Citation
Developmental changes in cortical processing as reflected by visually evoked potential variability

Material Information

Title:
Developmental changes in cortical processing as reflected by visually evoked potential variability
Creator:
Street, Wilma Jeanne, 1952-
Publication Date:
Language:
English
Physical Description:
viii, 52 leaves : ; 28 cm.

Subjects

Subjects / Keywords:
Child psychology ( jstor )
Clinical psychology ( jstor )
Electrodes ( jstor )
Evoked potentials ( jstor )
Mental stimulation ( jstor )
Parietal lobe ( jstor )
Philosophical psychology ( jstor )
Schizophrenia ( jstor )
Sex linked differences ( jstor )
Standard deviation ( jstor )
Human information processing in children ( lcsh )
Variability (Psychometrics) ( lcsh )
Visual evoked response ( lcsh )
Genre:
bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )

Notes

Thesis:
Thesis--University of Florida.
Bibliography:
Includes bibliographical references (leaves 47-51).
General Note:
Typescript.
General Note:
Vita.
Statement of Responsibility:
by W. Jeanne Street.

Record Information

Source Institution:
University of Florida
Holding Location:
University of Florida
Rights Management:
Copyright [name of dissertation author]. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Resource Identifier:
000209976 ( ALEPH )
AAX6795 ( NOTIS )
04164108 ( OCLC )

Downloads

This item has the following downloads:


Full Text










DEVELOPMENTAL CHANGES IN CORTICAL PROCESSING AS REFLECTED
BY VISUALLY EVOKED POTENTIAL VARIABILITY










By

W. JEANNE STREET


A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF
THE UNIVERSITY OF FLORIDA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
DEGREE OF DOCTOR OF PHILOSOPHY










UNIVERSITY OF FLORIDA


1978














ACKNOWLEDGEMENTS


I would like to express grateful appreciation, respect,

and affection to Dr. Nathan W. Perry, Jr., for his firm,

but unintrusive, support and guidance in all of my graduate

education endeavors. Many thanks to Dr. Robert L. Isaacson

for continually whetting my research taste buds, and to

Drs. Wiley Rasbury and Vernon Van De Riet for their personal

interest in me as a human being. Thanks to Dr. Donald

Childers, who pointed out to me the difference between a

fact and a piece of data.

I am extremely grateful to Drs. Bill Cleveland and

Dee Ramm, of the Duke University Medical Center, for their

unselfishness with their time and statistical and computer

expertise. I would also like to thank Denise Dixon for her

patience and promptness in typing the manuscript, and Helen

Corless for the figure drawings.

Family and friends provided immeasurable emotional

support over the years; most particularly, I am grateful

to my parents, Joan Duer, Peggy Brooks, and Clif Dopson for

their encouragement of me to finish without ever pushing

too hard.














TABLE OF CONTENTS

Page

ACKNOWLEDGEMENTS . ii

LIST OF TABLES .. .. iv

ABSTRACT ... v

SECTION

I. INTRODUCTION. ... .1

II. METHOD

Subjects 13
VER Testing Procedure 14
Preliminary Data Processing. .17
Data Analysis .. 22

III. RESULTS

Control Data 23
Whole VER Variability. 23
Component VER Variability. .. 24
Whole VER Variability by Sex .. .30

IV. DISCUSSION. .. 35

REFERENCES . .. .. 47

BIOGRAPHICAL SKETCH. .. 52


iii














LIST OF TABLES


Page

TABLE

1. Significant SD Changes Over Time for Whole VERs 25

2. Mean SDs and Directions of Change Over Time for
Whole VERs 26

3. Significant SD Changes Over Time for Component
VERs 28

4. Mean SDs and Directions of Change Over Time for
Component VERs 29

5. Significant SD Changes for Year 1 for Component
VERs 31

6. Significant SD Changes Over Time for Whole VERs
by Sex 32

7. Mean SDs and Directions of Change Over Time for
Whole VERs by Sex 33













Abstract of Dissertation Presented to the
Graduate Council of the University of Florida
in Partial Fulfillment of the Requirements
for the Degree of Doctor of Philosophy




DEVELOPMENTAL CHANGES IN CORTICAL PROCESSING AS REFLECTED
BY VISUALLY EVOKED POTENTIAL VARIABILITY

By

W. Jeanne Street

March 1978

Chairman: Nathan W. Perry, Jr.
Major Department: Clinical Psychology

There is general agreement that the variability, or

flexibility, seen in perceptual and intellectual response

patterns is important to the understanding and predict-

ability of behavior. In this study the variability of

cortical processing over time is investigated using

visually evoked response (VER) standard deviations as a

measure of variable cortical processing. Since VERs are

felt to reflect the sequence of neural events that occur

as a visual stimulus is perceived and processed by the

brain, VER variability is felt to reflect the variability

of cortical processing.

The subject population in this study consisted of

76 children who participated in the study for three years







starting when they were in kindergarten. All the children

had normal visual acuity. The sample was homogeneous with

respect to socio-economic status. VERs were collected for

each subject in response to four different stimulus

conditions and recorded from three or four scalp locations.

The variability measure derived was the standard deviation

(SD) statistical measure. This was derived for each whole

VER response, and one each for the early, middle, and late

components of each VER.

Upon determining that the control SD data were

significantly different from the other SD data, SD changes

over the years were examined across the whole VER for each

stimulus condition and location. Significant changes

were found from year 1 to year 3, and year 2 to year 3.

Most changes seen were a decrease in variability over time,

except for an increase from year 2 to year 3 at the parietal

lobe location. The overall analysis of change in the

variability of the VER components over time was not statis-

tically significant, but the pattern was the same as that

for the whole VERs of a decrease in variability over time

except for an increase at the parietal lobe location from

year 2 to year 3. There were differences between the

components within years, but the differences were con-

sistent over time. Changes in variability of the whole

VERs over time as a function of sex were examined. The

overall effect was not statistically significant, but the

females, in almost all conditions, demonstrated more VER








variability than the males. Also, the females demonstrated

a pattern similar to that of the total sample in that a

steady decrease in variability was seen across years,

except for the parietal lobe which showed an increase

from year 2 to year 3. However, the males showed an

increase in variability from year 1 to year 2 and a

decrease from year 2 to year 3 at all electrode locations.

The major finding of a consistent change in variability

over time in the total sample as measured by whole VER SD

indicated a significant decrease in variability of cortical

processing from age five to age seven and age six to age

seven, except for the cortical functioning detected at

the parietal lobe which indicated an increase in vari-

ability. These findings are consistent with, and extend,

the previous findings in the VER literature. The findings

are related to the literature on child cognitive develop-

ment. It is suggested that the decrease in VER variability

is indicative of cognitive processing that is mature or

practiced and that the increase in variability at the

parietal lobe is indicative of a currently active or

developing cognitive function. Similarly, a difference

in rate of growth of different cortical processes or

basic differences in cortical processing itself are hypo-

thesized in reference to the sex differences found. The

data provide the beginning of baseline data for normal


vii








changes in cognitive flexibility which may eventually

be used to help assess abnormal child growth and

development.


viii













SECTION I
INTRODUCTION


The central nervous system is characterized by

ongoing intrinsic electrical activity which is described

by the electroencephalogram (EEG). When this activity

is measured in response to a large number of presentations

of light flashes averaged together, the response change

produced is called a visual evoked response (VER). The

response to an individual flash is small and cannot

ordinarily be visually detected apart from the ongoing

activity; therefore, the responses to a large number

(50-100) of light flash presentations are averaged

together by computer. The averaging process results in

an electrical response that is easily identified. Widely

accepted today is the thought that neural structure and

function underlie mental processes. The described VER

has been proposed and used as an indicator of neural

functioning and mental processing; the VER is felt to

reflect in part the sequence of cortical events that

occur as a visual stimulus is perceived and processed

by the brain (Perry & Childers, 1969).

Several parameters of the VER, usually amplitude and

latency, have been derived and used to investigate brain

functioning that occurs during visual stimulation.









Developing from these investigations has been interest

in another parameter, variability, as an indicator of

cortical functioning, specifically cortical processing

variability (Brazier, 1964; Callaway, 1975; Ellingson,

1970). Although much of the theory and research on the

development of specific cortical functions concentrates

on the maturation of stable, constant response patterns,

there is general agreement that the variability seen in

response patterns is also important to development

(Callaway, 1975). Essential to the understanding and

predictability of behavior, in this instance cortical

processing, is knowing its patterns and changes over time.

The existence of critical points of brain and behavior

change may be detected not only through patterns of

continuity and stability, but through patterns of

instability and flexibility. Thus, VER investigations,

including ones measuring some form of variability, have

been done in order to better understand the cognitive

organization of brain-behavior relationships.

VER investigations have progressed on the assumption

that the patterns produced may be more accurate reflections

of cognitive substrates than currently used performance

measures of mental processing. An investigation of VER

data of five year olds using a factor analysis procedure

indicated that the VER is multidimensional in nature

(Street, Perry, & Cunningham, 1976). That is, several









different aspects of VER are functioning together at any

one time to contribute to the final detected signal.

Thus, if the resulting VER actually consists of a variety

of ongoing functions, investigations of the variability

of cognitive processing may lead to more accurate deter-

minations of the functional contribution of the different

aspects of the VER over time. Since measures of VER

variability are assumed to reflect variability in cognitive

processing, they may be used to more accurately correlate

neurophysiological processes with cognitive behavioral

processes.

There is strong evidence to indicate that aspects of

the VER are correlated with cortical processing. Early

work using the VER as an electrophysiological measure of

cognitive ability found high IQ scores to be associated

with short VER latency in later components (Chalke & Ertl,

1965). This finding has subsequently been replicated

several times: Bigum, Dustman, and Beck (1970) found

later component latencies to be significantly later

(p<.05) in mongoloids than in normal subjects, and

Shucard and Horn (1972) found correlations from -.15 to

-.32 between latency and cognitive abilities. Several

studies have found higher amplitudes in brighter children

and adults than in less bright people (Bigum et al.,

1970; Rhodes, Dustman, & Beck, 1969). Amplitude and

latency of VER components are the characteristics









usually used to make correlations with intelligence,

but it has been suggested that VER variability might be

an important phenomenon of evoked potentials (Brazier,

1964; Callaway, 1975).

Several VER studies, not all of which are develop-

mental in nature, have investigated VER variability,

although the variability examined is often differently

defined and measured across studies. Among 20 normal

adults the greatest VER variability was found between

subjects, next between areas of the head, and least

across time within an individual (Werre & Smith, 1964).

In another study on 20 normal adults, Ciganek (1969)

saw a decrease in amplitude variability after 80 msec

and an increase in variability in early latency waves.

He also found the amplitude variability of the EP

(evoked potential) to be negligible between the averaged

responses of individual subjects, although high across

the whole group of subjects. In a study of five adults,

Robinson (1975) demonstrated that attentive viewing as

compared to passive viewing produced a decrease in

amplitude variance of a particular VER.

Although most of the studies with psychiatric

patients do not control for level of intellect, the

evoked response findings suggest a correlation between

variability and thought disorders. Among psychiatric

patients, psychotic depressives showed greater variability









compared to other subgroups (Borge, 1973). Schizophrenics

as compared to normals had more variable VERs in response

to different stimulus intensities (Rappaport, Hopkins,

Hall, Belleza, & Hall, 1975). Schizophrenic adults,

some of whom were said to have a thought-process disorder,

showed greater variability of auditory evoked potentials

(based on correlations between AERs to different stimuli)

than normal subjects (Callaway, Jones, & Donchin, 1970).

Callaway and Jones conclude from another study that

variable evoked potentials are correlated with variable

and unstable cognitive functioning (1975). Lifshitz

(1969) found that schizophrenics showed more variability

than normals to simple (visual and compound (visual and

auditory) stimuli. Among schizophrenics, EP variability

(also based on between-EP correlations) is greatest in

those who show inaccurate and variable perceptual per-

formances (Inderbitzen, Buchsbaum, & Silverman, 1970).

Brazier (1964) was the first to look at variability

of the separate responses that are usually summed to

form a VER. She found variability to be greater in the

first 30 responses in a train of 300 than the last 30,

when habituation was said to have occurred. Barnet and

Lodge (1967) examined the unaveraged individual auditory

evoked responses of 15 mongoloid and 55 normal subjects

under 14 months of age and saw great variability in the

amplitudes, but found the mongoloids to have many more









extremely large responses and to show less decline in

response stimulation with repetitive stimulation than

the normal subjects. This suggests differences in brain

mechanisms governing sensory input.

Ellingson (1970) has done much work in the area on

infant VER variability and, overall, has found neonatal

VER variability to be high. Although he does not explain

mathematically how he measures variability, he states that

individual neonatal VERs, in contrast to the findings in

adults, were often variable in latency and amplitude

during a single recording session. In one study the

mean latencies of components of averaged auditory evoked

potentials were compared between sleeping children;

younger children's AERs were found to be more variable

than older children's (Barnet, Ohlrich, Weiss, & Shanks,

1975).

Callaway (1975) hypothesized that if evoked potentials

reflect cognitive processes, then habitually irregular or

unstable modes of cognitive processing should be accompanied

by variable evoked potentials. In a 1969 study (Callaway

& Stone) samples were described in which normal adults

showed low variabiliy VERs, schizophrenics had inter-

mediate values, and children (aged nine) had high variability.

Data on the children showed that lower evoked response

variability tended to be correlated with higher scores on

a visual-motor integration test. In another developmental









study done with visual and auditory evoked potentials,

variability of the EPs of 119 children from ages six

to 15 were investigated (Callaway & Halliday, 1973).

Variability decreased with increasing age. Further

investigations with the Beery Visual-Motor Integration

test (1967) led Callaway to conclude that EP stability is

sufficient, but not necessary, for good cognitive task

performance (1975). In several studies with normal

adults, Callaway (1975) found high EP variability to be

correlated with low verbal IQ. He hypothesized that,

in general, decreasing variability with increasing age

might be due to an increasing stability of cognitive

functioning with age.

Thus, VER variability has been used as a measure

of change, sometimes between VERs across subjects and

conditions, and sometimes between responses making up a

VER within a subject. Another way to consider VER

variability is to study the differences between early

and late components of the VER. The VER waveform is

considered to be composed of a number of components, or

positive and negative amplitude deflections. It has been

postulated that early components represent primary

sensory system activity and processing of the physical

parameters of the stimulus (John, Ruchkin, & Villegas,

1964; Ertl, 1969). Ertl (1969) states that the late

components of the AEP are sensitive to changes in








stimulus parameters involving decision-making (Sutton,
Braun, Zubin, & John, 1965), pattern recognition,

attention, and problem solving (Beinhocker, Brooks,

Anfenger, & Copenhaver, 1966; Callaway, 1966; Chapman,

& Bragdon, 1964; Uttal, 1965), drug-inducing changes in

levels of alertness (Allison, Goff, Abrahamian, & Rosner,

1963; Brazier, 1963; and Garcia-Austt, 1963), and

generally the informational content of the stimulus.

Buchsbaum feels that, because later components of EPs

(after 200 msec) change more than earlier ones as a

function of attention, arousal, and expectancy, greater

experiential effects might be expected in late components

(1974). He also suggests that early components may be

more stable and genetically determined. Callaway and

Halliday (1973) found the variability of late EP components

(100 msec or later) decreasing with increasing age more

than the variability of earlier components. Their findings

suggest that by age six a child's sensory processing is

stable, but higher perceptual information processing is

still stabilizing. Barnet et al. (1975) found that

decreases in the latencies of the various components

proceeded at different rates and felt that this suggested

that the components reflect independent neural substrates.

They also noted that the components of shortest latency

displayed the weakest relationship to age. Apparently,

not only the variability of the whole VER, but the










variability of its components gives an indication of

changing cortical processing.

As was previously noted, studies in the area of

VER variability are sometimes difficult to compare since

variability may be conceived of in several different

ways. For example, one is measurement, or experimental,

variability which, in most studies, is assumed to be

controlled for and, therefore, not contributing in a

large part to detected variability. Variability in

cortical processing may also be examined. This may be

thought of as consisting of two parts: one is a

structural variability in that the structure, or physical

parameters, of the sensory system and/or the stimulus

itself may be variable; the other part is-a functional

variability referring to variability, or flexibility, in

cortical processing of input--such changes are felt to

reflect processing variability at a level higher than the
primary sensory level. Developmental variability is also

examined and may also be thought of as consisting of two

parts: variability may be apparent as basic structures

develop, and when functioning develops after the physical

structure is clear.

Of major interest here is VER variability reflecting

cortical reorganization as a function of developmental

processes. It has been long established that most physical

and structural changes have occurred by this age range

(five to seven years) (Yakovlev & Lecours, 1967); therefore,









variability changes seen will be investigated as

indicators of cortical processing changes and/or

functional developmental changes in processing.

The age range chosen is an important one to

investigate not only because of the scarcity of VER

variability data on this group, but also because of the

important cognitive changes reportedly occurring at this

time. White (1965) has postulated that the five to

seven age range is a significant one for changes in

particular learning paradigms. Piaget (1962) stressed

the increasing flexibility of thinking and the resultant

acquisition of certain forms of conservation from the

ages four to seven. In general, ideas and research in

the developmental area indicate that response patterns

go through a period of increasing flexibility for proper

adaptation to the changing environment, but at some

point the flexibility either decreases or becomes more

selective. If, as expected, the VER variability measure

is useful as an indicator of normal growth and develop-

ment of cognitive processing, the timely significance

of the study becomes apparent. As a predictor and

diagnostic tool the measure may be useful in the detection

of and therapeutic intervention in problems of child

development, such as hyperactivity (Halliday, Rosenthal,

Naylor, & Callaway, 1976) and specific reading disability

(Preston, Guthrie, Kirsch, Gertman, & Childs, 1977).









It is felt that the variability measure provides a

picture of changing cognitive functioning and an index

to the developmental stages of differentially maturing

functions of the central nervous system.

In order to assess developmental changes in cortical

reorganization during this important age range, VER

variability measures were collected in a longitudinal

study of children over a three year span, variability

is expected to show a change in direction indicative

of functional changes in cortical and developmental

processing. Variability measures are derived on VERs

collected over the three years under several stimulus

conditions and from several cortical locations. VERs

in response to different frequencies of stimulation and

to different stimulus characteristics (pattern or

diffuse) are expected to show differences in variability,

as the brain may be expected to respond more or less

variably depending on the complexity of the stimulus.

Variability derived from different brain locations is

expected to differ as some are more purely perceptual

and may be at different developmental stages over the

three years. VER variability of early, middle, and late

components is expected to differ as these components

are thought to represent different stages and functions

of cortical processing. Since early components are

thought to represent simple sensory processes which









reach full development relatively early, they are expected

to show less VER variability over time than the later

components, which are thought to represent processing at

a higher level of complexity not yet completely

developed. The change in variability over time will

also be compared between males and females to investigate

possible sex differences, since, at this age range,

sex differences in specific cognitive abilities have

been found (Mussen, 1970).












SECTION II
METHOD

Subjects

Letters describing the study and asking for partici-

pation were sent to parents of all children entering

kindergarten in 1973 in the city of Gainesville, Flordia.

Those parents who responded were contacted and their child

was accepted in the study if (a) the family had no plans

to move within three years and (b) the child had no

unusual medical or developmental history. The subject

sample for this study consisted of 76 white children

(37 females, 39 males) with complete data for three years.

Attrition from the original sample of 98 was nine and

another 13 had incomplete data due to occasional equipment

and/or collection difficulties. During the first year of

data collection the mean age was 67.3 months (SD=2.9,

range=62-75 months), 79.2 months (SD=2.6, range=74-85 months)

during the second year, and 91.8 months (SD=2.7, range

86-100 months) during the third year. The mean full

score IQ (WPPSI) for the first year was 118.8 (SD=9.5,

range=94-144), the mean full score IQ (WISC-R) for the

second year was 114.2 (SD=11.4, range=84-141), and









the mean full score IQ (WISC-R) for the third year was

120 (SD=11.4, range=83-142). All children had normal

visual acuity in each eye (Snellen "E") and normal

stereopsis (Titmus "Fly"). The sample was relatively

homogeneous and upper middle-class with respect to

socio-economic status, with, for example, 16.6% of the

mothers and 65% of the fathers holding advanced degrees

and most families having an income in the range of

10-20 thousand dollars.

VER Testing Procedure
Silver-silver chloride cup electrodes and paste

(Beckman) were placed on the scalp at locations C3, C4,

0z, and Pz of the international 10-20 electrode system

(Jasper, 1958). The central locations (C3 and C4),

sampling left and right hemispheres, were referenced to

linked ear lobes. The occipital location was a bipolar

derivation between O0 and Pz, on the midsaggital plane.

After the first year a fourth location over the left

parietal (P3) was added. Impedances of approximately

2 Kv were obtained between electrodes, as measured with

a d.c. impedance tester (IMA Electronics).

Each subject was seated in an adjustable ophthalmic

chair in an electrically shielded and light-proof room

(ACE). Ventilating blowers produced a steady 62 dB noise

level (General Radio 1551-A) to mask equipment and

extraneous noise. Solid state d.c.-powered differential









amplifiers were placed inside the shielded room near the

subject, enabling the use of very short electrode leads

(Microdot). Following amplification, electrical activity

was filtered (1.0 to 50 Hz, Krohn-Hite 330 BR) and

simultaneously routed to an FM tape recorder (Sanborn

7000) and in year 1 averaged by a CAT computer and

subsequently by a Nicolet MED-80 averaging computer.

Frequency response of the complete recording system was

relatively flat from 2.0 Hz to 30 Hz, and was 50 percent

attenuated at 1 Hz and 50 Hz. A 5 uV calibrate signal

(Medistor C-1A) was introduced through the amplifiers

for each subject and processed in the same manner as the

VERs. Each VER was the result of sixty 500-msec sweeps

of the computer.

Throughout the VER session of approximately 25 min.,

subjects viewed binocularly a 60 (visual angle) circle

of achromatic light, continuously illuminated to provide

a background level of 0.1 log ft.-L. (SEI photometer).

The continuous background and the stimuli were provided

by four projectors (Viewlex V-120), mounted outside the

shielded room and projecting through a double plexiglas

conductive window (Tecknit) just above and behind the

subject's head. The stimuli were projected onto an

aluminized screen located eight feet in front of the

subject. Electronic shutters (Gerbrands) attached to

each projector determined stimulus durations. During

stimulation, eye fixation of subjects was aided by a chin









rest and monitored by an experimenter seated obliquely

in front of the subject. Fixation upon the center of

the circle was required for 30 sec for each trial.

Loss of fixation (greater than about 20) resulted in

aborting and repeating the VER averaging.

Three different stimulation conditions were used,

in order to obtain VERs reflecting presumably different

types of cortical processing. For the first stimulus

condition, 2 Hz diffuse, light flashes were presented

at a rate of 2/sec for 30 sec (giving 60 flashes). The

flashes, of 50 msec duration, were superimposed on the

60 background circle, and were functionally diffuse

since, other than the dim background illumination, the

room was dark.

The second stimulus condition, 6 Hz diffuse, consisted

of a 15 msec-duration flash superimposed on the 60 back-

ground at a rate of 6/sec for 30 sec (giving a total of

180 flashes, with the responses averaged over 60 sweeps

of 500 msec each, as in the 2 Hz diffuse condition).

Illuminance of the individual flashes in both the 2 Hz

diffuse and 6 Hz diffuse conditions was 2.35 log ft.-L.

There is evidence that diffuse light, as used in

the 2 Hz diffuse and 6 Hz diffuse conditions, is processed

differently from pattern stimulation by the cortex (Hubel

& Wiesel, 1962; Perry & Childers, 1969). To see what

effect pattern stimulation might have on the variability









of cortical processing the third stimulus condition

was the presentation of 2 Hz pattern. The pattern was a

6 "sunburst," with a dark 14' center from which an equal

number of light and dark rays extended, each of which

subtended 30' at the circumference. The pattern was

superimposed on the background circle at an illuminance

of 2.2 log ft.-L., and was alternated at a rate of 2/sec

with a diffuse 60 circle adjusted to the same apparent

brightness. The pattern appeared for 50 msec and disap-

peared for 450 msec, for a total of 30 sec (60 times),

without any apparent change in the brightness of the

circle.

In addition to the three stimulus conditions, a

control condition was used in which the cortical activity

was averaged in the same manner as for the 6 Hz diffuse

condition, but with the flashing light occluded so that

the subject viewed only the continuously-lit background

circle.

Ten 60-sweep VERs (trials) of 500 msec each were

collected from each subject, with approximately 2 min

between trials. The order of stimulus presentation for

the trials was as follows: (1) control; (2) (3) (4)

6 Hz diffuse; (5) 2 Hz pattern; (6) 6 Hz diffuse; (7) 2

Hz pattern; (8) 2 Hz diffuse; (9) 2 Hz pattern; (10) 2

Hz diffuse. This procedure yielded a total of 30 VERs

(10 trials by 3 electrode locations) for each subject.










Preliminary Data Processing

VERs for all subjects were first normalized relative

to the amplitude of a 5 &.V calibration sent through the

amplifiers and averaged in the same manner. Pearson

product-moment correlations were then performed between

common VERs measured from the same electrode location to

the same stimulus condition (that is, trials (2) (3) (4)

and (6) all at 6 Hz diffuse from the occipital location

were correlated, then from the left hemisphere location,

then the right hemisphere location, then the left parietal

location; trials (5) (7) and (9) all at 2 Hz pattern from

the occipital location were correlated, then from each of

the other locations; and trials (8) and (10) at 2 Hz

diffuse from each of the locations were correlated). VERs

from the same location to the same stimulus condition were

then pooled for each subject, reducing the 30 VERs to 12

or 16 (3 or 4 locations by 4 conditions including the control

trial). As a result, the control VER represents 60 sweeps,

each 6 Hz diffuse VER represents 240 sweeps, each 2 Hz

pattern VER represents 180 sweeps, and each 2 Hz diffuse

VER represents 120 sweeps. Based on these pooled VERs the

computer (Nicolet MED-80) was programmed to provide amplitude

measures at 128 data points across each VER waveform.

Fortunately, the data as described up to this point had

been collected as part of a larger longitudinal study

conducted by Nathan W. Perry, Jr., Ph.D. The available










amplitude data were then used in this study to derive

standard deviation (SD) measures, also using the Nicolet

MED-80 computer. The SD program resulted in 32 SDs

(one at every fourth point of the 128 data points) for

each VER. The 32 SDs were condensed to one SD by con-

verting the 32 SDs back to variances, getting an average

variance, and then taking the square root of that value.

The VER was also divided into early, middle, and late

components based on msec passed. The early component

consisted of the VER from 40 to 150 msec, the first 40

msec being dropped as the variance, there is felt to reflect

experimental error (Perry & Childers, 1969). The middle

component was the VER from 151 to 275 msec and the late

component was the VER from 276 to 400 msec. The last 100

msec were dropped for the same reason as cited above.

A single SD was derived for each of the components of each

of the VERs by the averaging process described above, so

that there were subsequently four SD measures for each

VER: one each for the whole, early, middle, and late VER.

The figure illustrates the steps taken to derive the SD

measures from the summated amplitude values of the VER

waveforms.

It has been suggested (Callaway, 1975) that the

amplitude of VERs is highly correlated with the standard

deviation(s) of a particular VER; therefore, standard

deviations may need to be divided by the VER peak-to-peak









Figure. Pictorial representation of derivation
of SDs. (A demonstrates a typical VER
waveform at a given location and stimulus
condition with summated waves apparent.
B demonstrates the computer data points
at which the SD measures were derived
from the contributing 120-240 available
amplitude measures at every fourth
point; the 32 resulting SDs were then
averaged to get one SD measure per VER
waveform. C demonstrates the division
of the VER waveform into an early,
middle, and late component; the SDs
derived from the whole waveform were
then averaged within each component
to result in three more SD measures
per waveform.)











volts



A















B


Data Points


Middle I Late


I I 1 I


4 I I I
4 812


Data Points


msec


I I i fI .


I I 12
4 812


128


Early


128


I









amplitude in a normalizing process. In order to test

this hypothesis, the SDs on the first year of data were

compared to the SDs divided by the peak-to-peak amplitudes

on the first year of data by using a Pearson means

correlation procedure. The two variables were found to

be largely uncorrelated across the 12 VERs (values

ranged from .25 to -.15) suggesting that standard devia-

tions do not need to be divided by the VER amplitudes

in order to discuss standard deviation changes. Based

on this finding, the rest of these analyses are based on

simple standard deviations, not SDs divided by peak-to-

peak amplitudes.

Data Analysis

Subsequent analyses were done using the General

Linear Models procedure from the SAS statistical program

package (1976). This procedure was chosen over other

possibilities due to its known reliability and its

flexibility in testing procedures. It is basically a

linear regression procedure using a least-squares fitting

of univariate and multivariate models of regression.













SECTION III
RESULTS

Control Data


Essential to further analyses is a finding of a

significant difference between the SD data collected

on the control trial and the SD data collected on the

experimental trials. As was noted earlier, VERs are

felt to reflect cortical activity above and beyond the

ongoing intrinsic electrical activity reflected by the

EEG. If the SD data from the control trial, in which

light was continuous rather than flashing, was not

significantly different from the other SD data, then the

SD data could be felt to reflect nothing more than the

variability of intrinsic processing and methodology.

The control SD data were compared to the VER SD data on

the first year of data collected at the occipital location.

The control data were significantly different (F(3,73)=

88.19, p < .0001) from the SD data derived from the 6 Hz

diffuse occipital condition, the 2 Hz pattern occipital

condition, and the 2 Hz diffuse occipital condition.

Whole VER Variability

In order to assess changes in variability over time

as evidenced through whole VER SDs the data were examined









by use of the SAS GLM procedure. Changes over the three

years were examined separately for each stimulus condition

and location and an overall effect was assessed. As can

be seen in Table 1, the overall effect was significant at

the p <.0003 level (F(21,55)=3.22). The individual

analyses indicated no significant changes in variability

from year 1 to year 2, whereas there were changes from

year 2 to year 3 and from year 1 to year 3, particularly

for the occipital brain location. There were significant

changes at the right lobe location for 6 Hz and 2 Hz

pattern from year 1 to year 3, but the significant change

was at the left lobe location for 2 Hz diffuse. Table 2

shows the mean SD at each year for each VER and the

direction of change. Except in a few cases, most of the

changes were a steady decrease in variability over time.

The changes in the parietal location for all three

stimulus conditions were increases from year 2 to year

3 (these changes were not statistically significant).

The SD changes at the occipital location for the 2 Hz

diffuse condition were the only ones that did not show

a linear change; there was an increase from year 1 to

year 2 (not a statistically significant change) and a

decrease from year 2 to year 3 (this was significant, as

was the overall decrease from year 1 to year 3).

Component VER Variability

In order to detect any significant changes in the

variability of the early, middle, and late components of










Table 1
Significant SD Changes Over Time for Whole VERs


Years
Condition 1-3 2-3

6Hz diffuse, occipital F(1,75)=16.53 F(1,75)=24.00
location (6HzO) P < .0001 p <.0001

6Hz diffuse, left lobe
location (6HzL)

6Hz diffuse, right lobe F(1,75)=4.48
location (6HzR) p < .0377

6Hz diffuse, parietal
location (6HzP)

2Hz pattern, occipital F(1,75)=29.83 F(1,75)=25.68
location (2HzP,0) p < .0001 p <.0001

2Hz pattern, left lobe
location (2HzP,L)

2Hz pattern, right lobe F(1,75)=7.62
location (2HzP,R) ~ < .0073

2Hz pattern, parietal
location (2HzP,P)

2Hz diffuse, occipital F(1,75)=9.67 F(1,75)=14.15
location (2HzD,0) p < .0037 p <.0003

2Hz diffuse, left lobe F(1,75)=4.42
location (2HzD,L) J < .0388

2Hz diffuse, right lobe
location (2HzD,R)

2Hz diffuse, parietal
location (2HzD,P)


*overall F(21,55)=3.22, p < .0003













Table 2

Mean SDs and Directions of Change Over Time for Whole VERs


Year

Condition 1 2 3 Direction Significant
Changes


6HzO 544.5 537.6 485.1 Decrease yrs. 1-3,2-3


6HzL 496.6 491.4 483.3 D


6HzR 495.2 483.5 474.8 D yrs. 1-3


6HzP 487.7 499.9 Increase


2HzP,O 614.8 599.4 534.4 D yrs. 1-3,2-3


2HzP,L 501.1 496.7 484.5 D


2HzP,R 505.7 488.9 476.7 D yrs. 1-3


2HzP,P 507.3 512.5 Increase


2HzD,O 520.8 527.1 479.5 I-D yrs. 1-3,2-3


2HzD,L 511.2 506.2 496.1 D yrs. 1-3


2HzD,R 509.5 498.0 496.3 D


2HzD,P 498.6 507.1 Increase

Note. The unit of measure for the numbers is uV.









the VER over time, and significant differences between

the components, the SDs derived on the components were

compared using the SAS GLM procedure. In this case,

differences between early and middle components were

compared between year 1 and year 2 and between year 2

and year 3, and differences between middle and late

components were compared between year 1 and year 2 and

between year 2 and year 3. First of all, the overall

tests of significance done in this procedure indicated

no significant differences; therefore, even though some

significant differences were found on the separate

analyses, conclusions based on these findings must be

conservative. Table 3 gives the findings based on

this analysis. As can be seen, most of the changes in

the SDs of the different components over time occur

between the second and third years in the 2 Hz pattern

conditions and the changes are evident across all three

components. Significant changes from year 1 to year 2

were found in the 2 Hz pattern left lobe and the 2 Hz

diffuse right lobe conditions. Table 4 shows the mean

SDs over time and the directions of change. Similarly

to the analysis of the whole VERs, most of the changes

are a linear decrease over time, except for the parietal

lobe components which show an increase from year 2 to

year 3. Also the 2 Hz diffuse occipital condition shows

an overall decrease, but an initial increase from year








Table 3
Significant SD Changes Over Time for Component VERs


Early-Middle Middle-Late

Years
Condi-
tion 1-2 2-3 1-2 2-3

6HzO

6HzL

6HzR

6HzP

2HzP,O F(1,75)=4.79
p <.0317

2HzP,L F(1,75)=4.87 F(1,75)=9.52 F(1,75)=4.97
S<.0304 p <.0028 p < .0288

2HzP,R F(1.75)=9.40
p <.0030

2HzP,P F(1,75)=8.26
____ 0053

2HzD,0

2HzD,L F(1,75)=3.81
R < .0545

2HzD,R F(1,75)=7.79
S. < .0067

2HzD,P


F(42,34)=1.18, p. < .3095


*overall








Table 4

Mean SDs and Directions of Change Over Time for Component VERs


Year

Condition Component 1 2 3 Direction


6HzO E 544.3 535.9 483.5 Decrease
M 543.4 538.4 484.4 D
L 546.6 539.2 486.8 D
6HzL E 495.8 488.7 482.2 D
M 494.7 492.7 482.3 D
L 498.3 491.3 486.0 D
6HzR E 495.4 482.2 475.1 D
M 497.0 481.9 473.1 D
L 494.3 484.3 474.5 D
6HzP E 485.6 498.0 Increase
M 486.8 499.0 I
L 487.2 501.7 I
2HzP,0 E 625.3 613.0 539.0 Decrease
M 615.8 596.1 532.3 D
L 603.7 587.0 519.2 D
2HzP,L E 501.2 500.2 483.6.. D
M 499.9 491.1 485.4 D
L 499.7 494.8 482.0 D
2HzP,R E 506.9 491.7 475.3 D
M 503.8 484.3 477.2 D
L 503.1 486.6 474.4 D
2HzP,P E 508.8 513.9 Increase
M -499.8 511.5 I
L 508.8 509.1 I
2HzDO E 529.7 536.3 486.1 I-Decrease
M 525.8 528.5 482.6 I-Decrease
L 513.7 519.5 472.3 I-Decrease
2HzD,L E 503.4 503.7 491.6 D
M 511.9 510.3 501.9 D
L 517.7 507.7 496.4 D
2HzD,R E 502.9 496.0 492.5 D
M 509.7 504.0 500.9 D
L 513.9 497.7 496.7 D
2HzD,P E 499.5 507.2 Increase
M -499.4 509.5 I
L 501.1 508.7 I


Note. The unit of measure for the numbers is


JNV.








1 to year 2. Since the first analysis on the components

demonstrated differences between them that were consistent

over time, it was felt appropriate to look at the change

in component variability within a given year. Table 5

gives the results of an analysis comparing the SDs of the

early components to the SDs of the middle components and

the SDs of the middle components to the SDs of the late

components within year l's data. Looking at the data in

this fashion, similar findings to those in Table 3 are

evident in that no significant differences in the SDs of

the components of the 6 Hz VERs were obtained.

Whole VER Variability by Sex

Changes in variability over time as a function of

sex were examined in an analysis of the whole VER SDs.

Changes over the three years were examined separately

for males and females at each stimulus condition and

location, and an overall effect was assessed. As can

be seen in Table 6, the overall effect was not statisti-

cally significant (F(18,58)=2.04, p '.2565). The

individual analyses indicated statistically significant

differences in variability change between males and females

from year 1 to year 2 and from year 1 to year 3 at the

right lobe location for the 6 Hz stimulus condition and

at the occipital location for the 2 Hz diffuse stimulus

location. Table 7 shows the mean SD for the sexes at

each year for each VER and the direction of change.













Table 5


Significant SD Changes for Year 1


for Component VERs


Condition Early-Middle Middle-Late


6Hz0

6HzL

6HzR
F(1,75)=4.34 F(1,75)=8.79
2HzP,0 -
2p 4 .0407 p <.0041
2HzP,L

2HzP,R
2HzD,0 F(1,75)=8.98
Sp <.0037
2 L ~F(1,75)=5.00
zl p < .0283
2H DR F(1,75)=4.07
2HzD,R .0473
p < .0473


F(18,58)=2.04, p < .0213


*overall












Table 6

Significant SD Changes Over Time for Whole VERs by Sex



Years
Condition 1-2 1-3


6HzO


6HzL

6HzR F(1,74)=6.24 F(1,74)=4.35
p_ < .0147 p <.0404

6HzP


2HzP,0


2HzP,L


2HzP,R


2HzP,P

2HzD,O F(1,74)=4.07 F(1,74)=4.78
p < .0473 p.< .0320

2HzD,L

2HzD,R

2HzD,P

*overall F(21,54)=1.24, p <.2565













Table 7
Mean SDs and Directions of Change Over Time
for Whole VERs by Sex


Year


Condition


Sex


Significant
Difference
3 Direction By Sex


Increase-
6HzO Male 512.0 527.4 473.3 Decrease
Female 578.8 548.4 497.6 D
6HzL M 481.0 485.4 474.5 I-D
F 513.1 497.8 492.6 D
6HzR M 468.8 482.1 467.5 I-D yrs. 1-2,
F 523.1 485.1 482.5 D 1-3
6HzP M 485.1 473.6 D i
F 490.5 527.7 I
2HzP,0 M 586.2 577.1 506.8 D
F 644;9 622.9 563.5 D
2HzP,L M 483.6 490.1 469.9 I-D
F 519.5 503.6 499.8 D
2HzP,R M 487.7 487.2 465.3 D
F 524.7 490.7 488.7 D
2HzP,P M 499.9 477.9 D
F 515.1 549.0 I
2HzD,0 M 481.3 515.1 467.6 I-D yrs. 1-2,
F 562.3 539.8 492.0 D 1-3
2HzD,L M 501.0 505.1 484.4 I-D
F 522.0 507.9 508.6 D-I
2HzDR M 492.9 498.2 482.3 I-D
F 527.0 497.9 510.9 D-I
2HzD,P M 499.0 477.2 D
____ F 498.2 538.7 I

Note. The unit of measure for the numbers is .L-V.









For the males, there was usually an increase in

variability from year 1 to year 2 and a decrease from

year 2 to year 3; in a few cases there was a consistent

decrease across the three years. For the females, in

most cases a steady decrease in variability was seen

across years, except for the parietal lobe data, in

which case an increase was seen from year 2 to year 3.

This is in contrast to the males who demonstrated a

decrease in variability from year 2 to year 3 at the

parietal lobe location. Overall, in all conditions and

years except two, the females showed more VER variability

than the males.













SECTION IV
DISCUSSION

The results of this longitudinal study indicate

significant changes in the variability (as measured

by standard deviations) of VERs over time in 76 children

from age five to age seven. Overall, change was

characterized by a consistent, progressive decrease in

variability over time with the major shifts between the

ages of five and seven, and six and seven. VER vari-

ability changed between the ages of five and six, but

not to a statistically significant degree, suggesting

that changes in cortical processing as a function of

age are not significant from age five to age six.

The major finding of a consistent change in

variability as a function of time is positive with

respect to the developmental research previously done

in the VER area and with the predictions of this study.

Callaway found in one study (Callaway & Halliday, 1973)

that variability decreased with increasing age and later

suggested that the change might be due to an increasing

stability of cognitive functioning with age (Callaway,

1975). Other authors also found more variable EPs in

children as compared to adults (Ellingson, 1970; Barnet









et al., 1975). The research leads to the prediction of

a consistent change, most likely a decrease, in VER

variability over time, possibly as a reflection of

maturing cortical processing, and this prediction was

supported by the findings in this study.

The single exception to the finding of decreasing

variability as a function of age was in the parietal

lobe location data which were obtained at ages six and

seven only. At this electrode location VER variability

increased from ages six to seven rather than decreased

raising the interesting speculation that this area of

brain functioning might be moving toward increasing

flexibility or may not yet be matured. Studies in related

areas of research provide possible partial explanations

for this finding. From the results of animal studies,

Lynch, Mountcastle, Talbot, and Yin (1977) conclude with

the hypothesis that the parietal lobe performs a matching

function between the neural signals of the nature of objects

and the internal drive state of the organism, and also

contains a neural apparatus for the direction of visual

attention to objects of interest and for shifting attention.

Perhaps parietal lobe functioning is more complex and

involves a discriminatory function which either matures

after the age of seven or fluctuates with development.

Luria (1966) described the functions of different areas

of the parietal lobe and they all involve some kind of








complex visual discrimination or integration. Thus,

parietal lobe variability in this group of children

appeared to be increasing, most likely due to an earlier

stage of development of certain visually-related cognitive

functions.

Preston et al. (1977) found VERs from the left

parietal lobe location to be important in differentiating

between groups of normal and disabled reading adults.

Normal readers showed larger VER amplitude differences

between a work and a flash condition at the left parietal

lobe location as compared to disabled readers. The

study basically supports earlier findings of decreased

VER amplitude at the left parietal lobe location in

disabled readers (Conners, 1970; Preston, Guthrie, &

Childs, 1974). The evidence linking reading functions

with VER measures from the left parietal lobe is compatible

with the VER variability data derived from the left

parietal lobe in this study. The increase in the measure

of variability from age six to seven is suggestive of a

currently active and developing process, such as reading,

that is not yet stable and habitual in its pattern of

functioning.

Although the overall significance level for the

analysis of change in whole VER variability over time

by sex was statistically low, the apparent differences

are striking. In most cases, the females not only









demonstrated more variability within a given year at a

given stimulus location and condition, but their vari-

ability change from year to year was more than that of

the males. The change in the females followed the pattern

of decreasing variability over time, whereas the males

often demonstrated a non-linear change of an increase

from age five to age six and then a decrease from age

six to age seven. Apparently, the variability contributed

by the females to the total sample masked, somewhat, the

pattern of change in the males which differed substantially

from the females. That the females demonstrated more VER

variability than males in cortical processing overall

possibly indicates more flexibility in processing at this

age range, or it may be that a basic sex difference in

the development of cortical processing exists. The dif-

ference between the sexes in the direction of the change

in variability may reflect a difference in maturational

stage of the cortical functions detected, possibly related

to a basic sex difference in cortical function development.

The males may be simply demonstrating a lag in which they

begin to demonstrate similar cognitive processing by age

seven.

The difference between the sexes in the change in

variability at the parietal lobe location from age six

to seven is of interest. The decrease in variability

from age six to seven for the males parallels the pattern









of decrease the males showed at the other locations, but

the increase in variability for the females is unique

for them. As hypothesized previously, this increase may

reflect an earlier stage of development of the cognitive

functions detected at this location.

Also consistent in the data was a highly significant

change in variability from age six to seven in the occipital

location VERs. Although the visual system has supposedly

reached physical maturity by this age, even the primary

sensory system appears to be undergoing marked signal

processing changes. However, a portion of the change

seen at the occipital location may be more sensory in

nature, since brain processing at this location is so

closely linked to the visual sensory system.

It is somewhat difficult to explain that significant

variability decreases were seen at the right lobe

location for the 6 Hz diffuse and 2 Hz pattern conditions,

whereas the significant changes for the 2 Hz diffuse

condition were at the left lobe location. This may have

to do with the known differences in functioning of the

opposite hemispheres combined with the unique characteristics

of the different stimulus conditions. The 6 Hz diffuse

and 2 Hz pattern stimulus conditions may be thought of as

slightly more complex in nature than the 2 Hz diffuse.

Apparently, cognitive functioning in the right lobe









became significantly less variable in response to complex

stimuli, while the left lobe's functioning became less

variable to a simpler stimulus.

The lack of overall statistically significant change

in differences in the variability of the early, middle,

and late components of the VER over time indicates that,

whatever the differences in cognitive functioning are

as reflected by the different components, they do not

reflect a significant difference in the flexibility of

processing over time. There were differences within a

year which may represent an artifact and/or contribute

to difficulty in detecting differences between years.

As might be expected, the variability over time within

components follows the same general pattern as the

overall VER variability changes (decreasing in all

conditions except at the parietal lobe location). How-

ever, a consistent pattern of variability change across

components within conditions is not apparent; in some

cases variability increases, in some it decreases, and

in some it is non-linear. Therefore, the hypothesis

that early components would show less variability change

over time than late components was not upheld. Evidently,

at least for this sample, the variability of the components

of any particular VER response does not reflect an easily

detectable pattern of change in cognitive functioning.









The major finding in this study of a consistent,

linear decrease in the variability of the whole VER.

response amplitude and its components complements and

extends thought and work done in the area of cognitive

development. As mentioned previously, thought in the

developmental area points to changes in flexibility of

cortical processing for proper adaptation to the

environment. White (1965) discusses the nature of

changes in children's learning processes which are known

to take place during the range of five to seven years of

age. He presents evidence for the idea of temporal

stacking in several kinds of learning. The five to seven

age period is perhaps a time when maturation inhibits a

broad spectrum of lower level functioning in favor of a

higher level of functioning. Literature is cited on

several learning paradigms in children which stress the

importance of the five to seven age range for changes in

learning and thinking processes.

Piaget also stressed important changes from four to

seven years of age (1962). During the intuitive phase of

the preoperational period (two to seven years of age) the

child begins to learn the concept of conservation. With

maturity, the child learns to respond more flexibly and

focuses on the more relevant aspects of an object or

situation in order to attain conservation skills.










Some theories of individual cognitive style are also

pertinent to the topic of response flexibility. Kagan's

reflectivity-impulsivity dimension (Kagan, Rosman, Day,

Albert, & Phillips, 1964) addresses the cognitive style

differences between children who take the time and

opportunity to try different alternatives and solutions

to a task situation and those who impulsively respond

after testing a limited number of hypotheses. In this

context, a reflective, flexible cognitive style generally

results in more accurate responding than a less varied

one. Witkin's field dependence and independence (Witkin,

Dyk, Faterson, Goodenough, & Karp, 1962) refers to the

tendency to perceive the perceptual field as undifferentiated

versus the tendency to analyze the constituents of the

field and perceive the different parts as separate from

the field. Children are apparently more field dependent

and this levels off by the teen years. The field inde-

pendent cognitive style implies a more flexible mode of

responding in that many parts of the picture are detected

rather than the whole picture being detected as one

configuration.

White's (1965) and Piaget's (1962) theories may be

seen as conducive to a hypothesis of change, particularly

one toward decreasing variability, in cortical functioning.

Kagan et al. (1964) and Witkin et al. (1962) present ideas








that are more conducive to a hypothesis of increasing

change in cortical functioning variability with age.

Scott (1957) blends the two directions and suggests that

higher organisms balance a tendency toward behaving

variably and one toward behaving predictably. In a

typical learning situation an individual needs to display

a certain amount of variability in responding for proper

adjustment, but later behaves more predictably when

learning has occurred. Werner takes almost the opposite

viewpoint (Langer, 1970) stating that the child first

responds rigidly with reflex actions and then develops

more flexibility in his worldly interactions.

The developmental literature on the developing

stability or instability of cognitive organization is

extensive. In general, authors agree that cognitive

processing goes through some specific changes as the child

matures, but they seem to be equally split as to whether

increasing stability or flexibility is essential and

primary to normal cognitive functioning. Of course,

situations, conceptual constructs, and critical age

periods vary across theories making comparison somewhat

difficult. In this study, an obvious change in cortical

processing was noted and at most stimulus conditions

and locations variability was seen to decrease as a

function of age. The change toward less flexibility

implies that the cognitive functions reflected by the









measure utilized are becoming more narrow and efficient

in nature, possibly due to a practice effect. The change

may reflect a cognitive function that reached maturity

at an earlier age and repeated use has shaped into an

increasingly stable function. However, as discussed

earlier, the VER data also reflected increasing vari-

ability in the parietal lobe location suggesting that

functions in this area may be newly developing and, con-

sequently, increasing in flexibility. Significant to

the findings is the differing contribution by each sex

to the overall variability measures. The differences

in variability changes between males and females suggests

a striking and stable difference in the development of

cognitive functions at this age range.

The fact that the average IQ of these children was

well above the average may also have influenced the per-

ceived variability changes. Perhaps this group was

somewhat advanced in the development of their overall

cognitive functioning contributing to the detection of

decreasing variability in most conditions. An investi-

gation of a group of children with a lower average IQ,

and one with the parietal lobe location measured for

more than two years should certainly help clarify some

of these issues.

In conclusion, this study demonstrated significant

changes in the variability of cognitive processing as a









function of time as reflected by a measure of variability

of the VER. Evidence is provided for the developmental

hypothesis that brain functioning changes in flexibility

as children grow older. Overall, the changes appear to

be linear based on these data, although the changes

decrease or increase depending on the brain location of

collection of the VER. Patterns of variability change

were also substantially different depending on sex of the

subject. This finding has important indications for

understanding child growth and development, and for under-

standing and managing specific development difficulties

that appear to be sex-related, such as specific reading

disability, which is more prevalent in males than in

females (Wender, 1971).

The variability measure has provided a view of an

aspect of child development that is often neglected: that

of the flexibility of responding, which must necessarily

change over time for appropriate growth and adaptation to

the environment. Consistent patterns of change in vari-

ability were found implying that flexibility is an important

and, possibly inherent, dimension of the normal growth and

development of cognitive functioning. The finding of

different directions of change depending on brain location

supports the notion that different brain areas develop

at different rates and that this is reflected in behavior.

The implications for the difference in parietal lobe data,








depending on sex, to data relevant to the problem of

disabled readers indicates the possible utility of this

measure in the early detection of problems with cognitive

functions that develop at different rates. The

longitudinal data examined here provide the beginnings

of needed baseline data for the overall normal changes

in cognitive flexibility which may eventually be used

to assess abnormal growth and related difficulties in

the cognitive development of children.













REFERENCES


Allison, T., Goff, W. R., Abrahamian, H. A., & Rosner, B. S.
The effects of barbiturate anesthesia upon human somato-
sensory evoked responses. EEG, 1963, Suppl. 24, 68-75.

Barnet, A. B., & Lodge, A. Click evoked EEG responses in
normal and developmentally retarded infants. Nature,
1967, 214, 252-255.

Barnet, A. B., Ohlrich, E. S., Weiss, I. P., & Shanks, B.
Auditory EPs during sleep in normal children from ten
days to three years of age. EEG, 1975, 39, 29-41.

Barr, A. J., Goodnight, J. H., Sall, J. P., & Helwig, J. T.
A user's guide to SAS 76. Raleigh, N.C.: Sparks Press,
1976.

Beery, K. E. Developmental test of visual-motor integration.
Chicago: Follett, 1967.

Beinhocker, G. D., Brooks, P. R., Anfenger, E., & Copenhaver,
R. M. Electroperimetry. IEEE Transactions in Biomedical
Engineering, 1966, 13, 11-18.

Bigum, H. A., Dustman, R. E., & Beck, E. C. Visual and
somatosensory evoked responses from mongoloid and normal
children. EEG, 1970, 28, 576-585.

Borge, G. F. Perceptual modulation and variability in
psychiatric patients. Archives of General Psychiatry,
1973, 29, 760-763.

Brazier, M. A. B. Information carrying characteristics of
brain responses. EEG, 1963, Suppl. 24, 55-67.

Brazier, M. A. B. A study of the variability of response
to flicker: The influence of other sensory stimuli.
In H. E. Henkes & L. H. van der Tweel (Eds.), Flicker.
The Hague: Dr. W. Junk Publishers, 1964, 221-237.

Buchsbaum, M. S. Average evoked response and stimulus
intensity in identical and fraternal twins. Physiological
Psychology, 1974, 2(3A), 365-370.

Callaway, E. Averaged evoked responses in psychiatry.
Journal of Nervous and Mental Diseases, 1966, 143, 80-92.







Callaway, E. Brain electrical potentials and individual
psychological differences. New York: Grune & Stratton,
1975.

Callaway, E., & Halliday, R. A. Evoked potential vari-
ability: Effects of age, amplitude and methods of
measurement. EEG, 1973, 34, 125-133.

Callaway, E., & Jones, R. T. Evoked responses for the study
of complex cognitive functions. In M. Kietzman, J. Zubin
& S. Sutton (Eds.), Experimental approaches to psycho-
pathology. New York: Academic Press, 1975.

Callaway, E., Jones, R. T., & Donchin, E. Auditory evoked
potential variability in schizophrenia. EEG, 1970,
29, 421-428.

Callaway, E. & Stone, G. C.- Evoked response methods for the
study of intelligence. Agressologie, 1969, 10(1), 1-5.

Chalke, F. C. R., & Ertl, J. Evoked potentials and intel-
ligence. Life Sciences, 1965, 4, 1319-1322.

Chapman, R. M., & Bragdon, H. R. Evoked responses to
numerical and nonnumerical visual stimuli while problem
solving. Nature, 1964, 203, 1155-1157.

Ciganek, L. Variability of the human visual evoked potential:
Normative data. EEG, 1969, 27, 35-42.

Conners, C. K. Cortical evoked response in children with
learning disorders. Psychophysiology, 1970, 7, 418-428-.

Ellingson, R. J. Variability of VERs in the human newborn.
EEG, 1970, 29, 10-19.

Ertl, J. Evoked potential, neural efficiency, & IQ. In
L. D. Proctor (Ed.), Biocybernetics of the central
nervous system. Boston: Little & Brown, 1969, 419-428.

Garcia-Austt, E. Influence of the states of awareness upon
sensory evoked potentials. EEG, 1963, Suppl. 24, 76-89.

Halliday, R., Rosenthal, J. H., Naylor, H., & Callaway, E.
Averaged evoked potential predictors of clinical improve-
ment in hyperactive children treated with methylphenidate:
An initial study and replication. Psychophysiology,
1976, 13, 429-439.

Hubel, D. H., & Wiesel, T. Receptive fields, binocular
interaction and functional architecture in the cat's
visual cortex. Journal of Physiology, 1962, 160,
106-154.







Inderbitzen, L. B., Buchsbaum, M., & Silverman, J. EEG-
averaged evoked responses and perceptual variability
in schizophrenia. Archives of General Psychiatry, 1970,
23, 438-444.

Jasper, H. H. The ten-twenty electrode system of the
international federation. EEG, 1958, 10, 370-375.

John, E. R., Ruchkin, D. S., & Villegas, J. Experimental
background: Signal analysis and behavior correlates of
evoked potential configurations in cats. Annals of the
New York Academy of Science, 1964, 112, 362-420.

Kagan, J., Rosman, B. L., Day, D., Albert, J. & Phillips,
W. Information processing in the child: Significance
of analytic and reflective attitudes. Psychological
Monographs, 1964 (Whole No. 578).

Langer, J. Werner's comparative organismic theory. In P.
Mussen (Ed.), Carmichael's manual of child psychology,
Vol. 1 (3rd ed.). New York: Wiley, 1970.

Lifshitz, K. An examination of EPs as indicators of informa-
tion processing in normal and schizophrenic subjects.
In E. Donchin & D. B. Lindsley (Eds.), Average evoked
potentials: Methods, results, and evaluations. Wash-
ington, D. C.: NASA SP-191, 1969, 357-362.

Luria, A. R. Higher cortical functions in man. New York:
Basic Books, 1966, 52.

Lynch, J. C., Mountcastle, V. B., Talbot, W. H., & Yin,
T. C. T. Parietal lobe mechanisms for directed visual
attention. Journal of Neurophysiology, 1977, 40(2),
362-389.

Mussen, P. H. (Ed.) Carmichael's manual of child psychology,
Vol. 1 (3rd ed.). New York: Wiley, 1970.

Perry, N. W., Jr., & Childers, D. G. The human visual
evoked response: Method and theory. Springfield:
Thomas, 1969.

Piaget, J. The stages of the intellectual development of
the child. Bulletin of the Menninger Clinic, 1962,
26(3), 120-145.

Preston, M. S., Guthrie, J. T., & Childs, B. Visual evoked
responses (VERs) in normal and disabled readers.
Psychophysiology, 1974, 11, 452-457.

Preston, M. S., Guthrie, J. T., Kirsch, I., Gertman, D., &
Childs, B. VERs in normal and disabled adult readers.
Psychophysiology, 1977, 14, 8-14.







Rappaport, M., Hopkins, H. K., Hall, K., Belleza, T., &
Hall, R. A. Schizophrenia and evoked potentials:
Maximum amplitude, frequency of peaks, variability and
phenothiazine effects. Psychophysiology, 1975, 12,
196-207.

Rhodes, L. E., Dustman, R. E., & Beck, E. C. The VER: A
comparison of bright and dull children. EEG, 1969,
27, 364-372.

Robinson, D. N. Statistical features of brain responses
under conditions of attention and habituation.
Psychological Reports, 1975, 32, 287-292.

Scott, J. P. The genetic and environmental differential
of behavior. In D. B. Harris (Ed.), The concept of
development. Minnesota: University of Minnesota
Press, 1957.

Shucard, D. W. & Horn, J. L. Evoked cortical potentials
and measurement of human abilities. Journal of Com-
parative and Physiological Psychology, 1972, 78, 59-68.

Street, W. J., Perry, N. W., Jr., & Cunningham, W. R. A
factor analysis of visual evoked responses. Psycho-
physiology, 1976, 13, 352-356.

Sutton, S., Braun, M., Zubin, J., & John, E. R. Evoked
potential correlates of stimulus uncertainty. Science,
1965, 150, 1187-1188.

Uttal, W. R. Do compound evoked potentials reflect psycho-
logical codes? Psychological Bulletin, 1965, 64, 377-392.

Wechsler, D. Manual for Wechsler preschool and primary
scale of intelligence. New York: The Psychological
Corporation, 1967.

Wechsler, D. Manual for Wechsler intelligence scale for
children--Revised. New York: The Psychological
Corporation, 1974.

Wender, P. H. Minimal brain dysfunction in children. New
York: Wiley, 1971.

Werre, P. F., & Smith, C. J. Variability of responses
evoked by flashes in man. EEG, 1964, 17, 644-652.

White, S. H. Evidence for a hierarchical arrangement of
learning processes. In L. P. Lipsitt & C. C. Spiker
(Eds.), Advances in child development and behavior,
Vol. 2. New York: Academic Press, 1965, 187-220.

Witkin, H. A., Dyk, R. B., Faterson, H. F., Goodenough,
D. R., & Karp, S. A. Psychological differentiation.
New York: Wiley, 1962.






51

Yakovlev, P. I., & Lecours, A. The myelogenetic cycles
of regional maturation of the brain. In A. Minkowski
(Ed.), Regional development of the brain in early
life. Philadelphia: F. A. Davis Company, 1967,
3-70.













BIOGRAPHICAL SKETCH


Name: W. Jeanne Street

I was born on October 1, 1952, in Lexington, Virginia,

in what was once the home of General Stonewall Jackson, was

at the time of my birth a military hospital, and is now a

museum to General Jackson. As my father was in the military

service my family, which consisted of my parents, two older

sisters, an older brother, and myself, moved and traveled

quite a bit. I lived in Ohio, Alabama, West Germany, and

Massachusetts before settling in Florida upon my father's

retirement from the service in 1965. The moving and tra-

veling had been fun and stimulating, but it was a welcome

change to settle in one place.

I graduated from Clearwater High School, Clearwater,

Florida, in 1970 after being involved in academics, student

government, the school newspaper, and numerous community

activities. Upon entering the University of Florida I

concentrated my efforts on my education in psychology and

received my B.A. in 1973, my M.A. in 1975, and now my Ph.D.

in 1978 in clinical psychology. I did my clinical psychology

internship at Duke University Medical Center, Durham, North

Carolina, and am currently employed there in the Center for

the Study of Aging and Human Development and the Division

of Medical Psychology.














I certify that I have read this study and that in
my opinion it conforms to acceptable standards of
scholarly presentation and is fully adequate, in scope
and quality, as a dissertation for the degree of
Doctor of Philosophy.



Nathan W. Perry, Jr., Chdirman
Professor of Clinical Psychology




I certify that I have read this study and that in
my opinion it conforms to acceptable standards of
scholarly presentation and is fully adequate, in scope
and quality, as a dissertation for the degree of
Doctor of Philosophy.



Robert L. Isaacson
Professor of Physiological
Psychology




I certify that I have read this study and that in
my opinion it conforms to acceptable standards of
scholarly presentation and is fully adequate, in scope
and quality, as a dissertation for the degree of
Doctor of Philosophy.



Donald Childers
Acting Chairman
Professor of Electrical
Engineering













I certify that I have read this study and that in
my opinion it conforms to acceptable standards of
scholarly presentation and is fully adequate, in scope
and quality, as a dissertation for the degree of
Doctor of Philosophy.



Wiley asbury
Associate Professor of Clinical
Psychology





I certify that I have read this study and that in
my opinion it conforms to acceptable standards of
scholarly presentation and is fully adequate, in scope
and quality, as a dissertation for the degree of
Doctor of Philosophy.


Vernon Van 'DVRiet
Associate Professor of Clinical
Psychology





This dissertation was submitted to the Graduate
Faculty of the Department of Clinical Psychology in
the College of Arts and Sciences and to the Graduate
Council, and was accepted as partial fulfillment of
the requirements for the degree of Doctor of Philosophy.

March 1978


Dean, Graduate School


































UNIVERSITY OF FLORIDA
3 1111111 262 08553 6364111111 1111111111111
3 1262 08553 6364

























































A u2




Full Text
xml version 1.0 encoding UTF-8
REPORT xmlns http:www.fcla.edudlsmddaitss xmlns:xsi http:www.w3.org2001XMLSchema-instance xsi:schemaLocation http:www.fcla.edudlsmddaitssdaitssReport.xsd
INGEST IEID E9KGQRDIY_K2KIID INGEST_TIME 2017-07-13T15:36:31Z PACKAGE AA00003499_00001
AGREEMENT_INFO ACCOUNT UF PROJECT UFDC
FILES



PAGE 1

'(9(/230(17$/ &+$1*(6 ,1 &257,&$/ 352&(66,1* $6 5()/(&7(' %< 9,68$//< (92.(' 327(17,$/ 9$5,$%,/,7< %\ : -($11( 675((7 $ ',66(57$7,21 35(6(17(' 72 7+( *5$'8$7( &281&,/ 2) 7+( 81,9(56,7< 2) )/25,'$ ,1 3$57,$/ )8/),//0(17 2) 7+( 5(48,5(0(176 )25 7+( '(*5(( 2) '2&725 2) 3+,/2623+< 81,9(56,7< 2) )/25,'$

PAGE 2

$&.12:/('*(0(176 ZRXOG OLNH WR H[SUHVV JUDWHIXO DSSUHFLDWLRQ UHVSHFW DQG DIIHFWLRQ WR 'U 1DWKDQ : 3HUU\ -U IRU KLV ILUP EXW XQLQWUXVLYH VXSSRUW DQG JXLGDQFH LQ DOO RI P\ JUDGXDWH HGXFDWLRQ HQGHDYRUV 0DQ\ WKDQNV WR 'U 5REHUW / ,VDDFVRQ IRU FRQWLQXDOO\ ZKHWWLQJ P\ UHVHDUFK WDVWH EXGV DQG WR 'UV :LOH\ 5DVEXU\ DQG 9HUQRQ 9DQ 'H 5LHW IRU WKHLU SHUVRQDO LQWHUHVW LQ PH DV D KXPDQ EHLQJ 7KDQNV WR 'U 'RQDOG &KLOGHUV ZKR SRLQWHG RXW WR PH WKH GLIIHUHQFH EHWZHHQ D IDFW DQG D SLHFH RI GDWD DP H[WUHPHO\ JUDWHIXO WR 'UV %LOO &OHYHODQG DQG 'HH 5DPP RI WKH 'XNH 8QLYHUVLW\ 0HGLFDO &HQWHU IRU WKHLU XQVHOILVKQHVV ZLWK WKHLU WLPH DQG VWDWLVWLFDO DQG FRPSXWHU H[SHUWLVH ZRXOG DOVR OLNH WR WKDQN 'HQLVH 'L[RQ IRU KHU SDWLHQFH DQG SURPSWQHVV LQ W\SLQJ WKH PDQXVFULSW DQG +HOHQ &RUOHVV IRU WKH ILJXUH GUDZLQJV )DPLO\ DQG IULHQGV SURYLGHG LPPHDVXUDEOH HPRWLRQDO VXSSRUW RYHU WKH \HDUV PRVW SDUWLFXODUO\ DP JUDWHIXO WR P\ SDUHQWV -RDQ 'XHU 3HJJ\ %URRNV DQG &OLI 'RSVRQ IRU WKHLU HQFRXUDJHPHQW RI PH WR ILQLVK ZLWKRXW HYHU SXVKLQJ L L WRR KDUG

PAGE 3

7$%/( 2) &217(176 3DJH $&.12:/('*(0(176 LL /,67 2) 7$%/(6 LY $%675$&7 Y 6(&7,21 ,1752'8&7,21 ,, 0(7+2' 6XEMHFWV 9(5 7HVWLQJ 3URFHGXUH 3UHOLPLQDU\ 'DWD 3URFHVVLQJ 'DWD $QDO\VLV ,,, 5(68/76 &RQWURO 'DWD :KROH 9(5 9DULDELOLW\ &RPSRQHQW 9(5 9DULDELOLW\ :KROH 9(5 9DULDELOLW\ E\ 6H[ ,9 ',6&866,21 5()(5(1&(6 %,2*5$3+,&$/ 6.(7&+ L L L

PAGE 4

/,67 2) 7$%/(6 3DJH 7$%/( 6LJQLILFDQW 6' &KDQJHV 2YHU 7LPH IRU :KROH 9(5V 0HDQ 6'V DQG 'LUHFWLRQV RI &KDQJH 2YHU 7LPH IRU :KROH 9(5V 6LJQLILFDQW 6' &KDQJHV 2YHU 7LPH IRU &RPSRQHQW 9(5V 0HDQ 6'V DQG 'LUHFWLRQV RI &KDQJH 2YHU 7LPH IRU &RPSRQHQW 9(5V 6LJQLILFDQW 6' &KDQJHV IRU
PAGE 5

$EVWUDFW RI 'LVVHUWDWLRQ 3UHVHQWHG WR WKH *UDGXDWH &RXQFLO RI WKH 8QLYHUVLW\ RI )ORULGD LQ 3DUWLDO )XOILOOPHQW RI WKH 5HTXLUHPHQWV IRU WKH 'HJUHH RI 'RFWRU RI 3KLORVRSK\ '(9(/230(17$/ &+$1*(6 ,1 &257,&$/ 352&(66,1* $6 5()/(&7(' %< 9,68$//< (92.(' 327(17,$/ 9$5,$%,/,7< %\ : -HDQQH 6WUHHW 0DUFK &KDLUPDQ 1DWKDQ : 3HUU\ -U 0DMRU 'HSDUWPHQW &OLQLFDO 3V\FKRORJ\ 7KHUH LV JHQHUDO DJUHHPHQW WKDW WKH YDULDELOLW\ RU IOH[LELOLW\ VHHQ LQ SHUFHSWXDO DQG L QWHO HFWXDOn UHVSRQVH SDWWHUQV LV LPSRUWDQW WR WKH XQGHUVWDQGLQJ DQG SUHGLFWn DELOLW\ RI EHKDYLRU ,Q WKLV VWXG\ WKH YDULDELOLW\ RI FRUWLFDO SURFHVVLQJ RYHU WLPH LV LQYHVWLJDWHG XVLQJ YLVXDOO\ HYRNHG UHVSRQVH 9(5f VWDQGDUG GHYLDWLRQV DV D PHDVXUH RI YDULDEOH FRUWLFDO SURFHVVLQJ 6LQFH 9(5V DUH IHOW WR UHIOHFW WKH VHTXHQFH RI QHXUDO HYHQWV WKDW RFFXU DV D YLVXDO VWLPXOXV LV SHUFHLYHG DQG SURFHVVHG E\ WKH EUDLQ 9(5 YDULDELOLW\ LV IHOW WR UHIOHFW WKH YDULDELOLW\ RI FRUWLFDO SURFHVVLQJ 7KH VXEMHFW SRSXODWLRQ LQ WKLV VWXG\ FRQVLVWHG RI FKLOGUHQ ZKR SDUWLFLSDWHG LQ WKH VWXG\ IRU WKUHH \HDUV Y

PAGE 6

VWDUWLQJ ZKHQ WKH\ ZHUH LQ NLQGHUJDUWHQ $OO WKH FKLOGUHQ KDG QRUPDO YLVXDO DFXLW\ 7KH VDPSOH ZDV KRPRJHQHRXV ZLWK UHVSHFW WR VRFLRHFRQRPLF VWDWXV 9(5V ZHUH FROOHFWHG IRU HDFK VXEMHFW LQ UHVSRQVH WR IRXU GLIIHUHQW VWLPXOXV FRQGLWLRQV DQG UHFRUGHG IURP WKUHH RU IRXU VFDOS ORFDWLRQV 7KH YDULDELOLW\ PHDVXUH GHULYHG ZDV WKH VWDQGDUG GHYLDWLRQ 6'f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n WLFDOO\ VLJQLILFDQW EXW WKH SDWWHUQ ZDV WKH VDPH DV WKDW IRU WKH ZKROH 9(5V RI D GHFUHDVH LQ YDULDELOLW\ RYHU WLPH H[FHSW IRU DQ LQFUHDVH DW WKH SDULHWDO OREH ORFDWLRQ IURP \HDU WR \HDU 7KHUH ZHUH GLIIHUHQFHV EHWZHHQ WKH FRPSRQHQWV ZLWKLQ \HDUV EXW WKH GLIIHUHQFHV ZHUH FRQn VLVWHQW RYHU WLPH &KDQJHV LQ YDULDELOLW\ RI WKH ZKROH 9(5V RYHU WLPH DV D IXQFWLRQ RI VH[ ZHUH H[DPLQHG 7KH RYHUDOO HIIHFW ZDV QRW VWDWLVWLFDOO\ VLJQLILFDQW EXW WKH IHPDOHV LQ DOPRVW DOO FRQGLWLRQV GHPRQVWUDWHG PRUH 9(5

PAGE 7

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n DELOLW\ 7KHVH ILQGLQJV DUH FRQVLVWHQW ZLWK DQG H[WHQG WKH SUHYLRXV ILQGLQJV LQ WKH 9(5 OLWHUDWXUH 7KH ILQGLQJV DUH UHODWHG WR WKH OLWHUDWXUH RQ FKLOG FRJQLWLYH GHYHORSn PHQW ,W LV VXJJHVWHG WKDW WKH GHFUHDVH LQ 9(5 YDULDELOLW\ LV LQGLFDWLYH RI FRJQLWLYH SURFHVVLQJ WKDW LV PDWXUH RU SUDFWLFHG DQG WKDW WKH LQFUHDVH LQ YDULDELOLW\ DW WKH SDULHWDO OREH LV LQGLFDWLYH RI D FXUUHQWO\ DFWLYH RU GHYHORSLQJ FRJQLWLYH IXQFWLRQ 6LPLODUO\ D GLIIHUHQFH LQ UDWH RI JURZWK RI GLIIHUHQW FRUWLFDO SURFHVVHV RU EDVLF GLIIHUHQFHV LQ FRUWLFDO SURFHVVLQJ LWVHOI DUH K\SRn WKHVL]HG LQ UHIHUHQFH WR WKH VH[ GLIIHUHQFHV IRXQG 7KH GDWD SURYLGH WKH EHJLQQLQJ RI EDVHOLQH GDWD IRU QRUPDO

PAGE 8

FKDQJHV LQ FRJQLWLYH IOH[LELOLW\ ZKLFK PD\ HYHQWXDOO\ EH XVHG WR KHOS DVVHVV DEQRUPDO FKLOG JURZWK DQG GHYHORSPHQW Y

PAGE 9

6(&7,21 ,1752'8&7,21 7KH FHQWUDO QHUYRXV V\VWHP LV FKDUDFWHUL]HG E\ RQJRLQJ LQWULQVLF HOHFWULFDO DFWLYLW\ ZKLFK LV GHVFULEHG E\ WKH HOHFWURHQFHSKDORJUDP ((*f :KHQ WKLV DFWLYLW\ LV PHDVXUHG LQ UHVSRQVH WR D ODUJH QXPEHU RI SUHVHQWDWLRQV RI OLJKW IODVKHV DYHUDJHG WRJHWKHU WKH UHVSRQVH FKDQJH SURGXFHG LV FDOOHG D YLVXDO HYRNHG UHVSRQVH 9(5f 7KH UHVSRQVH WR DQ LQGLYLGXDO IODVK LV VPDOO DQG FDQQRW RUGLQDULO\ EH YLVXDOO\ GHWHFWHG DSDUW IURP WKH RQJRLQJ DFWLYLW\ WKHUHIRUH WKH UHVSRQVHV WR D ODUJH QXPEHU f RI OLJKW IODVK SUHVHQWDWLRQV DUH DYHUDJHG WRJHWKHU E\ FRPSXWHU 7KH DYHUDJLQJ SURFHVV UHVXOWV LQ DQ HOHFWULFDO UHVSRQVH WKDW LV HDVLO\ LGHQWLILHG :LGHO\ DFFHSWHG WRGD\ LV WKH WKRXJKW WKDW QHXUDO VWUXFWXUH DQG IXQFWLRQ XQGHUOLH PHQWDO SURFHVVHV 7KH GHVFULEHG 9(5 KDV EHHQ SURSRVHG DQG XVHG DV DQ LQGLFDWRU RI QHXUDO IXQFWLRQLQJ DQG PHQWDO SURFHVVLQJ WKH 9(5 LV IHOW WR UHIOHFW LQ SDUW WKH VHTXHQFH RI FRUWLFDO HYHQWV WKDW RFFXU DV D YLVXDO VWLPXOXV LV SHUFHLYHG DQG SURFHVVHG E\ WKH EUDLQ 3HUU\ t &KLOGHUV f 6HYHUDO SDUDPHWHUV RI WKH 9(5 XVXDOO\ DPSOLWXGH DQG ODWHQF\ KDYH EHHQ GHULYHG DQG XVHG WR LQYHVWLJDWH EUDLQ IXQFWLRQLQJ WKDW RFFXUV GXULQJ YLVXDO VWLPXODWLRQ

PAGE 10

'HYHORSLQJ IURP WKHVH LQYHVWLJDWLRQV KDV EHHQ LQWHUHVW LQ DQRWKHU SDUDPHWHU YDULDELOLW\ DV DQ LQGLFDWRU RI FRUWLFDO IXQFWLRQLQJ VSHFLILFDOO\ FRUWLFDO SURFHVVLQJ YDULDELOLW\ %UD]LHU &DOODZD\ (OOLQJVRQ f $OWKRXJK PXFK RI WKH WKHRU\ DQG UHVHDUFK RQ WKH GHYHORSPHQW RI VSHFLILF FRUWLFDO IXQFWLRQV FRQFHQWUDWHV RQ WKH PDWXUDWLRQ RI VWDEOH FRQVWDQW UHVSRQVH SDWWHUQV WKHUH LV JHQHUDO DJUHHPHQW WKDW WKH YDULDELOLW\ VHHQ LQ UHVSRQVH SDWWHUQV LV DOVR LPSRUWDQW WR GHYHORSPHQW &DOODZD\ f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t &XQQLQJKDP f 7KDW LV VHYHUDO

PAGE 11

GLIIHUHQW DVSHFWV RI 9(5 DUH IXQFWLRQLQJ WRJHWKHU DW DQ\ RQH WLPH WR FRQWULEXWH WR WKH ILQDO GHWHFWHG VLJQDO 7KXV LI WKH UHVXOWLQJ 9(5 DFWXDOO\ FRQVLVWV RI D YDULHW\ RI RQJRLQJ IXQFWLRQV LQYHVWLJDWLRQV RI WKH YDULDELOLW\ RI FRJQLWLYH SURFHVVLQJ PD\ OHDG WR PRUH DFFXUDWH GHWHUn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f 7KLV ILQGLQJ KDV VXEVHTXHQWO\ EHHQ UHSOLFDWHG VHYHUDO WLPHV %LJXP 'XVWPDQ DQG %HFN f IRXQG ODWHU FRPSRQHQW ODWHQFLHV WR EH VLJQLILFDQWO\ ODWHU ef LQ PRQJRORLGV WKDQ LQ QRUPDO VXEMHFWV DQG 6KXFDUG DQG +RUQ f IRXQG FRUUHODWLRQV IURP WR EHWZHHQ ODWHQF\ DQG FRJQLWLYH DELOLWLHV 6HYHUDO VWXGLHV KDYH IRXQG KLJKHU DPSOLWXGHV LQ EULJKWHU FKLOGUHQ DQG DGXOWV WKDQ LQ OHVV EULJKW SHRSOH %LJXUQ HW D 5KRGHV 'XVWPDQ t %HFN f $PSOLWXGH DQG ODWHQF\ RI 9(5 FRPSRQHQWV DUH WKH FKDUDFWHULVWLFV

PAGE 12

XVXDOO\ XVHG WR PDNH FRUUHODWLRQV ZLWK LQWHOOLJHQFH EXW LW KDV EHHQ VXJJHVWHG WKDW 9(5 YDULDELOLW\ PLJKW EH DQ LPSRUWDQW SKHQRPHQRQ RI HYRNHG SRWHQWLDOV %UD]LHU &DOO DZD\ f 6HYHUDO 9(5 VWXGLHV QRW DOO RI ZKLFK DUH GHYHORSn PHQWDO LQ QDWXUH KDYH LQYHVWLJDWHG 9(5 YDULDELOLW\ DOWKRXJK WKH YDULDELOLW\ H[DPLQHG LV RIWHQ GLIIHUHQWO\ GHILQHG DQG PHDVXUHG DFURVV VWXGLHV $PRQJ QRUPDO DGXOWV WKH JUHDWHVW 9(5 YDULDELOLW\ ZDV IRXQG EHWZHHQ VXEMHFWV QH[W EHWZHHQ DUHDV RI WKH KHDG DQG OHDVW DFURVV WLPH ZLWKLQ DQ LQGLYLGXDO :HUUH t 6PLWK f ,Q DQRWKHU VWXG\ RQ QRUPDO DGXOWV &LJ£QHN f VDZ D GHFUHDVH LQ DPSOLWXGH YDULDELOLW\ DIWHU PVHF DQG DQ LQFUHDVH LQ YDULDELOLW\ LQ HDUO\ ODWHQF\ ZDYHV +H DOVR IRXQG WKH DPSOLWXGH YDULDELOLW\ RI WKH (3 HYRNHG SRWHQWLDOf WR EH QHJOLJLEOH EHWZHHQ WKH DYHUDJHG UHVSRQVHV RI LQGLYLGXDO VXEMHFWV DOWKRXJK KLJK DFURVV WKH ZKROH JURXS RI VXEMHFWV ,Q D VWXG\ RI ILYH DGXOWV 5RELQVRQ f GHPRQVWUDWHG WKDW DWWHQWLYH YLHZLQJ DV FRPSDUHG WR SDVVLYH YLHZLQJ SURGXFHG D GHFUHDVH LQ DPSOLWXGH YDULDQFH RI D SDUWLFXODU 9(5 $OWKRXJK PRVW RI WKH VWXGLHV ZLWK SV\FKLDWULF SDWLHQWV GR QRW FRQWURO IRU OHYHO RI LQWHOOHFW WKH HYRNHG UHVSRQVH ILQGLQJV VXJJHVW D FRUUHODWLRQ EHWZHHQ YDULDELOLW\ DQG WKRXJKW GLVRUGHUV $PRQJ SV\FKLDWULF SDWLHQWV SV\FKRWLF GHSUHVVLYHV VKRZHG JUHDWHU YDULDELOLW\

PAGE 13

FRPSDUHG WR RWKHU VXEJURXSV %RUJH f 6FKL]RSKUHQLFV DV FRPSDUHG WR QRUPDOV KDG PRUH YDULDEOH 9(5V LQ UHVSRQVH WR GLIIHUHQW VWLPXOXV LQWHQVLWLHV 5DSSDSRUW +RSNLQV +DOO %HOOH]D t +DOO f 6FKL]RSKUHQLF DGXOWV VRPH RI ZKRP ZHUH VDLG WR KDYH D WKRXJKWSURFHVV GLVRUGHU VKRZHG JUHDWHU YDULDELOLW\ RI DXGLWRU\ HYRNHG SRWHQWLDOV EDVHG RQ FRUUHODWLRQV EHWZHHQ $(5V WR GLIIHUHQW VWLPXOLf WKDQ QRUPDO VXEMHFWV &DOODZD\ -RQHV t 'RQFKLQ f &DOODZD\ DQG -RQHV FRQFOXGH IURP DQRWKHU VWXG\ WKDW YDULDEOH HYRNHG SRWHQWLDOV DUH FRUUHODWHG ZLWK YDULDEOH DQG XQVWDEOH FRJQLWLYH IXQFWLRQLQJ f /LIVKLW] f IRXQG WKDW VFKL]RSKUHQLFV VKRZHG PRUH YDULDELOLW\ WKDQ QRUPDOV WR VLPSOH YLVXDOf DQG FRPSRXQG YLVXDO DQG DXGLWRU\f VWLPXOL $PRQJ VFKL]RSKUHQLFV (3 YDULDELOLW\ DOVR EDVHG RQ EHWZHHQ(3 FRUUHODWLRQVf LV JUHDWHVW LQ WKRVH ZKR VKRZ LQDFFXUDWH DQG YDULDEOH SHUFHSWXDO SHUn IRUPDQFHV QGHUELW]HQ %XFKVEDXP t 6LOYHUPDQ f %UD]LHU f ZDV WKH ILUVW WR ORRN DW YDULDELOLW\ RI WKH VHSDUDWH UHVSRQVHV WKDW DUH XVXDOO\ VXPPHG WR IRUP D 9(5 6KH IRXQG YDULDELOLW\ WR EH JUHDWHU LQ WKH ILUVW UHVSRQVHV LQ D WUDLQ RI WKDQ WKH ODVW ZKHQ KDELWXDWLRQ ZDV VDLG WR KDYH RFFXUUHG %DUQHW DQG /RGJH f H[DPLQHG WKH XQDYHUDJHG LQGLYLGXDO DXGLWRU\ HYRNHG UHVSRQVHV RI PRQJRORLG DQG QRUPDO VXEMHFWV XQGHU PRQWKV RI DJH DQG VDZ JUHDW YDULDELOLW\ LQ WKH DPSOLWXGHV EXW IRXQG WKH PRQJRORLGV WR KDYH PDQ\ PRUH

PAGE 14

H[WUHPHO\ ODUJH UHVSRQVHV DQG WR VKRZ OHVV GHFOLQH LQ UHVSRQVH VWLPXODWLRQ ZLWK UHSHWLWLYH VWLPXODWLRQ WKDQ WKH QRUPDO VXEMHFWV 7KLV VXJJHVWV GLIIHUHQFHV LQ EUDLQ PHFKDQLVPV JRYHUQLQJ VHQVRU\ LQSXW (OOLQJVRQ f KDV GRQH PXFK ZRUN LQ WKH DUHD RQ LQIDQW 9(5 YDULDELOLW\ DQG RYHUDOO KDV IRXQG QHRQDWDO 9(5 YDULDELOLW\ WR EH KLJK $OWKRXJK KH GRHV QRW H[SODLQ PDWKHPDWLFDOO\ KRZ KH PHDVXUHV YDULDELOLW\ KH VWDWHV WKDW LQGLYLGXDO QHRQDWDO 9(5V LQ FRQWUDVW WR WKH ILQGLQJV LQ DGXOWV ZHUH RIWHQ YDULDEOH LQ ODWHQF\ DQG DPSOLWXGH GXULQJ D VLQJOH UHFRUGLQJ VHVVLRQ ,Q RQH VWXG\ WKH PHDQ ODWHQFLHV RI FRPSRQHQWV RI DYHUDJHG DXGLWRU\ HYRNHG SRWHQWLDOV ZHUH FRPSDUHG EHWZHHQ VOHHSLQJ FKLOGUHQ \RXQJHU FKLOGUHQnV $(5V ZHUH IRXQG WR EH PRUH YDULDEOH WKDQ ROGHU FKLOGUHQnV %DUQHW 2KOULFK :HLVV t 6KDQNV f &DOODZD\ f K\SRWKHVL]HG WKDW LI HYRNHG SRWHQWLDOV UHIOHFW FRJQLWLYH SURFHVVHV WKHQ KDELWXDOO\ LUUHJXODU RU XQVWDEOH PRGHV RI FRJQLWLYH SURFHVVLQJ VKRXOG EH DFFRPSDQLHG E\ YDULDEOH HYRNHG SRWHQWLDOV ,Q D VWXG\ &DOODZD\ t 6WRQHf VDPSOHV ZHUH GHVFULEHG LQ ZKLFK QRUPDO DGXOWV VKRZHG ORZ YDULDELOL\ 9(5V VFKL]RSKUHQLFV KDG LQWHUn PHGLDWH YDOXHV DQG FKLOGUHQ DJHG QLQHf KDG KLJK YDULDELOLW\ 'DWD RQ WKH FKLOGUHQ VKRZHG WKDW ORZHU HYRNHG UHVSRQVH YDULDELOLW\ WHQGHG WR EH FRUUHODWHG ZLWK KLJKHU VFRUHV RQ D YLVXDOPRWRU LQWHJUDWLRQ WHVW ,Q DQRWKHU GHYHORSPHQWDO

PAGE 15

VWXG\ GRQH ZLWK YLVXDO DQG DXGLWRU\ HYRNHG SRWHQWLDOV YDULDELOLW\ RI WKH (3V RI FKLOGUHQ IURP DJHV VL[ WR ZHUH LQYHVWLJDWHG &DOODZD\ t +DOOLGD\ f 9DULDELOLW\ GHFUHDVHG ZLWK LQFUHDVLQJ DJH )XUWKHU LQYHVWLJDWLRQV ZLWK WKH %HHU\ 9LVXDO0RWRU ,QWHJUDWLRQ WHVW f OHG &DOODZD\ WR FRQFOXGH WKDW (3 VWDELOLW\ LV VXIILFLHQW EXW QRW QHFHVVDU\ IRU JRRG FRJQLWLYH WDVN SHUIRUPDQFH f ,Q VHYHUDO VWXGLHV ZLWK QRUPDO DGXOWV &DOODZD\ f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t 9LOOHJDV (UWO f (UWO f VWDWHV WKDW WKH ODWH FRPSRQHQWV RI WKH $(3 DUH VHQVLWLYH WR FKDQJHV LQ

PAGE 16

VWLPXOXV SDUDPHWHUV LQYROYLQJ GHFLVLRQPDNLQJ 6XWWRQ %UDXQ =XELQ t -RKQ f SDWWHUQ UHFRJQLWLRQ DWWHQWLRQ DQG SUREOHP VROYLQJ %HLQKRFNHU %URRNV $QIHQJHU t &RSHQKDYHU &DOODZD\ &KDSPDQ t %UDJGRQ 8WWDO f GUXJLQGXFLQJ FKDQJHV LQ OHYHOV RI DOHUWQHVV $OOLVRQ *RII $EUDKDPLDQ t 5RVQHU %UD]LHU DQG *DUFLD$XVWW f DQG JHQHUDOO\ WKH LQIRUPDWLRQDO FRQWHQW RI WKH VWLPXOXV %XFKVEDXP IHHOV WKDW EHFDXVH ODWHU FRPSRQHQWV RI (3V DIWHU PVHFf FKDQJH PRUH WKDQ HDUOLHU RQHV DV D IXQFWLRQ RI DWWHQWLRQ DURXVDO DQG H[SHFWDQF\ JUHDWHU H[SHULHQWLDO HIIHFWV PLJKW EH H[SHFWHG LQ ODWH FRPSRQHQWV f +H DOVR VXJJHVWV WKDW HDUO\ FRPSRQHQWV PD\ EH PRUH VWDEOH DQG JHQHWLFDOO\ GHWHUPLQHG &DOODZD\ DQG +DOOLGD\ f IRXQG WKH YDULDELOLW\ RI ODWH (3 FRPSRQHQWV PVHF RU ODWHUf GHFUHDVLQJ ZLWK LQFUHDVLQJ DJH PRUH WKDQ WKH YDULDELOLW\ RI HDUOLHU FRPSRQHQWV 7KHLU ILQGLQJV VXJJHVW WKDW E\ DJH VL[ D FKLOGnV VHQVRU\ SURFHVVLQJ LV VWDEOH EXW KLJKHU SHUFHSWXDO LQIRUPDWLRQ SURFHVVLQJ LV VWLOO VWDELOL]LQJ %DUQHW HW DO f IRXQG WKDW GHFUHDVHV LQ WKH ODWHQFLHV RI WKH YDULRXV FRPSRQHQWV SURFHHGHG DW GLIIHUHQW UDWHV DQG IHOW WKDW WKLV VXJJHVWHG WKDW WKH FRPSRQHQWV UHIOHFW LQGHSHQGHQW QHXUDO VXEVWUDWHV 7KH\ DOVR QRWHG WKDW WKH FRPSRQHQWV RI VKRUWHVW ODWHQF\ GLVSOD\HG WKH ZHDNHVW UHODWLRQVKLS WR DJH $SSDUHQWO\ QRW RQO\ WKH YDULDELOLW\ RI WKH ZKROH 9(5 EXW WKH

PAGE 17

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f
PAGE 18

YDULDELOLW\ FKDQJHV VHHQ ZLOO EH LQYHVWLJDWHG DV LQGLFDWRUV RI FRUWLFDO SURFHVVLQJ FKDQJHV DQGRU IXQFWLRQDO GHYHORSPHQWDO FKDQJHV LQ SURFHVVLQJ 7KH DJH UDQJH FKRVHQ LV DQ LPSRUWDQW RQH WR LQYHVWLJDWH QRW RQO\ EHFDXVH RI WKH VFDUFLW\ RI 9(5 YDULDELOLW\ GDWD RQ WKLV JURXS EXW DOVR EHFDXVH RI WKH LPSRUWDQW FRJQLWLYH FKDQJHV UHSRUWHGO\ RFFXUULQJ DW WKLV WLPH :KLWH f KDV SRVWXODWHG WKDW WKH ILYH WR VHYHQ DJH UDQJH LV D VLJQLILFDQW RQH IRU FKDQJHV LQ SDUWLFXODU OHDUQLQJ SDUDGLJPV 3LDJHW f VWUHVVHG WKH LQFUHDVLQJ IOH[LELOLW\ RI WKLQNLQJ DQG WKH UHVXOWDQW DFTXLVLWLRQ RI FHUWDLQ IRUPV RI FRQVHUYDWLRQ IURP WKH DJHV IRXU WR VHYHQ ,Q JHQHUDO LGHDV DQG UHVHDUFK LQ WKH GHYHORSPHQWDO DUHD LQGLFDWH WKDW UHVSRQVH SDWWHUQV JR WKURXJK D SHULRG RI LQFUHDVLQJ IOH[LELOLW\ IRU SURSHU DGDSWDWLRQ WR WKH FKDQJLQJ HQYLURQPHQW EXW DW VRPH SRLQW WKH IOH[LELOLW\ HLWKHU GHFUHDVHV RU EHFRPHV PRUH VHOHFWLYH ,I DV H[SHFWHG WKH 9(5 YDULDELOLW\ PHDVXUH LV XVHIXO DV DQ LQGLFDWRU RI QRUPDO JURZWK DQG GHYHORSn PHQW RI FRJQLWLYH SURFHVVLQJ WKH WLPHO\ VLJQLILFDQFH RI WKH VWXG\ EHFRPHV DSSDUHQW $V D SUHGLFWRU DQG GLDJQRVWLF WRRO WKH PHDVXUH PD\ EH XVHIXO LQ WKH GHWHFWLRQ RI DQG WKHUDSHXWLF LQWHUYHQWLRQ LQ SUREOHPV RI FKLOG GHYHORSPHQW VXFK DV K\SHUDFWLYLW\ +DOOLGD\ 5RVHQWKDO 1D\ORU t &DOODZD\ f DQG VSHFLILF UHDGLQJ GLVDELOLW\ 3UHVWRQ *XWKULH .LUVFK *HUWPDQ t &KLOGV f

PAGE 19

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f DUH H[SHFWHG WR VKRZ GLIIHUHQFHV LQ YDULDELOLW\ DV WKH EUDLQ PD\ EH H[SHFWHG WR UHVSRQG PRUH RU OHVV YDULDEO\ GHSHQGLQJ RQ WKH FRPSOH[LW\ RI WKH VWLPXOXV 9DULDELOLW\ GHULYHG IURP GLIIHUHQW EUDLQ ORFDWLRQV LV H[SHFWHG WR GLIIHU DV VRPH DUH PRUH SXUHO\ SHUFHSWXDO DQG PD\ EH DW GLIIHUHQW GHYHORSPHQWDO VWDJHV RYHU WKH WKUHH \HDUV 9(5 YDULDELOLW\ RI HDUO\ PLGGOH DQG ODWH FRPSRQHQWV LV H[SHFWHG WR GLIIHU DV WKHVH FRPSRQHQWV DUH WKRXJKW WR UHSUHVHQW GLIIHUHQW VWDJHV DQG IXQFWLRQV RI FRUWLFDO SURFHVVLQJ 6LQFH HDUO\ FRPSRQHQWV DUH WKRXJKW WR UHSUHVHQW VLPSOH VHQVRU\ SURFHVVHV ZKLFK

PAGE 20

UHDFK IXOO GHYHORSPHQW UHODWLYHO\ HDUO\ WKH\ DUH H[SHFWHG WR VKRZ OHVV 9(5 YDULDELOLW\ RYHU WLPH WKDQ WKH ODWHU FRPSRQHQWV ZKLFK DUH WKRXJKW WR UHSUHVHQW SURFHVVLQJ DW D KLJKHU OHYHO RI FRPSOH[LW\ QRW \HW FRPSOHWHO\ GHYHORSHG 7KH FKDQJH LQ YDULDELOLW\ RYHU WLPH ZLOO DOVR EH FRPSDUHG EHWZHHQ PDOHV DQG IHPDOHV WR LQYHVWLJDWH SRVVLEOH VH[ GLIIHUHQFHV VLQFH DW WKLV DJH UDQJH VH[ GLIIHUHQFHV LQ VSHFLILF FRJQLWLYH DELOLWLHV KDYH EHHQ IRXQG 0XVVHQ f

PAGE 21

6(&7,21 ,, 0(7+2' 6XEMHFWV /HWWHUV GHVFULELQJ WKH VWXG\ DQG DVNLQJ IRU SDUWLFLn SDWLRQ ZHUH VHQW WR SDUHQWV RI DOO FKLOGUHQ HQWHULQJ NLQGHUJDUWHQ LQ LQ WKH FLW\ RI *DLQHVYLOOH )LRUGLD 7KRVH SDUHQWV ZKR UHVSRQGHG ZHUH FRQWDFWHG DQG WKHLU FKLOG ZDV DFFHSWHG LQ WKH VWXG\ LI Df WKH IDPLO\ KDG QR SODQV WR PRYH ZLWKLQ WKUHH \HDUV DQG Ef WKH FKLOG KDG QR XQXVXDO PHGLFDO RU GHYHORSPHQWDO KLVWRU\ 7KH VXEMHFW VDPSOH IRU WKLV VWXG\ FRQVLVWHG RI ZKLWH FKLOGUHQ IHPDOHV PDOHVf ZLWK FRPSOHWH GDWD IRU WKUHH \HDUV $WWULWLRQ IURP WKH RULJLQDO VDPSOH RI ZDV QLQH DQG DQRWKHU KDG LQFRPSOHWH GDWD GXH WR RFFDVLRQDO HTXLSPHQW DQGRU FROOHFWLRQ GLIILFXOWLHV 'XULQJ WKH ILUVW \HDU RI GDWD FROOHFWLRQ WKH PHDQ DJH ZDV PRQWKV 6' UDQJH PRQWKVf PRQWKV 6' UDQJH PRQWKVf GXULQJ WKH VHFRQG \HDU DQG PRQWKV 6' UDQJH PRQWKVf GXULQJ WKH WKLUG \HDU 7KH PHDQ IXOO VFRUH ,4 :336,f IRU WKH ILUVW \HDU ZDV 6' UDQJH f WKH PHDQ IXOO VFRUH ,4 :,6&5f IRU WKH VHFRQG \HDU ZDV 6' UDQJH f DQG

PAGE 22

WKH PHDQ IXOO VFRUH ,4 :,6&5f IRU WKH WKLUG \HDU ZDV 6' UDQJH f $OO FKLOGUHQ KDG QRUPDO YLVXDO DFXLW\ LQ HDFK H\H 6QHOOHQ (f DQG QRUPDO VWHUHRSVLV 7LWPXV )O\f 7KH VDPSOH ZDV UHODWLYHO\ KRPRJHQHRXV DQG XSSHU PLGGOHFODVV ZLWK UHVSHFW WR VRFLRHFRQRPLF VWDWXV ZLWK IRU H[DPSOH b RI WKH PRWKHUV DQG b RI WKH IDWKHUV KROGLQJ DGYDQFHG GHJUHHV DQG PRVW IDPLOLHV KDYLQJ DQ LQFRPH LQ WKH UDQJH RI WKRXVDQG GROODUV 9(5 7HVWLQJ 3URFHGXUH 6LOYHUVLOYHU FKORULGH FXS HOHFWURGHV DQG SDVWH %HFNPDQf ZHUH SODFHG RQ WKH VFDOS DW ORFDWLRQV &A &A ] DQG RI WKH LQWHUQDWLRQDO HOHFWURGH V\VWHP -DVSHU f 7KH FHQWUDO ORFDWLRQV &A DQG &Af VDPSOLQJ OHIW DQG ULJKW KHPLVSKHUHV ZHUH UHIHUHQFHG WR OLQNHG HDU OREHV 7KH RFFLSLWDO ORFDWLRQ ZDV D ELSRODU GHULYDWLRQ EHWZHHQ = DQG 3 RQ WKH PLGVDJJLWDO SODQH $IWHU WKH ILUVW \HDU D IRXUWK ORFDWLRQ RYHU WKH OHIW SDULHWDO f ZDV DGGHG ,PSHGDQFHV RI DSSUR[LPDWHO\ .X ZHUH REWDLQHG EHWZHHQ HOHFWURGHV DV PHDVXUHG ZLWK D GF LPSHGDQFH WHVWHU ,0$ (OHFWURQLFVf (DFK VXEMHFW ZDV VHDWHG LQ DQ DGMXVWDEOH RSKWKDOPLF FKDLU LQ DQ HOHFWULFDOO\ VKLHOGHG DQG OLJKWSURRI URRP $&(f 9HQWLODWLQJ EORZHUV SURGXFHG D VWHDG\ G% QRLVH OHYHO *HQHUDO 5DGLR $f WR PDVN HTXLSPHQW DQG H[WUDQHRXV QRLVH 6ROLG VWDWH GFSRZHUHG GLIIHUHQWLDO

PAGE 23

DPSOLILHUV ZHUH SODFHG LQVLGH WKH VKLHOGHG URRP QHDU WKH VXEMHFW HQDEOLQJ WKH XVH RI YHU\ VKRUW HOHFWURGH OHDGV 0LFURGRWf )ROORZLQJ DPSOLILFDWLRQ HOHFWULFDO DFWLYLW\ ZDV ILOWHUHG WR +] .URKQ+LWH %5f DQG VLPXOWDQHRXVO\ URXWHG WR DQ )0 WDSH UHFRUGHU 6DQERUQ f DQG LQ \HDU DYHUDJHG E\ D &$7 FRPSXWHU DQG VXEVHTXHQWO\ E\ D 1LFROHW 0(' DYHUDJLQJ FRPSXWHU )UHTXHQF\ UHVSRQVH RI WKH FRPSOHWH UHFRUGLQJ V\VWHP ZDV UHODWLYHO\ IODW IURP +] WR +] DQG ZDV SHUFHQW DWWHQXDWHG DW +] DQG +] $ A 9 FDOLEUDWH VLJQDO 0HGLVWRU &$f ZDV LQWURGXFHG WKURXJK WKH DPSOLILHUV IRU HDFK VXEMHFW DQG SURFHVVHG LQ WKH VDPH PDQQHU DV WKH 9(5V (DFK 9(5 ZDV WKH UHVXOW RI VL[W\ PVHF VZHHSV RI WKH FRPSXWHU 7KURXJKRXW WKH 9(5 VHVVLRQ RI DSSUR[LPDWHO\ PLQ VXEMHFWV YLHZHG ELQRFXODUO\ D r YLVXDO DQJOHf FLUFOH RI DFKURPDWLF OLJKW FRQWLQXRXVO\ LOOXPLQDWHG WR SURYLGH D EDFNJURXQG OHYHO RI ORJ IW/ 6(, SKRWRPHWHUf 7KH FRQWLQXRXV EDFNJURXQG DQG WKH VWLPXOL ZHUH SURYLGHG E\ IRXU SURMHFWRUV 9LHZOH[ 9f PRXQWHG RXWVLGH WKH VKLHOGHG URRP DQG SURMHFWLQJ WKURXJK D GRXEOH SOH[LJO£V FRQGXFWLYH ZLQGRZ 7HFNQLWf MXVW DERYH DQG EHKLQG WKH VXEMHFWnV KHDG 7KH VWLPXOL ZHUH SURMHFWHG RQWR DQ DOXPLQL]HG VFUHHQ ORFDWHG HLJKW IHHW LQ IURQW RI WKH VXEMHFW (OHFWURQLF VKXWWHUV *HUEUDQGVf DWWDFKHG WR HDFK SURMHFWRU GHWHUPLQHG VWLPXOXV GXUDWLRQV 'XULQJ VWLPXODWLRQ H\H IL[DWLRQ RI VXEMHFWV ZDV DLGHG E\ D FKLQ

PAGE 24

UHVW DQG PRQLWRUHG E\ DQ H[SHULPHQWHU VHDWHG REOLTXHO\ LQ IURQW RI WKH VXEMHFW )L[DWLRQ XSRQ WKH FHQWHU RI WKH FLUFOH ZDV UHTXLUHG IRU VHF IRU HDFK WULDO /RVV RI IL[DWLRQ JUHDWHU WKDQ DERXW rf UHVXOWHG LQ DERUWLQJ DQG UHSHDWLQJ WKH 9(5 DYHUDJLQJ 7KUHH GLIIHUHQW VWLPXODWLRQ FRQGLWLRQV ZHUH XVHG LQ RUGHU WR REWDLQ 9(5V UHIOHFWLQJ SUHVXPDEO\ GLIIHUHQW W\SHV RI FRUWLFDO SURFHVVLQJ )RU WKH ILUVW VWLPXOXV FRQGLWLRQ +] GLIIXVH OLJKW IODVKHV ZHUH SUHVHQWHG DW D UDWH RI VHF IRU VHF JLYLQJ IODVKHVf 7KH IODVKHV RI PVHF GXUDWLRQ ZHUH VXSHULPSRVHG RQ WKH r EDFNJURXQG FLUFOH DQG ZHUH IXQFWLRQDOO\ GLIIXVH VLQFH RWKHU WKDQ WKH GLP EDFNJURXQG LOOXPLQDWLRQ WKH URRP ZDV GDUN 7KH VHFRQG VWLPXOXV FRQGLWLRQ +] GLIIXVH FRQVLVWHG RI D PVHFGXUDWLRQ IODVK VXSHULPSRVHG RQ WKH r EDFNn JURXQG DW D UDWH RI VHF IRU VHF JLYLQJ D WRWDO RI IODVKHV ZLWK WKH UHVSRQVHV DYHUDJHG RYHU VZHHSV RI PVHF HDFK DV LQ WKH +] GLIIXVH FRQGLWLRQf ,OOXPLQDQFH RI WKH LQGLYLGXDO IODVKHV LQ ERWK WKH +] GLIIXVH DQG +] GLIIXVH FRQGLWLRQV ZDV ORJ IW/ 7KHUH LV HYLGHQFH WKDW GLIIXVH OLJKW DV XVHG LQ WKH +] GLIIXVH DQG +] GLIIXVH FRQGLWLRQV LV SURFHVVHG GLIIHUHQWO\ IURP SDWWHUQ VWLPXODWLRQ E\ WKH FRUWH[ +XEHL t :LHVHO 3HUU\ t &KLOGHUV f 7R VHH ZKDW HIIHFW SDWWHUQ VWLPXODWLRQ PLJKW KDYH RQ WKH YDULDELOLW\

PAGE 25

RI FRUWLFDO SURFHVVLQJ WKH WKLUG VWLPXOXV FRQGLWLRQ ZDV WKH SUHVHQWDWLRQ RI +] SDWWHUQ 7KH SDWWHUQ ZDV D r VXQEXUVW ZLWK D GDUN n FHQWHU IURP ZKLFK DQ HTXDO QXPEHU RI OLJKW DQG GDUN UD\V H[WHQGHG HDFK RI ZKLFK VXEWHQGHG n DW WKH FLUFXPIHUHQFH 7KH SDWWHUQ ZDV VXSHULPSRVHG RQ WKH EDFNJURXQG FLUFOH DW DQ LOOXPLQDQFH RI ORJ IW/ DQG ZDV DOWHUQDWHG DW D UDWH RI VHF ZLWK D GLIIXVH r FLUFOH DGMXVWHG WR WKH VDPH DSSDUHQW EULJKWQHVV 7KH SDWWHUQ DSSHDUHG IRU PVHF DQG GLVDSn SHDUHG IRU PVHF IRU D WRWDO RI VHF WLPHVf ZLWKRXW DQ\ DSSDUHQW FKDQJH LQ WKH EULJKWQHVV RI WKH FLUFH ,Q DGGLWLRQ WR WKH WKUHH VWLPXOXV FRQGLWLRQV D FRQWURO FRQGLWLRQ ZDV XVHG LQ ZKLFK WKH FRUWLFDO DFWLYLW\ ZDV DYHUDJHG LQ WKH VDPH PDQQHU DV IRU WKH +] GLIIXVH FRQGLWLRQ EXW ZLWK WKH IODVKLQJ OLJKW RFFOXGHG VR WKDW WKH VXEMHFW YLHZHG RQO\ WKH FRQWLQXRXV \LW EDFNJURXQG FLUFOH 7HQ VZHHS 9(5V WULDOVf RI PVHF HDFK ZHUH FROOHFWHG IURP HDFK VXEMHFW ZLWK DSSUR[LPDWHO\ PLQ EHWZHHQ WULDOV 7KH RUGHU RI VWLPXOXV SUHVHQWDWLRQ IRU WKH WULDOV ZDV DV IROORZV f FRQWURO f f f +] GLIIXVH f +] SDWWHUQ f +] GLIIXVH f +] SDWWHUQ f +] GLIIXVH f +] SDWWHUQ f +] GLIIXVH 7KLV SURFHGXUH \LHOGHG D WRWDO RI 9(5V WULDOV E\ HOHFWURGH ORFDWLRQVf IRU HDFK VXEMHFW

PAGE 26

3UHOLPLQDU\ 'DWD 3URFHVVLQJ 9(5V IRU DOO VXEMHFWV ZHUH ILUVW QRUPDOL]HG UHODWLYH WR WKH DPSOLWXGH RI D FDOLEUDWLRQ VHQW WKURXJK WKH DPSOLILHUV DQG DYHUDJHG LQ WKH VDPH PDQQHU 3HDUVRQ SURGXFWPRPHQW FRUUHODWLRQV ZHUH WKHQ SHUIRUPHG EHWZHHQ FRPPRQ 9(5V PHDVXUHG IURP WKH VDPH HOHFWURGH ORFDWLRQ WR WKH VDPH VWLPXOXV FRQGLWLRQ WKDW LV WULDOV f f f DQG f DOO DW +] GLIIXVH IURP WKH RFFLSLWDO ORFDWLRQ ZHUH FRUUHODWHG WKHQ IURP WKH OHIW KHPLVSKHUH ORFDWLRQ WKHQ WKH ULJKW KHPLVSKHUH ORFDWLRQ WKHQ WKH OHIW SDULHWDO ORFDWLRQ WULDOV f f DQG f DOO DW +] SDWWHUQ IURP WKH RFFLSLWDO ORFDWLRQ ZHUH FRUUHODWHG WKHQ IURP HDFK RI WKH RWKHU ORFDWLRQV DQG WULDOV f DQG f DW +] GLIIXVH IURP HDFK RI WKH ORFDWLRQV ZHUH FRUUHODWHGf 9(5V IURP WKH VDPH ORFDWLRQ WR WKH VDPH VWLPXOXV FRQGLWLRQ ZHUH WKHQ SRROHG IRU HDFK VXEMHFW UHGXFLQJ WKH 9(5V WR RU RU ORFDWLRQV E\ FRQGLWLRQV LQFOXGLQJ WKH FRQWURO WULDOf $V D UHVXOW WKH FRQWURO 9(5 UHSUHVHQWV VZHHSV HDFK +] GLIIXVH 9(5 UHSUHVHQWV VZHHSV HDFK +] SDWWHUQ 9(5 UHSUHVHQWV VZHHSV DQG HDFK +] GLIIXVH 9(5 UHSUHVHQWV VZHHSV %DVHG RQ WKHVH SRROHG 9(5V WKH FRPSXWHU 1LFROHW 0('*f ZDV SURJUDPPHG WR SURYLGH DPSOLWXGH PHDVXUHV DW GDWD SRLQWV DFURVV HDFK 9(5 ZDYHIRUP )RUWXQDWHO\ WKH GDWD DV GHVFULEHG XS WR WKLV SRLQW KDG EHHQ FROOHFWHG DV SDUW RI D ODUJHU ORQJLWXGLQDO VWXG\ FRQGXFWHG E\ 1DWKDQ : 3HUU\ -U 3K' 7KH DYDLODEOH

PAGE 27

DPSOLWXGH GDWD ZHUH WKHQ XVHG LQ WKLV VWXG\ WR GHULYH VWDQGDUG GHYLDWLRQ 6'f PHDVXUHV DOVR XVLQJ WKH 1LFROHW 0(' FRPSXWHU 7KH 6' SURJUDP UHVXOWHG LQ 6'V RQH DW HYHU\ IRXUWK SRLQW RI WKH GDWD SRLQWVf IRU HDFK 9(5 7KH 6'V ZHUH FRQGHQVHG WR RQH 6' E\ FRQn YHUWLQJ WKH 6'V EDFN WR YDULDQFHV JHWWLQJ DQ DYHUDJH YDULDQFH DQG WKHQ WDNLQJ WKH VTXDUH URRW RI WKDW YDOXH 7KH 9(5 ZDV DOVR GLYLGHG LQWR HDUO\ PLGGOH DQG ODWH FRPSRQHQWV EDVHG RQ PVHF SDVVHG 7KH HDUO\ FRPSRQHQW FRQVLVWHG RI WKH 9(5 IURP WR PVHF WKH ILUVW PVHF EHLQJ GURSSHG DV WKH YDULDQFH WKHUH LV IHOW WR UHIOHFW H[SHULPHQWDO HUURU 3HUU\ t &KLOGHUV f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f WKDW WKH DPSOLWXGH RI 9(5V LV KLJKO\ FRUUHODWHG ZLWK WKH VWDQGDUG GHYLDWLRQVf RI D SDUWLFXODU 9(5 WKHUHIRUH VWDQGDUG GHYLDWLRQV PD\ QHHG WR EH GLYLGHG E\ WKH 9(5 SHDNWRSHDN

PAGE 28

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f

PAGE 29

YROWV $ 'DWD 3RLQWV 'DWD 3RLQWV

PAGE 30

DPSOLWXGH LQ D QRUPDOL]LQJ SURFHVV ,Q RUGHU WR WHVW WKLV K\SRWKHVLV WKH 6'V RQ WKH ILUVW \HDU RI GDWD ZHUH FRPSDUHG WR WKH 6'V GLYLGHG E\ WKH SHDNWRSHDN DPSOLWXGHV RQ WKH ILUVW \HDU RI GDWD E\ XVLQJ D 3HDUVRQ PHDQV FRUUHODWLRQ SURFHGXUH 7KH WZR YDULDEOHV ZHUH IRXQG WR EH ODUJHO\ XQFRUUHODWHG DFURVV WKH 9(5V YDOXHV UDQJHG IURP WR f VXJJHVWLQJ WKDW VWDQGDUG GHYLDn WLRQV GR QRW QHHG WR EH GLYLGHG E\ WKH 9(5 DPSOLWXGHV LQ RUGHU WR GLVFXVV VWDQGDUG GHYLDWLRQ FKDQJHV %DVHG RQ WKLV ILQGLQJ WKH UHVW RI WKHVH DQDO\VHV DUH EDVHG RQ VLPSOH VWDQGDUG GHYLDWLRQV QRW 6'V GLYLGHG E\ SHDNWR SHDN DPSOLWXGHV 'DWD $QDO\VLV 6XEVHTXHQW DQDO\VHV ZHUH GRQH XVLQJ WKH *HQHUDO /LQHDU 0RGHOV SURFHGXUH IURP WKH 6$6 VWDWLVWLFDO SURJUDP SDFNDJH f 7KLV SURFHGXUH ZDV FKRVHQ RYHU RWKHU SRVVLELOLWLHV GXH WR LWV NQRZQ UHOLDELOLW\ DQG LWV IOH[LELOLW\ LQ WHVWLQJ SURFHGXUHV ,W LV EDVLFDOO\ D OLQHDU UHJUHVVLRQ SURFHGXUH XVLQJ D OHDVWVTXDUHV ILWWLQJ RI XQLYDULDWH DQG PXOWLYDULDWH PRGHOV RI UHJUHVVLRQ

PAGE 31

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f e f IURP WKH 6' GDWD GHULYHG IURP WKH +] GLIIXVH RFFLSLWDO FRQGLWLRQ WKH +] SDWWHUQ RFFLSLWDO FRQGLWLRQ DQG WKH +] GLIIXVH RFFLSLWDO FRQGLWLRQ :KROH 9(5 9DULDELOLW\ ,Q RUGHU WR DVVHVV FKDQJHV LQ YDULDELOLW\ RYHU WLPH DV HYLGHQFHG WKURXJK ZKROH 9(5 6'V WKH GDWD ZHUH H[DPLQHG

PAGE 32

E\ XVH RI WKH 6$6 */0 SURFHGXUH &KDQJHV RYHU WKH WKUHH \HDUV ZHUH H[DPLQHG VHSDUDWHO\ IRU HDFK VWLPXOXV FRQGLWLRQ DQG ORFDWLRQ DQG DQ RYHUDOO HIIHFW ZDV DVVHVVHG $V FDQ EH VHHQ LQ 7DEOH WKH RYHUDOO HIIHFW ZDV VLJQLILFDQW DW WKH e OHYHO ) f f 7KH LQGLYLGXDO DQDO\VHV LQGLFDWHG QR VLJQLILFDQW FKDQJHV LQ YDULDELOLW\ IURP \HDU WR \HDU ZKHUHDV WKHUH ZHUH FKDQJHV IURP \HDU WR \HDU DQG IURP \HDU WR \HDU SDUWLFXODUO\ IRU WKH RFFLSLWDO EUDLQ ORFDWLRQ 7KHUH ZHUH VLJQLILFDQW FKDQJHV DW WKH ULJKW OREH ORFDWLRQ IRU +] DQG +] SDWWHUQ IURP \HDU WR \HDU EXW WKH VLJQLILFDQW FKDQJH ZDV DW WKH OHIW OREH ORFDWLRQ IRU +] GLIIXVH 7DEOH VKRZV WKH PHDQ 6' DW HDFK \HDU IRU HDFK 9(5 DQG WKH GLUHFWLRQ RI FKDQJH ([FHSW LQ D IHZ FDVHV PRVW RI WKH FKDQJHV ZHUH D VWHDG\ GHFUHDVH LQ YDULDELOLW\ RYHU WLPH 7KH FKDQJHV LQ WKH SDULHWDO ORFDWLRQ IRU DOO WKUHH VWLPXOXV FRQGLWLRQV ZHUH LQFUHDVHV IURP \HDU WR \HDU WKHVH FKDQJHV ZHUH QRW VWDWLVWLFDOO\ VLJQLILFDQWf 7KH 6' FKDQJHV DW WKH RFFLSLWDO ORFDWLRQ IRU WKH +] GLIIXVH FRQGLWLRQ ZHUH WKH RQO\ RQHV WKDW GLG QRW VKRZ D OLQHDU FKDQJH WKHUH ZDV DQ LQFUHDVH IURP \HDU WR \HDU QRW D VWDWLVWLFDOO\ VLJQLILFDQW FKDQJHf DQG D GHFUHDVH IURP \HDU WR \HDU WKLV ZDV VLJQLILFDQW DV ZDV WKH RYHUDOO GHFUHDVH IURP \HDU WR \HDU f &RPSRQHQW 9(5 9DULDELOLW\ ,Q RUGHU WR GHWHFW DQ\ VLJQLILFDQW FKDQJHV LQ WKH YDULDELOLW\ RI WKH HDUO\ PLGGOH DQG ODWH FRPSRQHQWV RI

PAGE 33

7DEOH 6LJQLILFDQW 6' &KDQJHV 2YHU 7LPH IRU :KROH 9(5V
PAGE 34

7DEOH 0HDQ 6'V DQG 'LUHFWLRQV RI &KDQJH 2YHU 7LPH IRU :KROH 9(5V
PAGE 35

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

PAGE 36

7DEOH 6LJQLILFDQW 6' &KDQJHV 2YHU 7LPH IRU &RPSRQHQW 9(5V (DUO\0LGGOH 0LGGOH/DWH
PAGE 37

7DEOH 0HDQ 6'V DQG 'LUHFWLRQV RI &KDQJH 2YHU 7LPH IRU &RPSRQHQW 9(5V
PAGE 38

WR \HDU 6LQFH WKH ILUVW DQDO\VLV RQ WKH FRPSRQHQWV GHPRQVWUDWHG GLIIHUHQFHV EHWZHHQ WKHP WKDW ZHUH FRQVLVWHQW RYHU WLPH LW ZDV IHOW DSSURSULDWH WR ORRN DW WKH FKDQJH LQ FRPSRQHQW YDULDELOLW\ ZLWKLQ D JLYHQ \HDU 7DEOH JLYHV WKH UHVXOWV RI DQ DQDO\VLV FRPSDULQJ WKH 6'V RI WKH HDUO\ FRPSRQHQWV WR WKH 6'V RI WKH PLGGOH FRPSRQHQWV DQG WKH 6'V RI WKH PLGGOH FRPSRQHQWV WR WKH 6'V RI WKH ODWH FRPSRQHQWV ZLWKLQ \HDU n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n FDOO\ VLJQLILFDQW eB f e f 7KH LQGLYLGXDO DQDO\VHV LQGLFDWHG VWDWLVWLFDOO\ VLJQLILFDQW GLIIHUHQFHV LQ YDULDELOLW\ FKDQJH EHWZHHQ PDOHV DQG IHPDOHV IURP \HDU WR \HDU DQG IURP \HDU WR \HDU DW WKH ULJKW OREH ORFDWLRQ IRU WKH +] VWLPXOXV FRQGLWLRQ DQG DW WKH RFFLSLWDO ORFDWLRQ IRU WKH +] GLIIXVH VWLPXOXV ORFDWLRQ 7DEOH VKRZV WKH PHDQ 6' IRU WKH VH[HV DW HDFK \HDU IRU HDFK 9(5 DQG WKH GLUHFWLRQ RI FKDQJH

PAGE 39

7DEOH 6LJQLILFDQW 6' &KDQJHV IRU
PAGE 40

7DEOH 6LJQLILFDQW 6' &KDQJHV 2YHU 7LPH IRU :KROH 9(5V E\ 6H[
PAGE 41

7DEOH 0HDQ 6'V DQG 'LUHFWLRQV RI &KDQJH 2YHU 7LPH IRU :KROH 9(5V E\ 6H[
PAGE 42

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

PAGE 43

6(&7,21 ,9 ',6&866,21 7KH UHVXOWV RI WKLV ORQJLWXGLQDO VWXG\ LQGLFDWH VLJQLILFDQW FKDQJHV LQ WKH YDULDELOLW\ DV PHDVXUHG E\ VWDQGDUG GHYLDWLRQVf RI 9(5V RYHU WLPH LQ FKLOGUHQ IURP DJH ILYH WR DJH VHYHQ 2YHUDOO FKDQJH ZDV FKDUDFWHUL]HG E\ D FRQVLVWHQW SURJUHVVLYH GHFUHDVH LQ YDULDELOLW\ RYHU WLPH ZLWK WKH PDMRU VKLIWV EHWZHHQ WKH DJHV RI ILYH DQG VHYHQ DQG VL[ DQG VHYHQ 9(5 YDULn DELOLW\ FKDQJHG EHWZHHQ WKH DJHV RI ILYH DQG VL[ EXW QRW WR D VWDWLVWLFDOO\ VLJQLILFDQW GHJUHH VXJJHVWLQJ WKDW FKDQJHV LQ FRUWLFDO SURFHVVLQJ DV D IXQFWLRQ RI DJH DUH QRW VLJQLILFDQW IURP DJH ILYH WR DJH VL[ 7KH PDMRU ILQGLQJ RI D FRQVLVWHQW FKDQJH LQ YDULDELOLW\ DV D IXQFWLRQ RI WLPH LV SRVLWLYH ZLWK UHVSHFW WR WKH GHYHORSPHQWDO UHVHDUFK SUHYLRXVO\ GRQH LQ WKH 9(5 DUHD DQG ZLWK WKH SUHGLFWLRQV RI WKLV VWXG\ &DOODZD\ IRXQG LQ RQH VWXG\ &DOODZD\ t +DOOLGD\ f WKDW YDULDELOLW\ GHFUHDVHG ZLWK LQFUHDVLQJ DJH DQG ODWHU VXJJHVWHG WKDW WKH FKDQJH PLJKW EH GXH WR DQ LQFUHDVLQJ VWDELOLW\ RI FRJQLWLYH IXQFWLRQLQJ ZLWK DJH &DOODZD\ f 2WKHU DXWKRUV DOVR IRXQG PRUH YDULDEOH (3V LQ FKLOGUHQ DV FRPSDUHG WR DGXOWV (OOLQJVRQ %DUQHW

PAGE 44

HW DO f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
PAGE 45

FRPSOH[ YLVXDO GLVFULPLQDWLRQ RU LQWHJUDWLRQ 7KXV SDULHWDO OREH YDULDELOLW\ LQ WKLV JURXS RI FKLOGUHQ DSSHDUHG WR EH LQFUHDVLQJ PRVW OLNHO\ GXH WR DQ HDUOLHU VWDJH RI GHYHORSPHQW RI FHUWDLQ YLVXDOO\UHODWHG FRJQLWLYH IXQFWLRQV 3UHVWRQ HW DO f IRXQG 9(5V IURP WKH OHIW SDULHWDO OREH ORFDWLRQ WR EH LPSRUWDQW LQ GLIIHUHQWLDWLQJ EHWZHHQ JURXSV RI QRUPDO DQG GLVDEOHG UHDGLQJ DGXOWV 1RUPDO UHDGHUV VKRZHG ODUJHU 9(5 DPSOLWXGH GLIIHUHQFHV EHWZHHQ D ZRUN DQG D IODVK FRQGLWLRQ DW WKH OHIW SDULHWDO OREH ORFDWLRQ DV FRPSDUHG WR GLVDEOHG UHDGHUV 7KH VWXG\ EDVLFDOO\ VXSSRUWV HDUOLHU ILQGLQJV RI GHFUHDVHG 9(5 DPSOLWXGH DW WKH OHIW SDULHWDO OREH ORFDWLRQ LQ GLVDEOHG UHDGHUV &RQQHUV 3UHVWRQ *XWKULH t &KLOGV f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

PAGE 46

GHPRQVWUDWHG PRUH YDULDELOLW\ ZLWKLQ D JLYHQ \HDU DW D JLYHQ VWLPXOXV ORFDWLRQ DQG FRQGLWLRQ EXW WKHLU YDULn DELOLW\ FKDQJH IURP \HDU WR \HDU ZDV PRUH WKDQ WKDW RI WKH PDOHV 7KH FKDQJH LQ WKH IHPDOHV IROORZHG WKH SDWWHUQ RI GHFUHDVLQJ YDULDELOLW\ RYHU WLPH ZKHUHDV WKH PDOHV RIWHQ GHPRQVWUDWHG D QRQOLQHDU FKDQJH RI DQ LQFUHDVH IURP DJH ILYH WR DJH VL[ DQG WKHQ D GHFUHDVH IURP DJH VL[ WR DJH VHYHQ $SSDUHQWO\ WKH YDULDELOLW\ FRQWULEXWHG E\ WKH IHPDOHV WR WKH WRWDO VDPSOH PDVNHG VRPHZKDW WKH SDWWHUQ RI FKDQJH LQ WKH PDOHV ZKLFK GLIIHUHG VXEVWDQWLDOO\ IURP WKH IHPDOHV 7KDW WKH IHPDOHV GHPRQVWUDWHG PRUH 9(5 YDULDELOLW\ WKDQ PDOHV LQ FRUWLFDO SURFHVVLQJ RYHUDOO SRVVLEO\ LQGLFDWHV PRUH IOH[LELOLW\ LQ SURFHVVLQJ DW WKLV DJH UDQJH RU LW PD\ EH WKDW D EDVLF VH[ GLIIHUHQFH LQ WKH GHYHORSPHQW RI FRUWLFDO SURFHVVLQJ H[LVWV 7KH GLIn IHUHQFH EHWZHHQ WKH VH[HV LQ WKH GLUHFWLRQ RI WKH FKDQJH LQ YDULDELOLW\ PD\ UHIOHFW D GLIIHUHQFH LQ PDWXUDWLRQDO L VWDJH RI WKH FRUWLFDO IXQFWLRQV GHWHFWHG SRVVLEO\ UHODWHG WR D EDVLF VH[ GLIIHUHQFH LQ FRUWLFDO IXQFWLRQ GHYHORSPHQW 7KH PDOHV PD\ EH VLPSO\ GHPRQVWUDWLQJ D ODJ LQ ZKLFK WKH\ EHJLQ WR GHPRQVWUDWH VLPLODU FRJQLWLYH SURFHVVLQJ E\ DJH VHYHQ 7KH GLIIHUHQFH EHWZHHQ WKH VH[HV LQ WKH FKDQJH LQ YDULDELOLW\ DW WKH SDULHWDO OREH ORFDWLRQ IURP DJH VL[ WR VHYHQ LV RI LQWHUHVW 7KH GHFUHDVH LQ YDULDELOLW\ IURP DJH VL[ WR VHYHQ IRU WKH PDOHV SDUDOOHOV WKH SDWWHUQ

PAGE 47

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

PAGE 48

EHFDPH VLJQLILFDQWO\ OHVV YDULDEOH LQ UHVSRQVH WR FRPSOH[ VWLPXOL ZKLOH WKH OHIW OREHn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f +RZn HYHU D FRQVLVWHQW SDWWHUQ RI YDULDELOLW\ FKDQJH DFURVV FRPSRQHQWV ZLWKLQ FRQGLWLRQV LV QRW DSSDUHQW LQ VRPH FDVHV YDULDELOLW\ LQFUHDVHV LQ VRPH LW GHFUHDVHV DQG LQ VRPH LW LV QRQOLQHDU 7KHUHIRUH WKH K\SRWKHVLV WKDW HDUO\ FRPSRQHQWV ZRXOG VKRZ OHVV YDULDELOLW\ FKDQJH RYHU WLPH WKDQ ODWH FRPSRQHQWV ZDV QRW XSKHOG (YLGHQWO\ DW OHDVW IRU WKLV VDPSOH WKH YDULDELOLW\ RI WKH FRPSRQHQWV RI DQ\ SDUWLFXODU 9(5 UHVSRQVH GRHV QRW UHIOHFW DQ HDVLO\ GHWHFWDEOH SDWWHUQ RI FKDQJH LQ FRJQLWLYH IXQFWLRQLQJ

PAGE 49

7KH PDMRU ILQGLQJ LQ WKLV VWXG\ RI D FRQVLVWHQW OLQHDU GHFUHDVH LQ WKH YDULDELOLW\ RI WKH ZKROH 9(5 UHVSRQVH DPSOLWXGH DQG LWV FRPSRQHQWV FRPSOHPHQWV DQG H[WHQGV WKRXJKW DQG ZRUN GRQH LQ WKH DUHD RI FRJQLWLYH GHYHORSPHQW $V PHQWLRQHG SUHYLRXVO\ WKRXJKW LQ WKH GHYHORSPHQWDO DUHD SRLQWV WR FKDQJHV LQ IOH[LELOLW\ RI FRUWLFDO SURFHVVLQJ IRU SURSHU DGDSWDWLRQ WR WKH HQYLURQPHQW :KLWH f GLVFXVVHV WKH QDWXUH RI FKDQJHV LQ FKLOGUHQn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f 'XULQJ WKH LQWXLWLYH SKDVH RI WKH SUHRSHUDWLRQDO SHULRG WZR WR VHYHQ \HDUV RI DJHf WKH FKLOG EHJLQV WR OHDUQ WKH FRQFHSW RI FRQVHUYDWLRQ :LWK PDWXULW\ WKH FKLOG OHDUQV WR UHVSRQG PRUH IOH[LEO\ DQG IRFXVHV RQ WKH PRUH UHOHYDQW DVSHFWV RI DQ REMHFW RU VLWXDWLRQ LQ RUGHU WR DWWDLQ FRQVHUYDWLRQ VNLOOV

PAGE 50

6RPH WKHRULHV RI LQGLYLGXDO FRJQLWLYH VW\OH DUH DOVR SHUWLQHQW WR WKH WRSLF RI UHVSRQVH IOH[LELOLW\ .DJDQnV UHIHFWLYLW\LPSXVLYLW\ GLPHQVLRQ .DJDQ 5RVPDQ 'D\ $OEHUW t 3KLOOLSV f DGGUHVVHV WKH FRJQLWLYH VW\OH GLIIHUHQFHV EHWZHHQ FKLOGUHQ ZKR WDNH WKH WLPH DQG RSSRUWXQLW\ WR WU\ GLIIHUHQW DOWHUQDWLYHV DQG VROXWLRQV WR D WDVN VLWXDWLRQ DQG WKRVH ZKR LPSXOVLYHO\ UHVSRQG DIWHU WHVWLQJ D OLPLWHG QXPEHU RI K\SRWKHVHV ,Q WKLV FRQWH[W D UHIOHFWLYH IOH[LEOH FRJQLWLYH VW\OH JHQHUDOO\ UHVXOWV LQ PRUH DFFXUDWH UHVSRQGLQJ WKDQ D OHVV YDULHG RQH :LWNLQnV ILHOG GHSHQGHQFH DQG LQGHSHQGHQFH :LWNLQ '\N )DWHUVRQ *RRGHQRXJK t .DUS f UHIHUV WR WKH WHQGHQF\ WR SHUFHLYH WKH SHUFHSWXDO ILHOG DV XQGLIIHUHQWLDWHG YHUVXV WKH WHQGHQF\ WR DQDO\]H WKH FRQVWLWXHQWV RI WKH ILHOG DQG SHUFHLYH WKH GLIIHUHQW SDUWV DV VHSDUDWH IURP WKH ILHOG &KLOGUHQ DUH DSSDUHQWO\ PRUH ILHOG GHSHQGHQW DQG WKLV OHYHOV RII E\ WKH WHHQ \HDUV 7KH ILHOG LQGHn SHQGHQW FRJQLWLYH VW\OH LPSOLHV D PRUH IOH[LEOH PRGH RI UHVSRQGLQJ LQ WKDW PDQ\ SDUWV RI WKH SLFWXUH DUH GHWHFWHG UDWKHU WKDQ WKH ZKROH SLFWXUH EHLQJ GHWHFWHG DV RQH FRQILJXUDWLRQ :KLWHnV f DQG 3LDJHWnV f WKHRULHV PD\ EH VHHQ DV FRQGXFLYH WR D K\SRWKHVLV RI FKDQJH SDUWLFXODUO\ RQH WRZDUG GHFUHDVLQJ YDULDELOLW\ LQ FRUWLFDO IXQFWLRQLQJ .DJDQ HW DO f DQG :LWNLQ HW DO f SUHVHQW LGHDV

PAGE 51

WKDW DUH PRUH FRQGXFLYH WR D K\SRWKHVLV RI LQFUHDVLQJ FKDQJH LQ FRUWLFDO IXQFWLRQLQJ YDULDELOLW\ ZLWK DJH 6FRWW f EOHQGV WKH WZR GLUHFWLRQV DQG VXJJHVWV WKDW KLJKHU RUJDQLVPV EDODQFH D WHQGHQF\ WRZDUG EHKDYLQJ YDULDEO\ DQG RQH WRZDUG EHKDYLQJ SUHGLFWDEO\ ,Q D W\SLFDO OHDUQLQJ VLWXDWLRQ DQ LQGLYLGXDO QHHGV WR GLVSOD\ D FHUWDLQ DPRXQW RI YDULDELOLW\ LQ UHVSRQGLQJ IRU SURSHU DGMXVWPHQW EXW ODWHU EHKDYHV PRUH SUHGLFWDEO\ ZKHQ OHDUQLQJ KDV RFFXUUHG :HUQHU WDNHV DOPRVW WKH RSSRVLWH YLHZSRLQW /DQJHU f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

PAGE 52

PHDVXUH XWLOL]HG DUH EHFRPLQJ PRUH QDUURZ DQG HIILFLHQW LQ QDWXUH SRVVLEO\ GXH WR D SUDFWLFH HIIHFW 7KH FKDQJH PD\ UHIOHFW D FRJQLWLYH IXQFWLRQ WKDW UHDFKHG PDWXULW\ DW DQ HDUOLHU DJH DQG UHSHDWHG XVH KDV VKDSHG LQWR DQ LQFUHDVLQJO\ VWDEOH IXQFWLRQ +RZHYHU DV GLVFXVVHG HDUOLHU WKH 9(5 GDWD DOVR UHIOHFWHG LQFUHDVLQJ YDULn DELOLW\ LQ WKH SDULHWDO OREH ORFDWLRQ VXJJHVWLQJ WKDW IXQFWLRQV LQ WKLV DUHD PD\ EH QHZO\ GHYHORSLQJ DQG FRQn VHTXHQWO\ LQFUHDVLQJ LQ IOH[LELOLW\ 6LJQLILFDQW WR WKH ILQGLQJV LV WKH GLIIHULQJ FRQWULEXWLRQ E\ HDFK VH[ WR WKH RYHUDOO YDULDELOLW\ PHDVXUHV 7KH GLIIHUHQFHV LQ YDULDELOLW\ FKDQJHV EHWZHHQ PDOHV DQG IHPDOHV VXJJHVWV D VWULNLQJ DQG VWDEOH GLIIHUHQFH LQ WKH GHYHORSPHQW RI FRJQLWLYH IXQFWLRQV DW WKLV DJH UDQJH 7KH IDFW WKDW WKH DYHUDJH ,4 RI WKHVH FKLOGUHQ ZDV ZHOO DERYH WKH DYHUDJH PD\ DOVR KDYH LQIOXHQFHG WKH SHUn FHLYHG YDULDELOLW\ FKDQJHV 3HUKDSV WKLV JURXS ZDV VRPHZKDW DGYDQFHG LQ WKH GHYHORSPHQW RI WKHLU RYHUDOO FRJQLWLYH IXQFWLRQLQJ FRQWULEXWLQJ WR WKH GHWHFWLRQ RI GHFUHDVLQJ YDULDELOLW\ LQ PRVW FRQGLWLRQV $Q LQYHVWLn JDWLRQ RI D JURXS RI FKLOGUHQ ZLWK D ORZHU DYHUDJH ,4 DQG RQH ZLWK WKH SDULHWDO OREH ORFDWLRQ PHDVXUHG IRU PRUH WKDQ WZR \HDUV VKRXOG FHUWDLQO\ KHOS FODULI\ VRPH RI WKHVH LVVXHV ,Q FRQFOXVLRQ WKLV VWXG\ GHPRQVWUDWHG VLJQLILFDQW FKDQJHV LQ WKH YDULDELOLW\ RI FRJQLWLYH SURFHVVLQJ DV D

PAGE 53

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n VWDQGLQJ DQG PDQDJLQJ VSHFLILF GHYHORSPHQW GLIILFXOWLHV WKDW DSSHDU WR EH VH[UHODWHG VXFK DV VSHFLILF UHDGLQJ GLVDELOLW\ ZKLFK LV PRUH SUHYDOHQW LQ PDOHV WKDQ LQ IHPDOHV :HQGHU f 7KH YDULDELOLW\ PHDVXUH KDV SURYLGHG D YLHZ RI DQ DVSHFW RI FKLOG GHYHORSPHQW WKDW LV RIWHQ QHJOHFWHG WKDW RI WKH IOH[LELOLW\ RI UHVSRQGLQJ ZKLFK PXVW QHFHVVDULO\ FKDQJH RYHU WLPH IRU DSSURSULDWH JURZWK DQG DGDSWDWLRQ WR WKH HQYLURQPHQW &RQVLVWHQW SDWWHUQV RI FKDQJH LQ YDULn DELOLW\ ZHUH IRXQG LPSO\LQJ WKDW IOH[LELOLW\ LV DQ LPSRUWDQW DQG SRVVLEO\ LQKHUHQW GLPHQVLRQ RI WKH QRUPDO JURZWK DQG GHYHORSPHQW RI FRJQLWLYH IXQFWLRQLQJ 7KH ILQGLQJ RI GLIIHUHQW GLUHFWLRQV RI FKDQJH GHSHQGLQJ RQ EUDLQ ORFDWLRQ VXSSRUWV WKH QRWLRQ WKDW GLIIHUHQW EUDLQ DUHDV GHYHORS DW GLIIHUHQW UDWHV DQG WKDW WKLV LV UHIOHFWHG LQ EHKDYLRU 7KH LPSOLFDWLRQV IRU WKH GLIIHUHQFH LQ SDULHWDO OREH GDWD

PAGE 54

GHSHQGLQJ RQ VH[ WR GDWD UHOHYDQW WR WKH SUREOHP RI GLVDEOHG UHDGHUV LQGLFDWHV WKH SRVVLEOH XWLOLW\ RI WKLV PHDVXUH LQ WKH HDUO\ GHWHFWLRQ RI SUREOHPV ZLWK FRJQLWLYH IXQFWLRQV WKDW GHYHORS DW GLIIHUHQW UDWHV 7KH ORQJLWXGLQDO GDWD H[DPLQHG KHUH SURYLGH WKH EHJLQQLQJV RI QHHGHG EDVHOLQH GDWD IRU WKH RYHUDOO QRUPDO FKDQJHV LQ FRJQLWLYH IOH[LELOLW\ ZKLFK PD\ HYHQWXDOO\ EH XVHG WR DVVHVV DEQRUPDO JURZWK DQG UHODWHG GLIILFXOWLHV LQ WKH FRJQLWLYH GHYHORSPHQW RI FKLOGUHQ

PAGE 55

5()(5(1&(6 $OOLVRQ 7 *RII : 5 $EUDKDPLDQ + $ t 5RVQHU % 6 7KH HIIHFWV RI EDUELWXUDWH DQHVWKHVLD XSRQ KXPDQ VRPDWRn VHQVRU\ HYRNHG UHVSRQVHV ((* 6XSSO B %DUQHW $ % t /RGJH $ &OLFN HYRNHG ((* UHVSRQVHV LQ QRUPDO DQG GHYHORSPHQWDOO\ UHWDUGHG LQIDQWV 1DWXUH %DUQHW $ % 2KOULFK ( 6 :HLVV 3 t 6KDQNV % $XGLWRU\ (3V GXULQJ VOHHS LQ QRUPDO FKLOGUHQ IURP WHQ GD\V WR WKUHH \HDUV RI DJH ((* B %DUU $ *RRGQLJKW + 6DLO 3 t +HOZLJ 7 $ XVHUnV JXLGH WR 6$6 5DOHLTK 1& 6SDUNV 3UHVV %HHU\ ( 'HYHORSPHQWDO WHVW RI YLVXDOPRWRU LQWHJUDWLRQ &KLFDJR )RHWW %HLQKRFNHU %URRNV 3 5 $QIHQJHU ( t &RSHQKDYHU 5 0 (OHFWURSHULPHWU\ ,((( 7UDQVDFWLRQV LQ %LRPHGLFDO (QJLQHHULQJ B %LJXP + $ 'XVWPDQ 5 ( t %HFN ( & 9LVXDO DQG VRPDWRVHQVRU\ HYRNHG UHVSRQVHV IURP PRQJRORLG DQG QRUPDO FKLOGUHQ ((* %RUJH ) 3HUFHSWXDO PRGXODWLRQ DQG YDULDELOLW\ LQ SV\FKLDWULF SDWLHQWV $UFKLYHV RI *HQHUDO 3V\FKLDWU\ %UD]LHU 0 $ % ,QIRUPDWLRQ FDUU\LQJ FKDUDFWHULVWL FV RI EUDLQ UHVSRQVHV ((* 6XSSO B %UD]LHU 0 $ % $ VWXG\ RI WKH YDULDELOLW\ RI UHVSRQVH WR IOLFNHU 7KH LQIOXHQFH RI RWKHU VHQVRU\ VWLPXOL ,Q + ( +HQNHV t / + YDQ GHU 7ZHH (GVf ),LFNHU 7KH +DJXH 'U : -XQN 3XEOLVKHUV %XFKVEDXP 0 6 $YHUDJH HYRNHG UHVSRQVH DQG VWLPXOXV LQWHQVLW\ LQ LGHQWLFDO DQG IUDWHUQDO WZLQV 3K\VLRORTLFDO 3V\FKRORJ\ $f &DOODZD\ ( $YHUDJHG HYRNHG UHVSRQVHV LQ SV\FKLDWU\ -RXUQDO RI 1HUYRXV DQG 0HQWDO 'LVHDVHV

PAGE 56

&DOODZD\ ( %UDLQ HOHFWULFDO SRWHQWLDOV DQG LQGLYLGXDO SV\FKRORJLFDO GLIIHUHQFHV 1HZ
PAGE 57

,QGHUELW]HQ / % %XFKVEDXP 0 t 6LOYHUPDQ ((* DYHUDJHG HYRNHG UHVSRQVHV DQG SHUFHSWXDO YDULDELOLW\ LQ VFKL]RSKUHQLD $UFKLYHV RI *HQHUDO 3V\FKLDWU\ -DVSHU + + 7KH WHQWZHQW\ HOHFWURGH V\VWHP RI WKH LQWHUQDWLRQDO IHGHUDWLRQ ((* -RKQ ( 5 5XFKNLQ 6 t 9LOOHJDV ([SHULPHQWDO EDFNJURXQG 6LJQDO DQDO\VLV DQG EHKDYLRU FRUUHODWHV RI HYRNHG SRWHQWLDO FRQILJXUDWLRQV LQ FDWV $QQDOV RI WKH 1HZ
PAGE 58

5DSSDSRUW 0 +RSNLQV + +DOO %HOOH]D 7 t +DOO 5 $ 6FKL]RSKUHQLD DQG HYRNHG SRWHQWLDOV 0D[LPXP DPSOLWXGH IUHTXHQF\ RI SHDNV YDULDELOLW\ DQG SKHQRWKLD]LQH HIIHFWV 3V\FKRSK\VLRORT\ 5KRGHV / ( 'XVWPDQ 5 ( t %HFN ( & 7KH 9(5 $ FRPSDULVRQ RI EULJKW DQG GXOO FKLOGUHQ ((* 5RELQVRQ 1 6WDWLVWLFDO IHDWXUHV RI EUDLQ UHVSRQVHV XQGHU FRQGLWLRQV RI DWWHQWLRQ DQG KDELWXDWLRQ 3V\FKRORJLFDO 5HSRUWV } 6FRWW 3 7KH JHQHWLF DQG HQYLURQPHQWDO GLIIHUHQWLDO RI EHKDYLRU ,Q % +DUULV (Gf 7KH FRQFHSW RI GHYHORSPHQW 0LQQHVRWD 8QLYHUVLW\ RI 0LQQHVRWD 3UHVV 6KXFDUG : t +RUQ / (YRNHG FRUWLFDO SRWHQWLDOV DQG PHDVXUHPHQW RI KXPDQ DELOLWLHV -RXUQDO RI &RPn SDUDWLYH DQG 3K\VLRORJLFDO 3V\FKRORJ\ M 6WUHHW : 3HUU\ 1 : -U t &XQQLQJKDP : 5 $ IDFWRU DQDO\VLV RI YLVXDO HYRNHG UHVSRQVHV 3V\FKRn SK\VLRO RJ\ B 6XWWRQ 6 %UDXQ 0 =XELQ t -RKQ ( 5 (YRNHG SRWHQWLDO FRUUHODWHV RI VWLPXOXV XQFHUWDLQW\ 6FLHQFH 8WWDO : 5 'R FRPSRXQG HYRNHG SRWHQWLDOV UHIOHFW SV\FKRn ORJLFDO FRGHV" 3V\FKRORJLFDO %XOOHWLQ B :HFKVOHU 0DQXDO IRU :HFKVOHU SUHVFKRRO DQG SULPDU\ VFDOH RI LQWHOOLJHQFH 1HZ
PAGE 59


PAGE 60

%,2*5$3+,&$/ 6.(7&+ 1DPH : -HDQQH 6WUHHW ZDV ERUQ RQ 2FWREHU LQ /H[LQJWRQ 9LUJLQLD LQ ZKDW ZDV RQFH WKH KRPH RI *HQHUDO 6WRQHZDOO -DFNVRQ ZDV DW WKH WLPH RI P\ ELUWK D PLOLWDU\ KRVSLWDO DQG LV QRZ D PXVHXP WR *HQHUDO -DFNVRQ $V P\ IDWKHU ZDV LQ WKH PLOLWDU\ VHUYLFH P\ IDPLO\ ZKLFK FRQVLVWHG RI P\ SDUHQWV WZR ROGHU VLVWHUV DQ ROGHU EURWKHU DQG P\VHOI PRYHG DQG WUDYHOHG TXLWH D ELW OLYHG LQ 2KLR $ODEDPD :HVW *HUPDQ\ DQG 0DVVDFKXVHWWV EHIRUH VHWWOLQJ LQ )ORULGD XSRQ P\ IDWKHUnV UHWLUHPHQW IURP WKH VHUYLFH LQ 7KH PRYLQJ DQG WUDn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

PAGE 61

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

PAGE 62

, FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ OLf 2N0 ?F?6A;LK8 :LOH\ ) $ V V R F L L D V E X Un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

PAGE 63

81,9(56,7< 2) )/25,'$

PAGE 64

r? / N $ 06