRQDO YDULDWLRQ DQG
    WHPSRUDOLQFRQVLVWHQF\

     $FFXUDF\DVVHVVHPHQWRIODQGFRYHUFODVVLILFDWLRQ
    )RU WKH DFFXUDF\ DVVHVVPHQW RI WKH ODQG FRYHU FODVVLILFDWLRQV  UDQGRP UHIHUHQFH SRLQWV ZHUH
    JHQHUDWHG IURP WKH KLJK UHVROXWLRQ LPDJHU\ VHH VHFWLRQ F  ,VPDLO  -XVRII   LQGLFDWH WKDW DQ
    DFFXUDF\RILVDFFHSWDEOHOHYHORIGLJLWDOLPDJHFODVVLILFDWLRQIRU/DQGVDWLPDJHULHV+RZHYHULQWKLV
    VWXG\WKHZDWHUERGLHVDWWDLQHGDYHU\ORZDFFXUDF\OHYHOEHFDXVHPRVWRIWKHULYHUVKDYHOHVVWKDQP
    ZLGWKLHOHVVWKDQDSL[HOVL]HRIWKHLPDJHDQGFRPSULVHRIVKDOORZZDWHU,QDGGLWLRQVDQG\ULYHUEHGV
    KDYH YHU\ VLPLODU VSHFWUDO FKDUDFWHULVWLFV WR WKDW RI EXLOWXS DUHD 7KHVH IDFWV PDGH ZDWHU ERGLHV YHU\
    GLIILFXOWWRGHWHFWDQGWKXVQHHGHGSRVWFODVVLILFDWLRQUHILQHPHQW3RVWFODVVLILFDWLRQUHILQHPHQWZDVGRQH
    LQWZRVWHSV)LUVWPDMRULW\ILOWHUZLWKD[ZLQGRZZDVXVHGWRHOLPLQDWHPLVFODVVLILHGSL[HOV6HFRQG
    WKHULYHUQHWZRUNDQGRWKHUZDWHUERGLHVZHUHRYHUODLGZLWKWKHILOWHUHGLPDJHWRUHWDLQWKHZDWHUERGLHV
    LQ ODQG FRYHU PDSV 7KHVH IHDWXUHV ZHUH H[WUDFWHG IURP WKH ODQG XVH PDS RI  %HIRUH SRVW
    FODVVLILFDWLRQ UHILQHPHQW WKH RYHUDOO DFFXUDF\ RI WKH FODVVLILHG LPDJHV IRU WKH GLIIHUHQW \HDUV UDQJHG
    EHWZHHQZKLFKLQFUHDVHGWRDIWHUSRVWSURFHVVLQJ VHH7DEOHDQG7DEOH 6R
    RYHUDOOWKHREWDLQHGODQGFRYHUFODVVLILFDWLRQUHVXOWLVVXIILFLHQWO\DFFXUDWHIRUWKHIXUWKHUDQDO\VLV
    
    7DEOH/DQGVDWLPDJHFODVVLILFDWLRQDFFXUDFLHV  EHIRUHSRVWSURFHVVLQJ

    /DQGFRYHUFODVV            


     3URGXFHU
    V 8VHU
    V 3URGXFHU
    V 8VHU
    V 3URGXFHU
    V 8VHU
    V
    8UEDQ      
    :DWHU      
    )RUHVW      
    $UDEOHODQG      
    2YHUDOODFFXUDF\   
    
    .DSSDVWDWLVWLFV      
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    7DEOH/DQGVDWLPDJHFODVVLILFDWLRQDFFXUDFLHV  DIWHUSRVWSURFHVVLQJ

    /DQGFRYHUFODVV            


     3URGXFHU
    V 8VHU
    V 3URGXFHU
    V 8VHU
    V 3URGXFHU
    V 8VHU
    V
    8UEDQ      
    :DWHU      
    )RUHVW      
    $UDEOHODQG      
    2YHUDOODFFXUDF\   
    
    .DSSDVWDWLVWLF      
    
    7KH KLJKHVW SURGXFHU·V DFFXUDF\ ZKLFK FRUUHVSRQGV WR HUURU RI FRPPLVVLRQ VHH VHFWLRQ   ZDV
    REWDLQHG IRU IRUHVW FODVV IROORZHG E\ DUDEOH ODQG DQG XUEDQ FODVV ZDWHU ERGLHV DWWDLQHG RQO\ 
    SURGXFHU·VDFFXUDF\$IWHUSRVWFODVVLILFDWLRQUHILQHPHQWWKHSURGXFHU·VDFFXUDF\IRUZDWHULQFUHDVHGWR
     7DEOH   7KH UHVXOW VKRZV WKDW WKHUH LV VWLOO  LQDFFXUDF\ LQ WKH FODVVLILFDWLRQ ZKLFK LV
    SUREDEO\GXHWRFRQIOLFWEHWZHHQXUEDQFODVVDQGEDUHFODVV LQFOXGHGLQDUDEOHODQG ZKLFKKDYHVLPLODU
    VSHFWUDO FKDUDFWHULVWLFV 7KH KLJKHVWYDOXH RI XVHU·V DFFXUDF\LH HUURURIRPLVVLRQLV DWWDLQHGE\ IRUHVW
    ZLWKDFFXUDF\LQDOOWKUHH\HDUVZKLFKLVIROORZHGE\XUEDQFODVVZLWKDFFXUDF\OHYHORI
    DQGLQDQGUHVSHFWLYHO\DIWHUSRVWFODVVLILFDWLRQUHILQHPHQW VHH7DEOH 7KLV
    YDULDWLRQLVSUREDEO\FDXVHGE\VHDVRQDOHIIHFWRQODQGFRYHU
    
    7KH .DSSD VWDWLVWLFV LV DXWRPDWLFDOO\ JHQHUDWHG IURP WKH UHVXOW RI WKH ODQG FRYHU FODVVLILFDWLRQ 7KH
    .DSSD YDOXH RI  DQG  LQ WDEOH  UHSUHVHQWV D SUREDEOH  DQG  EHWWHU DFFXUDF\ WKDQ LI
    FODVVLILFDWLRQ LV EDVHG RQ UDQGRP XQVXSHUYLVHG FODVVLILFDWLRQ LQVWHDG RI WKH HPSOR\HG PD[LPXP
    OLNHOLKRRG FODVVLILFDWLRQ /DQGLV  .RFK   LQGLFDWH WKDW WKH DJUHHPHQW LV SRRU ZKHQ .DSSD
    JRRGZKHQ.DSSDDQGH[FHOOHQWZKHQ.DSSD!$IWHUUHILQHPHQWWKH.DSSDYDOXHIRUDOO
    FODVVLILHGLPDJHVLVJUHDWHUWKDQ VHH7DEOH 7KXVWKHRYHUDOODFFXUDF\LVFRQVLGHUHGDFFHSWDEOH
    IRUWKLVVWXG\

     7UHQGRIODQGFRYHUFKDQJHLQDQG
    
    $IWHUFODVVLILFDWLRQDQGDFFXUDF\DVVHVVPHQWWKHWUHQGRIXUEDQJURZWKRYHUWLPHZDV DQDO\VHGRQWKH
    EDVLVRIWKHODQGFRYHUPDSVJHQHUDWHG)LJXUHVKRZVWKHODQGFRYHUPDSVRIWKH\HDUV
    DQG7KHPDSVKRZVWKDWVLJQLILFDQWXUEDQH[SDQVLRQKDVRFFXUUHGGXULQJWKLVSHULRG0RVWRIWKH
    DUDEOH ODQG DQG IRUHVW DUHDV ZHUH WUDQVIRUPHG LQWR XUEDQ ODQGV 7DEOH GHPRQVWUDWH WKDWWKH XUEDQ
    DUHDRI.DWKPDQGXYDOOH\LQFUHDVHGE\ NP LQDQG NP LQDWDQDYHUDJH
    DQQXDOUDWHRINP)LJXUHLVWKHEDUFKDUWZKLFKYLVXDOO\TXDQWLILHVWKHDUHDRIODQGFRYHUFODVVHV
    LQGLIIHUHQW\HDUV$FFRUGLQJWRWKHFKDUWWKHVWXG\DUHDLVGRPLQDWHGE\DUDEOHODQGDQGIRUHVWDUHDV
    
    )URP7DEOHWZRPDLQODQGFRYHUWUDQVLWLRQVFDQEHREVHUYHGLQEHWZHHQ)LUVWO\GXULQJ
    WKH SHULRG RI  DJULFXOWXUDO DUHDV QHDU WKH PDMRU URDGV DQG H[LVWLQJ XUEDQ DUHDV EHJDQ WR
    WUDQVIRUP LQWR XUEDQ ODQG ZLWK DQ DQQXDO UDWH RI  NP ,Q WKLV SHULRG D VLJQLILFDQW DPRXQW RI
    DJULFXOWXUDO ODQG ZDV FRQYHUWHG LQWR XUEDQ DUHDV ZLWK WKH XUEDQL]DWLRQ SDWWHUQ IROORZLQJ E\ WKH URDG
    QHWZRUNVDQGWKHH[LVWLQJEXLOWXSSHULSKHULHV7KHDQQXDOXUEDQJDLQRIFDPH DWWKHH[SHQVHRI
    DUDEOH ODQG 6HFRQGO\ GXULQJ  D GLIIHUHQW SKHQRPHQRQ RI ODQG FRYHU WUDQVIRUPDWLRQ LV
    REVHUYHGFRPSDUHGWRHDUOLHUSHULRG,QWKLVSHULRGWKHXUEDQL]DWLRQFRQWLQXHGDWWKHSUR[LPLW\WRPDMRU

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    URDGVDQGH[LVWLQJEXLOWXSDUHDVEXWXUEDQODQGJDLQHGLWVVL]HDWWKHH[SHQVHRIIRUHVWDUHD$QQXDOO\
    NPRIIRUHVWDUHDLVORVWGXHWRFRQYHUVLRQRIXUEDQEXLOWXSDUHDLQWKLVSHULRG
    

    
    )LJXUH/DQGFRYHUFODVVLILFDWLRQPDSVRI.DWKPDQGXYDOOH\

    7KHODQGFRYHUFKDQJHVIURPRQHVWDWHWRDQRWKHUFDQDOVREHREVHUYHGIURP7DEOHDQG7DEOH
    'XULQJDVLJQLILFDQWDPRXQWRIDJULFXOWXUDOODQGVLHNPZDVWUDQVIRUPHGLQWRXUEDQ
    DUHDDQGDERXWNPRIIRUHVWDUHDLVWUDQVIRUPHGLQWRDUDEOHODQG 7DEOH $IWHUVWKHXUEDQ
    DUHD FRQWLQXHG WR H[SDQG DURXQG WKH H[LVWLQJ XUEDQ SHULSKHU\ DQG DORQJ WKH PDMRU URDGV 7KLV LV WKH
    UHDVRQIRUWKHGHFOLQHLQDUDEOHODQGGXULQJZKHQNPRIDUDEOHODQGZDVWUDQVIRUPHG
    LQWR XUEDQ DUHD 7DEOH   $W WKH VDPH WLPH IRUHVW DUHD DOVR IDFHG D VLJQLILFDQW ORVV EHFDXVH RI
    DJULFXOWXUDO WUDQVIRUPDWLRQ $URXQG  NP RI IRUHVW ODQG ZDV FRQYHUWHG LQWR DUDEOH ODQG %\ 
    DURXQGNPRIIRUHVWODQGKDVEHHQFRQYHUWHGLQWRDUDEOHODQGDQGDURXQGNPRIDUDEOH
    ODQGKDVEHHQFRQYHUWHGLQWRXUEDQDUHD 7DEOH 2INPRIXUEDQJURZWKLQ
    ZDVFRQYHUWHGIURPDUDEOHODQGDQGIURPIRUHVWDUHD7KLVVKRZVWKDWWKHWUHQGRIFRQYHUVLRQRI
    IRUHVWODQGLQWRDUDEOHODQGDQGDUDEOHODQGLQWREXLOWXSDUHDLQWKHYDOOH\LVQRWLFHDEOH
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    )LJXUHYLVXDOL]HWKHVSDWLDOSDWWHUQRIXUEDQJURZWKGXULQJDQG7KHWRWDOXUEDQDUHD
    RIWKH.DWKPDQGXYDOOH\LQFUHDVHGIURPNPLQWRNPLQZLWKDQDQQXDOH[SDQVLRQ
    UDWH RIZKLFK DOVR PHDQV WKDW WKH H[SDQGHG DUHD LV DOPRVW WZR WLPHV WKH RULJLQDO XUEDQ DUHD LQ
     7KH UDWH RI H[SDQVLRQ LV QRW KRPRJHQRXV WHPSRUDOO\ 'XULQJ  WKH VSHHG RI DQQXDO
    XUEDQH[SDQVLRQDFFHOHUDWHGWRDQGWKHH[SDQGHGDUHDDOPRVWGRXEOHGWKHRULJLQDOXUEDQDUHDLQ
    

    
    )LJXUH6SDWLDOSDWWHUQRIXUEDQJURZWKGXULQJ

    
    
    
    
    
    $UHD 6TNP

    
    
    
    
    
    
    $UDEOH
    8UEDQ :DWHU )RUHVW
    ODQG
    $UHD    
    $UHD    
    $UHD    
    
    )LJXUH$UHDRIODQGFRYHUFODVVHVLQNPDWWKHWLPHRIDQDO\VLV

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    7DEOH$QQXDOUDWHRIODQGFRYHUFKDQJH XQLWNP\HDU 

     $UHD NP    5DWHRIFKDQJHLQ 


    &ODVVHV         
    8UEDQ         
    :DWHU         
    )RUHVW         
    $UDEOHODQG         
    7RWDODUHD         
    
    

    7DEOH7KHFRQYHUVLRQPDWUL[RIODQGFRYHUFKDQJHIURPWR XQLWNP 

         
    $UDEOH
    8UEDQ :DWHU )RUHVW ODQG 7RWDO
    8UEDQ     
    :DWHU     
    )RUHVW     
    $UDEOHODQG     
    7RWDO     
    
    
    
    7DEOH7KHFRQYHUVLRQPDWUL[RIODQGFRYHUFKDQJHIURPWR XQLWNP 
         
    $UDEOH
    8UEDQ :DWHU )RUHVW ODQG 7RWDO
    8UEDQ     
    :DWHU     
    )RUHVW     
    $UDEOHODQG     
    7RWDO     
    
    
    
    7DEOH7KHFRQYHUVLRQ0DWUL[RIODQGFRYHUFKDQJHIURPWR XQLWNP 
         
    $UDEOH
    8UEDQ :DWHU )RUHVW ODQG 7RWDO
    8UEDQ     
    :DWHU     
    )RUHVW     
    $UDEOHODQG     
    7RWDO     
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

     3DWWHUQRIXUEDQJURZWK
    $V PHQWLRQHG HDUOLHU LQ VHFWLRQ  VSDWLDO SDWWHUQ RI XUEDQ JURZWK FDQ EH GLVWLQJXLVKHG LQWR WKUHH
    FDWHJRULHV LQILOO H[SDQVLRQ DQG VFDWWHUHG JURZWK ,Q JHQHUDO LQILOOLQJ RFFXUV LQ QRQ EXLOWXS RU YDFDQW
    DUHDVZKLFKLVVXUURXQGHG E\H[LVWLQJEXLOWXSDUHDDQGH[SDQVLRQRFFXUVLQWKHDGMDFHQW XUEDQIULQJH
    VSUHDGLQJ DZD\ IURP H[LVWLQJ EXLOWXS SDWFKHV 7KH WKLUG W\SH RI JURZWK LV VFDWWHUHG JURZWK ZKLFK
    PHDQVWKHIRUPDWLRQRIQHZXUEDQSDWFKHVZLWKRXWDQ\GLUHFWVSDWLDOFRQQHFWLRQZLWKH[LVWLQJEXLOWXS
    SDWFKHV,QRUGHUWRREWDLQLQILOOJURZWKDQGH[SDQVLRQDUHDVRIDQGDFRQWLJXRXV
    SRO\JRQRIDQGEXLOWXSDUHDZHUHFRQVWUXFWHG )LJXUH ,W LV FRQVWUXFWHGE\FRQYHUWLQJ
    EXLOWXSDUHDRIDQGLQWRSRO\JRQDQGDJJUHJDWLQJDOOSRO\JRQVZKLFKDUHZLWKLQWKHGLVWDQFH
    RIP7KHWKUHVKROGGLVWDQFHZDVDGRSWHGIURPWKH185(&  LQZKLFKRQHRIWKHFULWHULDWR
    GHILQHDFRQWLJXRXVEXLOWXSDUHDLVGLVWDQFHWREXLOGLQJVKRXOGEHOHVVWKDQP7KLVSRO\JRQLVWDNHQ
    DVDUHIHUHQFHWR FODVVLI\EXLOWXSDUHD LQWRLQILOOW\SHDQGRXWZDUGH[SDQVLRQW\SH$QDVVXPSWLRQIRU
    GHWHUPLQLQJ LQILOO DQG RXWZDUG H[SDQVLRQ LV DV IROORZV LI XUEDQ JURZWK LV RFFXUULQJ LQVLGH WKH
    FRQWLJXRXVEXLOWXSDUHDWKHQLWLVLQILOOW\SHDQGLIWKHJURZWKLVRFFXUULQJRXWVLGHWKHFRQWLJXRXVEXLOW
    XSDUHDWKHQLWLVH[SDQVLRQ)LJXUHVKRZVWKHPHWKRGWKDWZDVDGRSWHGWRGHWHUPLQHLQILOOJURZWK
    DQGH[SDQVLRQ
    

    
    )LJXUH0HWKRGIRUGHWHUPLQLQJLQILOODQGH[SDQVLRQ

    
    )LJXUH,QILOOGHYHORSPHQWDQGRXWZDUGH[SDQVLRQEHWZHHQ OHIW DQG ULJKW 

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    )LJXUHVKRZVWKHVSDWLDOSDWWHUQRILQILOOLQJDQGH[SDQVLRQRIWKHYDOOH\GXULQJDQG
    'XULQJWKHLQILOOGHYHORSPHQWZDVUHODWLYHO\ORZ2QO\ DURXQGNPRI WKHYDFDQW
    ODQGLQVLGHWKHFLW\ZHUHLQILOOHGZKLFKLVRQO\RIWRWDOXUEDQJURZWK VHH7DEOH &RQYHUVHO\
    RIXUEDQJURZWKZDVRFFXUULQJDURXQGWKHFLW\IULQJHVDVRXWZDUGH[SDQVLRQPDLQO\DORQJWKHIRXU
    PDMRUWUDQVSRUWDWLRQFRUULGRUVLQQHUULQJURDGDURXQGWKHFLW\SHULSKHU\DQGDUWHULDOURDGLQZHVWQRUWK
    DQGVRXWK,WVKRXOGEHQRWHGWKDWWKHUHDUHVRPHFLWLHVOLNH%KDNWDSXU7KLPLDQG.LUWLSXUORFDWHGDW
    WKH HDVWHUQDQGZHVWHUQSDUWRIWKHYDOOH\ZKLFKLVQRWWKHSDUWRIXUEDQH[SDQVLRQVLQFHWKH\DUHWKH
    WUDGLWLRQDOVHWWOHPHQWRIWKHYDOOH\'XULQJFRQVLGHUDEOHDUHDVKDYHEHHQGHYHORSHGDORQJWKH
    PDMRUURXWHVDQGDURXQGH[LVWLQJXUEDQSHULSKHULHV,QILOOGHYHORSPHQWZDVLQFUHDVHGWRNPZKLFK
    LV DERXW  RI WRWDO XUEDQ JURZWK ZKLOH  RI ODQG DURXQG FLW\ SHULSKHU\ ZDV XUEDQL]HG DV DQ
    RXWZDUGH[SDQVLRQ
    7DEOH7\SHVRIXUEDQJURZWK XQLWNP 

    $UHD NP 
    7\SHRI
    JURZWK    
    ([SDQVLRQ    
    ,QILOO    
    7RWDO    
    
    )LJXUH ULJKW VKRZVWKDWDSDUWIURPLQILOODQGH[SDQVLRQPDQ\QHZVHWWOHPHQWVDUHHPHUJLQJLQWKH
    YDOOH\LQDIRUPRIVFDWWHUHGGHYHORSPHQW%XWWKLVW\SHRIJURZWKLVQRWYHU\SURPLQHQWDFFRUGLQJWR
    ORFDO H[SHUWV 0RUHRYHU LW LV YHU\ GLIILFXOW WR PRGHO VFDWWHUHG JURZWK LQ ORJLVWLF UHJUHVVLRQ VLQFH LWV
    SUHGLFWLYHSRZHULVSRRUIRUGLVSHUVHGW\SHRIXUEDQJURZWK%HFDXVHRIWKLVUHDVRQVFDWWHUHGJURZWKLV
    QRWPRGHOOHGVHSDUDWHO\UDWKHULWLVLQFOXGHGLQRXWZDUGH[SDQVLRQ6RWKHIROORZLQJVHFWLRQVZLOOGHDO
    ZLWK/5PRGHOLQJIRURYHUDOOXUEDQJURZWKLQILOOLQJDQGH[SDQVLRQRQO\
    

     ,GHQWLI\LQJGULYLQJIDFWRUVRIXUEDQJURZWK
    7KLVVHFWLRQSUHVHQWVWKHPDLQILQGLQJVIURP/5PRGHOLQJWRH[DPLQHWKHUHODWLRQVKLSEHWZHHQXUEDQ
    JURZWKVDQGGULYLQJIDFWRUVLQWKHVWXG\DUHDGXULQJ7KHDQDO\VLVRIGULYLQJIRUFHV
    ZDVQRWSHUIRUPHGGXHWRGDWDXQDYDLODELOLW\IRUGULYLQJIRUFHV6HFWLRQDOUHDG\GLVFXVVHGDERXW
    WKHSUHOLPLQDU\DVVHVVPHQWRIGULYLQJIDFWRUVZKLFKZHUHEDVHGXSRQWKHOLWHUDWXUHUHYLHZ7KLVVHFWLRQ
    ZLOOHODERUDWHWKHUHVXOWVDIWHUDSSO\LQJ/5PRGHOE\XVLQJWKHPHWKRGVH[SODLQHGLQVHFWLRQ

     ,QGHSHQGHQWYDULDEOHIRUXUEDQJURZWK
    7KH/5PRGHOIRURYHUDOOXUEDQJURZWKLQILOOGHYHORSPHQWDQGRXWZDUGH[SDQVLRQZHUHFRQVWUXFWHGRQ
    WKHEDVLVRIIDFWRUVGHULYHGIURPWKHOLWHUDWXUH7DEOHVKRZVWKHOLVWRILQGHSHQGHQWIDFWRUVWKDWDUH
    GHULYHGIURPOLWHUDWXUHVDQGLQFOXGHGLQWKH/5PRGHO$OWRJHWKHUYDULDEOHVZHUHHQWHUHGLQWKH/5
    PRGHODWILUVWDQGPRGHOLQJZDVSHUIRUPHGIRU/DWHUYDULDEOHVZHUHUHPRYHGDFFRUGLQJWR
    WKHLUFROOLQHDULW\YDOXHDQGVLJQLILFDQFHOHYHO$GHWDLOSURFHGXUHIRUUHPRYDORIYDULDEOHVLVH[SODLQHGLQ
    VHFWLRQDQG
    

    )LJXUHDQG)LJXUHDUHWKHIDFWRUPDSVRIDQGXVHGLQWKLVVWXG\2QO\IDFWRUPDSV
    IRUDUHVKRZQLQ)LJXUHVLQFHRWKHUIDFWRUVDUHVDPHDVWKDWRI VHHVHFWLRQ 
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    7DEOH/LVWRIYDULDEOHVDQGGHVFULSWLRQV

    )DFWRU 9DULDEOHLQ/50 'HVFULSWLRQ 1DWXUHRI


    YDULDEOH
    'HSHQGHQW \ XUEDQJURZWK GLFKRWRPRXV
    QRXUEDQJURZWK 
    ,QGHSHQGHQW [  
    %LRSK\VLFDO 6ORSH 'HJUHHRIVORSH FRQWLQXRXV
    FKDUDFWHULVWLFV
    =RQLQJ )RUHVW IRUHVWQRWIRUHVW GLFKRWRPRXV
    3RSXODWLRQGHQVLW\ 3RSGHQ 3RSXODWLRQGHQVLW\ SHUVRQVTNP  FRQWLQXRXV
    3UR[LPDWHFDXVHV 'LVWBUGPDM 'LVWDQFHWRPDMRUURDGV P FRQWLQXRXV
    'LVWBUGPLQ 'LVWDQFHWRPLQRUURDGV P  FRQWLQXRXV
    'LVWBSLSH 'LVWDQFHWRZDWHUVXSSO\OLQHV P  FRQWLQXRXV
    'LVWB&%' 'LVWDQFHWR&%' P  FRQWLQXRXV
    'LVWBLQG 'LVWDQFHWRLQGXVWULDODUHD P  FRQWLQXRXV
    'LVWBULYHU 'LVWDQFHWRPDMRUULYHUV P  FRQWLQXRXV
    'LVWB8FHQWUH 'LVWDQFHWRXUEDQFHQWUHV P  FRQWLQXRXV
    'LVWBKHDOWK 'LVWDQFHWRKHDOWKIDFLOLWLHV P  FRQWLQXRXV
    'LVWBHGX 'LVWDQFHWRHGXFDWLRQDOIDFLOLWLHV P  FRQWLQXRXV
    ([LVWLQJXUEDQFOXVWHU 3URSBXUEDQ 3URSRUWLRQRIXUEDQDUHDLQWKHVXUURXQGLQJ FRQWLQXRXV
    DUHFWDQJXODUQHLJKERXUKRRGRI[ 

    'LVWBXFOXVWHU 'LVWDQFHWRH[LVWLQJXUEDQFOXVWHU P  FRQWLQXRXV

    (FRQRPLFIDFWRU /DQGBYDOXH 9DOXHRIODQGLQHDFKZDUG FRQWLQXRXV


    
    

     

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    )LJXUH)DFWRUPDSVRI

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    
    

    )LJXUH)DFWRUPDSVRI

    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

     0XOWLFROOLQHDULW\GLDJQRVWLFV
    3UHVHQFH RI FROOLQHDULW\ DPRQJ WKH YDULDEOHV FDQ UHVXOWV LQ SRRU HVWLPDWHV RI WKH PRGHO SDUDPHWHUV
    /HVVFKHQ HW DO  6R EHIRUH DQ\ UHJUHVVLRQ DQDO\VLV FDQ EH SHUIRUPHG LW LV SUHUHTXLVLWHWR FKHFN
    PXOWLFROOLQHDULW\ DPRQJ WKH LQGHSHQGHQW YDULDEOHV 9,) LV RQH RI WKH LQGLFDWLYH PHWKRGV WKDW KHOS WR
    FKHFNWKHFROOLQHDULW\DPRQJWKHYDULDEOHV VHHVHFWLRQ $FFRUGLQJWR)LHOG  9,)!VKRXOG
    EHHOLPLQDWHGIURP WKHDQDO\VLVDVLWLQGLFDWHVWKHSUHVHQFHRIYHU\KLJKFROOLQHDULW\ 7RRYHUFRPHWKH
    SUREOHPRIPXOWLFROOLQHDULW\DPRQJWKHGLIIHUHQWGULYLQJIDFWRUV9,)WHVWZDVSHUIRUPHGIRU
    GULYLQJ IDFWRUV 7KH WHVW VKRZHG WKDW GLVWDQFH WR LQGXVWULHV DQG GLVWDQFH WR XUEDQ FHQWUHV DUH KLJKO\
    FRUUHODWHGVLQFHWKH\VFRUH9,)YDOXHDQGUHVSHFWLYHO\ 7DEOH 
    
    7DEOH0XOWLFROOLQHDULW\UHVXOWIRULQGHSHQGHQWYDULDEOHV 6WHS 

    61 9DULDEOHV 'HVFULSWLRQ 9,)


     6ORSH 'HJUHHRIVORSH 
     )RUHVW IRUHVWQRWIRUHVW 
     3RSGHQ 3RSXODWLRQGHQVLW\ SHUVRQVTNP  
     GLVWBUGPDM 'LVWDQFHWRPDMRUURDGV P  
     'LVWBUGPLQ 'LVWDQFHWRPLQRUURDGV P  
     'LVWBSLSH 'LVWDQFHWRZDWHUVXSSO\OLQHV P  
     'LVWB&%' 'LVWDQFHWR&%' P  
     'LVWBULYHU 'LVWDQFHWRPDMRUULYHUV P  
     'LVWB8FHQWUH 'LVWDQFHWRXUEDQFHQWUHV P  
     'LVWBKHDOWK 'LVWDQFHWRKHDOWKIDFLOLWLHV P  
     'LVWBHGX 'LVWDQFHWRHGXFDWLRQDOIDFLOLWLHV P  
     3URSBXUEDQ 3URSRUWLRQRIXUEDQDUHDLQWKHVXUURXQGLQJ DUHFWDQJXODU 
    QHLJKERXUKRRGRI[ 
     'LVWBXFOXVWHU 'LVWDQFHWRH[LVWLQJXUEDQFOXVWHU P  
     /DQGBYDOXH 9DOXHRIODQGLQHDFKZDUG 
     'LVWBLQG 'LVWDQFHWRLQGXVWULDODUHD P   HOLPLQDWHG 

    
    7DEOH0XOWLFROOLQHDULW\UHVXOWIRULQGHSHQGHQWYDULDEOHV 6WHS 

    61 9DULDEOHV 'HVFULSWLRQ 9,)


     6ORSH 'HJUHHRIVORSH 
     )RUHVW IRUHVWQRWIRUHVW 
     3RSGHQ 3RSXODWLRQGHQVLW\ SHUVRQVTNP  
     GLVWBUGPDM 'LVWDQFHWRPDMRUURDGV P  
     'LVWBUGPLQ 'LVWDQFHWRPLQRUURDGV P  
     'LVWBSLSH 'LVWDQFHWRZDWHUVXSSO\OLQHV P  
     'LVWB&%' 'LVWDQFHWR&%' P  
     'LVWBULYHU 'LVWDQFHWRPDMRUULYHUV P  
     'LVWB8FHQWUH 'LVWDQFHWRXUEDQFHQWUHV P  
     'LVWBKHDOWK 'LVWDQFHWRKHDOWKIDFLOLWLHV P  
     'LVWBHGX 'LVWDQFHWRHGXFDWLRQDOIDFLOLWLHV P  
     3URSBXUEDQ 3URSRUWLRQRIXUEDQDUHDLQWKHVXUURXQGLQJ DUHFWDQJXODU 
    QHLJKERXUKRRGRI[ 
     'LVWBXFOXVWHU 'LVWDQFHWRH[LVWLQJXUEDQFOXVWHU P  
     /DQGBYDOXH 9DOXHRIODQGLQHDFKZDUG 
    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    $OWKRXJK9,)IRUGLVWDQFHWRLQGXVWULHVLVOHVVWKDQ 7DEOH LWZDVHOLPLQDWHGIURPWKHDQDO\VLV


    VLQFH WKH YDOXH LV YHU\ FORVH WR  6R DW ILUVW GLVWDQFH WR LQGXVWULHV ZDV HOLPLQDWHG $QG WKH WHVW ZDV
    UHSHDWHG DJDLQ 7KH UHVXOW LQ WKH VHFRQG VWHS VKRZHG WKDW WKHUH ZDV QR VLJQLILFDQW PXOWLFROOLQHDULW\
    DPRQJ WKH YDULDEOHV VLQFH WKH 9,) YDOXH IRU UHPDLQLQJ YDULDEOHV DUH ZHOO EHORZ  VHH 7DEOH  
    7KHUHIRUH LW FDQ EH VDIHO\ FRQFOXGHG WKDW WKHUH LV QR FROOLQHDULW\ ZLWKLQ H[SODQDWRU\ YDULDEOHV LQ WKH
    FXUUHQWPRGHO
    

     /5PRGHOIRURYHUDOOXUEDQJURZWK
    /RJLVWLFUHJUHVVLRQPRGHOIRURYHUDOOXUEDQJURZWKZDVEXLOWE\XVLQJYDULDEOHVWKDWZHUHVHOHFWHGDIWHU
    PXOWLFROOLQHDULW\ GLDJQRVLV %HIRUH EXLOGLQJ WKH UHJUHVVLRQ PRGHO LW LV SUHUHTXLVLWH WR FKRRVH WKH EHVW
    VDPSOLQJ ZLQGRZ VL]H EHFDXVH SUHVHQFH RI DXWRFRUUHODWLRQ DPRQJ WKH UHVLGXDOV SURGXFHG E\
    LQGHSHQGHQWYDULDEOHVLVYHU\VHQVLWLYHWRWKHVDPSOLQJZLQGRZVL]H VHHVHFWLRQ 6RLQRUGHUWR
    FKRRVH WKH EHVW VDPSOLQJ ZLQGRZ VL]H GLIIHUHQW PRGHOV ZHUH EXLOW IRU GLIIHUHQW VDPSOLQJ ZLQGRZ
    YDU\LQJ IURP [ WR [ $W ILUVW WKHVH PRGHOV ZHUH FUHDWHG E\ XVLQJ DOO  IDFWRUV 7KHQ WKH ILQDO
    PRGHOVZHUHFUHDWHGE\XVLQJEDFNZDUGVWHSZLVHSURFHGXUH VHHVHFWLRQIRUEDFNZDUGHOLPLQDWLRQ 
    ZKLFKZDV XVHG WRVHOHFW RQO\ WKRVH IDFWRUVZKLFK KDYH VLJQLILFDQW LQIOXHQFH RQ WKH PRGHO HVWLPDWLRQ
    SRZHU VHH7DEOH$WR7DEOH$LQ$QQH[HV, 7KHHVWLPDWHGSDUDPHWHUVRIWKHPRGHOVZHUHWHVWHG
    E\ XVLQJ 7:DOG VWDWLVWLFV WKDW GHWHUPLQH ZKHWKHU WKH HVWLPDWHG FRHIILFLHQW RI LQGHSHQGHQW YDULDEOH
    PDNHVVLJQLILFDQWFRQWULEXWLRQWRWKHUHVXOWRIPRGHO
    
    )RU HDFK PRGHO QXPEHU RI VLJQLILFDQW GULYLQJ IDFWRUV SHUFHQWDJH RI FRUUHFW SUHGLFWLRQ 3&3  DQG
    0RUDQ·V,ZHUHWHVWHG 7DEOH 3&3ZDVFKHFNHGRQO\IRUEXLOWXSDUHDVLQFHWKHPDLQFRQFHQWUDWLRQ
    RI WKH VWXG\ LV XUEDQ JURZWK ,Q RUGHU WR WHVW WKH SUHVHQFH RI VSDWLDO DXWRFRUUHODWLRQ 0RUDQ·V , ZDV
    FDOFXODWHGRQWKHUHVLGXDOVRIHVWLPDWHGPRGHOV VHHVHFWLRQIRU0RUDQ·V, $UHVLGXDOLQORJLVWLF
    UHJUHVVLRQ PRGHO LV GHILQHG DV WKH GLIIHUHQFH EHWZHHQ REVHUYHG < YDOXHV PLQXV SUHGLFWHG SUREDELOLW\
    7KHVWDWLVWLFVIRUHDFKPRGHOVKRZHGWKDWVDPSOLQJZLQGRZVL]HRI[DQG[VFRUHGORZHU0RUDQ·V
    , ZLWK ]VFRUH ZLWKLQ WKH FULWLFDO UDQJH $V [ KDV KLJKHU QXPEHU RI VLJQLILFDQW GULYLQJ IDFWRUV LQ
    FRPSDULVRQ WR [ WKH PRGHO ZLWK [ VDPSOLQJ VL]H ZDV VHOHFWHG DV WKH ILQDO PRGHO IRU IXUWKHU
    DQDO\VLV
    
    7DEOH6WDWLVWLFDOWHVWRI/50VRIGLIIHUHQWVDPSOLQJZLQGRZVL]H

    &ULWHULD 6DPSOLQJZLQGRZVL]H
    61R
     [ [ [ [ [
     6LJQLILFDQW'ULYLQJ)DFWRUV     
     3HUFHQWDJHRIFRUUHFWSUHGLFWLRQ3&3     
    0RUDQ
    V,QGH[     
     6SDWLDODXWRFRUUHODWLRQ
    ]VFRUH FULWLFDOYDOXHV      
    
    7KHILQDOPRGHORI[VDPSOLQJZLQGRZZDVREWDLQHGRQWKHILIWKEDFNZDUGVWHSDIWHUWKHHOLPLQDWLRQ
    RIIDFWRUVOLNHGLVWDQFHWRXUEDQFHQWUHVGLVWDQFHWRKHDOWKGLVWDQFHWRULYHUDQGIRUHVWVLQFHWKHLU7
    ZDOGVWDWLVWLFV SYDOXHV ZHUHJUHDWHUWKDQDVVLJQHGFRQILGHQFHOHYHO  7KHUHVSHFWLYHSYDOXHVIRU
    WKHVHYDULDEOHVDUHVKRZQLQ7DEOH$LQ$QQH[HV,7KHPRGHOZDVVLJQLILFDQWZLWK&KLVTXDUHYDOXHRI
    DQGSYDOXHOHVVWKDQ7DEOHVKRZVWKHVXPPDU\RIPRGHOIRURYHUDOOXUEDQJURZWK
    $FFRUGLQJ WR WKH WDEOH GLIIHUHQW YDULDEOH KDYH GLIIHUHQW GHJUHH RI LQIOXHQFH RQ SUREDELOLW\ RI XUEDQ

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    JURZWK7KHVHHIIHFWVDUHLQGLFDWHGE\FRHIILFLHQW E ZKLFKVXJJHVWWKDWE YDULDQFHLQXUEDQ JURZWKLV


    H[SODLQHGE\FRUUHVSRQGLQJLQGHSHQGHQWYDULDEOH$ODUJHSRVLWLYHEYDOXHLQGLFDWHVWKHVWURQJSRVLWLYH
    UHODWLRQVKLSEHWZHHQXUEDQJURZWKDQGWKHSUHGLFWRUYDULDEOHVDQGWKHODUJHQHJDWLYHEYDOXHLQGLFDWHV
    WKHVWURQJQHJDWLYHUHODWLRQVKLSZLWKXUEDQJURZWK
    
    ,Q DGGLWLRQ HDFK FRHIILFLHQWV YDOXH LV DVVRFLDWHG ZLWK FRUUHVSRQGLQJ RGGV UDWLR 25  ZKLFK LQGLFDWHV
    WKDWZKLFKYDULDEOHKDVWKHKLJKHVWLQIOXHQFHWRXUEDQJURZWK7KH25VKRZVWKHHIIHFWRILQFUHDVLQJ
    RQH XQLW RI LQGHSHQGHQW YDULDEOH WR WKH SUREDELOLW\ RI XUEDQ JURZWK KROGLQJ WKH RWKHU LQGHSHQGHQW
    YDULDEOHVFRQVWDQWDWDFHUWDLQYDOXH)URPWDEOHLWFDQEHVHHQWKDWSRSXODWLRQGHQVLW\KDVWKHELJJHVW
    LQIOXHQFHRQXUEDQJURZWKFRPSDUHGWRRWKHUIDFWRUV,WKDVFRHIILFLHQWYDOXHRIDQG25YDOXH
    ZKLFKFDQEHLQWHUSUHWHGDVWKHLQFUHDVHRIXQLWLQSRSXODWLRQGHQVLW\ZLOOLQIOXHQFHXQLWRIXUEDQ
    DUHD WR FKDQJHZLWKSUREDELOLW\ YDOXH RI2WKHU IDFWRUV FDQ EH LQWHUSUHWHG LQWKH VLPLODUZD\ DQG
    WKH\FDQEHUDQNHGDFFRUGLQJWRWKHYDOXHRI25DVVKRZQLQWDEOH
    
    $OOWKHYDULDEOHVWKDWKDYHSRVLWLYHUHODWLRQWRXUEDQJURZWKKDYHRGGVUDWLR 25 !LQGLFDWLQJWKDWLQ
    WKHLU SUHVHQFH WKH SUREDELOLW\ RI XUEDQ JURZWK LV KLJK 7KLV PHDQV SRSXODWLRQ GHQVLW\ LV WKH PDMRU
    GULYLQJ IRUFH RI XUEDQ JURZWK ZLWK KLJKHVW 25 RI  IROORZHG E\ SURSRUWLRQ RI XUEDQ DUHD LQ D
    QHLJKERXUKRRGZLWK25DQGODQGYDOXHZLWK25$OOWKHUHPDLQLQJYDULDEOHVWKDWDUHQHJDWLYHO\
    DVVRFLDWHGZLWKXUEDQJURZWKKDYH25LQGLFDWLQJWKDWSUREDELOLW\RIXUEDQJURZWKLVORZLIWKH\DUH
    IXUWKHUDZD\)RUHJGLVWDQFHWRZDWHUVXSSO\OLQH 'LVWBSLSH KDVWKHKLJKHVWQHJDWLYHDVVRFLDWLRQZLWK
    XUEDQJURZWKZKLFKLQGLFDWHVWKDWDVIXUWKHUDZD\IURPDZDWHUVXSSO\OLQH KLJKGLVWDQFHYDOXH WKHOHVV
    SUREDELOLW\RIXUEDQJURZWK ORZSUREDELOLW\YDOXH 
    
    7DEOH0RGHOSDUDPHWHUVIRURYHUDOOXUEDQJURZWK

    7:DOG &,IRU25
    E :DOG WHVW
    9DULDEOHV &RHIILFLHQW  6( ]YDOXH  SYDOXH  25 /RZHU 8SSHU
    &RQVWDQW       
    3RSGHQ       
    3URSBXUEDQ       
    /DQGBYDOXH       
    GLVWBUGPDM       
    6ORSH       
    'LVWBHGX       
    'LVWB&%'       
    'LVWBUGPLQ       
    'LVWBXFOXVWHU       
    'LVWBSLSH       

    
    7KH VWURQJ SRVLWLYH UHODWLRQVKLS RI SRSXODWLRQ GHQVLW\ VHHPV UHDVRQDEOH LQ FDVH RI .DWKPDQGX YDOOH\
    EHFDXVHERWKSRSXODWLRQJURZWKDQGXUEDQJURZWKLVFRQVLVWHQWO\LQFUHDVLQJDVVKRZQLQ)LJXUHLQ
    VHFWLRQ  7KH YDOOH\ XUEDQ DUHD LV VWLOO GRPLQDWHG E\ UHVLGHQWLDO DUHD ZKLFK WHQGV WR KDYH D KLJK
    QXPEHURISRSXODWLRQVUHVLGLQJRYHUWKHUH0RUHRYHUXUEDQJURZWKRIWKHYDOOH\LVKLJKO\LQIOXHQFHE\
    ODQGYDOXHZLWKRGGVUDWLRRI$UHDZKLFKLVDWFORVHUSUR[LPLW\WRFLW\FHQWUHKDVKLJKODQGYDOXHV
    DQGKLJKWHQGHQF\RIJURZWK&RQYHUVHO\DQDUHDZKLFKLVIDUWKHUDZD\IURPFLW\FHQWUHKDVORZODQG
    YDOXH ZLWK ORZ SUREDELOLW\ RI XUEDQ JURZWK $QRWKHU ILQGLQJ IURP WKH UHVHDUFK LV D VLJQLILFDQW

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    UHODWLRQVKLSEHWZHHQSURSRUWLRQRIXUEDQDUHDLQDQHLJKERUKRRGDUHDDQGSUREDELOLW\RIXUEDQJURZWK
    7KH VSDUVHO\ GHYHORSHG EXLOWXS DUHD LQ WKH XUEDQ IULQJH LQ WKH YDOOH\ LV PRVWO\ FOXVWHUHG DURXQG WKH
    H[LVWLQJ XUEDQ DUHDV 7KLV PHDQV DUHDV ZKLFK KDYH KLJKHU SURSRUWLRQ RI XUEDQ DUHDV KDYH KLJKHU
    SRWHQWLDORIJURZWKWKDQDUHDVZKLFKKDYHOHVVXUEDQSURSRUWLRQLQWKHVXUURXQGLQJ
    
    2WKHUGLVWDQFHUHODWHGIDFWRUVVXFKDVGLVWDQFHWRPDMRUURDGGLVWDQFHWRHGXFDWLRQDOIDFLOLWLHVGLVWDQFH
    WR&%'GLVWDQFHVWRPLQRUURDGDQGGLVWDQFHWRH[LVWLQJXUEDQFOXVWHUDQGGLVWDQFHWRZDWHUVXSSO\OLQH
    KDYHQHJDWLYHDVVRFLDWLRQZLWKXUEDQJURZWK7KHPRGHOVKRZVWKDWXUEDQJURZWKRIWKHYDOOH\KDVEHHQ
    FRQWUROOHGE\URDGDFFHVVLELOLW\7KH25IRUGLVWDQFHWRPDMRUURDGVLVRUZKLFKLQGLFDWHV
    WKDWWKHRGGVRIXUEDQGHYHORSPHQWLQDQDUHDFORVHUWRPDMRUURDGLVWLPHVDVODUJHDVWKHRGGVRI
    XUEDQ JURZWK LQ DQ DUHDNP IXUWKHU DZD\ IURPWKHPDMRUURDGV 7KLVKDV FRQWULEXWHG WR WKH VSDWLDO
    SDWWHUQRIOLQHDUGHYHORSPHQWDORQJWKHPDLQURDGV6LPLODUO\WKHUHVXOWUHYHDOVWKDWDUHDFORVHUWR&%'
    KDVKLJKSUREDELOLW\WRWUDQVIRUPLQWREXLOWXSZLWKDQ25RUZKLFKLVWKHHYLGHQFHRI
    WKH FHQWUDOL]HG PRQRFHQWULF XUEDQL]DWLRQ WUHQG RI WKH YDOOH\ )XUWKHUPRUH GLVWDQFH WR H[LVWLQJ XUEDQ
    FOXVWHU KDV DOVR QHJDWLYH DVVRFLDWLRQ ZLWK XUEDQ JURZWK ZKLFK PHDQV KLJKHU WKH GLVWDQFH IURP WKH
    H[LVWLQJXUEDQDUHDVORZHULVWKHSUREDELOLW\RIXUEDQJURZWKDQGORZHUWKHGLVWDQFHIURPWKHH[LVWLQJ
    XUEDQFOXVWHUKLJKHULVWKHSUREDELOLW\RIXUEDQJURZWK
    
    7KHPRGHODOVRGHPRQVWUDWHVWKDWVORSHLVDQLPSRUWDQWIDFWRURIXUEDQJURZWKLQWKH.DWKPDQGXYDOOH\
    ZLWKDQ25RU7KLVPHDQVWKHRGGVRIXUEDQJURZWKLQDQDUHDZLWKORZHUGHJUHHRIVORSH
    LVWLPHVDVODUJHDVLQWKHDUHDZLWKGHJUHHPRUHVORSH7KLVLVFRQILUPHGIURPWKHODQGFRYHUPDS
    DVPRVWRIWKHJURZWKLVFRQFHQWUDWHGLQYDOOH\IORRUZKLFKLVUHODWLYHO\IODW
    
    7DEOH'HJUHHRILQIOXHQFHRIGULYLQJIDFWRUVRQXUEDQJURZWKDFFRUGLQJWRH[SHUW·VLQWHUYLHZ

    )DFWRUVRIXUEDQJURZWK +LJK 0RGHUDWH 1R :HLJKW


    LQIOXHQFH   LQIOXHQFH   LQIOXHQFH  
    %LRSK\VLFDO 6ORSHRULHQWDWLRQ    
    FKDUDFWHU 'HJUHHRIVORSH    
    3RSXODWLRQJURZWK 3RSXODWLRQGHQVLW\    
    3ODQVDQGSROLFLHV =RQLQJ    
    3UR[LPDWHFDXVHV 'LVWDQFHWRPDMRUURDGV    
     'LVWDQFHWRPLQRUURDGV    
    'LVWDQFHWRULQJURDG    
    'LVWDQFHWRZDWHUOLQHV    
    'LVWDQFHWRVHZHUOLQH    
    'LVWDQFHWRHOHFWULFOLQHV    
    'LVWDQFHWR&%'    
    'LVWDQFHWRLQGXVWULDO   
    DUHD 
    'LVWDQFHWRPDMRUULYHUV    
    'LVWDQFHWRXUEDQ   
    FHQWUHV 
    'LVWDQFHWRKHDOWK   
    IDFLOLWLHV 
    'LVWDQFHWRHGXFDWLRQDOIDFLOLWLHV    
    ([LVWLQJFRQGLWLRQV ([LVWLQJXUEDQFOXVWHU    
    (FRQRPLFIDFWRUV /DQGYDOXH    
    6DIHW\ 3ROLWLFDO6DIHW\    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    
    5HJDUGLQJWKHGHJUHHRILQIOXHQFHRIGULYLQJIDFWRUVWKHUHVXOWREWDLQHGIURP/5PRGHODQGWKHUHVXOW
    REWDLQHGIURPH[SHUW·VLQWHUYLHZLVVRPHKRZFRPLQJ WRWKHVDPHFRQFOXVLRQDERXWWKHPDMRUGULYLQJ
    IDFWRUVRIXUEDQJURZWKLQ.DWKPDQGXYDOOH\ 7DEOH )RULQVWDQFHSRSXODWLRQGHQVLW\SURSRUWLRQ
    RIXUEDQDUHDLQVXUURXQGLQJDQGODQGYDOXHKDVKLJKLQIOXHQFHRQXUEDQJURZWKIURPERWKPRGHODQG
    H[SHUW·VLQWHUYLHZZKHUHDVVORSHGLVWDQFHWRHGXFDWLRQDOIDFLOLWLHVDQGGLVWDQFHWRZDWHUVXSSO\OLQHVKDYH
    PRGHUDWH LQIOXHQFH +RZHYHU GLVWDQFH WR PDMRU URDG LV ZKLFK KDV KLJKHVW LQIOXHQFH RQ XUEDQ JURZWK
    DFFRUGLQJWRH[SHUW·VLQWHUYLHZLVVKRZLQJPRGHUDWHLQIOXHQFHDFFRUGLQJWRWKHPRGHOZKLFKLVEHFDXVH
    RIWKHIDFWWKDWSUREDELOLW\RIXUEDQJURZWKGHFUHDVHZKHQGLVWDQFHIURPPDMRULQFUHDVH%HVLGHVWKHUH
    DUH VRPH IDFWRUV ZKRVH VLJQLILFDQFH OHYHO DUH WRWDOO\ GLIIHUHQW LQ WZR FDVHV )RU H[DPSOH GLVWDQFH WR
    XUEDQFHQWUHGLVWDQFHWRKHDOWKIDFLOLWLHVDQG]RQLQJZKLFKDUHVLJQLILFDQWGULYHUVDFFRUGLQJWRH[SHUW·V
    LQWHUYLHZDUHQRWVLJQLILFDQWDWDOODFFRUGLQJWRWKHPRGHODQGDUHWKXVHOLPLQDWHGIURPWKHPRGHO
    

     /5PRGHOIRU,QILOOLQJDQG([SDQVLRQ

     /5PRGHOIRULQILOOJURZWK
    /50IRULQILOOLQJZDVREWDLQHGRQWKHILIWKEDFNZDUGVWHSDIWHUHOLPLQDWLQJWKHIDFWRUVOLNHIRUHVWODQG
    YDOXHGLVWDQFHWRHGXFDWLRQDOIDFLOLWDWHVDQGGLVWDQFHWR&%'VLQFHWKHLUSYDOXHZHUHJUHDWHUWKDQ
    6HH7DEOH$LQ$QQH[HV, 7KHPRGHOZDVVLJQLILFDQWZLWK&KLVTXDUHYDOXHRIZLWKSYDOXH
    OHVVWKDQ7KHVDPSOLQJZLQGRZIRUWKLVPRGHOZDVUHGXFHGWR[IURP[VLQFHLWFRXOGQRWJDLQ
    VLJQLILFDQW SYDOXH IRU PRVW RI WKH YDULDEOHV XVHG LQ WKH PRGHO ZKLFK PLJKW EH EHFDXVH RI OHVV LQILOO
    JURZWK7KHHVWLPDWHG0RUDQ·V,VKRZHGWKDWWKHUHLVQRVSDWLDODXWRFRUUHODWLRQLQWKHUHVLGXDO RIWKH
    PRGHO7KHRYHUDOO3&3ZDVZKLOH3&3IRUEXLOWRSDUHDLV VHH7DEOH 
    
    7DEOH6WDWLVWLFDOWHVWRI,QILOOJURZWKPRGHO

    61 &ULWHULD [


     6LJQLILFDQW'ULYLQJ)DFWRUV 
     3HUFHQWDJHRIFRUUHFWSUHGLFWLRQ3&3 
     3&3IRUEXLOWXSDUHDRQO\ 
     6SDWLDO 0RUDQ
    V,QGH[ 
    DXWRFRUUHODWLRQ ]VFRUH FULWLFDOYDOXHV 
     
    
    
    7DEOHVKRZVWKHHVWLPDWHGSDUDPHWHUVIRUWKHLQILOOJURZWKPRGHOZKHUHYDULDEOHVDUHVLJQLILFDQW
    DWSYODXHOHVVWKDQ$PRQJWKHVHVLJQLILFDQWYDULDEOHVGLVWDQFHWRXUEDQFHQWUHSURSRUWLRQRIEXLOW
    XSDUHDLQDQHLJKERXUKRRGGLVWDQFHWRPDMRUURDGDQGSRSXODWLRQGHQVLW\KDYHSRVLWLYHDVVRFLDWLRQWR
    LQILOO JURZWK ZKLOH RWKHU UHPDLQLQJ YDULDEOHV KDYH QHJDWLYH DVVRFLDWLRQ LQGLFDWLQJ WKDW LQFUHDVH LQ WKH
    YDOXH RI WKHVH IDFWRU ZLOO GHFUHDVH WKH SUREDELOLW\ RI LQILOO JURZWK $OO IDFWRU ZLWK SRVLWLYH FRHIILFLHQW
    KDYH 25! LQGLFDWLQJ WKDW LI WKH YDOXH RI WKHVH YDULDEOHV LV LQFUHDVHG WKHQ LQILOO JURZWK WHQGV WR
    LQFUHDVH:KLOH25LQGLFDWHVWKDWLVWKHYDOXHRIWKHVHYDULDEOHVDUHLQFUHDVHGWKHQSUREDELOLW\RILQILOO
    JURZWKZLOOGHFUHDVH7KHKLJKHVWQHJDWLYHFRHIILFLHQWRIWKHIDFWRULQGLFDWHVWKHORZHVWLQIOXHQFHRIWKLV
    SDUWLFXODUIDFWRURQLQILOOGHYHORSPHQWRIWKHDUHD
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    'LVWDQFHWRXUEDQFHQWUHSOD\VDVLJQLILFDQWUROHLQLQILOOLQJRIYDFDQWODQGLQVLGHWKHH[LVWLQJXUEDQDUHD
    7KHSUREDELOLW\RILQILOOJURZWKLVYHU\KLJKRQDUHDVWKDWDUHIDUWKHUIURPXUEDQFHQWUHVWKDQRWKHUDUHDV
    7KH RGGVRI LQILOO JURZWKZRXOG LQFUHDVH E\ LI GLVWDQFH WR XUEDQ FHQWUH LV LQFUHDVHG E\ RQH XQLW
    7KLV UHODWLRQVKLS LV UHDVRQDEOH LQ .DWKPDQGX YDOOH\ VLQFH XUEDQ DUHDV DURXQG WKH XUEDQ FHQWUHV KDYH
    DOUHDG\EHHQILOOHGZLWKRXWDQ\VSDFHOHIWIRUIXUWKHULQILOOGHYHORSPHQW6LPLODUO\GLVWDQFHWRPDMRUURDG
    KDVDOVRDELJLQIOXHQFHRQWKHSUREDELOLW\RILQILOOLQJ7KHFORVHUWKHDUHDWRPDMRUURDGVWKHORZHULVWKH
    SUREDELOLW\ RILQILOOJURZWKZLWKDQRGGVUDWLRRIZKLFKPHDQV LIWKHDUHDLVRQH XQLW IDUWKHUDZD\
    IURPPDMRUURDGWKHQSUREDELOLW\RILQILOOLQJLVLQFUHDVHGE\7KLVVHHPVWUXHLQFDVHRIYDOOH\VLQFH
    ORWVRILQILOOLQJ DUH RFFXUULQJLQVLGHWKHFLW\SRFNHWVZKLFKDUH IDUWKHUDZD\IURPWKHPDMRUURDGVDQG
    KLJKZD\,QFRQWUDVWSURSRUWLRQRIXUEDQDUHDVLQDVXUURXQGLQJDUHDFRQWULEXWHVYHU\VLJQLILFDQWUROHLQ
    WUDQVIRUPDWLRQRIXUEDQQRQEXLOWXSSRFNHWVLQWREXLOWXS7KLVIDFWRUKDVDQRGGVUDWLRRIZKLFK
    LPSOLHVWKDWWKHSUREDELOLW\RIDQHLJKERXUKRRGWREHLQILOOHGLVWLPHVODUJHUZKHQRQHXUEDQFHOOLV
    DGGHG WRWKLVQHLJKERXUKRRG0RUHRYHUSRSXODWLRQGHQVLW\LVDOVRSOD\LQJDPDMRU UROHWRFRQYHUWWKH
    QRQEXLOWXS DUHD LQVLGH WKH FLW\ LQWR EXLOWXSZLWK DQ RGG UDWLR RI 7KH SUREDELOLW\ RI GHYHORSLQJ D
    YDFDQWODQGLQVLGHWKHFLW\LVLQFUHDVHGE\ZKHQSRSXODWLRQGHQVLW\LVLQFUHDVHGE\RQHXQLW7KLVPHDQV
    WKHSUREDELOLW\RILQILOOLQJLVKLJKHULQWKRVHDUHDVZKHUHSRSXODWLRQGHQVLW\LQKLJK
    
    7DEOH0RGHOSDUDPHWHUVIRU,QILOOJURZWK

    :DOG 7:DOG 2GGV &,IRU25


    ] S UDWLR
    9DULDEOHV &RHIILFLHQW E  6( YDOXH  GI YDOXH  25  /RZHU 8SSHU
    'LVWBXFHQWUH        

    3URSBXUEDQ        

    GLVWBUGPDM        

    3RSGHQ        

    'LVWBXFOXVWHU        

    'LVWBULYHU        


    'LVWBKHDOWK        

    6ORSH        

    'LVWBUGPLQ        

    'LVWBSLSH        

    &RQVWDQW        


    
    2WKHU IDFWRUV VXFK DV GLVWDQFH WR XUEDQ FOXVWHU GLVWDQFH WR ULYHU GLVWDQFH WR KHDOWK IDFLOLWLHV VORSH
    GLVWDQFHWRPLQRUURDGDQGGLVWDQFHWRZDWHUVXSSO\OLQHVKDVQHJDWLYHUHODWLRQVKLSWRLQILOOXUEDQJURZWK
    ,QILOOJURZWKWHQGVWRLQFUHDVHLIGLVWDQFHWRH[LVWLQJXUEDQFOXVWHULVORZZLWKDQRGGVUDWLRRIRU
    7KLVLQGLFDWHVWKDWWKHSUREDELOLW\RILQILOOJURZWKLVWLPHVDVKLJKDVWKHSUREDELOLW\RIDQ
    DUHDWKDWLVDXQLWGLVWDQFHDZD\IURPH[LVWLQJXUEDQFOXVWHU6LPLODUO\GLVWDQFHWRKHDOWKFHQWUHLVDOVR
    SOD\LQJ LPSRUWDQW UROH IRU LQILOO JURZWK RI WKH YDOOH\ 7KLV IDFWRU VFRUHG  25 ZKLFK FDQ EH

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    LQWHUSUHWHGDV$FFRUGLQJWRWKLVILJXUHWKHSUREDELOLW\RILQILOOLQJLVDVELJDVWKHSUREDELOLW\
    RIDQRWKHUDUHDZKLFKLVIDUWKHUDZD\IURPKHDOWKFHQWUHE\RQHXQLW
    
    $QRWKHULQWHUHVWLQJILQGLQJIURPWKHUHVXOWLVWKHQHJDWLYHUHODWLRQVKLSEHWZHHQVORSHDQGLQILOOJURZWK
    $QDUHDWHQGWRKDYHKLJKHUSUREDELOLW\RILQILOOJURZWKLILWKDVORZGHJUHHRIVORSHZKLFKVHHPVORJLFDO
    DV XUEDQ JURZWK LQ WKH YDOOH\ LV RFFXUULQJ LQ UHODWLYHO\ IODW DUHD WKDQ LQ VXUURXQGLQJ HOHYDWHG DUHDV
    'LVWDQFHWRULYHUKDVDOVRLQIOXHQFHGWKHLQILOOGHYHORSPHQWRIXUEDQDUHDVLQWKHYDOOH\0DQ\ULYHUVRI
    WKHYDOOH\KDYHQRSURSHUGHPDUFDWLRQGXHWRZKLFKULYHUEDQNVDUHHQFURDFKHGIRUGLIIHUHQWSXUSRVHV
    7KLV LV WKH UHDVRQ IRU WKH LQILOO JURZWK LQ PDQ\ SDUWV RI WKH FLW\ QHDU WKH ULYHU EDQNV $QRWKHU WZR
    IDFWRUVLHGLVWDQFHWRPLQRUURDGVDQGGLVWDQFHWRZDWHUVXSSO\OLQHVKDYHUHODWLYHO\ORZLQIOXHQFHRQWKH
    LQILOOGHYHORSPHQWVLQFHWKH\VFRUHGORZHVW25DVVKRZQLQWDEOH
    

     /5PRGHOIRU([SDQVLRQ
    /5PRGHOIRUH[SDQVLRQZDVREWDLQHGRQWKHHLJKWEDFNZDUGVWHSVDIWHUWKHHOLPLQDWLRQRIGLVWDQFHWR
    KHDOWKIRUHVWGLVWDQFHWRXUEDQFHQWUHVSURSRUWLRQRIXUEDQLQDQHLJKERXUKRRGVORSHDQGGLVWDQFHWR
    ULYHUVLQFHWKHLUSYDOXHZHUHJUHDWHUWKDQ VHH7DEOH$LQ$QQH[HV, 7KHPRGHOZDVVLJQLILFDQW
    ZLWK&KLVTXDUHYDOXHRIDWSYDOXHOHVVWKDQDQGWKHHVWLPDWHG0RUDQ·V,VKRZHGWKDWWKHUH
    LVQRVSDWLDODXWRFRUUHODWLRQLQWKHPRGHO·VUHVLGXDOV7KHRYHUDOO3&3ZDVZKLOH3&3IRUEXLOWXS
    ZDVRQO\ VHH7DEOH 7KLVLVEHFDXVHPRVWRIWKHXUEDQH[SDQVLRQVDUHRFFXUULQJLQVFDWWHUHG
    PDQQHU 7KLV W\SH RI JURZWK LV SRRUO\ SUHGLFWHG E\ /5 PRGHO DV LW LV QRW VWURQJ HQRXJK WR SUHGLFW
    GLVSHUVHGJURZWK
    7DEOH6WDWLVWLFDOWHVWRI([SDQVLRQPRGHO

    61 &ULWHULD [


     6LJQLILFDQW'ULYLQJ)DFWRUV 
     3HUFHQWDJHRIFRUUHFWSUHGLFWLRQ3&3 
     3&3IRUEXLOWXSDUHDRQO\ 
     6SDWLDO 0RUDQ
    V,QGH[ 
    DXWRFRUUHODWLRQ ]VFRUH FULWLFDOYDOXHV 
     
    
    7DEOH  JLYHV WKH VXPPDU\ RI HVWLPDWHG SDUDPHWHUV RI H[SDQVLRQ PRGHO LQ ZKLFK  IDFWRUV DUH
    VLJQLILFDQWDWSYDOXHOHVVWKDQ$FFRUGLQJWRWKHWDEOHSURSRUWLRQRIXUEDQDUHDLQDQHLJKERXUKRRG
    DQG ODQGYDOXH DUH SRVLWLYHO\ DVVRFLDWHG WR XUEDQ H[SDQVLRQZKLOH GLVWDQFH WR &%' GLVWDQFH WRKHDOWK
    FHQWUHV GLVWDQFH WR XUEDQ FOXVWHU GLVWDQFH WR PLQRU URDG DQG GLVWDQFH WR ZDWHU VXSSO\ OLQHV KDYH
    QHJDWLYH UHODWLRQVKLS ZLWK XUEDQ H[SDQVLRQ $OO WKH IDFWRUV ZKLFK KDYH SRVLWLYH FRHIILFLHQW YDOXH KDYH
    25 ! LQGLFDWLQJ WKDW LQWKHLU SUHVHQFH XUEDQ H[SDQVLRQ WHQGV WR LQFUHDVH &RQYHUVHO\ WKRVH IDFWRUV
    ZKLFK KDYH QHJDWLYH FRHIILFLHQW KDYH 25 LQGLFDWLQJ WKDW LQFUHDVH LQ YDOXH RI WKHVH IDFWRUV ZLOO
    GHFUHDVHWKHSUREDELOLW\RIXUEDQH[SDQVLRQ,QDGGLWLRQIDFWRUZLWKWKHKLJKHVWQHJDWLYHFRHIILFLHQWZLOO
    KDYHORZHVWLQIOXHQFHLQXUEDQH[SDQVLRQ
    
    $FFRUGLQJ WR 7DEOH  SURSRUWLRQ RI XUEDQ DUHD LQ WKH VXUURXQGLQJ KDYH WKH ELJJHVW LQIOXHQFH RQ
    XUEDQH[SDQVLRQRIWKHYDOOH\ZLWK257KLVPHDQVWKHSUREDELOLW\RIXUEDQDUHDWRH[SDQGZLOOEH
    WLPHVJUHDWHULIWKHUHLVDXQLWLQFUHDVHLQSURSRUWLRQRIXUEDQDUHDLQFHUWDLQQHLJKERXUKRRG7KLV
    VHHPVWUXHLQFDVHRI.DWKPDQGXYDOOH\VLQFHPRVWRIWKHJURZWKLVRFFXUULQJDURXQGWKHXUEDQIULQJH
    ZKHUHXUEDQSURSRUWLRQLVKLJKHU$QRWKHUPDMRUGULYLQJIRUFHIRUXUEDQH[SDQVLRQLVODQGYDOXHZKLFK

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    VFRUHGWKH25RI7KLVLQGLFDWHVWKDWWKHSUREDELOLW\RIXUEDQH[SDQVLRQLVLQFUHDVHGE\WLPHVLI
    WKHODQGYDOXHLVLQFUHDVHGE\RQH XQLW7KHUHVXOWVHHPV DPELJXRXVWRFHUWDLQH[WHQWVLQFHLQJHQHUDO
    SHRSOH ZRXOG UDWKHU SUHIHU FKHDSHU ODQG WR EXLOG WKHLU KRXVH %XW LW LV SRVVLEOH LQ .DWKPDQGX YDOOH\
    EHFDXVHODQGYDOXHLQ.DWKPDQGXYDOOH\LVGHWHUPLQHGE\DFFHVVLELOLW\WRURDGQHWZRUNV,IDFFHVVWRURDG
    QHWZRUNLVKLJKWKHQODQGYDOXHWHQGVWREHKLJKHU0RUHRYHUSHRSOHZRXOGSUHIHUWKRVHORFDWLRQVZKLFK
    KDYH KLJKHU DFFHVVLELOLW\ LQVSLWH RI KLJKHU ODQG YDOXH 6R DOWKRXJK WKH ODQG YDOXH LV YHU\ KLJK XUEDQ
    H[SDQVLRQLVJHQHUDOO\VHHQDURXQGURDGQHWZRUNVGXHWRKLJKDFFHVVLELOLW\
    
    7DEOH0RGHOSDUDPHWHUVIRU2XWZDUGH[SDQVLRQ

    2GGV &,IRU25
    &RHIILFLHQW 7:DOG UDWLR
    9DULDEOHV E  6( :DOG GI SYDOXH  25  /RZHU 8SSHU
    &RQVWDQW        
    3URSBXUEDQ        

    /DQGBYDOXH        

    'LVWBFEG        


    'LVWBKHDOWK        

    'LVWBXFOXVWHU        

    'LVWBUGPLQ        

    'LVWBSLSH        

    
    $OORWKHUGLVWDQFHUHODWHGIDFWRUVXFKDVGLVWDQFHWR&%'GLVWDQFHWRKHDOWKFHQWUHVGLVWDQFHWRXUEDQ
    FOXVWHU GLVWDQFH WR PLQRU URDG DQG GLVWDQFH WR ZDWHU VXSSO\ OLQH DUH QHJDWLYHO\ DVVRFLDWHG ZLWK XUEDQ
    H[SDQVLRQ'LVWDQFHWR&%'LVRQHRIWKHPDMRUGULYHUVRIXUEDQH[SDQVLRQLQWKHYDOOH\7KHFORVHUWKH
    GLVWDQFHIURPWKH&%'WKHKLJKHULVWKHSUREDELOLW\RIXUEDQH[SDQVLRQZLWKDQ25RI'LVWDQFHWR
    KHDOWKIDFLOLWLHVDOVRSOD\VDVLJQLILFDQWUROHIRUXUEDQH[SDQVLRQDVLWVFRUH25RIRUZKLFK
    LQGLFDWHVWKDWIRUHYHU\XQLWLQFUHDVHLQGLVWDQFHWR&%'ZLOOIDOOWKHSUREDELOLW\RIXUEDQH[SDQVLRQE\
    WLPHV2WKHUIDFWRUVVXFKDVGLVWDQFHWRXUEDQFOXVWHUGLVWDQFHWRPLQRUURDGDQGGLVWDQFHWRZDWHU
    VXSSO\ OLQH KDYH YHU\ ORZ LQIOXHQFH RQ XUEDQ H[SDQVLRQ VLQFH WKH\ SRVVHV YHU\ ORZ 25 DQG KLJK
    QHJDWLYHFRHIILFLHQWYDOXH

     0RGHOHYDOXDWLRQ
    $Q\XUEDQJURZWKPRGHOKDVWREHHYDOXDWHGIRULWVDFFXUDF\RISUHGLFWLRQEHIRUHXVLQJLWIRUWKHIXUWKHU
    DQDO\VLV:LWKRXWGRLQJVRLWPLJKWSURGXFHDGRXEWIXOUHVXOW7KHUHIRUHPRGHOHYDOXDWLRQLVRQHRIWKH
    LPSRUWDQWVWDJHVLQDVVHVVLQJWKHTXDOLW\RIWKHGHYHORSHG/5PRGHO7KHUHDUHGLIIHUHQWZD\VWRHYDOXDWH
    WKHSHUIRUPDQFHRI/5PRGHOLQFOXGLQJSHUFHQWDJHRIFRUUHFWSUHGLFWLRQ 3&3 DQGWKH.DSSDVWDWLVWLF
    7KHSHUIRUPDQFHRIXUEDQJURZWKPRGHOZDVHYDOXDWHGE\FRPSDULQJWKHSUREDELOLW\PDSRIZLWK
    WKHDFWXDOPDSRIXUEDQJURZWKLQ7KHIROORZLQJVHFWLRQVSUHVHQWWKHHYDOXDWLRQRIRYHUDOOXUEDQ
    JURZWKPRGHOLQILOOJURZWKPRGHODQGH[SDQVLRQPRGHO
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

     (YDOXDWLRQRIRYHUDOOXUEDQJURZWKPRGHO
    7KH3&3YDOXHIRUWKHRYHUDOOXUEDQJURZWKPRGHOZDVTXDQWLILHGIURPWKHFODVVLILFDWLRQWDEOH 
    7DEOH 1RUPDOO\FODVVLILFDWLRQDVVXPHVWKDWLIWKHSUREDELOLW\LVJUHDWHURUHTXDOWRWKHQXUEDQ
    JURZWKLVH[SHFWHGWRRFFXULHSUREDELOLWLHV•DUHFODVVLILHGDVDQGSUREDELOLWLHVDUHFODVVLILHG
    DV  /HVVFKHQ HW DO   %\ XVLQJ WKLV VWDQGDUG WKUHVKROG YDOXH WKH PRGHO SUHGLFWV  RI \
    RFFXUUHQFHFRUUHFWO\7KHPRGHOVHHPVWRKDYHDKLJKSUHGLFWLRQSRZHUGXHWRWKHIDFWWKDWWKHVWXG\
    DUHDFRQVLVWVRIKLJKHUSURSRUWLRQRIXQFKDQJHGFHOOVZKLFKDUHFRUUHFWO\SUHGLFWHG$VDUHVXOWLWVFRUHG
    KLJKHUYDOXHRI3&36LQFHWKHIRFXVRIWKLVUHVHDUFKLVXUEDQJURZWKWKHPRGHOZDVHYDOXDWHGRQO\IRU
    WKHXUEDQDUHD)URP
    7DEOH  EHORZ WKH FRUUHFW SUHGLFWLRQ IRU XUEDQ DUHD LV  5HPDLQLQJ  FRXOG QRW EH
    SUHGLFWHGE\WKHPRGHO7KLVRQWKHRQHKDQGVXJJHVWVWKDWQRWDOOWKHGULYLQJIRUFHVDUHSUHVHQWHGLQ
    WKH /5 PRGHO DQG RQ WKH RWKHU KDQG WKH SKHQRPHQRQ RI XUEDQ JURZWK FDQ QRW EH IXOO\ IRUHVHHQ
    +RZHYHU3&3JUHDWHUWKDQLVDFFHSWDEOHIRUXUEDQJURZWKPRGHOVDFFRUGLQJWRWKHOLWHUDWXUH
    
    7DEOH0RGHOHYDOXDWLRQIRURYHUDOOXUEDQJURZWK

    3UHGLFWHG
    2EVHUYHG
    1RQXUEDQ    8UEDQ    7RWDO 
    1RQXUEDQ        
    8UEDQ        
    7RWDO      
    &RUUHFWSUHGLFWLRQV
    :URQJSUHGLFWLRQ
    3HUFHQWDJHRIFRUUHFWSUHGLFWLRQ 3&3 
    3&3IRUXUEDQDUHDRQO\
    
    .DSSD VWDWLVWLF ZDV XVHG DV DQ DOWHUQDWLYH PHWKRG WR PHDVXUH WKH DJUHHPHQW EHWZHHQ DFWXDO DQG
    SUHGLFWHG XUEDQ JURZWK ZKLFK UDQJHV EHWZHHQ  DQG  VHH VHFWLRQ   ,W FRPSDUHV WKH WZR PDSV
    FHOOE\FHOOWRVHHLIHDFKSDLURIFHOOVLVHTXDORUQRWLQWHUPRIORFDWLRQDQGTXDQWLW\,QDGGLWLRQWRWKH
    VWDQGDUGV.DSSDLQGH[.DSSDIRUORFDWLRQ .ORF DQG.DSSDIRUTXDQWLW\ .+LVWR ZDVDOVRGHWHUPLQHG
    .DSSDIRUORFDWLRQ .ORF LVWKHDJUHHPHQWRIHDFKSDLURIFHOOVLQWHUPRIVSDWLDOSRVLWLRQRQWKHPDSDQG
    .DSSDIRUTXDQWLW\ .+LVWR LVWKHDJUHHPHQWRIHDFKSDLURIFHOOVLQWHUPVRIYDOXH UHIHUVHFWLRQ 
    $FFRUGLQJ WR /DQGLV  .RFK   WKH DJUHHPHQW LV SRRU ZKHQ .DSSD JRRG ZKHQ
    .DSSD DQG H[FHOOHQW ZKHQ .DSSD! 7KH FRPSDULVRQ RI REVHUYHG XUEDQ JURZWK DQG
    SUHGLFWHGXUEDQJURZWKLQUHVXOWHGLQ.DSSDYDOXH .ORF DQG.+LVWR  VHH)LJXUH
    )LQ$QQH[HV,, 7KHRYHUDOONDSSDYDOXHRIPHDQVWKHUHLVDJUHHPHQWEHWZHHQREVHUYHG
    DQG SUHGLFWHGXUEDQJURZWKZKLFKLVFDWHJRUL]HGDVDQH[FHOOHQWDJUHHPHQW7KXVLWFDQEHFRQFOXGHG
    WKDWWKHGULYLQJIDFWRUVXVHGLQWKHPRGHODUHFDSDEOHWRGHVFULEHWKHXUEDQJURZWKDQGWKH\FDQEHXVHG
    WRSUHGLFWIXWXUHXUEDQJURZWKSDWWHUQ
    
    )LJXUH  OHIW SDUW  VKRZV REVHUYHG YHUVXV VLPXODWHG XUEDQ JURZWK LQ  $OWKRXJK PRVW RI WKH
    XUEDQDQGQRQXUEDQDUHDVDUHFRUUHFWO\SUHGLFWHGWKHPRGHOGRHVQRWHVWLPDWHXUEDQH[SDQVLRQIXOO\
    FRUUHFW 7KLV LV ORJLFDO VLQFH WKH PRGHO LV D VWDWLVWLFDO VLPSOLILFDWLRQ RI D FRPSOH[ UHDO ZRUOG
    SKHQRPHQRQ)URPWKHILJXUHLWFDQEHREVHUYHGWKDWWKHPRGHOLVRYHUSUHGLFWLQJWKRVHDUHDVZKLFKDUH
    ORFDWHG LQVLGH WKH FRQWLJXRXV EXLOWXS DUHD 7KLV LQGLFDWHV WKDW WKH YDFDQW SRFNHWV LQVLGH WKH H[LVWLQJ
    XUEDQDUHDKDYHKLJKHUSUREDELOLW\WRFRQYHUWLQWRXUEDQ&RQYHUVHO\WKHDUHDVZKLFKDUHRXWVLGHRIDQG
    GLVFRQQHFWHGWRFRQWLJXRXVEXLOWXSDUHDKDVORZHUSUREDELOLW\WRFRQYHUWLQWRXUEDQ7KHULJKWSDUWRI
    ILJXUHVKRZVWKHUDQJHDQGGLVWULEXWLRQRISUREDELOLW\YDOXHVRIXUEDQJURZWKLQ/LJKWHUWRQHV

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    LQGLFDWH WKH KLJKHU SUREDELOLWLHV RI XUEDQ JURZWK DQG GDUNHU WRQHV LQGLFDWHG ORZHU SUREDELOLWLHV 7R
    NQRZWKHEHKDYLRXURIWKHVHSUREDELOLW\YDOXHVDQXQGHUSUHGLFWLRQPDSDQGRYHUSUHGLFWLRQPDSVDUH
    SUHSDUHGDORQJZLWKWKHKLVWRJUDPDVVKRZQLQ)LJXUHDQG)LJXUH

    
    )LJXUH2EVHUYHGDQGSUHGLFWHGXUEDQJURZWKDW OHIW DQG3UREDELOLW\PDSIRU ULJKW 

    
    )LJXUH5DQJHRISUREDELOLW\YDOXHVIRUXQGHUSUHGLFWLRQ OHIW DQGRYHUSUHGLFWLRQ ULJKW IRU

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    
    )LJXUH+LVWRJUDPVVKRZLQJUDQJHRISUREDELOLW\YDOXHVIRU

    )LJXUHVKRZVWKDWPRVWRIWKHKLJKHUYDOXHVRISUREDELOLW\DUHFRQFHQWUDWHGQHDUWKHFLW\DUHDVLQWKH
    YDFDQWSRFNHWVVXFKDVSDUNVLQVWLWXWLRQDODUHDVDQGRWKHUFXOWLYDEOHDQGQRQFXOWLYDEOHODQGVLQVLGHWKH
    FLW\ZKLFKDUHRYHUSUHGLFWHGE\WKHPRGHOZKHUHDVORZHUSUREDELOLW\YDOXHVDUHGLVWULEXWHGRQWKHXUEDQ
    IULQJH DUHDVWKDW DUH XQGHUSUHGLFWHG E\ WKHPRGHO )LJXUH  VKRZV WKHQXPEHU RI XQGHUSUHGLFWHG
    DQGRYHUSUHGLFWHGFHOOVZLWKLQGLIIHUHQWSUREDELOLW\UDQJHV7KHOHIWSDUWRIWKHILJXUHVKRZVWKDWPRVW
    RIWKHXQGHUSUHGLFWHGFHOOVOLHEHWZHHQSUREDELOLW\YDOXHVRIZKLOHWKHULJKWSDUWRIWKHILJXUH
    VKRZVPRVWRIWKHRYHUSUHGLFWLRQFHOOVDUHLQEHWZHHQWKHSUREDELOLW\YDOXHVUDQJHRIDQG
    7KLV LQGLFDWHV WKDW LQILOO GHYHORSPHQW KDYH KLJKHU SUREDELOLW\ YDOXHV RI XUEDQ JURZWK WKDQ XUEDQ
    H[SDQVLRQ

     6HQVLWLYLW\DQDO\VLVRIRYHUDOOXUEDQJURZWKPRGHO
    7RFKHFNWKHVHQVLWLYLW\RI/5PRGHOIRURYHUDOOXUEDQJURZWKGLIIHUHQWWKUHVKROGYDOXHVIRUFODVVLI\LQJ
    XUEDQ DQG QRQ XUEDQ ZHUH WHVWHG E\ REVHUYLQJ SHUFHQWDJH RI FRUUHFW SUHGLFWLRQ 3&3  DQG LWV
    FRPSOHPHQW WKH SHUFHQWDJH RI ZURQJ SUHGLFWLRQ 3:3  )URP 7DEOH  LW FDQ EH REVHUYHG WKDW
    DOWKRXJKWKHWKUHVKROGYDOXHVFDQEHEHWZHHQWREXWWKHYDOXHRI3&3LVDOZD\VJUHDWHUWKDQ
    DQGWKHYDULDWLRQRI3&3LVRQO\DURXQG6RWKHPDLQFRQFOXVLRQIURPWKHREVHUYDWLRQLVWKDW
    WKHPRGHOLVQRWYHU\VHQVLWLYHWRWKUHVKROGYDOXHVZKLFKPLJKWEHGXHWRWKUHHUHDVRQV)LUVWO\WKHVWXG\
    DUHD FRPSULVHV RI D ODUJH SURSRUWLRQ RI FRQVWDQW FHOOV WKDW GLG QRW FKDQJHG IURP WKHLU RULJLQDO VWDWH
    HLWKHURU %HFDXVHRIWKLVPRGHOLVFRUUHFWO\SUHGLFWLQJDOOWKRVHFRQVWDQWFHOOVDQGVFRULQJKLJKHU
    3&36HFRQGO\WKHGULYLQJIDFWRUVZKLFKDUHXVHGLQWKHPRGHODUHQRWHQWLUHO\VXIILFLHQWWRH[SODLQWKH
    XUEDQJURZWK,QVSLWHRIWKHHODERUDWHOLWHUDWXUHUHYLHZFRQGXFWHG VHH&KDSWHU LWLVFRQFHLYDEOHWKDW
    RQH RU PRUH GULYLQJ IDFWRUV DUH QRW LQFOXGHG LQ WKH FXUUHQW /5 PRGHO 7KLUGO\ DQG SUREDEO\ PRVW
    LPSRUWDQWO\ LW PXVW EH PHQWLRQHG WKDW WKH /5 PRGHO LV D VWDWLVWLFDO VLPSOLILFDWLRQ RI UHDOLW\ ZKHUHDV
    XUEDQJURZWKLVDFRPSOH[UHDOZRUOGSKHQRPHQRQ
    
    7DEOH0RGHODFFXUDF\IRUZKROHVWXG\DUHDDWGLIIHUHQWFODVVLILFDWLRQWKUHVKROGV

    7KUHVKROG          
    3&3            
    3:3            
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

     (YDOXDWLRQRI,QILOOJURZWKPRGHO
    )RULQILOOJURZWKPRGHOWKHRYHUDOO3&3ZDVZKLFKLVKLJKUHSUHVHQWDWLRQDOYDOXHIRULQILOOW\SHRI
    GHYHORSPHQW 7DEOH   +RZHYHU WKH PRGHO RYHUSUHGLFWV DURXQG  LQILOOLQJ DOPRVW DOO YDFDQW
    SRFNHWVDVVKRZQLQ)LJXUH7KLVLQGLFDWHVWKDWLQ/5PRGHOWKHSUREDELOLW\RIGHYHORSPHQWRIFHOOV
    LQVLGHH[LVWLQJEXLOWXSDUHDLVYHU\KLJK%HFDXVHRIWKLVPRVWRIWKHYDFDQWSRFNHWVDUHLQILOOHGHYHQLQ
    WKHUHVWULFWHGDUHDVVXFKDVDLUSRUWLQVWLWXWLRQDO]RQHVDQGSXEOLFSDUNV7KHVHDUHDVVKRXOGKDYHEHHQ
    H[FOXGHGDWWKHEHJLQQLQJVRWKDWPRGHOZRXOGQRWRYHUHVWLPDWHWKHJURZWK
    
    )LJXUHVKRZVWKHREVHUYHGYHUVXVVLPXODWHGLQILOOJURZWKLQ,WVKRZVWKDWDOWKRXJKWKHPRGHO
    FRUUHFWO\ SUHGLFWV D ODUJH DPRXQW RI LQILOO GHYHORSPHQW LW DOVR RYHUHVWLPDWHV FRQVLGHUDEOH DPRXQW RI
    LQILOOJURZWK7KHRYHUSUHGLFWLRQLVPDLQO\RFFXUULQJRQWKRVHORFDWLRQVZKLFKKDYHODUJHUSURSRUWLRQRI
    H[LVWLQJEXLOWXSDUHDDQGFORVHUSUR[LPLW\WRULQJURDG)LJXUHVKRZVWKHUDQJHRISUREDELOLW\YDOXHV
    IRUXQGHUSUHGLFWLRQDQGRYHUSUHGLFWLRQRILQILOOJURZWKLQ,WVKRZVWKDWWKHUHLVDIHZDPRXQWRI
    XQGHUSUHGLFWLRQ RFFXUULQJ PRVWO\ DW WKH SUREDELOLW\ YDOXHV  DQG  ,Q FRQWUDVW D VLJQLILFDQW
    DPRXQW RI RYHUSUHGLFWLRQ LV RFFXUULQJ DW WKH SUREDELOLW\ YDOXHV  WR  )LJXUH  VKRZV WKH
    TXDQWLW\DQGGLVWULEXWLRQRIXQGHUDQGRYHUSUHGLFWLRQDWGLIIHUHQWUDQJHVRISUREDELOLW\YDOXHVIRULQILOO
    JURZWK
    
    7KH PDLQ FRQFOXVLRQ IURP WKH DQDO\VLV LV WKDW /5 PRGHO IRU LQILOO JURZWK LV QRW YHU\ DFFXUDWH DW
    SUHGLFWLRQ VLQFH LW RYHUHVWLPDWHV VLJQLILFDQW DPRXQW RI FHOOV DV LQILOO 7KLV LV SUREDEO\ GXH WR WZR
    UHDVRQVILUVWGXHDEVHQFHRIUHVWULFWHGDUHDVDVDGULYLQJIDFWRUVZKLFKFRXOGKDYHUHVWULFWJURZWKDQG
    UHGXFHRYHUSUHGLFWLRQDQGVHFRQGGXHWRKLJKSRWHQWLDORIYDFDQWSRFNHWVWRWUDQVIRUPLQWREXLOWXSDV
    WKH\DUHFORVHUWRDOOIDFLOLWLHVDQGKDYHKLJKHUSURSRUWLRQRIXUEDQEXLOWXSLQDVXUURXQGLQJ
    
    7DEOH0RGHOHYDOXDWLRQIRULQILOOJURZWK

    3UHGLFWHG
    2EVHUYHG
    1RQXUEDQ   8UEDQ   7RWDO
      
    1RQXUEDQ   
        
    8UEDQ        
    7RWDO      
    &RUUHFWSUHGLFWLRQV
    :URQJSUHGLFWLRQ
    3HUFHQWDJHRIFRUUHFWSUHGLFWLRQ 3&3 
    3&3IRUEXLOWXSDUHDRQO\
    3HUFHQWDJHRIRYHUSUHGLFWLRQ
    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    
    )LJXUH&RPSDULVRQRIREVHUYHGDQGSUHGLFWHGLQILOOJURZWKLQ

    
    )LJXUH5DQJHRISUREDELOLW\YDOXHVIRUXQGHUSUHGLFWLRQ OHIW DQGRYHUSUHGLFWLRQ ULJKW IRU

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    
    )LJXUH+LVWRJUDPVVKRZLQJUDQJHRISUREDELOLW\YDOXHVIRU

     ([SDQVLRQPRGHO
    7KHRYHUDOODFFXUDF\IRUWKHH[SDQVLRQPRGHOZDVZLWKYHU\ORZ3&3IRUEXLOWXSDUHDLHRQO\
    7DEOH ,Q7DEOHLWFDQEHREVHUYHGWKDWDOPRVWRIQRQXUEDQFHOOVDUHFRUUHFWO\SUHGLFWHG
    E\WKHPRGHOZKLOHRIXUEDQFHOOVDUHXQGHUSUHGLFWHG7KLVLVEHFDXVHRIWKHIDFWWKDWWKHVWXG\DUHD
    FRPSULVHGRIODUJHDPRXQWRIQRQXUEDQFHOOVWKDQH[SDQVLRQFHOOV0RVWRIWKHQRQXUEDQFHOOVUHPDLQ
    FRQVWDQWGXULQJWKHVWXG\SHULRGDQGDUHFRUUHFWO\SUHGLFWHGE\WKHPRGHO%XWH[SDQVLRQFHOOVZKLFKDUH
    UHODWLYHO\YHU\ORZFRXOGQRWEHFRUUHFWO\SUHGLFWHG7KLVLQGLFDWHVWKDWWKHH[SDQVLRQPRGHOLVQRWYHU\
    JRRGLQSUHGLFWLQJRXWZDUGH[SDQVLRQDQGVFDWWHUHGJURZWK
    
    )LJXUHVKRZWKDWPRGHOLVFRUUHFWO\SUHGLFWLQJXUEDQH[SDQVLRQSUHGRPLQDQWO\RQWKRVHORFDWLRQV
    ZKLFKDUHDWWDFKHGWRFRQWLJXRXVEXLOWXSDUHDRI2WKHUVFDWWHUHGJURZWKDQGGLVSHUVHGJURZWK
    ZKLFKDUHGLVFRQQHFWHGWRFRQWLJXRXVEXLOWXSDUHDFRXOGQRWEHIXOO\SUHGLFWHG)LJXUHVKRZWKH
    VSDWLDOGLVWULEXWLRQRISUREDELOLW\YDOXHVIRUXQGHUSUHGLFWHGDQGRYHUSUHGLFWHGFHOOV7KHIUHTXHQF\DQG
    GLVWULEXWLRQRISUREDELOLW\YDOXHVIRUXQGHUDQGRYHUSUHGLFWLRQFDQEHVHHQLQ)LJXUH)URPERWK
    ILJXUHV LW FDQ EH REVHUYHG WKDW WKH DPRXQW RI XQGHUSUHGLFWLRQ LV FRQVLGHUDEO\ KLJKHU WKDQ RYHU
    SUHGLFWLRQ7KLVLQGLFDWHVWKDWH[SDQVLRQPRGHOLVQRWYHU\JRRGDWSUHGLFWLQJVFDWWHUHGDQGGLVFRQQHFWHG
    JURZWK
    7DEOH0RGHOHYDOXDWLRQIRUXUEDQH[SDQVLRQ

    3UHGLFWHG
    2EVHUYHG
    1RQXUEDQ   8UEDQ   7RWDO
    
    1RQXUEDQ        
    8UEDQ        
    7RWDO     
    
    &RUUHFWSUHGLFWLRQV
    :URQJSUHGLFWLRQ
    3HUFHQWDJHRIFRUUHFWSUHGLFWLRQ 3&3 
    3&3IRUEXLOWXSDUHDRQO\

    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    )URPWKHHYDOXDWLRQUHVXOWRIH[SDQVLRQPRGHOLWFDQEHFRQFOXGHWKDW/5PRGHOLVQRWYHU\JRRGDW
    SUHGLFWLQJ XUEDQ H[SDQVLRQ LQ WKH UHJLRQ ZLWK SUHGRPLQDQW UXUDO DUHDV ,I WKH UHJLRQ KDG KLJKHU
    SURSRUWLRQRIXUEDQDUHDWKDQUXUDODUHDLWFRXOGKDYHJLYHQEHWWHUUHVXOWIRUFRUUHFWSUHGLFWLRQRIEXLOW
    XS,WPLJKWEHDOVRGXHWRWKHGULYLQJIDFWRUVZKLFKDUHQRWVXIILFLHQWWRH[SODLQWKHXUEDQH[SDQVLRQ
    

    
    )LJXUH&RPSDULVRQRIREVHUYHGDQGSUHGLFWHGXUEDQH[SDQVLRQLQ

    
    )LJXUH5DQJHRISUREDELOLW\YDOXHVIRUXQGHUSUHGLFWLRQ OHIW DQGRYHUSUHGLFWLRQ ULJKW IRU

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    
    )LJXUH+LVWRJUDPVVKRZLQJUDQJHRISUREDELOLW\YDOXHVIRU

     3UREDEOHDUHDVRIIXWXUHXUEDQJURZWK
    
    $IWHUHYDOXDWLQJWKHRYHUDOOXUEDQJURZWKPRGHOIRUWKHIXWXUHXUEDQJURZWKZDVSURMHFWHG
    IRUWKH\HDUDQGEDVHGXSRQWKHHVWLPDWHGSDUDPHWHUVIURP/5PRGHODQGGULYLQJIDFWRUVRI
    )LJXUHVKRZVWKHVSDWLDOSDWWHUQRISURMHFWHGXUEDQJURZWKIRUDQGIRU$FFRUGLQJ
    WR)LJXUHLQXUEDQJURZWKZLOOEHH[SDQGLQJDORQJWKHPDMRUURDGVDQGKLJKZD\FRUULGRUV$V
    DUHVXOWPRVWRIWKHDUDEOHODQGLQWKHVHDUHDVLVH[SHFWHGWREHFRQYHUWHGLQWREXLOWXS0RUHRYHUIRU
    PRVWRIWKHDUHDVLQWKHVRXWKHUQDQGHDVWHUQSDUWRIWKHYDOOH\ZLOOEHXUEDQL]HGE\HDWLQJXSWKH
    DUDEOHODQGDURXQGWKHNH\XUEDQFHQWUHV%\WKLV\HDUDFFRUGLQJWRWKHPRGHODOOPXQLFLSDOLWLHVH[FHSW
    %KDNWDSXULQWKHHDVWZLOOEHPHUJHGLQWRJUHDWHU.DWKPDQGXFLW\2YHUWLPHWKLVRXWZDUGH[SDQVLRQFDQ
    WKUHDWHQWKHUHVHUYHGIRUHVWDUHDLQQRUWKSDUWRIWKH.DWKPDQGXYDOOH\
    

    
    )LJXUH3URMHFWHGXUEDQJURZWKIRU /HIW DQG 5LJKW 

    )LJXUH  VKRZV WKH WUHQG RI XUEDQ JURZWK IURP  WR  ,W VKRZV WKDW XUEDQ EXLOWXS DUHDV
    ZKLFKZDVDURXQGNPLQZLOOLQFUHDVHGE\IROGLQZLWKDQDUHDRIDQGIROGLQ

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    ZLWKDQDUHDRI7KLVPHDQVE\DQGWKHXUEDQDUHDLVH[SHFWHGWREHFRPHDOPRVW
    DQGWZLFHDVPXFKDVWKHH[LVWLQJEXLOWXSDUHDRI
    
    )LJXUHVKRZVWKHH[SHFWHGVSDWLDOSDWWHUQRIIXWXUHXUEDQJURZWKLQDQG)URPWKHILJXUH
    LW FDQ EH REVHUYHG WKDW PRVW RI WKH JURZWK ZLOO RFFXU LQ VRXWKHDVW DQG ZHVW GLUHFWLRQ 7KHUH LV QR
    SURPLQHQWJURZWKRFFXUULQJLQQRUWKGLUHFWLRQLQFRPSDULVRQWRRWKHUVLGHVSUREDEO\GXHWRWRSRJUDSK\
    LHKLJKHUGHJUHHRIVORSHDQGJUHDWHUGLVWDQFHWR&%'DQGXUEDQFHQWUHV
    
    

    

    
    $UHDLQNP

    

    

    

    
        
    8UEDQ     
    1RQXUEDQ     
    
    )LJXUH7UHQGRIXUEDQJURZWKLQNP 

    
    )LJXUH3URMHFWHGXUEDQJURZWKSDWWHUQLQDQG

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

     'LVFXVVLRQ
    
    7KLV VWXG\ KDV XVHG WKH WHFKQRORJLHV RI VDWHOOLWH UHPRWH VHQVLQJ GDWD FRPELQHG ZLWK *,6 WR DGGUHVV
    VSDWLRWHPSRUDO SURFHVV RI XUEDQ ODQG FRYHU FKDQJH 7KH UHVXOWV RI VSDWLRWHPSRUDO DQDO\VLV RI ODQG
    FRYHU FKDQJH LQGLFDWH WKDWWKHUH KDV EHHQ D QRWDEOH FKDQJH LQ XUEDQ ODQG FRYHU RI .DWKPDQGXYDOOH\
    GXULQJ WKH HQWLUH VWXG\ SHULRG 7ZR GLIIHUHQW VWXG\ SHULRGV RI WLPH  DQG   KDG
    GLIIHUHQWPHFKDQLVPRIODQGFRYHUFKDQJH)LUVWSKDVHKDGXUEDQGHYHORSPHQWPDLQO\DWWKHH[SHQVHRI
    DUDEOHODQGDQGVHFRQGSKDVHKDGXUEDQGHYHORSPHQWPDLQO\DWWKHH[SHQVHRIIRUHVWDUHD,QDGGLWLRQ
    GLIIHUHQW H[WHQW RI LQILOOLQJ DQG H[SDQVLRQ VKRZ WKDW WKH WUHQG RI XUEDQ GHYHORSPHQW ZDV QRW UHJXODU
    VSDWLDOO\DQGWHPSRUDOO\
    
    7KHXVHRI/DQGVDWGDWDKDVSURYHGWREHVXFFHVVIXOWRGHWHFWXUEDQODQGFRYHUFKDQJHLQWKHVWXG\DUHD
    7KHGLJLWDOLPDJH FODVVLILFDWLRQDORQJZLWK*,6 KDVGHPRQVWUDWHG LWVDELOLW\WRSURYLGHLQIRUPDWLRQRQ
    WKHUDWHGLUHFWLRQDQGORFDWLRQRIODQGFRYHUFKDQJHDVDUHVXOWRIXUEDQL]DWLRQ+RZHYHUWKHUHKDVEHHQ
    DQ LVVXH RI XQFHUWDLQQHVV UHODWHG WR FODVV LQFRQVLVWHQF\ZKLFKKDV QRWEHHQ H[DPLQHG LQ WKLVUHVHDUFK
    $OWKRXJK WKH RYHUDOO DFFXUDF\ RI FODVVLILHG LPDJHV ZDVUHDVRQDEO\ KLJK WKH DFFXUDF\ RI GLIIHUHQW ODQG
    FRYHUV YDULHV )RU HJ ZDWHUERGLHV DWWDLQHG VLJQLILFDQWO\ ORZ DFFXUDF\ LQ FRPSDULVRQ WR RWKHU FODVVHV
    ZKLFK LV GXH WR VLWH FRQVWUDLQW VXFK DV QDUURZ ZLGWK RI WKH ULYHUV ZKLFK PDGH LW GLIILFXOW WR GHWHFW
    )XUWKHUPRUH VDQG\ ULYHU EHGVZHUH FRQIXVHGZLWK XUEDQ FODVV GXH WRVLPLODU VSHFWUDO SURSHUWLHV 7KLV
    FRQIXVLRQKDV KLQGHUHGWKHDWWDLQPHQWRIDFFXUDWHZDWHUERGLHV6RWRLQFUHDVHWKHDFFXUDFLHVRIZDWHU
    ERGLHVPDMRULW\ILOWHUZDVSHUIRUPHGDWILUVWWRUHPRYHWKHPLVFODVVLILHGSL[HOVDQGWKHQULYHUQHWZRUNV
    ZHUHRYHUODLG7KHUHIRUHWKHPHWKRGKDVDOLPLWDWLRQWRLPSURYHDFFXUDF\RILQGLYLGXDOFODVVHV
    
    /5PRGHOZDVXVHGWRDQDO\VHXUEDQJURZWKDQGLWVGULYLQJIRUFHVZKLFKZHUHFRQVWUXFWHGRQWKHEDVLV
    RI GULYLQJ IDFWRUV GHULYHG IURP WKH OLWHUDWXUH DQG H[SHUW NQRZOHGJH RI SODQQLQJ SURIHVVLRQDOV LQ
    .DWKPDQGXYDOOH\,WZDVYHU\FKDOOHQJLQJWRDFTXLUHDOOWKHVHGDWD+RZHYHULWEHFDPHWUXHWKDWHYHQE\
    XVLQJ IHZHU GDWD ORJLVWLF UHJUHVVLRQ FDQ SURYLGH UHOHYDQW LQIRUPDWLRQ DERXW VSDWLDO SDWWHUQ RI XUEDQ
    JURZWK LQIXWXUH ,QPRVWRI WKH XUEDQVWXGLHV IDFWRUV VXFK DV SRSXODWLRQ GHQVLW\ GLVWDQFH WR PDMRU
    URDGDQGSURSRUWLRQRIXUEDQDUHDLQ DQHLJKERXUKRRGDUHUHSRUWHGDVPDMRUGULYLQJIDFWRUVRIXUEDQ
    JURZWK &KHQJ 0DVVHU)DQJHWDO+X /R+XDQJ 6LQ %XWWKHGHJUHHRI
    LQIOXHQFHRIWKHVHYDULDEOHVGLIIHUVIURPRQHFDVHWRDQRWKHU,QWKLVVWXG\WKHPDLQGULYLQJIDFWRUVIRU
    RYHUDOOXUEDQJURZWKLQILOOGHYHORSPHQWDQGRXWZDUGH[SDQVLRQDUHVLPLODUEXWWKHLUGHJUHHRILQIOXHQFH
    YDULHV
    
    7KHHYDOXDWLRQRIRYHUDOOXUEDQJURZWKPRGHOZDVGRQHRQWKHEDVLVRI3&3DQG.DSSDVWDWLVWLFVZKLFK
    VFRUHG WKH 3&3 YDOXH RI  DQG RYHUDOO .DSSD YDOXH RI  7KH UHVXOW IURP WKHVH HYDOXDWLRQ
    PHWKRGV LQGLFDWHV WKDW WKH PRGHO LV JRRG DW SUHGLFWLQJ RYHUDOO XUEDQ JURZWK 7KLV ZDV FRQILUPHG E\
    FRPSDULQJWKHUHVXOWIURPRWKHUVLPLODUVWXGLHVVXFKDV&KHQJ 0DVVHU  DQG+XDQJHWDO  
    7KHIXWXUHXUEDQJURZWKZDVSUHGLFWHGRQWKHEDVLVRIGULYLQJIDFWRUVRIGXHWRXQDYDLODELOLW\RI
    GDWDIRUIXWXUHGULYLQJIRUFHVDOWKRXJKPDQ\RIWKHVHIDFWRUVFDQVXEMHFWHGWRFKDQJHZLWKLQIHZ\HDUV
    7KLVPD\UHVXOWVLQFHUWDLQGHJUHHRIXQFHUWDLQLW\IRUWKHIXWXUHXUEDQJURZWKSURMHFWLRQ7KHHYDOXDWLRQ
    UHVXOWVIURPLQILOOJURZWKPRGHODQGH[SDQVLRQPRGHOVKRZVWKDW/5PRGHOLVYHU\JRRGDWSUHGLFWLQJ
    LQILOOJURZWKEXWDWWKHVDPHWLPHLWLVPXFKOHVVDFFXUDWHLQSUHGLFWLQJXUEDQH[SDQVLRQ:KHQLWFRPHV
    WRIRUHFDVWLQJXUEDQH[SDQVLRQWKHPRGHOFDQPXFKEHWWHUSUHGLFWWKHFRQWLJXRXVJURZWKEXWKDVSRRU
    H[SODQDWRU\SRZHUZKHQSUHGLFWLQJGLVSHUVHGRUVFDWWHUGJURZWK
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    %HVLGHV WKLV UHVHDUFK DOVR LQGLFDWHV WKDW /5 LV YHU\ VHQVLWLYH IRU VFDOH UHVROXWLRQ  RI DQDO\VLV ,Q WKLV
    VWXG\WKHVFDOHZDVFKRVHQRQWKHEDVLVRIUHVROXWLRQRI/DQGVDWLPDJHULHVZKLFKKDVSL[HOVL]HRI[
    PHWUH $QDO\VLV FRQGXFWHG RQ KLJKHU VSDWLDO UHVROXWLRQ LV GHVLUDEOH VLQFH LW PD\ SURYLGH WKH GHWDLO
    LQIRUPDWLRQDERXWFDXVDWLYHHIIHFWRIIDFWRUVZKLFKDUHQHJOHFWHGLQFRDUVHUVFDOH+RZHYHUIRUFLW\VFDOH
    ORZHUUHVROXWLRQLVPRUHUHDVRQDEOHEHFDXVHRIWKHLQWHQVHFRPSXWDWLRQDOSUREOHPRIILQHUUHVROXWLRQ
    $OVR WKHUH DUH VRPH IDFWRUV ZKLFK FDQ RQO\ EH UHYHDOHG E\ FRDUVHU VFDOH RI PRGHOLQJ HVSHFLDOO\ IRU
    UHJLRQDOSODQQLQJSROLFLHV 'XERY\NHWDO 
    
    6SDWLDODXWRFRUUHODWLRQRIWKHYDULDEOHV LV DQLPSRUWDQWLVVXHZKLFKKDVWREHWDNHQFDUHLQ/5PRGHO
    $FFRUGLQJ WR &KHQJ  0DVVHU   WKH W\SH RI VDPSOLQJ VFKHPH HPSOR\HG LQ WKH PRGHO FDQ
    VLJQLILFDQWO\ DIIHFW WKH HVWLPDWLRQV RI PRGHO SDUDPHWHUV DQG PRGHO DFFXUDF\ 7KLV VWXG\ LQFRUSRUDWHV
    V\VWHPDWLFVDPSOLQJVFKHPHWRUHGXFHWKHVSDWLDOGHSHQGHQFLHVRIPRGHOUHVLGXDOV7KLVPHWKRGVHHPHG
    WREHHIIHFWLYHIRUDOOWKUHHPRGHOVWRUHGXFHDXWRFRUUHODWLRQ$IWHUWHVWLQJGLIIHUHQW VDPSOLQJZLQGRZ
    VL]HYDU\LQJIURP[WR[DQRQRYHUODSSLQJ[ZLQGRZZDVFKRVHQIRUWKHRYHUDOOJURZWKPRGHO
    DQG H[SDQVLRQ PRGHO DV WKH\ SURYLGHG ZLWK ORZHVW 0RUDQ·V , DQG WKH EHVW SDUDPHWHU HVWLPDWLRQ )RU
    LQILOO JURZWK PRGHO ODUJHU VDPSOLQJ ZLQGRZ VL]HV UHVXOWHG LQ LQVLJQLILFDQW SYDOXHV IRU WKH YDULDEOHV
    FRPSDUHGWRWKHVPDOOHUVDPSOLQJZLQGRZ6R[VDPSOLQJZLQGRZZDVVHOHFWHGIRUWKHIXUWKHUDQDO\VLV
    VLQFHLWUHVXOWHGLQEHWWHUSYDOXHVIRUWKHYDULDEOHVLQWKHPRGHO
    
    $V LOOXVWUDWHG LQ 7DEOH  LQ VHFWLRQ  RQH RI WKH GLVDGYDQWDJHV RI /5 PRGHO LV ODFN RI WHPSRUDO
    G\QDPLFV LQ SUHGLFWLRQ RI XUEDQ JURZWK $GGLWLRQDOO\ LW GRHV QRW LQFRUSRUDWH XUEDQ JURZWK VFHQDULRV
    ZKLFK FDQ DIIHFW WKH SDWWHUQ RI IXWXUH XUEDQ JURZWK /5 PRGHO SURGXFH WKH SUREDELOLW\ PDS ZKLFK
    LQGLFDWHV WKH SRVVLEOH ORFDWLRQV RI IXWXUH XUEDQ JURZWK EXW LW GRHV QRW LQGLFDWH ZKHQ LW LV JRLQJ WR
    KDSSHQ7KLVLVEHFDXVHWKHPRGHOGRHVQRWSURFHHGZLWKWLPHLQDVHOIPRGLI\LQJZD\ $EHEH 
    )XUWKHUPRUH OLNH &$ PRGHO /5 PRGHO IDLO WR LQFRUSRUDWH WKH IDFWRUV VXFK DV SHRSOH SUHIHUHQFH IRU
    KRXVHKROGORFDWLRQVDIHW\IDFWRUVDQGSROLWLFDOIDFWRUVZKLFKPLJKWKDYHVLJQLILFDQWLQIOXHQFHRQXUEDQ
    JURZWK )RU HJ LQ .DWKPDQGX YDOOH\ RQH RI WKH PDLQ GULYHUV RI XUEDQ JURZWK LV SROLWLFDO DQG VDIHW\
    IDFWRU EHFDXVH WKHUH ZDV D FRQWLQXRXV LQIORZ RI UXUDOXUEDQ PLJUDWLRQ DIWHU 0DRLVW LQVXUJHQF\ ZKLFK
    VZHOOXSWKHXUEDQFHQWUHVRIWKHYDOOH\GXULQJPLGV 7LPDOVLQD 
    
    'HVSLWHRIDOOWKHVHOLPLWDWLRQVWKHLQWHJUDWLRQRIUHPRWHVHQVLQJ*,6DQG/5PRGHOSURYLGHLPSRUWDQW
    LQIRUPDWLRQUHJDUGLQJWKHSDWWHUQDQGSURFHVVRIODQGFRYHUFKDQJHUHODWLRQVKLSEHWZHHQXUEDQJURZWK
    DQGLWVGULYLQJIDFWRUVDQGGLUHFWLRQDQGPDJQLWXGHRIIXWXUHXUEDQJURZWK7KHVHUHVXOWVFDQEHXVHIXO
    LQ XUEDQ SODQQLQJ GRPDLQV WR VXSSRUW SROLF\ GHYHORSPHQW DQG GHFLVLRQ PDNLQJ 7KH /5 PRGHOV IRU
    GLIIHUHQW W\SHV RI JURZWK SURYLGH GLIIHUHQW LQIRUPDWLRQ IRU WKH GHFLVLRQ PDNHUV )RU LQVWDQFH LQILOO
    JURZWK PRGHO LQIRUPV WKHGHFLVLRQ PDNHUVZKHUH DUH WKH SUREDEOH DUHDV RI LQILOOLQJ DQG ZKDW DUH WKH
    PDMRUGULYHUVRIWKHVHW\SHVRIJURZWKZKLOHH[SDQVLRQPRGHOSURYLGHVWKHLQIRUPDWLRQDERXWZKDWDUH
    WKHSUREDEOHDUHDVRIXUEDQH[SDQVLRQDQGZKLFKIDFWRULVGULYLQJXUEDQH[SDQVLRQ7KHVHUHVXOWVZRXOG
    KHOSGHFLVLRQPDNHUVWRGHFLGHZKLFKDUHDVQHHGPRUHLQWHUYHQWLRQVLQRUGHUWRPDQDJHWKHIXWXUHXUEDQ
    JURZWK +RZHYHU WKHUH DUH VRPH SUDFWLFDO LVVXHV WR LPSOHPHQW WKHVH PRGHOV $EHEH   DQG
    'XERY\NHWDO  KDYHQRWHGWKDWWRXVHWKH/50LQXUEDQSODQQLQJSUDFWLFHVIXUWKHULPSURYHPHQW
    RI WKH WHFKQLTXH LV UHTXLUHG WR PDNH LW PRUH VLPSOH DQG XVHU IULHQGO\ 7KLV WRRO KDV WR LQFRUSRUDWH
    GLIIHUHQWVDPSOLQJVFKHPHVDORQJZLWKYDULRXVVWDWLVWLFDODQDO\VHVIRUWKH/5PRGHOLQJVXFKDVVSDWLDO
    DXWRFRUUHODWLRQ PXOWLFROOLQHDULW\ WHVW DQG PRGHO HYDOXDWLRQ EDVHG RQ GLIIHUHQW SDUDPHWHUV RWKHU WKDQ
    3&3DORQH
     

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

     &21&/86,216
    7KLVFKDSWHUGLVFXVVHVWKHPDLQILQGLQJVRIWKLVUHVHDUFKEDVHGRQWKHUHVXOWVDVZHOODVWKHPHWKRGVDQG
    WHFKQLTXHV DSSOLHG WR DFKLHYH DQVZHUV WR DOO UHVHDUFK TXHVWLRQV ,W FRQVLVWV RI WZR VHFWLRQV 7KH ILUVW
    VHFWLRQ GHDOV ZLWK WKH FRQFOXVLYH UHPDUNV RQ WKH PDLQ ILQGLQJV RI WKH UHVHDUFK 7KH VHFRQG VHFWLRQ
    SRLQWVRXWSRVVLEOHGLUHFWLRQVIRUWKHIXUWKHUUHVHDUFKEDVHGRQILQGLQJVDQGOLPLWDWLRQVRIWKLVVWXG\

     &RQFOXVLRQV
    7KHPDLQ DLPRIWKHUHVHDUFKZDVWRGHWHUPLQHGULYLQJIDFWRUV RIXUEDQJURZWK LQ.DWKPDQGXYDOOH\
    DQG WR IRUHFDVW IXWXUH XUEDQ JURZWK LQ .DWKPDQGX YDOOH\ ZKLFK ZDV DFKLHYHG E\ DGRSWLQJ VHYHUDO
    PHWKRGVDQGWHFKQLTXHV
    
    5HJDUGLQJWKHPHWKRGDSSOLHGLQWKLVVWXG\UHPRWHVHQVLQJDQGHDUWKREVHUYDWLRQFRXSOHGZLWK*,6KDV
    VXFFHVVIXOO\LGHQWLILHGWKHDFWXDOVSDWLRWHPSRUDOSURFHVVRIWKHXUEDQJURZWKXVLQJ/DQGVDWGDWDIURP
    GLIIHUHQW PRPHQWV LQ WLPH )XUWKHU DV D VWDWLVWLFDO DSSURDFK ORJLVWLF UHJUHVVLRQ DQDO\VLV KDV PDGH LW
    SRVVLEOHWRGHWHUPLQHWKHVLJQLILFDQWGULYLQJIRUFHVRIXUEDQJURZWKLQWKHYDOOH\DORQJZLWKWKHLUGHJUHH
    RI LQIOXHQFH DQG GLUHFWLRQ RI UHODWLRQVKLS ZLWK WKH XUEDQ JURZWK 0RUHRYHU GDWD DYDLODELOLW\ DQG GDWD
    TXDOLW\ZLOOKDYHVLJQLILFDQWHIIHFWRQWKHRXWSXWRIWKH/5PRGHOLQJ
    
    7KHIROORZLQJVXEVHFWLRQVGUDZWKHFRQFOXVLRQVIURPWKHPDLQILQGLQJVRIWKHUHVHDUFKWRDGGUHVVHDFK
    REMHFWLYHWKDWZHUHVHWWRPHHWWKHUHVHDUFKDLP

     ,GHQWLILFDWLRQDQGTXDQWLILFDWLRQRIXUEDQJURZWKSDWWHUQGXULQJDQG
    7KLVVHFWLRQSUHVHQWVWKHPDLQILQGLQJVRIWKHUHVHDUFKWKDW DGGUHVVWKHILUVWREMHFWLYH7KUHH/DQGVDW
    LPDJHV RI GLIIHUHQW \HDUV ZHUH FODVVLILHG XVLQJ UHPRWH VHQVLQJ DQG HDUWK REVHUYDWLRQ WHFKQLTXHV IRU
    LGHQWLI\LQJDQGTXDQWLI\LQJXUEDQJURZWKSDWWHUQRI.DWKPDQGXYDOOH\
    
    7KHGLJLWDOLPDJHFODVVLILFDWLRQFRXSOHGZLWK*,6KDVSURYHGWREHVXFFHVVIXOWRGHWHFWXUEDQODQGFRYHU
    FKDQJHLQWKHVWXG\DUHD7KLVWHFKQRORJ\KDVGHPRQVWUDWHGLWVDELOLW\WRSURYLGHLQIRUPDWLRQUHODWHGWR
    UDWHSDWWHUQGLUHFWLRQDQGORFDWLRQRIODQGFRYHUFKDQJHZKLFKLVUHVXOWHGIURPUDSLGXUEDQL]DWLRQRI
    WKHYDOOH\7KHUHVXOWIURPWKLVWHFKQLTXHVKRZHGWKDWWKHDFFXUDF\OHYHOZDVYHU\SRRUIRUZDWHUERGLHV
    RQO\ EHIRUHSRVWFODVVLILFDWLRQUHILQHPHQW$IWHUSRVWFODVVLILFDWLRQUHILQHPHQWWKHDFFXUDF\OHYHO
    ZDVVLJQLILFDQWO\LQFUHDVHGIRUZDWHUERGLHV+RZHYHUWKHLVVXHRIWHPSRUDODQGFODVVLQFRQVLVWHQF\KROGV
    FHUWDLQ GHJUHH RI XQFHUWDLQW\ LQ WKH FODVVLILFDWLRQ UHVXOW ZKLFK LV SURSDJDWHG DV DQ HUURU IDFWRU WR WKH
    IXUWKHUDQDO\VLV
    
    $QDO\VLV RI ODQG FRYHUPDSV SUHSDUHGIURP FODVVLILHG LPDJHV VKRZHG WKDW WKHUH KDV EHHQ DVLJQLILFDQW
    FKDQJHLQXUEDQEXLOWXSDUHDGXULQJODVW\HDUVDWWKHH[SHQVHRIDUDEOHODQGDQGIRUHVWDUHD%DVHGRQ
    WKHVHILQGLQJVLWFDQEHFRQFOXGHGWKDWDOOWKUHHODQGFRYHUFODVVHVLHXUEDQDUHDDUDEOHODQGDQGIRUHVW
    DUHDKDVEHHQVXEMHFWHGWRSURPLQHQWFKDQJHGXULQJWKHHQWLUHVWXG\SHULRG
    
    )XUWKHUPRUH WKH DQDO\VLV RI VSDWLDO SDWWHUQ RI XUEDQ JURZWKZDV SHUIRUPHG E\ GHILQLQJ WZR W\SHV RI
    XUEDQ JURZWKLQILOO DQG H[SDQVLRQ 7KLV GHILQLWLRQ LV EDVHG RQ FRQWLJXRXV SRO\JRQRI XUEDQ DUHDZLWK
    PWKUHVKROG%XWRQHRIWKHOLPLWDWLRQVRIXVLQJWKLVERXQGDU\LVWKDWLWFODVVLILHVWKHXUEDQJURZWK

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    EDVHG XSRQ WKH SRVLWLRQ RI GHOLQHDWHG XUEDQ DUHD ZKLFK LQ IDFW LV QRW DOZD\V DFFXUDWH 7KHUH LV WKH
    SRVVLELOLW\RILQILOORFFXUULQJRXWVLGHWKHERXQGDU\DQGH[SDQVLRQLQVLGHWKHERXQGDU\

     ,GHQWLILFDWLRQRIGULYLQJIRUFHVRIXUEDQJURZWK
    7KLV VHFWLRQ GHPRQVWUDWHV WKH PDLQ ILQGLQJV IRU WKH VHFRQG REMHFWLYH RI WKH UHVHDUFK ZKLFK ZDV
    FRQFHUQHGZLWKGHWHUPLQLQJWKHPDMRUGULYLQJIRUFHVRIXUEDQJURZWKXVLQJ/5PRGHO7RDGGUHVVWKH
    UHVHDUFK TXHVWLRQV RI WKLV REMHFWLYH WKUHH PRGHOV ZHUH SUHSDUHGRYHUDOO XUEDQ JURZWK PRGHO LQILOO
    JURZWKPRGHODQGH[SDQVLRQPRGHO$OOWKHWKUHHPRGHOVVKRZHGWKDWWKHXUEDQJURZWKRI.DWKPDQGX
    YDOOH\LVGHSHQGHQWRQQHLJKERXUKRRGYDULDEOHV SURSRUWLRQRIXUEDQDUHDLQDVXUURXQGLQJ DQGGLVWDQFH
    UHODWHGIDFWRUV GLVWDQFHWRPLQRUURDGGLVWDQFHWRXUEDQFOXVWHUDQGGLVWDQFHWRZDWHUVXSSO\OLQH 7KH
    UHVXOWV VXJJHVW WKDW FLW\ WHQGV WR JURZ LQ DUHDV DGMDFHQW WR DOUHDG\ DJJORPHUDWHG DUHD PLWLJDWLQJ XUEDQ
    H[SDQVLRQ 7KH GULYLQJ IDFWRUV RI WKLV W\SH RI JURZWK DUH D JRRG DFFHVVLELOLW\ DQG FRQQHFWLYLW\
    1HYHUWKHOHVVQRWRQO\WKHVHIDFWRUVSURYHGWREHLPSRUWDQWEXWDOVRSRSXODWLRQGHQVLW\ODQGYDOXHDQG
    VORSH
    
    $QDO\VLVRIGULYLQJIDFWRUIURPRYHUDOOXUEDQJURZWKPRGHODQGH[SHUWVLQWHUYLHZVKRZWKDWVRPHRIWKH
    PDMRUGULYLQJVXFKDVSRSXODWLRQGHQVLW\SURSRUWLRQRIXUEDQDUHDLQDVXUURXQGLQJDQGODQGYDOXHDUH
    FRPLQJWRWKHVDPHFRQFOXVLRQZKLOHRWKHUIDFWRUVVXFKDVGLVWDQFHWRXUEDQFHQWUHVGLVWDQFHWRKHDOWK
    IDFLOLWLHVDQG]RQLQJDUHQRWFRPLQJWRWKHFRQVHQVXV7KLVVXJJHVWVWKDWPRGHODQGH[SHUWNQRZOHGJH
    DUH WZR GLIIHUHQW HQWLWLHV ZKLFK KDYH GLIIHUHQW OHYHO RI XQGHUVWDQGLQJ 0RGHO LV VLPSOH VWDWLVWLFDO WRRO
    ZKLFK RSHUDWHV DW YHU\ ORFDO DQG GHWDLO OHYHO ,Q FRQWUDVW H[SHUWV DUH WKH SODQQLQJ SURIHVVLRQDO ZLWK D
    EURDGSHUFHSWLRQRQXUEDQJURZWKSKHQRPHQRQ'XHWRWKLVWKHUHVXOWRIPDMRUGULYLQJIDFWRUVPD\QRW
    EHDOZD\VVDPH
    
    )XUWKHUPRUHIURPWKHPRGHOHYDOXDWLRQUHVXOWLWZDVIRXQGWKDWDOWKRXJKWKHRYHUDOODFFXUDFLHVRIDOO
    WKUHH /5 PRGHOV ZHUH YHU\ KLJK EXW WKH 3&3 IRU EXLOWXS DUHD ZHUH FRQVLGHUDEO\ ORZ LH  IRU
    RYHUDOOXUEDQJURZWKPRGHODQGIRUH[SDQVLRQPRGHO0RUHRYHUWKHVHQVLWLYLW\DQDO\VLVRIRYHUDOO
    XUEDQJURZWKPRGHOVKRZVWKDWLWLVQRWYHU\VHQVLWLYHWRGLIIHUHQWWKUHVKROGYDOXHV7KHUHVXOWVVXJJHVW
    WKDWWKHSURSRVHG/5PRGHOVDUHQRWYHU\JRRGWRH[SODLQXUEDQJURZWKSUREDEO\GXHWRWKUHHUHDVRQV
    )LUVWWKHVWXG\DUHDFRPSULVHRIODUJHSURSRUWLRQRIXQFKDQJHGFHOOVZKLFKZHUHFRUUHFWO\SUHGLFWHGE\
    WKHPRGHO6HFRQGGULYLQJIDFWRUVZKLFKZHUHXVHGLQWKHPRGHODUHQRWHQWLUHO\VXIILFLHQWWRH[SODLQWKH
    XUEDQJURZWK7KLUGWKH/5PRGHOLVDVWDWLVWLFDOVLPSOLILFDWLRQRIUHDOLW\ZKLFKFRXOGQRWIXOO\H[SODLQ
    WKHFRPSOH[XUEDQJURZWKSKHQRPHQRQ

     )RUHFDVWLQJIXWXUHXUEDQJURZWK
    7KHWKLUGREMHFWLYHZDVWRLGHQWLI\WKHSUREDEOHDUHDVRIIXWXUHXUEDQJURZWK2YHUDOOXUEDQJURZWKZDV
    PRGHOOHGIRUDQGRQWKHEDVLVRIGULYLQJIDFWRUVRI0DQ\RIWKHVHIDFWRUVDUHOLNHO\WR
    FKDQJHLQIXWXUHZKLFKPD\KDYHGLIIHUHQWGHJUHHRILQIOXHQFHRQWKHXUEDQJURZWK6RWKHH[WUDSRODWHG
    XUEDQ JURZWK PLJKW KDYH FHUWDLQ GHJUHH RI XQFHUWDLQW\ UHJDUGLQJ WKHVH IDFWRUV )XUWKHUPRUH WKH
    SUREDELOLW\PDSVDUHEDVHGRQWKHH[WUDSRODWLRQRIKLVWRULFXUEDQJURZWKSURFHVVZKLFKLVQRWFHUWDLQWR
    FRQWLQXH LQ WKH IXWXUH +RZHYHU LW UHIOHFWV WKH VSDWLDO SDWWHUQ RI XUEDQ JURZWK LI KLVWRULF SURFHVV RI
    JURZWKFRQWLQXHVLQWKHIXWXUH,IWKLVLVWKHFDVHWKHQWKHSUREDELOLW\PDSJHQHUDWHGIRUIXWXUHXUEDQ
    JURZWK ZLOO EH KHOSIXO IRU SODQQHUV DQG GHFLVLRQ PDNHUV WR PDNH GHFLVLRQ IRU JXLGLQJ IXWXUH XUEDQ
    JURZWKRIWKHYDOOH\
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

     )XUWKHUUHVHDUFKGLUHFWLRQV
    )RU WKH IXUWKHU LPSURYHPHQW LQ WKH ILQGLQJV RI WKLV VWXG\ VRPH RI WKH UHFRPPHQGDWLRQV DUH OLVWHG
    EHORZ
    
    • 7KLVVWXG\KDVDSSOLHGELQRPLDO/5PRGHOWRDQDO\VHGULYLQJIDFWRUVRIXUEDQJURZWK6RHIIHFW
    RIIXWXUHXUEDQJURZWKRQGLIIHUHQWODQGFRYHUFODVVHVLVQRWGHWHUPLQHG)XUWKHUUHVHDUFKFDQ
    EHGRQHXVLQJPXOWLQRPLDO/5PRGHOWRH[DPLQHWKHHIIHFWVRIIXWXUHXUEDQJURZWKRQGLIIHUHQW
    ODQGFRYHUFKDQJHV
    
    • $OWKRXJK /5 PRGHO SURGXFHV WKH SUREDEOH DUHDV RI IXWXUH XUEDQ JURZWK LW GRHV QRW VSHFLI\
    ZKHQLWLVJRLQJWRKDSSHQEHFDXVHLWGRHVQRWSURFHHGZLWKWLPHLQVHOIPRGLI\LQJZD\7KLVLV
    RQH RI WKH OLPLWDWLRQV RI /5 PRGHO 6R IXUWKHU UHVHDUFK FDQ EH GRQH E\ XVLQJ VHOIPRGLI\LQJ
    DSSURDFKVRWKDWIDFWRUVLQWKHPRGHOFDQEHDXWRPDWLFDOO\XSGDWHGZLWKWLPH
    
    • 'XHWRXQDYDLODELOLW\RIGDWDIRUGULYLQJIDFWRUVRIXUEDQJURZWKGXULQJ/5PRGHOLV
    FRQVWUXFWHG RQ WKH EDVLV RI  GULYLQJ IDFWRUV 6R WKH PRGHO LV QRW YDOLGDWHG DV LW LV
    FRQVWUXFWHGRQWKHPRVWUHFHQWGDWDRI7KLVFDQEHFRQVLGHUHGDQGH[WHQGHGLQWKHIXWXUH
    UHVHDUFK
    
    • (DUOLHU VWXGLHV KDYH DOUHDG\ PRGHOOHG XUEDQ JURZWK RI WKH YDOOH\ E\ XVLQJ &HOOXODU DXWRPDWD
    +RZHYHU IXUWKHU VWXGLHV FDQ EH GRQH WR LQYHVWLJDWH WKH GLIIHUHQFHV EHWZHHQ WKHVH WZR
    DSSURDFKHV&$DQG/5PRGHOLQJLQWKHVDPHVWXG\DUHDDQGDQDO\]HERWKWKHLUDGYDQWDJHVDQG
    GLVDGYDQWDJHV
    
    
    
    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    /,672)5()(5(1&(6
    $EHEH) .  0RGHOOLQJ LQIRUPDO VHWWOHPHQWJURZWK LQ 'DU HV 6DODDP 7DQ]DQLD 8QLYHUVLW\ RI 7ZHQWH
    )DFXOW\ RI *HR,QIRUPDWLRQ DQG (DUWK 2EVHUYDWLRQ ,7&  (QVFKHGH 5HWULHYHG IURP
    KWWSZZZLWFQOOLEUDU\SDSHUVBPVFXSPDEHEHSGI
    $GKLNDUL-  /DQGUHIRUPLQ1HSDOSUREOHPVDQGSURVSHFWV1,'6
    $JXD\R 0 :LHJDQG 7 $]yFDU * ' :LHJDQG .  9HJD & (   5HYHDOLQJ WKH GULYLQJ
    IRUFHVRIPLGFLWLHVXUEDQJURZWKSDWWHUQVXVLQJVSDWLDOPRGHOLQJDFDVHVWXG\RI/RVÉQJHOHV
    &KLOH(FRORJ\DQG6RFLHW\  
    $OOHQ- /X.6  0RGHOLQJDQG3UHGLFWLQJRI)XWXUH8UEDQ*URZWKLQWKH&KDUOHVWRQ6RXWK
    &DUROLQD$UHD7HVWLPRQ\SUHVHQWHGWRWKH8QLWHG6WDWHV&RPPLVVLRQRQ2FHDQ3ROLF\RQ-DQXDU\
    $QGHUVRQ-  /RJLVWLFUHJUHVVLRQ+DQGERRNRI6WDWLVWLFV1RUWK+ROODQG1HZ<RUN
    $UD\D < +  &DEUDO 3   $QDO\VLV DQG PRGHOLQJ RI XUEDQ ODQG FRYHU FKDQJH LQ 6HWXEDO DQG
    6HVLPEUD3RUWXJDO5HPRWH6HQVLQJ  
    $UEXU\ -   )URP XUEDQ VSUDZO WR FRPSDFW FLW\ DQ DQDO\VLV RI XUEDQ JURZWK PDQDJHPHQW LQ $XFNODQG
    *HRJUDSK\DQG(QYLURQPHQWDO6FLHQFH 8QLYHUVLW\RI$XFNODQG
    %DJKHUL06XODLPDQ:1$ 9DJKHI1  /DQG8VH6XLWDELOLW\$QDO\VLV8VLQJ0XOWL&ULWHULD
    'HFLVLRQ $QDO\VLV 0HWKRG IRU &RDVWDO 0DQDJHPHQW DQG 3ODQQLQJ $ &DVH 6WXG\ RI 0DOD\VLD
    -RXUQDORI(QYLURQPHQWDO6FLHQFHDQG7HFKQRORJ\
    %HODO $ $  0RJKDQP ) 6   'HWHFWLQJ XUEDQ JURZWK XVLQJ UHPRWH VHQVLQJ DQG *,6
    WHFKQLTXHV LQ $O *KDUEL\D JRYHUQRUDWH (J\SW 7KH (J\SWLDQ -RXUQDO RI 5HPRWH 6HQVLQJ DQG 6SDFH
    6FLHQFH  
    %HUOLQJ:ROII6 :X-  0RGHOLQJXUEDQODQGVFDSHG\QDPLFV$FDVHVWXG\LQ3KRHQL[86$
    8UEDQ(FRV\VWHPV  
    %ODFN' +HQGHUVRQ9  $WKHRU\RIXUEDQJURZWK-RXUQDORISROLWLFDOHFRQRP\  
    %RRWK '  2OGILHOG 5   $ FRPSDULVRQ RI FODVVLILFDWLRQ DOJRULWKPV LQ WHUPV RI VSHHG DQG
    DFFXUDF\ DIWHU WKH DSSOLFDWLRQ RI D SRVWFODVVLILFDWLRQ PRGDO ILOWHU 5HPRWH 6HQVLQJ    
    
    &DPDJQL 5 *LEHOOL 0 &  5LJDPRQWL 3   8UEDQ PRELOLW\ DQG XUEDQ IRUP WKH VRFLDO DQG
    HQYLURQPHQWDO FRVWV RI GLIIHUHQW SDWWHUQV RI XUEDQ H[SDQVLRQ (FRORJLFDO (FRQRPLFV    
    
    &%6   1DWLRQDO SRSXODWLRQ FHQVXV  5HWULHYHG  $XJXVW  IURP
    KWWSFHQVXVJRYQSLQGH[SKS"RSWLRQ FRPBFRQWHQW YLHZ DUWLFOH LG  ,WHPLG 
    &KHQJ-  0RGHOOLQJVSDWLDODQGWHPSRUDOXUEDQJURZWK8WUHFKW8QLYHUVLW\
    &KHQJ- 0DVVHU,  8UEDQJURZWKSDWWHUQPRGHOLQJDFDVHVWXG\RI:XKDQFLW\35&KLQD
    /DQGVFDSHDQG8UEDQ3ODQQLQJ  
    &KHQJ-0DVVHU, 2WWHQV+  8QGHUVWDQGLQJXUEDQJURZWKV\VWHP7KHRULHVDQGPHWKRGV
    &KULVWHQVHQ5  /RJOLQHDUPRGHOVDQGORJLVWLFUHJUHVVLRQ
    &ODUNH . & +RSSHQ 6  *D\GRV /   0HWKRGV DQG WHFKQLTXHV IRU ULJRURXV FDOLEUDWLRQ RI D FHOOXODU
    DXWRPDWRQPRGHORIXUEDQJURZWK3DSHUSUHVHQWHGDWWKH7KLUG,QWHUQDWLRQDO&RQIHUHQFH:RUNVKRS
    RQ,QWHJUDWLQJ*,6DQG(QYLURQPHQWDO0RGHOLQJ6DQWD)H1HZ0H[LFR
    &RQJDOWRQ5*  $UHYLHZRIDVVHVVLQJWKHDFFXUDF\RIFODVVLILFDWLRQVRIUHPRWHO\VHQVHGGDWD
    5HPRWHVHQVLQJRIHQYLURQPHQW  
    &]HSLHO 6 $   0D[LPXP OLNHOLKRRG HVWLPDWLRQ RI ORJLVWLF UHJUHVVLRQ PRGHOV WKHRU\ DQG
    LPSOHPHQWDWLRQ3XEOLVKHGSDSHU$YDLODEOHRQKWWSF]HSQHWFRQWDFWKWPO $VVHVVHGRQ$SULO 
    'DOODO*(  7KH/LWWOH+DQGERRNRI6WDWLVWLFDO3UDFWLFH6LPSOLI\LQJD0XOWLSOH5HJUHVVLRQ(TXDWLRQ
    5HWULHYHGWK)HEIURPKWWSZZZMHUU\GDOODOFRP/+63VLPSOLI\KWP
    'H $OPHLGD & 0 9LHLUD 0RQWHLUR $ 0 &DPDUD * 6RDUHV)LOKR % 6 &RXWLQKR &HUTXHLUD *
    /RSHV3HQQDFKLQ& %DWW\0  *,6DQGUHPRWHVHQVLQJDVWRROVIRUWKHVLPXODWLRQRI
    XUEDQODQGXVHFKDQJH,QWHUQDWLRQDO-RXUQDORI5HPRWH6HQVLQJ  
    'XERY\N 2 6OLX]DV 5  )ODFNH -   6SDWLRWHPSRUDO PRGHOOLQJ RI LQIRUPDO VHWWOHPHQW
    GHYHORSPHQWLQ6DQFDNWHSHGLVWULFW,VWDQEXO7XUNH\,6356-RXUQDORI3KRWRJUDPPHWU\DQG5HPRWH
    6HQVLQJ  
    (0,  5LVN6HQVLWLYH/DQG8VH3ODQ)LQDO5HSRUW.DWKPDQGX0HWURSROLWDQ&LW\1HSDO
    )DQJ 6 *HUWQHU * = 6XQ =  $QGHUVRQ $ $   7KH LPSDFW RI LQWHUDFWLRQV LQ VSDWLDO
    VLPXODWLRQRIWKHG\QDPLFVRIXUEDQVSUDZO/DQGVFDSHDQG8UEDQ3ODQQLQJ  

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    )LHOG$  'LVFRYHULQJVWDWLVWLFVXVLQJ63666DJH3XEOLFDWLRQV/LPLWHG


    )RRG\*0  6WDWXVRIODQGFRYHUFODVVLILFDWLRQDFFXUDF\DVVHVVPHQW5HPRWHVHQVLQJRIHQYLURQPHQW
      
    *XR + /LX / +XDQJ * )XOOHU * =RX 5  <LQ <   $ V\VWHP G\QDPLFV DSSURDFK IRU
    UHJLRQDOHQYLURQPHQWDOSODQQLQJDQGPDQDJHPHQW$VWXG\IRUWKH/DNH(UKDL%DVLQ-RXUQDORI
    (QYLURQPHQWDO0DQDJHPHQW  
    +DDFN%1 5DIWHU$  8UEDQJURZWKDQDO\VLVDQGPRGHOLQJLQWKH.DWKPDQGX9DOOH\1HSDO
    +DELWDW,QWHUQDWLRQDO  
    +DOO3* 7HZGZU-RQHV0  8UEDQDQGUHJLRQDOSODQQLQJ7D\ORU )UDQFLV
    +H & 2NDGD 1 =KDQJ 4 6KL 3  =KDQJ - D  0RGHOLQJ XUEDQ H[SDQVLRQ VFHQDULRV E\
    FRXSOLQJ FHOOXODU DXWRPDWD PRGHO DQG V\VWHP G\QDPLF PRGHO LQ %HLMLQJ &KLQD $SSOLHG
    *HRJUDSK\  
    +H & 2NDGD 1 =KDQJ 4 6KL 3  =KDQJ - E  0RGHOLQJ XUEDQ H[SDQVLRQ VFHQDULRV E\
    FRXSOLQJ FHOOXODU DXWRPDWD PRGHO DQG V\VWHP G\QDPLF PRGHO LQ %HLMLQJ &KLQD $SSOLHG
    *HRJUDSK\  
    +HUROG 0 *ROGVWHLQ 1 &  &ODUNH . &   7KH VSDWLRWHPSRUDO IRUP RI XUEDQ JURZWK
    PHDVXUHPHQWDQDO\VLVDQGPRGHOLQJ5HPRWHVHQVLQJRIHQYLURQPHQW  
    +X =  /R & 3   0RGHOLQJ XUEDQ JURZWK LQ $WODQWD XVLQJ ORJLVWLF UHJUHVVLRQ &RPSXWHUV
    (QYLURQPHQWDQG8UEDQ6\VWHPV  
    +XDQJ% 6LQ+/  8QFRYHULQJWKH6SDFH²7LPH3DWWHUQVRI&KDQJHZLWKWKH8VHRI&KDQJH
    $QDO\VW²&DVH6WXG\RI+RQJ.RQJ$GYDQFHVLQ(DUWK2EVHUYDWLRQRI*OREDO&KDQJH
    +XDQJ % =KDQJ /  :X %   6SDWLRWHPSRUDO DQDO\VLV RI UXUDO²XUEDQ ODQG FRQYHUVLRQ
    ,QWHUQDWLRQDO-RXUQDORI*HRJUDSKLFDO,QIRUPDWLRQ6FLHQFH  
    ,VPDLO0+ -XVRII.  6DWHOOLWHGDWDFODVVLILFDWLRQDFFXUDF\DVVHVVPHQWEDVHGIURPUHIHUHQFH
    GDWDVHW,QWHUQDWLRQDO-RXUQDORI&RPSXWHUDQG,QIRUPDWLRQ6FLHQFHDQG(QJLQHHULQJ  
    ,7&  *,6FLHQFHDQG(DUWK2EVHUYDWLRQDSURFHVVEDVHGDSSURDFK(QVFKHGH
    .LYHOO3  /DQGDQGWKHFLW\SDWWHUQVDQGSURFHVVHVRIXUEDQFKDQJH3V\FKRORJ\3UHVV
    .RN .  9HOGNDPS $   (YDOXDWLQJ LPSDFW RI VSDWLDO VFDOHV RQ ODQG XVH SDWWHUQ DQDO\VLV LQ
    &HQWUDO$PHULFD$JULFXOWXUH(FRV\VWHPV DPS(QYLURQPHQW ² 
    /DQGLV - 5  .RFK * *   7KH PHDVXUHPHQW RI REVHUYHU DJUHHPHQW IRU FDWHJRULFDO GDWD
    %LRPHWULFV
    /DQJIRUG 0  2EWDLQLQJSRSXODWLRQ HVWLPDWHVLQQRQFHQVXVUHSRUWLQJ]RQHV$QHYDOXDWLRQRI
    WKHFODVVGDV\PHWULFPHWKRG&RPSXWHUV(QYLURQPHQWDQG8UEDQ6\VWHPV  
    /HVVFKHQ-39HUEXUJ3+ 6WDDO6-  6WDWLVWLFDO PHWKRGV IRUDQDO\VLQJWKHVSDWLDOGLPHQVLRQRI
    FKDQJHVLQODQGXVHDQGIDUPLQJV\VWHPV&LWHVHHU
    /X '  :HQJ 4   $ VXUYH\ RI LPDJH FODVVLILFDWLRQ PHWKRGV DQG WHFKQLTXHV IRU LPSURYLQJ
    FODVVLILFDWLRQSHUIRUPDQFH,QWHUQDWLRQDO-RXUQDORI5HPRWH6HQVLQJ  
    0DNWDY '  (UEHN ) 6   $QDO\VLV RI XUEDQ JURZWK XVLQJ PXOWLǦWHPSRUDO VDWHOOLWH GDWD LQ
    ,VWDQEXO7XUNH\,QWHUQDWLRQDO-RXUQDORI5HPRWH6HQVLQJ  
    0DWW *   %LQDU\ 5HVSRQVH 0RGHOV 3HUFHQWDJH RI FRUUHFW SUHGLFWLRQ 5HWULHYHG IURP
    KWWSVILOHVQ\XHGXPUJSXEOLFELQDU\UHVSRQVHSGI
    0F)DGGHQ '   &RQGLWLRQDO ORJLW DQDO\VLV RI TXDQWLWDWLYH FKRLFH EHKDYLRU ,Q 3 =DUHPEND ) L
    HFRQRPHWULFV (G 
    185(&   1HWZRUN RQ 8UEDQ 5HVHDUFK LQ WKH (XURSHDQ 8QLRQ $JJORPHUDWLRQ 'HOLPLQDWLRQ
    5HWULHYHG WK -DQ  IURP
    KWWSZZZRHDZDFDWLVUFRPHWGRFXPHQWV)LQDOB5HVXOWV&20(7B&77GHOLPLWGHOLPLWKWPO
    2·EULHQ 5 0   $ FDXWLRQ UHJDUGLQJ UXOHV RI WKXPE IRU YDULDQFH LQIODWLRQ IDFWRUV 4XDOLW\ 
    4XDQWLW\  
    2OXVH\L2)  8UEDQODQGXVHFKDQJHDQDO\VLVRIDWUDGLWLRQDOFLW\IURPUHPRWHVHQVLQJGDWD7KH
    FDVHRI,EDGDQPHWURSROLWDQDUHD1LJHULD+XPDQLW\DQG6RFLDO6FLHQFHV-RXUQDO
    2YHUPDUV.3GH.RQLQJ*+- 9HOGNDPS$  6SDWLDODXWRFRUUHODWLRQLQPXOWLVFDOHODQG
    XVHPRGHOV(FRORJLFDO0RGHOOLQJ ² 
    3RQWLXV 5 *   4XDQWLILFDWLRQ HUURU YHUVXV ORFDWLRQ HUURU LQ FRPSDULVRQ RI FDWHJRULFDO PDSV
    3KRWRJUDPPHWULF(QJLQHHULQJDQG5HPRWH6HQVLQJ  
    3UL\DQWR$7  7KHLPSDFWRIKXPDQDFWLYLWLHVRQFRDVWDO]RQHVDQGVWUDWHJLHVWRZDUGVVXVWDLQDEOHGHYHORSPHQW
    DFDVHVWXG\LQ3HNDORQJDQ,QGRQHVLD8QLYHUVLW\RI7ZHQWH)DFXOW\RI*HRLQIRUPDWLRQDQG(DUWK
    REVHUYDWLRQ,7&(QVFKHGH

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    5DQD 0   8UEDQ IULQJH 'HYHORSPHQW SDWWHUQ LQ NDWKPDQGX YDOOH\ 0DVWHU GHJUHH RI VFLHQFH LQ 8UEDQ
    3ODQQLQJ,QVWLWXWHRI(QJLQHHULQJ3XOFKRZN
    5LFKDUGV-$  5HPRWHVHQVLQJGLJLWDOLPDJHDQDO\VLVDQLQWURGXFWLRQ6SULQJHU
    6KUHVWKD5.  'HYHORSPHQW'\QDPLFVLQ8UEDQIULQJH$&DVHVWXG\RI/DOLWSXU60&0DVWHUGHJUHH
    7KHVLVUHSRUW,QVWLWXWHRI(QJLQHHULQJ3XOFKRZN
    6LQJK $   5HYLHZ $UWLFOH 'LJLWDO FKDQJH GHWHFWLRQ WHFKQLTXHV XVLQJ UHPRWHO\VHQVHG GDWD
    ,QWHUQDWLRQDO-RXUQDORI5HPRWH6HQVLQJ  
    6RQDU6*  8UEDQVSUDZO²$V\VWHPG\QDPLFDSSURDFK
    7KDSD 5 %  0XUD\DPD <   'ULYHUV RI XUEDQ JURZWK LQ WKH .DWKPDQGX YDOOH\ 1HSDO
    ([DPLQLQJWKHHIILFDF\RIWKHDQDO\WLFKLHUDUFK\SURFHVV$SSOLHG*HRJUDSK\  
    7KDSD 5 %  0XUD\DPD <   8UEDQ JURZWK PRGHOLQJ RI .DWKPDQGX PHWURSROLWDQ UHJLRQ
    1HSDO&RPSXWHUV(QYLURQPHQWDQG8UEDQ6\VWHPV  
    7LPDOVLQD . 3   5XUDO 8UEDQ 0LJUDWLRQ DQG /LYHOLKRRG LQ WKH ,QIRUPDO 6HFWRU 'HSDUWPHQW RI
    *HRJUDSK\1RUZHJLDQ8QLYHUVLW\RI6FLHQFHDQG7HFKQRORJ\ 1718 
    86*6  86'HSDUWPHQWRIWKH,QWHULRU_86*HRORJLFDO6XUYH\5HWULHYHG
    IURPKWWSJORYLVXVJVJRY!KWWSHDUWKH[SORUHUXVJVJRY!
    9HUEXUJ3 + 6RHSERHU : 9HOGNDPS $ /LPSLDGD 5 (VSDOGRQ 9  0DVWXUD 6 6$  
    0RGHOLQJ WKH VSDWLDO G\QDPLFV RI UHJLRQDO ODQG XVH 7KH &/8(6 PRGHO (QYLURQPHQWDO
    0DQDJHPHQW  
    9HUEXUJ3+YDQ(FN-55GH 1LMV7&0 'LMVW 0- 6FKRW3  'HWHUPLQDQWVRI
    ODQGXVHFKDQJHSDWWHUQVLQWKH1HWKHUODQGV(QYLURQPHQWDQG3ODQQLQJ%  
    9LHUD $ -  *DUUHWW - 0   8QGHUVWDQGLQJ LQWHUREVHUYHU DJUHHPHQW WKH NDSSD VWDWLVWLF )DP
    0HG  
    :KLWH5 (QJHOHQ*  +LJKUHVROXWLRQLQWHJUDWHGPRGHOOLQJRIWKHVSDWLDOG\QDPLFVRIXUEDQDQGUHJLRQDO
    V\VWHPV 3DSHU SUHVHQWHG DW WKH *HR&RPSXWDWLRQ
     -XO\    -XO\  
    )UHGHULFNVEXUJ9$86$
    :LOVRQ(+XUG- &LYFR'  'HYHORSPHQWRIDPRGHOWRTXDQWLI\DQGPDSXUEDQJURZWK
    :X % +XDQJ %  )XQJ 7   3URMHFWLRQ RI ODQG XVH FKDQJH SDWWHUQV XVLQJ NHUQHO ORJLVWLF
    UHJUHVVLRQ3KRWRJUDPPHWULF(QJLQHHULQJ 5HPRWH6HQVLQJ  
    ;LDR - 6KHQ < *H - 7DWHLVKL 5 7DQJ & /LDQJ <  +XDQJ =   (YDOXDWLQJ XUEDQ
    H[SDQVLRQ DQG ODQG XVH FKDQJH LQ 6KLMLD]KXDQJ &KLQD E\ XVLQJ *,6 DQG UHPRWH VHQVLQJ
    /DQGVFDSHDQG8UEDQ3ODQQLQJ  
    ;LH & +XDQJ % &ODUDPXQW &  &KDQGUDPRXOL &   6SDWLDO ORJLVWLF UHJUHVVLRQ DQG *,6 WR PRGHO
    UXUDOXUEDQ ODQG FRQYHUVLRQ 3DSHU SUHVHQWHG DW WKH 3URFHHGLQJV RI 352&(6686 6HFRQG
    ,QWHUQDWLRQDO &ROORTXLXP RQ WKH %HKDYLRXUDO )RXQGDWLRQV RI ,QWHJUDWHG /DQGXVH DQG
    7UDQVSRUWDWLRQ0RGHOV)UDPHZRUNV0RGHOVDQG$SSOLFDWLRQV
    ;X&/LX0=KDQJ&$Q6<X: &KHQ-0  7KHVSDWLRWHPSRUDOG\QDPLFVRIUDSLG
    XUEDQJURZWKLQWKH1DQMLQJPHWURSROLWDQUHJLRQRI&KLQD/DQGVFDSH(FRORJ\  
    <XDQ)6DZD\D.(/RHIIHOKRO]%& %DXHU0(  /DQGFRYHUFODVVLILFDWLRQDQGFKDQJH
    DQDO\VLV RI WKH 7ZLQ &LWLHV 0LQQHVRWD  0HWURSROLWDQ $UHD E\ PXOWLWHPSRUDO /DQGVDW UHPRWH
    VHQVLQJ5HPRWHVHQVLQJRIHQYLURQPHQW ² 
    =DNL5=DNL$ $KPHG6  /DQG8VHDQG/DQG&RYHU&KDQJHVLQ$ULG5HJLRQ7KH&DVH
    1HZ8UEDQL]HG=RQH1RUWKHDVW&DLUR(J\SW-RXUQDORI*HRJUDSKLF,QIRUPDWLRQ6\VWHP  
    
    =HQJ<1:X* 3=KDQ)% =KDQJ++  0RGHOLQJVSDWLDO ODQGXVHSDWWHUQ XVLQJ
    DXWRORJLVWLF UHJUHVVLRQ 7KH ,QWHUQDWLRQDO $UFKLYHV RI WKH 3KRWRJUDPPHWU\ 5HPRWH 6HQVLQJ DQG 6SDWLDO
    ,QIRUPDWLRQ6FLHQFHV;;;9,, % 
    
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    $11(;(6
    , 7DEOHV
    7DEOH$9DULDEOHVLQWKH[/5PRGHO

    &,IRU25
     % 6( :DOG GI 6LJ 25 /RZHU 8SSHU
    6WHSD 6ORSH        
    )RUHVW        
    GLVWBUGPDM        
    'LVWBUGPLQ        
    'LVWBSLSH        
    'LVWB&%'        
    'LVWBKHDOWK        
    'LVWBHGX        
    3URSBXUEDQ        
    'LVWBXFOXVWHU        

    /DQGBYDOXH        


    &RQVWDQW        

    9DULDEOHVVLJQLILFDQWDW
    
    7DEOH$9DULDEOHVLQWKH[/5PRGHO

    &,IRU25
     % 6( :DOG GI 6LJ 25 /RZHU 8SSHU
    6WHSD 6ORSH        
    )RUHVW        
    GLVWBUGPDM        

    'LVWBUGPLQ        

    'LVWBSLSH        

    'LVWB&%'        


    'LVWB8FHQWUH        

    'LVWBKHDOWK        

    'LVWBHGX        

    3URSBXUEDQ        

    'LVWBXFOXVWHU        

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    /DQGBYDOXH        

    &RQVWDQW        

    9DULDEOHVVLJQLILFDQWDW
    
    7DEOH$9DULDEOHVLQWKH[/5PRGHO

    &,IRU25
     % 6( :DOG GI 6LJ 25 /RZHU 8SSHU
    6WHSD 6ORSH        
    3RSGHQ        
    GLVWBUGPDM        
    'LVWBUGPLQ        

    'LVWBSLSH        

    'LVWB&%'        


    'LVWBHGX        
    3URSBXUEDQ        
    'LVWBXFOXVWHU        

    /DQGBYDOXH        

    &RQVWDQW        

    9DULDEOHVVLJQLILFDQWDW
    
    7DEOH$9DULDEOHVLQWKH[/5PRGHO

    &,IRU25
     % 6( :DOG GI 6LJ 25 /RZHU 8SSHU
    6WHSD 6ORSH        
    GLVWBUGPDM        
    'LVWBUGPLQ        
    'LVWBSLSH        
    'LVWB&%'        
    'LVWBULYHU        
    'LVWBKHDOWK        
    3URSBXUEDQ        
    'LVWBXFOXVWHU        

    /DQGBYDOXH        


    &RQVWDQW        

    9DULDEOHVVLJQLILFDQWDW
    

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    7DEOH$9DULDEOHVLQWKH[/5PRGHO

    &,IRU25
     % 6( :DOG GI 6LJ 25 /RZHU 8SSHU
    6WHSD 6ORSH        
    3RSGHQ        
    GLVWBUGPDM        
    'LVWBUGPLQ        

    'LVWBSLSH        

    'LVWB&%'        


    'LVWBHGX        
    3URSBXUEDQ        
    'LVWBXFOXVWHU        

    &RQVWDQW        

    9DULDEOHVVLJQLILFDQWDW
    
    7DEOH$5HVXOWRIORJLVWLFUHJUHVVLRQIRURYHUDOOJURZWK

    9DULDEOHVLQWKH/5PRGHOIRURYHUDOOJURZWK

    &,IRU25
     % 6( :DOG GI 6LJ 25 /RZHU 8SSHU
    6WHS 6ORSH        
    D
    )RUHVW        
    3RSGHQ        
    GLVWBUGPDM        
    'LVWBUGPLQ        
    'LVWBSLSH        
    'LVWB&%'        
    'LVWBULYHU        
    'LVWB8FHQWUH        

    'LVWBKHDOWK        


    'LVWBHGX        
    3URSBXUEDQ        
    'LVWBXFOXVWHU        

    /DQGBYDOXH        


    &RQVWDQW       
    6WHS 6ORSH        
    D
    3RSGHQ        
    GLVWBUGPDM        
    'LVWBUGPLQ        
    'LVWBSLSH        

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    'LVWB&%'        


    'LVWBULYHU        
    'LVWB8FHQWUH        

    'LVWBKHDOWK        


    'LVWBHGX        
    3URSBXUEDQ        
    'LVWBXFOXVWHU        

    /DQGBYDOXH        


    &RQVWDQW        
    6WHS 6ORSH        
    D
    3RSGHQ        
    GLVWBUGPDM        
    'LVWBUGPLQ        
    'LVWBSLSH        
    'LVWB&%'        
    'LVWBULYHU        
    'LVWB8FHQWUH        

    'LVWBHGX        


    3URSBXUEDQ        
    'LVWBXFOXVWHU        

    /DQGBYDOXH        


    &RQVWDQW        
    6WHS 6ORSH        
    D
    3RSGHQ        
    GLVWBUGPDM        
    'LVWBUGPLQ        
    'LVWBSLSH        
    'LVWB&%'        
    'LVWB8FHQWUH        

    'LVWBHGX        


    3URSBXUEDQ        
    'LVWBXFOXVWHU        

    /DQGBYDOXH        


    &RQVWDQW        
    6WHS 6ORSH        
    D
    3RSGHQ        
    GLVWBUGPDM        
    'LVWBUGPLQ        
    'LVWBSLSH        
    'LVWB&%'        
    'LVWBHGX        

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    3URSBXUEDQ        


    'LVWBXFOXVWHU        

    /DQGBYDOXH        


    &RQVWDQW        

    D9DULDEOH V UHPRYHGRQVWHS)RUHVW 
    E9DULDEOH V UHPRYHGRQVWHS'LVWBKHDOWK
    F9DULDEOH V UHPRYHGRQVWHS'LVWBULYHU
    G9DULDEOH V UHPRYHGRQVWHS'LVWB8FHQWUH
    
    7DEOH$5HVXOWRIORJLVWLFUHJUHVVLRQIRU,QILOOJURZWK

    9DULDEOHVLQWKH/5PRGHOIRULQILOOJURZWK

    &,IRU25
     % 6( :DOG GI 6LJ 25 /RZHU 8SSHU
    6WHSD 'LVWBFEG        

    'LVWBHGX        

    'LVWBKHDOWK        

    'LVWBSLSH        

    GLVWBUGPDM        


    'LVWBUGPLQ        

    'LVWBULYHU        


    'LVWBXFHQWUH        

    'LVWBXFOXVWHU        

    IRUHVW        

    /DQGBYDOXH        

    3RSGHQ        


    3URSBXUEDQ        

    6ORSH        


    &RQVWDQW       
    6WHSD 'LVWBFEG        
    'LVWBHGX        
    'LVWBKHDOWK        

    'LVWBSLSH        


    GLVWBUGPDM        
    'LVWBUGPLQ        

    'LVWBULYHU        

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    'LVWBXFHQWUH        

    'LVWBXFOXVWHU        

    /DQGBYDOXH        

    3RSGHQ        


    3URSBXUEDQ        

    6ORSH        


    &RQVWDQW       
    6WHSD 'LVWBFEG        
    'LVWBHGX        
    'LVWBKHDOWK        

    'LVWBSLSH        


    GLVWBUGPDM        
    'LVWBUGPLQ        

    'LVWBULYHU        


    'LVWBXFHQWUH        

    'LVWBXFOXVWHU        

    3RSGHQ        


    3URSBXUEDQ        

    6ORSH        


    &RQVWDQW       
    6WHSD 'LVWBFEG        
    'LVWBKHDOWK        

    'LVWBSLSH        


    GLVWBUGPDM        
    'LVWBUGPLQ        

    'LVWBULYHU        


    'LVWBXFHQWUH        

    'LVWBXFOXVWHU        

    3RSGHQ        


    3URSBXUEDQ        

    6ORSH        


    &RQVWDQW       
    6WHSD 'LVWBKHDOWK        

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    'LVWBSLSH        


    GLVWBUGPDM        
    'LVWBUGPLQ        

    'LVWBULYHU        


    'LVWBXFHQWUH        

    'LVWBXFOXVWHU        

    3RSGHQ        


    3URSBXUEDQ        

    6ORSH        


    &RQVWDQW       
    D9DULDEOH V UHPRYHGRQVWHSIRUHVW
    E9DULDEOH V UHPRYHGRQVWHS/DQGBYDOXH
    F9DULDEOH V UHPRYHGRQVWHS'LVWBHGX
    G9DULDEOH V UHPRYHGRQVWHS'LVWBFEG
    
    7DEOH$5HVXOWRIORJLVWLFUHJUHVVLRQIRU([SDQVLRQ

    9DULDEOHVLQWKH/5PRGHOIRU([SDQVLRQ
    &,IRU25
     % 6( :DOG GI 6LJ 25 /RZHU 8SSHU
    6WHSD 'LVWBFEG        
    'LVWBHGX        
    'LVWBKHDOWK        

    'LVWBSLSH        


    GLVWBUGPDM        
    'LVWBUGPLQ        

    'LVWBULYHU        


    'LVWBXFHQWUH        

    'LVWBXFOXVWHU        

    IRUHVW        


    /DQGBYDOXH        

    3RSGHQ        


    3URSBXUEDQ        

    6ORSH        


    &RQVWDQW       
    6WHSD 'LVWBFEG        

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    'LVWBKHDOWK        

    'LVWBSLSH        


    GLVWBUGPDM        
    'LVWBUGPLQ        

    'LVWBULYHU        


    'LVWBXFHQWUH        

    'LVWBXFOXVWHU        

    IRUHVW        


    /DQGBYDOXH        

    3RSGHQ        


    3URSBXUEDQ        

    6ORSH        


    &RQVWDQW       
    6WHSD 'LVWBFEG        
    'LVWBKHDOWK        

    'LVWBSLSH        


    GLVWBUGPDM        
    'LVWBUGPLQ        

    'LVWBULYHU        


    'LVWBXFHQWUH        

    'LVWBXFOXVWHU        

    /DQGBYDOXH        

    3RSGHQ        


    3URSBXUEDQ        

    6ORSH        


    &RQVWDQW       
    6WHSD 'LVWBFEG        
    'LVWBKHDOWK        

    'LVWBSLSH        


    GLVWBUGPDM        
    'LVWBUGPLQ        

    'LVWBULYHU        


    'LVWBXFHQWUH        

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    'LVWBXFOXVWHU        

    /DQGBYDOXH        

    3RSGHQ        


    6ORSH        
    &RQVWDQW       
    6WHSD 'LVWBFEG        
    'LVWBKHDOWK        

    'LVWBSLSH        


    'LVWBUGPLQ        

    'LVWBULYHU        


    'LVWBXFHQWUH        

    'LVWBXFOXVWHU        

    /DQGBYDOXH        

    3RSGHQ        


    6ORSH        
    &RQVWDQW       
    6WHSD 'LVWBFEG        
    'LVWBKHDOWK        

    'LVWBSLSH        


    'LVWBUGPLQ        

    'LVWBULYHU        


    'LVWBXFHQWUH        

    'LVWBXFOXVWHU        

    /DQGBYDOXH        

    3RSGHQ        


    &RQVWDQW       
    6WHSD 'LVWBFEG        
    'LVWBKHDOWK        

    'LVWBSLSH        


    'LVWBUGPLQ        

    'LVWBULYHU        


    'LVWBXFOXVWHU        

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    /DQGBYDOXH        

    3RSGHQ        


    &RQVWDQW       
    6WHSD 'LVWBFEG        
    'LVWBKHDOWK        

    'LVWBSLSH        


    'LVWBUGPLQ        

    'LVWBXFOXVWHU        

    /DQGBYDOXH        

    3RSGHQ        


    &RQVWDQW       
    D9DULDEOH V UHPRYHGRQVWHS'LVWBHGX
    E9DULDEOH V UHPRYHGRQVWHSIRUHVW
    F9DULDEOH V UHPRYHGRQVWHS3URSBXUEDQ
    G9DULDEOH V UHPRYHGRQVWHSGLVWBUGPDM
    H9DULDEOH V UHPRYHGRQVWHS6ORSH
    I9DULDEOH V UHPRYHGRQVWHS'LVWBXFHQWUH
    J9DULDEOH V UHPRYHGRQVWHS'LVWBULYHU
     

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    ,, )LJXUHV
    
    

    
    )LJXUH).DSSDVWDWLVWLFVEDVHGRQREVHUYHGXUEDQJURZWKLQ

    
    
    
     

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    ,,, ([SHUWLQWHUYLHZ
    ,QWURGXFWLRQ
    7KLVUHVHDUFKIRFXVHVRQGHWHUPLQLQJIDFWRUVZKLFKGULYHVWKHXUEDQJURZWKDQGIRUHFDVWLQJIXWXUHXUEDQJURZWK
    SDWWHUQ LQ .DWKPDQGX YDOOH\ ,Q WKLV UHJDUGV WKLV LQWHUYLHZ ZLOO KHOS WR DGGUHVV H[SHUW RSLQLRQ DERXW WKH XUEDQ
    JURZWKDQGLWVGULYLQJIDFWRUV,QDGGLWLRQLWZLOOJLYHWKHLQVLJKWRIXUEDQGHYHORSPHQWSROLFLHVLQWKHYDOOH\
    
    1DPHRILQWHUYLHZHH««««««««««««««
    2UJDQL]DWLRQ«««««««««««««
    3RVW««««««««««««««««

    &KHFNOLVWIRULQWHUYLHZ
    $ 8QGHUVWDQGLQJWKHFRQFHSWRIXUEDQJURZWK
    D $FFRUGLQJWRWKHOLWHUDWXUHWKHUHDUHWKUHHW\SHVRIXUEDQJURZWKDVVKRZQLQILJEHORZ&RXOG\RX
    SOHDVHVWDWHZKHUHDUHWKHVHJURZWKVRFFXUULQJLQWKHYDOOH\"

    
    )LJXUH)'LIIHUHQWW\SHVRIXUEDQJURZWK

    E :KLFKRQHGR\RXWKLQNLVWKHPRVWSURPLQHQWLQ.DWKPDQGXYDOOH\":K\"
    
    % 8QGHUVWDQGLQJWKHGULYHUVRIXUEDQJURZWK
    D )URPOLWHUDWXUHUHYLHZIROORZLQJGULYLQJIDFWRUVRIXUEDQJURZWKKDYHEHHQOLVWHG&RXOG\RXSOHDVH
    WLFNWKHPDFFRUGLQJWRWKHLUGHJUHHRILQIOXHQFH"
    E ,Q\RXUYLHZZKDWDUHWKHNH\IDFWRUVRIXUEDQJURZWKLQ.DWKPDQGXYDOOH\"
    F :KDWDUHWKHGULYLQJIDFWRUVRILQILOOJURZWKRXWZDUGH[SDQVLRQVDQGVFDWWHUHGJURZWK"

    )DFWRUVRIXUEDQJURZWK +LJK 0RGHUDWH 1R


    LQIOXHQFH LQIOXHQFH LQIOXHQFH
    %LRSK\VLFDOFKDUDFWHU 6ORSHRULHQWDWLRQ   
    'HJUHHRIVORSH  
    3RSXODWLRQJURZWK 3RSXODWLRQGHQVLW\   
    3ODQVDQGSROLFLHV =RQLQJ   
    3UR[LPDWHFDXVHV 'LVWDQFHWRPDMRUURDGV   
     'LVWDQFHWRPLQRUURDGV   
    'LVWDQFHWRULQJURDG 
    'LVWDQFHWRZDWHUOLQHV   
    'LVWDQFHWRVHZHUOLQH   
    'LVWDQFHWRHOHFWULFOLQHV   
    'LVWDQFHWR&%'   

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<

    'LVWDQFHWRLQGXVWULDODUHD    
    'LVWDQFHWRPDMRUULYHUV  
    'LVWDQFHWRXUEDQFHQWUHV   
    'LVWDQFHWRKHDOWKIDFLOLWLHV    
    'LVWDQFH WR HGXFDWLRQDO    
    IDFLOLWLHV 
    ([LVWLQJFRQGLWLRQV ([LVWLQJXUEDQFOXVWHU    
    (FRQRPLFIDFWRUV /DQGYDOXH    
    6DIHW\ 3ROLWLFDO6DIHW\    
    ,IRWKHUSOHDVHVSHFLI\     
     
       
     
       
    
    
    & 3ODQDQGSROLFLHVRIXUEDQJURZWKLQ.DWKPDQGXYDOOH\
    D :KDWW\SHVRISODQDQGSROLFLHVDUHWKHUHWRFRQWUROXUEDQJURZWKLQ.DWKPDQGXYDOOH\"
    E 2QH RI WKH LQQRYDWLYH SDUWV RI /RQJ WHUP GHYHORSPHQW SODQ RI .DWKPDQGX YDOOH\ LV XUEDQ
    FRQWDLQPHQWSROLF\:KDWLVWKHEDVLVIRUGHOLQHDWLQJWKLVERXQGDU\"

     

    
    02'(/,1*85%$1*52:7+,1.$7+0$1'89$//(<
    

    ,9 7UDLQLQJ6HW6XUYH\6KHHW
    3RLQW
    ; < /DQGFRYHU 5RRI7\SH  &RQVW<HDU
    ,'
          
          
          
          
          
         
          
          
          
          
          
          
          
          
          
         
         
          
          
          
          
          
          
          
          
         
         
          
          
          
          
          
          
          
          
          
         
          
          
          
     /DQGFRYHU7\SH%XLOGLQJͲ!%5RDGͲ!5:DWHUͲ!:)RUHVWͲ!)9HJHWDWLRQͲ!9%DUHͲ!%D
     5RRI7\SH7LOHVͲ!7FRUUXJDWHGLURQVKHHWͲ!&5HLQIRUFHGFHPHQWFRQFUHWHͲ!5&&2WKHUVͲ!2
     ,IODQGFRYHULVEXLOGLQJRUURDG

    

    You might also like