Citation
Rate of juvenile delinquency across family functioning and personality

Material Information

Title:
Rate of juvenile delinquency across family functioning and personality
Creator:
Cluxton, John C., 1968-
Publication Date:
Language:
English
Physical Description:
xiii, 188 leaves : ; 29 cm.

Subjects

Subjects / Keywords:
Adolescents ( jstor )
Child psychology ( jstor )
Delinquency ( jstor )
Juvenile delinquency ( jstor )
Juveniles ( jstor )
Logistic regression ( jstor )
Modeling ( jstor )
Personality inventories ( jstor )
Social interaction ( jstor )
Young offenders ( jstor )
Counselor Education thesis, Ph.D ( lcsh )
Dissertations, Academic -- Counselor Education -- UF ( lcsh )
City of Panama City ( local )
Genre:
bibliography ( marcgt )
non-fiction ( marcgt )

Notes

Thesis:
Thesis (Ph.D.)--University of Florida, 1999.
Bibliography:
Includes bibliographical references (leaves 162-187).
General Note:
Typescript.
General Note:
Vita.
Statement of Responsibility:
by John C. Cluxton.

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:
030471454 ( ALEPH )
42451562 ( OCLC )
Classification:
LD1780 1999 .C649 ( lcc )

Downloads

This item has the following downloads:


Full Text












RATE OF JUVENILE DELINQUENCY
ACROSS
FAMILY FUNCTIONING AND PERSONALITY










By

JOHN C. CLUXTON


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

UNIVERSITY OF FLORIDA


1999






























Copyright 1999

By

John C. Cluxton




















This dissertation is dedicated

to all of those throughout my life

who believed and encouraged me to say

"I can."



And



To all of my family and friends

who continue to stand by me

while I strive to have

my moments of

"I did it."














ACKNOWLEDGMENTS

I extend my deepest appreciation to everyone who has stood by me while I've

slowly progressed, like the river that eventually wins over the rock, through to the

completion of this dissertation.

I extend special thanks to Dr. Bob and Mrs. Pat Lee for giving me an opportunity

to work and train with the challenging juvenile delinquent clientele at C.R.E.S.T.

Services Inc. Through their ever present guidance and passion, the Lees helped me to

develop a holistic understanding of the complex delinquent population.

I owe a great debt of gratitude to my colleagues and friends at the University of

Florida Department of Counselor Education and to both the Alachua and the Columbia

County Departments of Juvenile Justice. The collection, scoring and success of this

dissertation would not have been possible without their help.

I feel very fortunate to have been involved in a graduate program which offered

such diverse perspectives. Throughout my graduate education the professors encouraged

me to develop my own views based on coherent theory, clinical experience and solid

research. I also want to thank the wonderful group of professionals on my committee who

encouraged me to follow my own views while offering me the guidance, feedback, and

expertise needed to complete my dissertation. Specifically, I thank Dr. Silvia E. Rafuls

for her clinical supervision of my training and her challenging questions which led to











ways to improve my research; Dr. Robert D. Myrick for his instruction and expertise

working with and understanding the adolescent population; and Dr. M. David Miller for

his statistical guidance and ability to instill within me a sense of confidence in my ability

to accomplish the design and analysis of this dissertation.

I offer a special thanks to Dr. Peter A. D. Sherrard, not only for chairing my

committee, but more importantly, for his overall impact on my professional development.

I will be forever grateful for the many times I experienced Dr. Sherrard's artistry of

teaching. He was able to create for me a sense of genuine support as he helped me to

understand the connections between the little things, while at the same time, challenged

me to develop an understanding of the bigger picture.

Finally, I thank my family and friends who have supported me. Their continuous

encouragement helped fuel my persistence and ultimate ability to complete this

dissertation. I especially thank my wife, Tali, who fought beside me through the

frustrations and sacrifices. She helped to energize me through her challenges to reach

completion. Most importantly, Tali offered her love and her belief that I could indeed

succeed.

Now that I have finished this dissertation, I know the answer to the question,

"How did the turtle win the race?" He did it slowly, with persistent focus, and most

importantly, always with the support of those who believed in him.














TABLE OF CONTENTS
page
A CKN OW LEDGM ENTS ............................................................................................ iv

LIST OF TA BLES ........................................................................................................ x

LIST OF FIGURES ....................................................................................................... xi

ABSTRA CT ................................................................................................................. xii

CHAPTERS

I INTRODUCTION .............................................................................................. 1

Scope of the Problem .......................................................................................... 2
Theoretical Fram work ...................................................................................... 9
Eco-Systemic Model of Human Development........................................ 10
Construct of Personality ......................................................................... 14
Circumplex Model of Marital and Family Systems............................... 18
Rationale for the Study ..................................................................................... 20
Statem ent of the Problem .................................................................................. 21
Need for the Study ............................................................................................ 21
Purpose of the Study ......................................................................................... 24
Research Questions .......................................................................................... 25
Definition of Term s .......................................................................................... 27
Organization of the Study ................................................................................ 31

2 REVIEW OF THE LITERATURE ................................................................. 33

Introduction ..................................................................................................... 33
Personality and Delinquency ............................................................................ 34
Fam ily Functioning and Delinquency .............................................................. 41
Structural Variables .............................................................................. 41
Fam ily Functioning ............................................................................... 43
Circumplex Model of Marital and Family Systems ................................ 45
Adaptability ............................................................................... 49
Cohesion..................................................................................... 50











Eco-System ic M odel of Hum an Developm ent................................................. 53
Relationship Between Family Functioning and Personality ................ 57
Reciprocal Nature of Variables on Development................................. 59
Protective and Risk Factors ................................................................. 61
Goodness of Fit ..................................................................................... 65
Sum m ary ........................................................................................................... 67

3 M ETHODOLOGY .......................................................................................... 68

Statement of Purpose ....................................................................................... 68
Delineation of Relevant Variables ................................................................... 69
Dependent Variable .............................................................................. 69
Independent Variables .......................................................................... 69
Age............................................................................................. 69
Gender ....................................................................................... 70
Race ........................................................................................... 71
Adaptability .............................................................................. 72
Cohesion ................................................................................... 72
Social m aladjustm ent scale (SA) .............................................. 72
M anifest aggression scale (M A) ............................................... 72
Asocial index (AI) ..................................................................... 73
Hypotheses ....................................................................................................... 73
Data Analysis .................................................................................................... 77
Description of the Population ........................................................................... 79
Sam pling Procedures ......................................................................................... 80
Sam ple .............................................................................................................. 81
Data Collection ................................................................................................. 82
Instrum entation ................................................................................................ 83
Jesness Personality Inventory .............................................................. 83
Family Adaptability and Cohesion Evaluation Scales
(FACES II) ........................................................................................ 87
Sum m ary........................................................................................................... 91

4 RESULTS........................................................................................................... 92

Introduction ..................................................................................................... 92
Demographic Characteristics of the Research Sample ..................................... 93
Descriptive Data on Categorical Variables ....................................................... 94
Gender .................................................................................................. 94
Ethnicity ................................................................................................ 95











Descriptive Data on Interval V ariables ............................................................ 96
Age ........................................................................................................ 96
Cohesion Scale ..................................................................................... 96
A daptability Scale ................................................................................ 97
Social M aladjustm ent Scale .................................................................. 98
M anifest Aggression Scale ................................................................... 98
Asocial Index ....................................................................................... 99
Inferential Statistical Analysis Procedures ........................................................ 100
Bivariate Logistic Com prisons .......................................................... 102
M ultinom ial Logistic Regression Results .............................................. 104
Evaluation of Hypotheses ................................................................................. 106
Sum m ary ........................................................................................................... 111

5 DISCUSSION .................................................................................................... 113

Introduction...................................................................................................... 113
Overview of Study ............................................................................................ 113
Evaluation of Hypotheses ................................................................................ 116
Discussion of Results ....................................................................................... 119
Relationship of Age to Rate of Juvenile Delinquency........................... 119
Relationship of Gender to Rate of Juvenile Delinquency..................... 120
Relationship of Race to Rate of Juvenile Delinquency......................... 121
Relationship of Personality and Family Functioning
to Rate of Juvenile Delinquency....................................................... 122
Research question 6 & 7........................................................... 123
Research question 5................................................................. 125
Lim stations of Study....................................................................................... 131
Practical Im plications of the Results.............................................................. 134
Assessm ent......................................................................................... 134
Training and Practice.......................................................................... 135
Social Policy....................................................................................... 136
Recom m endations........................................................................................... 136
Meta Theory of Hierarchical Cybernetic Feedback Loops............................. 140
Chapter Sum m ary........................................................................................... 147



APPENDICES

A JESNESS PERSONALITY INVENTORY ..................................................... 149











B FAMILY ADAPTABILITY AND COHESION EVALUATION SCALES
(FA CES-Il) ..................................................................................................... 151

C DEMOGRAPHIC INFORMATION................................................................ 153

D LINEAR SCORING AND INTERPRETATION FOR FACES-11 .................. 156

E JESNESS PERSONALITY INVENTORY ANSWER SHEET...................... 158

F JESNESS PERSONALITY INVENTORY PROFILE SHEET ....................... 160

REFEREN CES .............................................................................................................. 162

BIOGRAPHICAL SKETCH ......................................................................................... 188














LIST OF TABLES
Table page

1 Frequency Distribution by Gender and Level of Delinquent Offending .......... 94

2 Frequency Distribution by Gender and Ethnicity............................................. 95

3 Descriptive Data on Interval Variables............................................................. 99

4 Bivariate Comparison Results........................................................................... 103

5 Multinomial Logistic Regression Results for Model 1.................................... 104

6 Multinomial Logistic Regression Results for Model 2..................................... 105

7 Statistical Tests of Hypotheses......................................................................... 110

8 Frequency Distribution of Males by Rate of Offending Across
Combinations of Cohesion (C) and Manifest Aggression (MA)................. 128

9 Frequency Distribution of Females by Rate of Offending Across
Combinations of Cohesion (C) and Manifest Aggression (MA)................. 129














LIST OF FIGURES
Figure page

1 Circumplex Model of Marital and Family Systems ........................................ 19

2 Thee-Dimensional Family Circumplex Model............................................... 88

3 Powers (1973) meta theory of hierarchical feedback loops applied
to personality, family functioning, and delinquency..................................... 144














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

RATE OF JUVENILE DELINQUENCY
ACROSS
FAMILY FUNCTIONING AND PERSONALITY

By

John C. Cluxton

August 1999

Chairperson: Dr. Peter A. D. Sherrard
Major Department: Counselor Education

This study was guided by a transactional and eco-systemic conceptualization of

delinquency risk and predicted that the level of development of antisocial behaviors is a

function of the interaction among individual and contextual characteristics. While strides

in the literature have been made to substantiate the usefulness of eco-systemic

multivariate models in delinquency research, this study investigated the yet to be full

explored existence of a possible relationship between facets of the adolescent's

personality and perceptions of family functioning across rates of delinquency.

The research was based on a sample consisting of 169 delinquent African-

American and Caucasian adolescents who ranged from 13 to 18 years. The subjects fit

into one of three rates of offending: first time offenders (having only one charge),

multiple offenders (having 2 to 4 charges) and chronic offenders (having 5 or more

xii














charges). Each subject's personality was assessed through the use of the Jesness

Personality Inventory. Each subject's perception of family functioning was assessed

through the use of the Family Adaptability and Cohesion Evaluation Scale (FACES-II).

The data were analyzed using multinomial logistic and bivariate logistic regression

procedures.

The results of the current study provide statistical evidence which supports the

need to include within eco-systemic multivariate models of delinquency rate the variables

of age, gender and the interaction of facets of the adolescent's personality (Manifest

Aggression) and family functioning (Cohesion). These findings support the need for

future research which is guided by eco-systemic multivariate models of delinquency risk

to explore further the complex relationship between theories of personality and family

functioning across rates of juvenile delinquent offending. A meta model which outlines a

theory of hierarchical cybernetic feedback loops was presented to provide insight and

guidance for future research and elucidate the processes at work between the rate of

juvenile delinquency across personality and family functioning.














CHAPTER I
INTRODUCTION

There is an ancient fable out of India reported by Karen Backstein (1992) which

tells of six blind men who encounter an elephant for the first time. Each touches a

different part of the immense animal and each one's description elicits a distinctly

different image of the animal which each believes is an accurate picture of what the

animal is truly like. However, the wise Rajah advises them to combine each of their

perspectives in order to gain a greater understanding of the nature and identity of the

elephant.

The study of juvenile delinquency is currently going through a similar evolution.

Rather than take a singular view (biological, psychological, or sociological) in the

etiology of delinquency, much of the field is pursuing a more holistic eco-systemic view

of self and system development (Bogenschneider, 1996, Bronfenbrenner, 1979;

Henggeler, 1989; Lemer, 1991; Liddle, 1995; Magnusson, 1995; Moffitt, 1993; Salts,

Lindholm, Goddard, & Duncan, 1995; Mulvey, Arthur, Reppucci, 1993; Paris, 1996;

Reid, 1993; Tolan & Loeber, 1993; Yoshikawa, 1994; Worden, 1991). This new

approach to delinquency, proposes that the relationship between an adolescent's

personality and family functioning is likely to influence his/her rate of juvenile

delinquent acts. Presently, little is known about this hypothesized relationship in the

study of juvenile delinquency so this study has theoretical implications regarding the

1








2

importance of personality and family functioning in the promising eco-systemic approach

to delinquency and practical applications in the areas of research, training, practice and

social policy.

The purpose of this study was to determine if there exists a relationship between

personality and family functioning across the rate of delinquency.



Scope-ofthe Problem

The extent and costs of juvenile delinquency compounds the urgency for research

which contributes to the understanding and ultimate efforts to decrease juvenile

delinquency. From 1988 to 1992, juvenile violent crime arrests increased 47% (whereas

adult violent crime arrests increased 19%). Increases in juvenile arrests for specific

offenses were murder (51%), Rape (17%), Robbery (50%), and aggravated assault (49%)

(Snyder, 1994). From 1988 through 1992, the number of delinquent cases disposed by

juvenile courts increased 26%. During the same period, Juvenile Courts disposed 56%

more violent cases, including 55% more homicide and 80% more aggravated assault

cases (Butts. Snyder, & Finnegan, 1994). According to a report by Butts (1994), juvenile

courts in the United States handled almost one and a half million delinquency cases in

1992, a 26% increase over the 1988 cases load. Were this rate to continue, that load

would double approximately every 12 years (rule of 70) (Williams & Rogers, 1996).

Further, according to the Federal Bureau of Investigations (FBI) Uniform Crime Reports

(1994), law enforcement agencies made 2.0 million arrests of juveniles (people below the

age of 18) in 1993. Juveniles were responsible for 17% of all arrests in 1993.










Between 1989 and 1993, the total number of juveniles increased 13% (FBI, 1994).

Juveniles committed 13% of all violent crimes (i.e., homicide, rapes, robberies, and

aggravated assaults) in the United States in 1993 (as measured by crimes that were

cleared by arrests) (FBI, 1994). In 1993, juveniles accounted for 13% of the U.S.

population, were responsible for 9% of all murder clearances in the United States, 14% of

forcible rapes, 17% of robberies, and 13% of all aggravated assaults (FBI, 1994).

The most recent FBI Uniform Crime Reports (1997) on juvenile crime are a bit

more encouraging. The juvenile arrest rates for violent crime dropped 9% from 1995 and

12% from 1994, marking the second year of decline after steady increases the previous

six years. The juvenile arrest rate for robbery dropped 10% between 1995 and 1996,

while the juvenile arrest rate for aggravated assault dropped 9%. The juvenile arrest rate

for burglary in 1996 is 45% lower than 1980, while the arrest rate for motor vehicle theft

is the lowest since 1987 and the rate for arson the lowest since 1992. While there appears

to be a slowing in the rate of juvenile delinquency, we are no where near the low rates of

1950s (Loeber, 1990). Juvenile delinquency continues to exact a high toll on society and

causes great emotional and interpersonal costs to the adolescent and those around them

(Gorman-Smith, Tolan, Zelolli, & Huesmann, 1996; Laub & Sampson, 1994; Cohen,

Miller, & Rossman, 1994).

The costs of delinquency to society in resources and funds are enormous. The

United States spends more than 1 billion dollars a year to maintain our juvenile justice

system (Patterson, DeBaryshe,& Ramsey, 1989). The average cost of incarcerating a

minor has risen from $29,000 in 1992 (Children's Defense Fund, 1992) to $36,000 per








4

year in 1998 (Quinn, 1998). The Rand corporation reported that in the United States, the

expected crime and correction costs for one chronic juvenile offender was $225,000 to

$350,000 over his or her life time, based on 1.5 arrests a year over 13.3 years of crime.

This figure does not include the cost of the damage to other people's property (Shamsie

& Hluchy, 1991). The yearly cost of school vandalism alone is estimated to be one-half

billion dollars (Feldman, Caplinger, & Wodarski, 1981). The chronic offenders (five or

more offenses) alone exact an enormous monetary cost to society in police hours, court

time, failed attempts at rehabilitation and billions of dollars spent to repair the tangible

consequences of such offending (Lynam, 1996). These costs are staggering considering

that chronic offenders may only make up 5-6% of the total delinquent population, yet are

reported to be responsible for 50-60% of known crimes (see, Farrington, Ohlin & Wilson,

1986).

There are many personal costs of delinquency that impact an adolescent when

according to Steinborg (1991), changes are occurring in an adolescent's life faster and

greater than at any other time except infancy. Adolescents are faced with understanding

and accepting their own biological changes, becoming comfortable with their sexuality

(particularly the emergence of sexual preference), choosing their occupational identity

and negotiating their developmental struggle towards autonomy and independence

(Kinney & Leaton, 1983). These complex tasks in development are negatively impacted

by delinquency. For example, Patterson, DeBaryshe, and Ramsey (1989) reported that

antisocial children are likely to experience major adjustment problems in the area of

academic achievement and peer social relations (Kazdin, 1987; Walker, Shinn, O'Neill,










& Ramsey, 1987; Wilson & Hermstein, 1985). Jessor (1991) concluded that high risk

behaviors such as delinquency can jeopardize the accomplishment of normal

developmental tasks, the fulfilment of expected social roles, the acquisition of essential

skills, the achievement of a sense of adequacy and competence, and the appropriate

preparation for transition to the next stage in the life trajectory (i.e., young adulthood).

Perhaps one of the greatest personal costs is the waste of a young person's life, who, after

chronically offending, may never realize his/her potential, but rather spends most of the

time in and out of institutions.

Efforts to study and look for answers to delinquency are complicated when

considering how to distinguish among the types of juvenile delinquents. The historical

approach of comparing delinquent to non-delinquent groups has more recently been

viewed as too gross a distinction due to the shear frequency of delinquent acts during

adolescence (Lau & Leung, 1992; Tolan & Loeber, 1993). It has been reported that 88%

of juveniles confess to committing at least one chargeable offense (Williams & Gold,

1982). In adolescence (age 13-18) more than 50% admit to theft, 35% admit to engaging

in more than one type of antisocial behavior, such as aggression, drug abuse, arson and

vandalism (See Elliot, Ageton, Huizinga, Knowles, & Carter, 1983; Feldman, Caplinger,

& Wodarski, 1983; Moffitt, Silva, Lynam & Henry, 1994; William & Gold, 1982).

Actual rates of delinquent behavior soar so high during adolescence that participation in

delinquent behavior appears to be a normal part of teen life (Elliot, Ageton, Huizinga,

Knowles, & Carter, 1983; Elliot, Huizinga, & Menard, 1989; Moffitt, 1993; Tolan &

Loeber, 1993; Tolan & Guerra, 1992; Tolan & Lorion, 1988).








6

Indeed, numerous rigorous self-report studies have now documented that it is statistically

aberrant to refrain from crime during adolescence (Elliot, Ageton, Huizinga, Knowles, &

Carter, 1983; Hirschi, 1969; Moffitt & Silva, 1988).

Thus, following that involvement in antisocial behavior of some sort is almost

universal among American adolescents and recognizing that differences have been found

between transient (few offenses) and chronic (five or more offenses) involvement in

delinquency (Lorion, Tolan, & Wahlar, 1987; Moffitt & Silva, 1988; Quay, 1987;

Shannon, 1978; Tolan, 1987; Tolan, Lorion, 1988; West & Farrington, 1977) various

levels of involvement should be distinguished when studying the delinquent population

(Tolan & Loeber, 1993; Tolan, Cromwell, & Brasswell, 1986). Adding to the complexity

of studying this population is the finding that most adolescents committing antisocial acts

engage in a large variety of acts termed "Cafeteria-style offending" (Farrington, 1990;

Gottfredson & Hirschi, 1994; Haapasalo & Hamalainen, 1996; Klein, 1984,1989). To

account for these concerns, this study utilized frequency of offending (rate) to distinguish

delinquents within the collected sample population. Frequency is a method of

measurement common in delinquency research and has shown high reliability and

validity (Cox, 1996; Lau & Leung, 1992; Leug & Drasgow, 1986; Lynam, 1996;

Spiuack, Marcus, & Swift, 1986). The following will further explore the complexity of

delinquency and present the guiding theoretical lenses used to understand and investigate

delinquency in the current study.

The high costs and wide spread occurrence of delinquency has spurred many

efforts to discover what factors contribute to the understanding and explanation of the










varying levels in delinquency among the youth. Many of these factors purposed by

criminologists and psychologists alike include: poverty, lack of bonding to societal

institutions, bonding to deviant peer groups, low intelligence, availability of drugs and

guns, genetic predisposition, neurological and biological factors, differences in

personality, family background, family functioning and family risk factors (Binder, Geis,

& Bruce, 1988; Elliot, Huizinga, & Ageton, 1985; Farrington, Loeber, Elliott, Hawkins,

Kandel, Klein, McCord, Rowe, & Tremblay, 1990; Goldstein, 1990; Hirschi, 1969;

Jesness, 1996; Loeber & Stouthamer-Loeber, 1986; Patterson, DeBarshe, & Ramsey,

1989; Walsh & Olson, 1989; Yoshikawa, 1994).

More recent views in the field of juvenile delinquent study support the notion that

delinquency is a result of many complex interacting factors, thus having no single factor

explaining its occurrence (Benda, 1987; Bogenschneider, 1996; Calabrese & Adams,

1990; Marsh, Clement, Stoughton, & Marckioni, 1986; Jesness, 1996; Salts, Lindholm,

Goddard, & Duncan, 1995; Tolan & Loeber, 1993; Tolan, Cromwell, & Brasswell, 1986;

Worden, 1991). Consistent with this view and providing the theoretical bases for this

study, was the theoretical works of Bronfenbrenner (1979).

Bronfenbrenner's (1979) holistic eco-systemic view of self and system

development has gained wide support in the literature as a theoretical model providing a

viable frame that can explain the need for a multivariate approach in the understanding,

treatment, and prevention of juvenile delinquency (Bogenschneider, 1996, Henggeler,

1989, Liddle, 1995; Moffitt, 1993; Salts, Lindholm, Goddard, & Duncan, 1995; Paris,

1996; Reid, 1993; Tolan & Loeber, 1993; Yoshikawa, 1994; Worden, 1991).










Bronfenbrenner's (1988) theory has at its foundation the premise that human

development occurs as a joint function between the characteristics of the person and the

environment.

The empirical literature strongly supports Bronfenbrenner's view of behavior in

which criminal behavior is multidetermined by the reciprocal interplay of characteristics

of the individual youth and the key social systems in which the youths are embedded (i.e.,

family, peer, school, neighborhood, etc.) (Elliot, 1994; Hawkins, & Catalano, 1993;

Henggeler, 1989, 1996; Thornberry, Huizinga, & Loeber, 1995; Tolan, Guerra, 1994).

Considered most influential on human development are the proximal environmental and

organismic influences (Bronfenbrenner, 1988). Proximal influences emanate either from

within the person, or from physical features, objects, and persons in the immediate face to

face setting (Bronfenbrenner, 1988). Two proximal influences which have been supported

in the literature to be related to delinquency and were the focus of the current study of

adolescent rate of delinquent offending were the adolescent's personality and the

adolescent's perception of their family functioning.

Personality factors have for a long time occupied an important role and been

linked in research to antisocial and delinquent behavior (Dembo, La Voie, Schmeider, &

Washburn, 1987; Farrington, 1990; Fonseca & Yule, 1995; Gold, 1978; Heaven, 1996;

Hoge, Andrews, Lesheid, 1994; Jesness, 1996; Roderts, Schmitz, Pinto, & Cain, 1990;

Rutter & Rutter, 1993; Salts, Lindholm, Goddard, & Duncan, 1995; Paris, 1996; Tolan &

Loeber, 1993; Quay, 1987). Family factors have also consistently been strongly related to

delinquency in studies and reviews of antisocial and delinquent behavior (Chamberlain &










Rosicky, 1995; Hazelrigg, Cooper, & Borduin, 1987; Lauritsen, 1993; Loeber & Hay,

1994; ;Henggeler, 1989; Loeber & Dishion, 1983; Tolan, Cromwell, & Brasswell, 1986;

Wasserman, Miller, Pinner, & Jaramillo, 1996; Loeber & Stouthamer-Loeber, 1986;

Snyder & Patterson, 1987; Tolan & Loeber, 1993).

Based on Bronfenbrenner's (1979) model, an expected relationship was expected

to exist between an adolescent's personality and their perception of family functioning

across their rate of delinquent offending. Bronfenbrenner's (1979) holistic eco-systemic

model provided the theoretical frame to validate the growing consensus within the field

of delinquency research for the need to explore the existence of a possible relationship

between personality and family functioning across rate of delinquent offending

(Arbuthnot, Gordon, & Jurkovic, 1987; Cox, 1996; Jesness, 1996; Jessor, 1991; Le

Blanc, 1992; Lorion, Tolan, & Wahlar, 1987; Quay, 1987; Sameroff & Chandler, 1975;

Shaw & Scott, 1991; Tolan, Cromwell, & Brasswell, 1986). Thus, the purpose of this

study was to determine if there exists a relationship between personality and family

functioning across the rate of delinquency. This study addressed this recognized gap in

the understanding of delinquency and provides information which has theoretical and

practical implications for the understanding and future work with the complex and costly

problem of Juvenile delinquency.



TheoreticalEramework

Bronfenbrenner's holistic eco-systemic model of human development has been

embraced by many in delinquency research due to the growing trend to utilize










multivariate models to explore the etiology, treatment and prevention of delinquency

(Tolan & Loeber, 1993). In agreement with the multivarite approach, this study also

utilized Bronfenbrenner's (1979) model of human development to provide the theoretical

grounds to investigate the existence of a relationship between the proximal characteristics

of the person (i.e., personality) and the environment (i.e., family functioning) on the

directions of human social development as seen through the adolescent's rate of

delinquent offending. The following will be a presentation of Bronfenbrenner's eco-

systemic model (1979), followed by Jesness's (1996) construct of personality and Olson,

Russell and Sprenkle's (1983) Circumplex Model of Marital and Family Systems.

Eco- Systemic Model of Human Development

Bronfenbrenner, (1995) offered the following two propositions as defining

properties to his ecological systems theory:

Proposition 1: Especially in its early phases, and to a great extent

throughout the life course, human development takes place through

processes of progressively more complex reciprocal interaction between

an active, evolving biopsychological human organism and the persons,

objects, and symbols in its immediate environment. To be effective, the

interaction must occur on a regular basis over extended periods of time.

Such enduring forms of interaction in the immediate environment are

referred to as proximal processes. Examples of enduring patterns of

proximal processes are found in parent-child and child-child activities,










groups or solitary play, reading, learning new skills, studying, athletic

activities, and performing complex tasks (Bronfenbrenner, 1995, p. 620).

Proposition 2: The form, power, content, and direction of the

proximal processes effecting development vary systematically as a joint

function of the biopsychological characteristics of the developing person;

of the environment, both immediate and more remote, in which the

processes are taking place; and the nature of the developmental outcomes

under consideration (Bronfenbrenner, 1995, p. 620).



According to Bronfenbrenner (1979), children are shaped not only by their

personal attributes, but also by the ever-widening environments in which they develop.

Children are influenced first and foremost by their family, but also by their peers, school

and communities (Bogenschneider, 1996). From the ecological perspective the

environmental influence is not limited to a single immediate setting, but is extended to

incorporate interconnections between such settings, as well as, the external influences

emanating from the larger surroundings. Thus, the ecological environment is conceived

by Bronfenbrenner (1979) in a topologically nested arrangement of concentric structures

with each containing the next. The structures are referred to as micro-, meso-, exo-, and

macrosystems. This study focused on the microsystem, therefore more emphasis will be

placed on its explanation.

The microsystem refers to a pattern of activities, roles, and interpersonal relations

experienced by the developing person in a given setting with particular physical and










material characteristics (Bronfenbrenner, 1979). Thus, it involves the structures and

processes taking place in an immediate face to face setting containing the developing

person (e.g., family, school, peer group, workplace, etc.). Contained within the

microsystem are the more powerful proximal influences such as personality and family

functioning. Of critical importance to Bronfenbrenner (1979) is not only the objective

properties of the environment, but also the way in which these properties are perceived by

the persons in the environment. Put simply, the aspects that are seen as most powerful in

shaping psychological growth are those that have meaning to the person in a given

situation. For this reason, the current study was most concerned with the perceptions of

the adolescent when assessing personality and family functioning.

The three remaining progressively more comprehensive levels include the meso-,

exo-, and macrosystem. The mesosystem comprises the linkages and processes taking

place between two or more settings containing the developing person. The exosystem

comprises the linkages and processes taking place between two or more settings, at least

one of which does not contain the development person, but in which events occur that

indirectly influence processes within the immediate setting in which the developing

person lives. And finally, the Macrosystem consists of the overarching pattern of micro-,

meso-, and exosystems characteristic of a given culture or subculture, with particular

reference to the belief system, bodies of knowledge, material resources, customs, life-

styles, opportunity structures, hazards, and life course options that are embedded in each

of these broader systems (Bronfenbrenner, 1994).










Further, two recent additions include the chronosystems (changes or consistencies over

time) and the inclusion of the genetic inheritance in the ecological perspective

(reconceptualization of the role of genetics in human development) (see Bronfenbrenner,

1994).

A basic tenet of the ecological perspective is the implied fit between the

characteristics of a living organism and its surroundings (Bronfrenbrenner, 1988). Thus,

for example, according to Worden (1991) the person brings a unique mixture of

temperament, personality, intelligence, and developmental history to a given context

which, in turn, possesses its own requirements: Intrapersonal dynamics interact with

interpersonal forces. The "goodness of fit" between these two is then the soil of adaptive

or maladaptive psychological and social functioning (Rutter & Rutter, 1993; Thomas &

Chess, 1977; 1980; Lemrner, 1982). Thus, optimal development does not directly derive

from either the nature of the child's characteristics per se or the demands of the contexts

within which the child functions. Instead, if a child's characteristics match (or fit) the

demands of a particular setting, adaptive outcomes will accrue (Worden, 1991). In

contrast, disturbed behavioral functioning is manifested in a "poor fit" between

environment expectations and demands and the capacities of the child at a particular Ie\ cl

of development (Thomas & Chess, 1980).

In closing, Bronfenbrenner's (1979) eco-systemic view of development not only

recognizes characteristics of the person and the environment as critical to development,

but holds that an interaction between the two is the general focus of eco-systemic based

research. Interactional studies in delinquency are in the minority resulting in far more








14

known about main effects than interactional effects (Farrington, 1995; Hoge, Andrews, &

Leshied, 1994; Tolan, 1987). According to Bronfenbrenner (1979), the interactional

emphasis of the eco-systemic approach is due to the theoretical view that there exists a

reciprocal nature of development. Development is seen as a two way street that entails

changes: environmental demands change, behavior changes, attitudes change, and self-

perceptions change. The "goodness of fit" fluctuates as environmental expectations and

demands change or as the person's expectations and self-perceptions change; change in

one effects changes in the other (Worden, 1991). As already mentioned, while it is

important to consider both the environmental influences and the child's influences,

Bronfenbenner (1979) highlights that when considering the environmental influences,

what matters for behavior and development is the environment as it is "perceived" rather

than as it may exist in "objective" reality. Thus, ultimately, development is defined as the

person's evolving conception of the ecological environment, and his/her relation to it, as

well as the person's growing capacity to discover, sustain, or alter its properties

(Bronfenbrenner, 1979).

Construct of Personality

The construct of personality in this study was grounded in Jesness's (1996)

Jesness Personality Inventory. Jesness (1996) sites the early influences of Marguarite

(Grant) Warren and her sentinel work on I-level theory of personality (Sullivan, Grant, &

Grant, 1957) as playing a major role in the foundations of the Jesness Personality

Inventory Classification system and his articulation of personality characteristics defining

the construct of personality.








15

The following will review this study's adopted core structure of personality, the defining

elements of Jesness's construct of personality, and will close with a discussion of which

facets of the Jesness Personality Inventory were utilized in the present study.

The core structure of personality as presented by Sullivan, Grant, and Grant

(1957), has as a basic premise that human organisms tend to break experience into its

fundamental elements to provide reference points in adjusting to the complex stimulus

structure of the external world. According to Sullivan et al. (1957), these reference points

are not isolated from one another, but are merged in a basic, central reference scheme or

cognitive world, in which the experienced world of the person is integrated with, and

modified by, personal needs and expectations. The nature and quality of perception and

experience impact the developmental expectations and hypotheses about reference points

and so determine behavioral consequences of experience.

According to Jesness and Wedge (1984), the individual's perception of his or her

world is theorized to be constantly shaped by unique and ever-changing personal

cognitive lens. Consequently, these expectations and hypotheses influence all the

individual's interpretations of and responses to the environment. Thus, it is believed that

over time a fairly consistent set of expectations and attitudes is established to form the

interpreting and working philosophy of life. It is this nexus of gradually expanding

experience, expectations, hypotheses, and perceptions which make up the core of

personality (Sullivan et al, 1957).

Jesness adds to the work of Sullivan, Grant, and Grant (1957) by providing ten

personality characteristics and an index of delinquency (A-Social Index). These








16

personality characteristics make up the construct of personality and are measured by the

Jesness Personality Inventory. Jesness (1996) views the delinquent population as a

heterogeneous group which can be distinguished not only by the number of offenses, but

by their personality profile. The personality profile as measured by the Jesness

Personality Inventory consists of the following personality dimensions (Jesness, 1996, p.

5):

Social Maladjustment Scale (SM): Social maladjustment refers to a set of attitudes

associated with inadequate or disturbed socialization. Here, social maladjustment

is defined by the extent to which individuals share attitudes of persons who do not

meet personal needs and environmental demands in socially approved ways.

Value Oriented Scale (VO): Value orientation refers to a tendency to share attitudes and

opinions characteristic of a person in the lower socioeconomic classes.

Immaturity Scale (Imm): Immaturity reflects a tendency to display attitudes and

perceptions of self and others that are usual for a person of a younger age than the

subject.

Autism Scale (Au): Autism measures a tendency to distort reality, and in thinking and in

perceiving, according to one's personal desires or needs.

Alienation Scale (AI): Alienation refers to the presence of distrust and estrangement in a

person's attitudes towards others, especially towards those representing authority.

Manifest Aggression Scale (MA): Manifest aggression reflect an awareness of unpleasant

feelings (especially anger and frustration), a tendency to react readily with those

feelings, and discomfort concerning the presence and control of those feelings.










Withdrawal-Depression Scale (Wd): Withdrawal-depression indicates the extent of an

individual's dissatisfaction with him-or herself and others, in a tendency towards

isolation.

Social Anxiety Scale (SA): Social anxiety refers to feelings of anxiety and to conscious

emotional discomfort in interpersonal relations.

Repression Scale (Rep): Repression reflects the exclusion from conscious awareness of

feelings that the individual normally would be expected to experience, or a failure

to label these emotions.

Denial Scale (Den): Denial indicates a reluctance to acknowledge unpleasant events or

conditions encountered in daily living.

Asocial Index (AI): The asocial index reflects a generalized disposition to resolve social

or personal problems in ways that show a disregard for social customs or rules.



The current study focused on the SM, MA, and AI Jesness personality scales.

These three have consistently been found to distinguish among levels of delinquency

(Dembo, La Voie, Schmeidler, & Washburn, 1987; Graham, 1981; Kunce & Hemphill,

1983; Martin, 1981; Martin & Murphy, 1993; Sorensen & Johnson, 1996). Though the AI

is a personality profile composite score of all 10 personality characteristics reflecting the

generalized tendency to behave in ways that transgress established rules, the SM and MA

have been found to stand out in their own right as important personality characteristics to

consider in distinguishing among the delinquent population (Jesness, 1996).










CircumplexiModeoLfMadtaLand Eamily Systems

The construct of family functioning is grounded in Olson, Russell and Sprenkle's

(1983) Circumplex Model of Marital and Family Systems as tested by the FACES-II. The

Circumplex Model of Marital and Family Systems consists of three central dimensions of

family behavior which are integrated in the model: adaptability, cohesion, and

communication (Thomas and Olson, 1993). The following will be a review of the

Circumplex Model which was utilized in the current study.

The two primary dimensions of family interaction in this model are adaptability

and cohesion (Olson, Mccubbin, Barnes, Larson, Muxen, & Wibson, 1985). Family

adaptability is defined as "the ability of a marital or family system to change its power

structure, role relationships, and relationship rules in response to situational and

developmental stress" (Olson, Russell, & Sprenkle, 1983, p. 70). There are four levels of

adaptability ranging from extremely low (rigid), to moderate (structured, flexible), to

extremely high (chaotic). Family cohesion is defined as "the emotional bonding that

family members have towards one another" (Olson et al., 1983, p.70). Within the

Circumplex Model there are four levels of cohesion ranging from extremely low

(disengaged), to moderate (separated, connected), to extremely high (enmeshed).

The two dimensions of cohesion and adaptability with their four levels are

arranged orthogonally to form the Circumplex Model. Thus, the Circumplex Model

yields 16 possible combinations of cohesion and adaptability. The four types in the center

of the model are called Balanced types because they represent a balance between the

extremes of the cohesion and adaptability continue. The eight Mid-Ranged family types










19


are Extreme on one dimension and Balanced on the other. Then finally, there are the four


Extreme types. These are families who are existing at either extreme of the cohesion and


the adaptability continue at the same time.


The third dimension of The Circumplex Model is family communication. Family


communication is seen as critical in facilitating movement along the two dimensions of


adaptability and cohesion (Olson et. al., 1979). It is hypothesized that families who are


typed in the Balanced area of the Circumplex Model have better communication skills


than families in the Extreme types (Walsh, 1993).


Low COHESION High I N

DISENGAGED SEPARATED CONNECTED ENMESHED


CHAOTICALLY Clq G I-%L





V LXBE / FLEXIBLE / FLEXIBLY FLEXIBLY \ FEIL
CHAOICXIB CHOTCL LY CHAOTCALL
T DISENGAGED CHENMESHED
High

A
D
A
P FLEXIBLE FLEXIBLE FLEXIBLY FLEXIBLY FLEXIBLY
DISENGAGED SEPARATE CONNECTED ENMESHED
A
B

L
I STRUCTURALLY STRUCTURALLY STRUCTURALLY
T STRUCTURED DISENGAGED SEPARATE CONNECTED STRUCTURALLY
Y

Low


S RIGID t SEPARATED CONNECTED IGIDLY
T K11U ultNC~t~u ,,-^^^^^f^ ^, ENMESHED



BALANCED MID-RANGE EXTREME


Figure _1 Circumplex Model of Marital and Family Systems










The Circumplex Model assumes there is a curvilinear relationship between the

two central dimensions (cohesion and adaptability) and family functioning. Those

families who exist in the mid ranges of cohesion and adaptability (Balanced) are

hypothesized to be most viable for healthy family functioning and development (Olson,

1989). These balanced families have moderate cohesion (separated, connected)

representing a balance between too little closeness (disengaged) and too much closeness

(enmeshed) in the family. Similarly, balanced families also have moderate adaptability

(structured, flexible) representing a balance between too little change (rigid) and too

much change (chaotic) in the family. Families found to range in the extremes of cohesion

and adaptability are generally seen as most dysfunctional and problematic in terms of

family functioning and development (Olson, Sprenkle, & Russuel, 1979).



Rationalefor the -Study

This study was theoretically grounded in an eco-systemic theory of self and

system development. Bronfenbrenner's (1979) Social Ecological model of human

development provided the fundamental theoretical justification for investigating if a

relationship between personality (i.e., characteristics of the self) and family functioning1

(i.e., environmental characteristics of the system), existed across levels of delinquent

offending (i.e., social development). The construct of personality was grounded in

Jesness's (1996) Jesness Personality Inventory which identified ten personality

characteristics and an index of delinquency (Asocial Index). The construct of family

functioning was grounded in Olson, Russell and Sprenkle's (1983) Circumplex Model of








21

Marital and Family Systems as tested by the FACES-11. Thus, this study was guided by a

transactional and multilevel conceptualization of delinquency risk and presumed that the

development of antisocial behaviors was dependent on the interaction of individual and

contextual characteristics (Bronfenbrenner, 1979).



Statement-oftheJProblem

The relationship between family functioning (cohesion and adaptability) as seen

through the lens of the family Circumplex model (Olson et. al., 1983) and personality

(social maladjustment, manifest aggression, and asocial index) as grounded in the Jesness

personality inventory (Jesness, 1996) across rates of delinquency was unknown. The

following will address the need for the study.



Needfor theStudy

As established above, the wide extent and high costs of juvenile offending

compounds the urgency for research which contributes to the understanding and ultimate

efforts to decrease juvenile delinquency. Research efforts which attempt to further the

field of study in juvenile delinquency are considered an excellent investment in the future

of our nation that can be postponed only at great cost to society (Bogenschneider, 1996;

Committee on Economic Development, Research and Policy, 1987). A theoretically

supported question (Bronfenbrenner, 1979) and recognized gap in the field of juvenile

delinquent study (Arbuthnot, Gordon, & Jurkovic 1987; Cox, 1996; Jesness, 1996;

Jessor, 1991; Le Blanc, 1992; Lorion, Tolan, & Wahlar, 1987; Quay, 1987; Sameroff &








22

Chandler, 1975; Shaw & Scott, 1991; Tolan, Cromwell, & Brasswell, 1986) of which this

study addressed was, "Does a relationship exist between an adolescent's personality and

his/her perception of family functioning across his/her rate of delinquent offending while

holding age, race and gender constant?"

It was the position of this researcher that if it were known whether this

hypothesized relationship existed, there would be implications for theory, research,

training, practice and social policy. Such knowledge would encourage critical appraisal of

existing theoretical approaches to juvenile delinquency. If no relationship was found, then

attention could be paid to expanding the understanding of juvenile delinquency from the

theoretical perspectives of personality and family functioning in isolation of each other.

Further, no relationship found could be interpreted to challenge the theoretical

underpinnings of Bronfenbrenner's (1979) model in regards to juvenile delinquency. If a

relationship was found, then further attention could be given to the critical examination of

the role of personality and family functioning taken together. This would be consistent

with Bronfenbrenner's (1979) Social Ecological model of human development when

exploring juvenile delinquency.

This knowledge also could facilitate further research into what is considered

critical regions of assessment in juvenile delinquents. For example, the importance of

careful and accurate assessment which contributes to juvenile justice correctional

decisions (Andrews, Bonta, and Hoge, 1990; Hoge, Andrews, and Leschied, 1995; Jaffe,

Leschied, Sab, and Austin, 1985), the ability to target those juveniles who are most in

need of limited treatment resources (Farrington, 1995) as well as the areas to be addressed










in a treatment strategy dealing with a juvenile delinquent client (Henggeler, 1989;

Loeber, 1990; Mulvey, Arthur, Reppucci, 1993; Tolan and Mitchell, 1989) could all be

influenced by the findings of this study. If no relationship was found, researching the

significance of assessing personality and family functioning independently regarding the

above examples could be pursued. If a relationship was found, further efforts could be

made to explore the interaction of personality and family functions when assessing for the

above examples. Further, finding a relationship would contribute to the need for research

efforts to go beyond the cross-sectional study design, as was the case in this study, to a

longitudinal design. This would allow an exploration into what intervals of time one

should reassess the relationship between the adolescent's personality and family

functioning when addressing the above examples.

The findings of this study could be seen to have implications for counselors in

training and in practice when applied to the counseling needs of juvenile delinquents. If

no relationship was found, less importance may have been placed in gaining

understanding of the relationship between theories of personality and family functioning

when considering treatment approaches for the delinquent population. If a relationship

was found, greater importance would need to be placed on adopting a more holistic eco-

systemic stance including personality and family functioning when considering

approaches to counseling and understanding the juvenile population.

Finally, social policy could be influenced by the findings of this study. According

to Garbarino (1993), when we are talking about social policy we are talking about what

we think is simultaneously desirable and attainable: A statement of will, a statement of










goals, and the social maps that we see giving us the route to attain these goals. Social

policy informs clinical practice and it indirectly sets the agenda for clinical practice.

Social policy offers a definition of what the issues are, and it shapes the means available

to address these issues (Garbarino, 1993). The design of social policy is greatly

influenced by fundamental assumptions or conclusions about the nature of both social

problems and adolescents. If no relationship was found, grounds to influence the social

policies to fund research and programs which have little concern for the interaction of

personality and family functioning when dealing with the juvenile delinquent population

would be established. If a relationship was found, not only would grounds for funding

research and programs which take into consideration the relationship of personality and

family functioning strengthen, but also policies instructing state juvenile justice

assessment approaches may be influenced to consider the adolescent's personality and

family functioning as well.



Purpose of the Study

The purpose of this study was to further efforts in the determination of the

existence of a relationship between personality and family functioning across the rate of

delinquency. The findings contribute to addressing the recognized gap in the

understanding of delinquency and provide information which has theoretical and practical

implications for the understanding and future work with the complex and costly problem

of Juvenile delinquency.










Research Questions

The independent variables that were included in the collection of original research

questions (as listed below) were: age, gender, race, adaptability, cohesion, social

maladjustment, manifest aggression, and asocial index. The dependent variable referred

to in these research questions was the rate of juvenile delinquency as measured by

number of criminal charges. The primary research question addressed in the current study

was, "Does a relationship exist between an adolescent's personality and his/her

perception of family functioning across his/her rate of delinquent offending while holding

age, race and gender constant?" Each listed research question below that pertained to an

interaction between personality and family functioning was developed to provide the

inferences needed in their own right to address the primary research question. The

research questions including interactions were questions 4, 5, 6, 7, 8, and 9. The

remaining questions were developed to address age (question 1), gender (question 2),

and race (question 3).

However, due to multi-colinearity concerns, of the research questions listed

below, 4, 8, and 9 were unable to be addressed. Nevertheless, sufficient inferences needed

to address the primary research question was gained through addressing the remaining

research questions (5, 6, and 7). All of the corresponding tested hypotheses with their

required modifications due to multi-colinearity concerns are presented in chapter 3. The

primary changes revolved around limiting the number of variables that were controlled

for. The following is a list of the research questions that were originally purposed to be

addressed in this study.










1. What is the relationship between age and rate of juvenile delinquency as

measured by number of criminal charges while holding gender, race, adaptability,

cohesion, social maladjustment, manifest aggression, and asocial index constant?

2. What is the relationship between gender and rate of juvenile delinquency as

measured by number of criminal charges while holding age, race, adaptability, cohesion,

social maladjustment, manifest aggression, and asocial index constant?

3. What is the relationship between race and rate of juvenile delinquency as

measured by number of criminal charges while holding age, gender, adaptability,

cohesion, social maladjustment, manifest aggression, and asocial index constant?

4. What is the relationship between family cohesion as measured by FACES-Il

and rate of juvenile delinquency as measured by number of criminal charges as one varies

across scores of social maladjustment as measured by Jesness personality inventory while

holding age, gender, race, adaptability, manifest aggression, and asocial index constant?

5. What is the relationship between family cohesion as measured by FACES-11

and rate of juvenile delinquency as measured by number of criminal charges as one varies

across scores of manifest aggression as measured by Jesness personality inventory while

holding age, gender, race, adaptability, social maladjustment, and asocial index constant?

6. What is the relationship between family cohesion as measured by FACES-II

and rate of juvenile delinquency as measured by number of criminal charges as one varies

across scores of asocial index as measured by Jesness personality inventory while holding

age, gender, race, adaptability, social maladjustment, and manifest aggression constant?








27

7. What is the relationship between family adaptability as measured by FACES-11

and rate of juvenile delinquency as measured by number of criminal charges as one varies

across scores of social maladjustment as measured by Jesness personality inventory while

holding age, gender, race, cohesion, manifest aggression, and asocial index constant?

8. What is the relationship between family adaptability as measured by FACES-II

and rate of juvenile delinquency as measured by number of criminal charges as one varies

across scores of manifest aggression as measured by Jesness personality inventory while

holding age, gender, race, cohesion, social maladjustment, and asocial index constant?

9. What is the relationship between family adaptability as measured by FACES-11

and rate of juvenile delinquency as measured by number of criminal charges as one varies

across scores of asocial index as measured by Jesness personality inventory while holding

age, gender, race, cohesion, social maladjustment, and manifest aggression, constant?



Definition-ofTerms

For the purposes of this study, the terms listed below were defined as follows:

Adolescence refers to the period of life between childhood and adulthood, and for

the purposes of this study referred to those individuals who ranged in age from 13 to 18.

Asocial Index (AI): The asocial index reflects a generalized disposition to resolve

social or personal problems in ways that show a disregard for social customs or rules

(Jesness, 1996, p. 6). Discriminate Functional Analysis was used to create this scale

which combines scores from all the other personality scales to best distinguish








28

delinquents (Jesness, 1996). For the purposes of this study AI was determined through the

use of the Jesness Personality Inventory.

Balanced familyAtypes are those families who exist in the mid ranges of cohesion

and adaptability. These families are hypothesized to be most viable for healthy family

functioning and development (Olson, 1989).

Delinquency, is defined as behavior that has caused or could cause adjudication of

a person no older than 18 (Tolan, Cromwell, & Brasswell, 1986).

Delinquent adolescents, for the purposes of this study were adolescents between

the ages of 12 and 19 years old who had been charged with a minimum of one illegal

offense as filed with the Department of Juvenile Justice.

Development, as defined through the lens of eco-systemic theory is seen as the

person's evolving conception of the ecological environment, and his/her relation to it, as

well as the person's growing capacity to discover, sustain, or alter its properties

(Bronfenbrenner, 1979). Fundamental to this view is the belief that development results

as a function of characteristics of the individual and his/her environment

(Bronfenbrenner, 1988). For the purposes of this study, increased levels of delinquent

offending suggested the presence of less healthy social development.

Eco-systemictheory purports that children are shaped not only by their personal

attributes, but also by the ever-widening environments in which they develop

(Bronfenbrenner, 1979). Children are influenced first and foremost by their family, but

also by their peers, school and communities (Bogenschneider, 1996). From the ecological

perspective the environmental influence is not limited to a single, immediate setting, but








29

is extended to incorporate interconnections between such settings, as well as the external

influences emanating from the larger surroundings. Thus, as Bronfenbrenner (1979)

noted, research that investigates the adolescent's transactions within different systems

greatly facilitates our understanding of the etiology of deviant behavior.

Extreme family types are those families found to range in the extremes of

cohesion and adaptability. These families are generally seen as most dysfunctional and

problematic in terms of family functioning and development (Olson, Sprenkle, &

Russuel, 1979).

FamilyAdaptability is defined as the extent to which the family system is flexible

and able to change its power structure, role relationships, and relationship rules in

response to situational and developmental stress (Olson et al., 1985). For the purposes of

this study, adaptability was determined by the adaptability score from FACES-II.

Eamily-Cohesion is defined as "the emotional bonding that family members have

towards one another" (Olson et al., 1983, p.70). Cohesion incorporates concepts of

emotional bonding, boundaries, coalitions, time, space, friends, decision making,

interests, and reaction (Olson et al., 1985). For the purposes of this study, cohesion was

determined by the cohesion score from FACES-II.

Familyfunctioning for the purposes of this study was grounded in Olson, Russell

and Sprenkle's (1983) Circumplex Model of Marital and Family Systems as tested by the

FACES-Il. The level of family functioning varies from healthy to less healthy as families

move form balanced family types to extreme family types respectively.











Family cohesion and adaptability are the core factors making up the construct of family

functioning (Olson et. al, 1985).

Manifestaggression_(MA): Manifest aggression reflects an awareness of

unpleasant feelings (especially anger and frustration), a tendency to react readily with

those feelings, and discomfort concerning the presence and control of those feelings

(Jesness, 1996, p. 5). For the purposes of this study MA was determined by the score on

the MA scale of the Jesness Personality Inventory.

The microsystem refers to a pattern of activities, roles, and interpersonal relations

experienced by the developing person in a given setting with particular physical and

material characteristics (Bronfenbrenner, 1979). Thus, it involves the structures and

processes taking place in an immediate face to face setting containing the developing

person (e.g., family, school, peer group, workplace, etc.).

Personality for the purposes of this study was grounded in Jesness's (1996)

Jesness Personality Inventory. Central to defining the construct of personality in the

current study was the asocial index. Further, the personality characteristics of social

maladjustment and manifest aggression were included as relevant personality

characteristics influencing the development of delinquency (Jesness, 1996).

The proximal influences which are contained within the microsystem and were

relevant to the current study included personality and family functioning. These two

influences interact to form proximal processes which are viewed to directly effect the

course of an individual's development (Bronfenbrenner, 1995).










Social Maladjustment (SM): Social maladjustment refers to a set of attitudes

associated with inadequate or disturbed socialization. Here, social maladjustment is

defined by the extent to which individuals share attitudes of persons who do not meet

personal needs and environmental demands in socially approved ways (Jesness, 1996, p.

5). For the purposes of this study SM was determined by the score on the SM scale of the

Jesness Personality Inventory.

Rate of juvenile delinquency for the purposes of this study, was comprised of the

total current number of illegal charges with which an adolescent has accrued over their

life time as filed within the juvenile court system at the time of data collection. The rate

was then delineated by categories of frequency of offending which included: first time

offenders (having only one charge), multiple offenders (having 2 to 4 charges) and

chronic offenders (having 5 or more charges) (Tracy, Wolfgang, & Figlio, 1990;

Wolfgang, Figlio, & Sellin, 1972).



OrganizatioaofiLthe-Study

The remainder of this study is organized into four chapters. Chapter 2 will present

a review of the related literature. Chapter 3 will describe the purpose and methodology

containing a statement of purpose, including delineation of relevant variables,

hypotheses, data analysis, description of the population, sampling procedures, sample,

data collection, and instrumentation. The results of the statistical analysis will be reported

in chapter 4. The study will conclude in chapter 5 where there will be a discussion of the

results as compared to the literature and the theories utilized.








32

Chapter 5 will also include a discussion of the limitations of the study, practical

implications of the results and recommendations for future research.














CHAPTER 2
REVIEW OF THE LITERATURE


Introduction

Adolescence is marked by dramatic changes in the individual and his/her

relationships with significant others and society. It is a time of magnificent promise and

insidious risk (Cox, 1996; Jessor, 1991). Adolescence marks a long process of

experimentation which is essential to self definition. The adolescent and their family

mutually influence each other across time. The adolescent's family must adjust to this

process by providing an environment which helps the adolescent to evaluate the outcome

of these changes. Overall, adaptions in family organization including changes in cohesion

and adaptability are required to meet these tasks of adolescence (Worden, 1991) as the

family is transformed from a unit geared to protect and nurture young children to one that

prepares them to enter the world of adult responsibilities and commitments (Garcia-Preto,

1988). The interplay or fit between the characteristics of the adolescent and the family

become the soil which generates adaptive or maladaptive psychological and social

development/functioning (Bronfrenbrenner, 1988; Rutter & Rutter, 1993; Thomas &

Chess, 1977; 1980; Lemer, 1982, Worden, 1991).

Bronfenbrenner (1979), who provided the guiding theory of this study, views

social development (level of delinquency) as a function of characteristics of the










individual (e.g., personality) and the environment (e.g., family). The present study was

designed to test that functional relationship by addressing the question, "Does a

relationship exist between an adolescent's personality (i.e., characteristics of the self) and

his/her perception of family functioning (i.e., environmental characteristics of the system)

across his/her rate of delinquent offending (i.e., social development) while holding

relevant factors such as age, gender, and race constant?"

Chapter II will review the relevant literature to provide a context for

understanding the relationship between: (a) personality and delinquency, (b) family

functioning and delinquency, and (c ) Bronfenbrenner's (1979) Eco-Systemic Model of

Human Development and delinquency.



Personality-andiDelinquency

Personality factors have been linked in research to antisocial and delinquent

behavior for a long time (Dembo, La Voie, Schmeider, & Washburn, 1987; Eysenck &

Gudjonsson, 1989; Farrington, 1990; Fonseca & Yule, 1995; Gold, 1978; Guerra, 1987:

Heaven, 1996; Hoge, Andrews, Lesheid, 1994; Jesness, 1996; Roderts, Schmitz, Pinto. &

Cain, 1990; Moffitt, 1993; Paris, 1996; Rutter & Giller, 1983; Rutter & Rutter, 1993;

Salts, Lindholm, Goddard, & Duncan, 1995; Sorensen & Johnson, 1996; Tolan & Loeber.

1993; Quay, 1987). Jessor (1982), Shaw & Scott (1991) and, more recently, Jensen-

Campbell, Graziano, and Hair (1996) have emphasized the importance of recognizing that

personality factors are essential to a theoretical understanding of the way in which

adolescents with problem behaviors perceive their environment.








35

For example, recent efforts have operationalized and validated factors relevant to a theory

of criminal or antisocial personality to provide a viable explanation for the considerable

continuity over time in the relative levels of both offending and antisocial behavior

(Farrington, 1990; Frichette & LeBlanc, 1987; Jesness, 1996; Le Blanc, McDuff,

Charlebois, Gagnon, & Tremblay, 1991; Lytton, 1990; Shaw & Bell, 1993 and Quay,

1987).

Dembo, LaVoie, Schmeidher, and Washburn (1987) have suggested that to

neglect the psychological dimension of the adolescent precludes a deeper understanding

of the motivational bases of their behavior. Loeber and Dishion (1983) observed that the

general interest in identifying psychological variables related to delinquency stems from

the promising proposition that if such variables exist, then children at risk for

delinquency could be identified and targeted for preventive intervention.

Part of what makes an individual unique is their distinctive personality. From

birth, children are viewed as varying in their constitutional makeup or temperament

which provides the foundation of their own unique personality style (Kohnstamm, Bates,

& Rothbart, 1989; Garrison & Earls, 1987; Rutter & Rutter, 1993). Personality refers to

the pattern that each person, as a thinking being, develops as a way of dealing with their

temperamental traits, their encounters with various social contexts, and their life

experiences (Rutter & Rutter, 1993). Personality involves sets of cognitions about

ourselves, our relationships, and our interactions with the environment which constitute

the self-system and contains such qualities as self-esteem, self-efficacy, and social

problem-solving skills (Rutter & Rutter, 1993). The core structure of personality is based










in the human inclination to break experience into its fundamental elements to provide

reference points in adjusting to the complex stimulus structure of the external world

(Sullivan, Grant, & Grant, 1957). The merging of these reference points establishes a

basic central reference scheme or cognitive world, in which the experienced world of the

person is integrated with, and modified by, personal needs and expectations (Sullivan et

al, 1957). Consequently, these expectations, personal needs and hypotheses influence all

the individual's interpretations of and responses to the environment (Jesness & Wedge,

1984). Thus, over time, a fairly consistent set of expectations and attitudes is established

as an interpreting and working philosophy of life. Sullivan et al, (1957) suggests that it is

this nexus of gradually expanding experience, expectations, hypotheses, and perceptions

which make up the core of the personality.

Implicit in personality formation is the consistency or stability across time of its

makeup within an individual (Brook, Whiteman, Normura, Gordon, & Cohen, 1988;

Caspi & Bemrn, 1990; Tolan & Loeber, 1993). Many researchers have established a link

between early temperament and later personality (Caspi, Henry, McGee, Moffitt, and

Silva, 1995; Caspi, & Silva, 1995; Lynam, 1996). Tolan and Thomas (1995) reported

that Nagin and Farrington's (1992) test of Farrington and West's (in press) Cambridge

data suggests that persistent personality traits offered a reasonable explanation for the

numbers of convictions for criminal offenses among their 411 urban male sample, which

was followed from age 8 to 32. Nagin and Farrington's (1992) results support the

contention of Wilson and Hermstein (1985) and Gottfredson and Hirschi (1990) who

state that criminal activity level is primarily due to stable individual differences and not










situational or dynamic characteristics, such as timing of delinquent onset. Tolan and

Thomas (1995) and Tolan and Loeber (1993) agree that stable individual characteristics

are more influential than dynamic and situational influences, especially for those with

more extreme delinquency patterns (e.g., multiple arrests).

Continued evidence supporting the stability of personality over time has

strengthened the efforts to identify personality characteristics which differentiate types of

delinquents and levels of delinquency (See Mulvey, Arthur, Reppucci, 1993). According

to Quay (1987), several studies offer convergent support for a few distinct behavioral

subtypes which have shown promising, but mixed results. For example, factor analytic

studies of data from behavioral check lists (Achenback & Edelbrook, 1983; Quay &

Peterson, 1983) have identified four categories: undersocialized aggressive, socialized

aggressive, attention deficit, and anxious withdrawn. Similarly, (Mulvey, Aurthur and

Reppucci, 1993), research rooted in the California I-Level system of the 1970's (Jesness,

1971) found three subtypes of delinquents: passive conformist, power-oriented, and

neurotic (Palmer, 1974). Gold, (1978), Kaplan, (1980), Wells, & Rankin, (1993)

identified lower level of self-esteem as a common personality trait among delinquents.

Loeber, (1982), Loeber, (1990), Lorion et al. (1987), Patterson, (1986), and Tolan &

Mitchell, (1989) identified elevated measures of aggression as a common trait.

Measures of individual aggression have been viewed as the most useful form of

delineating delinquents followed second by indices of family systemic functioning

(Tolan, Cromwell, & Brass, 1986; Lorion, Tolan, & Wahlar, 1987). In a review provided

by Loeber and Stouthamer-Loeber (1987) it was concluded that 70 to 90 percent of








38

violent offenders had been highly aggressive when young (Farrington, 1978; Magnusson,

Stattin & Duner, 1983; Robins, 1966). Blumstein, Farrington, and Moitra, (1985), Craig

and Glick, (1968), Eron and Huesmann, (1990), Farrington (1995), and Pulkkinen,

(1983) all reported that elevated levels of aggressive tendencies correlated with violent

and chronic delinquent offending.

To illustrate the pervasiveness of aggression in antisocial youth, the following

will summerize five constructs of cognitive activity levels or styles related to increased

risks of delinquency as provided by Tolan and Loeber (1993). First, antisocial children

tend to utilize aggressive social cognitions in evaluating problems (Dodge, 1980; Dodge

& Frame, 1982; Guerra, Tolan, Huesmann, Van Acker, & Eron, 1990; Huesmann, 1988;

Huesmann & Eron, 1984). Second, antisocial children and adolescents tend to over label

individuals' behavior as motivated by aggression and to apply aggressive responses to

problem-solving (Dodge & Somberg, 1987). Antisocial children are often less aware of

the impact of such behavior on others (Guerra & Slaby, 1990) and are less able to take the

perspective of others in social interactions (Guerra, Eron, Huesmann, Tolan, & Van

Acker, 1991; Huesmann & Eron, 1984). Third, they evidence limited moral reasoning

skills (Guerra & Slaby, 1989,1990), and fourth, a low social skills level is often seen

which further contributes to their increased risk for antisocial behavior (Tolan, Pentz,

Aupporle, & Davis, 1990).








39

And finally, fifth, antisocial adolescents tend to have lower ability to generate competent

social dilemma solutions, tend to have less competent and less broad range of coping

skills (Tolan, Blitz, Davis, Fisher, Schwartz, & Thomas, 1990), and utilize more direct

(passive) as well as aggressive coping responses to stress (Tolan & Gorman-Smith,

1991).

While aggression is among the strongest facets of personality useful in delineating

risk of delinquency, it is merely one element of a more general antisocial tendency or

personality which may arise in childhood and could continue through the teenage and

adult years leading to increased offending (Farrington, 1995; West & Farrington, 1977).

For example, Hoge, Andrews, and Leshied (1994) utilized a sample of 338 mostly more

serious male and female offenders ranging in age from 12-17 to explore the independent

contribution of a general antisocial attitude variable in predicting delinquent activity. The

authors concluded that an antisocial attitude variable reflecting criminal or otherwise

antisocial attitudes, made a significant contribution to the prediction of criminal activity

independent of the family and peer association variables. This result was seen as

consistent with those reported by Glueck and Glueck (1950) and Guerra (1989) and

emphasizes the importance of antisocial/antiauthority/procriminal attitudes and beliefs in

the promotion of criminal behavior in young people.

Taking the above personality findings into consideration, the present study

utilized Jesness's (1996) Jesness Personality Inventory to operationalize and define the

construct of personality. Building on the defining personality work of Sullivan, Grant,

and Grant (1957), Jesness identified ten personality characteristics and an index of








40

delinquency (Asocial Index). Of these personality scales, the current study focused on the

social maladjustment (SM), manifest aggression (MA) and asocial index (AI). The

primary reasons these three were chosen was the importance of considering facets of

personality which pertain to amounts of aggression, the inappropriate usage of aggression

and a general antisocial attitudes in the delineation of delinquency.

SM refers to a set of attitudes associated with inadequate or disturbed

socialization. Here, social maladjustment is defined by the extent to which individuals

share attitudes of persons who do not meet personal needs and environmental demands in

socially approved ways (Jesness, 1996). MA reflects an awareness of unpleasant feelings

(especially anger and frustration), a tendency to react readily with those feelings, and

discomfort concerning the presence and control of those feelings (Jesness, 1996). AI is a

personality profile composite score of all 10 personality characteristics reflecting a

generalized disposition to resolve social or personal problems in ways that show a

disregard for social customs or rules (Jesness, 1996). These three have consistently been

found to distinguish among levels of delinquency (Dembo, La Voie, Schmeidler, &

Washburn, 1987; Graham, 1981; Jesness, 1996; Kunce & Hemphill, 1983; Martin, 1981;

Martin & Murphy, 1993; Sorensen & Johnson, 1996). It is clear from the above review

that personality is an important factor in the exploration of delinquency. The following

will be a review of what empirical and theoretical role the family plays in the exploration

of delinquency.










Family Functioning and Delinquency

Similar to personality factors, family factors have also been found to strongly

relate to delinquency in studies and reviews of antisocial and delinquent behavior

(Chamberlain & Rosicky, 1995; Hazelrigg, Cooper, & Borduin, 1987; Lauritsen, 1993;

Loeber & Hay, 1994; Henggeler, 1989; Johnson, Su, Gerstein, Shin, & Hoffman, 1995;

Loeber & Dishion, 1983; Tolan, Cromwell, & Brass, 1986; Wasserman, Miller, Pinner, &

Jaramillo, 1996; Loeber & Stouthamer-Loeber, 1986; Loeber, 1990; Snyder & Patterson,

1987; Tolan & Loeber, 1993). Research involving the role of the family in delinquency

has been investigated from many different perspectives. Tolan et al (1986) breaks the

research down into two primary categories. First, the earlier research focused more

heavily on structural variables. Second, and perhaps more of a direct indicator of the

family's role in delinquency is family interaction style and emotional atmosphere or more

commonly termed, "family functioning" variables. The following will be a review of

research findings from the structural and family functioning categories, an explanation of

the Circumplex Model of Marital and Family Systems (Olson, Russell, & Sprenkle.

1983) chosen to theoretically conceptualize family functioning, and relevant research

findings relating the Circumplex model to delinquency.

Structural Variables

As denoted by Tolan et al (1986), the majority of early research focused on

structural variables such as father's absence. Much of the broken home research could be

considered to fall under this category. A fairly current comprehensive critique attempting

to clarify the relationship between the broken home and juvenile delinquency conducted










by Free (1991) offers an excellent review of this category and broader demographic

variables. Free's findings, which are constant with a study conducted by Wells and

Rankin (1991), suggest that the broken home is more strongly related to minor offenses

than to serious offenses. Further, Free (1991) found that the effects of father absence and

the presence of a stepparent on delinquency were inconclusive and some evidence was

found supporting variations to the broken home/delinquency relationship depending on

gender, race, socioeconomic status, and neighborhood. Inconclusive findings precluded

Free (1991) from being able to discern a clear evaluation regarding the impact of the

timing of the break (childhood verses adolescence) or reasons for the break (divorce

versus death) on delinquency.

A review provided by Yoshikawa (1994), concluded that effects of family

structural variables such as broken homes, separation from parents, and number of

parents in the family, were indirectly mediated by parenting variables which are often

considered variables of family functioning (Bates, Bayles, Bennett, Ridge, & Brown,

1991; Cohen & Brooks, 1987; Craig & Glick, 1963; Laub & Simpson, 1988; Liska &

Reed, 1985; McCord, 1979; Patterson, 1982). General findings across the field of

delinquency have lead to the conclusion by many in the field that family structure appears

to be of little significance in over all juvenile delinquency, especially when controlling

for family functioning (Cernkovich & Giordano, 1987; Henggeler, 1989; Lauritsen, 1993;

Loeber & Stouthamer-Loeber, 1986; Lorion, Tolan, & Wahlar, 1987; Rosen, 1985;

Tolan, 1987 ; Tolan et. al, 1986; Tolan & Loeber, 1993; Tolan & Lorion, 1988 Tolan &

Mitchell, 1989; Yoshikawa, 1994).








43

Thus, as Nye (1958, p.34), an early researcher in the field of delinquency concluded, "It

is not the structure of the family per se which is causally related to delinquency, but

rather the actual relationships and interactional patterns which are the key variables."

Family Functioning

Family functioning was denoted by Tolan et al (1986) as the more recent and

primary category of family variables which play a major role in the development and

maintenance of juvenile delinquency. Family functioning variables are mainly seen to

consist of qualities including family interactional style and emotional atmosphere. The

following is a summary of five family functioning characteristics or interactions within

families having antisocial children which distinguish them from other families as outlined

by Tolan and Mitchell (1989) and corroborated by many other researchers (Chamberlain

& Rosicky, 1995, Henggeler, 1989; Henggeler, Melton, Smith, Foster, Hanely, &

Hutchinson, 1993; Lyton, True, Eisen, 1995; McGuffin & Gottesman, 1985; Wasserman,

Miller, Pinner, & Jarmillo, 1996; Yoshikawa, 1994).

First, families having delinquents often demonstrate long-standing and high

frequency levels of parental conflict, especially around discipline and value directives to

the children (Alexander, 1973; Hetherington, Stowie, & Ridberg, 1971; Reiss, 1981;

Singer, 1974). These families are often market by inconsistent disciplinary practices and

unintentional parental reinforcement (McCord, 1979; Patterson, & Stouthamer-loeber,

1984). Second, the direction of conversations and more importantly the influence of

power on family decisions is rarely differentially influenced between parents and children

(Alexander, 1973; Hetherington et al., 1971; Minuchin, Montalvo, Gurmey, Rosman, &










Schumer, 1967). Third, family interactions are frequently coercive for all involved

(Patterson, 1986). As a result of the coercive nature of relationships, positive expressions

seldom occur and they are unlikely to be followed by positive responses (Alexander,

1973). Similarly, Hanson, Henggeler, Haefele, & Rodick (1984), Power, Ash,

Schoenberg, and Sorey (1974), and Salts, Lindholm, Goddard, & Duncan, (1995) have all

suggested that in general, research supports the observation that families of delinquents

tend to exhibit more conflict than families of non-delinquents. Overall, this third point

emphasizes a general lack of positive affect in delinquent family interactions.

Fourth, according to Tolan and Mitchell (1989), communication in these families

is more often misperceived and labeled as aggressive than in other families (Alexander,

1973). There is a heightened tendency in the entire family to be suspicious of the

motivations of others and to assume intentional aggression. This propensity is usually

more prominent in the identified patient. Systemically, this leads to less emotional

cohesion, especially during times of conflict (Hanson, Henggeler, Haefle, & Rodick,

1984; Henggeler, 1989; Tolan, 1987;1988a; Tolan & Loeber, 1993). The fifth and final

discriminating characteristic of these families, is that a large percentage of

communication time is dominated by one or two members with an implicit or sometimes

explicit message proclaiming a lack of willingness to compromise. Similarly, family

problem-solving interactions are often viewed by members as threatening and as a

situation of competitiveness rather than joint challenge (Reiss, 1981). In sum, according

to this fifth point, it is Tolan and Mitchell's (1989) conclusion that much of the

communication is defensive, hostile, and aimed at maintaining one's safety.










Other summaries have listed similar distinguishing characteristics. For example,

the review offered by Scholte (1992), found major family risk factors regarding

delinquency included: (1) severe family conflict, (2) insecure attachments, (3) poor

supervision, (4) nondemocratic child-rearing practices, and (5) antisocial behavior at

home. Taking this review of the characteristics of delinquent families into consideration,

it is not surprising that many researchers have found between 30 and 40 percent of

variation in child antisocial behavior to be due to poor parenting and family interaction

variables, (i.e., poor family functioning) (e.g., Baldwin & Skinner, 1988; Patterson, 1986;

Patterson, Debaryshe, & Ramsey, 1989; Patterson, Dishion, & Banks, 1984).

The following will be an explanation of the Circumplex model which was used in

the current study. This theoretical model will help provide insights into the mechanisms

and characteristics within the family system which may effect the level of delinquency.

CircumplexModel of Marital and Family Systems

The current study utilized the Circumplex Model of Marital and Family Systems

(Olson, Sprenkle, & Russell, 1979; Olson, Russell, & Sprenkle, 1983, 1989) to

theoretically conceptualize family functioning. This model was developed in an attempt

to bridge the gap between research, theory, and practice (Olson, 1986). The core

components of this systems theory (cohesion and adaptability) were derived out of an

attempt to delineate two aspects of marital and family behavior that appear as underlying

dimensions for the multitude of concepts in the family field (Olson, Sprenkle, & Russell,

1979).








46

A review of the literature conducted by Olson et al (1979) brought to light over 50

concepts related to one or both of these dimensions. For example, as illustrated by

Edman, Cole and Howard (1990), related to cohesion are Minuchin's (1974) concepts of

boundaries, disengagement, and enmeshment, Bowen's (1959) concepts of emotional

divorce, differentiation, and emotional fusion, Hess and Handel's (1959) concepts of

separateness and connectedness, and Wynne and his colleagues' (1958) concepts of

pseudohostility, mutuality, and pseudomuality. Related to adaptability are the Kiemrnan

and Tallman's (1972) concepts of flexibility and spousal adaptability, Wertheim's (1975)

concepts of morphostasis and morphogenesis and the Group for the Advancement of

Psychiatry's (1970) concepts of role agreement, and flexible leadership. These concepts

along with the foundations of general systems theory (Buckley, 1967) have all played a

role in the theoretical formulations of family functioning as modeled by the Circumplex

model. In the current study, this model was measured through the use of the FACES-Il.

The following will be an overview of the Circumplex Model of Marital and Family

Systems followed by research relating this model to delinquency.

Cohesion and adaptability are the two primary qualities used in the Circumplex

model to delineate the levels of family functioning. Family functioning is defined to

range from the most healthy or Balance family types, to Mid-Range, to the least healthy

or Extreme family types. The level of communication within the family is the third

dimension of the model. Communication is hypothesized to facilitate the family's ability

to shift upwards from lower levels of functioning or, if poor communication is present,

deteriorate to lower levels of family functioning.








47

To determine a family's overall level of family functioning from this perspective,

their quality of cohesion and adaptability must be established. Family cohesion is

defined as "the emotional bonding that family members have towards one another"

(Olson, Russell, & Sprenkle, 1983, p. 70). Cohesion is seen as varying along a continuum

consisting of four basic levels. These levels vary from the extremely low (disengaged), to

moderate (separated, connected), to extremely high (enmeshed). Similarly, adaptability is

defined to also vary along a continuum consisting of four basic levels. These levels vary

from extremely low (rigid), to moderate (structured, flexible), to extremely high

(chaotic). Family adaptability is defined as "the ability of a marital or family system to

change its power structure, role relationships, and relationship rules in response to

situational and developmental stress" (Olson et al., 1983, p.70).

To understand the meaning behind the levels of family functioning it is important

to understand the central hypothesis to the Circumplex model. This model hypothesizes

the existence of a curvilinear relationship between the dimensions of cohesion and

adaptability and family functioning (Olson, McCubbin, Barnes, Larson, Muxen, &

Wilson, 1985). Thus, as previously outlined, those families who exist in the mid ranges of

cohesion and adaptability (Balanced family types) are hypothesized to be most viable for

healthy family functioning and development (Olson, 1989). The balanced families have

moderate cohesion (separated, connected) representing a balance between too little

closeness (disengaged) and too much closeness (enmeshed) in the family. Similarly,

balanced families also have moderate adaptability (structured, flexible) representing a

balance between too little change (rigid) and too much change (chaotic) in the family.










Families found to range in the extremes of cohesion and adaptability (Extreme

family types) are generally seen as most dysfunctional and problematic in terms of family

functioning and development (Olson, Sprenkle, & Russuel, 1979). It is also hypothesized

that families who are of Balanced type have better communication skills than families in

the Extreme types (Olson, 1989). Overall, the Circumplex model is clearly defined and

easily measurable (FACES-11) which contributed to its utility in distinguishing levels of

family functioning.

The utility and theoretical tenets postulated by the Circumplex model have been

substantiated throughout the literature. For example, it has been clearly established that

the Circumplex model can reliably discriminate between problem families and non-

symptomatic families (Walsh, 1993). Also, Olson (1994) has made a strong case

substantiating the underlying curvilinear hypothesis of the Circumplex model.

Further support also exists within the literature for the model's hypothesis which

suggests that lower functioning families such as families with delinquents would reflect

more troubled communications than higher functioning families. For example, in relation

to communication, such families have been associated with inconsistent family

communication patterns (Lessin & Jacob, 1984), high amounts of paternal and maternal

defensive communication in competitive contexts (Alexander, Waldron, Barton, & Mas,

1989), and generally aggressive and unclear communications styles (Alexander, 1973;

Tolan & Mitchell, 1989).

Most relevant to the present study was the support found across several reviews of

the Circumplex model's utility to distinguish among levels of delinquency (e.g., Geismar










& Wood, 1986; Henggeler, 1989). Findings similar to the above reviewed have

contributed to prominent researchers in the field of delinquency to indorse the

Circumplex model as a family systems model of choice in the area of delinquency

research and treatment (Henggeler, 1989; Maynard & Hultquist, 1988; Tolan & Lorion,

1988; Worden, 1991). The following will be a review of research findings relating the

two central dimensions of the Circumplex Model (adaptability and cohesion) to

delinquency.

Adaptability

While still supported, the dimension receiving the least empirical backing has

been the adaptability dimension of the Circumplex model. This dimension has not

consistently been shown to discriminate between levels of delinquency (Cox, 1996;

Hanson, Henggeler, Haefle, & Rodick, 1984, Henggeler, Melton, Smith, Foster, Hanley,

& Hutchinson, 1993; Krohn, Stem, Thomberry, & Jang, 1992; Tolan, 1988a). According

to Henggeler (1989), this may be due to sampling and measurement differences. While

according to Olson (1994), it may be more an artifact of the current likert scale design

utilized in the FACES-LI.

However, other studies have utilized the FACES and demonstrated a relationship

between the extremes of adaptability and levels of delinquency. For example, in a sample

of juvenile offenders, Rodick, Henggeler, and Hanson (1986), found that families of

delinquents were more chaotic and disorganized. Blaske, Borduin, Henggeler, and Mann

(1989) found that the families of adolescent offenders, especially violent offenders, were

more rigid and inflexible.








50

Similarly, the studies of McGaha and Foumier (1988) exploring families having

violent offenders and Henggeler, Burr-Harris, Borduin, and McCallum, (1991) studying

families with repeat adolescent offenders, each found scores suggesting these families

existed in the extremes of adaptability as measured by the FACES. Though mixed

findings exist, reviewers have generally concluded that a link appears to exits between

adolescent antisocial behavior and both low family adaptability (rigid family structure)

and high family adaptability (chaotic family structure) (e.g., Geismar & Wood, 1986;

Henggeler, 1989).

Cohesion

The relationship between many different forms of cohesion in family systems and

delinquency has been strongly supported in the literature. For instance, Patterson,

DeBaryshe, and Ramsey (1989), characterized families of antisocial children to have little

parental involvement with their children; Phares and Compas (1992), reported that many

researchers have found delinquent families to have conflictual, unaffectionate father son

relations and to have generally poor parental relations, and Johnson, Su, Gerstein, Shin,

and Hoffman, (1995) determined that research has consistently shown that a low degree

of parental support (i.e., parental interest, understanding, supervision, discipline,

encouragement and love) is a key determinant of poor psychosocial adolescent

functioning including delinquency. Further, Krohn, Stem, Thomberry, and Jang (1992),

Moffitt (1993), Lauritsen (1993), and Salts, Lindholm, Goddard, and Duncan, (1995)

have all concluded that low family cohesion or low family attachment bonds were among

the strongest predictors of delinquent and persistent antisocial behavior.








51

Other examples strengthening the link between family cohesion and delinquency

are Shaw and Bell's (1993) conclusions that family factors involving discipline and the

quality of parent-child relations are at the for front of meta-analyses in the delinquency

field and Rosen's (1985) determination that after a comprehensive review of the

literature, no matter how delinquency is defined or measured or what population is being

studied, the research consistently shows that poor parent-child relationships, no matter

how defined or measured are associated with higher levels of delinquency. And finally,

Tolan, Cromwell, and Brass (1986), concluded that the literature strongly demonstrates

family cohesion and parental discipline as the variables which most strongly

differentiated levels of delinquents second only to individual aggression.

Similarity, research specifically reporting on the cohesion dimension of the

Circumplex model has also shown a consistent relationship between levels of cohesion

and levels of delinquency. For example, a study conducted by McGaha and Foumrnier

(1988) found that families having violent offenders exist in the extremes of cohesion as

measured by the FACES. A study conducted by Henggeler, Melton, Smith, Foster,

Hanley and Hutchinson (1993) with a sampled of 87 serious juvenile offenders from

disadvantaged families, found cohesion correlated with non-violent and violent

offending. Further, while studying general delinquency, Maynard and Hultquist (1988)

found that among their small sample of delinquents, 44 percent of the families fell in the

extreme range, 48 percent were mid-range, and 2 percent were in the balanced range.

Maynard and his associate concluded that from their sample it would seem deviant

behavior of the youths may be indicative of overall family dysfunction.








52

These findings are consistent with other researchers findings in that FACES scores tend

to be in the extreme ranges of cohesion for families with delinquent youth (Hanson,

Henggeler, Haefle, & Rodick, 1984; Rodick, Henggeler, & Hanson, 1986; Tolan, 1988a).

Following that the current study explored the rate of delinquency, of particular

interest were findings surrounding rates of delinquency and cohesion as measured by the

FACES. For example, Druckman (1979) found that juveniles in her study with the

highest recidivism rates came from families in the extreme enmeshed category.

Henggeler, Burr-Harris, Borduin, and McCallium (1991) researching families with repeat

adolescent offenders, also found scores indicating these families existed in the extremes

of cohesion. Finally, Cox (1996) concluded that her results indicated the frequency of

arrest not severity of crime most correlated with extremes of the cohesion range. Cox

(1996) also reported, though not statistically significant, that severity of crime correlated

negatively with a measure of self-esteem.

Overall, the presented studies and other reviews (e.g., Geismar & Wood, 1986;

Henggeler, 1989) support the existence of a relationship between levels of adolescent

antisocial behavior and both low family cohesion (disengaged family structure) and in a

few cases, for high family cohesion (enmeshed family structure). In sum, the empirical

literature provides ample support for the utility of the Circumplex model to distinguish

levels of delinquency and to provide insight into the relationship between family

functioning and delinquency.








53

The following review of Bronfenbrenner's (1979) holistic eco-systemic model of human

development outlines the theoretical grounds utilized to justify the current study's

exploration of the existence of a relationship between family functioning and personality

across the rate of delinquency.



Eco-Systemic Model of Human Development

Bronfenbrenner's ecological paradigm, first introduced in the 1970s

(Bronfenbrenner 1974, 1976, 1977, 1979), represented a reaction to the restricted scope

of most research then being conducted by developmental psychologists (Bronfenbrenner,

1994). According to Bronfenbrenner (1994) the primary scientific aim of this ecological

approach is not to claim answers, but to provide a theoretical framework that, through its

application, will lead to further progress in discovering the processes and conditions that

shape the course of human development. Many researchers in the field of juvenile

delinquency have recognized Bronfenbrenner's (1979) Eco-Systemic Model of Human

Development as a viable frame to explain the need for a multivariate approach in the

understanding, treatment, and prevention of juvenile delinquency (Bogenschneider, 1996;

Henggeler, 1989; Lemer, 1991; Liddle, 1995; Magnusson, 1995; Moffitt, 1993; Salts,

Lindholm, Goddard, & Duncan, 1995; Mulvey, Arthur, Reppucci, 1993; Paris, 1996;

Reid, 1993; Tolan & Loeber, 1993; Yoshikawa, 1994; Worden, 1991).










The current study utilized Bronfenbrenner's model to justify the investigation of the

existence of a relationship between personality (i.e., characteristics of the self) and family

functioning (i.e., environmental characteristics of the system) across levels of delinquent

offending (i.e., social development).

The following will be a discussion of Bronfenbrenner's (1979) Eco-Systemic

Model with a focus on the proximal influences of family functioning (in particular

cohesion and adaptability) and personality on development. This will be followed by a

discussion of the theorized reciprocal nature of personality and family functioning and

their possible risk and protective influences on development. The section will close with

an explanation of the eco-systemic position of "goodness of fit" as related to one's

developmental outcome. Relevant research from the field of juvenile delinquency will be

included throughout this discussion.

Bronfenbrenner's (1979) Eco-Systemic Model has at its foundation the premise

that human development occurs as a joint function of characteristics of the person and the

environment. In essence, this model theorizes that a complexity of multiple factors, rather

than a single factor, influences human development and social functioning. A relevant

area of support for this position has been the discovery that the development of

delinquency is a result of many complex interacting factors (Benda, 1987;

Bogenschneider, 1996; Calabrese & Adams, 1990; Marsh, Clement, Stoughton, &

Marckioni, 1986; Jesness, 1996; Salts, Lindholm, Goddard, & Duncan, 1995; Tolan &

Loeber, 1993; Tolan, Cromwell, & Brass, 1986; Worden, 1991). According to

Bronfenbrenner's model, the multiple factors of influence on development emanate from










several levels of the ecosystem. These levels vary from those directly including the

individual to more distal factors within the environment not necessarily including the

individual. Bronfenbrenner (1979) describes the ecosystem to be a topologically nested

arrangement of concentric structures with each containing the next. As previously

reviewed, these structures are referred to as micro-, meso-, exo-, and macrosystems. The

microsystem was most relevant to the current study and will be the focus of the current

literature review.

The microsystem refers to a pattern of activities, roles, and interpersonal relations

experienced by the developing person in a given setting with particular physical and

material characteristics (Bronfenbrenner, 1979). Thus, it involves the structures and

processes taking place in an immediate face to face setting containing the developing

person (e.g., family, school, peer group, workplace, etc.). For example, beyond the

previously established relationship of personality and delinquency and family functioning

and delinquency, is evidence relating ones peer group (Elliot et al., 1985; Erickson &

Jensen, 1977; Dodge, 1980; Patterson & Dishion, 1985; Tolan, 1988b; Tolan, 1990;

Tolan & Loeber, 1993), School (Hawkins & Lam, 1987; Salts, Lindholm, Goddard, &

Duncan, 1995;), job site (Duster, 1987; Fagan & Wexler, 1987; Hirschi, 1969; Tolan,

1988b), Church (Higgins & Albrecht, 1977), and community (Bogenschneider, 1996) to

levels of delinquency.

Bronfenbrenner, (1988) considers the most influential forces on human

development to be the proximal environmental and organismic influences within the

microsystem. These proximal influences emanate either from within the person, or from










physical features, objects, and persons in the immediate face to face setting

(Bronfenbrenner, 1988). The two proximal influences of focus in the current study were

the adolescent's personality and the adolescent's family functioning. The relationship

between these two proximal influences along with other various variables of influence on

development were theorized to be reciprocal in nature and to culminate into the forces

determining the outcomes of development (Bronfenbrenner, 1979).

The basic nature of the relationship between the influencing variables on

development is described in Bronfenbrenner's (1995) two defining properties of his

ecological systems theory. As previously reviewed, according to Proposition 1,

especially in its early phases, and to a great extent throughout the life course, human

development is seen to takes place through processes of progressively more complex

reciprocal interaction between an active, evolving biopsychological human organism and

the persons, objects, and symbols in its immediate environment. According to

Bronfenbrenner (1995), in order for these interactions to be effective, they must occur on

a regular basis over extended periods of time. These enduring forms of interaction in the

immediate environment are between the proximal influences and are referred to as

proximal processes. Examples of enduring patterns of proximal processes are found in

parent-child and child-child activities, groups or solitary play, reading, learning new

skills, studying, athletic activities, and performing complex tasks (Bronfenbrenner, 1995).

Further, according to Proposition 2, the form, power, content, and direction of the

proximal processes effecting development vary systematically as a joint function of the

biopsychological characteristics of the developing person; of the environment, both










immediate and more remote, in which the processes are taking place; and the nature of

the developmental outcomes under consideration (Bronfenbrenner, 1995). Thus, as many

researchers from the eco-systemic approach have supported, rather than view the primacy

of one factor over another's influence on developmental outcomes, more a reciprocal

interaction of factors would be expected to exist (Bogenschneider, 1996; Borduin, Pruitt,

Henggeler, 1985; Bronfenbrenner, 1995; Calabrese & Adams, 1990; Cohen & Siegel,

1991; Dadds, 1987; Farrington, 1995; Henggeler, 1989; Lemer, 1991; McLeod,

Kruttschnitt, & Domfield, 1994; Wasserman, Miller, Pinner, & Jaramillo, 1996;

Magnusson, 1995; Paris, 1996; Sameroff, 1975; Shaw & Bell, 1993; Tolan & Leober,

1993; Walsh, Craik, & Price, 1992). The following will be a discussion of the

relationship between the proximal influences of family functioning (in particular cohesion

and adaptability) and personality.

Relationship Between Family functioning and&Personality

Psychological health was the focus of much of the earlier work exploring the

relationship between family functioning and developing children and adolescents. For

example, Minuchin, Rossman, and Baker's (1978) work lead them to conclude that the

emotional boundaries of family members (i.e., cohesion) and family adaptation to

developmental and external pressures (i.e., adaptability) appear to have a curvilinear

relationship to the psychological health of family members. The extremes in either

parameter, according the Minuchin et al. (1978) appeared to characterize dysfunctional

family systems and to contribute to poor psychological health.










This conclusion, especially in relation to cohesion, has since been supported by many

others in the field (Amerikaner, Monks, Wolfe, & Thomas, 1994; Barnes & Farrell, 1992;

Farrell & Barnes, 1993; Farrell, Bamrnes, Banerjee, 1995; Lin, Dean, & Ensel, 1985;

Prange, Greenbaum, Silver, Friedman, Kutash, & Duchnowski, 1992; Walsh & Olson,

1989).

Other researchers have focused on the relationship of family functioning and

personality development in specific. For example, similar to Bronfenbrenner (1979),

Loevinger (1976) purports that personality or ego development is stimulated by the

interpersonal environment, especially the intrafamilial environment. Loevinger theorized

that parents can function as pacers or factors of equilibrium in their child's ego growth.

More recently, Novy, Gaa, Frankiewicz, Liberman, and Amerikaner, (1992) working

from Loevinger's theory, sampled 61 nonchronic juvenile offenders and their parents and

found an association between FACES-II scores of cohesion and adaptability and the

juvenile offender's level of ego development. Results revealed functional levels of family

functioning were associated with higher levels of ego development while lower levels of

ego development were associated with both the parent's and the adolescent's view of a

dysfunctional range of cohesion and adaptability. Some variations were reported by Novy

et al. (1992) depending on match or mismatch of parental and adolescent view of family

functioning.

A further example of specific work exploring the importance of the quality of

family interactions in ego development is a study conducted by Hauser, Powers, Noam,

Jacobson, Weiss, and Follanshee (1984). These researchers found that family interactions








59

emphasizing warmth, acceptance, and understanding tend to support higher levels of ego

development and identity clarification in adolescents. Further, Hauser et al. (1984)

concluded that the absence of such positive interactions and the presence of their negative

counterparts (devaluing, indifference) are associated with diminished levels of adolescent

ego development.

In general, consistent support has been found to demonstrate that the extremes of

the cohesion and adaptability dimensions are more associated with poor development of

personality, while more functional levels of cohesion and adaptability are more associated

with healthy development of personality (e.g., Beavers, 1977; Prange, Greenbaum, Silver,

Friedman, Kutash, & Duchnowski, 1992; Walsh & Olson, 1989).Thus, the eco-systemic

position of a hypothesized relationship between the proximal influences of family

functioning and personality could be interpreted to have empirical support. The focus of

this review now turns to literature more specifically supporting the hypothesized

reciprocal nature of the relationship between the two proximal influences of personality

and family functioning.

Reciprocal Nature of Variableson-Development

The reciprocal nature of the relationship between family functioning and

personality can be interpreted to gain support through a study conducted by Smets and

Hartup (1988). The primary goal of their study was to explored the relationship between

cohesion and adaptability and child symptomatology while controlling such factors as

personality. Their sample consisted of 120 families and their children who ranged

between the ages of 6 and 16. All of these families were referred to one of six out patient










clinics in Northern Wisconsin for treatment. Smets and Hartup (1988) reported that

extreme range scores on the FACES-11 for cohesion and adaptability were associated

more with low self-esteem than were midrange family functioning scores. The results

could be seen to supported the position that a child's self-esteem and sense of self-

efficacy is tied to their family system.

Further, Smets and Hartup (1988) emphasized that due to the correlational nature

of the statistics used, caution is necessary when attempting to make causal interpretations.

The authors suggested that low self-esteem (and concomitant behavioral manifestations)

may be disruptive factors within the family, but the reverse may also be true. Thus, a

reciprocal model may be seen to exist. The dysfunctional family system may lower the

self-esteem of the child, but at the same time, the defensive tactics used by the children

with low feelings of self-worth probably also reduce the effectiveness of the family

system to function.

Similarly, according to Wasserman, Miller, Pinner, and Jaramillo, (1996) grounds

exist supporting the view that the juxtaposition of a difficult child (e.g., impulsive,

aggressive) with an adverse family context (e.g., incompetent parenting) may initiate risk

for a persistent pattern of oppositional and antisocial behavior through a transactional or

reciprocal process between the family and the child. Other researcher have concurred

with this interpretation (e.g., Cicchetti & Richters, 1993; Conduct Problems Prevention

Research Group, 1992; Moffitt, 1993).

In sum, the evidence provided by Smets and Hartup (1988) and Wasserman,

Miller, Pinner, and Jaramillo, (1996) are consistent with many other researchers who










have supported the reciprocal nature of family functioning and personality on the

outcome of development (Bronfenbrenner, 1979; Brooks, Whiteman, Normura, Gordan,

& Cohen, 1988; McLeod, Kruttschnitt, & Domfeld, 1994; Lemer & Spanier, 1978; Tolan

& Mitchell, 1989; Shaw & Bell, 1993; Wasserman, Miller, Pinner, & Jaramillo, 1996).

The following section will bring to light the possible influences of the protective and risk

factors associated with family functioning and personality on development. This is seen

to further strengthen the existence of a possible relationship between family functioning

and personality upon the rate of delinquency.

Protective and Risk Factors

The complex impact on the course of development that the existence of a

reciprocal relationship between family functioning and personality appear to have is

further strengthened by evidence of each factor's risk and/or protective influences.

According to Bogenschneider (1996) the acknowledgment of possible risk and protective

aspects of variables on the outcome of development is an important facet to an eco-

systemic orientation. The following will be a review of the defining properties of

protective and risk influences along with possible specific family functioning and

personality examples of these influences on delinquency.

Protective factors are qualities or conditions that moderate a juvenile's exposure

to risk (Wilson & Howell, 1994). They are considered by both Garmezy (1985) and

Rutter (1990) to mitigate the impact of risk on adolescent behavior and development. In

essence, their role is to modify the response to later adversity rather than to foster normal

development in any direct sense (Rutter, 1985). However, this does not imply that










protective factors can not impact development directly (Farrell, Barnes, & Banerjee,

1995). Risk factors on the other hand are qualities or conditions that directly contribute to

dysfunction (Rutter, 1990). Thus, in general, protective factors or processes are not

simply the opposite if risks; protective processes do not load directly to an outcome, as

risks do, but rather operate when a risk is present (Rutter, 1987).

Further, it can be seen as evident that risk factors operate in a cumulative and

interactive fashion. This is based on a review of several longitudinal studies exploring the

impact of multiple risks on child development and delinquency (Yoshikawa, 1994).

According to Yoshikawa (1994), a multiplicative, rather than simply additive, relation is

often found between the number of risk factors and likelihood of dysfunction. Risk

factors can interact (or, to use Rutter's (1979) term, "potentiate" each other) to greatly

increase chances of later dysfunction. For example, Kolvin, Miller, Fleeting, and Kolvin

(1988) explored multiple risk factors measured during the first 5 years of a Newcastle,

England, Birth cohort of 847 children. It was found that the mean number of criminal

offenses committed up to the age of 33 was 0.7 for those with no risk factors present, 2.9

for those with one or two, and 5.1 for those with 3 or more. These findings are consistent

with other studies exploring the cumulative impact of multiple risk factors and level of

antisocial behavior (Leober, 1990; Saner & Ellickson, 1996).

Across the literature protective and risk factors have been categorized by several

authors in similar ways. These include Jessor's (1991) social environment and personality

domains, Wilson, JD, and Howell's (1994) individual characteristics, bonding (inside and

outside the family), and healthy beliefs and clear standards of behavior categories, Moen










and Erickson's (1995) social and personal resources, Garmezy's (1985) personality

features, family cohesion, and external support features, and Bogenshneider's (1996)

breakdown by individual, family, peer, school, work setting, and community levels.

Consistent across all of these examples is the inclusion of an individual level and an

environmental level. This parallels the eco-systemic position that development results

from a function of forces including the individual and the environment. The following

review of protective and risk factors as related to levels of delinquency will focus on

family functioning and personality influences.

Qualities of family function which may act as protective factors indirectly

contributing to a decreased level of delinquency include: healthy levels of family

cohesion or family bonds (Bogenshneider, 1996; Hirschi, 1969, Garmezy, 1985, Jessor,

1991; Moen & Erickson, 1995; Paris, 1996; Rosen, 1985; Rutter, 1979; Wilson, JD, &

Howell, 1994), effective and nurturing parenting (Farrington & West, 1981; Liddle, 1995;

McCord, 1986; Pulkkinen, 1983), clear standards of family behavior (Wilson, JD, &

Howell, 1994), the absence of family discord (Garmezy, 1985; Hirschi, 1969, Moen &

Erickson, 1995; Rutter, 1979), and intimate family communication (Hirschi, 1969).

Qualities of family function which may act as risk factors directly contributing to an

increased level of delinquency include: insecure attachments (Bogenscheider, 1996:

Campbell, 1990), chaotic family environment (Paris, 1996), parental instability (Paris,

1996), poor parent child rearing practices (Bogenschneider, 1996; Leober, 1990; Paris,

1996), unclear family rules, expectations, and rewards (Bogenschneider, 1996), and

general family dysfunction (Leober, 1990; Paris, 1996). These examples provide a similar










profile to the Circumplex model. Thus, is would appear that aspects of the balanced

regions of cohesion and adaptability could act similarly to protective factors while, the

extremes could act similar to the risk factors.

Qualities of personality which may act as protective factors indirectly contributing

to a decreased level of delinquency include: positive self-esteem (Bogenschneider, 1996;

Heaven, 1996; McFarlane, Bellissimo, & Norman, 1994; Schweitzer, Seth-Smith &

Callan, 1992), resilient temperament (Rutter, 1990; Wilson, JD, & Howell, 1994),

psychological hardiness (Kobasa, 1979; Amerikaner, Monks, Wolfe, & Thomas, 1994),

health temperamental, cognitive, and emotional resources (Quay, 1987), high value on

academic achievement (Jessor, 1991), healthy beliefs and a clear standard of behavior

(Wilson, JD, & Howell, 1994), high intolerance of deviance (Jessor, 1991), altruism and

basic values (Moen & Erickson, 1995), well developed social and intellectual skills

(Bogenschneider, 1996), and a positive social orientation (Wilson, JD, & Howell, 1994).

Qualities of personality which may act as risk factors directly contributing to an increased

level of delinquency include: antisocial/antiauthority/procriminal attitudes (Farrington,

1995; Glueck & Glueck, 1950; Guerra, 1989; Hoge, Andrews, & Leshied, 1994; Jesness,

1996), high levels of alienation or rebelliousness (Bogenschneider, 1996)

high levels of aggression (Blumstein, Farrington, & Moitra, 1985; Craig & Glick, 1968;

Eron & Huesmann, 1990; Farrington, 1995; Pulkkinen, 1983), having multiple factors of

Asocial personality disorder or factors of Conduct disorder (Paris, 1996),

impulsive disposition (Kagan, 1994), and high behavioral activation levels (Paris, 1996).

These examples provide a similar profile to the personality characteristics assessed in the








65

current study. Thus, this would imply that varying levels of the SM, MA, and AI scales in

the Jesness Personality Inventory may also represent risk factors when extremely

elevated.

The above review provides considerable evidence of the multiple way in which an

interaction between characteristics of family functioning and personality may be

expressed as forms of risk and protective factors influencing each other and development.

In essence, protective and risk factors contribute to the reciprocal dance between the

proximal influences and may effect the odds or probabilities that the levels of delinquent

offending may vary. Protective and risk factors are another facet of the eco-systemic

orientation which suggests that there may existence an interaction between family

functioning and personality on the rate of delinquency. The following section will

provide insight into how the eco-systemic model emphasizes the quality of the

relationship or "goodness of fit" between the individual and environment which may

contribute to the individual's developmental outcomes.

Goodness of Fit

The protective and risk influences along with the reciprocal nature of family

functioning and personality are viewed to contribute to the forces shaping the outcome of

development. These factors add to the complexity of the fit between the individual and

the environment. According to the eco-systemic model, the overall "goodness of fit"

between the characteristics of a living organism and its surroundings may result in the

formation of adaptive or maladaptive psychological and social functioning

(Bronfenbrenner, 1988; Lemer, 1982; Rutter & Rutter, 1993; Thomas & Chess, 1977;










1980; Worden, 1991). In general, during the interaction of intrapersonal dynamics with

interpersonal forces, if a child's characteristics match (or fit) the demands of a particular

setting, adaptive outcomes may accrue, but if a "poor fit" between environmental

expectations and demands and the capacities of the child at a particular level of

development exist, disturbed behavioral functioning may instead manifested (Thomas &

Chess, 1980; Worden, 1991).

When considering a developmental outcome, Bronfenbrenner's (1995) Eco-

Systemic Model of Human Development recommends factoring into the evaluation the

"goodness of fit" for the individual throughout the interaction between many

characteristics of the individual and multiple levels of the environment over time. Thus,

as strongly supported by the empirical literature, Bronfenbrenner's (1979) overall view of

criminal behavior is that it is multi-determined by the reciprocal interplay of

characteristics of the individual youth and the key social systems in which the youths are

embedded (i.e., family, peer, school, neighborhood, community) (Bogenschneider, 1996;

Elliot, 1994; Hawkins & Catalano, 1993; Henggeler, 1989, 1996; Thornberry, Huizinga,

& Loeber, 1995: Tolan & Guerra, 1994).

Further, the eco-systemic model theorizes that playing a dominate role in this

process are the proximal influences located within the microsystem (Bronfenbrenner,

1979). Thus, the eco-systemic model provided the theoretical justification for the current

study's examination of the existence of a relationship between the proximal influences of

family functioning and personality upon the rate of delinquency.










Summary

In summary, a review of the literature was presented which included significant

theoretical and empirical evidence relating personality, family functioning and

Bronfenbrenner's (1979) eco-systemic model of human development to rate of juvenile

delinquency. A significant gap in the literature exists regarding the exploration of the

existence of a relationship between personality and family functioning across the rate of

delinquency (Arbuthnot, Gordon, & Jurkovic, 1987; Jesness, 1996; Le Blanc, 1992;

Lorion, Tolan, & Wahlar, 1987; Mulvey, Arthur, & Reppucci, 1993; Tolan, Cromwell, &

Brass, 1986). Bronfenbrenner's (1979) Eco-Systemic Model of Human Development was

presented to provide the theoretical justification for the current study's attempt to fill this

gap through addressing the question "Does a relationship exist between an adolescent's

personality (i.e., characteristics of the self) and his/her perception of family functioning

(i.e., environmental characteristics of the system) across his/her rate of delinquent

offending (i.e., social development) while holding relevant factors such as age, gender,

and race constant?"














CHAPTER THREE
METHODOLOGY



This chapter will address the following topics: (a) statement of purpose, (b)

relevant variables, (c) hypotheses, (d) data analysis, (e) description of the population, (f)

sampling procedures, (g) sample, (h) data collection, and (i) instrumentation.



Statement ofPurpose

This study is based on the eco-systemic view that children are shaped not only by

their personal attributes, but also by the ever-widening environments in which they

develop (Bronfenbrenner, 1979). Central to the course of social development is the

interplay between proximal characteristics of the child and their environment

(Bronfenbrenner, 1988). Yet to be fully explored in the field of delinquent study is the

possible existence of a relationship between two relevant proximal influences known as

personality and family functioning. This study was designed to investigate the existence

of a relationship between personality and family functioning across the rate of juvenile

delinquency.










Delineati-oifRelevant Variables

DependentVariable

The dependent variable was the adolescent's rate of juvenile delinquency. It was

comprised of the total number of illegal charges with which an adolescent has accrued

over their life time as filed within the juvenile court system at the time of data collection.

This variable was broken into three frequencies of offending which included: first time

offender (having only one charge), multiple offender (having 2 to 4 charges) and chronic

offender (having 5 or more charges) (Hindelang, Hirschi, & Weis, 1981; Tracy,

Wolfgang, & Figlio, 1990; Wolfgang, Figlio, & Sellin, 1972). Utilizing frequency is a

method of measurement common in delinquency research and has shown high reliability

and validity (Cox, 1996; Lau & Leung, 1992; Leug & Drasgow, 1986; Lynam, 1996;

Smith, Visher, & Jarjoura, 1991; Spiuack, Marcus, & Swift, 1986). The utilization of

official records of one's frequency of charges was chosen following that official records

of arrests or court contacts are the most widely reported figures used in the literature

(Mulvey, Arthur, & Reppucci, 1993).

Independent Variables

Age, for the purposes of this study was defined as the listed length of time one has

been alive as provided by the respondent in whole numbers on the demographic

questionnaire. The role of age in understanding delinquency has been fraught with

inconsistent findings. For example, Hindelang, Hirschi, and Weis, (1981) used National

Crime Survey data for 1973-1977 and documented very dramatic age specific variations

in differences of delinquent crime rates. Tolan and Loeber (1993) reported age correlates










positively in adolescence with the overall prevalence of antisocial involvement with a

peak at age 16 for serious offending and dropping off around 17-19. Smith, Visher, and

Jaroura (1991) found age among active offenders did not relate to the frequency of

delinquency activity. From a different view, Smets, and Hartup (1988) and Olczak,

Parcell, and Sttot (1983) both made very strong cases to control for age due to the

possible developmental difference effecting family relations and ultimately levels of

delinquency.

Gender, for the purposes of this study was defined as the indication of male or

female on the demographic questionnaire by the respondent. The role of gender in

understanding delinquency has been debated in the literature (see Yoshikawa, 1994).

Many researchers have found males to have higher rates of offending both according to

official records and self-report data (Canter, 1982; Elliot, Huizinga, & Menard, 1989;

Hindelang, Hirschi, & Weis, 1981; Sander & Ellickson, 1996; Smith, Visher, & Jaroura,

1991; Tracy, Wolfgang, & Figlio, 1990; Wemrner & Smith, 1992) while others have found

no difference in delinquency as a result of gender (Blumstien, Alfred, Cohen, Roth. &

Visher, 1986; Shaw & Scott. 1991). Recently, though only one in four juveniles were

female in the state of Florida during 1994-95, female juvenile crime increased at a faster

rate (55%) than male juvenile crime (23-26%) in Florida during 1994-95 (Department of

Juvenile Justice, 1996).








71

Further gender difference supported by research include, the view that families of female

delinquents are more dysfunctional than families of male delinquents (Henggeler,

Edwards, & Borduin 1987) and that male delinquents are found

to be more vulnerable than girls to family risk for antisocial behavior and delinquency

(Rutter & Giller, 1983; Yashikawa, 1994; Zaslow & Hayes, 1986).

Race, for the purposes of this study was defined as the indication of Caucasian

(White), African American (Black), Hispanic or other by the respondent on the

demographic questionnaire. The focus of this review will be on findings for White and

Black adolescents because these two ethnic groups made up 95% of the available data

sample and constituted all of the reduced sample analyzed in this study.

Predictors such as low levels of family affection and high levels of family conflict

have been found to be associated with White and Black levels of general delinquency

(Doane, 1978; Gove & Crutchfield, 1982; Henggeler, 1989; Salts, Linholm, Goddard, &

Duncan, 1995; Tolan & Lorion, 1988). When considering family cohesion, dysfunctional

levels reflecting enmeshed family systems have been associated with high levels of

offending in the Black youth (Rodick, Henggeler, & Hanson, 1986) while extremely low

levels reflecting disengaged family systems have been associated with high levels of

offending for White adolescents (Tolan, 1988a). Differences in frequency rates have also

been found based on race (Elliot, Huizinga, & Ageton, 1985; Smith, Visher, & Jarjoura,

1991; Tolan & Loeber, 1993; Hindelang, Hirschi, & Weis, 1981).










For example, Elliot and Ageton (1980) and Short (1990) found significantly greater

delinquent and violent behavior for Black youth than White when utilizing police and

court data. Interestingly, self-report studies consistently have been found to reflect no

difference in delinquent behavior by race (Salts, Linholm, Goddard, & Duncan, 1995).

Adaptability, was defined as the extent to which the family system was flexible

and able to change its power structure, role relationships, and relationship rules in

response to situational and developmental stress (Olson et al., 1985). For the purposes of

this study, adaptability was determined by the adaptability score from FACES-11.

Cohesion, was defined as "the emotional bonding that family members had

towards one another" (Olson et al., 1983, p.70). Cohesion incorporates concepts of

emotional bonding, boundaries, coalitions, time, space, friends, decision making,

interests, and reaction (Olson et al., 1985). For the purposes of this study, cohesion was

determined by the cohesion score from FACES-11.

Socialmaladjustmentscale_(SM), Social maladjustment referred to a set of

attitudes associated with inadequate or disturbed socialization. Here, social

maladjustment was defined by the extent to which individuals shared attitudes of persons

who did not meet personal needs and environmental demands in socially approved ways

(Jesness, 1996, p. 5). For the purposes of this study SM was determined by the score on

the SM scale of the Jesness Personality Inventory.

Manifest-aggression scale (MA), Manifest aggression reflected an awareness of

unpleasant feelings (especially anger and frustration), a tendency to react readily with

those feelings, and discomfort concerning the presence and control of those feelings








73

(Jesness, 1996, p. 5). For the purposes of this study, MA was determined by the score on

the MA scale of the Jesness Personality Inventory.

Asocial index(AI), The asocial index reflected a generalized disposition to

resolve social or personal problems in ways that showed a disregard for social customs or

rules (Jesness, 1996, p. 6). Discriminant Function Analysis was used to create this scale

which combines scores from all the other personality scales to best distinguish

delinquents (Jesness, 1996). For the purposes of this study AI was determined through the

use of the Jesness Personality Inventory.



Hypotheses

The following is a presentation of the original hypotheses proposed and the

modified hypotheses that were tested in this study. Modifications were made to the

original hypotheses due to concerns of multicolinearity found in the original full logistic

regression model. While modifications resulted in hypotheses 4, 8, and 9 being left

untestable, the remaining hypotheses differed simply by the number of variables being

controlled during analysis.

Ho,: (Original) There is no relationship between age and rate of juvenile delinquency

as measured by number of criminal charges while holding gender, race,

adaptability, cohesion, social maladjustment, manifest aggression, and

asocial index constant.








74

(Tested)There is no relationship between age and rate of juvenile delinquency as

measured by number of criminal charges while holding gender, race,

cohesion, manifest aggression, and asocial index constant.

Ho2: (Original) There is no relationship between gender and rate of juvenile

delinquency as measured by number of criminal charges while holding

age, race, adaptability, cohesion, social maladjustment, manifest

aggression, and asocial index constant.

(Tested) There is no relationship between gender and rate of juvenile delinquency

as measured by number of criminal charges while holding age, race,

cohesion, manifest aggression, and asocial index constant.

Ho3: (Original) There is no relationship between race and rate of juvenile delinquency

as measured by number of criminal charges while holding age, gender,

adaptability, cohesion, social maladjustment, manifest aggression, and

asocial index constant.

(Tested) There is no relationship between race and rate of juvenile delinquency as

measured by number of criminal charges while holding age, gender,

cohesion, manifest aggression, and asocial index constant.

Ho4: (Original and Untestable) The relationship between family cohesion as measured

by FACES-II and rate of juvenile delinquency as measured by number of

criminal charges will not vary as a function of social maladjustment as

measured by Jesness personality inventory while holding age, gender,

race, adaptability, manifest aggression, and asocial index constant.










Ho5: (Original) The relationship between family cohesion as measured by FACES-Il

and rate of juvenile delinquency as measured by number of criminal

charges will not vary as a function of manifest aggression as measured by

Jesness personality inventory while holding age, gender, race, adaptability,

social maladjustment, and asocial index constant.

(Tested) The relationship between family cohesion as measured by FACES-11 and

rate of juvenile delinquency as measured by number of criminal charges

will not vary as a function of manifest aggression as measured by Jesness

personality inventory while holding age, gender, race, and asocial index

constant.

Ho6: (Original) The relationship between family cohesion as measured by FACES-II

and rate of juvenile delinquency as measured by number of criminal

charges will not vary as a function of asocial index as measured by Jesness

personality inventory while holding age, gender, race, adaptability, social

maladjustment, and manifest aggression constant.

(Tested) The relationship between family cohesion as measured by FACES-II and

rate of juvenile delinquency as measured by number of criminal charges

will not vary as a function of asocial index as measured by Jesness

personality inventory while holding age, gender, race, and manifest

aggression constant.








76

Ho7: (Original) The relationship between family adaptability as measured by FACES-II

and rate of juvenile delinquency as measured by number of criminal

charges will not vary as a function of social maladjustment as measured by

Jesness personality inventory while holding age, gender, race, cohesion,

manifest aggression, and asocial index constant.

(Tested) The relationship between family adaptability as measured by FACES-II

and rate of juvenile delinquency as measured by number of criminal

charges will not vary as a function of social maladjustment as measured by

Jesness personality inventory while holding age, gender, and race constant.

Ho8: (Original) The relationship between family adaptability as measured by FACES-II

and rate of juvenile delinquency as measured by number of criminal

charges will not vary as a function of manifest aggression as measured by

Jesness personality inventory while holding age, gender, race, cohesion,

social maladjustment, and asocial index constant.

(Tested) The relationship between family adaptability as measured by FACES-II

and rate of juvenile delinquency as measured by number of criminal

charges will not vary as a function of manifest aggression as measured by

Jesness personality inventory while holding age, gender, race, cohesion,

social maladjustment, and asocial index constant.










Ho9g: (Original and Untestable) The relationship between family adaptability as

measured by FACES-11 and rate of juvenile delinquency as measured by

number of criminal charges will not vary as a function of asocial index as

measured by Jesness personality inventory while holding age, gender,

race, cohesion, social maladjustment, and manifest aggression, constant.



Data-Analysis

Multinomial logistic regression was used to evaluate the significance of variance

explained in the dependent variable (rate of juvenile delinquency) by combinations of this

study's set of selected independent variables [age (A), gender (G), race (R), adaptability

(ADP), cohesion (C), social maladjustment (SM), manifest aggression (MA), and asocial

index(AI)]. Forms of multinomial regression analysis such as multinomial logistic

regression analysis are supported in the delinquency literature as statistical methods

useful in exploring multivariate models of delinquency (Farrington, 1994; Hoge,

Andrews, & Leshied, 1994; Salts, Linholm, Goddard, & Duncan, 1995; Scholte, 1992:

Tolan, 1987; Tolan & Lorion, 1988; Wasserman, Miller, Pinner, & Jaramillo, 1996). The

use of multinomial logistic regression analysis allowed the analysis of the relationships.

between the independent variables while controlling for the other independent variables

of interest. The following multinomial logistic regression model was originally purposed:


Rate of delinquency = A+G+R+C+ADP+SM+MA+AI+C,AI+ADP,AI+C,SM+C,MA+ADP,SM+ADP,MA








78

Due to discovering multi-colinearity concerns (strong correlations between certain

variables within the full original model), the full model was modified to form two

reduced multinomial logistic regressions models (Model 1 & Model 2). Model 1 was

designed to primarily address hypotheses 1, 2, 3, 5, and 6. Model 2 was run to provide

information regarding the primary nature of hypothesis 7. As stated earlier, hypotheses 4,

8, and 9 were left untestable. The following were the modified multinomial logistic

regression models run in analysis:



Model 1: Rate of delinquency = A+G+R+C+MA+AI+C,AI+C,MA

Model 2: Rate of delinquency = A+G+R+ADP+SM+ADP,SM



The following basic procedural format was followed in the analysis. Upon

discovering that the general model was significant at the a = .05 level, the conclusion was

made that at least one of the independent variables in that model of focus was related to

the dependent variable while controlling for the other independent variables. The next

step in analysis was then to review the partial logistic regression coefficients

corresponding to the hypotheses for significance at the a = .05 level. Consistent with

socio-ecological research (Bronfenbrenner, 1979), the significance of any interaction term

in one of the multinomial logistic regression models was of greatest interest. According

to Bronfenbrenner (1979), the interactional emphasis of the eco-systemic approach is due

to the theoretical view that there exists a reciprocal nature to development especially

between the proximal influences.








79

Thus, of greatest concern was the interaction terms which contained the theoretically and

empirically relevant aspects of the adolescent's personality and perception of family

functioning.

Finding a significant interaction term was interpreted as statistical evidence to

reject that term's null hypothesis (no relationship exists) and instead was seen as

statistical evidence in favor of accepting that terms alternative hypothesis that a

relationship does exist. Evidence resulting in rejecting an interaction term was interpreted

to provide statistical grounds to suggest that (at a probability greater that chance) the

answer was "yes" to the primary research question, "Does a relationship exist between an

adolescent's personality and his/her perception of family functioning across his/her rate

of delinquent offending while holding age, gender, and race constant?"

The analysis run also included multiple single variable logistic regression models

to explore the relationship between each independent variable and the dependent variable.

This multiple bivariate analysis was seen to add to the investigation of the independent

variables with the dependent variable and allowed for a comparisons between the

bivariate and the multinomial logistic regression models (1&2) which contain more

control variables.



Description of Lthe Population

The population specifically targeted for this study was adolescents involved in the

Department of Juvenile Justice system in the State of Florida who range in age between

13 and 18. The entire research sample was drawn from this group. The Department of










Juvenile Justice (DJJ) (1996) provided the following demographics for the year's total

population of delinquency cases received in the state of Florida: (a) regarding age 88%

of the cases were filed for adolescents ranging in age between 13 and 18, (b) regarding

gender 77% of all cases consisted of male adolescents and 23% consisted of female

adolescents, and (c) regarding race 57% were White, 42% were Black, and 1% were

other.



SamplingProcedures

Data were collected from two separate DJJ districts which included 16 counties

located geographically in North Central Florida. The data were collected by a private

counseling agency who specializes in counseling the juvenile delinquent population. This

agency routinely collected assessment information for the purposes of research and

treatment. All of the cases referred to this private agency for counseling were received

from the DJJ. Thus, the subjects for this study were drawn from the total data file

previously collected by this private agency during the period 4/1/96 to 8/31/96. The data

made available for this study had no identifying information to assure the confidentiality

of the subjects to be included in this study.

The questionnaires were administered during the first interview by the agency

counselors. These counselors were (at a minimum) all advanced graduate students

(beyond Master's level) in training in mental health fields at the University of Florida.

Prior to interviewing the court referred clients, each counselor received agency training in

administering the questionnaires.










The clients were verbally informed that any information used for research purposes

would have no identifying information to assure their anonymity.



Sample

The full sample available for this study was previously collected by a private

agency drawing from the 16 surrounding counties in North Central Florida between

4/1/96 to 8/31/96. Though the full sample consisted of 184 subjects, this sample was

reduced to 169 due to an insufficient number of subjects in all ethnic categories for

comparisons and some subjects falling outside the study's defined age range (13 to 18).

The reduced sample included only subjects from the White and Black ethnic groups. As

consistent with an earlier census of this private agency's clientele (Lee & Prichard, 1991),

80% of the subjects lived in families with income below poverty level as determined by

receiving AFDC/ Welfare or not.

Family structures varied from those having a single parent and one child to those

having both parents or a variation of grandparents and multiple siblings. The vast

majority lived in a non-nuclear family configuration. This wide variation in family

structure was not viewed to be of great concern due to the findings that family structure

appears to be of little significance in overall juvenile delinquency especially when

controlling for family functioning (Cemrnkovich & Giordano, 1987; Henggeler, 1989;

Lauritsen, 1993; Lorion, Tolan, & Wahlar, 1987; Rosen, 1985; Tolan et. al, 1986; Tolan

& Loeber, 1993; Tolan & Mitchell, 1989; Yoshikawa, 1994).








82

The analyzed sample, was fairly representative in demographics to the year's total

population of delinquency cases received in the State of Florida: (a) regarding age, the

subjects range between 13 and 18 years old which is consistent with the majority of cases

referred to juvenile court, (b) regarding gender, 78% of subjects consist of male

adolescents and 22% consist of female adolescents, and (c) regarding race, 47% of

subjects were White and 52%were Black. The subjects range between 1 and 36 charges

with the majority of subjects ranging between 1 and 9 charges. There also appeared to

exist a sufficient number of subjects in the three levels of offending to be studied: 41

subjects are first time offenders (having only one charge), 48 subjects are multiple

offenders (having 2 to 4 charges), and 80 subjects are chronic offenders (having 5 or

more charges).



Data-Collection

The data were collected through a private counseling agency which asked referred

clients in the initial interview to complete the assessment package containing the Jesness

Personality Inventory Question (see Appendix A) and JI Answer Sheet (see Appendix E),

the Family Adaptability and Cohesion Scales (FACES-11) (see Appendix B) and a

demographic information sheet (see Appendix C). The assessment took approximately 35

to 45 minutes to complete. The Florida Department of Juvenile Justice provided

information in reference to number of charges for each subject. The identifying

information was removed and a participant code was given.








83

Each assessment package was put in its own data packet for research purposes. The data

packets were scored and analyzed by this researcher.



Instrumentation

In addition to a demographic questionnaire (Appendix C) assessing number of

charges, county, income status, gender, age, race, and current family members at home,

there were two standardized instruments relevant to this study: (a) Jesness Personality

Inventory (Appendix A & F) and (b) Family Adaptability and Cohesion Scales (FACES-

11, Appendix B).

Jesness Personality Ivrentory

The independent variables for the construct of personality in the study included,

social maladjustment (SM), manifest aggression (MA), and asocial index (AI). These

were measured by the Jesness Personality Inventory (JI). The original version of the JI

was developed as part of the Fricot Ranch Study in California (Jesness, 1965, 1971)

which was a five-year project whose goal was to evaluate the effectiveness of an

intensive institutional treatment program for young male delinquents. The study was

sponsored by the Rosenburg Foundation through a grant to the California State Youth

Authority. The original norming and validation studies were based on a sample of 970

male delinquents and 1,075 male nondelinquents between the ages of 8 and 18, and on a

sample of 450 female delinquents and nondelinquents ranging in age from 11 to 18. All

delinquents were adjudicated, and most were awaiting placement in California Youth

Authority (CYA) institutions. The nondelinquent sample was obtained at 10 public








84

schools in northern California (Jesness, 1996). In the early 1960s, the JI was modified so

that it could be used with older male adolescents (Jesness, 1962, 1963), and further

revised in 1972 making the instrument appropriate for use with adults and for females

(Jesness, 1983). The most recent changes to content were made in 1986 (Jesness, 1996).

The JI is an easily administered 155 item true-false inventory written at the third

grade reading level (Sorensen & Johnson, 1996). It is useful in identifying personality

characteristics of delinquents. The JI is multidimensional in that it provides age-normed T

scores on ten of eleven personality characteristics and a graphic profile that illustrates

various personality types. It also provides a single index (AI) of personality tendencies

predictive of social and personality problems (Martin & Murphy, 1993). Three

personality characteristics are criterion referenced trait scales (social maladjustment,

value oriented, and immaturity) and seven are cluster analyzed personality scales (autism,

alienation, manifest aggression, withdrawal-depression, social anxiety, repression, and

denial) and one (asocial index) is a composite personality index derived from

discriminant analysis to predict level of delinquency status utilizing all the other scale

scores (Jesness & Wedge, 1983).

The JI has been supported by many research findings in the field as a valid and

reliable instrument for distinguishing among delinquents via personality characteristics

(Jesness, 1996). While general support for reliability and validity will be reviewed, focus

will be give to the SM, MA and AI scales due to their use in this study. Jesness (1996)

reports a test-retest (8 months) reliability of .79 for SM and .76 for MA based on a

sample of 131 delinquents ages 14 to 21. Wright and Jesness (1981) reported a test-retest










reliability (one week) of .74 for AI. Note was made in the Jesness Inventory manual

manual (Jesness, 1996) regarding concern for the test-retest reliability for AI on children

below 15 for long periods of time. Regarding alpha reliabilities, Le Blanc, Mcduff,

Charlebois, Gagnon, & Tremblay, (1991) reported .90 for SM and .82 for MA. Further,

exploring the ability to falsify JI responses, the JI was administered to 57 delinquents at a

CYA reception center under the instructions that the findings would be solely for research

purposes (honest run). The next day the JI was given again with the instructions that the

findings would be used to judge the kids with the goal to encourage them to answer in a

way favorable for themselves (fake good run). Results revealed fairly stable scores with

some variation in SM, but no change in over all composite AI score (Jesness, 1996).

According to Le Blanc (1990), the concurrent, discriminant, and predictive

validity of the JI scales were controlled on a sample of 6,604 adolescents between the

ages of 10 and 18. Most of the scales correlated higher with scales of their domain than

with scales from another domain, most of the scales discriminated between past, actual

and subsequent self-reported delinquency and problem behaviors, and, finally, that most

of them distinguished between presence or absence of official delinquency and adult

criminality. Similarly, a review by Quay (1987) provides considerable evidence

supporting the concurrent, convergent, and predictive validity of the JI. Quay's review

includes numerous findings reported by Baker and Spielberg (1970), Cowden, Peterson

and Patch (1969), Graham (1981), Martin (1981), Saunders and Davis (1976), Vallance

and Forrest (1971) and Yiannakis (1976). Quay (1987) concluded that the JI promises to

represent a valuable addition to the delinquency research's armamentarium.








86

In general, the bulk of the research on the JI is in the area of differentiating groups

of delinquents. For instance, Cowden, Peterson, and Pacht (1969), found the JI cores

differentiated well-adjusted from poorly adjusted youth within an institution; Stott and

Olczak (1978) showed that JI scales differentiated juvenile delinquents from status

offenders; Sauders and Davis (1976) found that certain sub scales differentiated between

institutionalized delinquents and probationers; Graham (1981) found that consistently

higher AI scores distinguished among levels of offending (first offense, 2 offences, more

than 2) and found the AI predicted who of the first time offenders would re-offend in a

one year follow up; Martin (1981) found that consistently higher AI, SM, VO, AU, MA

and DEN scores distinguished among levels of institutionalized delinquents (those

formally adjudicated by the court system for two or more charges and those not formally

charged) and a socially acting out noninstitutionalized control group; and finally Kunce

and Hemphill (1983) investigated the validity implications of the JI for 1,122

institutionalized male adolescent delinquents and found that AI, SM, AU, and MA

correlated positively with frequency of prior arrests and number of previous

institutionalizations. Consistent with a review conducted by Quay (1987), the results of

this review of the Jesness Inventory found ample support for the use of the JI for research,

diagnostic purposes and the general assessment of adohscent social maladjustment.

Administration of the JI requires a question booklet (Appendix A), an answer

sheet (Appendix E) and a pencil. Currently there is available a "QuickScore Form" which

illuminates the need for the scoring stencils (Jesness, 1996). The traditional method was

used in the collection of the available data for this study. Respondents were asked to read










the question sheet and fill in the appropriate true or false response on the answer sheet.

Emphasis was made to assure they knew there are no right or wrong answers.

The traditional method for scoring was used as opposed to the recently released

QuickScore Form method. To traditionally score the test requires (1) a set of ten scoring

stencils; (2) a set of norms for males and females of all ages; and (3) profile sheets (see

Appendix F). The scales were scored by placing stencils over the answer sheet. Raw

scores were obtained by totaling the number of marked responses that showed through

the stencils for each scale. These totals were written in the proper spaces on the answer

sheet. The raw score for each subject was then transferred to the profile sheet. The

Asocial Index was obtained using the computational box on the reverse side of the profile

sheet. The AI was derived by utilizing the conversion table of the profile sheet to finding

the various weighted scores based on the required JI scale raw scores. The next step was

to determine the T scores by locating the T-score equivalent of each raw score in the

manual tables matching the subjects age and sex. The AI score was found by taking the

raw AI score and matching it in the manual table to gain the converted score. These

converted scores were then plotted on the profile sheet. Due to the current study not

utilizing the 1 Level Classification, the I Level Classification scoring process will not be

reviewed.

EamilyAdaptability and CohesionScales(FACES-II)

The independent variables of cohesion and adaptability were measured by

FACES-11. The original version was developed by Olson, Russell, and Sprenkle in 1979

as an outgrowth of their Circumplex Model of Marital and Family Systems. Using factor




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 EF4C4KN7T_OCY1Q4 INGEST_TIME 2014-06-04T22:42:39Z PACKAGE AA00021362_00001
AGREEMENT_INFO ACCOUNT UF PROJECT UFDC
FILES



PAGE 1

5$7( 2) -89(1,/( '(/,148(1&< $&5266 )$0,/< )81&7,21,1* $1' 3(5621$/,7< %\ -2+1 & &/8;721 $ ',66(57$7,21 35(6(17(' 72 7+( *5$'8$7( 6&+22/ 2) 7+( 81,9(56,7< 2) )/25,'$ ,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

&RS\ULJKW %\ -RKQ & &OX[WRQ

PAGE 3

7KLV GLVVHUWDWLRQ LV GHGLFDWHG WR DOO RI WKRVH WKURXJKRXW P\ OLIH ZKR EHOLHYHG DQG HQFRXUDJHG PH WR VD\ f, FDQf $QG 7R DOO RI P\ IDPLO\ DQG IULHQGV ZKR FRQWLQXH WR VWDQG E\ PH ZKLOH VWULYH WR KDYH P\ PRPHQWV RI f, GLG LWf

PAGE 4

$&.12:/('*0(176 H[WHQG P\ GHHSHVW DSSUHFLDWLRQ WR HYHU\RQH ZKR KDV VWRRG E\ PH ZKLOH ,f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

PAGE 5

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f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f+RZ GLG WKH WXUWOH ZLQ WKH UDFH"f +H GLG LW VORZO\ ZLWK SHUVLVWHQW IRFXV DQG PRVW LPSRUWDQWO\ DOZD\V ZLWK WKH VXSSRUW RI WKRVH ZKR EHOLHYHG LQ KLP Y

PAGE 6

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

PAGE 7

(FR6\VWHPLF 0RGHO RI +XPDQ 'HYHORSPHQW 5HODWLRQVKLS %HWZHHQ )DPLO\ )XQFWLRQLQJ DQG 3HUVRQDOLW\ 5HFLSURFDO 1DWXUH RI 9DULDEOHV RQ 'HYHORSPHQW 3URWHFWLYH DQG 5LVN )DFWRUV *RRGQHVV RI )LW 6XPPDU\ 0(7+2'2/2*< 6WDWHPHQW RI 3XUSRVH 'HOLQHDWLRQ RI 5HOHYDQW 9DULDEOHV 'HSHQGHQW 9DULDEOH ,QGHSHQGHQW 9DULDEOHV $JH *HQGHU 5DFH $GDSWDELOLW\ &RKHVLRQ 6RFLDO PDODGMXVWPHQW VFDOH 6$f 0DQLIHVW DJJUHVVLRQ VFDOH 0$f $VRFLDO LQGH[ $,f +\SRWKHVHV 'DWD $QDO\VLV 'HVFULSWLRQ RI WKH 3RSXODWLRQ 6DPSOLQJ 3URFHGXUHV 6DPSOH 'DWD &ROOHFWLRQ ,QVWUXPHQWDWLRQ -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ )DPLO\ $GDSWDELOLW\ DQG &RKHVLRQ (YDOXDWLRQ 6FDOHV )$&(6 ,,f 6XPPDU\ 5(68/76 ,QWURGXFWLRQ 'HPRJUDSKLF &KDUDFWHULVWLFV RI WKH 5HVHDUFK 6DPSOH 'HVFULSWLYH 'DWD RQ &DWHJRULFDO 9DULDEOHV *HQGHU (WKQLFLW\ YLL

PAGE 8

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t 5HVHDUFK TXHVWLRQ /LPLWDWLRQV RI 6WXG\ 3UDFWLFDO ,PSOLFDWLRQV RI WKH 5HVXOWV $VVHVVPHQW 7UDLQLQJ DQG 3UDFWLFH 6RFLDO 3ROLF\ 5HFRPPHQGDWLRQV 0HWD 7KHRU\ RI +LHUDUFKLFDO &\EHUQHWLF )HHGEDFN /RRSV &KDSWHU 6XPPDU\ $33(1',&(6 $ -(61(66 3(5621$/,7< ,19(1725< YLLL

PAGE 9

% )$0,/< $'$37$%,/,7< $1' &2+(6,21 (9$/8$7,21 6&$/(6 )$&(6,,f & '(02*5$3+,& ,1)250$7,21 /,1($5 6&25,1* $1' ,17(535(7$7,21 )25 )$&(6,, ( -(61(66 3(5621$/,7< ,19(1725< $16:(5 6+((7 ) -(61(66 3(5621$/,7< ,19(1725< 352),/( 6+((7 5()(5(1&(6 %,2*5$3+,&$/ 6.(7&+ ,;

PAGE 10

/,67 2) 7$%/(6 7DEOH SDJH )UHTXHQF\ 'LVWULEXWLRQ E\ *HQGHU DQG /HYHO RI 'HOLQTXHQW 2IIHQGLQJ )UHTXHQF\ 'LVWULEXWLRQ E\ *HQGHU DQG (WKQLFLW\ 'HVFULSWLYH 'DWD RQ ,QWHUYDO 9DULDEOHV %LYDULDWH &RPSDULVRQ 5HVXOWV 0XOWLQRPLDO /RJLVWLF 5HJUHVVLRQ 5HVXOWV IRU 0RGHO 0XOWLQRPLDO /RJLVWLF 5HJUHVVLRQ 5HVXOWV IRU 0RGHO 6WDWLVWLFDO 7HVWV RI +\SRWKHVHV )UHTXHQF\ 'LVWULEXWLRQ RI 0DOHV E\ 5DWH RI 2IIHQGLQJ $FURVV &RPELQDWLRQV RI &RKHVLRQ &f DQG 0DQLIHVW $JJUHVVLRQ 0$f )UHTXHQF\ 'LVWULEXWLRQ RI )HPDOHV E\ 5DWH RI 2IIHQGLQJ $FURVV &RPELQDWLRQV RI &RKHVLRQ &f DQG 0DQLIHVW $JJUHVVLRQ 0$f [

PAGE 11

/,67 2) ),*85(6 (LJXUH SDJH &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ 6\VWHPV 7KHH'LPHQVLRQDO )DPLO\ &LUFXPSOH[ 0RGHO 3RZHUV f PHWD WKHRU\ RI KLHUDUFKLFDO IHHGEDFN ORRSV DSSOLHG WR SHUVRQDOLW\ IDPLO\ IXQFWLRQLQJ DQG GHOLQTXHQF\ [L

PAGE 12

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fV SHUVRQDOLW\ DQG SHUFHSWLRQV RI IDPLO\ IXQFWLRQLQJ DFURVV UDWHV RI GHOLQTXHQF\ 7KH UHVHDUFK ZDV EDVHG RQ D VDPSOH FRQVLVWLQJ RI GHOLQTXHQW $IULFDQ $PHULFDQ DQG &DXFDVLDQ DGROHVFHQWV ZKR UDQJHG IURP WR \HDUV 7KH VXEMHFWV ILW LQWR RQH RI WKUHH UDWHV RI RIIHQGLQJ ILUVW WLPH RIIHQGHUV KDYLQJ RQO\ RQH FKDUJHf PXOWLSOH RIIHQGHUV KDYLQJ WR FKDUJHVf DQG FKURQLF RIIHQGHUV KDYLQJ RU PRUH ;8

PAGE 13

FKDUJHVf (DFK VXEMHFWnV SHUVRQDOLW\ ZDV DVVHVVHG WKURXJK WKH XVH RI WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ (DFK VXEMHFWfV SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ ZDV DVVHVVHG WKURXJK WKH XVH RI WKH )DPLO\ $GDSWDELOLW\ DQG &RKHVLRQ (YDOXDWLRQ 6FDOH )$&(6,,f 7KH GDWD ZHUH DQDO\]HG XVLQJ PXOWLQRPLDO ORJLVWLF DQG ELYDULDWH ORJLVWLF UHJUHVVLRQ SURFHGXUHV 7KH UHVXOWV RI WKH FXUUHQW VWXG\ SURYLGH VWDWLVWLFDO HYLGHQFH ZKLFK VXSSRUWV WKH QHHG WR LQFOXGH ZLWKLQ HFRV\VWHPLF PXOWLYDULDWH PRGHOV RI GHOLQTXHQF\ UDWH WKH YDULDEOHV RI DJH JHQGHU DQG WKH LQWHUDFWLRQ RI IDFHWV RI WKH DGROHVFHQWfV SHUVRQDOLW\ 0DQLIHVW $JJUHVVLRQf DQG IDPLO\ IXQFWLRQLQJ &RKHVLRQf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

PAGE 14

&+$37(5 ,1752'8&7,21 7KHUH LV DQ DQFLHQW IDEOH RXW RI ,QGLD UHSRUWHG E\ .DUHQ %DFNVWHLQ f ZKLFK WHOOV RI VL[ EOLQG PHQ ZKR HQFRXQWHU DQ HOHSKDQW IRU WKH ILUVW WLPH (DFK WRXFKHV D GLIIHUHQW SDUW RI WKH LPPHQVH DQLPDO DQG HDFK RQHfV GHVFULSWLRQ HOLFLWV D GLVWLQFWO\ GLIIHUHQW LPDJH RI WKH DQLPDO ZKLFK HDFK EHOLHYHV LV DQ DFFXUDWH SLFWXUH RI ZKDW WKH DQLPDO LV WUXO\ OLNH +RZHYHU WKH ZLVH 5DMDK DGYLVHV WKHP WR FRPELQH HDFK RI WKHLU SHUVSHFWLYHV LQ RUGHU WR JDLQ D JUHDWHU XQGHUVWDQGLQJ RI WKH QDWXUH DQG LGHQWLW\ RI WKH HOHSKDQW 7KH VWXG\ RI MXYHQLOH GHOLQTXHQF\ LV FXUUHQWO\ JRLQJ WKURXJK D VLPLODU HYROXWLRQ 5DWKHU WKDQ WDNH D VLQJXODU YLHZ ELRORJLFDO SV\FKRORJLFDO RU VRFLRORJLFDOf LQ WKH HWLRORJ\ RI GHOLQTXHQF\ PXFK RI WKH ILHOG LV SXUVXLQJ D PRUH KROLVWLF HFRV\VWHPLF YLHZ RI VHOI DQG V\VWHP GHYHORSPHQW %RJHQVFKQHLGHU %URQIHQEUHQQHU +HQJJHOHU /HPHU /LGGOH 0DJQXVVRQ 0RIILWW 6DOWV /LQGKROP *RGGDUG t 'XQFDQ 0XOYH\ $UWKXU 5HSSXFFL 3DULV 5HLG 7RODQ t /RHEHU
PAGE 15

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b ZKHUHDV DGXOW YLROHQW FULPH DUUHVWV LQFUHDVHG bf ,QFUHDVHV LQ MXYHQLOH DUUHVWV IRU VSHFLILF RIIHQVHV ZHUH PXUGHU bf 5DSH bf 5REEHU\ bf DQG DJJUDYDWHG DVVDXOW bf 6Q\GHU f )URP WKURXJK WKH QXPEHU RI GHOLQTXHQW FDVHV GLVSRVHG E\ MXYHQLOH FRXUWV LQFUHDVHG b 'XULQJ WKH VDPH SHULRG -XYHQLOH &RXUWV GLVSRVHG b PRUH YLROHQW FDVHV LQFOXGLQJ b PRUH KRPLFLGH DQG b PRUH DJJUDYDWHG DVVDXOW FDVHV %XWWV 6Q\GHU t )LQQHJDQ f $FFRUGLQJ WR D UHSRUW E\ %XWWV f MXYHQLOH FRXUWV LQ WKH 8QLWHG 6WDWHV KDQGOHG DOPRVW RQH DQG D KDOI PLOOLRQ GHOLQTXHQF\ FDVHV LQ D b LQFUHDVH RYHU WKH FDVHV ORDG :HUH WKLV UDWH WR FRQWLQXH WKDW ORDG ZRXOG GRXEOH DSSUR[LPDWHO\ HYHU\ \HDUV UXOH RI f :LOOLDPV t 5RJHUV f )XUWKHU DFFRUGLQJ WR WKH )HGHUDO %XUHDX RI ,QYHVWLJDWLRQV )%,f 8QLIRUP &ULPH 5HSRUWV f ODZ HQIRUFHPHQW DJHQFLHV PDGH PLOOLRQ DUUHVWV RI MXYHQLOHV SHRSOH EHORZ WKH DJH RI f LQ -XYHQLOHV ZHUH UHVSRQVLEOH IRU b RI DOO DUUHVWV LQ

PAGE 16

%HWZHHQ DQG WKH WRWDO QXPEHU RI MXYHQLOHV LQFUHDVHG b )%, f -XYHQLOHV FRPPLWWHG b RI DOO YLROHQW FULPHV LH KRPLFLGH UDSHV UREEHULHV DQG DJJUDYDWHG DVVDXOWVf LQ WKH 8QLWHG 6WDWHV LQ DV PHDVXUHG E\ FULPHV WKDW ZHUH FOHDUHG E\ DUUHVWVf )%, f ,Q MXYHQLOHV DFFRXQWHG IRU b RI WKH 86 SRSXODWLRQ ZHUH UHVSRQVLEOH IRU b RI DOO PXUGHU FOHDUDQFHV LQ WKH 8QLWHG 6WDWHV b RI IRUFLEOH UDSHV b RI UREEHULHV DQG b RI DOO DJJUDYDWHG DVVDXOWV )%, f 7KH PRVW UHFHQW )%, 8QLIRUP &ULPH 5HSRUWV f RQ MXYHQLOH FULPH DUH D ELW PRUH HQFRXUDJLQJ 7KH MXYHQLOH DUUHVW UDWHV IRU YLROHQW FULPH GURSSHG b IURP DQG b IURP PDUNLQJ WKH VHFRQG \HDU RI GHFOLQH DIWHU VWHDG\ LQFUHDVHV WKH SUHYLRXV VL[ \HDUV 7KH MXYHQLOH DUUHVW UDWH IRU UREEHU\ GURSSHG b EHWZHHQ DQG ZKLOH WKH MXYHQLOH DUUHVW UDWH IRU DJJUDYDWHG DVVDXOW GURSSHG b 7KH MXYHQLOH DUUHVW UDWH IRU EXUJODU\ LQ LV b ORZHU WKDQ ZKLOH WKH DUUHVW UDWH IRU PRWRU YHKLFOH WKHIW LV WKH ORZHVW VLQFH DQG WKH UDWH IRU DUVRQ WKH ORZHVW VLQFH :KLOH WKHUH DSSHDUV WR EH D VORZLQJ LQ WKH UDWH RI MXYHQLOH GHOLQTXHQF\ ZH DUH QR ZKHUH QHDU WKH ORZ UDWHV RI V /RHEHU f -XYHQLOH GHOLQTXHQF\ FRQWLQXHV WR H[DFW D KLJK WROO RQ VRFLHW\ DQG FDXVHV JUHDW HPRWLRQDO DQG LQWHUSHUVRQDO FRVWV WR WKH DGROHVFHQW DQG WKRVH DURXQG WKHP *RUPDQ6PLWK 7RODQ =HOROOL t +XHVPDQQ /DXE t 6DPSVRQ &RKHQ 0LOOHU t 5RVVPDQ f 7KH FRVWV RI GHOLQTXHQF\ WR VRFLHW\ LQ UHVRXUFHV DQG IXQGV DUH HQRUPRXV 7KH 8QLWHG 6WDWHV VSHQGV PRUH WKDQ ELOOLRQ GROODUV D \HDU WR PDLQWDLQ RXU MXYHQLOH MXVWLFH V\VWHP 3DWWHUVRQ 'H%DU\VKHt 5DPVH\ f 7KH DYHUDJH FRVW RI LQFDUFHUDWLQJ D PLQRU KDV ULVHQ IURP LQ &KLOGUHQfV 'HIHQVH )XQG f WR SHU

PAGE 17

\HDU LQ 4XLQQ f 7KH 5DQG FRUSRUDWLRQ UHSRUWHG WKDW LQ WKH 8QLWHG 6WDWHV WKH H[SHFWHG FULPH DQG FRUUHFWLRQ FRVWV IRU RQH FKURQLF MXYHQLOH RIIHQGHU ZDV WR RYHU KLV RU KHU OLIH WLPH EDVHG RQ DUUHVWV D \HDU RYHU \HDUV RI FULPH 7KLV ILJXUH GRHV QRW LQFOXGH WKH FRVW RI WKH GDPDJH WR RWKHU SHRSOHfV SURSHUW\ 6KDPVLH t +OXFK\ f 7KH \HDUO\ FRVW RI VFKRRO YDQGDOLVP DORQH LV HVWLPDWHG WR EH RQHKDOI ELOOLRQ GROODUV )HOGPDQ &DSOLQJHU t :RGDUVNL f 7KH FKURQLF RIIHQGHUV ILYH RU PRUH RIIHQVHVf DORQH H[DFW DQ HQRUPRXV PRQHWDU\ FRVW WR VRFLHW\ LQ SROLFH KRXUV FRXUW WLPH IDLOHG DWWHPSWV DW UHKDELOLWDWLRQ DQG ELOOLRQV RI GROODUV VSHQW WR UHSDLU WKH WDQJLEOH FRQVHTXHQFHV RI VXFK RIIHQGLQJ /\QDP f 7KHVH FRVWV DUH VWDJJHULQJ FRQVLGHULQJ WKDW FKURQLF RIIHQGHUV PD\ RQO\ PDNH XS b RI WKH WRWDO GHOLQTXHQW SRSXODWLRQ \HW DUH UHSRUWHG WR EH UHVSRQVLEOH IRU b RI NQRZQ FULPHV VHH )DUULQJWRQ 2KOLQ t :LOVRQ f 7KHUH DUH PDQ\ SHUVRQDO FRVWV RI GHOLQTXHQF\ WKDW LPSDFW DQ DGROHVFHQW ZKHQ DFFRUGLQJ WR 6WHLQERUJ f FKDQJHV DUH RFFXUULQJ LQ DQ DGROHVFHQWfV OLIH IDVWHU DQG JUHDWHU WKDQ DW DQ\ RWKHU WLPH H[FHSW LQIDQF\ $GROHVFHQWV DUH IDFHG ZLWK XQGHUVWDQGLQJ DQG DFFHSWLQJ WKHLU RZQ ELRORJLFDO FKDQJHV EHFRPLQJ FRPIRUWDEOH ZLWK WKHLU VH[XDOLW\ SDUWLFXODUO\ WKH HPHUJHQFH RI VH[XDO SUHIHUHQFHf FKRRVLQJ WKHLU RFFXSDWLRQDO LGHQWLW\ DQG QHJRWLDWLQJ WKHLU GHYHORSPHQWDO VWUXJJOH WRZDUGV DXWRQRP\ DQG LQGHSHQGHQFH .LQQH\ t /HDWRQ f 7KHVH FRPSOH[ WDVNV LQ GHYHORSPHQW DUH QHJDWLYHO\ LPSDFWHG E\ GHOLQTXHQF\ )RU H[DPSOH 3DWWHUVRQ 'H%DU\VKH DQG 5DPVH\ f UHSRUWHG WKDW DQWLVRFLDO FKLOGUHQ DUH OLNHO\ WR H[SHULHQFH PDMRU DGMXVWPHQW SUREOHPV LQ WKH DUHD RI DFDGHPLF DFKLHYHPHQW DQG SHHU VRFLDO UHODWLRQV .D]GLQ :DONHU 6KLQQ 2f1HLOO

PAGE 18

t 5DPVH\ :LOVRQ t +HUPVWHLQ f -HVVRU f FRQFOXGHG WKDW KLJK ULVN EHKDYLRUV VXFK DV GHOLQTXHQF\ FDQ MHRSDUGL]H WKH DFFRPSOLVKPHQW RI QRUPDO GHYHORSPHQWDO WDVNV WKH IXOILOPHQW RI H[SHFWHG VRFLDO UROHV WKH DFTXLVLWLRQ RI HVVHQWLDO VNLOOV WKH DFKLHYHPHQW RI D VHQVH RI DGHTXDF\ DQG FRPSHWHQFH DQG WKH DSSURSULDWH SUHSDUDWLRQ IRU WUDQVLWLRQ WR WKH QH[W VWDJH LQ WKH OLIH WUDMHFWRU\ LH \RXQJ DGXOWKRRGf 3HUKDSV RQH RI WKH JUHDWHVW SHUVRQDO FRVWV LV WKH ZDVWH RI D \RXQJ SHUVRQfV OLIH ZKR DIWHU FKURQLFDOO\ RIIHQGLQJ PD\ QHYHU UHDOL]H KLVKHU SRWHQWLDO EXW UDWKHU VSHQGV PRVW RI WKH WLPH LQ DQG RXW RI LQVWLWXWLRQV (IIRUWV WR VWXG\ DQG ORRN IRU DQVZHUV WR GHOLQTXHQF\ DUH FRPSOLFDWHG ZKHQ FRQVLGHULQJ KRZ WR GLVWLQJXLVK DPRQJ WKH W\SHV RI MXYHQLOH GHOLQTXHQWV 7KH KLVWRULFDO DSSURDFK RI FRPSDULQJ GHOLQTXHQW WR QRQGHOLQTXHQW JURXSV KDV PRUH UHFHQWO\ EHHQ YLHZHG DV WRR JURVV D GLVWLQFWLRQ GXH WR WKH VKHDU IUHTXHQF\ RI GHOLQTXHQW DFWV GXULQJ DGROHVFHQFH /DX t /HXQJ 7RODQ t /RHEHU f ,W KDV EHHQ UHSRUWHG WKDW b RI MXYHQLOHV FRQIHVV WR FRPPLWWLQJ DW OHDVW RQH FKDUJHDEOH RIIHQVH :LOOLDPV t *ROG f ,Q DGROHVFHQFH DJH f PRUH WKDQ b DGPLW WR WKHIW b DGPLW WR HQJDJLQJ LQ PRUH WKDQ RQH W\SH RI DQWLVRFLDO EHKDYLRU VXFK DV DJJUHVVLRQ GUXJ DEXVH DUVRQ DQG YDQGDOLVP 6HH (OOLRW $JHWRQ +XL]LQJD .QRZOHV t &DUWHU )HOGPDQ &DSOLQJHU t :RGDUVNL 0RIILWW 6LOYD /\QDP t +HQU\ :LOOLDP t *ROG f $FWXDO UDWHV RI GHOLQTXHQW EHKDYLRU VRDU VR KLJK GXULQJ DGROHVFHQFH WKDW SDUWLFLSDWLRQ LQ GHOLQTXHQW EHKDYLRU DSSHDUV WR EH D QRUPDO SDUW RI WHHQ OLIH (OOLRW $JHWRQ +XL]LQJD .QRZOHV t &DUWHU (OOLRW +XL]LQJD t 0HQDUG 0RIILWW 7RODQ t /RHEHU 7RODQ t *XHUUD 7RODQ t /RULRQ f

PAGE 19

,QGHHG QXPHURXV ULJRURXV VHOIUHSRUW VWXGLHV KDYH QRZ GRFXPHQWHG WKDW LW LV VWDWLVWLFDOO\ DEHUUDQW WR UHIUDLQ IURP FULPH GXULQJ DGROHVFHQFH (OOLRW $JHWRQ +XL]LQJD .QRZOHV t &DUWHU +LUVFKL 0RIILWW t 6LOYD f 7KXV IROORZLQJ WKDW LQYROYHPHQW LQ DQWLVRFLDO EHKDYLRU RI VRPH VRUW LV DOPRVW XQLYHUVDO DPRQJ $PHULFDQ DGROHVFHQWV DQG UHFRJQL]LQJ WKDW GLIIHUHQFHV KDYH EHHQ IRXQG EHWZHHQ WUDQVLHQW IHZ RIIHQVHVf DQG FKURQLF ILYH RU PRUH RIIHQVHVf LQYROYHPHQW LQ GHOLQTXHQF\ /RULRQ 7RODQ t :DKODU 0RIILWW t 6LOYD 4XD\ 6KDQQRQ 7RODQ 7RODQ /RULRQ :HVW t )DUULQJWRQ f YDULRXV OHYHOV RI LQYROYHPHQW VKRXOG EH GLVWLQJXLVKHG ZKHQ VWXG\LQJ WKH GHOLQTXHQW SRSXODWLRQ 7RODQ t /RHEHU 7RODQ &URPZHOO t %UDVVZHOO f $GGLQJ WR WKH FRPSOH[LW\ RI VWXG\LQJ WKLV SRSXODWLRQ LV WKH ILQGLQJ WKDW PRVW DGROHVFHQWV FRPPLWWLQJ DQWLVRFLDO DFWV HQJDJH LQ D ODUJH YDULHW\ RI DFWV WHUPHG f&DIHWHULDVW\OH RIIHQGLQJf )DUULQJWRQ *RWWIUHGVRQ t +LUVFKL +DDSDVDOR t +DPDODLQHQ .OHLQ f 7R DFFRXQW IRU WKHVH FRQFHUQV WKLV VWXG\ XWLOL]HG IUHTXHQF\ RI RIIHQGLQJ UDWHf WR GLVWLQJXLVK GHOLQTXHQWV ZLWKLQ WKH FROOHFWHG VDPSOH SRSXODWLRQ )UHTXHQF\ LV D PHWKRG RI PHDVXUHPHQW FRPPRQ LQ GHOLQTXHQF\ UHVHDUFK DQG KDV VKRZQ KLJK UHOLDELOLW\ DQG YDOLGLW\ &R[ /DX t /HXQJ /HXJ t 'UDVJRZ /\QDP 6SLXDFN 0DUFXV t 6ZLIW f 7KH IROORZLQJ ZLOO IXUWKHU H[SORUH WKH FRPSOH[LW\ RI GHOLQTXHQF\ DQG SUHVHQW WKH JXLGLQJ WKHRUHWLFDO OHQVHV XVHG WR XQGHUVWDQG DQG LQYHVWLJDWH GHOLQTXHQF\ LQ WKH FXUUHQW VWXG\ 7KH KLJK FRVWV DQG ZLGH VSUHDG RFFXUUHQFH RI GHOLQTXHQF\ KDV VSXUUHG PDQ\ HIIRUWV WR GLVFRYHU ZKDW IDFWRUV FRQWULEXWH WR WKH XQGHUVWDQGLQJ DQG H[SODQDWLRQ RI WKH

PAGE 20

YDU\LQJ OHYHOV LQ GHOLQTXHQF\ DPRQJ WKH \RXWK 0DQ\ RI WKHVH IDFWRUV SXUSRVHG E\ FULPLQRORJLVWV DQG SV\FKRORJLVWV DOLNH LQFOXGH SRYHUW\ ODFN RI ERQGLQJ WR VRFLHWDO LQVWLWXWLRQV ERQGLQJ WR GHYLDQW SHHU JURXSV ORZ LQWHOOLJHQFH DYDLODELOLW\ RI GUXJV DQG JXQV JHQHWLF SUHGLVSRVLWLRQ QHXURORJLFDO DQG ELRORJLFDO IDFWRUV GLIIHUHQFHV LQ SHUVRQDOLW\ IDPLO\ EDFNJURXQG IDPLO\ IXQFWLRQLQJ DQG IDPLO\ ULVN IDFWRUV %LQGHU *HLV t %UXFH (OOLRW +XL]LQJD t $JHWRQ )DUULQJWRQ /RHEHU (OOLRWW +DZNLQV .DQGHO .OHLQ 0F&RUG 5RZH t 7UHPEOD\ *ROGVWHLQ +LUVFKL -HVQHVV /RHEHU t 6WRXWKDPHU/RHEHU 3DWWHUVRQ 'H%DUVKH t 5DPVH\ :DOVK t 2OVRQ
PAGE 21

%URQIHQEUHQQHUfV f WKHRU\ KDV DW LWV IRXQGDWLRQ WKH SUHPLVH WKDW KXPDQ GHYHORSPHQW RFFXUV DV D MRLQW IXQFWLRQ EHWZHHQ WKH FKDUDFWHULVWLFV RI WKH SHUVRQ DQG WKH HQYLURQPHQW 7KH HPSLULFDO OLWHUDWXUH VWURQJO\ VXSSRUWV %URQIHQEUHQQHUfV YLHZ RI EHKDYLRU LQ ZKLFK FULPLQDO EHKDYLRU LV PXOWLGHWHUPLQHG E\ WKH UHFLSURFDO LQWHUSOD\ RI FKDUDFWHULVWLFV RI WKH LQGLYLGXDO \RXWK DQG WKH NH\ VRFLDO V\VWHPV LQ ZKLFK WKH \RXWKV DUH HPEHGGHG LH IDPLO\ SHHU VFKRRO QHLJKERUKRRG HWFf (OOLRW +DZNLQV t &DWDODQR +HQJJHOHU 7KRPEHUU\ +XL]LQJD t /RHEHU 7RODQ *XHUUD f &RQVLGHUHG PRVW LQIOXHQWLDO RQ KXPDQ GHYHORSPHQW DUH WKH SUR[LPDO HQYLURQPHQWDO DQG RUJDQLVPLF LQIOXHQFHV %URQIHQEUHQQHU f 3UR[LPDO LQIOXHQFHV HPDQDWH HLWKHU IURP ZLWKLQ WKH SHUVRQ RU IURP SK\VLFDO IHDWXUHV REMHFWV DQG SHUVRQV LQ WKH LPPHGLDWH IDFH WR IDFH VHWWLQJ %URQIHQEUHQQHU f 7ZR SUR[LPDO LQIOXHQFHV ZKLFK KDYH EHHQ VXSSRUWHG LQ WKH OLWHUDWXUH WR EH UHODWHG WR GHOLQTXHQF\ DQG ZHUH WKH IRFXV RI WKH FXUUHQW VWXG\ RI DGROHVFHQW UDWH RI GHOLQTXHQW RIIHQGLQJ ZHUH WKH DGROHVFHQWfV SHUVRQDOLW\ DQG WKH DGROHVFHQWfV SHUFHSWLRQ RI WKHLU IDPLO\ IXQFWLRQLQJ 3HUVRQDOLW\ IDFWRUV KDYH IRU D ORQJ WLPH RFFXSLHG DQ LPSRUWDQW UROH DQG EHHQ OLQNHG LQ UHVHDUFK WR DQWLVRFLDO DQG GHOLQTXHQW EHKDYLRU 'HPER /D 9RLH 6FKPHLGHU t :DVKEXUQ )DUULQJWRQ )RQVHFD t
PAGE 22

5RVLFN\ +D]HOULJJ &RRSHU t %RUGXLQ /DXULWVHQ /RHEHU t +D\ +HQJJHOHU /RHEHU t 'LVKLRQ 7RODQ &URPZHOO t %UDVVZHOO :DVVHUPDQ 0LOOHU 3LQQHU t -DUDPLOOR /RHEHU t 6WRXWKDPHU/RHEHU 6Q\GHU t 3DWWHUVRQ 7RODQ t /RHEHU f %DVHG RQ %URQIHQEUHQQHUfV f PRGHO DQ H[SHFWHG UHODWLRQVKLS ZDV H[SHFWHG WR H[LVW EHWZHHQ DQ DGROHVFHQWfV SHUVRQDOLW\ DQG WKHLU SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ DFURVV WKHLU UDWH RI GHOLQTXHQW RIIHQGLQJ %URQIHQEUHQQHUfV f KROLVWLF HFRV\VWHPLF PRGHO SURYLGHG WKH WKHRUHWLFDO IUDPH WR YDOLGDWH WKH JURZLQJ FRQVHQVXV ZLWKLQ WKH ILHOG RI GHOLQTXHQF\ UHVHDUFK IRU WKH QHHG WR H[SORUH WKH H[LVWHQFH RI D SRVVLEOH UHODWLRQVKLS EHWZHHQ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ DFURVV UDWH RI GHOLQTXHQW RIIHQGLQJ $UEXWKQRW *RUGRQ t -XUNRYLF &R[ -HVQHVV -HVVRU /H %ODQF /RULRQ 7RODQ t :DKODU 4XD\ 6DPHURII t &KDQGOHU 6KDZ t 6FRWW 7RODQ &URPZHOO t %UDVVZHOO f 7KXV WKH SXUSRVH RI WKLV VWXG\ ZDV WR GHWHUPLQH LI WKHUH H[LVWV D UHODWLRQVKLS EHWZHHQ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ DFURVV WKH UDWH RI GHOLQTXHQF\ 7KLV VWXG\ DGGUHVVHG WKLV UHFRJQL]HG JDS LQ WKH XQGHUVWDQGLQJ RI GHOLQTXHQF\ DQG SURYLGHV LQIRUPDWLRQ ZKLFK KDV WKHRUHWLFDO DQG SUDFWLFDO LPSOLFDWLRQV IRU WKH XQGHUVWDQGLQJ DQG IXWXUH ZRUN ZLWK WKH FRPSOH[ DQG FRVWO\ SUREOHP RI -XYHQLOH GHOLQTXHQF\ 7KHRUHWLFDO )UDPHZRUN %URQIHQEUHQQHUfV KROLVWLF HFRV\VWHPLF PRGHO RI KXPDQ GHYHORSPHQW KDV EHHQ HPEUDFHG E\ PDQ\ LQ GHOLQTXHQF\ UHVHDUFK GXH WR WKH JURZLQJ WUHQG WR XWLOL]H

PAGE 23

PXOWLYDULDWH PRGHOV WR H[SORUH WKH HWLRORJ\ WUHDWPHQW DQG SUHYHQWLRQ RI GHOLQTXHQF\ 7RODQ t /RHEHU f ,Q DJUHHPHQW ZLWK WKH PXOWLYDULWH DSSURDFK WKLV VWXG\ DOVR XWLOL]HG %URQIHQEUHQQHUfV f PRGHO RI KXPDQ GHYHORSPHQW WR SURYLGH WKH WKHRUHWLFDO JURXQGV WR LQYHVWLJDWH WKH H[LVWHQFH RI D UHODWLRQVKLS EHWZHHQ WKH SUR[LPDO FKDUDFWHULVWLFV RI WKH SHUVRQ LH SHUVRQDOLW\f DQG WKH HQYLURQPHQW LH IDPLO\ IXQFWLRQLQJf RQ WKH GLUHFWLRQV RI KXPDQ VRFLDO GHYHORSPHQW DV VHHQ WKURXJK WKH DGROHVFHQWfV UDWH RI GHOLQTXHQW RIIHQGLQJ 7KH IROORZLQJ ZLOO EH D SUHVHQWDWLRQ RI %URQIHQEUHQQHUfV HFR V\VWHPLF PRGHO f IROORZHG E\ -HVQHVVfV f FRQVWUXFW RI SHUVRQDOLW\ DQG 2OVRQ 5XVVHOO DQG 6SUHQNOHfV f &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ 6\VWHPV (FR6\VWHPLF 0RGHO RI +XPDQ 'HYHORSPHQW %URQIHQEUHQQHU f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

PAGE 24

JURXSV RU VROLWDU\ SOD\ UHDGLQJ OHDUQLQJ QHZ VNLOOV VWXG\LQJ DWKOHWLF DFWLYLWLHV DQG SHUIRUPLQJ FRPSOH[ WDVNV %URQIHQEUHQQHU S f 3URSRVLWLRQ 7KH IRUP SRZHU FRQWHQW DQG GLUHFWLRQ RI WKH SUR[LPDO SURFHVVHV HIIHFWLQJ GHYHORSPHQW YDU\ V\VWHPDWLFDOO\ DV D MRLQW IXQFWLRQ RI WKH ELRSV\FKRORJLFDO FKDUDFWHULVWLFV RI WKH GHYHORSLQJ SHUVRQ RI WKH HQYLURQPHQW ERWK LPPHGLDWH DQG PRUH UHPRWH LQ ZKLFK WKH SURFHVVHV DUH WDNLQJ SODFH DQG WKH QDWXUH RI WKH GHYHORSPHQWDO RXWFRPHV XQGHU FRQVLGHUDWLRQ %URQIHQEUHQQHU S f $FFRUGLQJ WR %URQIHQEUHQQHU f FKLOGUHQ DUH VKDSHG QRW RQO\ E\ WKHLU SHUVRQDO DWWULEXWHV EXW DOVR E\ WKH HYHUZLGHQLQJ HQYLURQPHQWV LQ ZKLFK WKH\ GHYHORS &KLOGUHQ DUH LQIOXHQFHG ILUVW DQG IRUHPRVW E\ WKHLU IDPLO\ EXW DOVR E\ WKHLU SHHUV VFKRRO DQG FRPPXQLWLHV %RJHQVFKQHLGHU f )URP WKH HFRORJLFDO SHUVSHFWLYH WKH HQYLURQPHQWDO LQIOXHQFH LV QRW OLPLWHG WR D VLQJOH LPPHGLDWH VHWWLQJ EXW LV H[WHQGHG WR LQFRUSRUDWH LQWHUFRQQHFWLRQV EHWZHHQ VXFK VHWWLQJV DV ZHOO DV WKH H[WHUQDO LQIOXHQFHV HPDQDWLQJ IURP WKH ODUJHU VXUURXQGLQJV 7KXV WKH HFRORJLFDO HQYLURQPHQW LV FRQFHLYHG E\ %URQIHQEUHQQHU f LQ D WRSRORJLFDOO\ QHVWHG DUUDQJHPHQW RI FRQFHQWULF VWUXFWXUHV ZLWK HDFK FRQWDLQLQJ WKH QH[W 7KH VWUXFWXUHV DUH UHIHUUHG WR DV PLFUR PHVR H[R DQG PDFURV\VWHPV 7KLV VWXG\ IRFXVHG RQ WKH PLFURV\VWHP WKHUHIRUH PRUH HPSKDVLV ZLOO EH SODFHG RQ LWV H[SODQDWLRQ 7KH PLFURV\VWHP UHIHUV WR D SDWWHUQ RI DFWLYLWLHV UROHV DQG LQWHUSHUVRQDO UHODWLRQV H[SHULHQFHG E\ WKH GHYHORSLQJ SHUVRQ LQ D JLYHQ VHWWLQJ ZLWK SDUWLFXODU SK\VLFDO DQG

PAGE 25

PDWHULDO FKDUDFWHULVWLFV %URQIHQEUHQQHU f 7KXV LW LQYROYHV WKH VWUXFWXUHV DQG SURFHVVHV WDNLQJ SODFH LQ DQ LPPHGLDWH IDFH WR IDFH VHWWLQJ FRQWDLQLQJ WKH GHYHORSLQJ SHUVRQ HJ IDPLO\ VFKRRO SHHU JURXS ZRUNSODFH HWFf &RQWDLQHG ZLWKLQ WKH PLFURV\VWHP DUH WKH PRUH SRZHUIXO SUR[LPDO LQIOXHQFHV VXFK DV SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ 2I FULWLFDO LPSRUWDQFH WR %URQIHQEUHQQHU f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n VW\OHV RSSRUWXQLW\ VWUXFWXUHV KD]DUGV DQG OLIH FRXUVH RSWLRQV WKDW DUH HPEHGGHG LQ HDFK RI WKHVH EURDGHU V\VWHPV %URQIHQEUHQQHU f

PAGE 26

)XUWKHU WZR UHFHQW DGGLWLRQV LQFOXGH WKH FKURQRV\VWHPV FKDQJHV RU FRQVLVWHQFLHV RYHU WLPHf DQG WKH LQFOXVLRQ RI WKH JHQHWLF LQKHULWDQFH LQ WKH HFRORJLFDO SHUVSHFWLYH UHFRQFHSWXDOL]DWLRQ RI WKH UROH RI JHQHWLFV LQ KXPDQ GHYHORSPHQWf VHH %URQIHQEUHQQHU f $ EDVLF WHQHW RI WKH HFRORJLFDO SHUVSHFWLYH LV WKH LPSOLHG ILW EHWZHHQ WKH FKDUDFWHULVWLFV RI D OLYLQJ RUJDQLVP DQG LWV VXUURXQGLQJV %URQIUHQEUHQQHU f 7KXV IRU H[DPSOH DFFRUGLQJ WR :RUGHQ f WKH SHUVRQ EULQJV D XQLTXH PL[WXUH RI WHPSHUDPHQW SHUVRQDOLW\ LQWHOOLJHQFH DQG GHYHORSPHQWDO KLVWRU\ WR D JLYHQ FRQWH[W ZKLFK LQ WXUQ SRVVHVVHV LWV RZQ UHTXLUHPHQWV ,QWUDSHUVRQDO G\QDPLFV LQWHUDFW ZLWK LQWHUSHUVRQDO IRUFHV 7KH fJRRGQHVV RI ILWf EHWZHHQ WKHVH WZR LV WKHQ WKH VRLO RI DGDSWLYH RU PDODGDSWLYH SV\FKRORJLFDO DQG VRFLDO IXQFWLRQLQJ 5XWWHU t 5XWWHU 7KRPDV t &KHVV /HPHU f 7KXV RSWLPDO GHYHORSPHQW GRHV QRW GLUHFWO\ GHULYH IURP HLWKHU WKH QDWXUH RI WKH FKLOGfV FKDUDFWHULVWLFV SHU VH RU WKH GHPDQGV RI WKH FRQWH[WV ZLWKLQ ZKLFK WKH FKLOG IXQFWLRQV ,QVWHDG LI D FKLOGfV FKDUDFWHULVWLFV PDWFK RU ILWf WKH GHPDQGV RI D SDUWLFXODU VHWWLQJ DGDSWLYH RXWFRPHV ZLOO DFFUXH :RUGHQ f ,Q FRQWUDVW GLVWXUEHG EHKDYLRUDO IXQFWLRQLQJ LV PDQLIHVWHG LQ D fSRRU ILWf EHWZHHQ HQYLURQPHQW H[SHFWDWLRQV DQG GHPDQGV DQG WKH FDSDFLWLHV RI WKH FKLOG DW D SDUWLFXODU OHY HO RI GHYHORSPHQW 7KRPDV t &KHVV f ,Q FORVLQJ %URQIHQEUHQQHUfV f HFRV\VWHPLF YLHZ RI GHYHORSPHQW QRW RQO\ UHFRJQL]HV FKDUDFWHULVWLFV RI WKH SHUVRQ DQG WKH HQYLURQPHQW DV FULWLFDO WR GHYHORSPHQW EXW KROGV WKDW DQ LQWHUDFWLRQ EHWZHHQ WKH WZR LV WKH JHQHUDO IRFXV RI HFRV\VWHPLF EDVHG UHVHDUFK ,QWHUDFWLRQDO VWXGLHV LQ GHOLQTXHQF\ DUH LQ WKH PLQRULW\ UHVXOWLQJ LQ IDU PRUH

PAGE 27

NQRZQ DERXW PDLQ HIIHFWV WKDQ LQWHUDFWLRQDO HIIHFWV )DUULQJWRQ +RJH $QGUHZV t /HVKLHG 7RODQ f $FFRUGLQJ WR %URQIHQEUHQQHU f WKH LQWHUDFWLRQDO HPSKDVLV RI WKH HFRV\VWHPLF DSSURDFK LV GXH WR WKH WKHRUHWLFDO YLHZ WKDW WKHUH H[LVWV D UHFLSURFDO QDWXUH RI GHYHORSPHQW 'HYHORSPHQW LV VHHQ DV D WZR ZD\ VWUHHW WKDW HQWDLOV FKDQJHV HQYLURQPHQWDO GHPDQGV FKDQJH EHKDYLRU FKDQJHV DWWLWXGHV FKDQJH DQG VHOIn SHUFHSWLRQV FKDQJH 7KH fJRRGQHVV RI ILWf IOXFWXDWHV DV HQYLURQPHQWDO H[SHFWDWLRQV DQG GHPDQGV FKDQJH RU DV WKH SHUVRQfV H[SHFWDWLRQV DQG VHOISHUFHSWLRQV FKDQJH FKDQJH LQ RQH HIIHFWV FKDQJHV LQ WKH RWKHU :RUGHQ f $V DOUHDG\ PHQWLRQHG ZKLOH LW LV LPSRUWDQW WR FRQVLGHU ERWK WKH HQYLURQPHQWDO LQIOXHQFHV DQG WKH FKLOGfV LQIOXHQFHV %URQIHQEHQQHU f KLJKOLJKWV WKDW ZKHQ FRQVLGHULQJ WKH HQYLURQPHQWDO LQIOXHQFHV ZKDW PDWWHUV IRU EHKDYLRU DQG GHYHORSPHQW LV WKH HQYLURQPHQW DV LW LV fSHUFHLYHGf UDWKHU WKDQ DV LW PD\ H[LVW LQ fREMHFWLYHf UHDOLW\ 7KXV XOWLPDWHO\ GHYHORSPHQW LV GHILQHG DV WKH SHUVRQfV HYROYLQJ FRQFHSWLRQ RI WKH HFRORJLFDO HQYLURQPHQW DQG KLVKHU UHODWLRQ WR LW DV ZHOO DV WKH SHUVRQfV JURZLQJ FDSDFLW\ WR GLVFRYHU VXVWDLQ RU DOWHU LWV SURSHUWLHV %URQIHQEUHQQHU f &RQVWUXFW RI 3HUVRQDOLW\ 7KH FRQVWUXFW RI SHUVRQDOLW\ LQ WKLV VWXG\ ZDV JURXQGHG LQ -HVQHVVfV f -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ -HVQHVV f VLWHV WKH HDUO\ LQIOXHQFHV RI 0DUJXDULWH *UDQWf :DUUHQ DQG KHU VHQWLQHO ZRUN RQ ,OHYHO WKHRU\ RI SHUVRQDOLW\ 6XOOLYDQ *UDQW t *UDQW f DV SOD\LQJ D PDMRU UROH LQ WKH IRXQGDWLRQV RI WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ &ODVVLILFDWLRQ V\VWHP DQG KLV DUWLFXODWLRQ RI SHUVRQDOLW\ FKDUDFWHULVWLFV GHILQLQJ WKH FRQVWUXFW RI SHUVRQDOLW\

PAGE 28

7KH IROORZLQJ ZLOO UHYLHZ WKLV VWXG\fV DGRSWHG FRUH VWUXFWXUH RI SHUVRQDOLW\ WKH GHILQLQJ HOHPHQWV RI -HVQHVVfV FRQVWUXFW RI SHUVRQDOLW\ DQG ZLOO FORVH ZLWK D GLVFXVVLRQ RI ZKLFK IDFHWV RI WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ ZHUH XWLOL]HG LQ WKH SUHVHQW VWXG\ 7KH FRUH VWUXFWXUH RI SHUVRQDOLW\ DV SUHVHQWHG E\ 6XOOLYDQ *UDQW DQG *UDQW f KDV DV D EDVLF SUHPLVH WKDW KXPDQ RUJDQLVPV WHQG WR EUHDN H[SHULHQFH LQWR LWV IXQGDPHQWDO HOHPHQWV WR SURYLGH UHIHUHQFH SRLQWV LQ DGMXVWLQJ WR WKH FRPSOH[ VWLPXOXV VWUXFWXUH RI WKH H[WHUQDO ZRUOG $FFRUGLQJ WR 6XOOLYDQ HW DO f WKHVH UHIHUHQFH SRLQWV DUH QRW LVRODWHG IURP RQH DQRWKHU EXW DUH PHUJHG LQ D EDVLF FHQWUDO UHIHUHQFH VFKHPH RU FRJQLWLYH ZRUOG LQ ZKLFK WKH H[SHULHQFHG ZRUOG RI WKH SHUVRQ LV LQWHJUDWHG ZLWK DQG PRGLILHG E\ SHUVRQDO QHHGV DQG H[SHFWDWLRQV 7KH QDWXUH DQG TXDOLW\ RI SHUFHSWLRQ DQG H[SHULHQFH LPSDFW WKH GHYHORSPHQWDO H[SHFWDWLRQV DQG K\SRWKHVHV DERXW UHIHUHQFH SRLQWV DQG VR GHWHUPLQH EHKDYLRUDO FRQVHTXHQFHV RI H[SHULHQFH $FFRUGLQJ WR -HVQHVV DQG :HGJH f WKH LQGLYLGXDOfV SHUFHSWLRQ RI KLV RU KHU ZRUOG LV WKHRUL]HG WR EH FRQVWDQWO\ VKDSHG E\ XQLTXH DQG HYHUFKDQJLQJ SHUVRQDO FRJQLWLYH OHQV &RQVHTXHQWO\ WKHVH H[SHFWDWLRQV DQG K\SRWKHVHV LQIOXHQFH DOO WKH LQGLYLGXDOfV LQWHUSUHWDWLRQV RI DQG UHVSRQVHV WR WKH HQYLURQPHQW 7KXV LW LV EHOLHYHG WKDW RYHU WLPH D IDLUO\ FRQVLVWHQW VHW RI H[SHFWDWLRQV DQG DWWLWXGHV LV HVWDEOLVKHG WR IRUP WKH LQWHUSUHWLQJ DQG ZRUNLQJ SKLORVRSK\ RI OLIH ,W LV WKLV QH[XV RI JUDGXDOO\ H[SDQGLQJ H[SHULHQFH H[SHFWDWLRQV K\SRWKHVHV DQG SHUFHSWLRQV ZKLFK PDNH XS WKH FRUH RI SHUVRQDOLW\ 6XOOLYDQ HW DO f -HVQHVV DGGV WR WKH ZRUN RI 6XOOLYDQ *UDQW DQG *UDQW f E\ SURYLGLQJ WHQ SHUVRQDOLW\ FKDUDFWHULVWLFV DQG DQ LQGH[ RI GHOLQTXHQF\ $6RFLDO ,QGH[f 7KHVH

PAGE 29

SHUVRQDOLW\ FKDUDFWHULVWLFV PDNH XS WKH FRQVWUXFW RI SHUVRQDOLW\ DQG DUH PHDVXUHG E\ WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ -HVQHVV f YLHZV WKH GHOLQTXHQW SRSXODWLRQ DV D KHWHURJHQHRXV JURXS ZKLFK FDQ EH GLVWLQJXLVKHG QRW RQO\ E\ WKH QXPEHU RI RIIHQVHV EXW E\ WKHLU SHUVRQDOLW\ SURILOH 7KH SHUVRQDOLW\ SURILOH DV PHDVXUHG E\ WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ FRQVLVWV RI WKH IROORZLQJ SHUVRQDOLW\ GLPHQVLRQV -HVQHVV S f 6RFLDO 0DODGMXVWPHQW 6FDOH 60f 6RFLDO PDODGMXVWPHQW UHIHUV WR D VHW RI DWWLWXGHV DVVRFLDWHG ZLWK LQDGHTXDWH RU GLVWXUEHG VRFLDOL]DWLRQ +HUH VRFLDO PDODGMXVWPHQW LV GHILQHG E\ WKH H[WHQW WR ZKLFK LQGLYLGXDOV VKDUH DWWLWXGHV RI SHUVRQV ZKR GR QRW PHHW SHUVRQDO QHHGV DQG HQYLURQPHQWDO GHPDQGV LQ VRFLDOO\ DSSURYHG ZD\V 9DOXH 2ULHQWHG 6FDOH 92f 9DOXH RULHQWDWLRQ UHIHUV WR D WHQGHQF\ WR VKDUH DWWLWXGHV DQG RSLQLRQV FKDUDFWHULVWLF RI D SHUVRQ LQ WKH ORZHU VRFLRHFRQRPLF FODVVHV ,PPDWXULW\ 6FDOH ,PPf ,PPDWXULW\ UHIOHFWV D WHQGHQF\ WR GLVSOD\ DWWLWXGHV DQG SHUFHSWLRQV RI VHOI DQG RWKHUV WKDW DUH XVXDO IRU D SHUVRQ RI D \RXQJHU DJH WKDQ WKH VXEMHFW $XWLVP 6FDOH $Xf $XWLVP PHDVXUHV D WHQGHQF\ WR GLVWRUW UHDOLW\ DQG LQ WKLQNLQJ DQG LQ SHUFHLYLQJ DFFRUGLQJ WR RQHfV SHUVRQDO GHVLUHV RU QHHGV $OLHQDWLRQ 6FDOH $Of $OLHQDWLRQ UHIHUV WR WKH SUHVHQFH RI GLVWUXVW DQG HVWUDQJHPHQW LQ D SHUVRQfV DWWLWXGHV WRZDUGV RWKHUV HVSHFLDOO\ WRZDUGV WKRVH UHSUHVHQWLQJ DXWKRULW\ 0DQLIHVW $JJUHVVLRQ 6FDOH 0$f 0DQLIHVW DJJUHVVLRQ UHIOHFW DQ DZDUHQHVV RI XQSOHDVDQW IHHOLQJV HVSHFLDOO\ DQJHU DQG IUXVWUDWLRQf D WHQGHQF\ WR UHDFW UHDGLO\ ZLWK WKRVH IHHOLQJV DQG GLVFRPIRUW FRQFHUQLQJ WKH SUHVHQFH DQG FRQWURO RI WKRVH IHHOLQJV

PAGE 30

:LWKGUDZDO'HSUHVVLRQ 6FDOH :Gf :LWKGUDZDOGHSUHVVLRQ LQGLFDWHV WKH H[WHQW RI DQ LQGLYLGXDOfV GLVVDWLVIDFWLRQ ZLWK KLPRU KHUVHOI DQG RWKHUV LQ D WHQGHQF\ WRZDUGV LVRODWLRQ 6RFLDO $Q[LHW\ 6FDOH 6$f 6RFLDO DQ[LHW\ UHIHUV WR IHHOLQJV RI DQ[LHW\ DQG WR FRQVFLRXV HPRWLRQDO GLVFRPIRUW LQ LQWHUSHUVRQDO UHODWLRQV 5HSUHVVLRQ 6FDOH 5HSf 5HSUHVVLRQ UHIOHFWV WKH H[FOXVLRQ IURP FRQVFLRXV DZDUHQHVV RI IHHOLQJV WKDW WKH LQGLYLGXDO QRUPDOO\ ZRXOG EH H[SHFWHG WR H[SHULHQFH RU D IDLOXUH WR ODEHO WKHVH HPRWLRQV 'HQLDO 6FDOH 'HQf 'HQLDO LQGLFDWHV D UHOXFWDQFH WR DFNQRZOHGJH XQSOHDVDQW HYHQWV RU FRQGLWLRQV HQFRXQWHUHG LQ GDLO\ OLYLQJ $VRFLDO ,QGH[ $,f 7KH DVRFLDO LQGH[ UHIOHFWV D JHQHUDOL]HG GLVSRVLWLRQ WR UHVROYH VRFLDO RU SHUVRQDO SUREOHPV LQ ZD\V WKDW VKRZ D GLVUHJDUG IRU VRFLDO FXVWRPV RU UXOHV 7KH FXUUHQW VWXG\ IRFXVHG RQ WKH 60 0$ DQG $, -HVQHVV SHUVRQDOLW\ VFDOHV 7KHVH WKUHH KDYH FRQVLVWHQWO\ EHHQ IRXQG WR GLVWLQJXLVK DPRQJ OHYHOV RI GHOLQTXHQF\ 'HPER /D 9RLH 6FKPHLGOHU t :DVKEXUQ *UDKDP .XQFH t +HPSKLOO 0DUWLQ 0DUWLQ t 0XUSK\ 6RUHQVHQ t -RKQVRQ f 7KRXJK WKH $, LV D SHUVRQDOLW\ SURILOH FRPSRVLWH VFRUH RI DOO SHUVRQDOLW\ FKDUDFWHULVWLFV UHIOHFWLQJ WKH JHQHUDOL]HG WHQGHQF\ WR EHKDYH LQ ZD\V WKDW WUDQVJUHVV HVWDEOLVKHG UXOHV WKH 60 DQG 0$ KDYH EHHQ IRXQG WR VWDQG RXW LQ WKHLU RZQ ULJKW DV LPSRUWDQW SHUVRQDOLW\ FKDUDFWHULVWLFV WR FRQVLGHU LQ GLVWLQJXLVKLQJ DPRQJ WKH GHOLQTXHQW SRSXODWLRQ -HVQHVV f

PAGE 31

7KH FRQVWUXFW RI IDPLO\ IXQFWLRQLQJ LV JURXQGHG LQ 2OVRQ 5XVVHOO DQG 6SUHQNOHfV f &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ 6\VWHPV DV WHVWHG E\ WKH )$&(6,, 7KH &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ 6\VWHPV FRQVLVWV RI WKUHH FHQWUDO GLPHQVLRQV RI IDPLO\ EHKDYLRU ZKLFK DUH LQWHJUDWHG LQ WKH PRGHO DGDSWDELOLW\ FRKHVLRQ DQG FRPPXQLFDWLRQ 7KRPDV DQG 2OVRQ f 7KH IROORZLQJ ZLOO EH D UHYLHZ RI WKH &LUFXPSOH[ 0RGHO ZKLFK ZDV XWLOL]HG LQ WKH FXUUHQW VWXG\ 7KH WZR SULPDU\ GLPHQVLRQV RI IDPLO\ LQWHUDFWLRQ LQ WKLV PRGHO DUH DGDSWDELOLW\ DQG FRKHVLRQ 2OVRQ 0FFXEELQ %DPHV /DUVRQ 0X[HQ t :LEVRQ f )DPLO\ DGDSWDELOLW\ LV GHILQHG DV WKH DELOLW\ RI D PDULWDO RU IDPLO\ V\VWHP WR FKDQJH LWV SRZHU VWUXFWXUH UROH UHODWLRQVKLSV DQG UHODWLRQVKLS UXOHV LQ UHVSRQVH WR VLWXDWLRQDO DQG GHYHORSPHQWDO VWUHVV 2OVRQ 5XVVHOO t 6SUHQNOH S f 7KHUH DUH IRXU OHYHOV RI DGDSWDELOLW\ UDQJLQJ IURP H[WUHPHO\ ORZ ULJLGf WR PRGHUDWH VWUXFWXUHG IOH[LEOHf WR H[WUHPHO\ KLJK FKDRWLFf )DPLO\ FRKHVLRQ LV GHILQHG DV WKH HPRWLRQDO ERQGLQJ WKDW IDPLO\ PHPEHUV KDYH WRZDUGV RQH DQRWKHU 2OVRQ HW DO Sf :LWKLQ WKH &LUFXPSOH[ 0RGHO WKHUH DUH IRXU OHYHOV RI FRKHVLRQ UDQJLQJ IURP H[WUHPHO\ ORZ GLVHQJDJHGf WR PRGHUDWH VHSDUDWHG FRQQHFWHGf WR H[WUHPHO\ KLJK HQPHVKHGf 7KH WZR GLPHQVLRQV RI FRKHVLRQ DQG DGDSWDELOLW\ ZLWK WKHLU IRXU OHYHOV DUH DUUDQJHG RUWKRJRQDOO\ WR IRUP WKH &LUFXPSOH[ 0RGHO 7KXV WKH &LUFXPSOH[ 0RGHO \LHOGV SRVVLEOH FRPELQDWLRQV RI FRKHVLRQ DQG DGDSWDELOLW\ 7KH IRXU W\SHV LQ WKH FHQWHU RI WKH PRGHO DUH FDOOHG %DODQFHG W\SHV EHFDXVH WKH\ UHSUHVHQW D EDODQFH EHWZHHQ WKH H[WUHPHV RI WKH FRKHVLRQ DQG DGDSWDELOLW\ FRQWLQXD 7KH HLJKW 0LG5DQJHG IDPLO\ W\SHV

PAGE 32

DUH ([WUHPH RQ RQH GLPHQVLRQ DQG %DODQFHG RQ WKH RWKHU 7KHQ ILQDOO\ WKHUH DUH WKH IRXU ([WUHPH W\SHV 7KHVH DUH IDPLOLHV ZKR DUH H[LVWLQJ DW HLWKHU H[WUHPH RI WKH FRKHVLRQ DQG WKH DGDSWDELOLW\ FRQWLQXD DW WKH VDPH WLPH 7KH WKLUG GLPHQVLRQ RI 7KH &LUFXPSOH[ 0RGHO LV IDPLO\ FRPPXQLFDWLRQ )DPLO\ FRPPXQLFDWLRQ LV VHHQ DV FULWLFDO LQ IDFLOLWDWLQJ PRYHPHQW DORQJ WKH WZR GLPHQVLRQV RI DGDSWDELOLW\ DQG FRKHVLRQ 2OVRQ HW DO f ,W LV K\SRWKHVL]HG WKDW IDPLOLHV ZKR DUH W\SHG LQ WKH %DODQFHG DUHD RI WKH &LUFXPSOH[ 0RGHO KDYH EHWWHU FRPPXQLFDWLRQ VNLOOV WKDQ IDPLOLHV LQ WKH ([WUHPH W\SHV :DOVK f VDA6 /RZ &2+(6,21 +LJK ',6(1*$*(' 6(3$5$7(' &211(&7(' (10(6+(' &+$27,& +LJK $ $ 3 )/(;,%/( 7 $ % / 7 6758&785(' < /RZ 5,*,' %$/$1&(' 0,'5$1*( (;75(0( )LJXUH &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ 6\VWHPV

PAGE 33

7KH &LUFXPSOH[ 0RGHO DVVXPHV WKHUH LV D FXUYLOLQHDU UHODWLRQVKLS EHWZHHQ WKH WZR FHQWUDO GLPHQVLRQV FRKHVLRQ DQG DGDSWDELOLW\f DQG IDPLO\ IXQFWLRQLQJ 7KRVH IDPLOLHV ZKR H[LVW LQ WKH PLG UDQJHV RI FRKHVLRQ DQG DGDSWDELOLW\ %DODQFHGf DUH K\SRWKHVL]HG WR EH PRVW YLDEOH IRU KHDOWK\ IDPLO\ IXQFWLRQLQJ DQG GHYHORSPHQW 2OVRQ f 7KHVH EDODQFHG IDPLOLHV KDYH PRGHUDWH FRKHVLRQ VHSDUDWHG FRQQHFWHGf UHSUHVHQWLQJ D EDODQFH EHWZHHQ WRR OLWWOH FORVHQHVV GLVHQJDJHGf DQG WRR PXFK FORVHQHVV HQPHVKHGf LQ WKH IDPLO\ 6LPLODUO\ EDODQFHG IDPLOLHV DOVR KDYH PRGHUDWH DGDSWDELOLW\ VWUXFWXUHG IOH[LEOHf UHSUHVHQWLQJ D EDODQFH EHWZHHQ WRR OLWWOH FKDQJH ULJLGf DQG WRR PXFK FKDQJH FKDRWLFf LQ WKH IDPLO\ )DPLOLHV IRXQG WR UDQJH LQ WKH H[WUHPHV RI FRKHVLRQ DQG DGDSWDELOLW\ DUH JHQHUDOO\ VHHQ DV PRVW G\VIXQFWLRQDO DQG SUREOHPDWLF LQ WHUPV RI IDPLO\ IXQFWLRQLQJ DQG GHYHORSPHQW 2OVRQ 6SUHQNOH t 5XVVXHO f 5DWLRQDOH GRU WKH 6WXG\ 7KLV VWXG\ ZDV WKHRUHWLFDOO\ JURXQGHG LQ DQ HFRV\VWHPLF WKHRU\ RI VHOI DQG V\VWHP GHYHORSPHQW %URQIHQEUHQQHUfV f 6RFLDO (FRORJLFDO PRGHO RI KXPDQ GHYHORSPHQW SURYLGHG WKH IXQGDPHQWDO WKHRUHWLFDO MXVWLILFDWLRQ IRU LQYHVWLJDWLQJ LI D UHODWLRQVKLS EHWZHHQ SHUVRQDOLW\ LH FKDUDFWHULVWLFV RI WKH VHOIf DQG IDPLO\ IXQFWLRQLQJ LH HQYLURQPHQWDO FKDUDFWHULVWLFV RI WKH V\VWHPf H[LVWHG DFURVV OHYHOV RI GHOLQTXHQW RIIHQGLQJ LH VRFLDO GHYHORSPHQWf 7KH FRQVWUXFW RI SHUVRQDOLW\ ZDV JURXQGHG LQ -HVQHVVfV f -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ ZKLFK LGHQWLILHG WHQ SHUVRQDOLW\ FKDUDFWHULVWLFV DQG DQ LQGH[ RI GHOLQTXHQF\ $VRFLDO ,QGH[f 7KH FRQVWUXFW RI IDPLO\ IXQFWLRQLQJ ZDV JURXQGHG LQ 2OVRQ 5XVVHOO DQG 6SUHQNOHfV f &LUFXPSOH[ 0RGHO RI

PAGE 34

0DULWDO DQG )DPLO\ 6\VWHPV DV WHVWHG E\ WKH )$&(6,, 7KXV WKLV VWXG\ ZDV JXLGHG E\ D WUDQVDFWLRQDO DQG PXOWLOHYHO FRQFHSWXDOL]DWLRQ RI GHOLQTXHQF\ ULVN DQG SUHVXPHG WKDW WKH GHYHORSPHQW RI DQWLVRFLDO EHKDYLRUV ZDV GHSHQGHQW RQ WKH LQWHUDFWLRQ RI LQGLYLGXDO DQG FRQWH[WXDO FKDUDFWHULVWLFV %URQIHQEUHQQHU f 6WDWHPHQW RI WKH 3UREOHP 7KH UHODWLRQVKLS EHWZHHQ IDPLO\ IXQFWLRQLQJ FRKHVLRQ DQG DGDSWDELOLW\f DV VHHQ WKURXJK WKH OHQV RI WKH IDPLO\ &LUFXPSOH[ PRGHO 2OVRQ HW DO f DQG SHUVRQDOLW\ VRFLDO PDODGMXVWPHQW PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[f DV JURXQGHG LQ WKH -HVQHVV SHUVRQDOLW\ LQYHQWRU\ -HVQHVV f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f $ WKHRUHWLFDOO\ VXSSRUWHG TXHVWLRQ %URQIHQEUHQQHU f DQG UHFRJQL]HG JDS LQ WKH ILHOG RI MXYHQLOH GHOLQTXHQW VWXG\ $UEXWKQRW *RUGRQ t -XUNRYLF &R[ -HVQHVV -HVVRU /H %ODQF /RULRQ 7RODQ t :DKODU 4XD\ 6DPHURII t

PAGE 35

&KDQGOHU 6KDZ t 6FRWW 7RODQ &URPZHOO t %UDVVZHOO f RI ZKLFK WKLV VWXG\ DGGUHVVHG ZDV f'RHV D UHODWLRQVKLS H[LVW EHWZHHQ DQ DGROHVFHQWfV SHUVRQDOLW\ DQG KLVKHU SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ DFURVV KLVKHU UDWH RI GHOLQTXHQW RIIHQGLQJ ZKLOH KROGLQJ DJH UDFH DQG JHQGHU FRQVWDQW"f ,W ZDV WKH SRVLWLRQ RI WKLV UHVHDUFKHU WKDW LI LW ZHUH NQRZQ ZKHWKHU WKLV K\SRWKHVL]HG UHODWLRQVKLS H[LVWHG WKHUH ZRXOG EH LPSOLFDWLRQV IRU WKHRU\ UHVHDUFK WUDLQLQJ SUDFWLFH DQG VRFLDO SROLF\ 6XFK NQRZOHGJH ZRXOG HQFRXUDJH FULWLFDO DSSUDLVDO RI H[LVWLQJ WKHRUHWLFDO DSSURDFKHV WR MXYHQLOH GHOLQTXHQF\ ,I QR UHODWLRQVKLS ZDV IRXQG WKHQ DWWHQWLRQ FRXOG EH SDLG WR H[SDQGLQJ WKH XQGHUVWDQGLQJ RI MXYHQLOH GHOLQTXHQF\ IURP WKH WKHRUHWLFDO SHUVSHFWLYHV RI SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ LQ LVRODWLRQ RI HDFK RWKHU )XUWKHU QR UHODWLRQVKLS IRXQG FRXOG EH LQWHUSUHWHG WR FKDOOHQJH WKH WKHRUHWLFDO XQGHUSLQQLQJV RI %URQIHQEUHQQHUfV f PRGHO LQ UHJDUGV WR MXYHQLOH GHOLQTXHQF\ ,I D UHODWLRQVKLS ZDV IRXQG WKHQ IXUWKHU DWWHQWLRQ FRXOG EH JLYHQ WR WKH FULWLFDO H[DPLQDWLRQ RI WKH UROH RI SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ WDNHQ WRJHWKHU 7KLV ZRXOG EH FRQVLVWHQW ZLWK %URQIHQEUHQQHUfV f 6RFLDO (FRORJLFDO PRGHO RI KXPDQ GHYHORSPHQW ZKHQ H[SORULQJ MXYHQLOH GHOLQTXHQF\ 7KLV NQRZOHGJH DOVR FRXOG IDFLOLWDWH IXUWKHU UHVHDUFK LQWR ZKDW LV FRQVLGHUHG FULWLFDO UHJLRQV RI DVVHVVPHQW LQ MXYHQLOH GHOLQTXHQWV )RU H[DPSOH WKH LPSRUWDQFH RI FDUHIXO DQG DFFXUDWH DVVHVVPHQW ZKLFK FRQWULEXWHV WR MXYHQLOH MXVWLFH FRUUHFWLRQDO GHFLVLRQV $QGUHZV %RQWD DQG +RJH +RJH $QGUHZV DQG /HVFKLHG -DIIH /HVFKLHG 6DE DQG $XVWLQ f WKH DELOLW\ WR WDUJHW WKRVH MXYHQLOHV ZKR DUH PRVW LQ QHHG RI OLPLWHG WUHDWPHQW UHVRXUFHV )DUULQJWRQ f DV ZHOO DV WKH DUHDV WR EH DGGUHVVHG

PAGE 36

LQ D WUHDWPHQW VWUDWHJ\ GHDOLQJ ZLWK D MXYHQLOH GHOLQTXHQW FOLHQW +HQJJHOHU /RHEHU 0XOYH\ $UWKXU 5HSSXFFL 7RODQ DQG 0LWFKHOO f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fV SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ ZKHQ DGGUHVVLQJ WKH DERYH H[DPSOHV 7KH ILQGLQJV RI WKLV VWXG\ FRXOG EH VHHQ WR KDYH LPSOLFDWLRQV IRU FRXQVHORUV LQ WUDLQLQJ DQG LQ SUDFWLFH ZKHQ DSSOLHG WR WKH FRXQVHOLQJ QHHGV RI MXYHQLOH GHOLQTXHQWV ,I QR UHODWLRQVKLS ZDV IRXQG OHVV LPSRUWDQFH PD\ KDYH EHHQ SODFHG LQ JDLQLQJ XQGHUVWDQGLQJ RI WKH UHODWLRQVKLS EHWZHHQ WKHRULHV RI SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ ZKHQ FRQVLGHULQJ WUHDWPHQW DSSURDFKHV IRU WKH GHOLQTXHQW SRSXODWLRQ ,I D UHODWLRQVKLS ZDV IRXQG JUHDWHU LPSRUWDQFH ZRXOG QHHG WR EH SODFHG RQ DGRSWLQJ D PRUH KROLVWLF HFR V\VWHPLF VWDQFH LQFOXGLQJ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ ZKHQ FRQVLGHULQJ DSSURDFKHV WR FRXQVHOLQJ DQG XQGHUVWDQGLQJ WKH MXYHQLOH SRSXODWLRQ )LQDOO\ VRFLDO SROLF\ FRXOG EH LQIOXHQFHG E\ WKH ILQGLQJV RI WKLV VWXG\ $FFRUGLQJ WR *DUEDULQR f ZKHQ ZH DUH WDONLQJ DERXW VRFLDO SROLF\ ZH DUH WDONLQJ DERXW ZKDW ZH WKLQN LV VLPXOWDQHRXVO\ GHVLUDEOH DQG DWWDLQDEOH $ VWDWHPHQW RI ZLOO D VWDWHPHQW RI

PAGE 37

JRDOV DQG WKH VRFLDO PDSV WKDW ZH VHH JLYLQJ XV WKH URXWH WR DWWDLQ WKHVH JRDOV 6RFLDO SROLF\ LQIRUPV FOLQLFDO SUDFWLFH DQG LW LQGLUHFWO\ VHWV WKH DJHQGD IRU FOLQLFDO SUDFWLFH 6RFLDO SROLF\ RIIHUV D GHILQLWLRQ RI ZKDW WKH LVVXHV DUH DQG LW VKDSHV WKH PHDQV DYDLODEOH WR DGGUHVV WKHVH LVVXHV *DUEDULQR f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f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

PAGE 38

5HVHDUFK 4XHVWLRQV 7KH LQGHSHQGHQW YDULDEOHV WKDW ZHUH LQFOXGHG LQ WKH FROOHFWLRQ RI RULJLQDO UHVHDUFK TXHVWLRQV DV OLVWHG EHORZf ZHUH DJH JHQGHU UDFH DGDSWDELOLW\ FRKHVLRQ VRFLDO PDODGMXVWPHQW PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[ 7KH GHSHQGHQW YDULDEOH UHIHUUHG WR LQ WKHVH UHVHDUFK TXHVWLRQV ZDV WKH UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV 7KH SULPDU\ UHVHDUFK TXHVWLRQ DGGUHVVHG LQ WKH FXUUHQW VWXG\ ZDV f'RHV D UHODWLRQVKLS H[LVW EHWZHHQ DQ DGROHVFHQWfV SHUVRQDOLW\ DQG KLVKHU SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ DFURVV KLVKHU UDWH RI GHOLQTXHQW RIIHQGLQJ ZKLOH KROGLQJ DJH UDFH DQG JHQGHU FRQVWDQW"f (DFK OLVWHG UHVHDUFK TXHVWLRQ EHORZ WKDW SHUWDLQHG WR DQ LQWHUDFWLRQ EHWZHHQ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ ZDV GHYHORSHG WR SURYLGH WKH LQIHUHQFHV QHHGHG LQ WKHLU RZQ ULJKW WR DGGUHVV WKH SULPDU\ UHVHDUFK TXHVWLRQ 7KH UHVHDUFK TXHVWLRQV LQFOXGLQJ LQWHUDFWLRQV ZHUH TXHVWLRQV DQG 7KH UHPDLQLQJ TXHVWLRQV ZHUH GHYHORSHG WR DGGUHVV DJH TXHVWLRQ f JHQGHU TXHVWLRQ f DQG UDFH TXHVWLRQ f +RZHYHU GXH WR PXOWLFROLQHDULW\ FRQFHUQV RI WKH UHVHDUFK TXHVWLRQV OLVWHG EHORZ DQG ZHUH XQDEOH WR EH DGGUHVVHG 1HYHUWKHOHVV VXIILFLHQW LQIHUHQFHV QHHGHG WR DGGUHVV WKH SULPDU\ UHVHDUFK TXHVWLRQ ZDV JDLQHG WKURXJK DGGUHVVLQJ WKH UHPDLQLQJ UHVHDUFK TXHVWLRQV DQG f $OO RI WKH FRUUHVSRQGLQJ WHVWHG K\SRWKHVHV ZLWK WKHLU UHTXLUHG PRGLILFDWLRQV GXH WR PXOWLFROLQHDULW\ FRQFHUQV DUH SUHVHQWHG LQ FKDSWHU 7KH SULPDU\ FKDQJHV UHYROYHG DURXQG OLPLWLQJ WKH QXPEHU RI YDULDEOHV WKDW ZHUH FRQWUROOHG IRU 7KH IROORZLQJ LV D OLVW RI WKH UHVHDUFK TXHVWLRQV WKDW ZHUH RULJLQDOO\ SXUSRVHG WR EH DGGUHVVHG LQ WKLV VWXG\

PAGE 39

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

PAGE 40

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f 7KH DVRFLDO LQGH[ UHIOHFWV D JHQHUDOL]HG GLVSRVLWLRQ WR UHVROYH VRFLDO RU SHUVRQDO SUREOHPV LQ ZD\V WKDW VKRZ D GLVUHJDUG IRU VRFLDO FXVWRPV RU UXOHV -HVQHVV S f 'LVFULPLQDWH )XQFWLRQDO $QDO\VLV ZDV XVHG WR FUHDWH WKLV VFDOH ZKLFK FRPELQHV VFRUHV IURP DOO WKH RWKHU SHUVRQDOLW\ VFDOHV WR EHVW GLVWLQJXLVK

PAGE 41

GHOLQTXHQWV -HVQHVV f )RU WKH SXUSRVHV RI WKLV VWXG\ $, ZDV GHWHUPLQHG WKURXJK WKH XVH RI WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ %DODQFHG IDPLO\ W\SHV DUH WKRVH IDPLOLHV ZKR H[LVW LQ WKH PLG UDQJHV RI FRKHVLRQ DQG DGDSWDELOLW\ 7KHVH IDPLOLHV DUH K\SRWKHVL]HG WR EH PRVW YLDEOH IRU KHDOWK\ IDPLO\ IXQFWLRQLQJ DQG GHYHORSPHQW 2OVRQ f 'HOLQTXHQF\ LV GHILQHG DV EHKDYLRU WKDW KDV FDXVHG RU FRXOG FDXVH DGMXGLFDWLRQ RI D SHUVRQ QR ROGHU WKDQ 7RODQ &URPZHOO t %UDVVZHOO f 'HOLQTXHQW DGROHVFHQWV IRU WKH SXUSRVHV RI WKLV VWXG\ ZHUH DGROHVFHQWV EHWZHHQ WKH DJHV RI DQG \HDUV ROG ZKR KDG EHHQ FKDUJHG ZLWK D PLQLPXP RI RQH LOOHJDO RIIHQVH DV ILOHG ZLWK WKH 'HSDUWPHQW RI -XYHQLOH -XVWLFH 'HYHORSPHQW DV GHILQHG WKURXJK WKH OHQV RI HFRV\VWHPLF WKHRU\ LV VHHQ DV WKH SHUVRQfV HYROYLQJ FRQFHSWLRQ RI WKH HFRORJLFDO HQYLURQPHQW DQG KLVKHU UHODWLRQ WR LW DV ZHOO DV WKH SHUVRQfV JURZLQJ FDSDFLW\ WR GLVFRYHU VXVWDLQ RU DOWHU LWV SURSHUWLHV %URQIHQEUHQQHU f )XQGDPHQWDO WR WKLV YLHZ LV WKH EHOLHI WKDW GHYHORSPHQW UHVXOWV DV D IXQFWLRQ RI FKDUDFWHULVWLFV RI WKH LQGLYLGXDO DQG KLVKHU HQYLURQPHQW %URQIHQEUHQQHU f )RU WKH SXUSRVHV RI WKLV VWXG\ LQFUHDVHG OHYHOV RI GHOLQTXHQW RIIHQGLQJ VXJJHVWHG WKH SUHVHQFH RI OHVV KHDOWK\ VRFLDO GHYHORSPHQW (FRV\VWHPLF WKHRU\ SXUSRUWV WKDW FKLOGUHQ DUH VKDSHG QRW RQO\ E\ WKHLU SHUVRQDO DWWULEXWHV EXW DOVR E\ WKH HYHUZLGHQLQJ HQYLURQPHQWV LQ ZKLFK WKH\ GHYHORS %URQIHQEUHQQHU f &KLOGUHQ DUH LQIOXHQFHG ILUVW DQG IRUHPRVW E\ WKHLU IDPLO\ EXW DOVR E\ WKHLU SHHUV VFKRRO DQG FRPPXQLWLHV %RJHQVFKQHLGHU f )URP WKH HFRORJLFDO SHUVSHFWLYH WKH HQYLURQPHQWDO LQIOXHQFH LV QRW OLPLWHG WR D VLQJOH LPPHGLDWH VHWWLQJ EXW

PAGE 42

LV H[WHQGHG WR LQFRUSRUDWH LQWHUFRQQHFWLRQV EHWZHHQ VXFK VHWWLQJV DV ZHOO DV WKH H[WHUQDO LQIOXHQFHV HPDQDWLQJ IURP WKH ODUJHU VXUURXQGLQJV 7KXV DV %URQIHQEUHQQHU f QRWHG UHVHDUFK WKDW LQYHVWLJDWHV WKH DGROHVFHQWfV WUDQVDFWLRQV ZLWKLQ GLIIHUHQW V\VWHPV JUHDWO\ IDFLOLWDWHV RXU XQGHUVWDQGLQJ RI WKH HWLRORJ\ RI GHYLDQW EHKDYLRU ([WUHPH IDPLO\ W\SHV DUH WKRVH IDPLOLHV IRXQG WR UDQJH LQ WKH H[WUHPHV RI FRKHVLRQ DQG DGDSWDELOLW\ 7KHVH IDPLOLHV DUH JHQHUDOO\ VHHQ DV PRVW G\VIXQFWLRQDO DQG SUREOHPDWLF LQ WHUPV RI IDPLO\ IXQFWLRQLQJ DQG GHYHORSPHQW 2OVRQ 6SUHQNOH t 5XVVXHO f )DPLO\ $GDSWDELOLW\ LV GHILQHG DV WKH H[WHQW WR ZKLFK WKH IDPLO\ V\VWHP LV IOH[LEOH DQG DEOH WR FKDQJH LWV SRZHU VWUXFWXUH UROH UHODWLRQVKLSV DQG UHODWLRQVKLS UXOHV LQ UHVSRQVH WR VLWXDWLRQDO DQG GHYHORSPHQWDO VWUHVV 2OVRQ HW DO f )RU WKH SXUSRVHV RI WKLV VWXG\ DGDSWDELOLW\ ZDV GHWHUPLQHG E\ WKH DGDSWDELOLW\ VFRUH IURP )$&(6,, )DPLO\-=RKHVLRQ LV GHILQHG DV fWKH HPRWLRQDO ERQGLQJ WKDW IDPLO\ PHPEHUV KDYH WRZDUGV RQH DQRWKHUf 2OVRQ HW DO Sf &RKHVLRQ LQFRUSRUDWHV FRQFHSWV RI HPRWLRQDO ERQGLQJ ERXQGDULHV FRDOLWLRQV WLPH VSDFH IULHQGV GHFLVLRQ PDNLQJ LQWHUHVWV DQG UHDFWLRQ 2OVRQ HW DO f )RU WKH SXUSRVHV RI WKLV VWXG\ FRKHVLRQ ZDV GHWHUPLQHG E\ WKH FRKHVLRQ VFRUH IURP )$&(6,, )DPLO\ IXQFWLRQLQJ IRU WKH SXUSRVHV RI WKLV VWXG\ ZDV JURXQGHG LQ 2OVRQ 5XVVHOO DQG 6SUHQNOHfV f &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ 6\VWHPV DV WHVWHG E\ WKH )$&(6,, 7KH OHYHO RI IDPLO\ IXQFWLRQLQJ YDULHV IURP KHDOWK\ WR OHVV KHDOWK\ DV IDPLOLHV PRYH IRUP EDODQFHG IDPLO\ W\SHV WR H[WUHPH IDPLO\ W\SHV UHVSHFWLYHO\

PAGE 43

)DPLO\ FRKHVLRQ DQG DGDSWDELOLW\ DUH WKH FRUH IDFWRUV PDNLQJ XS WKH FRQVWUXFW RI IDPLO\ IXQFWLRQLQJ 2OVRQ HW DO f 0DQLIHVW DJJUHVVLRQ 0$f 0DQLIHVW DJJUHVVLRQ UHIOHFWV DQ DZDUHQHVV RI XQSOHDVDQW IHHOLQJV HVSHFLDOO\ DQJHU DQG IUXVWUDWLRQf D WHQGHQF\ WR UHDFW UHDGLO\ ZLWK WKRVH IHHOLQJV DQG GLVFRPIRUW FRQFHUQLQJ WKH SUHVHQFH DQG FRQWURO RI WKRVH IHHOLQJV -HVQHVV S f )RU WKH SXUSRVHV RI WKLV VWXG\ 0$ ZDV GHWHUPLQHG E\ WKH VFRUH RQ WKH 0$ VFDOH RI WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ 7KH PLFURV\VWHP UHIHUV WR D SDWWHUQ RI DFWLYLWLHV UROHV DQG LQWHUSHUVRQDO UHODWLRQV H[SHULHQFHG E\ WKH GHYHORSLQJ SHUVRQ LQ D JLYHQ VHWWLQJ ZLWK SDUWLFXODU SK\VLFDO DQG PDWHULDO FKDUDFWHULVWLFV %URQIHQEUHQQHU f 7KXV LW LQYROYHV WKH VWUXFWXUHV DQG SURFHVVHV WDNLQJ SODFH LQ DQ LPPHGLDWH IDFH WR IDFH VHWWLQJ FRQWDLQLQJ WKH GHYHORSLQJ SHUVRQ HJ IDPLO\ VFKRRO SHHU JURXS ZRUNSODFH HWFf 3HUVRQDOLW\ IRU WKH SXUSRVHV RI WKLV VWXG\ ZDV JURXQGHG LQ -HVQHVVfV f -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ &HQWUDO WR GHILQLQJ WKH FRQVWUXFW RI SHUVRQDOLW\ LQ WKH FXUUHQW VWXG\ ZDV WKH DVRFLDO LQGH[ )XUWKHU WKH SHUVRQDOLW\ FKDUDFWHULVWLFV RI VRFLDO PDODGMXVWPHQW DQG PDQLIHVW DJJUHVVLRQ ZHUH LQFOXGHG DV UHOHYDQW SHUVRQDOLW\ FKDUDFWHULVWLFV LQIOXHQFLQJ WKH GHYHORSPHQW RI GHOLQTXHQF\ -HVQHVV f 7KH SUR[LPDO LQIOXHQFHV ZKLFK DUH FRQWDLQHG ZLWKLQ WKH PLFURV\VWHP DQG ZHUH UHOHYDQW WR WKH FXUUHQW VWXG\ LQFOXGHG SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ 7KHVH WZR LQIOXHQFHV LQWHUDFW WR IRUP SUR[LPDO SURFHVVHV ZKLFK DUH YLHZHG WR GLUHFWO\ HIIHFW WKH FRXUVH RI DQ LQGLYLGXDOfV GHYHORSPHQW %URQIHQEUHQQHU f

PAGE 44

L 6RFLDO PDODGMXVWPHQW UHIHUV WR D VHW RI DWWLWXGHV DVVRFLDWHG ZLWK LQDGHTXDWH RU GLVWXUEHG VRFLDOL]DWLRQ +HUH VRFLDO PDODGMXVWPHQW LV GHILQHG E\ WKH H[WHQW WR ZKLFK LQGLYLGXDOV VKDUH DWWLWXGHV RI SHUVRQV ZKR GR QRW PHHW SHUVRQDO QHHGV DQG HQYLURQPHQWDO GHPDQGV LQ VRFLDOO\ DSSURYHG ZD\V -HVQHVV S f )RU WKH SXUSRVHV RI WKLV VWXG\ 60 ZDV GHWHUPLQHG E\ WKH VFRUH RQ WKH 60 VFDOH RI WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ 5DWH RI MXYHQLOH GHOLQTXHQF\ IRU WKH SXUSRVHV RI WKLV VWXG\ ZDV FRPSULVHG RI WKH WRWDO FXUUHQW QXPEHU RI LOOHJDO FKDUJHV ZLWK ZKLFK DQ DGROHVFHQW KDV DFFUXHG RYHU WKHLU OLIH WLPH DV ILOHG ZLWKLQ WKH MXYHQLOH FRXUW V\VWHP DW WKH WLPH RI GDWD FROOHFWLRQ 7KH UDWH ZDV WKHQ GHOLQHDWHG E\ FDWHJRULHV RI IUHTXHQF\ RI RIIHQGLQJ ZKLFK LQFOXGHG ILUVW WLPH RIIHQGHUV KDYLQJ RQO\ RQH FKDUJHf PXOWLSOH RIIHQGHUV KDYLQJ WR FKDUJHVf DQG FKURQLF RIIHQGHUV KDYLQJ RU PRUH FKDUJHVf 7UDF\ :ROIJDQJ t )LJOLR :ROIJDQJ )LJOLR t 6HOOLQ f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

PAGE 45

&KDSWHU ZLOO DOVR LQFOXGH D GLVFXVVLRQ RI WKH OLPLWDWLRQV RI WKH VWXG\ SUDFWLFDO LPSOLFDWLRQV RI WKH UHVXOWV DQG UHFRPPHQGDWLRQV IRU IXWXUH UHVHDUFK

PAGE 46

&+$37(5 5(9,(: 2) 7+( /,7(5$785( ,QWURGXFWLRQ $GROHVFHQFH LV PDUNHG E\ GUDPDWLF FKDQJHV LQ WKH LQGLYLGXDO DQG KLVKHU UHODWLRQVKLSV ZLWK VLJQLILFDQW RWKHUV DQG VRFLHW\ ,W LV D WLPH RI PDJQLILFHQW SURPLVH DQG LQVLGLRXV ULVN &R[ OHVVRU f $GROHVFHQFH PDUNV D ORQJ SURFHVV RI H[SHULPHQWDWLRQ ZKLFK LV HVVHQWLDO WR VHOI GHILQLWLRQ 7KH DGROHVFHQW DQG WKHLU IDPLO\ PXWXDOO\ LQIOXHQFH HDFK RWKHU DFURVV WLPH 7KH DGROHVFHQWfV IDPLO\ PXVW DGMXVW WR WKLV SURFHVV E\ SURYLGLQJ DQ HQYLURQPHQW ZKLFK KHOSV WKH DGROHVFHQW WR HYDOXDWH WKH RXWFRPH RI WKHVH FKDQJHV 2YHUDOO DGDSWLRQV LQ IDPLO\ RUJDQL]DWLRQ LQFOXGLQJ FKDQJHV LQ FRKHVLRQ DQG DGDSWDELOLW\ DUH UHTXLUHG WR PHHW WKHVH WDVNV RI DGROHVFHQFH :RUGHQ f DV WKH IDPLO\ LV WUDQVIRUPHG IURP D XQLW JHDUHG WR SURWHFW DQG QXUWXUH \RXQJ FKLOGUHQ WR RQH WKDW SUHSDUHV WKHP WR HQWHU WKH ZRUOG RI DGXOW UHVSRQVLELOLWLHV DQG FRPPLWPHQWV *DUFLD3UHWR f 7KH LQWHUSOD\ RU ILW EHWZHHQ WKH FKDUDFWHULVWLFV RI WKH DGROHVFHQW DQG WKH IDPLO\ EHFRPH WKH VRLO ZKLFK JHQHUDWHV DGDSWLYH RU PDODGDSWLYH SV\FKRORJLFDO DQG VRFLDO GHYHORSPHQWIXQFWLRQLQJ %URQIUHQEUHQQHU 5XWWHU t 5XWWHU 7KRPDV t &KHVV /HPHU :RUGHQ f %URQIHQEUHQQHU f ZKR SURYLGHG WKH JXLGLQJ WKHRU\ RI WKLV VWXG\ YLHZV VRFLDO GHYHORSPHQW OHYHO RI GHOLQTXHQF\f DV D IXQFWLRQ RI FKDUDFWHULVWLFV RI WKH

PAGE 47

LQGLYLGXDO HJ SHUVRQDOLW\f DQG WKH HQYLURQPHQW HJ IDPLO\f 7KH SUHVHQW VWXG\ ZDV GHVLJQHG WR WHVW WKDW IXQFWLRQDO UHODWLRQVKLS E\ DGGUHVVLQJ WKH TXHVWLRQ f'RHV D UHODWLRQVKLS H[LVW EHWZHHQ DQ DGROHVFHQWfV SHUVRQDOLW\ LH FKDUDFWHULVWLFV RI WKH VHOIf DQG KLVKHU SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ LH HQYLURQPHQWDO FKDUDFWHULVWLFV RI WKH V\VWHPf DFURVV KLVKHU UDWH RI GHOLQTXHQW RIIHQGLQJ LH VRFLDO GHYHORSPHQWf ZKLOH KROGLQJ UHOHYDQW IDFWRUV VXFK DV DJH JHQGHU DQG UDFH FRQVWDQW"f &KDSWHU ,, ZLOO UHYLHZ WKH UHOHYDQW OLWHUDWXUH WR SURYLGH D FRQWH[W IRU XQGHUVWDQGLQJ WKH UHODWLRQVKLS EHWZHHQ Df SHUVRQDOLW\ DQG GHOLQTXHQF\ Ef IDPLO\ IXQFWLRQLQJ DQG GHOLQTXHQF\ DQG F f %URQIHQEUHQQHUfV f (FR6\VWHPLF 0RGHO RI +XPDQ 'HYHORSPHQW DQG GHOLQTXHQF\ 3HUVRQDOLW\ DQG 'HOLQTXHQF\ 3HUVRQDOLW\ IDFWRUV KDYH EHHQ OLQNHG LQ UHVHDUFK WR DQWLVRFLDO DQG GHOLQTXHQW EHKDYLRU IRU D ORQJ WLPH 'HPER /D 9RLH 6FKPHLGHU t :DVKEXUQ (\VHQFN t *XGMRQVVRQ )DUULQJWRQ )RQVHFD t
PAGE 48

)RU H[DPSOH UHFHQW HIIRUWV KDYH RSHUDWLRQDOL]HG DQG YDOLGDWHG IDFWRUV UHOHYDQW WR D WKHRU\ RI FULPLQDO RU DQWLVRFLDO SHUVRQDOLW\ WR SURYLGH D YLDEOH H[SODQDWLRQ IRU WKH FRQVLGHUDEOH FRQWLQXLW\ RYHU WLPH LQ WKH UHODWLYH OHYHOV RI ERWK RIIHQGLQJ DQG DQWLVRFLDO EHKDYLRU )DUULQJWRQ )ULFKHWWH t /H%ODQF -HVQHVV /H %ODQF 0F'XII &KDUOHERLV *DJQRQ t 7UHPEOD\ /\WWRQ 6KDZ t %HOO DQG 4XD\ f 'HPER /D9RLH 6FKPHLGKHU DQG :DVKEXUQ f KDYH VXJJHVWHG WKDW WR QHJOHFW WKH SV\FKRORJLFDO GLPHQVLRQ RI WKH DGROHVFHQW SUHFOXGHV D GHHSHU XQGHUVWDQGLQJ RI WKH PRWLYDWLRQDO EDVHV RI WKHLU EHKDYLRU /RHEHU DQG 'LVKLRQ f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t 5RWKEDUW *DUULVRQ t (DUOV 5XWWHU t 5XWWHU f 3HUVRQDOLW\ UHIHUV WR WKH SDWWHUQ WKDW HDFK SHUVRQ DV D WKLQNLQJ EHLQJ GHYHORSV DV D ZD\ RI GHDOLQJ ZLWK WKHLU WHPSHUDPHQWDO WUDLWV WKHLU HQFRXQWHUV ZLWK YDULRXV VRFLDO FRQWH[WV DQG WKHLU OLIH H[SHULHQFHV 5XWWHU t 5XWWHU f 3HUVRQDOLW\ LQYROYHV VHWV RI FRJQLWLRQV DERXW RXUVHOYHV RXU UHODWLRQVKLSV DQG RXU LQWHUDFWLRQV ZLWK WKH HQYLURQPHQW ZKLFK FRQVWLWXWH WKH VHOIV\VWHP DQG FRQWDLQV VXFK TXDOLWLHV DV VHOIHVWHHP VHOIHIILFDF\ DQG VRFLDO SUREOHPVROYLQJ VNLOOV 5XWWHU t 5XWWHU f 7KH FRUH VWUXFWXUH RI SHUVRQDOLW\ LV EDVHG

PAGE 49

LQ WKH KXPDQ LQFOLQDWLRQ WR EUHDN H[SHULHQFH LQWR LWV IXQGDPHQWDO HOHPHQWV WR SURYLGH UHIHUHQFH SRLQWV LQ DGMXVWLQJ WR WKH FRPSOH[ VWLPXOXV VWUXFWXUH RI WKH H[WHUQDO ZRUOG 6XOOLYDQ *UDQW t *UDQW f 7KH PHUJLQJ RI WKHVH UHIHUHQFH SRLQWV HVWDEOLVKHV D EDVLF FHQWUDO UHIHUHQFH VFKHPH RU FRJQLWLYH ZRUOG LQ ZKLFK WKH H[SHULHQFHG ZRUOG RI WKH SHUVRQ LV LQWHJUDWHG ZLWK DQG PRGLILHG E\ SHUVRQDO QHHGV DQG H[SHFWDWLRQV 6XOOLYDQ HW DO f &RQVHTXHQWO\ WKHVH H[SHFWDWLRQV SHUVRQDO QHHGV DQG K\SRWKHVHV LQIOXHQFH DOO WKH LQGLYLGXDOfV LQWHUSUHWDWLRQV RI DQG UHVSRQVHV WR WKH HQYLURQPHQW -HVQHVV t :HGJH f 7KXV RYHU WLPH D IDLUO\ FRQVLVWHQW VHW RI H[SHFWDWLRQV DQG DWWLWXGHV LV HVWDEOLVKHG DV DQ LQWHUSUHWLQJ DQG ZRUNLQJ SKLORVRSK\ RI OLIH 6XOOLYDQ HW DO f VXJJHVWV WKDW LW LV WKLV QH[XV RI JUDGXDOO\ H[SDQGLQJ H[SHULHQFH H[SHFWDWLRQV K\SRWKHVHV DQG SHUFHSWLRQV ZKLFK PDNH XS WKH FRUH RI WKH SHUVRQDOLW\ ,PSOLFLW LQ SHUVRQDOLW\ IRUPDWLRQ LV WKH FRQVLVWHQF\ RU VWDELOLW\ DFURVV WLPH RI LWV PDNHXS ZLWKLQ DQ LQGLYLGXDO %URRN :KLWHPDQ 1RUPXUD *RUGRQ t &RKHQ &DVSL t %HUQ 7RODQ t /RHEHU f 0DQ\ UHVHDUFKHUV KDYH HVWDEOLVKHG D OLQN EHWZHHQ HDUO\ WHPSHUDPHQW DQG ODWHU SHUVRQDOLW\ &DVSL +HQU\ 0F*HH 0RIILWW DQG 6LOYD &DVSL t 6LOYD /\QDP f 7RODQ DQG 7KRPDV f UHSRUWHG WKDW 1DJLQ DQG )DUULQJWRQfV f WHVW RI )DUULQJWRQ DQG :HVWfV LQ SUHVVf &DPEULGJH GDWD VXJJHVWV WKDW SHUVLVWHQW SHUVRQDOLW\ WUDLWV RIIHUHG D UHDVRQDEOH H[SODQDWLRQ IRU WKH QXPEHUV RI FRQYLFWLRQV IRU FULPLQDO RIIHQVHV DPRQJ WKHLU XUEDQ PDOH VDPSOH ZKLFK ZDV IROORZHG IURP DJH WR 1DJLQ DQG )DUULQJWRQfV f UHVXOWV VXSSRUW WKH FRQWHQWLRQ RI :LOVRQ DQG +HUPVWHLQ f DQG *RWWIUHGVRQ DQG +LUVFKL f ZKR VWDWH WKDW FULPLQDO DFWLYLW\ OHYHO LV SULPDULO\ GXH WR VWDEOH LQGLYLGXDO GLIIHUHQFHV DQG QRW

PAGE 50

VLWXDWLRQDO RU G\QDPLF FKDUDFWHULVWLFV VXFK DV WLPLQJ RI GHOLQTXHQW RQVHW 7RODQ DQG 7KRPDV f DQG 7RODQ DQG /RHEHU f DJUHH WKDW VWDEOH LQGLYLGXDO FKDUDFWHULVWLFV DUH PRUH LQIOXHQWLDO WKDQ G\QDPLF DQG VLWXDWLRQDO LQIOXHQFHV HVSHFLDOO\ IRU WKRVH ZLWK PRUH H[WUHPH GHOLQTXHQF\ SDWWHUQV HJ PXOWLSOH DUUHVWVf &RQWLQXHG HYLGHQFH VXSSRUWLQJ WKH VWDELOLW\ RI SHUVRQDOLW\ RYHU WLPH KDV VWUHQJWKHQHG WKH HIIRUWV WR LGHQWLI\ SHUVRQDOLW\ FKDUDFWHULVWLFV ZKLFK GLIIHUHQWLDWH W\SHV RI GHOLQTXHQWV DQG OHYHOV RI GHOLQTXHQF\ 6HH 0XOYH\ $UWKXU 5HSSXFFL f $FFRUGLQJ WR 4XD\ f VHYHUDO VWXGLHV RIIHU FRQYHUJHQW VXSSRUW IRU D IHZ GLVWLQFW EHKDYLRUDO VXEW\SHV ZKLFK KDYH VKRZQ SURPLVLQJ EXW PL[HG UHVXOWV )RU H[DPSOH IDFWRU DQDO\WLF VWXGLHV RI GDWD IURP EHKDYLRUDO FKHFN OLVWV $FKHQEDFN t (GHOEURRN 4XD\ t 3HWHUVRQ f KDYH LGHQWLILHG IRXU FDWHJRULHV XQGHUVRFLDOL]HG DJJUHVVLYH VRFLDOL]HG DJJUHVVLYH DWWHQWLRQ GHILFLW DQG DQ[LRXV ZLWKGUDZQ 6LPLODUO\ 0XOYH\ $XUWKXU DQG 5HSSXFFL f UHVHDUFK URRWHG LQ WKH &DOLIRUQLD ,/HYHO V\VWHP RI WKH nV -HVQHVV f IRXQG WKUHH VXEW\SHV RI GHOLQTXHQWV SDVVLYH FRQIRUPLVW SRZHURULHQWHG DQG QHXURWLF 3DOPHU f *ROG f .DSODQ f :HOOV t 5DQNLQ f LGHQWLILHG ORZHU OHYHO RI VHOIHVWHHP DV D FRPPRQ SHUVRQDOLW\ WUDLW DPRQJ GHOLQTXHQWV /RHEHU f /RHEHU f /RULRQ HW DO f 3DWWHUVRQ f DQG 7RODQ t 0LWFKHOO f LGHQWLILHG HOHYDWHG PHDVXUHV RI DJJUHVVLRQ DV D FRPPRQ WUDLW 0HDVXUHV RI LQGLYLGXDO DJJUHVVLRQ KDYH EHHQ YLHZHG DV WKH PRVW XVHIXO IRUP RI GHOLQHDWLQJ GHOLQTXHQWV IROORZHG VHFRQG E\ LQGLFHV RI IDPLO\ V\VWHPLF IXQFWLRQLQJ 7RODQ &URPZHOO t %UDVV /RULRQ 7RODQ t :DKODU f ,Q D UHYLHZ SURYLGHG E\ /RHEHU DQG 6WRXWKDPHU/RHEHU f LW ZDV FRQFOXGHG WKDW WR SHUFHQW RI

PAGE 51

YLROHQW RIIHQGHUV KDG EHHQ KLJKO\ DJJUHVVLYH ZKHQ \RXQJ )DUULQJWRQ 0DJQXVVRQ 6WDWWLQ t 'XQHU 5RELQV f %OXPVWHLQ )DUULQJWRQ DQG 0RLWUD f &UDLJ DQG *OLFN f (URQ DQG +XHVPDQQ f )DUULQJWRQ f DQG 3XONNLQHQ f DOO UHSRUWHG WKDW HOHYDWHG OHYHOV RI DJJUHVVLYH WHQGHQFLHV FRUUHODWHG ZLWK YLROHQW DQG FKURQLF GHOLQTXHQW RIIHQGLQJ 7R LOOXVWUDWH WKH SHUYDVLYHQHVV RI DJJUHVVLRQ LQ DQWLVRFLDO \RXWK WKH IROORZLQJ ZLOO VXPPHUL]H ILYH FRQVWUXFWV RI FRJQLWLYH DFWLYLW\ OHYHOV RU VW\OHV UHODWHG WR LQFUHDVHG ULVNV RI GHOLQTXHQF\ DV SURYLGHG E\ 7RODQ DQG /RHEHU f )LUVW DQWLVRFLDO FKLOGUHQ WHQG WR XWLOL]H DJJUHVVLYH VRFLDO FRJQLWLRQV LQ HYDOXDWLQJ SUREOHPV 'RGJH 'RGJH t )UDPH *XHUUD 7RODQ +XHVPDQQ 9DQ $FNHU t (URQ +XHVPDQQ +XHVPDQQ t (URQ f 6HFRQG DQWLVRFLDO FKLOGUHQ DQG DGROHVFHQWV WHQG WR RYHU ODEHO LQGLYLGXDOVf EHKDYLRU DV PRWLYDWHG E\ DJJUHVVLRQ DQG WR DSSO\ DJJUHVVLYH UHVSRQVHV WR SUREOHPVROYLQJ 'RGJH t 6RPEHUJ f $QWLVRFLDO FKLOGUHQ DUH RIWHQ OHVV DZDUH RI WKH LPSDFW RI VXFK EHKDYLRU RQ RWKHUV *XHUUD t 6ODE\ f DQG DUH OHVV DEOH WR WDNH WKH SHUVSHFWLYH RI RWKHUV LQ VRFLDO LQWHUDFWLRQV *XHUUD (URQ +XHVPDQQ 7RODQ t 9DQ $FNHU +XHVPDQQ t (URQ f 7KLUG WKH\ HYLGHQFH OLPLWHG PRUDO UHDVRQLQJ VNLOOV *XHUUD t 6ODE\ f DQG IRXUWK D ORZ VRFLDO VNLOOV OHYHO LV RIWHQ VHHQ ZKLFK IXUWKHU FRQWULEXWHV WR WKHLU LQFUHDVHG ULVN IRU DQWLVRFLDO EHKDYLRU 7RODQ 3HQW] $XSSRUOH t 'DYLV f

PAGE 52

$QG ILQDOO\ ILIWK DQWLVRFLDO DGROHVFHQWV WHQG WR KDYH ORZHU DELOLW\ WR JHQHUDWH FRPSHWHQW VRFLDO GLOHPPD VROXWLRQV WHQG WR KDYH OHVV FRPSHWHQW DQG OHVV EURDG UDQJH RI FRSLQJ VNLOOV 7RODQ %OLW] 'DYLV )LVKHU 6FKZDUW] t 7KRPDV f DQG XWLOL]H PRUH GLUHFW SDVVLYHf DV ZHOO DV DJJUHVVLYH FRSLQJ UHVSRQVHV WR VWUHVV 7RODQ t *RUPDQ6PLWK f :KLOH DJJUHVVLRQ LV DPRQJ WKH VWURQJHVW IDFHWV RI SHUVRQDOLW\ XVHIXO LQ GHOLQHDWLQJ ULVN RI GHOLQTXHQF\ LW LV PHUHO\ RQH HOHPHQW RI D PRUH JHQHUDO DQWLVRFLDO WHQGHQF\ RU SHUVRQDOLW\ ZKLFK PD\ DULVH LQ FKLOGKRRG DQG FRXOG FRQWLQXH WKURXJK WKH WHHQDJH DQG DGXOW \HDUV OHDGLQJ WR LQFUHDVHG RIIHQGLQJ )DUULQJWRQ :HVW t )DUULQJWRQ f )RU H[DPSOH +RJH $QGUHZV DQG /HVKLHG f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f DQG *XHUUD f DQG HPSKDVL]HV WKH LPSRUWDQFH RI DQWLVRFLDODQWLDXWKRULW\SURFULPLQDO DWWLWXGHV DQG EHOLHIV LQ WKH SURPRWLRQ RI FULPLQDO EHKDYLRU LQ \RXQJ SHRSOH 7DNLQJ WKH DERYH SHUVRQDOLW\ ILQGLQJV LQWR FRQVLGHUDWLRQ WKH SUHVHQW VWXG\ XWLOL]HG -HVQHVVfV f -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ WR RSHUDWLRQDOL]H DQG GHILQH WKH FRQVWUXFW RI SHUVRQDOLW\ %XLOGLQJ RQ WKH GHILQLQJ SHUVRQDOLW\ ZRUN RI 6XOOLYDQ *UDQW DQG *UDQW f -HVQHVV LGHQWLILHG WHQ SHUVRQDOLW\ FKDUDFWHULVWLFV DQG DQ LQGH[ RI

PAGE 53

GHOLQTXHQF\ $VRFLDO ,QGH[f 2I WKHVH SHUVRQDOLW\ VFDOHV WKH FXUUHQW VWXG\ IRFXVHG RQ WKH VRFLDO PDODGMXVWPHQW 60f PDQLIHVW DJJUHVVLRQ 0$f DQG DVRFLDO LQGH[ $,f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f 0$ UHIOHFWV DQ DZDUHQHVV RI XQSOHDVDQW IHHOLQJV HVSHFLDOO\ DQJHU DQG IUXVWUDWLRQf D WHQGHQF\ WR UHDFW UHDGLO\ ZLWK WKRVH IHHOLQJV DQG GLVFRPIRUW FRQFHUQLQJ WKH SUHVHQFH DQG FRQWURO RI WKRVH IHHOLQJV -HVQHVV f $, LV D SHUVRQDOLW\ SURILOH FRPSRVLWH VFRUH RI DOO SHUVRQDOLW\ FKDUDFWHULVWLFV UHIOHFWLQJ D JHQHUDOL]HG GLVSRVLWLRQ WR UHVROYH VRFLDO RU SHUVRQDO SUREOHPV LQ ZD\V WKDW VKRZ D GLVUHJDUG IRU VRFLDO FXVWRPV RU UXOHV -HVQHVV f 7KHVH WKUHH KDYH FRQVLVWHQWO\ EHHQ IRXQG WR GLVWLQJXLVK DPRQJ OHYHOV RI GHOLQTXHQF\ 'HPER /D 9RLH 6FKPHLGOHU t :DVKEXUQ *UDKDP -HVQHVV .XQFH t +HPSKLOO 0DUWLQ 0DUWLQ t 0XUSK\ 6RUHQVHQ mIH -RKQVRQ f ,W LV FOHDU IURP WKH DERYH UHYLHZ WKDW SHUVRQDOLW\ LV DQ LPSRUWDQW IDFWRU LQ WKH H[SORUDWLRQ RI GHOLQTXHQF\ 7KH IROORZLQJ ZLOO EH D UHYLHZ RI ZKDW HPSLULFDO DQG WKHRUHWLFDO UROH WKH IDPLO\ SOD\V LQ WKH H[SORUDWLRQ RI GHOLQTXHQF\

PAGE 54

)DPLO\ )XQFWLRQLQJ DQG 'HOLQTXHQF\ 6LPLODU WR SHUVRQDOLW\ IDFWRUV IDPLO\ IDFWRUV KDYH DOVR EHHQ IRXQG WR VWURQJO\ UHODWH WR GHOLQTXHQF\ LQ VWXGLHV DQG UHYLHZV RI DQWLVRFLDO DQG GHOLQTXHQW EHKDYLRU &KDPEHUODLQ t 5RVLFN\ +D]HOULJJ &RRSHU t %RUGXLQ /DXULWVHQ /RHEHU t +D\ +HQJJHOHU -RKQVRQ 6X *HUVWHLQ 6KLQ t +RIIPDQ /RHEHU t 'LVKLRQ 7RODQ &URPZHOO t %UDVV :DVVHUPDQ 0LOOHU 3LQQHU t -DUDPLOOR /RHEHU t 6WRXWKDPHU/RHEHU /RHEHU 6Q\GHU t 3DWWHUVRQ 7RODQ t /RHEHU f 5HVHDUFK LQYROYLQJ WKH UROH RI WKH IDPLO\ LQ GHOLQTXHQF\ KDV EHHQ LQYHVWLJDWHG IURP PDQ\ GLIIHUHQW SHUVSHFWLYHV 7RODQ HW DO f EUHDNV WKH UHVHDUFK GRZQ LQWR WZR SULPDU\ FDWHJRULHV )LUVW WKH HDUOLHU UHVHDUFK IRFXVHG PRUH KHDYLO\ RQ VWUXFWXUDO YDULDEOHV 6HFRQG DQG SHUKDSV PRUH RI D GLUHFW LQGLFDWRU RI WKH IDPLO\nV UROH LQ GHOLQTXHQF\ LV IDPLO\ LQWHUDFWLRQ VW\OH DQG HPRWLRQDO DWPRVSKHUH RU PRUH FRPPRQO\ WHUPHG fIDPLO\ IXQFWLRQLQJf YDULDEOHV 7KH IROORZLQJ ZLOO EH D UHYLHZ RI UHVHDUFK ILQGLQJV IURP WKH VWUXFWXUDO DQG IDPLO\ IXQFWLRQLQJ FDWHJRULHV DQ H[SODQDWLRQ RI WKH &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ 6\VWHPV 2OVRQ 5XVVHOO t 6SUHQNOH f FKRVHQ WR WKHRUHWLFDOO\ FRQFHSWXDOL]H IDPLO\ IXQFWLRQLQJ DQG UHOHYDQW UHVHDUFK ILQGLQJV UHODWLQJ WKH &LUFXPSOH[ PRGHO WR GHOLQTXHQF\ 6WUXFWXUDO 9DULDEOHV $V GHQRWHG E\ 7RODQ HW DO f WKH PDMRULW\ RI HDUO\ UHVHDUFK IRFXVHG RQ VWUXFWXUDO YDULDEOHV VXFK DV IDWKHUnV DEVHQFH 0XFK RI WKH EURNHQ KRPH UHVHDUFK FRXOG EH FRQVLGHUHG WR IDOO XQGHU WKLV FDWHJRU\ $ IDLUO\ FXUUHQW FRPSUHKHQVLYH FULWLTXH DWWHPSWLQJ WR FODULI\ WKH UHODWLRQVKLS EHWZHHQ WKH EURNHQ KRPH DQG MXYHQLOH GHOLQTXHQF\ FRQGXFWHG

PAGE 55

E\ )UHH f RIIHUV DQ H[FHOOHQW UHYLHZ RI WKLV FDWHJRU\ DQG EURDGHU GHPRJUDSKLF YDULDEOHV )UHHfV ILQGLQJV ZKLFK DUH FRQVWDQW ZLWK D VWXG\ FRQGXFWHG E\ :HOOV DQG 5DQNLQ f VXJJHVW WKDW WKH EURNHQ KRPH LV PRUH VWURQJO\ UHODWHG WR PLQRU RIIHQVHV WKDQ WR VHULRXV RIIHQVHV )XUWKHU )UHH f IRXQG WKDW WKH HIIHFWV RI IDWKHU DEVHQFH DQG WKH SUHVHQFH RI D VWHSSDUHQW RQ GHOLQTXHQF\ ZHUH LQFRQFOXVLYH DQG VRPH HYLGHQFH ZDV IRXQG VXSSRUWLQJ YDULDWLRQV WR WKH EURNHQ KRPHGHOLQTXHQF\ UHODWLRQVKLS GHSHQGLQJ RQ JHQGHU UDFH VRFLRHFRQRPLF VWDWXV DQG QHLJKERUKRRG ,QFRQFOXVLYH ILQGLQJV SUHFOXGHG )UHH f IURP EHLQJ DEOH WR GLVFHUQ D FOHDU HYDOXDWLRQ UHJDUGLQJ WKH LPSDFW RI WKH WLPLQJ RI WKH EUHDN FKLOGKRRG YHUVHV DGROHVFHQFHf RU UHDVRQV IRU WKH EUHDN GLYRUFH YHUVXV GHDWKf RQ GHOLQTXHQF\ $ UHYLHZ SURYLGHG E\
PAGE 56

7KXV DV 1\H Sf DQ HDUO\ UHVHDUFKHU LQ WKH ILHOG RI GHOLQTXHQF\ FRQFOXGHG f,W LV QRW WKH VWUXFWXUH RI WKH IDPLO\ SHU VH ZKLFK LV FDXVDOO\ UHODWHG WR GHOLQTXHQF\ EXW UDWKHU WKH DFWXDO UHODWLRQVKLSV DQG LQWHUDFWLRQDO SDWWHUQV ZKLFK DUH WKH NH\ YDULDEOHVf )DPLO\ )XQFWLRQLQJ )DPLO\ IXQFWLRQLQJ ZDV GHQRWHG E\ 7RODQ HW DO f DV WKH PRUH UHFHQW DQG SULPDU\ FDWHJRU\ RI IDPLO\ YDULDEOHV ZKLFK SOD\ D PDMRU UROH LQ WKH GHYHORSPHQW DQG PDLQWHQDQFH RI MXYHQLOH GHOLQTXHQF\ )DPLO\ IXQFWLRQLQJ YDULDEOHV DUH PDLQO\ VHHQ WR FRQVLVW RI TXDOLWLHV LQFOXGLQJ IDPLO\ LQWHUDFWLRQDO VW\OH DQG HPRWLRQDO DWPRVSKHUH 7KH IROORZLQJ LV D VXPPDU\ RI ILYH IDPLO\ IXQFWLRQLQJ FKDUDFWHULVWLFV RU LQWHUDFWLRQV ZLWKLQ IDPLOLHV KDYLQJ DQWLVRFLDO FKLOGUHQ ZKLFK GLVWLQJXLVK WKHP IURP RWKHU IDPLOLHV DV RXWOLQHG E\ 7RODQ DQG 0LWFKHOO f DQG FRUURERUDWHG E\ PDQ\ RWKHU UHVHDUFKHUV &KDPEHUODLQ t 5RVLFN\ +HQJJHOHU +HQJJHOHU 0HOWRQ 6PLWK )RVWHU +DQHO\ t +XWFKLQVRQ /\WRQ 7UXH (LVHQ 0F*XIILQ t *RWWHVPDQ :DVVHUPDQ 0LOOHU 3LQQHU t -DUPLOOR
PAGE 57

6FKXPHU f 7KLUG IDPLO\ LQWHUDFWLRQV DUH IUHTXHQWO\ FRHUFLYH IRU DOO LQYROYHG 3DWWHUVRQ f $V D UHVXOW RI WKH FRHUFLYH QDWXUH RI UHODWLRQVKLSV SRVLWLYH H[SUHVVLRQV VHOGRP RFFXU DQG WKH\ DUH XQOLNHO\ WR EH IROORZHG E\ SRVLWLYH UHVSRQVHV $OH[DQGHU f 6LPLODUO\ +DQVRQ +HQJJHOHU +DHIHOH t 5RGLFN f 3RZHU $VK 6FKRHQEHUJ DQG 6RUH\ f DQG 6DOWV /LQGKROP *RGGDUG t 'XQFDQ f KDYH DOO VXJJHVWHG WKDW LQ JHQHUDO UHVHDUFK VXSSRUWV WKH REVHUYDWLRQ WKDW IDPLOLHV RI GHOLQTXHQWV WHQG WR H[KLELW PRUH FRQIOLFW WKDQ IDPLOLHV RI QRQGHOLQTXHQWV 2YHUDOO WKLV WKLUG SRLQW HPSKDVL]HV D JHQHUDO ODFN RI SRVLWLYH DIIHFW LQ GHOLQTXHQW IDPLO\ LQWHUDFWLRQV )RXUWK DFFRUGLQJ WR 7RODQ DQG 0LWFKHOO f FRPPXQLFDWLRQ LQ WKHVH IDPLOLHV LV PRUH RIWHQ PLVSHUFHLYHG DQG ODEHOHG DV DJJUHVVLYH WKDQ LQ RWKHU IDPLOLHV $OH[DQGHU f 7KHUH LV D KHLJKWHQHG WHQGHQF\ LQ WKH HQWLUH IDPLO\ WR EH VXVSLFLRXV RI WKH PRWLYDWLRQV RI RWKHUV DQG WR DVVXPH LQWHQWLRQDO DJJUHVVLRQ 7KLV SURSHQVLW\ LV XVXDOO\ PRUH SURPLQHQW LQ WKH LGHQWLILHG SDWLHQW 6\VWHPLFDOO\ WKLV OHDGV WR OHVV HPRWLRQDO FRKHVLRQ HVSHFLDOO\ GXULQJ WLPHV RI FRQIOLFW +DQVRQ +HQJJHOHU +DHIOH t 5RGLFN +HQJJHOHU 7RODQ D 7RODQ t /RHEHU f 7KH ILIWK DQG ILQDO GLVFULPLQDWLQJ FKDUDFWHULVWLF RI WKHVH IDPLOLHV LV WKDW D ODUJH SHUFHQWDJH RI FRPPXQLFDWLRQ WLPH LV GRPLQDWHG E\ RQH RU WZR PHPEHUV ZLWK DQ LPSOLFLW RU VRPHWLPHV H[SOLFLW PHVVDJH SURFODLPLQJ D ODFN RI ZLOOLQJQHVV WR FRPSURPLVH 6LPLODUO\ IDPLO\ SUREOHPVROYLQJ LQWHUDFWLRQV DUH RIWHQ YLHZHG E\ PHPEHUV DV WKUHDWHQLQJ DQG DV D VLWXDWLRQ RI FRPSHWLWLYHQHVV UDWKHU WKDQ MRLQW FKDOOHQJH 5HLVV f ,Q VXP DFFRUGLQJ WR WKLV ILIWK SRLQW LW LV 7RODQ DQG 0LWFKHOOfV f FRQFOXVLRQ WKDW PXFK RI WKH FRPPXQLFDWLRQ LV GHIHQVLYH KRVWLOH DQG DLPHG DW PDLQWDLQLQJ RQHfV VDIHW\

PAGE 58

2WKHU VXPPDULHV KDYH OLVWHG VLPLODU GLVWLQJXLVKLQJ FKDUDFWHULVWLFV )RU H[DPSOH WKH UHYLHZ RIIHUHG E\ 6FKROWH f IRXQG PDMRU IDPLO\ ULVN IDFWRUV UHJDUGLQJ GHOLQTXHQF\ LQFOXGHG f VHYHUH IDPLO\ FRQIOLFW f LQVHFXUH DWWDFKPHQWV f SRRU VXSHUYLVLRQ f QRQGHPRFUDWLF FKLOGUHDULQJ SUDFWLFHV DQG f DQWLVRFLDO EHKDYLRU DW KRPH 7DNLQJ WKLV UHYLHZ RI WKH FKDUDFWHULVWLFV RI GHOLQTXHQW IDPLOLHV LQWR FRQVLGHUDWLRQ LW LV QRW VXUSULVLQJ WKDW PDQ\ UHVHDUFKHUV KDYH IRXQG EHWZHHQ DQG SHUFHQW RI YDULDWLRQ LQ FKLOG DQWLVRFLDO EHKDYLRU WR EH GXH WR SRRU SDUHQWLQJ DQG IDPLO\ LQWHUDFWLRQ YDULDEOHV LH SRRU IDPLO\ IXQFWLRQLQJf HJ %DOGZLQ t 6NLQQHU 3DWWHUVRQ 3DWWHUVRQ 'HEDU\VKH t 5DPVH\ 3DWWHUVRQ 'LVKLRQ t %DQNV f 7KH IROORZLQJ ZLOO EH DQ H[SODQDWLRQ RI WKH &LUFXPSOH[ PRGHO ZKLFK ZDV XVHG LQ WKH FXUUHQW VWXG\ 7KLV WKHRUHWLFDO PRGHO ZLOO KHOS SURYLGH LQVLJKWV LQWR WKH PHFKDQLVPV DQG FKDUDFWHULVWLFV ZLWKLQ WKH IDPLO\ V\VWHP ZKLFK PD\ HIIHFW WKH OHYHO RI GHOLQTXHQF\ 7KH FXUUHQW VWXG\ XWLOL]HG WKH &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ 6\VWHPV 2OVRQ 6SUHQNOH t 5XVVHOO 2OVRQ 5XVVHOO t 6SUHQNOH f WR WKHRUHWLFDOO\ FRQFHSWXDOL]H IDPLO\ IXQFWLRQLQJ 7KLV PRGHO ZDV GHYHORSHG LQ DQ DWWHPSW WR EULGJH WKH JDS EHWZHHQ UHVHDUFK WKHRU\ DQG SUDFWLFH 2OVRQ f 7KH FRUH FRPSRQHQWV RI WKLV V\VWHPV WKHRU\ FRKHVLRQ DQG DGDSWDELOLW\f ZHUH GHULYHG RXW RI DQ DWWHPSW WR GHOLQHDWH WZR DVSHFWV RI PDULWDO DQG IDPLO\ EHKDYLRU WKDW DSSHDU DV XQGHUO\LQJ GLPHQVLRQV IRU WKH PXOWLWXGH RI FRQFHSWV LQ WKH IDPLO\ ILHOG 2OVRQ 6SUHQNOH t 5XVVHOO f

PAGE 59

$ UHYLHZ RI WKH OLWHUDWXUH FRQGXFWHG E\ 2OVRQ HW DO f EURXJKW WR OLJKW RYHU FRQFHSWV UHODWHG WR RQH RU ERWK RI WKHVH GLPHQVLRQV )RU H[DPSOH DV LOOXVWUDWHG E\ (GPDQ &ROH DQG +RZDUG f UHODWHG WR FRKHVLRQ DUH 0LQXFKLQnV f FRQFHSWV RI ERXQGDULHV GLVHQJDJHPHQW DQG HQPHVKPHQW %RZHQnV f FRQFHSWV RI HPRWLRQDO GLYRUFH GLIIHUHQWLDWLRQ DQG HPRWLRQDO IXVLRQ +HVV DQG +DQGHOnV f FRQFHSWV RI VHSDUDWHQHVV DQG FRQQHFWHGQHVV DQG :\QQH DQG KLV FROOHDJXHVn f FRQFHSWV RI SVHXGRKRVWLOLW\ PXWXDOLW\ DQG SVHXGRPXDOLW\ 5HODWHG WR DGDSWDELOLW\ DUH WKH .LHPDQ DQG 7DOOPDQnV f FRQFHSWV RI IOH[LELOLW\ DQG VSRXVDO DGDSWDELOLW\ :HUWKHLPnV f FRQFHSWV RI PRUSKRVWDVLV DQG PRUSKRJHQHVLV DQG WKH *URXS IRU WKH $GYDQFHPHQW RI 3V\FKLDWU\nV f FRQFHSWV RI UROH DJUHHPHQW DQG IOH[LEOH OHDGHUVKLS 7KHVH FRQFHSWV DORQJ ZLWK WKH IRXQGDWLRQV RI JHQHUDO V\VWHPV WKHRU\ %XFNOH\ f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fV DELOLW\ WR VKLIW XSZDUGV IURP ORZHU OHYHOV RI IXQFWLRQLQJ RU LI SRRU FRPPXQLFDWLRQ LV SUHVHQW GHWHULRUDWH WR ORZHU OHYHOV RI IDPLO\ IXQFWLRQLQJ

PAGE 60

7R GHWHUPLQH D IDPLO\fV RYHUDOO OHYHO RI IDPLO\ IXQFWLRQLQJ IURP WKLV SHUVSHFWLYH WKHLU TXDOLW\ RI FRKHVLRQ DQG DGDSWDELOLW\ PXVW EH HVWDEOLVKHG )DPLO\ FRKHVLRQ LV GHILQHG DV WKH HPRWLRQDO ERQGLQJ WKDW IDPLO\ PHPEHUV KDYH WRZDUGV RQH DQRWKHU 2OVRQ 5XVVHOO t 6SUHQNOH S f &RKHVLRQ LV VHHQ DV YDU\LQJ DORQJ D FRQWLQXXP FRQVLVWLQJ RI IRXU EDVLF OHYHOV 7KHVH OHYHOV YDU\ IURP WKH H[WUHPHO\ ORZ GLVHQJDJHGf WR PRGHUDWH VHSDUDWHG FRQQHFWHGf WR H[WUHPHO\ KLJK HQPHVKHGf 6LPLODUO\ DGDSWDELOLW\ LV GHILQHG WR DOVR YDU\ DORQJ D FRQWLQXXP FRQVLVWLQJ RI IRXU EDVLF OHYHOV 7KHVH OHYHOV YDU\ IURP H[WUHPHO\ ORZ ULJLGf WR PRGHUDWH VWUXFWXUHG IOH[LEOHf WR H[WUHPHO\ KLJK FKDRWLFf )DPLO\ DGDSWDELOLW\ LV GHILQHG DV WKH DELOLW\ RI D PDULWDO RU IDPLO\ V\VWHP WR FKDQJH LWV SRZHU VWUXFWXUH UROH UHODWLRQVKLSV DQG UHODWLRQVKLS UXOHV LQ UHVSRQVH WR VLWXDWLRQDO DQG GHYHORSPHQWDO VWUHVV 2OVRQ HW DO Sf 7R XQGHUVWDQG WKH PHDQLQJ EHKLQG WKH OHYHOV RI IDPLO\ IXQFWLRQLQJ LW LV LPSRUWDQW WR XQGHUVWDQG WKH FHQWUDO K\SRWKHVLV WR WKH &LUFXPSOH[ PRGHO 7KLV PRGHO K\SRWKHVL]HV WKH H[LVWHQFH RI D FXUYLOLQHDU UHODWLRQVKLS EHWZHHQ WKH GLPHQVLRQV RI FRKHVLRQ DQG DGDSWDELOLW\ DQG IDPLO\ IXQFWLRQLQJ 2OVRQ 0F&XEELQ %DPHV /DUVRQ 0X[HQ t :LOVRQ f 7KXV DV SUHYLRXVO\ RXWOLQHG WKRVH IDPLOLHV ZKR H[LVW LQ WKH PLG UDQJHV RI FRKHVLRQ DQG DGDSWDELOLW\ %DODQFHG IDPLO\ W\SHVf DUH K\SRWKHVL]HG WR EH PRVW YLDEOH IRU KHDOWK\ IDPLO\ IXQFWLRQLQJ DQG GHYHORSPHQW 2OVRQ f 7KH EDODQFHG IDPLOLHV KDYH PRGHUDWH FRKHVLRQ VHSDUDWHG FRQQHFWHGf UHSUHVHQWLQJ D EDODQFH EHWZHHQ WRR OLWWOH FORVHQHVV GLVHQJDJHGf DQG WRR PXFK FORVHQHVV HQPHVKHGf LQ WKH IDPLO\ 6LPLODUO\ EDODQFHG IDPLOLHV DOVR KDYH PRGHUDWH DGDSWDELOLW\ VWUXFWXUHG IOH[LEOHf UHSUHVHQWLQJ D EDODQFH EHWZHHQ WRR OLWWOH FKDQJH ULJLGf DQG WRR PXFK FKDQJH FKDRWLFf LQ WKH IDPLO\

PAGE 61

)DPLOLHV IRXQG WR UDQJH LQ WKH H[WUHPHV RI FRKHVLRQ DQG DGDSWDELOLW\ ([WUHPH IDPLO\ W\SHVf DUH JHQHUDOO\ VHHQ DV PRVW G\VIXQFWLRQDO DQG SUREOHPDWLF LQ WHUPV RI IDPLO\ IXQFWLRQLQJ DQG GHYHORSPHQW 2OVRQ 6SUHQNOH t 5XVVXHO f ,W LV DOVR K\SRWKHVL]HG WKDW IDPLOLHV ZKR DUH RI %DODQFHG W\SH KDYH EHWWHU FRPPXQLFDWLRQ VNLOOV WKDQ IDPLOLHV LQ WKH ([WUHPH W\SHV 2OVRQ f 2YHUDOO WKH &LUFXPSOH[ PRGHO LV FOHDUO\ GHILQHG DQG HDVLO\ PHDVXUDEOH )$&(6,,f ZKLFK FRQWULEXWHG WR LWV XWLOLW\ LQ GLVWLQJXLVKLQJ OHYHOV RI IDPLO\ IXQFWLRQLQJ 7KH XWLOLW\ DQG WKHRUHWLFDO WHQHWV SRVWXODWHG E\ WKH &LUFXPSOH[ PRGHO KDYH EHHQ VXEVWDQWLDWHG WKURXJKRXW WKH OLWHUDWXUH )RU H[DPSOH LW KDV EHHQ FOHDUO\ HVWDEOLVKHG WKDW WKH &LUFXPSOH[ PRGHO FDQ UHOLDEO\ GLVFULPLQDWH EHWZHHQ SUREOHP IDPLOLHV DQG QRQ V\PSWRPDWLF IDPLOLHV :DOVK f $OVR 2OVRQ f KDV PDGH D VWURQJ FDVH VXEVWDQWLDWLQJ WKH XQGHUO\LQJ FXUYLOLQHDU K\SRWKHVLV RI WKH &LUFXPSOH[ PRGHO )XUWKHU VXSSRUW DOVR H[LVWV ZLWKLQ WKH OLWHUDWXUH IRU WKH PRGHOfV K\SRWKHVLV ZKLFK VXJJHVWV WKDW ORZHU IXQFWLRQLQJ IDPLOLHV VXFK DV IDPLOLHV ZLWK GHOLQTXHQWV ZRXOG UHIOHFW PRUH WURXEOHG FRPPXQLFDWLRQV WKDQ KLJKHU IXQFWLRQLQJ IDPLOLHV )RU H[DPSOH LQ UHODWLRQ WR FRPPXQLFDWLRQ VXFK IDPLOLHV KDYH EHHQ DVVRFLDWHG ZLWK LQFRQVLVWHQW IDPLO\ FRPPXQLFDWLRQ SDWWHUQV /HVVLQ t -DFRE f KLJK DPRXQWV RI SDWHUQDO DQG PDWHUQDO GHIHQVLYH FRPPXQLFDWLRQ LQ FRPSHWLWLYH FRQWH[WV $OH[DQGHU :DOGURQ %DUWRQ t 0DV f DQG JHQHUDOO\ DJJUHVVLYH DQG XQFOHDU FRPPXQLFDWLRQV VW\OHV $OH[DQGHU 7RODQ t 0LWFKHOO f 0RVW UHOHYDQW WR WKH SUHVHQW VWXG\ ZDV WKH VXSSRUW IRXQG DFURVV VHYHUDO UHYLHZV RI WKH &LUFXPSOH[ PRGHOfV XWLOLW\ WR GLVWLQJXLVK DPRQJ OHYHOV RI GHOLQTXHQF\ HJ *HLVPDU

PAGE 62

t :RRG +HQJJHOHU f )LQGLQJV VLPLODU WR WKH DERYH UHYLHZHG KDYH FRQWULEXWHG WR SURPLQHQW UHVHDUFKHUV LQ WKH ILHOG RI GHOLQTXHQF\ WR LQGRUVH WKH &LUFXPSOH[ PRGHO DV D IDPLO\ V\VWHPV PRGHO RI FKRLFH LQ WKH DUHD RI GHOLQTXHQF\ UHVHDUFK DQG WUHDWPHQW +HQJJHOHU 0D\QDUG t +XOWTXLVW 7RODQ t /RULRQ :RUGHQ f 7KH IROORZLQJ ZLOO EH D UHYLHZ RI UHVHDUFK ILQGLQJV UHODWLQJ WKH WZR FHQWUDO GLPHQVLRQV RI WKH &LUFXPSOH[ 0RGHO DGDSWDELOLW\ DQG FRKHVLRQf WR GHOLQTXHQF\ $GDSWDELOLW\ :KLOH VWLOO VXSSRUWHG WKH GLPHQVLRQ UHFHLYLQJ WKH OHDVW HPSLULFDO EDFNLQJ KDV EHHQ WKH DGDSWDELOLW\ GLPHQVLRQ RI WKH &LUFXPSOH[ PRGHO 7KLV GLPHQVLRQ KDV QRW FRQVLVWHQWO\ EHHQ VKRZQ WR GLVFULPLQDWH EHWZHHQ OHYHOV RI GHOLQTXHQF\ &R[ +DQVRQ +HQJJHOHU +DHIOH t 5RGLFN +HQJJHOHU 0HOWRQ 6PLWK )RVWHU +DQOH\ t +XWFKLQVRQ .URKQ 6WHP 7KRPEHUU\ t -DQJ 7RODQ Df $FFRUGLQJ WR +HQJJHOHU f WKLV PD\ EH GXH WR VDPSOLQJ DQG PHDVXUHPHQW GLIIHUHQFHV :KLOH DFFRUGLQJ WR 2OVRQ f LW PD\ EH PRUH DQ DUWLIDFW RI WKH FXUUHQW OLNHUW VFDOH GHVLJQ XWLOL]HG LQ WKH )$&(6,, +RZHYHU RWKHU VWXGLHV KDYH XWLOL]HG WKH )$&(6 DQG GHPRQVWUDWHG D UHODWLRQVKLS EHWZHHQ WKH H[WUHPHV RI DGDSWDELOLW\ DQG OHYHOV RI GHOLQTXHQF\ )RU H[DPSOH LQ D VDPSOH RI MXYHQLOH RIIHQGHUV 5RGLFN +HQJJHOHU DQG +DQVRQ f IRXQG WKDW IDPLOLHV RI GHOLQTXHQWV ZHUH PRUH FKDRWLF DQG GLVRUJDQL]HG %ODVNH %RUGXLQ +HQJJHOHU DQG 0DQQ f IRXQG WKDW WKH IDPLOLHV RI DGROHVFHQW RIIHQGHUV HVSHFLDOO\ YLROHQW RIIHQGHUV ZHUH PRUH ULJLG DQG LQIOH[LEOH

PAGE 63

6LPLODUO\ WKH VWXGLHV RI 0F*DKD DQG )RXUQLHU f H[SORULQJ IDPLOLHV KDYLQJ YLROHQW RIIHQGHUV DQG +HQJJHOHU %XUU+DUULV %RUGXLQ DQG 0F&DOOXP f VWXG\LQJ IDPLOLHV ZLWK UHSHDW DGROHVFHQW RIIHQGHUV HDFK IRXQG VFRUHV VXJJHVWLQJ WKHVH IDPLOLHV H[LVWHG LQ WKH H[WUHPHV RI DGDSWDELOLW\ DV PHDVXUHG E\ WKH )$&(6 7KRXJK PL[HG ILQGLQJV H[LVW UHYLHZHUV KDYH JHQHUDOO\ FRQFOXGHG WKDW D OLQN DSSHDUV WR H[LWV EHWZHHQ DGROHVFHQW DQWLVRFLDO EHKDYLRU DQG ERWK ORZ IDPLO\ DGDSWDELOLW\ ULJLG IDPLO\ VWUXFWXUHf DQG KLJK IDPLO\ DGDSWDELOLW\ FKDRWLF IDPLO\ VWUXFWXUHf HJ *HLVPDU t :RRG +HQJJHOHU f &RKHVLRQ 7KH UHODWLRQVKLS EHWZHHQ PDQ\ GLIIHUHQW IRUPV RI FRKHVLRQ LQ IDPLO\ V\VWHPV DQG GHOLQTXHQF\ KDV EHHQ VWURQJO\ VXSSRUWHG LQ WKH OLWHUDWXUH )RU LQVWDQFH 3DWWHUVRQ 'H%DU\VKH DQG 5DPVH\ f FKDUDFWHUL]HG IDPLOLHV RI DQWLVRFLDO FKLOGUHQ WR KDYH OLWWOH SDUHQWDO LQYROYHPHQW ZLWK WKHLU FKLOGUHQ 3KDUHV DQG &RPS£V f UHSRUWHG WKDW PDQ\ UHVHDUFKHUV KDYH IRXQG GHOLQTXHQW IDPLOLHV WR KDYH FRQIOLFWXDO XQDIIHFWLRQDWH IDWKHU VRQ UHODWLRQV DQG WR KDYH JHQHUDOO\ SRRU SDUHQWDO UHODWLRQV DQG -RKQVRQ 6X *HUVWHLQ 6KLQ DQG +RIIPDQ f GHWHUPLQHG WKDW UHVHDUFK KDV FRQVLVWHQWO\ VKRZQ WKDW D ORZ GHJUHH RI SDUHQWDO VXSSRUW LH SDUHQWDO LQWHUHVW XQGHUVWDQGLQJ VXSHUYLVLRQ GLVFLSOLQH HQFRXUDJHPHQW DQG ORYHf LV D NH\ GHWHUPLQDQW RI SRRU SV\FKRVRFLDO DGROHVFHQW IXQFWLRQLQJ LQFOXGLQJ GHOLQTXHQF\ )XUWKHU .URKQ 6WHP 7KRPEHUU\ DQG -DQJ f 0RIILWW f /DXULWVHQ f DQG 6DOWV /LQGKROP *RGGDUG DQG 'XQFDQ f KDYH DOO FRQFOXGHG WKDW ORZ IDPLO\ FRKHVLRQ RU ORZ IDPLO\ DWWDFKPHQW ERQGV ZHUH DPRQJ WKH VWURQJHVW SUHGLFWRUV RI GHOLQTXHQW DQG SHUVLVWHQW DQWLVRFLDO EHKDYLRU

PAGE 64

2WKHU H[DPSOHV VWUHQJWKHQLQJ WKH OLQN EHWZHHQ IDPLO\ FRKHVLRQ DQG GHOLQTXHQF\ DUH 6KDZ DQG %HOOfV f FRQFOXVLRQV WKDW IDPLO\ IDFWRUV LQYROYLQJ GLVFLSOLQH DQG WKH TXDOLW\ RI SDUHQWFKLOG UHODWLRQV DUH DW WKH IRU IURQW RI PHWDDQDO\VHV LQ WKH GHOLQTXHQF\ ILHOG DQG 5RVHQfV f GHWHUPLQDWLRQ WKDW DIWHU D FRPSUHKHQVLYH UHYLHZ RI WKH OLWHUDWXUH QR PDWWHU KRZ GHOLQTXHQF\ LV GHILQHG RU PHDVXUHG RU ZKDW SRSXODWLRQ LV EHLQJ VWXGLHG WKH UHVHDUFK FRQVLVWHQWO\ VKRZV WKDW SRRU SDUHQWFKLOG UHODWLRQVKLSV QR PDWWHU KRZ GHILQHG RU PHDVXUHG DUH DVVRFLDWHG ZLWK KLJKHU OHYHOV RI GHOLQTXHQF\ $QG ILQDOO\ 7RODQ &URPZHOO DQG %UDVV f FRQFOXGHG WKDW WKH OLWHUDWXUH VWURQJO\ GHPRQVWUDWHV IDPLO\ FRKHVLRQ DQG SDUHQWDO GLVFLSOLQH DV WKH YDULDEOHV ZKLFK PRVW VWURQJO\ GLIIHUHQWLDWHG OHYHOV RI GHOLQTXHQWV VHFRQG RQO\ WR LQGLYLGXDO DJJUHVVLRQ 6LPLODULW\ UHVHDUFK VSHFLILFDOO\ UHSRUWLQJ RQ WKH FRKHVLRQ GLPHQVLRQ RI WKH &LUFXPSOH[ PRGHO KDV DOVR VKRZQ D FRQVLVWHQW UHODWLRQVKLS EHWZHHQ OHYHOV RI FRKHVLRQ DQG OHYHOV RI GHOLQTXHQF\ )RU H[DPSOH D VWXG\ FRQGXFWHG E\ 0F*DKD DQG )RXUQLHU f IRXQG WKDW IDPLOLHV KDYLQJ YLROHQW RIIHQGHUV H[LVW LQ WKH H[WUHPHV RI FRKHVLRQ DV PHDVXUHG E\ WKH )$&(6 $ VWXG\ FRQGXFWHG E\ +HQJJHOHU 0HOWRQ 6PLWK )RVWHU +DQOH\ DQG +XWFKLQVRQ f ZLWK D VDPSOHG RI VHULRXV MXYHQLOH RIIHQGHUV IURP GLVDGYDQWDJHG IDPLOLHV IRXQG FRKHVLRQ FRUUHODWHG ZLWK QRQYLROHQW DQG YLROHQW RIIHQGLQJ )XUWKHU ZKLOH VWXG\LQJ JHQHUDO GHOLQTXHQF\ 0D\QDUG DQG +XOWTXLVW f IRXQG WKDW DPRQJ WKHLU VPDOO VDPSOH RI GHOLQTXHQWV SHUFHQW RI WKH IDPLOLHV IHOO LQ WKH H[WUHPH UDQJH SHUFHQW ZHUH PLGUDQJH DQG SHUFHQW ZHUH LQ WKH EDODQFHG UDQJH 0D\QDUG DQG KLV DVVRFLDWH FRQFOXGHG WKDW IURP WKHLU VDPSOH LW ZRXOG VHHP GHYLDQW EHKDYLRU RI WKH \RXWKV PD\ EH LQGLFDWLYH RI RYHUDOO IDPLO\ G\VIXQFWLRQ

PAGE 65

7KHVH ILQGLQJV DUH FRQVLVWHQW ZLWK RWKHU UHVHDUFKHUV ILQGLQJV LQ WKDW )$&(6 VFRUHV WHQG WR EH LQ WKH H[WUHPH UDQJHV RI FRKHVLRQ IRU IDPLOLHV ZLWK GHOLQTXHQW \RXWK +DQVRQ +HQJJHOHU +DHIOH t 5RGLFN 5RGLFN +HQJJHOHU t +DQVRQ 7RODQ Df )ROORZLQJ WKDW WKH FXUUHQW VWXG\ H[SORUHG WKH UDWH RI GHOLQTXHQF\ RI SDUWLFXODU LQWHUHVW ZHUH ILQGLQJV VXUURXQGLQJ UDWHV RI GHOLQTXHQF\ DQG FRKHVLRQ DV PHDVXUHG E\ WKH )$&(6 )RU H[DPSOH 'UXFNPDQ f IRXQG WKDW MXYHQLOHV LQ KHU VWXG\ ZLWK WKH KLJKHVW UHFLGLYLVP UDWHV FDPH IURP IDPLOLHV LQ WKH H[WUHPH HQPHVKHG FDWHJRU\ +HQJJHOHU %XUU+DUULV %RUGXLQ DQG 0F&DOOLXP f UHVHDUFKLQJ IDPLOLHV ZLWK UHSHDW DGROHVFHQW RIIHQGHUV DOVR IRXQG VFRUHV LQGLFDWLQJ WKHVH IDPLOLHV H[LVWHG LQ WKH H[WUHPHV RI FRKHVLRQ )LQDOO\ &R[ f FRQFOXGHG WKDW KHU UHVXOWV LQGLFDWHG WKH IUHTXHQF\ RI DUUHVW QRW VHYHULW\ RI FULPH PRVW FRUUHODWHG ZLWK H[WUHPHV RI WKH FRKHVLRQ UDQJH &R[ f DOVR UHSRUWHG WKRXJK QRW VWDWLVWLFDOO\ VLJQLILFDQW WKDW VHYHULW\ RI FULPH FRUUHODWHG QHJDWLYHO\ ZLWK D PHDVXUH RI VHOIHVWHHP 2YHUDOO WKH SUHVHQWHG VWXGLHV DQG RWKHU UHYLHZV HJ *HLVPDU t :RRG +HQJJHOHU f VXSSRUW WKH H[LVWHQFH RI D UHODWLRQVKLS EHWZHHQ OHYHOV RI DGROHVFHQW DQWLVRFLDO EHKDYLRU DQG ERWK ORZ IDPLO\ FRKHVLRQ GLVHQJDJHG IDPLO\ VWUXFWXUHf DQG LQ D IHZ FDVHV IRU KLJK IDPLO\ FRKHVLRQ HQPHVKHG IDPLO\ VWUXFWXUHf ,Q VXP WKH HPSLULFDO OLWHUDWXUH SURYLGHV DPSOH VXSSRUW IRU WKH XWLOLW\ RI WKH &LUFXPSOH[ PRGHO WR GLVWLQJXLVK OHYHOV RI GHOLQTXHQF\ DQG WR SURYLGH LQVLJKW LQWR WKH UHODWLRQVKLS EHWZHHQ IDPLO\ IXQFWLRQLQJ DQG GHOLQTXHQF\

PAGE 66

7KH IROORZLQJ UHYLHZ RI %URQIHQEUHQQHUfV f KROLVWLF HFRV\VWHPLF PRGHO RI KXPDQ GHYHORSPHQW RXWOLQHV WKH WKHRUHWLFDO JURXQGV XWLOL]HG WR MXVWLI\ WKH FXUUHQW VWXG\fV H[SORUDWLRQ RI WKH H[LVWHQFH RI D UHODWLRQVKLS EHWZHHQ IDPLO\ IXQFWLRQLQJ DQG SHUVRQDOLW\ DFURVV WKH UDWH RI GHOLQTXHQF\ %URQIHQEUHQQHUfV HFRORJLFDO SDUDGLJP ILUVW LQWURGXFHG LQ WKH V %URQIHQEUHQQHU f UHSUHVHQWHG D UHDFWLRQ WR WKH UHVWULFWHG VFRSH RI PRVW UHVHDUFK WKHQ EHLQJ FRQGXFWHG E\ GHYHORSPHQWDO SV\FKRORJLVWV %URQIHQEUHQQHU f $FFRUGLQJ WR %URQIHQEUHQQHU f WKH SULPDU\ VFLHQWLILF DLP RI WKLV HFRORJLFDO DSSURDFK LV QRW WR FODLP DQVZHUV EXW WR SURYLGH D WKHRUHWLFDO IUDPHZRUN WKDW WKURXJK LWV DSSOLFDWLRQ ZLOO OHDG WR IXUWKHU SURJUHVV LQ GLVFRYHULQJ WKH SURFHVVHV DQG FRQGLWLRQV WKDW VKDSH WKH FRXUVH RI KXPDQ GHYHORSPHQW 0DQ\ UHVHDUFKHUV LQ WKH ILHOG RI MXYHQLOH GHOLQTXHQF\ KDYH UHFRJQL]HG %URQIHQEUHQQHUfV f (FR6\VWHPLF 0RGHO RI +XPDQ 'HYHORSPHQW DV D YLDEOH IUDPH WR H[SODLQ WKH QHHG IRU D PXOWLYDULDWH DSSURDFK LQ WKH XQGHUVWDQGLQJ WUHDWPHQW DQG SUHYHQWLRQ RI MXYHQLOH GHOLQTXHQF\ %RJHQVFKQHLGHU +HQJJHOHU /HPHU /LGGOH 0DJQXVVRQ 0RIILWW 6DOWV /LQGKROP *RGGDUG t 'XQFDQ 0XOYH\ $UWKXU 5HSSXFFL 3DULV 5HLG 7RODQ t /RHEHU
PAGE 67

7KH FXUUHQW VWXG\ XWLOL]HG %URQIHQEUHQQHUfV PRGHO WR MXVWLI\ WKH LQYHVWLJDWLRQ RI WKH H[LVWHQFH RI D UHODWLRQVKLS EHWZHHQ SHUVRQDOLW\ LH FKDUDFWHULVWLFV RI WKH VHOIf DQG IDPLO\ IXQFWLRQLQJ LH HQYLURQPHQWDO FKDUDFWHULVWLFV RI WKH V\VWHPf DFURVV OHYHOV RI GHOLQTXHQW RIIHQGLQJ LH VRFLDO GHYHORSPHQWf 7KH IROORZLQJ ZLOO EH D GLVFXVVLRQ RI %URQIHQEUHQQHUfV f (FR6\VWHPLF 0RGHO ZLWK D IRFXV RQ WKH SUR[LPDO LQIOXHQFHV RI IDPLO\ IXQFWLRQLQJ LQ SDUWLFXODU FRKHVLRQ DQG DGDSWDELOLW\f DQG SHUVRQDOLW\ RQ GHYHORSPHQW 7KLV ZLOO EH IROORZHG E\ D GLVFXVVLRQ RI WKH WKHRUL]HG UHFLSURFDO QDWXUH RI SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ DQG WKHLU SRVVLEOH ULVN DQG SURWHFWLYH LQIOXHQFHV RQ GHYHORSPHQW 7KH VHFWLRQ ZLOO FORVH ZLWK DQ H[SODQDWLRQ RI WKH HFRV\VWHPLF SRVLWLRQ RI fJRRGQHVV RI ILWf DV UHODWHG WR RQHfV GHYHORSPHQWDO RXWFRPH 5HOHYDQW UHVHDUFK IURP WKH ILHOG RI MXYHQLOH GHOLQTXHQF\ ZLOO EH LQFOXGHG WKURXJKRXW WKLV GLVFXVVLRQ %URQIHQEUHQQHUfV f (FR6\VWHPLF 0RGHO KDV DW LWV IRXQGDWLRQ WKH SUHPLVH WKDW KXPDQ GHYHORSPHQW RFFXUV DV D MRLQW IXQFWLRQ RI FKDUDFWHULVWLFV RI WKH SHUVRQ DQG WKH HQYLURQPHQW ,Q HVVHQFH WKLV PRGHO WKHRUL]HV WKDW D FRPSOH[LW\ RI PXOWLSOH IDFWRUV UDWKHU WKDQ D VLQJOH IDFWRU LQIOXHQFHV KXPDQ GHYHORSPHQW DQG VRFLDO IXQFWLRQLQJ $ UHOHYDQW DUHD RI VXSSRUW IRU WKLV SRVLWLRQ KDV EHHQ WKH GLVFRYHU\ WKDW WKH GHYHORSPHQW RI GHOLQTXHQF\ LV D UHVXOW RI PDQ\ FRPSOH[ LQWHUDFWLQJ IDFWRUV %HQGD %RJHQVFKQHLGHU &DODEUHVH t $GDPV 0DUVK &OHPHQW 6WRXJKWRQ t 0DUFNLRQL -HVQHVV 6DOWV /LQGKROP *RGGDUG t 'XQFDQ 7RODQ t /RHEHU 7RODQ &URPZHOO t %UDVV :RUGHQ f $FFRUGLQJ WR %URQIHQEUHQQHUfV PRGHO WKH PXOWLSOH IDFWRUV RI LQIOXHQFH RQ GHYHORSPHQW HPDQDWH IURP

PAGE 68

VHYHUDO OHYHOV RI WKH HFRV\VWHP 7KHVH OHYHOV YDU\ IURP WKRVH GLUHFWO\ LQFOXGLQJ WKH LQGLYLGXDO WR PRUH GLVWDO IDFWRUV ZLWKLQ WKH HQYLURQPHQW QRW QHFHVVDULO\ LQFOXGLQJ WKH LQGLYLGXDO %URQIHQEUHQQHU f GHVFULEHV WKH HFRV\VWHP WR EH D WRSRORJLFDOO\ QHVWHG DUUDQJHPHQW RI FRQFHQWULF VWUXFWXUHV ZLWK HDFK FRQWDLQLQJ WKH QH[W $V SUHYLRXVO\ UHYLHZHG WKHVH VWUXFWXUHV DUH UHIHUUHG WR DV PLFUR PHVR H[R DQG PDFURV\VWHPV 7KH PLFURV\VWHP ZDV PRVW UHOHYDQW WR WKH FXUUHQW VWXG\ DQG ZLOO EH WKH IRFXV RI WKH FXUUHQW OLWHUDWXUH UHYLHZ 7KH PLFURV\VWHP UHIHUV WR D SDWWHUQ RI DFWLYLWLHV UROHV DQG LQWHUSHUVRQDO UHODWLRQV H[SHULHQFHG E\ WKH GHYHORSLQJ SHUVRQ LQ D JLYHQ VHWWLQJ ZLWK SDUWLFXODU SK\VLFDO DQG PDWHULDO FKDUDFWHULVWLFV %URQIHQEUHQQHU f 7KXV LW LQYROYHV WKH VWUXFWXUHV DQG SURFHVVHV WDNLQJ SODFH LQ DQ LPPHGLDWH IDFH WR IDFH VHWWLQJ FRQWDLQLQJ WKH GHYHORSLQJ SHUVRQ HJ IDPLO\ VFKRRO SHHU JURXS ZRUNSODFH HWFf )RU H[DPSOH EH\RQG WKH SUHYLRXVO\ HVWDEOLVKHG UHODWLRQVKLS RI SHUVRQDOLW\ DQG GHOLQTXHQF\ DQG IDPLO\ IXQFWLRQLQJ DQG GHOLQTXHQF\ LV HYLGHQFH UHODWLQJ RQHV SHHU JURXS (OOLRW HW DO (ULFNVRQ t -HQVHQ 'RGJH 3DWWHUVRQ t 'LVKLRQ 7RODQ E 7RODQ 7RODQ t /RHEHU f 6FKRRO +DZNLQV t /DP 6DOWV /LQGKROP *RGGDUG t 'XQFDQ f MRE VLWH 'XVWHU )DJDQ t :H[OHU +LUVFKL 7RODQ Ef &KXUFK +LJJLQV t $OEUHFKW f DQG FRPPXQLW\ %RJHQVFKQHLGHU f WR OHYHOV RI GHOLQTXHQF\ %URQIHQEUHQQHU f FRQVLGHUV WKH PRVW LQIOXHQWLDO IRUFHV RQ KXPDQ GHYHORSPHQW WR EH WKH SUR[LPDO HQYLURQPHQWDO DQG RUJDQLVPLF LQIOXHQFHV ZLWKLQ WKH PLFURV\VWHP 7KHVH SUR[LPDO LQIOXHQFHV HPDQDWH HLWKHU IURP ZLWKLQ WKH SHUVRQ RU IURP

PAGE 69

SK\VLFDO IHDWXUHV REMHFWV DQG SHUVRQV LQ WKH LPPHGLDWH IDFH WR IDFH VHWWLQJ %URQIHQEUHQQHU f 7KH WZR SUR[LPDO LQIOXHQFHV RI IRFXV LQ WKH FXUUHQW VWXG\ ZHUH WKH DGROHVFHQWfV SHUVRQDOLW\ DQG WKH DGROHVFHQWfV IDPLO\ IXQFWLRQLQJ 7KH UHODWLRQVKLS EHWZHHQ WKHVH WZR SUR[LPDO LQIOXHQFHV DORQJ ZLWK RWKHU YDULRXV YDULDEOHV RI LQIOXHQFH RQ GHYHORSPHQW ZHUH WKHRUL]HG WR EH UHFLSURFDO LQ QDWXUH DQG WR FXOPLQDWH LQWR WKH IRUFHV GHWHUPLQLQJ WKH RXWFRPHV RI GHYHORSPHQW %URQIHQEUHQQHU f 7KH EDVLF QDWXUH RI WKH UHODWLRQVKLS EHWZHHQ WKH LQIOXHQFLQJ YDULDEOHV RQ GHYHORSPHQW LV GHVFULEHG LQ %URQIHQEUHQQHUfV f WZR GHILQLQJ SURSHUWLHV RI KLV HFRORJLFDO V\VWHPV WKHRU\ $V SUHYLRXVO\ UHYLHZHG DFFRUGLQJ WR 3URSRVLWLRQ HVSHFLDOO\ LQ LWV HDUO\ SKDVHV DQG WR D JUHDW H[WHQW WKURXJKRXW WKH OLIH FRXUVH KXPDQ GHYHORSPHQW LV VHHQ WR WDNHV SODFH WKURXJK SURFHVVHV RI SURJUHVVLYHO\ PRUH FRPSOH[ UHFLSURFDO LQWHUDFWLRQ EHWZHHQ DQ DFWLYH HYROYLQJ ELRSV\FKRORJLFDO KXPDQ RUJDQLVP DQG WKH SHUVRQV REMHFWV DQG V\PEROV LQ LWV LPPHGLDWH HQYLURQPHQW $FFRUGLQJ WR %URQIHQEUHQQHU f LQ RUGHU IRU WKHVH LQWHUDFWLRQV WR EH HIIHFWLYH WKH\ PXVW RFFXU RQ D UHJXODU EDVLV RYHU H[WHQGHG SHULRGV RI WLPH 7KHVH HQGXULQJ IRUPV RI LQWHUDFWLRQ LQ WKH LPPHGLDWH HQYLURQPHQW DUH EHWZHHQ WKH SUR[LPDO LQIOXHQFHV DQG DUH UHIHUUHG WR DV SUR[LPDO SURFHVVHV ([DPSOHV RI HQGXULQJ SDWWHUQV RI SUR[LPDO SURFHVVHV DUH IRXQG LQ SDUHQWFKLOG DQG FKLOGFKLOG DFWLYLWLHV JURXSV RU VROLWDU\ SOD\ UHDGLQJ OHDUQLQJ QHZ VNLOOV VWXG\LQJ DWKOHWLF DFWLYLWLHV DQG SHUIRUPLQJ FRPSOH[ WDVNV %URQIHQEUHQQHU f )XUWKHU DFFRUGLQJ WR 3URSRVLWLRQ WKH IRUP SRZHU FRQWHQW DQG GLUHFWLRQ RI WKH SUR[LPDO SURFHVVHV HIIHFWLQJ GHYHORSPHQW YDU\ V\VWHPDWLFDOO\ DV D MRLQW IXQFWLRQ RI WKH ELRSV\FKRORJLFDO FKDUDFWHULVWLFV RI WKH GHYHORSLQJ SHUVRQ RI WKH HQYLURQPHQW ERWK

PAGE 70

LPPHGLDWH DQG PRUH UHPRWH LQ ZKLFK WKH SURFHVVHV DUH WDNLQJ SODFH DQG WKH QDWXUH RI WKH GHYHORSPHQWDO RXWFRPHV XQGHU FRQVLGHUDWLRQ %URQIHQEUHQQHU f 7KXV DV PDQ\ UHVHDUFKHUV IURP WKH HFRV\VWHPLF DSSURDFK KDYH VXSSRUWHG UDWKHU WKDQ YLHZ WKH SULPDF\ RI RQH IDFWRU RYHU DQRWKHUfV LQIOXHQFH RQ GHYHORSPHQWDO RXWFRPHV PRUH D UHFLSURFDO LQWHUDFWLRQ RI IDFWRUV ZRXOG EH H[SHFWHG WR H[LVW %RJHQVFKQHLGHU %RUGXLQ 3UXLWW +HQJJHOHU %URQIHQEUHQQHU &DODEUHVH t $GDPV &RKHQ t 6LHJHO 'DGGV )DUULQJWRQ +HQJJHOHU /HPHU 0F/HRG .UXWWVFKQLWW t 'RPILHOG :DVVHUPDQ 0LOOHU 3LQQHU t -DUDPLOOR 0DJQXVVRQ 3DULV 6DPHURII 6KDZ t %HOO 7RODQ t /HREHU :DOVK &UDLN t 3ULFH f 7KH IROORZLQJ ZLOO EH D GLVFXVVLRQ RI WKH UHODWLRQVKLS EHWZHHQ WKH SUR[LPDO LQIOXHQFHV RI IDPLO\ IXQFWLRQLQJ LQ SDUWLFXODU FRKHVLRQ DQG DGDSWDELOLW\f DQG SHUVRQDOLW\ 5HODWLRQVKLS %HWZHHQ )DPLO\ )XQFWLRQLQJ DQG 3HUVRQDOLW\ 3V\FKRORJLFDO KHDOWK ZDV WKH IRFXV RI PXFK RI WKH HDUOLHU ZRUN H[SORULQJ WKH UHODWLRQVKLS EHWZHHQ IDPLO\ IXQFWLRQLQJ DQG GHYHORSLQJ FKLOGUHQ DQG DGROHVFHQWV )RU H[DPSOH 0LQXFKLQ 5RVVPDQ DQG %DNHUfV f ZRUN OHDG WKHP WR FRQFOXGH WKDW WKH HPRWLRQDO ERXQGDULHV RI IDPLO\ PHPEHUV LH FRKHVLRQf DQG IDPLO\ DGDSWDWLRQ WR GHYHORSPHQWDO DQG H[WHUQDO SUHVVXUHV LH DGDSWDELOLW\f DSSHDU WR KDYH D FXUYLOLQHDU UHODWLRQVKLS WR WKH SV\FKRORJLFDO KHDOWK RI IDPLO\ PHPEHUV 7KH H[WUHPHV LQ HLWKHU SDUDPHWHU DFFRUGLQJ WKH 0LQXFKLQ HW DO f DSSHDUHG WR FKDUDFWHUL]H G\VIXQFWLRQDO IDPLO\ V\VWHPV DQG WR FRQWULEXWH WR SRRU SV\FKRORJLFDO KHDOWK

PAGE 71

7KLV FRQFOXVLRQ HVSHFLDOO\ LQ UHODWLRQ WR FRKHVLRQ KDV VLQFH EHHQ VXSSRUWHG E\ PDQ\ RWKHUV LQ WKH ILHOG $PHULNDQHU 0RQNV :ROIH t 7KRPDV %DPHV t )DUUHOO )DUUHOO t %DPHV )DUUHOO %DPHV %DQHUMHH /LQ 'HDQ t (QVHO 3UDQJH *UHHQEDXP 6LOYHU )ULHGPDQ .XWDVK t 'XFKQRZVNL :DOVK t 2OVRQ f 2WKHU UHVHDUFKHUV KDYH IRFXVHG RQ WKH UHODWLRQVKLS RI IDPLO\ IXQFWLRQLQJ DQG SHUVRQDOLW\ GHYHORSPHQW LQ VSHFLILF )RU H[DPSOH VLPLODU WR %URQIHQEUHQQHU f /RHYLQJHU f SXUSRUWV WKDW SHUVRQDOLW\ RU HJR GHYHORSPHQW LV VWLPXODWHG E\ WKH LQWHUSHUVRQDO HQYLURQPHQW HVSHFLDOO\ WKH LQWUDIDPLOLDO HQYLURQPHQW /RHYLQJHU WKHRUL]HG WKDW SDUHQWV FDQ IXQFWLRQ DV SDFHUV RU IDFWRUV RI HTXLOLEULXP LQ WKHLU FKLOGfV HJR JURZWK 0RUH UHFHQWO\ 1RY\ *DD )UDQNLHZLF] /LEHUPDQ DQG $PHULNDQHU f ZRUNLQJ IURP /RHYLQJHUfV WKHRU\ VDPSOHG QRQFKURQLF MXYHQLOH RIIHQGHUV DQG WKHLU SDUHQWV DQG IRXQG DQ DVVRFLDWLRQ EHWZHHQ )$&(6,, VFRUHV RI FRKHVLRQ DQG DGDSWDELOLW\ DQG WKH MXYHQLOH RIIHQGHUfV OHYHO RI HJR GHYHORSPHQW 5HVXOWV UHYHDOHG IXQFWLRQDO OHYHOV RI IDPLO\ IXQFWLRQLQJ ZHUH DVVRFLDWHG ZLWK KLJKHU OHYHOV RI HJR GHYHORSPHQW ZKLOH ORZHU OHYHOV RI HJR GHYHORSPHQW ZHUH DVVRFLDWHG ZLWK ERWK WKH SDUHQWfV DQG WKH DGROHVFHQWfV YLHZ RI D G\VIXQFWLRQDO UDQJH RI FRKHVLRQ DQG DGDSWDELOLW\ 6RPH YDULDWLRQV ZHUH UHSRUWHG E\ 1RY\ HW DO f GHSHQGLQJ RQ PDWFK RU PLVPDWFK RI SDUHQWDO DQG DGROHVFHQW YLHZ RI IDPLO\ IXQFWLRQLQJ $ IXUWKHU H[DPSOH RI VSHFLILF ZRUN H[SORULQJ WKH LPSRUWDQFH RI WKH TXDOLW\ RI IDPLO\ LQWHUDFWLRQV LQ HJR GHYHORSPHQW LV D VWXG\ FRQGXFWHG E\ +DXVHU 3RZHUV 1RDP -DFREVRQ :HLVV DQG )ROODQVKHH f 7KHVH UHVHDUFKHUV IRXQG WKDW IDPLO\ LQWHUDFWLRQV

PAGE 72

HPSKDVL]LQJ ZDUPWK DFFHSWDQFH DQG XQGHUVWDQGLQJ WHQG WR VXSSRUW KLJKHU OHYHOV RI HJR GHYHORSPHQW DQG LGHQWLW\ FODULILFDWLRQ LQ DGROHVFHQWV )XUWKHU +DXVHU HW DO f FRQFOXGHG WKDW WKH DEVHQFH RI VXFK SRVLWLYH LQWHUDFWLRQV DQG WKH SUHVHQFH RI WKHLU QHJDWLYH FRXQWHUSDUWV GHYDOXLQJ LQGLIIHUHQFHf DUH DVVRFLDWHG ZLWK GLPLQLVKHG OHYHOV RI DGROHVFHQW HJR GHYHORSPHQW ,Q JHQHUDO FRQVLVWHQW VXSSRUW KDV EHHQ IRXQG WR GHPRQVWUDWH WKDW WKH H[WUHPHV RI WKH FRKHVLRQ DQG DGDSWDELOLW\ GLPHQVLRQV DUH PRUH DVVRFLDWHG ZLWK SRRU GHYHORSPHQW RI SHUVRQDOLW\ ZKLOH PRUH IXQFWLRQDO OHYHOV RI FRKHVLRQ DQG DGDSWDELOLW\ DUH PRUH DVVRFLDWHG ZLWK KHDOWK\ GHYHORSPHQW RI SHUVRQDOLW\ HJ %HDYHUV 3UDQJH *UHHQEDXP 6LOYHU )ULHGPDQ .XWDVK t 'XFKQRZVNL :DOVK t 2OVRQ f7KXV WKH HFRV\VWHPLF SRVLWLRQ RI D K\SRWKHVL]HG UHODWLRQVKLS EHWZHHQ WKH SUR[LPDO LQIOXHQFHV RI IDPLO\ IXQFWLRQLQJ DQG SHUVRQDOLW\ FRXOG EH LQWHUSUHWHG WR KDYH HPSLULFDO VXSSRUW 7KH IRFXV RI WKLV UHYLHZ QRZ WXUQV WR OLWHUDWXUH PRUH VSHFLILFDOO\ VXSSRUWLQJ WKH K\SRWKHVL]HG UHFLSURFDO QDWXUH RI WKH UHODWLRQVKLS EHWZHHQ WKH WZR SUR[LPDO LQIOXHQFHV RI SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ 5HFLSURFDO 1DWXUH RI 9DULDEOHV RQ 'HYHORSPHQW 7KH UHFLSURFDO QDWXUH RI WKH UHODWLRQVKLS EHWZHHQ IDPLO\ IXQFWLRQLQJ DQG SHUVRQDOLW\ FDQ EH LQWHUSUHWHG WR JDLQ VXSSRUW WKURXJK D VWXG\ FRQGXFWHG E\ 6PHWV DQG +DUWXS f 7KH SULPDU\ JRDO RI WKHLU VWXG\ ZDV WR H[SORUHG WKH UHODWLRQVKLS EHWZHHQ FRKHVLRQ DQG DGDSWDELOLW\ DQG FKLOG V\PSWRPDWRORJ\ ZKLOH FRQWUROOLQJ VXFK IDFWRUV DV SHUVRQDOLW\ 7KHLU VDPSOH FRQVLVWHG RI IDPLOLHV DQG WKHLU FKLOGUHQ ZKR UDQJHG EHWZHHQ WKH DJHV RI DQG $OO RI WKHVH IDPLOLHV ZHUH UHIHUUHG WR RQH RI VL[ RXW SDWLHQW

PAGE 73

FOLQLFV LQ 1RUWKHUQ :LVFRQVLQ IRU WUHDWPHQW 6PHWV DQG +DUWXS f UHSRUWHG WKDW H[WUHPH UDQJH VFRUHV RQ WKH )$&(6,, IRU FRKHVLRQ DQG DGDSWDELOLW\ ZHUH DVVRFLDWHG PRUH ZLWK ORZ VHOIHVWHHP WKDQ ZHUH PLGUDQJH IDPLO\ IXQFWLRQLQJ VFRUHV 7KH UHVXOWV FRXOG EH VHHQ WR VXSSRUWHG WKH SRVLWLRQ WKDW D FKLOGfV VHOIHVWHHP DQG VHQVH RI VHOI HIILFDF\ LV WLHG WR WKHLU IDPLO\ V\VWHP )XUWKHU 6PHWV DQG +DUWXS f HPSKDVL]HG WKDW GXH WR WKH FRUUHODWLRQDO QDWXUH RI WKH VWDWLVWLFV XVHG FDXWLRQ LV QHFHVVDU\ ZKHQ DWWHPSWLQJ WR PDNH FDXVDO LQWHUSUHWDWLRQV 7KH DXWKRUV VXJJHVWHG WKDW ORZ VHOIHVWHHP DQG FRQFRPLWDQW EHKDYLRUDO PDQLIHVWDWLRQVf PD\ EH GLVUXSWLYH IDFWRUV ZLWKLQ WKH IDPLO\ EXW WKH UHYHUVH PD\ DOVR EH WUXH 7KXV D UHFLSURFDO PRGHO PD\ EH VHHQ WR H[LVW 7KH G\VIXQFWLRQDO IDPLO\ V\VWHP PD\ ORZHU WKH VHOIHVWHHP RI WKH FKLOG EXW DW WKH VDPH WLPH WKH GHIHQVLYH WDFWLFV XVHG E\ WKH FKLOGUHQ ZLWK ORZ IHHOLQJV RI VHOIZRUWK SUREDEO\ DOVR UHGXFH WKH HIIHFWLYHQHVV RI WKH IDPLO\ V\VWHP WR IXQFWLRQ 6LPLODUO\ DFFRUGLQJ WR :DVVHUPDQ 0LOOHU 3LQQHU DQG -DUDPLOOR f JURXQGV H[LVW VXSSRUWLQJ WKH YLHZ WKDW WKH MX[WDSRVLWLRQ RI D GLIILFXOW FKLOG HJ LPSXOVLYH DJJUHVVLYHf ZLWK DQ DGYHUVH IDPLO\ FRQWH[W HJ LQFRPSHWHQW SDUHQWLQJf PD\ LQLWLDWH ULVN IRU D SHUVLVWHQW SDWWHUQ RI RSSRVLWLRQDO DQG DQWLVRFLDO EHKDYLRU WKURXJK D WUDQVDFWLRQDO RU UHFLSURFDO SURFHVV EHWZHHQ WKH IDPLO\ DQG WKH FKLOG 2WKHU UHVHDUFKHU KDYH FRQFXUUHG ZLWK WKLV LQWHUSUHWDWLRQ HJ &LFFKHWWL t 5LFKWHUV &RQGXFW 3UREOHPV 3UHYHQWLRQ 5HVHDUFK *URXS 0RIILWW f ,Q VXP WKH HYLGHQFH SURYLGHG E\ 6PHWV DQG +DUWXS f DQG :DVVHUPDQ 0LOOHU 3LQQHU DQG -DUDPLOOR f DUH FRQVLVWHQW ZLWK PDQ\ RWKHU UHVHDUFKHUV ZKR

PAGE 74

KDYH VXSSRUWHG WKH UHFLSURFDO QDWXUH RI IDPLO\ IXQFWLRQLQJ DQG SHUVRQDOLW\ RQ WKH RXWFRPH RI GHYHORSPHQW %URQIHQEUHQQHU %URRNV :KLWHPDQ 1RUPXUD *RUGDQ t &RKHQ 0F/HRG .UXWWVFKQLWW t 'RPIHOG /HPHU t 6SDQLHU 7RODQ t 0LWFKHOO 6KDZ t %HOO :DVVHUPDQ 0LOOHU 3LQQHU t -DUDPLOOR f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fV ULVN DQGRU SURWHFWLYH LQIOXHQFHV $FFRUGLQJ WR %RJHQVFKQHLGHU f WKH DFNQRZOHGJPHQW RI SRVVLEOH ULVN DQG SURWHFWLYH DVSHFWV RI YDULDEOHV RQ WKH RXWFRPH RI GHYHORSPHQW LV DQ LPSRUWDQW IDFHW WR DQ HFR V\VWHPLF RULHQWDWLRQ 7KH IROORZLQJ ZLOO EH D UHYLHZ RI WKH GHILQLQJ SURSHUWLHV RI SURWHFWLYH DQG ULVN LQIOXHQFHV DORQJ ZLWK SRVVLEOH VSHFLILF IDPLO\ IXQFWLRQLQJ DQG SHUVRQDOLW\ H[DPSOHV RI WKHVH LQIOXHQFHV RQ GHOLQTXHQF\ 3URWHFWLYH IDFWRUV DUH TXDOLWLHV RU FRQGLWLRQV WKDW PRGHUDWH D MXYHQLOHfV H[SRVXUH WR ULVN :LOVRQ t +RZHOO f 7KH\ DUH FRQVLGHUHG E\ ERWK *DUPH]\ f DQG 5XWWHU f WR PLWLJDWH WKH LPSDFW RI ULVN RQ DGROHVFHQW EHKDYLRU DQG GHYHORSPHQW ,Q HVVHQFH WKHLU UROH LV WR PRGLI\ WKH UHVSRQVH WR ODWHU DGYHUVLW\ UDWKHU WKDQ WR IRVWHU QRUPDO GHYHORSPHQW LQ DQ\ GLUHFW VHQVH 5XWWHU f +RZHYHU WKLV GRHV QRW LPSO\ WKDW

PAGE 75

SURWHFWLYH IDFWRUV FDQ QRW LPSDFW GHYHORSPHQW GLUHFWO\ )DUUHOO %DUQHV t %DQHUMHH f 5LVN IDFWRUV RQ WKH RWKHU KDQG DUH TXDOLWLHV RU FRQGLWLRQV WKDW GLUHFWO\ FRQWULEXWH WR G\VIXQFWLRQ 5XWWHU f 7KXV LQ JHQHUDO SURWHFWLYH IDFWRUV RU SURFHVVHV DUH QRW VLPSO\ WKH RSSRVLWH LI ULVNV SURWHFWLYH SURFHVVHV GR QRW ORDG GLUHFWO\ WR DQ RXWFRPH DV ULVNV GR EXW UDWKHU RSHUDWH ZKHQ D ULVN LV SUHVHQW 5XWWHU f )XUWKHU LW FDQ EH VHHQ DV HYLGHQW WKDW ULVN IDFWRUV RSHUDWH LQ D FXPXODWLYH DQG LQWHUDFWLYH IDVKLRQ 7KLV LV EDVHG RQ D UHYLHZ RI VHYHUDO ORQJLWXGLQDO VWXGLHV H[SORULQJ WKH LPSDFW RI PXOWLSOH ULVNV RQ FKLOG GHYHORSPHQW DQG GHOLQTXHQF\
PAGE 76

DQG (ULFNVRQfV f VRFLDO DQG SHUVRQDO UHVRXUFHV *DUPH]\fV f SHUVRQDOLW\ IHDWXUHV IDPLO\ FRKHVLRQ DQG H[WHUQDO VXSSRUW IHDWXUHV DQG %RJHQVKQHLGHUfV f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t (ULFNVRQ 3DULV 5RVHQ 5XWWHU :LOVRQ -' t +RZHOO f HIIHFWLYH DQG QXUWXULQJ SDUHQWLQJ )DUULQJWRQ t :HVW /LGGOH 0F&RUG 3XONNLQHQ f FOHDU VWDQGDUGV RI IDPLO\ EHKDYLRU :LOVRQ -' t +RZHOO f WKH DEVHQFH RI IDPLO\ GLVFRUG *DUPH]\ +LUVFKL 0RHQ / (ULFNVRQ 5XWWHU f DQG LQWLPDWH IDPLO\ FRPPXQLFDWLRQ +LUVFKL f 4XDOLWLHV RI IDPLO\ IXQFWLRQ ZKLFK PD\ DFW DV ULVN IDFWRUV GLUHFWO\ FRQWULEXWLQJ WR DQ LQFUHDVHG OHYHO RI GHOLQTXHQF\ LQFOXGH LQVHFXUH DWWDFKPHQWV %RJHQVFKHLGHU &DPSEHOO f FKDRWLF IDPLO\ HQYLURQPHQW 3DULV f SDUHQWDO LQVWDELOLW\ 3DULV f SRRU SDUHQW FKLOG UHDULQJ SUDFWLFHV %RJHQVFKQHLGHU /HREHU 3DULV f XQFOHDU IDPLO\ UXOHV H[SHFWDWLRQV DQG UHZDUGV %RJHQVFKQHLGHU f DQG JHQHUDO IDPLO\ G\VIXQFWLRQ /HREHU 3DULV f 7KHVH H[DPSOHV SURYLGH D VLPLODU

PAGE 77

SURILOH WR WKH &LUFXPSOH[ PRGHO 7KXV LV ZRXOG DSSHDU WKDW DVSHFWV RI WKH EDODQFHG UHJLRQV RI FRKHVLRQ DQG DGDSWDELOLW\ FRXOG DFW VLPLODUO\ WR SURWHFWLYH IDFWRUV ZKLOH WKH H[WUHPHV FRXOG DFW VLPLODU WR WKH ULVN IDFWRUV 4XDOLWLHV RI SHUVRQDOLW\ ZKLFK PD\ DFW DV SURWHFWLYH IDFWRUV LQGLUHFWO\ FRQWULEXWLQJ WR D GHFUHDVHG OHYHO RI GHOLQTXHQF\ LQFOXGH SRVLWLYH VHOIHVWHHP %RJHQVFKQHLGHU +HDYHQ 0F)DUODQH %HOOLVVLPR t 1RUPDQ 6FKZHLW]HU 6HWK6PLWK t &DOODQ f UHVLOLHQW WHPSHUDPHQW 5XWWHU :LOVRQ -' t +RZHOO f SV\FKRORJLFDO KDUGLQHVV .REDVD $PHULNDQHU 0RQNV :ROIH t 7KRPDV f KHDOWK WHPSHUDPHQWDO FRJQLWLYH DQG HPRWLRQDO UHVRXUFHV 4XD\ f KLJK YDOXH RQ DFDGHPLF DFKLHYHPHQW -HVVRU f KHDOWK\ EHOLHIV DQG D FOHDU VWDQGDUG RI EHKDYLRU :LOVRQ -' t +RZHOO f KLJK LQWROHUDQFH RI GHYLDQFH -HVVRU f DOWUXLVP DQG EDVLF YDOXHV 0RHQ t (ULFNVRQ f ZHOO GHYHORSHG VRFLDO DQG LQWHOOHFWXDO VNLOOV %RJHQVFKQHLGHU f DQG D SRVLWLYH VRFLDO RULHQWDWLRQ :LOVRQ -' t +RZHOO f 4XDOLWLHV RI SHUVRQDOLW\ ZKLFK PD\ DFW DV ULVN IDFWRUV GLUHFWO\ FRQWULEXWLQJ WR DQ LQFUHDVHG OHYHO RI GHOLQTXHQF\ LQFOXGH DQWLVRFLDODQWLDXWKRULW\SURFULPLQDO DWWLWXGHV )DUULQJWRQ *OXHFN t *OXHFN *XHUUD +RJH $QGUHZV t /HVKLHG -HVQHVV f KLJK OHYHOV RI DOLHQDWLRQ RU UHEHOOLRXVQHVV %RJHQVFKQHLGHU f KLJK OHYHOV RI DJJUHVVLRQ %OXPVWHLQ )DUULQJWRQ t 0RLWUD &UDLJ t *OLFN (URQ t +XHVPDQQ )DUULQJWRQ 3XONNLQHQ f KDYLQJ PXOWLSOH IDFWRUV RI $VRFLDO SHUVRQDOLW\ GLVRUGHU RU IDFWRUV RI &RQGXFW GLVRUGHU 3DULV f LPSXOVLYH GLVSRVLWLRQ .DJDQ f DQG KLJK EHKDYLRUDO DFWLYDWLRQ OHYHOV 3DULV f 7KHVH H[DPSOHV SURYLGH D VLPLODU SURILOH WR WKH SHUVRQDOLW\ FKDUDFWHULVWLFV DVVHVVHG LQ WKH

PAGE 78

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fJRRGQHVV RI ILWf EHWZHHQ WKH LQGLYLGXDO DQG HQYLURQPHQW ZKLFK PD\ FRQWULEXWH WR WKH LQGLYLGXDOfV GHYHORSPHQWDO RXWFRPHV *RRGQHVV RI 3LW 7KH SURWHFWLYH DQG ULVN LQIOXHQFHV DORQJ ZLWK WKH UHFLSURFDO QDWXUH RI IDPLO\ IXQFWLRQLQJ DQG SHUVRQDOLW\ DUH YLHZHG WR FRQWULEXWH WR WKH IRUFHV VKDSLQJ WKH RXWFRPH RI GHYHORSPHQW 7KHVH IDFWRUV DGG WR WKH FRPSOH[LW\ RI WKH ILW EHWZHHQ WKH LQGLYLGXDO DQG WKH HQYLURQPHQW $FFRUGLQJ WR WKH HFRV\VWHPLF PRGHO WKH RYHUDOO fJRRGQHVV RI ILWf EHWZHHQ WKH FKDUDFWHULVWLFV RI D OLYLQJ RUJDQLVP DQG LWV VXUURXQGLQJV PD\ UHVXOW LQ WKH IRUPDWLRQ RI DGDSWLYH RU PDODGDSWLYH SV\FKRORJLFDO DQG VRFLDO IXQFWLRQLQJ %URQIHQEUHQQHU /HPHU 5XWWHU t 5XWWHU 7KRPDV t &KHVV

PAGE 79

:RUGHQ f ,Q JHQHUDO GXULQJ WKH LQWHUDFWLRQ RI LQWUDSHUVRQDO G\QDPLFV ZLWK LQWHUSHUVRQDO IRUFHV LI D FKLOGfV FKDUDFWHULVWLFV PDWFK RU ILWf WKH GHPDQGV RI D SDUWLFXODU VHWWLQJ DGDSWLYH RXWFRPHV PD\ DFFUXH EXW LI D fSRRU ILWf EHWZHHQ HQYLURQPHQWDO H[SHFWDWLRQV DQG GHPDQGV DQG WKH FDSDFLWLHV RI WKH FKLOG DW D SDUWLFXODU OHYHO RI GHYHORSPHQW H[LVW GLVWXUEHG EHKDYLRUDO IXQFWLRQLQJ PD\ LQVWHDG PDQLIHVWHG 7KRPDV t &KHVV :RUGHQ f :KHQ FRQVLGHULQJ D GHYHORSPHQWDO RXWFRPH %URQIHQEUHQQHUfV f (FR 6\VWHPLF 0RGHO RI +XPDQ 'HYHORSPHQW UHFRPPHQGV IDFWRULQJ LQWR WKH HYDOXDWLRQ WKH fJRRGQHVV RI ILWf IRU WKH LQGLYLGXDO WKURXJKRXW WKH LQWHUDFWLRQ EHWZHHQ PDQ\ FKDUDFWHULVWLFV RI WKH LQGLYLGXDO DQG PXOWLSOH OHYHOV RI WKH HQYLURQPHQW RYHU WLPH 7KXV DV VWURQJO\ VXSSRUWHG E\ WKH HPSLULFDO OLWHUDWXUH %URQIHQEUHQQHUfV f RYHUDOO YLHZ RI FULPLQDO EHKDYLRU LV WKDW LW LV PXOWLGHWHUPLQHG E\ WKH UHFLSURFDO LQWHUSOD\ RI FKDUDFWHULVWLFV RI WKH LQGLYLGXDO \RXWK DQG WKH NH\ VRFLDO V\VWHPV LQ ZKLFK WKH \RXWKV DUH HPEHGGHG LH IDPLO\ SHHU VFKRRO QHLJKERUKRRG FRPPXQLW\f %RJHQVFKQHLGHU (OOLRW +DZNLQV t &DWDODQR +HQJJHOHU 7KRPEHUU\ +XL]LQJD t /RHEHU 7RODQ t *XHUUD f )XUWKHU WKH HFRV\VWHPLF PRGHO WKHRUL]HV WKDW SOD\LQJ D GRPLQDWH UROH LQ WKLV SURFHVV DUH WKH SUR[LPDO LQIOXHQFHV ORFDWHG ZLWKLQ WKH PLFURV\VWHP %URQIHQEUHQQHU f 7KXV WKH HFRV\VWHPLF PRGHO SURYLGHG WKH WKHRUHWLFDO MXVWLILFDWLRQ IRU WKH FXUUHQW VWXG\fV H[DPLQDWLRQ RI WKH H[LVWHQFH RI D UHODWLRQVKLS EHWZHHQ WKH SUR[LPDO LQIOXHQFHV RI IDPLO\ IXQFWLRQLQJ DQG SHUVRQDOLW\ XSRQ WKH UDWH RI GHOLQTXHQF\

PAGE 80

6XPPDU\ ,Q VXPPDU\ D UHYLHZ RI WKH OLWHUDWXUH ZDV SUHVHQWHG ZKLFK LQFOXGHG VLJQLILFDQW WKHRUHWLFDO DQG HPSLULFDO HYLGHQFH UHODWLQJ SHUVRQDOLW\ IDPLO\ IXQFWLRQLQJ DQG %URQIHQEUHQQHUfV f HFRV\VWHPLF PRGHO RI KXPDQ GHYHORSPHQW WR UDWH RI MXYHQLOH GHOLQTXHQF\ $ VLJQLILFDQW JDS LQ WKH OLWHUDWXUH H[LVWV UHJDUGLQJ WKH H[SORUDWLRQ RI WKH H[LVWHQFH RI D UHODWLRQVKLS EHWZHHQ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ DFURVV WKH UDWH RI GHOLQTXHQF\ $UEXWKQRW *RUGRQ t -XUNRYLF -HVQHVV /H %ODQF /RULRQ 7RODQ t :DKODU 0XOYH\ $UWKXU t 5HSSXFFL 7RODQ &URPZHOO t %UDVV f %URQIHQEUHQQHUfV f (FR6\VWHPLF 0RGHO RI +XPDQ 'HYHORSPHQW ZDV SUHVHQWHG WR SURYLGH WKH WKHRUHWLFDO MXVWLILFDWLRQ IRU WKH FXUUHQW VWXG\fV DWWHPSW WR ILOO WKLV JDS WKURXJK DGGUHVVLQJ WKH TXHVWLRQ f'RHV D UHODWLRQVKLS H[LVW EHWZHHQ DQ DGROHVFHQWfV SHUVRQDOLW\ LH FKDUDFWHULVWLFV RI WKH VHOIf DQG KLVKHU SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ LH HQYLURQPHQWDO FKDUDFWHULVWLFV RI WKH V\VWHPf DFURVV KLVKHU UDWH RI GHOLQTXHQW RIIHQGLQJ LH VRFLDO GHYHORSPHQWf ZKLOH KROGLQJ UHOHYDQW IDFWRUV VXFK DV DJH JHQGHU DQG UDFH FRQVWDQW"

PAGE 81

&+$37(5 7+5(( 0(7+2'2/2*< 7KLV FKDSWHU ZLOO DGGUHVV WKH IROORZLQJ WRSLFV Df VWDWHPHQW RI SXUSRVH Ef UHOHYDQW YDULDEOHV Ff K\SRWKHVHV Gf GDWD DQDO\VLV Hf GHVFULSWLRQ RI WKH SRSXODWLRQ If VDPSOLQJ SURFHGXUHV Jf VDPSOH Kf GDWD FROOHFWLRQ DQG Lf LQVWUXPHQWDWLRQ 6WDWHPHQW RI 3XUSRVH 7KLV VWXG\ LV EDVHG RQ WKH HFRV\VWHPLF YLHZ WKDW FKLOGUHQ DUH VKDSHG QRW RQO\ E\ WKHLU SHUVRQDO DWWULEXWHV EXW DOVR E\ WKH HYHUZLGHQLQJ HQYLURQPHQWV LQ ZKLFK WKH\ GHYHORS %URQIHQEUHQQHU f &HQWUDO WR WKH FRXUVH RI VRFLDO GHYHORSPHQW LV WKH LQWHUSOD\ EHWZHHQ SUR[LPDO FKDUDFWHULVWLFV RI WKH FKLOG DQG WKHLU HQYLURQPHQW %URQIHQEUHQQHU f
PAGE 82

'HOLQHDWLRQ RI 5HOHYDQW 9DULDEOHV 'HSHQGHQ/
PAGE 83

SRVLWLYHO\ LQ DGROHVFHQFH ZLWK WKH RYHUDOO SUHYDOHQFH RI DQWLVRFLDO LQYROYHPHQW ZLWK D SHDN DW DJH IRU VHULRXV RIIHQGLQJ DQG GURSSLQJ RII DURXQG 6PLWK 9LVKHU DQG -DURXUD f IRXQG DJH DPRQJ DFWLYH RIIHQGHUV GLG QRW UHODWH WR WKH IUHTXHQF\ RI GHOLQTXHQF\ DFWLYLW\ )URP D GLIIHUHQW YLHZ 6PHWV DQG +DUWXS f DQG 2OF]DN 3DUFHOO DQG 6WWRW f ERWK PDGH YHU\ VWURQJ FDVHV WR FRQWURO IRU DJH GXH WR WKH SRVVLEOH GHYHORSPHQWDO GLIIHUHQFH HIIHFWLQJ IDPLO\ UHODWLRQV DQG XOWLPDWHO\ OHYHOV RI GHOLQTXHQF\ *HQGHU IRU WKH SXUSRVHV RI WKLV VWXG\ ZDV GHILQHG DV WKH LQGLFDWLRQ RI PDOH RU IHPDOH RQ WKH GHPRJUDSKLF TXHVWLRQQDLUH E\ WKH UHVSRQGHQW 7KH UROH RI JHQGHU LQ XQGHUVWDQGLQJ GHOLQTXHQF\ KDV EHHQ GHEDWHG LQ WKH OLWHUDWXUH VHH
PAGE 84

)XUWKHU JHQGHU GLIIHUHQFH VXSSRUWHG E\ UHVHDUFK LQFOXGH WKH YLHZ WKDW IDPLOLHV RI IHPDOH GHOLQTXHQWV DUH PRUH G\VIXQFWLRQDO WKDQ IDPLOLHV RI PDOH GHOLQTXHQWV +HQJJHOHU (GZDUGV t %RUGXLQ f DQG WKDW PDOH GHOLQTXHQWV DUH IRXQG WR EH PRUH YXOQHUDEOH WKDQ JLUOV WR IDPLO\ ULVN IRU DQWLVRFLDO EHKDYLRU DQG GHOLQTXHQF\ 5XWWHU t *LOOHU
PAGE 85

)RU H[DPSOH (OOLRW DQG $JHWRQ f DQG 6KRUW f IRXQG VLJQLILFDQWO\ JUHDWHU GHOLQTXHQW DQG YLROHQW EHKDYLRU IRU %ODFN \RXWK WKDQ :KLWH ZKHQ XWLOL]LQJ SROLFH DQG FRXUW GDWD ,QWHUHVWLQJO\ VHOIUHSRUW VWXGLHV FRQVLVWHQWO\ KDYH EHHQ IRXQG WR UHIOHFW QR GLIIHUHQFH LQ GHOLQTXHQW EHKDYLRU E\ UDFH 6DOWV /LQKROP *RGGDUG t 'XQFDQ f $GDSWDELOLW\ ZDV GHILQHG DV WKH H[WHQW WR ZKLFK WKH IDPLO\ V\VWHP ZDV IOH[LEOH DQG DEOH WR FKDQJH LWV SRZHU VWUXFWXUH UROH UHODWLRQVKLSV DQG UHODWLRQVKLS UXOHV LQ UHVSRQVH WR VLWXDWLRQDO DQG GHYHORSPHQWDO VWUHVV 2OVRQ HW DO f )RU WKH SXUSRVHV RI WKLV VWXG\ DGDSWDELOLW\ ZDV GHWHUPLQHG E\ WKH DGDSWDELOLW\ VFRUH IURP )$&(6,, &RKHVLRQ ZDV GHILQHG DV fWKH HPRWLRQDO ERQGLQJ WKDW IDPLO\ PHPEHUV KDG WRZDUGV RQH DQRWKHUf 2OVRQ HW DO Sf &RKHVLRQ LQFRUSRUDWHV FRQFHSWV RI HPRWLRQDO ERQGLQJ ERXQGDULHV FRDOLWLRQV WLPH VSDFH IULHQGV GHFLVLRQ PDNLQJ LQWHUHVWV DQG UHDFWLRQ 2OVRQ HW DO f )RU WKH SXUSRVHV RI WKLV VWXG\ FRKHVLRQ ZDV GHWHUPLQHG E\ WKH FRKHVLRQ VFRUH IURP )$&(6,, 6RFLD/PDODGMXVWPHLL/VFDOH 60f 6RFLDO PDODGMXVWPHQW UHIHUUHG WR D VHW RI DWWLWXGHV DVVRFLDWHG ZLWK LQDGHTXDWH RU GLVWXUEHG VRFLDOL]DWLRQ +HUH VRFLDO PDODGMXVWPHQW ZDV GHILQHG E\ WKH H[WHQW WR ZKLFK LQGLYLGXDOV VKDUHG DWWLWXGHV RI SHUVRQV ZKR GLG QRW PHHW SHUVRQDO QHHGV DQG HQYLURQPHQWDO GHPDQGV LQ VRFLDOO\ DSSURYHG ZD\V -HVQHVV S f )RU WKH SXUSRVHV RI WKLV VWXG\ 60 ZDV GHWHUPLQHG E\ WKH VFRUH RQ WKH 60 VFDOH RI WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ 0DQLIHVW DJJUHVVLRQ VFDOH M0$f 0DQLIHVW DJJUHVVLRQ UHIOHFWHG DQ DZDUHQHVV RI XQSOHDVDQW IHHOLQJV HVSHFLDOO\ DQJHU DQG IUXVWUDWLRQf D WHQGHQF\ WR UHDFW UHDGLO\ ZLWK WKRVH IHHOLQJV DQG GLVFRPIRUW FRQFHUQLQJ WKH SUHVHQFH DQG FRQWURO RI WKRVH IHHOLQJV

PAGE 86

-HVQHVV S f )RU WKH SXUSRVHV RI WKLV VWXG\ 0$ ZDV GHWHUPLQHG E\ WKH VFRUH RQ WKH 0$ VFDOH RI WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ $VRFLDO LQGH[ $,f 7KH DVRFLDO LQGH[ UHIOHFWHG D JHQHUDOL]HG GLVSRVLWLRQ WR UHVROYH VRFLDO RU SHUVRQDO SUREOHPV LQ ZD\V WKDW VKRZHG D GLVUHJDUG IRU VRFLDO FXVWRPV RU UXOHV -HVQHVV S f 'LVFULPLQDQW )XQFWLRQ $QDO\VLV ZDV XVHG WR FUHDWH WKLV VFDOH ZKLFK FRPELQHV VFRUHV IURP DOO WKH RWKHU SHUVRQDOLW\ VFDOHV WR EHVW GLVWLQJXLVK GHOLQTXHQWV -HVQHVV f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f 7KHUH LV QR UHODWLRQVKLS EHWZHHQ DJH DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZKLOH KROGLQJ JHQGHU UDFH DGDSWDELOLW\ FRKHVLRQ VRFLDO PDODGMXVWPHQW PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[ FRQVWDQW

PAGE 87

7HVWHGf7KHUH LV QR UHODWLRQVKLS EHWZHHQ DJH DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZKLOH KROGLQJ JHQGHU UDFH FRKHVLRQ PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[ FRQVWDQW +R 2ULJLQDOf 7KHUH LV QR UHODWLRQVKLS EHWZHHQ JHQGHU DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZKLOH KROGLQJ DJH UDFH DGDSWDELOLW\ FRKHVLRQ VRFLDO PDODGMXVWPHQW PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[ FRQVWDQW 7HVWHGf 7KHUH LV QR UHODWLRQVKLS EHWZHHQ JHQGHU DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZKLOH KROGLQJ DJH UDFH FRKHVLRQ PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[ FRQVWDQW +R 2ULJLQDOf 7KHUH LV QR UHODWLRQVKLS EHWZHHQ UDFH DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZKLOH KROGLQJ DJH JHQGHU DGDSWDELOLW\ FRKHVLRQ VRFLDO PDODGMXVWPHQW PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[ FRQVWDQW 7HVWHGf 7KHUH LV QR UHODWLRQVKLS EHWZHHQ UDFH DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZKLOH KROGLQJ DJH JHQGHU FRKHVLRQ PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[ FRQVWDQW +R 2ULJLQDO DQG 8QWHVWDEOHf 7KH UHODWLRQVKLS EHWZHHQ IDPLO\ FRKHVLRQ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI VRFLDO PDODGMXVWPHQW DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU UDFH DGDSWDELOLW\ PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[ FRQVWDQW

PAGE 88

+R 2ULJLQDOf 7KH UHODWLRQVKLS EHWZHHQ IDPLO\ FRKHVLRQ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI PDQLIHVW DJJUHVVLRQ DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU UDFH DGDSWDELOLW\ VRFLDO PDODGMXVWPHQW DQG DVRFLDO LQGH[ FRQVWDQW 7HVWHGf 7KH UHODWLRQVKLS EHWZHHQ IDPLO\ FRKHVLRQ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI PDQLIHVW DJJUHVVLRQ DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU UDFH DQG DVRFLDO LQGH[ FRQVWDQW +R 2ULJLQDOf 7KH UHODWLRQVKLS EHWZHHQ IDPLO\ FRKHVLRQ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI DVRFLDO LQGH[ DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU UDFH DGDSWDELOLW\ VRFLDO PDODGMXVWPHQW DQG PDQLIHVW DJJUHVVLRQ FRQVWDQW 7HVWHGf 7KH UHODWLRQVKLS EHWZHHQ IDPLO\ FRKHVLRQ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI DVRFLDO LQGH[ DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU UDFH DQG PDQLIHVW DJJUHVVLRQ FRQVWDQW

PAGE 89

+R 2ULJLQDOf 7KH UHODWLRQVKLS EHWZHHQ IDPLO\ DGDSWDELOLW\ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI VRFLDO PDODGMXVWPHQW DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU UDFH FRKHVLRQ PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[ FRQVWDQW 7HVWHGf 7KH UHODWLRQVKLS EHWZHHQ IDPLO\ DGDSWDELOLW\ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI VRFLDO PDODGMXVWPHQW DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU DQG UDFH FRQVWDQW +RJ 2ULJLQDOf 7KH UHODWLRQVKLS EHWZHHQ IDPLO\ DGDSWDELOLW\ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI PDQLIHVW DJJUHVVLRQ DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU UDFH FRKHVLRQ VRFLDO PDODGMXVWPHQW DQG DVRFLDO LQGH[ FRQVWDQW 7HVWHGf 7KH UHODWLRQVKLS EHWZHHQ IDPLO\ DGDSWDELOLW\ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI PDQLIHVW DJJUHVVLRQ DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU UDFH FRKHVLRQ VRFLDO PDODGMXVWPHQW DQG DVRFLDO LQGH[ FRQVWDQW

PAGE 90

+R 2ULJLQDO DQG 8QWHVWDEOHf 7KH UHODWLRQVKLS EHWZHHQ IDPLO\ DGDSWDELOLW\ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI DVRFLDO LQGH[ DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU UDFH FRKHVLRQ VRFLDO PDODGMXVWPHQW DQG PDQLIHVW DJJUHVVLRQ FRQVWDQW 'DWD $QDO\VLV 0XOWLQRPLDO ORJLVWLF UHJUHVVLRQ ZDV XVHG WR HYDOXDWH WKH VLJQLILFDQFH RI YDULDQFH H[SODLQHG LQ WKH GHSHQGHQW YDULDEOH UDWH RI MXYHQLOH GHOLQTXHQF\f E\ FRPELQDWLRQV RI WKLV VWXG\fV VHW RI VHOHFWHG LQGHSHQGHQW YDULDEOHV >DJH $f JHQGHU *f UDFH 5f DGDSWDELOLW\ $'3f FRKHVLRQ &f VRFLDO PDODGMXVWPHQW 60f PDQLIHVW DJJUHVVLRQ 0$f DQG DVRFLDO LQGH[$,f@ )RUPV RI PXOWLQRPLDO UHJUHVVLRQ DQDO\VLV VXFK DV PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ DQDO\VLV DUH VXSSRUWHG LQ WKH GHOLQTXHQF\ OLWHUDWXUH DV VWDWLVWLFDO PHWKRGV XVHIXO LQ H[SORULQJ PXOWLYDULDWH PRGHOV RI GHOLQTXHQF\ )DUULQJWRQ +RJH $QGUHZV t /HVKLHG 6DOWV /LQKROP *RGGDUG t 'XQFDQ 6FKROWH 7RODQ 7RODQ t /RULRQ :DVVHUPDQ 0LOOHU 3LQQHU t -DUDPLOOR f 7KH XVH RI PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ DQDO\VLV DOORZHG WKH DQDO\VLV RI WKH UHODWLRQVKLSV EHWZHHQ WKH LQGHSHQGHQW YDULDEOHV ZKLOH FRQWUROOLQJ IRU WKH RWKHU LQGHSHQGHQW YDULDEOHV RI LQWHUHVW 7KH IROORZLQJ PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ PRGHO ZDV RULJLQDOO\ SXUSRVHG 5DWH RI GHOLQTXHQF\ $*5&$'3600$$,&$,$'3$,&60&0$$'360$'30$

PAGE 91

'XH WR GLVFRYHULQJ PXOWLFROLQHDULW\ FRQFHUQV VWURQJ FRUUHODWLRQV EHWZHHQ FHUWDLQ YDULDEOHV ZLWKLQ WKH IXOO RULJLQDO PRGHOf WKH IXOO PRGHO ZDV PRGLILHG WR IRUP WZR UHGXFHG PXOWLQRPLDO ORJLVWLF UHJUHVVLRQV PRGHOV 0RGHO t 0RGHO f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f WKH VLJQLILFDQFH RI DQ\ LQWHUDFWLRQ WHUP LQ RQH RI WKH PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ PRGHOV ZDV RI JUHDWHVW LQWHUHVW $FFRUGLQJ WR %URQIHQEUHQQHU f WKH LQWHUDFWLRQDO HPSKDVLV RI WKH HFRV\VWHPLF DSSURDFK LV GXH WR WKH WKHRUHWLFDO YLHZ WKDW WKHUH H[LVWV D UHFLSURFDO QDWXUH WR GHYHORSPHQW HVSHFLDOO\ EHWZHHQ WKH SUR[LPDO LQIOXHQFHV

PAGE 92

7KXV RI JUHDWHVW FRQFHUQ ZDV WKH LQWHUDFWLRQ WHUPV ZKLFK FRQWDLQHG WKH WKHRUHWLFDOO\ DQG HPSLULFDOO\ UHOHYDQW DVSHFWV RI WKH DGROHVFHQWfV SHUVRQDOLW\ DQG SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ )LQGLQJ D VLJQLILFDQW LQWHUDFWLRQ WHUP ZDV LQWHUSUHWHG DV VWDWLVWLFDO HYLGHQFH WR UHMHFW WKDW WHUPfV QXOO K\SRWKHVLV QR UHODWLRQVKLS H[LVWVf DQG LQVWHDG ZDV VHHQ DV VWDWLVWLFDO HYLGHQFH LQ IDYRU RI DFFHSWLQJ WKDW WHUPV DOWHUQDWLYH K\SRWKHVLV WKDW D UHODWLRQVKLS GRHV H[LVW (YLGHQFH UHVXOWLQJ LQ UHMHFWLQJ DQ LQWHUDFWLRQ WHUP ZDV LQWHUSUHWHG WR SURYLGH VWDWLVWLFDO JURXQGV WR VXJJHVW WKDW DW D SUREDELOLW\ JUHDWHU WKDW FKDQFHf WKH DQVZHU ZDV f\HVf WR WKH SULPDU\ UHVHDUFK TXHVWLRQ f'RHV D UHODWLRQVKLS H[LVW EHWZHHQ DQ DGROHVFHQWfV SHUVRQDOLW\ DQG KLVKHU SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ DFURVV KLVKHU UDWH RI GHOLQTXHQW RIIHQGLQJ ZKLOH KROGLQJ DJH JHQGHU DQG UDFH FRQVWDQW"f 7KH DQDO\VLV UXQ DOVR LQFOXGHG PXOWLSOH VLQJOH YDULDEOH ORJLVWLF UHJUHVVLRQ PRGHOV WR H[SORUH WKH UHODWLRQVKLS EHWZHHQ HDFK LQGHSHQGHQW YDULDEOH DQG WKH GHSHQGHQW YDULDEOH 7KLV PXOWLSOH ELYDULDWH DQDO\VLV ZDV VHHQ WR DGG WR WKH LQYHVWLJDWLRQ RI WKH LQGHSHQGHQW YDULDEOHV ZLWK WKH GHSHQGHQW YDULDEOH DQG DOORZHG IRU D FRPSDULVRQV EHWZHHQ WKH ELYDULDWH DQG WKH PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ PRGHOV tf ZKLFK FRQWDLQ PRUH FRQWURO YDULDEOHV 'HVFULSWLRQ RI WKH 3RSXODWLRQ 7KH SRSXODWLRQ VSHFLILFDOO\ WDUJHWHG IRU WKLV VWXG\ ZDV DGROHVFHQWV LQYROYHG LQ WKH 'HSDUWPHQW RI -XYHQLOH -XVWLFH V\VWHP LQ WKH 6WDWH RI )ORULGD ZKR UDQJH LQ DJH EHWZHHQ DQG 7KH HQWLUH UHVHDUFK VDPSOH ZDV GUDZQ IURP WKLV JURXS 7KH 'HSDUWPHQW RI

PAGE 93

-XYHQLOH -XVWLFH '--f f SURYLGHG WKH IROORZLQJ GHPRJUDSKLFV IRU WKH \HDUfV WRWDO SRSXODWLRQ RI GHOLQTXHQF\ FDVHV UHFHLYHG LQ WKH VWDWH RI )ORULGD Df UHJDUGLQJ DJH b RI WKH FDVHV ZHUH ILOHG IRU DGROHVFHQWV UDQJLQJ LQ DJH EHWZHHQ DQG Ef UHJDUGLQJ JHQGHU b RI DOO FDVHV FRQVLVWHG RI PDOH DGROHVFHQWV DQG b FRQVLVWHG RI IHPDOH DGROHVFHQWV DQG Ff UHJDUGLQJ UDFH b ZHUH :KLWH b ZHUH %ODFN DQG b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f DOO DGYDQFHG JUDGXDWH VWXGHQWV EH\RQG 0DVWHUfV OHYHOf LQ WUDLQLQJ LQ PHQWDO KHDOWK ILHOGV DW WKH 8QLYHUVLW\ RI )ORULGD 3ULRU WR LQWHUYLHZLQJ WKH FRXUW UHIHUUHG FOLHQWV HDFK FRXQVHORU UHFHLYHG DJHQF\ WUDLQLQJ LQ DGPLQLVWHULQJ WKH TXHVWLRQQDLUHV

PAGE 94

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fV GHILQHG DJH UDQJH WR f 7KH UHGXFHG VDPSOH LQFOXGHG RQO\ VXEMHFWV IURP WKH :KLWH DQG %ODFN HWKQLF JURXSV $V FRQVLVWHQW ZLWK DQ HDUOLHU FHQVXV RI WKLV SULYDWH DJHQF\fV FOLHQWHOH /HH t 3ULFKDUG f b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t *LRUGDQR +HQJJHOHU /DXULWVHQ /RULRQ 7RODQ t :DKODU 5RVHQ 7RODQ HW DO 7RODQ t /RHEHU 7RODQ t 0LWFKHOO
PAGE 95

7KH DQDO\]HG VDPSOH ZDV IDLUO\ UHSUHVHQWDWLYH LQ GHPRJUDSKLFV WR WKH \HDUfV WRWDO SRSXODWLRQ RI GHOLQTXHQF\ FDVHV UHFHLYHG LQ WKH 6WDWH RI )ORULGD Df UHJDUGLQJ DJH WKH VXEMHFWV UDQJH EHWZHHQ DQG \HDUV ROG ZKLFK LV FRQVLVWHQW ZLWK WKH PDMRULW\ RI FDVHV UHIHUUHG WR MXYHQLOH FRXUW Ef UHJDUGLQJ JHQGHU b RI VXEMHFWV FRQVLVW RI PDOH DGROHVFHQWV DQG b FRQVLVW RI IHPDOH DGROHVFHQWV DQG Ff UHJDUGLQJ UDFH b RI VXEMHFWV ZHUH :KLWH DQG bZHUH %ODFN 7KH VXEMHFWV UDQJH EHWZHHQ DQG FKDUJHV ZLWK WKH PDMRULW\ RI VXEMHFWV UDQJLQJ EHWZHHQ DQG FKDUJHV 7KHUH DOVR DSSHDUHG WR H[LVW D VXIILFLHQW QXPEHU RI VXEMHFWV LQ WKH WKUHH OHYHOV RI RIIHQGLQJ WR EH VWXGLHG VXEMHFWV DUH ILUVW WLPH RIIHQGHUV KDYLQJ RQO\ RQH FKDUJHf VXEMHFWV DUH PXOWLSOH RIIHQGHUV KDYLQJ WR FKDUJHVf DQG VXEMHFWV DUH FKURQLF RIIHQGHUV KDYLQJ RU PRUH FKDUJHVf 'DWD &ROOHFWLRQ 7KH GDWD ZHUH FROOHFWHG WKURXJK D SULYDWH FRXQVHOLQJ DJHQF\ ZKLFK DVNHG UHIHUUHG FOLHQWV LQ WKH LQLWLDO LQWHUYLHZ WR FRPSOHWH WKH DVVHVVPHQW SDFNDJH FRQWDLQLQJ WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ 4XHVWLRQ VHH $SSHQGL[ $f DQG -, $QVZHU 6KHHW VHH $SSHQGL[ (f WKH )DPLO\ $GDSWDELOLW\ DQG &RKHVLRQ 6FDOHV )$&(6,,f VHH $SSHQGL[ %f DQG D GHPRJUDSKLF LQIRUPDWLRQ VKHHW VHH $SSHQGL[ &f 7KH DVVHVVPHQW WRRN DSSUR[LPDWHO\ WR PLQXWHV WR FRPSOHWH 7KH )ORULGD 'HSDUWPHQW RI -XYHQLOH -XVWLFH SURYLGHG LQIRUPDWLRQ LQ UHIHUHQFH WR QXPEHU RI FKDUJHV IRU HDFK VXEMHFW 7KH LGHQWLI\LQJ LQIRUPDWLRQ ZDV UHPRYHG DQG D SDUWLFLSDQW FRGH ZDV JLYHQ

PAGE 96

(DFK DVVHVVPHQW SDFNDJH ZDV SXW LQ LWV RZQ GDWD SDFNHW IRU UHVHDUFK SXUSRVHV 7KH GDWD SDFNHWV ZHUH VFRUHG DQG DQDO\]HG E\ WKLV UHVHDUFKHU ,QVWUXPHQWDWLRQ ,Q DGGLWLRQ WR D GHPRJUDSKLF TXHVWLRQQDLUH $SSHQGL[ &f DVVHVVLQJ QXPEHU RI FKDUJHV FRXQW\ LQFRPH VWDWXV JHQGHU DJH UDFH DQG FXUUHQW IDPLO\ PHPEHUV DW KRPH WKHUH ZHUH WZR VWDQGDUGL]HG LQVWUXPHQWV UHOHYDQW WR WKLV VWXG\ Df -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ $SSHQGL[ $ t )f DQG Ef )DPLO\ $GDSWDELOLW\ DQG &RKHVLRQ 6FDOHV )$&(6 ,, $SSHQGL[ %f -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ 7KH LQGHSHQGHQW YDULDEOHV IRU WKH FRQVWUXFW RI SHUVRQDOLW\ LQ WKH VWXG\ LQFOXGHG VRFLDO PDODGMXVWPHQW 60f PDQLIHVW DJJUHVVLRQ 0$f DQG DVRFLDO LQGH[ $,f 7KHVH ZHUH PHDVXUHG E\ WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ -,f 7KH RULJLQDO YHUVLRQ RI WKH -, ZDV GHYHORSHG DV SDUW RI WKH )ULFRW 5DQFK 6WXG\ LQ &DOLIRUQLD -HVQHVV f ZKLFK ZDV D ILYH\HDU SURMHFW ZKRVH JRDO ZDV WR HYDOXDWH WKH HIIHFWLYHQHVV RI DQ LQWHQVLYH LQVWLWXWLRQDO WUHDWPHQW SURJUDP IRU \RXQJ PDOH GHOLQTXHQWV 7KH VWXG\ ZDV VSRQVRUHG E\ WKH 5RVHQEXUJ )RXQGDWLRQ WKURXJK D JUDQW WR WKH &DOLIRUQLD 6WDWH
PAGE 97

VFKRROV LQ QRUWKHUQ &DOLIRUQLD -HVQHVV f ,Q WKH HDUO\ V WKH -, ZDV PRGLILHG VR WKDW LW FRXOG EH XVHG ZLWK ROGHU PDOH DGROHVFHQWV -HVQHVV f DQG IXUWKHU UHYLVHG LQ PDNLQJ WKH LQVWUXPHQW DSSURSULDWH IRU XVH ZLWK DGXOWV DQG IRU IHPDOHV -HVQHVV f 7KH PRVW UHFHQW FKDQJHV WR FRQWHQW ZHUH PDGH LQ -HVQHVV f 7KH -, LV DQ HDVLO\ DGPLQLVWHUHG LWHP WUXHIDOVH LQYHQWRU\ ZULWWHQ DW WKH WKLUG JUDGH UHDGLQJ OHYHO 6RUHQVHQ t -RKQVRQ f ,W LV XVHIXO LQ LGHQWLI\LQJ SHUVRQDOLW\ FKDUDFWHULVWLFV RI GHOLQTXHQWV 7KH -, LV PXOWLGLPHQVLRQDO LQ WKDW LW SURYLGHV DJHQRUPHG 7 VFRUHV RQ WHQ RI HOHYHQ SHUVRQDOLW\ FKDUDFWHULVWLFV DQG D JUDSKLF SURILOH WKDW LOOXVWUDWHV YDULRXV SHUVRQDOLW\ W\SHV ,W DOVR SURYLGHV D VLQJOH LQGH[ $,f RI SHUVRQDOLW\ WHQGHQFLHV SUHGLFWLYH RI VRFLDO DQG SHUVRQDOLW\ SUREOHPV 0DUWLQ t 0XUSK\ f 7KUHH SHUVRQDOLW\ FKDUDFWHULVWLFV DUH FULWHULRQ UHIHUHQFHG WUDLW VFDOHV VRFLDO PDODGMXVWPHQW YDOXH RULHQWHG DQG LPPDWXULW\f DQG VHYHQ DUH FOXVWHU DQDO\]HG SHUVRQDOLW\ VFDOHV DXWLVP DOLHQDWLRQ PDQLIHVW DJJUHVVLRQ ZLWKGUDZDOGHSUHVVLRQ VRFLDO DQ[LHW\ UHSUHVVLRQ DQG GHQLDOf DQG RQH DVRFLDO LQGH[f LV D FRPSRVLWH SHUVRQDOLW\ LQGH[ GHULYHG IURP GLVFULPLQDQW DQDO\VLV WR SUHGLFW OHYHO RI GHOLQTXHQF\ VWDWXV XWLOL]LQJ DOO WKH RWKHU VFDOH VFRUHV -HVQHVV t :HGJH f 7KH -, KDV EHHQ VXSSRUWHG E\ PDQ\ UHVHDUFK ILQGLQJV LQ WKH ILHOG DV D YDOLG DQG UHOLDEOH LQVWUXPHQW IRU GLVWLQJXLVKLQJ DPRQJ GHOLQTXHQWV YLD SHUVRQDOLW\ FKDUDFWHULVWLFV -HVQHVV f :KLOH JHQHUDO VXSSRUW IRU UHOLDELOLW\ DQG YDOLGLW\ ZLOO EH UHYLHZHG IRFXV ZLOO EH JLYH WR WKH 60 0$ DQG $, VFDOHV GXH WR WKHLU XVH LQ WKLV VWXG\ -HVQHVV f UHSRUWV D WHVWUHWHVW PRQWKVf UHOLDELOLW\ RI IRU 60 DQG IRU 0$ EDVHG RQ D VDPSOH RI GHOLQTXHQWV DJHV WR :ULJKW DQG -HVQHVV f UHSRUWHG D WHVWUHWHVW

PAGE 98

UHOLDELOLW\ RQH ZHHNf RI IRU $, 1RWH ZDV PDGH LQ WKH -HVQHVV ,QYHQWRU\ PDQXDO PDQXDO -HVQHVV f UHJDUGLQJ FRQFHUQ IRU WKH WHVWUHWHVW UHOLDELOLW\ IRU $, RQ FKLOGUHQ EHORZ IRU ORQJ SHULRGV RI WLPH 5HJDUGLQJ DOSKD UHOLDELOLWLHV /H %ODQF 0FGXII &KDUOHERLV *DJQRQ t 7UHPEOD\ f UHSRUWHG IRU 60 DQG IRU 0$ )XUWKHU H[SORULQJ WKH DELOLW\ WR IDOVLI\ -, UHVSRQVHV WKH -, ZDV DGPLQLVWHUHG WR GHOLQTXHQWV DW D &<$ UHFHSWLRQ FHQWHU XQGHU WKH LQVWUXFWLRQV WKDW WKH ILQGLQJV ZRXOG EH VROHO\ IRU UHVHDUFK SXUSRVHV KRQHVW UXQf 7KH QH[W GD\ WKH -, ZDV JLYHQ DJDLQ ZLWK WKH LQVWUXFWLRQV WKDW WKH ILQGLQJV ZRXOG EH XVHG WR MXGJH WKH NLGV ZLWK WKH JRDO WR HQFRXUDJH WKHP WR DQVZHU LQ D ZD\ IDYRUDEOH IRU WKHPVHOYHV IDNH JRRG UXQf 5HVXOWV UHYHDOHG IDLUO\ VWDEOH VFRUHV ZLWK VRPH YDULDWLRQ LQ 60 EXW QR FKDQJH LQ RYHU DOO FRPSRVLWH $, VFRUH -HVQHVV f $FFRUGLQJ WR /H %ODQF f WKH FRQFXUUHQW GLVFULPLQDQW DQG SUHGLFWLYH YDOLGLW\ RI WKH -, VFDOHV ZHUH FRQWUROOHG RQ D VDPSOH RI DGROHVFHQWV EHWZHHQ WKH DJHV RI DQG 0RVW RI WKH VFDOHV FRUUHODWHG KLJKHU ZLWK VFDOHV RI WKHLU GRPDLQ WKDQ ZLWK VFDOHV IURP DQRWKHU GRPDLQ PRVW RI WKH VFDOHV GLVFULPLQDWHG EHWZHHQ SDVW DFWXDO DQG VXEVHTXHQW VHOIUHSRUWHG GHOLQTXHQF\ DQG SUREOHP EHKDYLRUV DQG ILQDOO\ WKDW PRVW RI WKHP GLVWLQJXLVKHG EHWZHHQ SUHVHQFH RU DEVHQFH RI RIILFLDO GHOLQTXHQF\ DQG DGXOW FULPLQDOLW\ 6LPLODUO\ D UHYLHZ E\ 4XD\ f SURYLGHV FRQVLGHUDEOH HYLGHQFH VXSSRUWLQJ WKH FRQFXUUHQW FRQYHUJHQW DQG SUHGLFWLYH YDOLGLW\ RI WKH -, 4XD\fV UHYLHZ LQFOXGHV QXPHURXV ILQGLQJV UHSRUWHG E\ %DNHU DQG 6SLHOEHUJ f &RZGHQ 3HWHUVRQ DQG 3DWFK f *UDKDP f 0DUWLQ f 6DXQGHUV DQG 'DYLV f 9DOODQFH DQG )RUUHVW f DQG
PAGE 99

,Q JHQHUDO WKH EXON RI WKH UHVHDUFK RQ WKH -, LV LQ WKH DUHD RI GLIIHUHQWLDWLQJ JURXSV RI GHOLQTXHQWV )RU LQVWDQFH &RZGHQ 3HWHUVRQ DQG 3DFKW f IRXQG WKH -, FRUHV GLIIHUHQWLDWHG ZHOODGMXVWHG IURP SRRUO\ DGMXVWHG \RXWK ZLWKLQ DQ LQVWLWXWLRQ 6WRWW DQG 2OF]DN f VKRZHG WKDW -, VFDOHV GLIIHUHQWLDWHG MXYHQLOH GHOLQTXHQWV IURP VWDWXV RIIHQGHUV 6DXGHUV DQG 'DYLV f IRXQG WKDW FHUWDLQ VXE VFDOHV GLIIHUHQWLDWHG EHWZHHQ LQVWLWXWLRQDOL]HG GHOLQTXHQWV DQG SUREDWLRQHUV *UDKDP f IRXQG WKDW FRQVLVWHQWO\ KLJKHU $, VFRUHV GLVWLQJXLVKHG DPRQJ OHYHOV RI RIIHQGLQJ ILUVW RIIHQVH RIIHQFHV PRUH WKDQ f DQG IRXQG WKH $, SUHGLFWHG ZKR RI WKH ILUVW WLPH RIIHQGHUV ZRXOG UHRIIHQG LQ D RQH \HDU IROORZ XS 0DUWLQ f IRXQG WKDW FRQVLVWHQWO\ KLJKHU $, 60 92 $8 0$ DQG '(1 VFRUHV GLVWLQJXLVKHG DPRQJ OHYHOV RI LQVWLWXWLRQDOL]HG GHOLQTXHQWV WKRVH IRUPDOO\ DGMXGLFDWHG E\ WKH FRXUW V\VWHP IRU WZR RU PRUH FKDUJHV DQG WKRVH QRW IRUPDOO\ FKDUJHGf DQG D VRFLDOO\ DFWLQJ RXW QRQLQVWLWXWLRQDOL]HG FRQWURO JURXS DQG ILQDOO\ .XQFH DQG +HPSKLOO f LQYHVWLJDWHG WKH YDOLGLW\ LPSOLFDWLRQV RI WKH -, IRU LQVWLWXWLRQDOL]HG PDOH DGROHVFHQW GHOLQTXHQWV DQG IRXQG WKDW $, 60 $8 DQG 0$ FRUUHODWHG SRVLWLYHO\ ZLWK IUHTXHQF\ RI SULRU DUUHVWV DQG QXPEHU RI SUHYLRXV LQVWLWXWLRQDOL]DWLRQV &RQVLVWHQW ZLWK D UHYLHZ FRQGXFWHG E\ 4XD\ f WKH UHVXOWV RI WKLV UHYLHZ RI WKH -HVQHVV ,QYHQWRU\ IRXQG DPSOH VXSSRUW IRU WKH XVH RI WKH -, IRU UHVHDUFK GLDJQRVWLF SXUSRVHV DQG WKH JHQHUDO DVVHVVPHQW RI DGROHVFHQW VRFLDO PDODGMXVWPHQW $GPLQLVWUDWLRQ RI WKH -, UHTXLUHV D TXHVWLRQ ERRNOHW $SSHQGL[ $f DQ DQVZHU VKHHW $SSHQGL[ (f DQG D SHQFLO &XUUHQWO\ WKHUH LV DYDLODEOH D f4XLFN6FRUH )RUPf ZKLFK LOOXPLQDWHV WKH QHHG IRU WKH VFRULQJ VWHQFLOV -HVQHVV f 7KH WUDGLWLRQDO PHWKRG ZDV XVHG LQ WKH FROOHFWLRQ RI WKH DYDLODEOH GDWD IRU WKLV VWXG\ 5HVSRQGHQWV ZHUH DVNHG WR UHDG

PAGE 100

WKH TXHVWLRQ VKHHW DQG ILOO LQ WKH DSSURSULDWH WUXH RU IDOVH UHVSRQVH RQ WKH DQVZHU VKHHW (PSKDVLV ZDV PDGH WR DVVXUH WKH\ NQHZ WKHUH DUH QR ULJKW RU ZURQJ DQVZHUV 7KH WUDGLWLRQDO PHWKRG IRU VFRULQJ ZDV XVHG DV RSSRVHG WR WKH UHFHQWO\ UHOHDVHG 4XLFN6FRUH )RUP PHWKRG 7R WUDGLWLRQDOO\ VFRUH WKH WHVW UHTXLUHV f D VHW RI WHQ VFRULQJ VWHQFLOV f D VHW RI QRUPV IRU PDOHV DQG IHPDOHV RI DOO DJHV DQG f SURILOH VKHHWV VHH $SSHQGL[ )f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f 7KH LQGHSHQGHQW YDULDEOHV RI FRKHVLRQ DQG DGDSWDELOLW\ ZHUH PHDVXUHG E\ )$&(6,, 7KH RULJLQDO YHUVLRQ ZDV GHYHORSHG E\ 2OVRQ 5XVVHOO DQG 6SUHQNOH LQ DV DQ RXWJURZWK RI WKHLU &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ 6\VWHPV 8VLQJ IDFWRU

PAGE 101

DQDO\VLV DQG DOSKD UHOLDELOLW\ WKH VFDOH ZDV UHGXFHG IURP LWHPV WR ,Q WKH LWHP VFDOH ZDV DGPLQLVWHUHG WR LQGLYLGXDOV LQ 2OVRQfV VWXG\ RI QRUPDO IDPLOLHV DFURVV WKH IDPLO\ OLIH F\FOH 2OVRQ 0F&XEELQ %DPHV /DUVHQ 0X[HQ t :LOVRQ f DQG ZLWK IDFWRU DQDO\VLV DQG DOSKD UHOLDELOLW\ DQDO\VLV WKH VFDOH ZDV UHGXFHG WR LWHPV ,Q WKH )$&(6,,, ZDV GHYHORSHG DQG FXUUHQWO\ WKH )$&(6 ,9 LV WR EH FRPSOHWHG E\ WKH VXPPHU RI SHUVRQDO FRPPXQLFDWLRQ / .QXWVRQ 'HFHPEHU f )RU WKH FXUUHQW VWXG\ 2OVRQ DGYLVHG WKDW WKH )$&(6,, EH XWLOL]HG SHUVRQDO FRPPXQLFDWLRQ 2OVRQ )HEUXDU\ f )$&(6,, LV D LWHP LQVWUXPHQW ZULWWHQ DW WKH VHYHQWK JUDGH OHYHO ZKLFK DOORZV FKLOGUHQ DV \RXQJ DV WR HDVLO\ XQGHUVWDQG WKH LWHPV 2OVRQ 3RQWQHU t %HOO f 2I WKH LWHPV PHDVXUH FRKHVLRQ DQG PHDVXUH DGDSWDELOLW\ 7ZR LWHPV RQ HDFK RI WKH IROORZLQJ HLJKW FRQFHSWV UHODWH WR FRKHVLRQ HPRWLRQDO ERQGLQJ IDPLO\ ERXQGDULHV FRDOLWLRQV WLPH VSDFH IULHQGV GHFLVLRQ PDNLQJ LQWHUHVWVUHFUHDWLRQ 7ZR RU WKUHH LWHPV IRU WKH VL[ FRQFHSWV UHODWH WR DGDSWDELOLW\ DVVHUWLYHQHVV OHDGHUVKLS GLVFLSOLQH QHJRWLDWLRQ UROHV DQG UXOHV 6PDUW &KLEXFRV t 'LGLHU f )$&(6,, KDV EHHQ XVHG LQ D YDULHW\ RI LQVWDQFHV ZLWK ODUJH QXPEHUV RI DGXOW DQG DGROHVFHQW IDPLO\ PHPEHUV 2OVRQ 0F&XEELQ %DPHV /DUVHQ 0X[HQ DQG :LOVRQ f UHSRUWHG LQ UHJDUGV WR WKH UHOLDELOLW\ RI )$&(6,, LQWHUQDO FRQVLVWHQF\ IRU WKH ZKROH VFDOH FDPH WR DQG WHVWUHWHVW UHOLDELOLW\ ZHHNVf ZDV IRU FRKHVLRQ DQG IRU DGDSWDELOLW\ 9HU\ JRRG HYLGHQFH LV UHSRUWHG IRU WKH IDFH DQG FRQWHQW YDOLGLW\ DQG JRRG HYLGHQFH OLQHDU UHODWLRQVKLSf LV UHSRUWHG IRU WKH FRQFXUUHQW YDOLGLW\ 2OVRQ 0F&XEELQ %DPHV /DUVHQ 0X[HQ t :LOVRQ f

PAGE 102

7KH )$&(6,, FDQ EH DGPLQLVWHUHG RQ DQ LQGLYLGXDO RU WRWDO IDPLO\ PHPEHU EDVLV 2OVRQ 0F&XEELQ %DUQHV /DUVHQ 0X[HQ t :LOVRQ f 7KH )$&(6,, ZDV DGPLQLVWHUHG WR WKH UHIHUUHG DGROHVFHQW RQO\ LQ WKH FXUUHQW DYDLODEOH GDWD VDPSOH 7KLV ZDV LQWHUSUHWHG DV FRQVLVWHQW ZLWK WKH %URQIHQEHQQHUfV f HFRV\VWHPLF WKHRU\ %URQIHQEHQQHU f KLJKOLJKWV WKDW ZKHQ FRQVLGHULQJ WKH HQYLURQPHQWDO LQIOXHQFHV LH IDPLO\f ZKDW PDWWHUV IRU EHKDYLRU DQG GHYHORSPHQW LV WKH HQYLURQPHQW DV LW LV fSHUFHLYHGf UDWKHU WKDQ DV LW PD\ H[LVW LQ fREMHFWLYHf UHDOLW\ 7KHUHIRUH LQ WKH FXUUHQW VWXG\ RQO\ WKH DGROHVFHQWfV YLHZ RQ WKH )$&(6,, ZDV UHTXLUHG DQG XWLOL]HG 7KH UHVSRQGHQWV ZHUH DVNHG WR UHDG WKH VWDWHPHQWV DQG GHFLGH IRU HDFK RQH KRZ IUHTXHQWO\ RQ HDFK VFDOH WKDW UDQJHV IURP DOPRVW QHYHUf WR DOPRVW DOZD\Vf WKH GHVFULEHG EHKDYLRU RFFXUUHG LQ KLVKHU IDPLO\ /LQHDU VFRULQJ DQG LQWHUSUHWDWLRQV ZHUH XVHG EDVHG RQ WKH UHFRPPHQGDWLRQV RI 2OVRQ DQG :LOVRQ f 2OVRQ DQG :LOVRQ f UHSRUWHG WKDW LW LV DSSURSULDWH WR XWLOL]H WKH VDPH FXWWLQJ SRLQWV IRU WKH IRXU OHYHOV RI FRKHVLRQ DQG DGDSWDELOLW\ +RZHYHU 2OVRQ DQG :LOVRQ f DOVR UHSRUWHG WKDW WKH FDWHJRULHV RI HQPHVKHG DQG FKDRWLF DUH QR ORQJHU PHDVXUHG ,QVWHDG YHU\ FRQQHFWHG DQG YHU\ IOH[LEOH DUH PRUH DSSURSULDWH FRQFHSWV IRU VFRUHV LQ WKDW UDQJH )XUWKHU RQFH DGDSWDELOLW\ DQG FRKHVLRQ DUH FRQYHUWHG LQWR D )DPLO\ 7\SH VFRUH UDQJLQJ IURP WR WKH )DPLO\ W\SHV QRZ UDQJH IURP ([WUHPH W\SH WR 0LGUDQJH WR 0RGHUDWHO\ %DODQFHG WR KLJKHVW VFRUHV UHIOHFWLQJ D %DODQFHG )DPLO\ 7\SH 7KLV ZRXOG DOORZ WKH RSWLRQDO XVH RI WKH 7KUHH'LPHQVLRQDO )DPLO\ &LUFXPSOH[ 0RGHO 6HH 2OVRQ t :LOVRQ f

PAGE 103

6<67(0 7<3(6 M 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

PAGE 104

$IWHU REWDLQLQJ WKH WRWDO FRKHVLRQ DQG DGDSWDELOLW\ VFRUHV WKH FRUUHVSRQGLQJ VFRUH IRU HDFK GLPHQVLRQ RQ WKH f/LQHDU 6FRULQJ DQG ,QWHUSUHWDWLRQf FKDUW $SSHQGL[ 'f ZHUH ORFDWHG 7KH IDPLO\ W\SH VFRUH UDQJH f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

PAGE 105

&+$37(5 5(68/76 ,QWURGXFWLRQ 7KLV VWXG\ ZDV GHVLJQHG WR DGGUHVV WKH TXHVWLRQ f'RHV D UHODWLRQVKLS H[LVW EHWZHHQ DQ DGROHVFHQWfV SHUVRQDOLW\ LH FKDUDFWHULVWLFV RI WKH VHOIf DQG KLVKHU SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ LH HQYLURQPHQWDO FKDUDFWHULVWLFV RI WKH V\VWHPf DFURVV KLVKHU UDWH RI GHOLQTXHQW RIIHQGLQJ LH VRFLDO GHYHORSPHQWf ZKLOH KROGLQJ UHOHYDQW IDFWRUV VXFK DV DJH JHQGHU DQG UDFH FRQVWDQW"f $Q DQVZHU WR WKLV TXHVWLRQ FRXOG KDYH ZLGH LPSOLFDWLRQV IRU WKHRU\ UHVHDUFK WUDLQLQJ SUDFWLFH DQG VRFLDO SROLF\ 7KH ILQGLQJV RI WKLV VWXG\ ZLOO DOVR FRQWULEXWH WR WKH OLWHUDWXUH RQ MXYHQLOH GHOLQTXHQF\ %URQIHQEUHQQHUfV f 6RFLDO (FRORJLFDO 0RGHO RI +XPDQ 'HYHORSPHQW SURYLGHG WKH WKHRUHWLFDO MXVWLILFDWLRQ IRU H[SORULQJ WKH H[LVWHQFH RI WKLV UHODWLRQVKLS 7KH FHQWUDO SUHPLVH RI %URQIHQEUHQQHUfV PRGHO LV WKDW KXPDQ GHYHORSPHQW RFFXUV DV D MRLQW IXQFWLRQ RI FKDUDFWHULVWLFV RI WKH SHUVRQ HJ SHUVRQDOLW\f DQG WKH HQYLURQPHQW HJ IDPLO\ IXQFWLRQLQJf 2I VSHFLILF IRFXV LQ WKLV VWXG\ ZDV WKH SUR[LPDO LQIOXHQFHV RI SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQ XSRQ UDWH RI MXYHQLOH GHOLQTXHQF\ 7KH FRQVWUXFW RI SHUVRQDOLW\ ZDV JURXQGHG LQ -HVQHVVfV f -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ ZKLFK ZDV WKH DVVHVVPHQW LQVWUXPHQW XVHG WR DWWDLQ WKH VFRUHV RQ WKH VRFLDO PDODGMXVWPHQW VFDOH 60f PDQLIHVW DJJUHVVLRQ VFDOH 0$f DQG DVRFLDO LQGH[ $,f

PAGE 106

7KH FRQVWUXFW RI IDPLO\ IXQFWLRQLQJ ZDV JURXQGHG LQ 2OVRQ 5XVVHOO DQG 6SUHQNOHfV f &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ 6\VWHPV DQG WKH )$&(6,, LQYHQWRU\ ZKLFK ZDV WKH DVVHVVPHQW LQVWUXPHQW XVHG WR DVVHVV IDPLO\ FRKHVLRQ DQG DGDSWDELOLW\ 7KLV VWXG\fV DYDLODEOH VDPSOH ZDV FRPSULVHG RI MXYHQLOH GHOLQTXHQWV ZKR ZHUH SUHYLRXVO\ DVVHVVHG E\ D SULYDWH FRXQVHOLQJ DJHQF\ 7R FRQIRUP WR WKLV VWXG\fV GHILQHG DJH UDQJH WR f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f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f

PAGE 107

'HVFULSWLYH 'DWD RQ &DWHJRULFDO 9DULDEOHV *HQGHU 7KH WRWDO VDPSOH RI MXYHQLOH GHOLQTXHQWV ZDV SULPDULO\ FRPSULVHG RI PDOHV 7KHUH ZHUH PDOHV bf DQG IHPDOHV bf 'XH WR DQ LQVXIILFLHQW QXPEHU RI VXEMHFWV WR UHSUHVHQW WKH RWKHU HWKQLFLWLHV WKH VDPSOH ZDV UHGXFHG WR VXEMHFWV ZKLFK LQFOXGHG WR \HDU ROG DGROHVFHQWV ZKR ZHUH RI :KLWH DQG %ODFN HWKQLFLW\ 7KH UHGXFHG VDPSOH IRU DQDO\VLV FRQVLVWHG RI PDOHV bf DQG IHPDOHV bf 7KRXJK PDOHV IDU RXW QXPEHUHG WKH IHPDOHV LQ WKLV VDPSOH WKLV UDWLR LV FRQVLVWHQW ZLWK WKH SHUFHQWDJHV IRU WKH WRWDO SRSXODWLRQ UHSRUWHG IRU )ORULGD b PDOHV t b IHPDOHVf E\ WKH )ORULGD 'HSDUWPHQW RI -XYHQLOH -XVWLFH f 7DEOH LQGLFDWHV WKH IUHTXHQF\ RI PDOHV DQG IHPDOHV DFURVV WKH OHYHO RI GHOLQTXHQW RIIHQGLQJ ZLWKLQ WKH DQDO\]HG VDPSOH 7DEOH )UHTXHQF\ 'LVWULEXWLRQ K\-MHQGHU DQG//HYH/RI 'HOLQTXHQW 2IIHQGLQJ *HQGHU Q )LUVW 7LPH 2IIHQGHU Q bf Q bf 0XOWLSOH 2IIHQGHU Q bf &KURQLF 2IIHQGHU Q bf 0DOH f f f f )HPDOH f f f f 7RWDO f f f f

PAGE 108

(WKQLFLW\ 2I WKH WRWDO VDPSOH VXEMHFWVf b Q f LGHQWLILHG WKHPVHOYHV DV %ODFN b Q f LGHQWLILHG WKHPVHOYHV DV :KLWH b Q f LGHQWLILHG WKHPVHOYHV DV +LVSDQLF DQG b Q f LGHQWLILHG WKHPVHOYHV DV RWKHU 7KRXJK WKH SHUFHQWDJHV RI :KLWH DQG %ODFN VXEMHFWV IDU RXW ZD\ WKH SHUFHQWDJHV RI RWKHU HWKQLF JURXSV WKLV LV IDLUO\ FRQVLVWHQW ZLWK WKH SHUFHQWDJHV IRU WKH WRWDO SRSXODWLRQ UHSRUWHG LQ )ORULGD b :KLWH b %ODFN DQG b ZHUH RWKHUf E\ '-f +RZHYHU GXH WR DQ LQVXIILFLHQW QXPEHU RI VXEMHFWV LQ WKH RWKHU HWKQLF FDWHJRULHV IRU FRPSDULVRQV WKH VDPSOH ZDV UHGXFHG WR LQFOXGH RQO\ :KLWH DQG %ODFN VXEMHFWV 7KH UHGXFHG VDPSOH IRU DQDO\VLV FRQVLVWHG RI b Q f ZKR LGHQWLILHG WKHPVHOYHV DV %ODFN DQG b Q f ZKR LGHQWLILHG WKHPVHOYHV DV :KLWH 7DEOH LQGLFDWHV WKH IUHTXHQF\ RI PDOHV DQG IHPDOHV DFURVV WKH HWKQLF FDWHJRULHV ZLWKLQ WKH DQDO\]HG VDPSOH 7DEOH DQG (WKQLFLW\ *HQGHU Q :KLWH %ODFN Q bf Q bf Q bf 0DOH f f f )HPDOH f f f 7RWDO f f f

PAGE 109

'HVFULSWLYH 'DWD RQ ,QWHUYDO 9DULDEOHV 7KH IROORZLQJ ZLOO EH D FRPSDULVRQ RI WKH LQWHUYDO YDULDEOHV DFURVV ERWK WKH UDWHV RI RIIHQGLQJ DQG WKH WRWDO FULPH PHDQV ZLWKLQ HDFK UDWH 7KH UDWH ZDV GHOLQHDWHG LQWR FDWHJRULHV RI IUHTXHQF\ RI RIIHQGLQJ ZKLFK LQFOXGH ILUVW WLPH RIIHQGHUV KDYLQJ RQO\ RQH FKDUJHf PXOWLSOH RIIHQGHUV KDYLQJ WR FKDUJHVf DQG FKURQLF RIIHQGHUV KDYLQJ RU PRUH FKDUJHVf 7UDF\ :ROIJDQJ t )LJOLR :ROIJDQJ )LJOLR t 6HOOLQ f 7KH FDWHJRULFDO GHSHQGHQW YDULDEOH ZLOO EH XVHG WR RUJDQL]H WKH LOOXVWUDWLRQ IRU WKH GHVFULSWLYH VWDWLVWLFV FRQGXFWHG XSRQ WKH LQWHUYDO YDULDEOHV 7KHUH ZHUH VXEMHFWV DW WKH ILUVW WLPH RIIHQGHU UDWH VXEMHFWV DW WKH PXOWLSOH RIIHQGHU UDWH DQG VXEMHFWV DW WKH FKURQLF RIIHQGHU UDWH 7KH WRWDO FULPH PHDQV DFURVV HDFK RI WKH WKUHH UDWHV RI RIIHQGLQJ ZHUH D PHDQ RI IRU ILUVW WLPH RIIHQGHUV IRU PXOWLSOH RIIHQGHUV DQG D PHDQ RI IRU FKURQLF RIIHQGHUV 7KH UHPDLQLQJ GHVFULSWLYH VWDWLVWLFV UHODWH WR WKH VDPSOH RI VXEMHFWV DQDO\]HG XQOHVV RWKHUZLVH VWDWHG 7DEOH LQGLFDWHV WKH GHVFULSWLYH GDWD FRPSLOHG RQ WKH LQWHUYDO YDULDEOHV DJH FRKHVLRQ DGDSWDELOLW\ 60 0$ $, DQG UDWH RI RIIHQGLQJf $JH 6XEMHFWV LQ WKH DQDO\]HG VDPSOH UDQJHG LQ DJH IRUP WR \HDUV ROG 7KH PHDQ DJH IRU ILUVW WLPH RIIHQGHUV ZDV 6' f 7KH PHDQ DJH IRU PXOWLSOH RIIHQGHUV ZDV 6' f 7KH PHDQ DJH IRU FKURQLF RIIHQGHUV ZDV 6' f 7KH )$&(6,, ZDV XWLOL]HG WR DVVHVV IDPLO\ FRKHVLRQ 7KH OLQHDU VFRULQJ DQG LQWHUSUHWDWLRQV ZHUH XVHG EDVHG RQ WKH UHFRPPHQGDWLRQV RI 2OVRQ DQG :LOVRQ f 2OVRQ DQG :LOVRQ f UHSRUWHG WKH FXWWLQJ SRLQWV IRU WKH IRXU OHYHOV RI FRKHVLRQ

PAGE 110

UHPDLQ WKH VDPH H[FHSW WKH FDWHJRU\ RI HQPHVKHG LV QR ORQJHU PHDVXUHG ,QVWHDG YHU\ FRQQHFWHG LV D PRUH DSSURSULDWH FRQFHSW IRU VFRUHV LQ WKDW UDQJH 7KH UDZ FRKHVLRQ VFRUHV ZHUH XVHG LQ DQDO\VLV &RKHVLRQ VFRUHV UDQJH IURP D ORZ RI WR UHIOHFWLQJ WKH H[WUHPH UDQJH GLVHQJDJHGf VFRUHV RI WR UHIOHFWLQJ WKH PLGUDQJHV VHSDUDWH DQG FRQQHFWHGf DQG VFRUHV RI WR UHIOHFWLQJ WKH YHU\ FRQQHFWHG UDQJH RI FRKHVLRQ 'HVFULSWLYH DQDO\VLV UHYHDOHG WKDW WKH PHDQ FRKHVLRQ VFRUH IRU WKH DQDO\]HG VDPSOH ZDV 6' f 7KH PHDQ FRKHVLRQ VFRUH IRU ILUVW WLPH RIIHQGHUV ZDV 6' f 7KH PHDQ FRKHVLRQ VFRUH IRU PXOWLSOH RIIHQGHUV ZDV 6' f 7KH PHDQ FRKHVLRQ VFRUH IRU FKURQLF RIIHQGHUV ZDV 6' f $GDSWDELOLW\ 6FDOH 7KH )$&(6,, ZDV XWLOL]HG WR DVVHVV IDPLO\ DGDSWDELOLW\ 7KH OLQHDU VFRULQJ DQG LQWHUSUHWDWLRQV ZHUH XVHG EDVHG RQ WKH UHFRPPHQGDWLRQV RI 2OVRQ DQG :LOVRQ f 2OVRQ DQG :LOVRQ f UHSRUWHG WKH FXWWLQJ SRLQWV IRU WKH IRXU OHYHOV RI DGDSWDELOLW\ UHPDLQ WKH VDPH H[FHSW WKH FDWHJRU\ RI FKDRWLF LV QR ORQJHU PHDVXUHG ,QVWHDG YHU\ IOH[LEOH LV D PRUH DSSURSULDWH FRQFHSW IRU VFRUHV LQ WKDW UDQJH 7KH UDZ DGDSWDELOLW\ VFRUHV ZHUH XVHG LQ DQDO\VLV $GDSWDELOLW\ VFRUHV UDQJH IURP D ORZ RI WR UHIOHFWLQJ WKH H[WUHPH UDQJH ULJLGf VFRUHV RI WR UHIOHFWLQJ WKH PLGUDQJHV VWUXFWXUHG DQG IOH[LEOHf DQG VFRUHV RI WR UHIOHFWLQJ WKH YHU\ IOH[LEOH UDQJH RI DGDSWDELOLW\ 'HVFULSWLYH DQDO\VLV UHYHDOHG WKDW WKH PHDQ DGDSWDELOLW\ VFRUH IRU WKH DQDO\]HG VDPSOH ZDV 6' f 7KH PHDQ DGDSWDELOLW\ VFRUH IRU ILUVW WLPH RIIHQGHUV ZDV 6' f 7KH PHDQ DGDSWDELOLW\ VFRUH IRU PXOWLSOH RIIHQGHUV ZDV 6' f 7KH PHDQ DGDSWDELOLW\ VFRUH IRU FKURQLF RIIHQGHUV ZDV 6' f

PAGE 111

6RFLDO 0DODGMXVWPHQW 6FDOH 7KH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ ZDV XWLOL]HG WR DVVHVV WKH VRFLDO PDODGMXVWPHQW VFRUH ,Q RUGHU WR FRQGXFW VWDWLVWLFDO DQDO\VLV WKH UDZ 60 VFRUHV ZHUH FRQYHUWHG WR 7 VFRUHV WKDW JHQHUDOO\ UDQJH IURP WR 6FRUHV HOHYDWHG EH\RQG D 7VFRUH RI DUH FRQVLGHUHG WR EH PRUH LQGLFDWLYH RI D SHUVRQDOLW\ SURILOH FRQVLVWHQW ZLWK LQFUHDVHG MXYHQLOH RIIHQGLQJ 'HVFULSWLYH DQDO\VLV UHYHDOHG WKDW WKH PHDQ VRFLDO PDODGMXVWPHQW VFRUH IRU WKH DQDO\]HG VDPSOH ZDV 6' f 7KH PHDQ VRFLDO PDODGMXVWPHQW VFRUH IRU ILUVW WLPH RIIHQGHUV ZDV 6' f 7KH PHDQ VRFLDO PDODGMXVWPHQW VFRUH IRU PXOWLSOH RIIHQGHUV ZDV 6' f 7KH PHDQ VRFLDO PDODGMXVWPHQW VFRUH IRU FKURQLF RIIHQGHUV ZDV 6' f 0DQLIHVW $JJUHVVLRQ 6FDOH 7KH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ ZDV XWLOL]HG WR DVVHVV WKH PDQLIHVW DJJUHVVLRQ VFRUH ,Q RUGHU WR FRQGXFW VWDWLVWLFDO DQDO\VLV WKH UDZ 0$ VFRUHV ZHUH FRQYHUWHG WR 7 VFRUHV WKDW JHQHUDOO\ UDQJH IURP WR 6FRUHV HOHYDWHG EH\RQG D 7VFRUH RI DUH FRQVLGHUHG WR EH PRUH LQGLFDWLYH RI D SHUVRQDOLW\ SURILOH FRQVLVWHQW ZLWK LQFUHDVHG MXYHQLOH RIIHQGLQJ 'HVFULSWLYH DQDO\VLV UHYHDOHG WKDW WKH PHDQ PDQLIHVW DJJUHVVLRQ VFRUH IRU WKH DQDO\]HG VDPSOH ZDV 6' f 7KH PHDQ PDQLIHVW DJJUHVVLRQ VFRUH IRU ILUVW WLPH RIIHQGHUV ZDV 6' f 7KH PHDQ PDQLIHVW DJJUHVVLRQ VFRUH IRU PXOWLSOH RIIHQGHUV ZDV 6' f7KH PHDQ PDQLIHVW DJJUHVVLRQ VFRUH IRU FKURQLF RIIHQGHUV ZDV 6' f

PAGE 112

$VRFLDO ,QGH[ 7KH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ ZDV XWLOL]HG WR DVVHVV WKH DVRFLDO LQGH[ ,Q RUGHU WR FRQGXFW VWDWLVWLFDO DQDO\VLV WKH DSSURSULDWH SURFHGXUHV ZHUH XWLOL]HG WR GHULYH WKH $, UDZ VFRUH ZKLFK ZDV WKHQ FRQYHUWHG WR WKH $, VWDQGDUG VFRUH 7KH VWDQGDUG VFRUHV FDQ UDQJH IURP WR 6WDQGDUG VFRUHV HOHYDWHG EH\RQG DUH FRQVLGHUHG WR EH PRUH LQGLFDWLYH RI D SHUVRQDOLW\ SURILOH FRQVLVWHQW ZLWK LQFUHDVHG MXYHQLOH RIIHQGLQJ )RU H[DPSOH -HVQHVV f UHSRUWV D VWDQGDUG VFRUH RI LV b DFFXUDWH LQ FODVVLI\LQJ LQGLYLGXDOV DV GHOLQTXHQW YHUVHV QRQGHOLQTXHQW 'HVFULSWLYH DQDO\VLV UHYHDOHG WKDW WKH PHDQ DVRFLDO LQGH[ VFRUH IRU WKH DQDO\]HG VDPSOH ZDV 6' f 7KH PHDQ DVRFLDO LQGH[ IRU ILUVW WLPH RIIHQGHUV ZDV 6' f 7KH PHDQ DVRFLDO LQGH[ IRU PXOWLSOH RIIHQGHUV ZDV 6' f7KH PHDQ DVRFLDO LQGH[ IRU FKURQLF RIIHQGHUV ZDV 6' f 7DEOH 'HVFULSWLYH 'DWD RQ ,QWHUYDO 9DULDEOHV )DFWRU E\ 2IIHQGHU 5DWH 7RWDO &ULPH 0HDQ Q 0 6' $JH )LUVW 0XOWLSOH &KURQLF 7RWDO &RKHVLRQ6FDOH )$&(6,,f )LUVW 0XOWLSOH &KURQLF 7RWDO

PAGE 113

7DEOH &RQWLQXHGf )DFWRU E\ 2IIHQGHU 5DWH 7RWDO &ULPH 0HDQ Q 0 6' $GDSWDELOLW\ 6FDOH )$&(6,,f )LUVW 0XOWLSOH &KURQLF 7RWDO )LUVW 0XOWLSOH &KURQLF 7RWDO 0DQLIHVW $JJUHVVLRQ 6FDOH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\f )LUVW 0XOWLSOH &KURQLF 7RWDO )LUVW 0XOWLSOH &KURQLF 7RWDO ,QIHUHQWLDO 6WDWLVWLFDO $QDO\VLV 3URFHGXUHV $OO GDWD ZHUH DQDO\]HG XVLQJ 6<67$7 IRU :LQGRZV 6WDWLVWLFV 9HUVLRQ (GLWLRQ $V GHVFULEHG LQ &KDSWHU ORJLVWLF UHJUHVVLRQ ZDV WKH IRUP RI UHJUHVVLRQ XWLOL]HG

PAGE 114

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f 0DVRQ t %UDPEOH f 7KLV HVWDEOLVKHG VLJQLILFDQFH OHYHO GHWHUPLQHG WKH EDVLV XSRQ ZKLFK WKH GHFLVLRQV ZHUH PDGH HLWKHU WR DFFHSW RU UHMHFW WKH QXOO K\SRWKHVHV 7R DGGUHVV WKH QLQH K\SRWKHVHV WKH RULJLQDO SURSRVHG IXOO PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ PRGHO ZDV GHVLJQHG WR LQFOXGH DV WKH PDLQ HIIHFW LQGHSHQGHQW YDULDEOHV DJH $f JHQGHU *f UDFH 5f DGDSWDELOLW\ $'3f FRKHVLRQ &f VRFLDO PDODGMXVWPHQW 60f PDQLIHVW DJJUHVVLRQ 0$f DQG DVRFLDO LQGH[ $,f 7KH LQWHUDFWLRQ WHUPV ZHUH WR LQFOXGH & $, $'3 $, & 60 & 0$ $'3 60 $'3 0$ 7KH VXEMHFWfV UDWH RI RIIHQGLQJ ZDV LGHQWLILHG DV WKH GHSHQGHQW YDULDEOH 7KH PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ PHWKRG ZRXOG VWDWLVWLFDOO\ FRQWURO HDFK OLVWHG LQGHSHQGHQW YDULDEOH ZKLOH FRQVLGHULQJ WKH VLJQLILFDQFH RI RWKHU LQSXW YDULDEOHV LQ WKDW PRGHO +RZHYHU XSRQ YHULILFDWLRQ RI WKH DVVXPSWLRQV FRUUHVSRQGLQJ WR WKH XVH RI ORJLVWLF UHJUHVVLRQ DQDO\VLV RQ WKH SXUSRVHG IXOO PRGHO PXOWLFROLQHDULW\ FRQFHUQV ZHUH IRXQG WR H[LVW EHWZHHQ DGDSWDELOLW\ DQG FRKHVLRQ U f DQG 60 ZLWK ERWK 0$ U f DQG $, U f $V D UHVXOW DGDSWDELOLW\ DQG 60 ZHUH UHPRYHG IURP WKH IXOO ORJLVWLF UHJUHVVLRQ PRGHO DQG UXQ LQ D VHSDUDWH ORJLVWLF PRGHO ZKLFK DOVR LQFOXGHG UDFH JHQGHU DQG DJH $GDSWDELOLW\ ZDV FKRVHQ WR EH UHPRYHG IURP WKH IXOO RULJLQDO PRGHO GXH WR

PAGE 115

FRKHVLRQfV VWURQJHU VXSSRUW LQ WKH GHOLQTXHQF\ OLWHUDWXUH 60 ZDV UHPRYHG IURP WKH IXOO RULJLQDO PRGHO WR DOORZ PRUH SHUVRQDOLW\ YDULDEOHV WR UHPDLQ LQ WKH PRGLILHG 0RGHO 7KHVH PRGLILFDWLRQV WR WKH RULJLQDO IXOO ORJLW PRGHO UHQGHUHG XQWHVWDEOH K\SRWKHVHV DQG +RZHYHU ZKLOH WKH QXPEHU RI YDULDEOHV FRQWUROOHG IRU ZDV UHGXFHG DOWHUQDWH ORJLW PRGHOV ZHUH UXQ ZKLFK DOORZHG WKH SULPDU\ FRPSDULVRQV SURSRVHG LQ K\SRWKHVHV DQG WR EH DGGUHVVHG 7KH PDLQ PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ PRGHO 0RGHO f ZDV GHYHORSHG WR DGGUHVV WKH SULPDU\ QDWXUH RI K\SRWKHVHV DQG )RU WKH SXUSRVHV RI H[SORULQJ WKH UHODWLRQVKLSV EHWZHHQ WKH UHPRYHG LQGHSHQGHQW YDULDEOHV DGDSWDELOLW\ DQG 60f DQG GHOLQTXHQF\ D VHFRQG ORJLVWLF UHJUHVVLRQ PRGHO 0RGHO f ZDV UXQ 0RGHO ZDV UXQ WR SURYLGH LQIRUPDWLRQ UHJDUGLQJ WKH SULPDU\ QDWXUH RI K\SRWKHVLV 7KH PRGLILHG ORJLVWLF UHJUHVVLRQ PRGHOV UXQ GLG SURYLGH WKH VWDWLVWLFDO LQIHUHQFHV QHHGHG WR DGGUHVV WKLV VWXG\f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

PAGE 116

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tf ZKLFK FRQWDLQ PRUH FRQWURO YDULDEOHV 7KH UHVXOWV RI WKH ELYDULDWH DQDO\VLV UHYHDOHG VLJQLILFDQFH ZDV DFKLHYHG JHQGHU FKLVTXDUH S DQG FRKHVLRQ FKLVTXDUH S 6LJQLILFDQFH ZDV QRW DFKLHYHG IRU DJH UDFH DGDSWDELOLW\ 60 0$ RU $, DW S 7DEOH VXPPDUL]HV WKH UHVXOWV RI WKH ELYDULDWH DQDO\VLV 7DEOH %LYDULDWH &RPSDULVRQ 5HVXOWV ,QSXW YDULDEOH ') :DOG &KL6TXDUH 35 &KL6TXDUH $JH *HQGHUD D 5DFH &RKHVLRQ D $GDSWDELOLW\ 60 0$ $, 6LJQLILFDQW DW S

PAGE 117

0XOWLQRPLDO /RJLVWLF 5HJUHVVLRQ 5HVXOWV 0RGHO 7KLV PRGHO ZDV GHVLJQHG WR SULPDULO\ DGGUHVV K\SRWKHVHV DQG 7KH PDLQ HIIHFW LQGHSHQGHQW YDULDEOHV LQFOXGHG DJH $f JHQGHU *f UDFH 5f FRKHVLRQ &f PDQLIHVW DJJUHVVLRQ 0$f DQG DVRFLDO LQGH[ $,f 7KH LQWHUDFWLRQ WHUPV LQFOXGHG & 0$ DQG & $, 7KH VXEMHFWf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

PAGE 118

7DEOH &RQWLQXHGf 0RGHO ,QSXW YDULDEOH ') :DOG &KL6TXDUH 35 &KL6TXDUH & 0$D D & $, D 6LJQLILFDQW DW S 0RGHO 7KLV PRGHO ZDV GHVLJQHG WR SULPDULO\ DGGUHVV K\SRWKHVHV 7KH PDLQ HIIHFW LQGHSHQGHQW YDULDEOHV LQFOXGHG DJH $f JHQGHU *f UDFH 5f DGDSWDELOLW\ $'3f DQG VRFLDO PDODGMXVWPHQW 60f 7KH LQWHUDFWLRQ WHUP ZDV $'3 60 7KH VXEMHFWfV UDWH RI RIIHQGLQJ ZDV LGHQWLILHG DV WKH GHSHQGHQW YDULDEOH 7KH PDLQ HIIHFW LQGHSHQGHQW YDULDEOHV IRXQG WR DFKLHYH VLJQLILFDQFH LQFOXGHG DJH FKLVTXDUH S DQG JHQGHU FKL VTXDUH S 7KH PDLQ HIIHFW LQGHSHQGHQW YDULDEOHV IRXQG QRW WR DFKLHYH VLJQLILFDQFH DW S ZHUH UDFH $GDSWDELOLW\ DQG 60 7KH LQWHUDFWLRQ WHUP $'3 60f GLG QRW DFKLHYH VLJQLILFDQFH DW S 7DEOH VXPPDUL]HV WKH UHVXOWV RI WKH PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ 0RGHO 7DEOH 0XOLWQRPLDO;RJLVWLF 5HJUHVVLRQ-OHVXOWL )RU 0RGHO ,QSXW YDULDEOH ') :DOG &KL6TXDUH 35 &KL6TXDUH $JHD D *HQGHUD D 5DFH

PAGE 119

7DEOH &RQWLQXHGf ,QSXW YDULDEOH ') :DOG &KL6TXDUH 35 &KL6TXDUH $'3 60 $'3 60 D 6LJQLILFDQW DW S (YDOXDWLRQA +\SRWKHVHV 1LQH K\SRWKHVHV ZHUH RULJLQDOO\ SXUSRVHG LQ WKLV UHVHDUFK VWXG\ WR DVVHVV WKH H[LVWHQFH RI D SRVVLEOH UHODWLRQVKLS EHWZHHQ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ DFURVV DQ DGROHVFHQWfV UDWH RI RIIHQGLQJ $V D UHVXOW RI PXOWLFROLQHDULW\ FRQFHUQV WKH RULJLQDO IXOO PXOWLQRPLDO PRGHO ZDV PRGLILHG WR IRUP WZR PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ PRGHOV t f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

PAGE 120

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f 6XSSRUW ZDV DOVR IRXQG IRU WKH VLJQLILFDQFH RI DJH LQ PRGHO FKLVTXDUH S f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f 6XSSRUW ZDV DOVR IRXQG IRU WKH VLJQLILFDQFH RI JHQGHU LQ PRGHO FKLVTXDUH S f DQG LQ WKH ELYDULDWH DQDO\VLV FKLVTXDUH S f +\SRWKHVLVA` SURSRVHG WKDW WKHUH LV QR UHODWLRQVKLS EHWZHHQ UDFH DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZKLOH KROGLQJ DJH

PAGE 121

JHQGHU FRKHVLRQ PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[ FRQVWDQW 7KH UHVXOWV RI WKH PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ DQG FRUUHVSRQGLQJ SDUWLDO ORJLVWLF UHJUHVVLRQ FRHIILFLHQW LQ 0RGHO GHPRQVWUDWHG WKDW QR VWDWLVWLFDO HYLGHQFH ZDV HVWDEOLVKHG WR VXSSRUW WKH UHMHFWLRQ RI QXOO K\SRWKHVLV WKH PDLQ HIIHFW IRU UDFHf DW S 6LPLODUO\ UHVXOWV IURP 0RGHO DQG ELYDULDWH DQDO\VLV DOVR IRXQG UDFH GLG QRW DFKLHYH VLJQLILFDQFH DW S WKDW WKH UHODWLRQVKLS EHWZHHQ IDPLO\ FRKHVLRQ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI VRFLDO PDODGMXVWPHQW DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU UDFH DGDSWDELOLW\ PDQLIHVW DJJUHVVLRQ DQG DVRFLDO LQGH[ FRQVWDQW 'XH WR PXOWLFROLQHDULW\ FRQFHUQV WKLV K\SRWKHVLV ZDV XQWHVWDEOH %LYDULDWH ORJLVWLF DQDO\VLV ZDV FRPSOHWHG RQ HDFK YDULDEOH DQG UHYHDOHG VLJQLILFDQFH IRU FRKHVLRQ FKLVTXDUH S f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f

PAGE 122

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f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f +\SRWKHVLV SURSRVHG WKDW WKH UHODWLRQVKLS EHWZHHQ IDPLO\ DGDSWDELOLW\ DV PHDVXUHG E\ )$&(6,, DQG UDWH RI MXYHQLOH GHOLQTXHQF\ DV PHDVXUHG E\ QXPEHU RI FULPLQDO FKDUJHV ZLOO QRW YDU\ DV D IXQFWLRQ RI PDQLIHVW DJJUHVVLRQ DV PHDVXUHG E\ -HVQHVV SHUVRQDOLW\ LQYHQWRU\ ZKLOH KROGLQJ DJH JHQGHU UDFH FRKHVLRQ VRFLDO

PAGE 123

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f§ f§ 8QWHVWDEOH R ; 2QH & 0$ 5HMHFW +R 2QH & $, 1RW 5HMHFW

PAGE 124

,OO 7DEOH &RQWLQXHGf +\SRWKHVLV 6WDWLVWLFDO 0RGHO ,QSXW YDULDEOH :DOG &KL6TXDUH 35 &KL6TXDUH 'HFLVLRQ +R 7ZR $'3 60 1RW 5HMHFW +R 1RQH $'3 0$ f§ f§ 8QWHVWDEOH +R 1RQH $'3 $, f§ f§ 8QWHVWDEOH D 6LJQLILFDQW DW S 6XPPDU\ ,Q VXPPDU\ GHVFULSWLYH DQDO\VLV RI WKH GDWD UHYHDOHG D VDPSOH RI DGROHVFHQWV ZKR YDULHG RQ GHPRJUDSKLF FKDUDFWHULVWLFV DQG UDWH RI RIIHQGLQJ 7KH VDPSOH ZDV UHGXFHG IURP VXEMHFWV WR %ODFN DQG :KLWH VXEMHFWV UDQJLQJ LQ DJH IURP WR \HDUV ROG ,QIHUHQWLDO DQDO\VLV ZDV FRQGXFWHG WKURXJK WKH XVH RI PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ DQG ELYDULDWH ORJLVWLF UHJUHVVLRQ 7KLV VWXG\fV XWLOL]DWLRQ RI D PXOWLQRPLDO W\SH RI UHJUHVVLRQ LV FRQVLVWHQW ZLWK WKH SUDFWLFHV RI RWKHUV LQ WKH ILHOG RI MXYHQLOH GHOLQTXHQW VWXG\ ZKR DUH H[SORULQJ PXOWLYDULDWH PRGHOV RI GHOLQTXHQF\ )DUULQJWRQ +RJH $QGUHZV t /HVFKLHG 6DOWV /LQGKROP *RGGDUG t 'XQFDQ 6FKROWH 7RODQ 7RODQ t /RULRQ :DVVHUPDQ 0LOOHU 3LQQHU t -DUDPLOOR f 7KH XVH RI PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ SHUPLWWHG WKH DQDO\VLV RI WKH UHODWLRQVKLS EHWZHHQ WKH GHSHQGHQW YDULDEOH DQG YDULRXV LQGHSHQGHQW YDULDEOHV ZKLOH FRQWUROOLQJ IRU RWKHU LQGHSHQGHQW YDULDEOHV LQ WKH PRGHO %LYDULDWH ORJLVWLF FRPSDULVRQV ZHUH DOVR SURYLGHG 'XH WR FRQFHUQV RI PXOWLFROLQHDULW\ K\SRWKHVHV DQG ZHUH XQWHVWDEOH 7KH

PAGE 125

UHVXOWV RI WKH VWDWLVWLFDO DQDO\VLV IRU WKLV VDPSOH UHYHDOHG LQVXIILFLHQW VWDWLVWLFDO HYLGHQFH WR VXSSRUW WKH UHMHFWLRQ RI QXOO K\SRWKHVLV DQG 7KHUHIRUH QR HYLGHQFH ZDV IRXQG WR VXSSRUW D UHODWLRQVKLS EHWZHHQ WKH LQSXW YDULDEOHV RI UDFH RU WKH LQWHUDFWLRQ WHUPV RI HLWKHU FRKHVLRQ t DVRFLDO LQGH[ RU DGDSWDELOLW\ t VRFLDO PDODGMXVWPHQW ZLWK WKH GHSHQGHQW YDULDEOH UDWH RI RIIHQGLQJf +RZHYHU VXIILFLHQW VWDWLVWLFDO HYLGHQFH ZDV IRXQG WR UHMHFW QXOO K\SRWKHVLV DQG 7KHUHIRUH VXSSRUWLQJ WKH H[LVWHQFH RI D VLJQLILFDQW UHODWLRQVKLS EHWZHHQ WKH LQSXW YDULDEOHV RI DJH JHQGHU DQG WKH LQWHUDFWLRQ RI FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ ZLWK WKH GHSHQGHQW YDULDEOH UDWH RI RIIHQGLQJf &KDSWHU ZLOO SUHVHQW DQ RYHUYLHZ RI WKH VWXG\ D GLVFXVVLRQ RI WKH UHVXOWV WKH OLPLWDWLRQV RI WKH VWXG\ SUDFWLFDO LPSOLFDWLRQV DQG UHFRPPHQGDWLRQV IRU IXWXUH UHVHDUFK

PAGE 126

&+$37(5 ',6&866,21 2QH RI WKH JUHDWHVW PLVWDNHV WKDW FDQ EH PDGH LV WR DVVXPH WKDW VLPSOH ZD\V FDQ EH IRXQG WR VROYH MXYHQLOH GHOLQTXHQF\ 7KHUH DUH QR SKLORVRSKHUfV VWRQHV RQHDGD\ PHGLFLQHV RU VSHFLDO IRUPXODV WR FKDQJH \RXQJ SHRSOH FDXJKW XS LQ FULPH DQG WKH MXYHQLOH MXVWLFH V\VWHP /HH t .ORSIHU f ,QWURGXFWLRQ 7KLV FKDSWHU VXPPDUL]HV WKH SXUSRVH RI WKH VWXG\ LQFOXGLQJ D GHVFULSWLRQ RI WKH UHVHDUFK PHWKRGRORJ\ DQG VDPSOH $OVR SURYLGHG LV D VXPPDU\ HYDOXDWLRQ RI WKH K\SRWKHVHV D GLVFXVVLRQ RI WKH UHVXOWV UHODWHG WR WKH SULPDU\ UHVHDUFK TXHVWLRQV OLPLWDWLRQV RI WKH VWXG\ DQG WKHRUHWLFDO DQG SUDFWLFDO LPSOLFDWLRQ RI WKH ILQGLQJV )LQDOO\ UHFRPPHQGDWLRQV IRU IXWXUH UHVHDUFK ZLOO EH RIIHUHG DQG DQ LQWURGXFWLRQ WR 3RZHUVfV f 0HWD 7KHRU\ RI +LHUDUFKLFDO &\EHUQHWLF )HHGEDFN /RRSV LV SUHVHQWHG 3RZHUVfV PHWD WKHRU\ RIIHUV DQ DOWHUQDWLYH H[SODQDWLRQ RI WKH SURFHVVHV DW ZRUN EHWZHHQ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ RQ WKH UDWH RI MXYHQLOH GHOLQTXHQW RIIHQGLQJ DQG PD\ LQVSLUH IXWXUH UHVHDUFK RQ WKLV WRSLF 2YHUYLHZ RI 6WXG\ $ JURZLQJ FRQVHQVXV LQ WKH ILHOG RI MXYHQLOH GHOLQTXHQW VWXG\ VXSSRUWV WKH YLHZ WKDW WKH GHYHORSPHQW DQG PDLQWHQDQFH RI MXYHQLOH RIIHQGLQJ LV D UHVXOW RI PDQ\ FRPSOH[

PAGE 127

IDFWRUV %HQGD %RJHQVFKQHLGHU &DODEUHVH t $GDPV 0DUVK &OHPHQW 6WRXJKWRQ t 0DUFNLRQL -HVQHVV 6DOWV /LQGKROP *RGGDUG t 'XQFDQ 7RODQ t /RHEHU 7RODQ &URPZHOO t %UDVVZHOO :RUGHQ f 7KXV PDQ\ FXUUHQW UHVHDUFKHUV VXSSRUW WKH XVH RI PXOWLYDULDWH HFRV\VWHPLF PRGHOV WR LQYHVWLJDWH WKH GHYHORSPHQW SUHYHQWLRQ DQG WUHDWPHQW RI MXYHQLOH GHOLQTXHQF\ %RJHQVFKQHLGHU %URQIHQEUHQQHU +HQJJHOHU /HPHU /LGGOH 0DJQXVVRQ 0RIILWW 6DOWV /LQGKROP *RGGDUG t 'XQFDQ 0XOYH\ $UWKXU 5HSSXFFL 3DULV 5HLG 7RODQ t /RHEHU
PAGE 128

7KH FRQVWUXFW RI IDPLO\ IXQFWLRQLQJ ZDV JURXQGHG LQ 2OVRQ 5XVVHOO DQG 6SUHQNOHfV f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b RI WKH DQDO\]HG VDPSOH FRQVLVWHG RI PDOHV b IHPDOHV b ZHUH %ODFN DQG b ZHUH :KLWH 7KLV GLVWULEXWLRQ LV FRQVLVWHQW ZLWK WKH JHQGHU DQG HWKQLF GLVWULEXWLRQ VHHQ LQ WKH RIIHQGHU SRSXODWLRQ DV UHSRUWHG E\ WKH 6WDWH RI )ORULGD 'HSDUWPHQW RI -XYHQLOH -XVWLFH '-f 7KURXJK WKH XVH RI PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ LW ZDV SRVVLEOH WR KROG RQH RU PRUH RI WKH LQGHSHQGHQW YDULDEOHV FRQVWDQW LQ RUGHU WR GHWHUPLQH WKH VLJQLILFDQFH RI D VLQJOH LQSXW YDULDEOHfV UHODWLRQVKLS WR WKH GHSHQGHQW YDULDEOH 7KLV PHWKRG DOVR PDGH LW SRVVLEOH WR GHWHUPLQH LI WZR YDULDEOHV LQWHUDFWHG ZLWK RQH DQRWKHU LQ SUHGLFWLQJ WKH YDULDQFH LQ WKH GHSHQGHQW YDULDEOH ZKLOH FRQWUROOLQJ IRU WKH RWKHU LQSXW YDULDEOHV 7KH ILQGLQJV RI WKLV VWXG\ KDYH ERWK WKHRUHWLFDO DQG SUDFWLFDO LPSOLFDWLRQV )XUWKHU WKH ILQGLQJV FRQWULEXWH WR ILOOLQJ WKH JDS LQ WKH OLWHUDWXUH H[SORULQJ WKH H[LVWHQFH RI D UHODWLRQVKLS EHWZHHQ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ DFURVV UDWH RI GHOLQTXHQW

PAGE 129

RIIHQGLQJ 7KH IROORZLQJ LV D VXPPDU\ HYDOXDWLRQ RI WKH UHVHDUFK K\SRWKHVHV LQ OLJKW RI WKH VWDWLVWLFDO ILQGLQJV (YDOXDWLRQ RI +\SRWKHVHV 7KH VWDWLVWLFDO DQDO\VLV GLUHFWO\ SHUWDLQLQJ WR WKH K\SRWKHVHV LQYROYHG UXQQLQJ WZR PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ PRGHOV t f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f EXW QRW LQ WKH ELYDULDWH DQDO\VLV DW S WHVWHG WKH PDLQ HIIHFW IRU JHQGHU DV LW UHODWHG WR UDWH RI MXYHQLOH GHOLQTXHQF\ 7KH UHVXOWV UHYHDOHG WKDW VXIILFLHQW HYLGHQFH ZDV DWWDLQHG WR GHPRQVWUDWH WKDW JHQGHU KDG DFKLHYHG VLJQLILFDQFH LQ 0RGHO ZLWK D FKLVTXDUH S

PAGE 130

6XSSRUW ZDV DOVR IRXQG IRU WKH VLJQLILFDQFH RI JHQGHU LQ 0RGHO FKLVTXDUH S f DQG LQ WKH ELYDULDWH DQDO\VLV FKLVTXDUH S f +\SRWKHVLV WHVWHG WKH PDLQ HIIHFW IRU UDFH DV LW UHODWHG WR UDWH RI MXYHQLOH GHOLQTXHQF\ 7KH UHVXOWV UHYHDOHG WKDW LQVXIILFLHQW VWDWLVWLFDO HYLGHQFH ZDV IRXQG LQ 0RGHO WR VXSSRUW WKH UHMHFWLRQ RI K\SRWKHVHV DW S 6LPLODUO\ UHVXOWV IURP 0RGHO DQG ELYDULDWH DQDO\VLV DOVR IRXQG UDFH GLG QRW DFKLHYH VLJQLILFDQFH DW S ZDV GHVLJQHG WR WHVW WKH LQWHUDFWLRQ RI IDPLO\ FRKHVLRQ DQG VRFLDO PDODGMXVWPHQW DV UHODWHG WR UDWH RI MXYHQLOH GHOLQTXHQF\ +RZHYHU GXH WR PXOWLn FROLQHDULW\ FRQFHUQV WKLV K\SRWKHVLV ZDV XQWHVWDEOH $OWKRXJK WKH LQWHUDFWLRQ RI FRKHVLRQ DQG 60 ZDV QRW H[SORUHG ELYDULDWH ORJLVWLF DQDO\VLV UHYHDOHG VLJQLILFDQFH ZDV DFKLHYHG IRU FRKHVLRQ FKLVTXDUH S f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

PAGE 131

+\SRWKHVLV ZDV GHVLJQHG WR WHVW WKH LQWHUDFWLRQ RI IDPLO\ DGDSWDELOLW\ DQG PDQLIHVW DJJUHVVLRQ DV UHODWHG WR UDWH RI MXYHQLOH GHOLQTXHQF\ +RZHYHU GXH WR PXOWLn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f PDLQ HIIHFW IRU JHQGHUf DQG LQWHUDFWLRQ WHUP IRU & t 0$f ZHUH UHMHFWHG DQG QR VWDWLVWLFDO HYLGHQFH ZDV IRXQG WR VXSSRUW WKH UHMHFWLRQ RI QXOO K\SRWKHVLV 0DLQ HIIHFW IRU UDFHf LQWHUDFWLRQ WHUP IRU & t $,f DQG LQWHUDFWLRQ WHUP IRU $'3 t 60f +\SRWKHVHV DQG ZHUH XQWHVWDEOH GXH WR PRGLILFDWLRQV DV D UHVXOW RI PXOWLFROLQHDULW\ FRQFHUQV 7KH ELYDULDWH DQDO\VLV UHYHDOHG VLJQLILFDQW UHVXOWV IRU JHQGHU DQG FRKHVLRQ &RQWUDU\ WR WKH PXOWLQRPLDO PRGHOV DJH ZDV QRW IRXQG WR DFKLHYH ELYDULDWH VLJQLILFDQFH )XUWKHU ZKLOH 0$ ZDV IRXQG WR EH FRQWDLQHG LQ D VLJQLILFDQW LQWHUDFWLRQ WHUP ZLWK FRKHVLRQ WKH ELYDULDWH FRPSDULVRQ IRU 0$ GLG QRW DWWDLQ VLJQLILFDQFH

PAGE 132

'LVFXVVLRQ RI 5HVXOWV 7KH UHVXOWV RI WKH PXOWLQRPLDO ORJLVLWLF UHJUHVVLRQ DQDO\VLV UHYHDOHG VXSSRUW IRU DQG D ODFN RI VXSSRUW IRU VHYHUDO RI WKH K\SRWKHVLV WHVWHG 7KH IROORZLQJ GLVFXVVLRQ RI WKH UHVXOWV ZLOO DGGUHVV HDFK RI WKLV VWXG\f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f EXW QRW LQ WKH ELYDULDWH DQDO\VLV DW S 7KLV VWXG\fV VLJQLILFDQW HIIHFW IRU DJH VXSSRUWV WKH ILQGLQJV RI +LQGHODQJ +LUVFKL DQG :HLV f DQG 7RODQ DQG /RHEHU f ZKR UHSRUWHG D UHODWLRQVKLS EHWZHHQ DJH DQG UDWHV RI GHOLQTXHQW RIIHQGLQJ 7KH FXUUHQW PXOWLQRPLDO ILQGLQJV DUH LQ GLUHFW FRQWUDVW KRZHYHU WR 6PLWK 9LVKHU DQG -DUMRXUD f ZKR IRXQG QR UHODWLRQVKLS EHWZHHQ DJH DPRQJ DFWLYH RIIHQGHUV DQG WKH IUHTXHQF\ RI GHOLQTXHQW DFWLYLW\ 7KH VWDWLVWLFV XVHG DQG WKH FURVV VHFWLRQDO GHVLJQ RI WKH FXUUHQW VWXG\ FRQVWUDLQ FRQMHFWXUH DERXW WKH FDXVDO QDWXUH RI WKLV UHODWLRQVKLS )RU H[DPSOH GLG DJH UHIOHFW D GLUHFW FDXVH WR OHYHO RI RIIHQGLQJ" :DV LW DQ LQGLUHFW HIIHFW UHIOHFWLQJ GHYHORSPHQWDO GLIIHUHQFHV HIIHFWLQJ IDPLO\ UHODWLRQV ZKLFK WKHQ HIIHFWHG OHYHOV RI GHOLQTXHQF\ DV VXJJHVWHG E\ 6PHWV DQG +DUWXS DQG 2OF]DN

PAGE 133

3DUFHOO DQG 6WWRW f" 2U ZDV DJH VLJQLILFDQW VLPSO\ EHFDXVH DPRQJ RXU VDPSOH WKH ROGHU DGROHVFHQWV KDG PRUH WLPH WR DFTXLUH PRUH FKDUJHV 7KH GLIIHUHQFHV LQ PHDQ DJHV LQ WKLV VDPSOH IURP IRU ILUVW WLPH RIIHQGHUV WR IRU FKURQLF RIIHQGHUVf FRXOG EH VDLG WR VXSSRUW WKLV ODWWHU FRQFOXVLRQ 7KH FXUUHQW ILQGLQJ RI D VLJQLILFDQW DJH HIIHFW SURYLGHV VXSSRUW IRU %URQIHQEUHQQHUfV HFRV\VWHPLF PRGHO $JH ZRXOG DSSHDU WR EH D VLJQLILFDQW FKDUDFWHULVWLF RI DQ DGROHVFHQW ZKLFK HIIHFWV WKH FRXUVH RI KLVKHU VRFLDO GHYHORSPHQW ,Q JHQHUDO WKLV VWXG\fV ILQGLQJV RQ WKH UROH RI DJH VXJJHVW WKH QHHG WR FRQWURO IRU DJH ZKHQ H[SORULQJ D PXOWLYDULDWH PRGHOf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f DQG LQ WKH ELYDULDWH DQDO\VLV FKL VTXDUH S f 7KHVH ILQGLQJ UHJDUGLQJ JHQGHU DUH FRQVLVWHQW ZLWK PDQ\ RWKHU VWXGLHV LQ WKH GHOLQTXHQF\ OLWHUDWXUH &DQWHU (OOLRW +XL]LQJD t 0HQDUG +LQGHODQJ +LUVFKL t :HLV 6DQHU t (OOLFNVRQ 6PLWK 9LVKHU t -DUMRXUD 7UDF\ :ROIJDQJ t )LJOLR :HUQHU t 6PLWK
PAGE 134

UHVHDUFKHUV KDYH IRXQG QR GLIIHUHQFH GXH WR JHQGHU %OXPVWLHQ &RKHQ 5RWK t 9LVKHU 6KDZ t 6FRWW f WKH FXUUHQW VWXG\fV UHVXOWV ZRXOG VXJJHVW WKH QHHG WR FRQVLGHU FRQWUROOLQJ IRU JHQGHU LQ WKH H[SORUDWLRQ RI WKH FRPSOH[ IDFWRUV HIIHFWLQJ GHOLQTXHQF\ 7KH FXUUHQW ILQGLQJ RI D VLJQLILFDQW JHQGHU HIIHFW SURYLGHV VXSSRUW IRU %URQIHQEUHQQHUfV HFRV\VWHPLF PRGHO *HQGHU ZRXOG DSSHDU WR EH D VLJQLILFDQW FKDUDFWHULVWLF RI DQ DGROHVFHQW ZKLFK HIIHFWV WKH FRXUVH RI KLVKHU VRFLDO GHYHORSPHQW DQG VKRXOG EH FRQWUROOHG IRU LQ PXOWLYDULDWH GHOLQTXHQF\ VWXGLHV 5HODWLRQVKLS RI 5DFH WR 5DWH RI -XYHQLOH 'HOLQTXHQF\ 7KH SXUSRVH RI UHVHDUFK TXHVWLRQ ZDV WR LQYHVWLJDWH WKH UHODWLRQVKLS EHWZHHQ UDFH DQG UDWH RI MXYHQLOH GHOLQTXHQF\ ZKLOH FRQWUROOLQJ IRU RWKHU UHOHYDQW YDULDEOHV +\SRWKHVLV WHVWHG WKH PDLQ HIIHFW IRU UDFH DV LW UHODWHG WR UDWH RI MXYHQLOH GHOLQTXHQF\ ZKLOH FRQWUROOLQJ IRU RWKHU UHOHYDQW LQSXW YDULDEOHV ,QVXIILFLHQW VWDWLVWLFDO HYLGHQFH ZDV IRXQG LQ WKH PXOLQRPLDO ORJLVWLF UHJUHVVLRQ 0RGHO WR VXSSRUW WKH UHMHFWLRQ RI K\SRWKHVHV DW S 6LPLODUO\ UHVXOWV IURP 0RGHO DQG ELYDULDWH DQDO\VLV DOVR IRXQG UDFH GLG QRW DFKLHYH VLJQLILFDQFH DW S ,W LV LPSRUWDQW WR UHDOL]H WKDW WKH DQDO\]HG VDPSOH ZDV PDGH XS RI &DXFDVLDQ :KLWHf DQG $IULFDQ $PHULFDQ %ODFNf \RXWK RQO\ 7KLV UHVWULFWV WKH JHQHUDOL]DWLRQ RI WKHVH ILQGLQJV :KLOH NHHSLQJ LQ PLQG WKH VDPSOH FRQVLVWHG RI RQO\ :KLWH DQG %ODFN \RXWK ILQGLQJ D ODFN RI VXSSRUW IRU D UHODWLRQVKLS EHWZHHQ UDFH DQG RIILFLDO PHDVXUHV RI UDWH RI GHOLQTXHQF\ LV FRQWUDU\ WR WKH PDMRULW\ RI VWXG\fV UHYLHZHG (OOLRW t $JHWRQ (OOLRW +XL]LQJD t $JHWRQ 6KRUW 6PLWK 9LVKHU t -DUMRXUD 7RODQ t /RHEHU +LQGHODQJ +LUVFKL t :HLV f

PAGE 135

7KLV VWXG\fV ILQGLQJV RQ UDFH DUH VLPLODU WR WKH VHOIUHSRUW VWXGLHV ZKLFK JHQHUDOO\ KDYH IRXQG QR GLIIHUHQFH LQ GHOLQTXHQW EHKDYLRU E\ UDFH 6DOWV /LQKROP *RGGDUG t 'XQFDQ f )LQGLQJ WKDW UDFH ZDV QRW D VXSSRUWHG VLJQLILFDQW HIIHFW LQ SUHGLFWLQJ UDWHV RI GHOLQTXHQF\ DPRQJ RXU VDPSOH FRXOG FKDOOHQJH WKH UROH RI UDFH LQ %URQIHQEUHQQHUfV HFR V\VWHPLF PRGHO %DVHG RQ WKH ILQGLQJ RI WKLV VWXG\ UDFH DV UHVWULFWHG WR %ODFN DQG :KLWH HWKQLF JURXSV ZRXOG QRW DSSHDU WR EH D VLJQLILFDQW FKDUDFWHULVWLF RI DQ DGROHVFHQW FRQWULEXWLQJ WR WKH HIIHFWV RQ WKH RXWFRPH RI VRFLDO GHYHORSPHQW 5HODWLRQVKLS RI 3HUVRQDOLW\ DQG )DPLO\ )XQFWLRQLQJWR 5DWH RI -XYHQLOH 'HOLQTXHQF\ 7KH SULPDU\ UHVHDUFK TXHVWLRQ DGGUHVVHG LQ WKH FXUUHQW VWXG\ ZDV f'RHV D UHODWLRQVKLS H[LVW EHWZHHQ DQ DGROHVFHQWfV SHUVRQDOLW\ DQG KLVKHU SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ DFURVV KLVKHU UDWH RI GHOLQTXHQW RIIHQGLQJ ZKLOH KROGLQJ DJH UDFH DQG JHQGHU FRQVWDQW"f 7R DGGUHVV WKLV TXHVWLRQ VHYHUDO LQGHSHQGHQW UHVHDUFK TXHVWLRQV DQG f DQG FRUUHVSRQGLQJ K\SRWKHVHV SHUWDLQLQJ WR DQ LQWHUDFWLRQ EHWZHHQ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ ZHUH GHYHORSHG (DFK RI WKHVH UHVHDUFK TXHVWLRQV DQG FRUUHVSRQGLQJ K\SRWKHVHV WDNHQ DORQH ZHUH GHVLJQHG WR SURYLGH WKH LQIHUHQFH QHHGHG WR DGGUHVV WKH DERYH TXHVWLRQ 'XH WR PXOWLFROLQHDULW\ FRQFHUQV UHVHDUFK TXHVWLRQV DQG ZHUH QRW LQFOXGHG LQ DQDO\VLV 1HYHUWKHOHVV WKH UHPDLQLQJ UHVHDUFK TXHVWLRQV DQG FRUUHVSRQGLQJ K\SRWKHVHV DQG f SURYLGHG VXIILFLHQW LQIHUHQFHV QHHGHG WR DGGUHVV WKH SULPDU\ UHVHDUFK TXHVWLRQ 7KH IROORZLQJ GLVFXVVLRQ ZLOO DGGUHVV UHVHDUFK TXHVWLRQV DQG ILUVW DQG WKHQ UHVHDUFK TXHVWLRQ

PAGE 136

5HVHDUFK TXHVWLRQV t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fV GLVFRYHU\ WKDW ZLWKLQ WKH VDPSOH FROOHFWHG DGDSWDELOLW\ GLG QRW DFKLHYH VLJQLILFDQFH LQ HLWKHU WKH PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ PRGHO RU WKH ELYDULDWH FRPSDULVRQV FRQWLQXHV WR UDLVH GRXEW LQ WKH XWLOLW\ RI WKLV GLPHQVLRQ RI IDPLO\ IXQFWLRQLQJ WR GLVFULPLQDWH OHYHOV RI GHOLQTXHQF\ 7KLV ILQGLQJ LV FRQVLVWHQW ZLWK RWKHUV LQ WKH ILHOG RI GHOLQTXHQF\ UHVHDUFK &R[ +DQVRQ +HQJJHOHU +DHIOH t 5RGLFN +HQJJHOHU 0HOWRQ 6PLWK )RVWHU +DQOH\ t

PAGE 137

+XWFKLQVRQ .URKQ 6WHP 7KRPEHUU\ t -DQJ 7RODQ Df $FFRUGLQJ WR 2OVRQ f LQFRQVLVWHQW ILQGLQJV UHJDUGLQJ WKH )$&(6 DVVHVVPHQW RI DGDSWDELOLW\ PD\ EH DQ DUWLIDFW RI WKH FXUUHQW OLNHUW VFDOH GHVLJQ XWLOL]HG LQ WKH )$&(6,, UDWKHU WKDQ DQ LQGLFDWLRQ RI D WKHRUHWLFDO ZHDNQHVV :KLOH DGDSWDELOLW\ GLG QRW GLVWLQJXLVK DPRQJ WKH OHYHOV RI GHOLQTXHQWV ZLWKLQ WKH FXUUHQW VWXG\ WKH UDQJH RI PHDQ DGDSWDELOLW\ VFRUHV IRXQG WR f GLG VXJJHVW WKDW DOO WKH VXEMHFWV VKRXOG EH FODVVLILHG DV FRPLQJ IURP D PLGUDQJH IDPLO\ W\SH UDWKHU WKDQ D EDODQFHG IDPLO\ W\SH 7KLV LV FRQVLVWHQW ZLWK RWKHUV ZKR KDYH IRXQG DGDSWDELOLW\ WR GLVWLQJXLVK EHWZHHQ QRQGHOLQTXHQWV ZKR JHQHUDOO\ FRPH IURP EDODQFHG IDPLOLHVf DQG GHOLQTXHQWV ZKR JHQHUDOO\ DUH IRXQG WR FRPH IURP PLGUDQJH WR H[WUHPH IDPLO\ W\SHVf HJ %ODVNH %RUGXLQ +HQJJHOHU t 0DQQ *HLVPDU t :RRG 5RGLFN +HQJJHOHU t +DQVRQ f ,Q VXP WKDW DGDSWDELOLW\ ZDV IRXQG WR FRUUHFWO\ LGHQWLI\ DOO GHOLQTXHQW VXEMHFWV VXSSRUWV WKH WKHRUHWLFDO FRQVWUXFW RI DGDSWDELOLW\ +RZHYHU WKH ILQGLQJV RI WKLV VWXG\ QHJDWHV WKH XWLOLW\ RI WKH )$&(6,, DVVHVVPHQW RI DGDSWDELOLW\ DV D IDPLO\ IXQFWLRQLQJ FKDUDFWHULVWLF LQ PXOWLYDULDWH PRGHOV LQYHVWLJDWLQJ OHYHOV RI GHOLQTXHQF\ DPRQJ WKH SRSXODWLRQ RI MXYHQLOH GHOLQTXHQWV 6RFLDO PDODGMXVWPHQWAQG DVRFLDO LQGH[ 7KH FXUUHQW VWXG\fV GLVFRYHU\ WKDW ZLWKLQ WKH VDPSOH FROOHFWHG 60 DQG $, GLG QRW DFKLHYH VLJQLILFDQFH LQ HLWKHU WKH PXOWLQRPLDO ORJLVWLF UHJUHVVLRQ PRGHO RU WKH ELYDULDWH FRPSDULVRQV UDLVHG GRXEW LQ WKH XWLOLW\ RI WKHVH DVSHFWV RI SHUVRQDOLW\ WR GLVFULPLQDWH OHYHOV RI GHOLQTXHQF\ 7KHVH ILQGLQJV DUH FRQVLVWHQW ZLWK D PLQRULW\ LQ WKH ILHOG RI GHOLQTXHQF\ UHVHDUFK ZKR KDYH XWLOL]HG WKH -HVQHVV

PAGE 138

,QYHQWRU\ HJ -HVQHVV E 6DXQGHUV t 'DYLHV 6KDUN t +DQGDO f +RZHYHU WKHVH ILQGLQJV VWDQG LQ GLUHFW FRQWUDVW WR WKH PDMRULW\ RI WKH UHVHDUFKHUV ZKR KDYH XWLOL]HG WKH -HVQHVV ,QYHQWRU\ HJ &RZGHQ 3HWHUVRQ t 3DWFK 'HFNHU 'HPER /D 9RLH 6FKPHLGOHU t :DVKEXUQ *UDKDP -HVQHVV .XQFH t +HPSKLOO 0DUWLQ 0DUWLQ t 0XUSK\ 5REHUWV 6FKPLW] 3LQWR t &DLQ 6DXQGHUV t 'DYLHV 6RUHQVHQ t -RKQVRQ 6WRWW t 2OF]DN f 7KH UDQJH RI PHDQ VFRUHV IRU 60 LH WR f DQG IRU $, LH WR f ZKLOH QRW GLVFULPLQDWLQJ DFURVV OHYHOV RI GHOLQTXHQF\ DPRQJ WKH VDPSOH RI GHOLQTXHQWV DUH ERWK ZLWKLQ WKH UDQJHV FKDUDFWHULVWLF RI \RXWKIXO RIIHQGHUV -HVQHVV f ,Q VXP WKLV VWXG\ VXSSRUWV WKH ILQGLQJV RI PDQ\ UHVHDUFKHUV HJ +RJH $QGUHZV t /HVKLHG *OXHFN t *OXHFN *XHUUD f WKDW JHQHUDO DQWLVRFLDODQWLDXWKRULW\SURFULPLQDO SHUVRQDOLW\ DWWLWXGHV VXFK DV 60 DQG $, DUH FRPPRQO\ IRXQG ZLWKLQ WKH GHOLQTXHQW SRSXODWLRQ +RZHYHU WKH ILQGLQJV GR QRW VXSSRUW WKH -HVQHVV ,QYHQWRU\fV DVVHVVPHQW RI 60 DQG $, DV D GLVFULPLQDWRU WR GLVFULPLQDWH DPRQJ OHYHOV RI \RXWKIXO RIIHQGHUV ZLWKLQ WKH GHOLQTXHQW SRSXODWLRQ 5HVHDUFK TXHVWLRQ 5HVHDUFK TXHVWLRQ DQG WKH FRUUHVSRQGLQJ K\SRWKHVLV LQYHVWLJDWHG D GLIIHUHQW WKHRUHWLFDOO\ DQG HPSLULFDOO\ VXSSRUWHG LQWHUDFWLRQ SHUWDLQLQJ WR WKH UHODWLRQVKLS RI SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ ZLWK UDWH RI MXYHQLOH GHOLQTXHQF\ +\SRWKHVLV WHVWHG WKH LQWHUDFWLRQ WHUP LQFOXGLQJ & 0$ 6XIILFLHQW HYLGHQFH ZDV IRXQG WR GHPRQVWUDWH WKDW

PAGE 139

DQ LQWHUDFWLRQ EHWZHHQ & DQG 0$ DWWDLQHG VWDWLVWLFDO VLJQLILFDQFH LQ 0RGHO ZLWK D FKL VTXDUH S %HFDXVH D VLJQLILFDQW LQWHUDFWLRQ HIIHFW IRU 0$ DQG & ZDV GLVFRYHUHG WKH PDLQ HIIHFWV IRU FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ ZHUH QRW LQYHVWLJDWHG 7KLV ZDV FRQVLVWHQW ZLWK WKH VWDQGDUG SUDFWLFHV RI VWDWLVWLFDO DQDO\VLV VWDWLQJ WKDW LW LV LQDSSURSULDWH WR H[SORUH WKH ORZHU RUGHU PDLQ HIIHFW WHUPV LI WKH KLJKHU RUGHU WHUP LQFOXGLQJ WKHVH YDULDEOHV LV IRXQG WR DWWDLQ VLJQLILFDQFH %RUJ DQG *DOO f 7KH LQWHUDFWLRQ GHPRQVWUDWHG LQ TXHVWLRQ LQGLFDWHV WKDW WKH FRKHVLRQ GLPHQVLRQ RI WKH &LUFXPSOH[ PRGHO DSSHDUV WR EH D UHOHYDQW IDFWRU DVVRFLDWHG ZLWK GHOLQTXHQF\ 7KLV LV FRQVLVWHQW ZLWK PDQ\ RWKHU VWXGLHV LQ WKH ILHOG RI MXYHQLOH GHOLQTXHQW VWXG\ HJ &R[ 'UXFNPDQ *HLVPDU t :RRG +DQVRQ +HQJJHOHU %XUU+DUULV %RUGXLQ t 0F&DOOLXP +HQJJHOHU +HQJJHOHU +DHIOH t 5RGLFN +HQJJHOHU 0HOWRQ 6PLWK )RVWHU +DQOH\ t +XWFKLQVRQ 0D\QDUG t +XOWTXLVW 0F*DKD t )RXUQLHU 5RGLFN +HQJJHOHU t +DQVRQ 7RODQ Df 7KH LQWHUDFWLRQ GHPRQVWUDWHG LQ TXHVWLRQ DOVR UHYHDOHG WKDW WKH 0$ RI WKH -HVQHVV SHUVRQDOLW\ LQYHQWRU\ DSSHDUV WR EH D UHOHYDQW IDFWRU DVVRFLDWHG ZLWK GHOLQTXHQF\ 7KLV WRR LV FRQVLVWHQW ZLWK PDQ\ VWXGLHV LQ WKH ILHOG RI MXYHQLOH GHOLQTXHQW VWXG\ HJ &RZGHQ 3HWHUVRQ t 3DWFK 'HFNHU 'HPER /D 9RLH 6FKPHLGOHU t :DVKEXUQ *UDKDP -HVQHVV .XQFH t +HPSKLOO 0DUWLQ 0DUWLQ t 0XUSK\ 5REHUWV 6FKPLW] 3LQWR t &DLQ 6DXQGHUV t 'DYLHV 6RUHQVHQ t -RKQVRQ 6WRWW t 2OF]DN f 7KH VLJQLILFDQW LQWHUDFWLRQ IRXQG LQ TXHVWLRQ DOVR SURYLGHV VWDWLVWLFDO HYLGHQFH ZKLFK VXJJHVWV WKDW FKDUDFWHULVWLFV RI WKH SHUVRQ DQG WKH HQYLURQPHQW PD\ KDYH D

PAGE 140

UHFLSURFDO LQIOXHQFH RQ WKH RXWFRPHV RI VRFLDO GHYHORSPHQW 7KLV LV LQ OLQH ZLWK WKH ILQGLQJV RI PDQ\ RWKHU UHVHDUFKHUV %URQIHQEUHQQHU %URRNV :KLWHPDQ 1RPXUD *RUGDQ t &RKHQ &LFFKHWWL t 5LFKWHUV 0F/HRG .UXWWVFKQLWW t 'RPIHOG /HPHU t 6SDQLHU 3UREOHPV 3UHYHQWLRQ 5HVHDUFK *URXS 0RIILWW 7RODQ t 0LWFKHOO 6KDZ t %HOO 6PHWV t +DUWXS :DVVHUPDQ 0LOOHU 3LQQHU t -DUDPLOOR f 0RUH VSHFLILFDOO\ ILQGLQJ WKLV VLJQLILFDQW LQWHUDFWLRQ WHUP LPSOLHV WKDW WKH FRPSOH[ LQWHUDFWLRQDO QDWXUH RI DVSHFWV RI WKH DGROHVFHQWfV SHUVRQDOLW\ LH 0$f DQG SHUFHSWLRQ RI IDPLO\ IXQFWLRQ LH FRKHVLRQf VKRXOG EH WDNHQ LQWR DFFRXQW ZKHQ XWLOL]LQJ PXOWLYDULDWH PRGHOV WR VWXG\ OHYHOV RI MXYHQLOH GHOLQTXHQF\ 7KRXJK QRW D UHVHDUFK TXHVWLRQ DVNHG LQ WKH FXUUHQW VWXG\ WKH QH[W TXHVWLRQ UDLVHG FRXOG EH f,I 0$ DQG FRKHVLRQ DUH UHODWHG KRZ GR WKH\ UHODWH"f 8QIRUWXQDWHO\ GXH WR WKH FURVVHFWLRQDO GHVLJQ DQG FRUUHODWLRQDO QDWXUH RI WKH VWDWLVWLFDO SURFHGXUHV XVHG LQ WKH FXUUHQW VWXG\ OLWWOH LQVLJKW LQWR WKH H[DFW QDWXUH RI WKLV UHODWLRQVKLS EHWZHHQ FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ FDQ EH GHGXFHG 6KDZ t 6FRWW 6FKROWH f 7KXV WKH H[DFW QDWXUH RI WKH UHODWLRQVKLS EHWZHHQ FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ UHPDLQV XQNQRZQ DQG RSHQ IRU IXUWKHU UHVHDUFK :KLOH DFNQRZOHGJLQJ WKHVH OLPLWDWLRQV VRPH OLPLWHG LQVLJKW LQWR KRZ WKH LQWHUDFWLRQ RI FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ FDQ EH JDLQHG IURP 7DEOH PDOH VXEMHFWVf DQG 7DEOH IHPDOH VXEMHFWVf 7KHVH WZR WDEOHV SURYLGH WKH SHUFHQWDJHV RI PDOH RU IHPDOH VXEMHFWV LQ HDFK OHYHO RI RIIHQGLQJ DFURVV WKH YDU\LQJ FRPELQDWLRQV RI KLJK DQG ORZ FRKHVLRQ DQG PDQLIHVWDWLRQ DJJUHVVLRQ

PAGE 141

$ IXUWKHU VWDWLVWLFDO OLPLWDWLRQ WR WKH VWUHQJWK RI LQIHUHQFHV PDGH IURP WKH SDWWHUQV VHHQ LQ WKHVH WDEOHV LV WKH VPDOO QXPEHU RI VXEMHFWV SHU FDWHJRU\ &RPSXWDWLRQV ZLWKLQ 7DEOH DQG 7DEOH ZHUH EDVHG RQ WKH IROORZLQJ FULWHULD +LJK RU KHDOWK\ FRKHVLRQ ZDV GHILQHG DV VFRUHV RQ WKH )$&(6,, UHIOHFWLQJ PLG WR EDODQFHG UDQJH D FRKHVLRQ VFRUH RI RU KLJKHUf /RZ RU XQKHDOWK\ FRKHVLRQ ZDV GHILQHG DV VFRUHV RQ WKH )$&(6,, UHIOHFWLQJ WKH H[WUHPH GLVHQJDJHG UDQJH D FRKHVLRQ VFRUH RI RU ORZHUf +LJK RU XQKHDOWK\ PDQLIHVW DJJUHVVLRQ ZDV GHILQHG DV VFRUHV RQ WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ IRXQG WR H[LVW RQH VWDQGDUG GHYLDWLRQ DERYH WKH PHDQ D VFRUH RI RU KLJKHUf /RZ PDQLIHVW DJJUHVVLRQ ZDV GHILQHG DV D VFRUH IRXQG WR H[LVW DW RU EHORZ WKH PHDQ D VFRUH RI RU ORZHUf 7DEOH )UHTXHQF\ 'LVWULEXWLRQ RI 0DOHV E\ 5DWH RI 2IIHQGLQJ $FURVV &RPELQDWLRQV RI &RKHVLRQ /HYHO RI 2IIHQGLQJ /RZ & +LJK 0$ Qbf /RZ & /RZ 0$ Qbf +LJK & +LJK 0$ Qbf +LJK & /RZ 0$ Qbf &KURQLF 2IIHQGHU f f f f 0XOWLSOH 2IIHQGHU f f f f )LUVW 7LPH 2IIHQGHU f f f f 1ROH 7KH YDOXHV UHSUHVHQW WKH SHUFHQWDJHV RI WKH WRWDO QXPEHU RI PDOH VXEMHFWV DFURVV HDFK OHYHO RI RIIHQGLQJ DQG ZLWKLQ WKH VSHFLILF FRPELQDWLRQ RI OHYHOV RI FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ

PAGE 142

7DEOH )UHTXHQF\ 'LVWULEXWLRQ RI )HPDOHV /HYHO RI 2IIHQGLQJ /RZ & +LJK 0$ Qbf /RZ & /RZ 0$ Qbf +LJK & +LJK 0$ Qbf +LJK & /RZ 0$ Qbf &KURQLF 2IIHQGHU f f f f 0XOWLSOH 2IIHQGHU f f f f )LUVW 7LPH 2IIHQGHU f f f f 1RWH 7KH YDOXHV UHSUHVHQW WKH SHUFHQWDJHV RI WKH WRWDO QXPEHU RI IHPDOH VXEMHFWV DFURVV HDFK OHYHO RI RIIHQGLQJ DQG ZLWKLQ WKH VSHFLILF FRPELQDWLRQ RI OHYHOV RI FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ 7DEOH DQG 7DEOH UHYHDO VHYHUDO LQWHUHVWLQJ SDWWHUQV UHODWHG WR WKH LQWHUDFWLRQ RI FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ )LUVW WLPH IHPDOH RIIHQGHUV ZKHUH IRXQG WR KDYH D KLJKHU SHUFHQWDJH RI VXEMHFWV ZLWKLQ WKH PRUH KHDOWK\ UDQJHV RI FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ bf WKDQ ZLWKLQ WKH XQKHDOWK\ UDQJHV RI FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ bf )HPDOH FKURQLF RIIHQGHUV ZKHUH IRXQG WR KDYH D KLJKHU SHUFHQWDJH RI VXEMHFWV ZLWKLQ WKH XQKHDOWK\ UDQJHV RI FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ bf WKDQ ZLWKLQ PRUH KHDOWK\ UDQJHV RI FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ bf 7KH SDWWHUQ ZLWKLQ WKH IHPDOH PXOWLSOH RIIHQGHUV DQG DFURVV WKH PDOH RIIHQGHUV ZDV OHVV FOHDU :KHQ FRPSDULQJ WKH PL[HG OHYHOV RI KHDOWK\ DQG OHVV KHDOWK\ FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ DFURVV WKH OHYHOV RI PDOH RIIHQGLQJ LQ 7DEOH PDOHV KDYH D KLJKHU

PAGE 143

SHUFHQWDJH RI VXEMHFWV LQ WKH KHDOWK\ FRKHVLRQ DQG KLJK PDQLIHVW DJJUHVVLRQ FRPELQDWLRQV WKDQ ZLWKLQ WKH XQKHDOWK\ FRKHVLRQ DQG ORZ PDQLIHVW DJJUHVVLRQ FRPELQDWLRQV 7KH JUHDWHVW GLIIHUHQFH LQ WKLV SDWWHUQ LV VHHQ LQ WKH PDOH FKURQLF RIIHQGHU OHYHO b YHUVHV bf 7KH RSSRVLWH SDWWHUQ LV UHIOHFWHG LQ WKH IHPDOH FKURQLF RIIHQGHUV 7DEOH f ZKLFK GHPRQVWUDWH D KLJKHU SHUFHQWDJH RI VXEMHFWV ZLWKLQ WKH XQKHDOWK\ FRKHVLRQ DQG ORZ PDQLIHVW DJJUHVVLRQ bf WKDQ ZLWKLQ WKH KHDOWK\ FRKHVLRQ DQG KLJK PDQLIHVW DJJUHVVLRQ bf 7KLV PD\ VXJJHVW WKDW HVSHFLDOO\ IRU FKURQLF RIIHQGHUV ZLWK PL[HG OHYHOV RI KHDOWK\ DQG OHVV KHDOWK\ FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ PDOHV DUH PRUH LQIOXHQFH E\ SRRU OHYHOV RI SHUVRQDOLW\ LH 0$f ZKLOH IHPDOHV DUH PRUH LQIOXHQFHG E\ SRRU OHYHOV RI IDPLO\ IXQFWLRQLQJ LH FRKHVLRQf ,W VKRXOG EH FDXWLRQHG DJDLQ WKDW GXH WR WKH OLPLWDWLRQV ZKLFK UHVXOW IRUP WKLV VWXG\fV FURVVHFWLRQDO DQG FRUUHODWLRQDO GHVLJQ FRXSOHG ZLWK WKLV VWXG\fV H[WUHPHO\ VPDOO QXPEHU RI VXEMHFWV ZLWKLQ HDFK FRPSDULVRQ OLWWOH ZHLJKW FDQ EH JLYHQ WR WKHVH SDWWHUQV XQWLO IXUWKHU H[SORUDWLRQ DQG YHULILFDWLRQ E\ IXWXUH UHVHDUFK 'HVSLWH WKH OLPLWDWLRQV ZLWKLQ WKH FXUUHQW VWXG\ WR LQIHU WKH H[DFW QDWXUH RI WKH UHODWLRQVKLS EHWZHHQ FRKHVLRQ DQG PDQLIHVW DJJUHVVLRQ WKH GLVFRYHU\ RI D VLJQLILFDQW LQWHUDFWLRQ WHUP SHUWDLQLQJ WR IDPLO\ IXQFWLRQLQJ DQG SHUVRQDOLW\ SURYLGHG VXSSRUW IRU DQ DQVZHU RI f\HVf WR WKLV VWXG\fV SULPDU\ UHVHDUFK TXHVWLRQ 7KXV VWDWLVWLFDO HYLGHQFH ZDV IRXQG WR VXJJHVW WKHUH PD\ H[LVW D UHODWLRQVKLS EHWZHHQ SHUVRQDOLW\ DQG WKH DGROHVFHQWfV SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ DFURVV KLVKHU UDWH RI RIIHQGLQJ ZKLOH KROGLQJ UHOHYDQW IDFWRUV VXFK DV DJH JHQGHU DQG UDFH FRQVWDQW

PAGE 144

6SHFLILFDOO\ WKH FXUUHQW ILQGLQJV SURYLGH VXSSRUW IRU %URQIHQEUHQQHUfV f WKHRUHWLFDO PRGHO DQG IRU WKH XWLOL]DWLRQ RI DVSHFWV RI ERWK WKH &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ )XQFWLRQLQJ 2OVRQ HW DO f DQG WKH -HVQHVV 3HUVRQDOLW\ ,QYHQWRU\ -HVQHVV f ZKHQ VWXG\LQJ OHYHOV RI MXYHQLOH GHOLQTXHQF\ /LPLWDWLRQV RI 6WXG\ 7KH UHVXOWV DQG LPSOLFDWLRQV GUDZQ IURP WKLV VWXG\ PXVW EH DVVHVVHG ZLWKLQ WKH FRQWH[W RI LWV OLPLWDWLRQV 7KH IROORZLQJ DUH FRQVLGHUHG WR EH OLPLWDWLRQV RI WKH VWXG\ 7KH VHOIUHSRUW PHWKRGV RI DVVHVVPHQW XVHG DUH YXOQHUDEOH WR UHVSRQGHQW ELDVHV 0F&XEELQ t 7KRPSVRQ f 6HOIUHSRUW PHWKRGV UDLVH FRQFHUQV RYHU WKH KRQHVW\ RI WKH UHVSRQGHQW LQ DQVZHULQJ WKH TXHVWLRQV DQG DGGUHVVLQJ HDFK TXHVWLRQ UDWKHU WKDQ MXVW PDUNLQJ DQVZHUV &KULVWPDV 7UHHLQJf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t :LOVRQ f

PAGE 145

7KLV PHWKRG ZDV FKRVHQ EDVHG RQ WKH WKHRUHWLFDO MXVWLILFDWLRQV RI WKH JURXQGLQJ WKHRU\ IRU WKLV VWXG\ %URQIHQEUHQQHU f 7KH PHWKRG XWLOL]HG LQ WKH SUHVHQW VWXG\ WR DVVHVV RQHfV UDWH RI GHOLQTXHQF\ FRXOG OLPLW WKH JHQHUDOL]DELOLW\ RI WKH ILQGLQJV IRU VRPH W\SHV RI GHOLQTXHQWV 7KH PHWKRG XVHG ZDV WKH FDOFXODWLRQ RI RIILFLDOO\ UHSRUWHG FKDUJHV 7KHUH LV D FRQWLQXLQJ GHEDWH RI ZKHWKHU RIILFLDO UHFRUGV VKRXOG EH XVHG RU VHOIUHSRUW PHDVXUHV LQ PHDVXULQJ GHOLQTXHQF\ 5RVHQ 7RODQ t /RHEHU
PAGE 146

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f 7KH FXUUHQW VWXG\ XWLOL]HG D FURVVVHFWLRQDO GHVLJQ UDWKHU WKDQ D ORQJLWXGLQDO GHVLJQ $FFRUGLQJ WR 6FKROWH f DQG 6KDZ DQG 6FRWW f IRUPV RI UHJUHVVLRQ DQDO\VLV RQ FURVVVHFWLRQDO GDWD SURYLGH OLWWOH LQIRUPDWLRQ DERXW HIIHFWV DQG PLQLPDO HPSLULFDO GHPRQVWUDWLRQ RI WKH GLUHFWLRQ RI HIIHFWV 7KHUHIRUH ZKLOH WKH UHODWLRQVKLSV EHWZHHQ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ PD\ EH HVWDEOLVKHG WKH XVH RI ORQJLWXGLQDO GDWD LV QHHGHG WR DVVHVV WKH QDWXUH DQG FRQFOXVLRQV UHJDUGLQJ FDXVDO RU GLUHFWLRQDO HIIHFWV RI WKH YDULDEOHV H[SORUHG

PAGE 147

3UDFWLFDO ,PSOLFDWLRQV RI WKH 5HVXOWV 7KH WKHRUHWLFDO LPSOLFDWLRQV RI WKH ILQGLQJV WR WKLV VWXG\fV JURXQGLQJ WKHRULHV SRVLWHG E\ %URQIHQEUHQQHU f 2OVRQ 6SUHQNOH DQG 5XVVHOO f DQG -HVQHVV f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f DQG DVSHFWV RI IDPLO\ IXQFWLRQLQJ HJ FRKHVLRQf EXW DOVR SURYLGHG VXSSRUW IRU WKH KROLVWLF HFR V\VWHPLF DSSURDFK WR DVVHVVLQJ DQG XQGHUVWDQGLQJ UDWHV RI MXYHQLOH GHOLQTXHQF\ 7KXV WKH FXUUHQW VWXG\f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

PAGE 148

6DE DQG $XVWLQ f LQFUHDVH WKH DELOLW\ WR WDUJHW WKRVH MXYHQLOHV ZKR DUH PRVW LQ QHHG RI OLPLWHG WUHDWPHQW UHVRXUFHV )DUULQJWRQ 1LDUKRV t 5RXWK f )XUWKHU WKHVH ILQGLQJV FRXSOHG ZLWK WKH PXOWLV\VWHPLF DSSURDFK PD\ EHWWHU GLUHFW XV WR LGHQWLI\LQJ ZKDW DUHDV WR EH DGGUHVVHG LQ D WUHDWPHQW VWUDWHJ\ GHDOLQJ ZLWK WKH MXYHQLOH GHOLQTXHQW FOLHQWHOH +HQJJHOHU /RHEHU 0XOYH\ $UWKXU t 5HSSXFFL 7RODQ t 0LWFKHOO f 7KH ILQGLQJV KDYH LPSOLFDWLRQV IRU FRXQVHORUV LQ WUDLQLQJ DQG LQ SUDFWLFH ZKR QHHG WR NQRZ WKH FRXQVHOLQJ QHHGV RI MXYHQLOH GHOLQTXHQWV /RHEHU f EHOLHYHV WKHUH H[LVWV D VWURQJ QHHG WR LPSURYH WUDLQLQJ IRU SURIHVVLRQDOV DQG SDUDSURIHVVLRQDOV ZRUNLQJ ZLWK WKLV SRSXODWLRQ 2WKHU WKDQ FOLQLFDO H[SHULHQFH PDQ\ WKHUDSLVWV DQG WKHUDSLVWV LQ WUDLQLQJ KDYH QRW UHFHLYHG DGHTXDWH SUHSDUDWLRQ WR XQGHUVWDQG DQG ZRUN ZLWK WKH GHOLQTXHQW SRSXODWLRQ DQG WKHLU IDPLOLHV /LGGOH f 7KH ILQGLQJV RI WKLV VWXG\ ZRXOG VXSSRUW WKH DGRSWLRQ RI D PRUH KROLVWLF HFRV\VWHPLF VWDQFH LQFOXGLQJ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ ZKHQ FRQVLGHULQJ DSSURDFKHV WR FRXQVHOLQJ DQG XQGHUVWDQGLQJ WKH MXYHQLOH GHOLQTXHQW SRSXODWLRQ )RU H[DPSOH +HQJJHOHU f XWLOL]LQJ WKH ZRUN RI %URQIHQEUHQQHU f KDV GHYHORSHG DQG HPSLULFDOO\ VXSSRUWHG DQ HFRV\VWHPLFDOO\ EDVHG PXOWLV\VWHPLF WKHUDSHXWLF DSSURDFK WR ZRUNLQJ ZLWK WKH GHOLQTXHQW DQG VHYHUHO\ GHOLQTXHQW SRSXODWLRQV DQG WKHLU IDPLOLHV +HQJJHOHU f 7KLV LV D SURPLVLQJ DSSURDFK WR WUHDWLQJ DQG XQGHUVWDQGLQJ WKH GHOLQTXHQW SRSXODWLRQ &KDPEHUODLQ t 5RVLFN\ .D]GLQ /LGGOH 7RODQ t /RHEHU f

PAGE 149

7KRXJK WKH FXUUHQW VWXG\fV ILQGLQJV PD\ FKDOOHQJH WKLV DSSURDFK WR LQFOXGH PRUH LQ GHSWK DVSHFWV RI SHUVRQDOLW\ LQ DVVHVVPHQW DQG WUHDWPHQW WKLV DSSURDFK VWLOO JDLQV VXSSRUW E\ WKLV VWXG\fV ILQGLQJV 7KXV JUHDWHU FRQILGHQFH FDQ EH SODFHG LQ VXFK HFRV\VWHPLF PRGHOV ZKLFK KDYH WKH SRWHQWLDO WR JXLGH HIIRUWV WR LPSURYH WUDLQLQJ DQG SUDFWLFH ZLWK WKH GLIILFXOW MXYHQLOH GHOLQTXHQW SRSXODWLRQ 6RFLDO 3ROLF\ 7KH GHVLJQ RI VRFLDO SROLF\ LV JUHDWO\ LQIOXHQFHG E\ IXQGDPHQWDO DVVXPSWLRQV RU FRQFOXVLRQV DERXW WKH QDWXUH RI ERWK VRFLDO SUREOHPV DQG DGROHVFHQWV *DUEDULQR f 7KH ILQGLQJV RI WKLV VWXG\ VKHG LQVLJKW LQWR WKH IDFWRUV UHODWHG WR WKH UDWH RI MXYHQLOH GHOLQTXHQF\ DQG VXSSRUW WKH XVH RI D KROLVWLF HFRV\VWHPLF DSSURDFK 7KXV WKLV VWXG\ SURYLGHV JURXQGV IRU SROLFLHV ZKLFK VXSSRUW IXQGLQJ UHVHDUFK DQG SURJUDPV WKDW XWLOL]H WKH HFRV\VWHPLF DSSURDFK DQG WDNH LQWR FRQVLGHUDWLRQ DJH JHQGHU DQG WKH UHODWLRQVKLS RI SHUVRQDOLW\ HJ PDQLIHVW DJJUHVVLRQf DQG IDPLO\ IXQFWLRQLQJ HJ FRKHVLRQf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

PAGE 150

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t +DUWXS f 2U D ORQJLWXGLQDO VWXG\ PD\ EULQJ WR OLJKW LI DQG KRZ WKH LQWHUDFWLRQ RI WKHVH FRQVWUXFWV PD\ LQIOXHQFH PXOWLSOH SDWKZD\V OHDGLQJ WR WKH GHYHORSPHQW RI YDU\LQJ OHYHOV RI GHOLQTXHQF\ +HQU\ 0RIILWW 5RELQV (DUOV t 6LOYLD 0RIILWW 7RODQ t /RHEHU f $FFRUGLQJ WR WKH HFRV\VWHPLF PRGHO RI KXPDQ GHYHORSPHQW %URQIHQEUHQQHU f WKH UHODWLRQVKLSV EHWZHHQ WKH FKDUDFWHULVWLFV RI

PAGE 151

WKH FKLOG DQG WKH HQYLURQPHQW DUH UHFLSURFDO RYHU WLPH 0DQ\ UHVHDUFKHUV VXSSRUW WKH QHHG IRU D GHVLJQHG ORQJLWXGLQDO VWXG\ WR FDSWXUH WKH G\QDPLF QDWXUH LQ WKH WUDQVDFWLRQV EHWZHHQ FKDUDFWHULVWLFV RI WKH FKLOG DQG WKH HQYLURQPHQW UDWKHU WKDQ FURVVHFWLRQDO VWXGLHV ZKLFK WDNH D fVQDS VKRWf RI WKH VWRU\ ZLWK D IRFXV RQ RQH PRPHQW LQ WLPH %URQIHQEUHQQHU 0RIILWW 6DPHURII 6FKROWH 6KDZ t 6FRWW 7RODQ t 7KRPDV 7RODQ t /RHEHU f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

PAGE 152

$QRWKHU H[DPSOH ZRXOG EH WKH H[SORUDWLRQ RI WKH LQWHUDFWLRQV RI SHUVRQDOLW\ GLVRUGHUV RI WKH DGROHVFHQW VXFK DV &RQGXFW 'LVRUGHU ZLWK IDPLO\ IXQFWLRQLQJ XSRQ WKH UDWH RI GHOLQTXHQF\ 7KH UHVHDUFK RQ WKH HWLRORJ\ DQG UHODWLRQV RI &RQGXFW 'LVRUGHU DQG IDPLO\ IXQFWLRQLQJ KDV EHHQ IRXQG WR EH YHU\ VLPLODU WR WKDW IRXQG LQ GHOLQTXHQF\ &RLH t -DFREV 2IIRUG 3DULV 5XWWHU t *LOOHU f 5HJDUGLQJ D GLIIHUHQW DVSHFW RI IDPLO\ IXQFWLRQLQJ IXUWKHU VWXGLHV H[SORULQJ LQWHUDFWLRQV RI SHUVRQDOLW\ DQG SDUHQWLQJ XSRQ WKH UDWHV RI GHOLQTXHQW RIIHQGLQJ DUH QHHGHG %URRNV :KLWHPDQ 1RPXUD *RUGRQ t &RKHQ 0F/HRG .UXWWVFKQLWW t 'RPIHOG 0RIILWW 3DWWHUVRQ t %DQN 7RODQ t 7KRPDV :DVVHUPDQ 0LOOHU 3LQQHU t -DUDPLOOR f 6LPLODUO\ WKRXJK WKLV VWXG\ IRFXVHG RQ WKH DGROHVFHQWfV SHUVRQDOLW\ DQG SHUFHSWLRQ RI IDPLO\ IXQFWLRQLQJ VWXGLHV H[SORULQJ IDPLO\ IXQFWLRQLQJ DQG WKH SDUHQWfV SHUVRQDOLW\ XSRQ WKH OHYHO RI MXYHQLOH RIIHQGLQJ LQ WKH RIIVSULQJ DUH QHHGHG 3KDUHV DQG &RPS£V f KDYH IRXQG VLJQLILFDQW ILQGLQJV LQ WKLV DUHD RI UHVHDUFK 6XFK IXWXUH VWXGLHV ZRXOG DGG WR WKH XQGHUVWDQGLQJ RI WKH FRPSOH[LW\ LQ WKH HFRV\VWHPLF XQGHUVWDQGLQJ RI GHOLQTXHQF\ GHYHORSPHQW 6HYHUDO UHFRPPHQGDWLRQV FDQ EH PDGH WR VWUHQJWKHQ RU IXUWKHU WKH UHSOLFDWLRQ HIIRUWV RI WKH FXUUHQW VWXG\ 7KHVH LQFOXGH $f 5DWKHU WKDQ RQH DVVHVVPHQW PHDVXUH RI HDFK FRQVWUXFW DVVHVVHG LW LV UHFRPPHQGHG PXOWLSOH PHDVXUHV EH XVHG WR HOLPLQDWH D PRQRRSHUDWLRQDO ELDV )RU

PAGE 153

H[DPSOH WKRXJK WKH FXUUHQW ILQGLQJV GLG QRW ILQG DGDSWDELOLW\ WR DWWDLQ VLJQLILFDQFH ZLWK WKH )$&(6,, DVVHVVPHQW PHDVXUH IXWXUH VWXGLHV PD\ ZDQW WR DOVR LQFOXGH WKH XWLOL]DWLRQ RI WKH QHZ )$&(6 ,9 7KLV DVVHVVPHQW PHDVXUH PD\ FRQWULEXWH WR WKH DELOLW\ RI PXOWLSOH PHDVXUHV RI IDPLO\ IXQFWLRQLQJ WR XQFRYHU GLIIHUHQW UHOHYDQW DVSHFWV RI WKH LQWHUDFWLRQ EHWZHHQ IDPLO\ DGDSWDELOLW\ DQG SHUVRQDOLW\ DFURVV UDWHV RI GHOLQTXHQF\ %f )XWXUH VWXGLHV VKRXOG PDNH XVH RI D ORQJLWXGLQDO GHVLJQ WR DWWDLQ VWURQJHU GLUHFWLRQDO LQIHUHQFHV &f ,W LV UHFRPPHQGHG WKDW JUHDWHU JHQHUDOL]DWLRQ RI ILQGLQJV ZRXOG EH JDLQHG WKURXJK LQFOXGLQJ D PRUH GLYHUVH VDPSOH RI HWKQLF JURXSV $QG ILQDOO\ 'f OHVV YDOLGLW\ WKUHDWV WR IXWXUH UHVHDUFK ZRXOG EH IRXQG IROORZLQJ WKH XVH RI UDQGRP VHOHFWLRQ 7KH IROORZLQJ ZLOO EH DQ LQWURGXFWLRQ WR 3RZHUVfV f 0HWD 7KHRU\ RI +LHUDUFKLFDO &\EHUQHWLF )HHGEDFN /RRSV 3RZHUVfV PHWD WKHRU\ f LV SUHVHQWHG WR SURYLGH D WKHRUHWLFDO PRGHO ZKLFK PD\ KHOS WR JXLGH IXWXUH UHVHDUFK DQG RIIHU DQ H[SODQDWLRQ RI WKH SURFHVVHV DW ZRUN EHWZHHQ SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ RQ WKH UDWH RI MXYHQLOH GHOLQTXHQW RIIHQGLQJ %URQIHQEUHQQHUfV f 6RFLDO (FRORJLFDO PRGHO RI KXPDQ GHYHORSPHQW SURYLGHV D IXQGDPHQWDO WKHRUHWLFDO MXVWLILFDWLRQ IRU LQYHVWLJDWLQJ WKH UHODWLRQVKLS EHWZHHQ SHUVRQDOLW\ LH VHOIf DQG IDPLO\ IXQFWLRQLQJ LH V\VWHPf DFURVV OHYHOV RI GHOLQTXHQW

PAGE 154

RIIHQGLQJ +RZHYHU RWKHU WKDQ VWUHVVLQJ WKH FRQWULEXWLRQV WR WKH DGROHVFHQWfV VRFLDO GHYHORSPHQW RI WKH UHFLSURFDO UHODWLRQVKLS EHWZHHQ FKDUDFWHULVWLFV RI WKH DGROHVFHQW HJ SHUVRQDOLW\f DQG WKH HQYLURQPHQW HJ IDPLO\ IXQFWLRQLQJf %URQIHQEUHQQHUfV WKHRU\ RIIHUV OLWWOH H[SODQDWLRQ RI KRZ WKLV UHODWLRQVKLS FXOPLQDWHV LQWR DFWV RI GHOLQTXHQF\ 3RZHUVfV f PHWD WKHRU\ RI +LHUDUFKLFDO &\EHUQHWLF )HHGEDFN ORRSV FDQ EH VHHQ DV D PRGHO ZKLFK KHOSV WR LOOXVWUDWH KRZ WKH UHFLSURFDO LQWHUDFWLRQ RI VHOI DQG V\VWHP PD\ LQIOXHQFH YDULDWLRQV LQ GHOLQTXHQW DFWV 7KH IROORZLQJ GLVFXVVLRQ ZLOO SURYLGH DQ H[SODQDWLRQ RI KRZ 3RZHUVfV f PHWD WKHRU\ DV GHVFULEHG E\ &DUYHU DQG 6FKHLHU f UHODWHV WR VHOI IDPLO\ V\VWHP DQG WKH GHFLVLRQV WR DFW 7KLV VHFWLRQ ZLOO FORVH ZLWK WKLV PRGHOfV SRVVLEOH XVH LQ LOOXVWUDWLQJ KRZ WKH H[SHFWHG UHODWLRQVKLS EHWZHHQ VHOI DQG V\VWHP PD\ LQIOXHQFH WKH UDWH RI RQHfV GHOLQTXHQW DFWV 6XJJHVWLRQV IRU IXWXUH UHVHDUFK DUH LQFOXGHG 7R EHJLQ DW WKH OHYHO RI WKH VHOI &DUYHU DQG 6FKHLHU f VXJJHVW SHRSOH IRUP EHKDYLRUDO LQWHQWLRQV )RUPLQJ DQ LQWHQWLRQ UHIOHFWV D VXEWOH PHQWDO DOJHEUD LQWHJUDWLQJ VHYHUDO NLQGV RI LQIRUPDWLRQ ZKLFK WKHQ UHVXOWV LQ D SUREDELOLW\ RI GRLQJ WKH EHKDYLRU ,I WKH SUREDELOLW\ LV KLJK HQRXJK DQ LQWHQWLRQ LV IRUPHG DQG WKH EHKDYLRU LV FDUULHG RXW )RUPLQJ DQ LQWHQWLRQ UHIHUV WR WKH SURFHVV RI HVWDEOLVKLQJ D SDUWLFXODU JRDO IRU RQHfV IXWXUH DFWLRQ 2QFH D JRDO KDV EHHQ VHW DQG DQ LQWHQWLRQ IRUPHG WKH DFFXUDF\ RI WKH EHKDYLRU FKRVHQ WR PDWFK WKH LQWHQWLRQ DQG WKH DFWXDO FDUU\LQJ RXW RI WKH DFWLRQ LV JXLGHG E\ IHHGEDFN FRQWURO 3RZHUV f 7KH EDVLF XQLW RI RSHUDWLRQ LQ IHHGEDFN FRQWURO LV WKH IHHGEDFN ORRS 7KLV LV D VHOIn UHJXODWLRQ FRQWURO V\VWHP )RU VHOIUHJXODWLRQ WR RFFXU ILUVW RQH PXVW KDYH D YDOXH WR VHOI 0

PAGE 155

UHJXODWH WRZDUGVf§ $ UHIHUHQFH YDOXH JRDO RU VWDQGDUG RI FRPSDULVRQ IRU RQHfV EHKDYLRU 7KH VHFRQG WKLQJ QHHGHG IRU IHHGEDFN FRQWURO LV D SHUFHSWLRQ RI RQHfV SUHVHQW EHKDYLRU DQG LWV HIIHFWV 7KLUG VHOIUHJXODWLRQ E\ IHHGEDFN FRQWURO UHTXLUHV D SHULRGLF FRPSDULVRQ RI WKHVH SHUFHSWLRQV ZLWK RQHfV UHIHUHQFH YDOXH WKURXJK D PHFKDQLVP WHUPHG D fFRPSDUDWRUff ,I RQHfV EHKDYLRU LV HIILFDFLRXV LH KDYLQJ WKH GHVLUHG HIIHFWf WKH FRPSDULVRQ VKRZV QR GLVFUHSDQF\ DQG WKH\ FRQWLQXH WR DFW DV EHIRUH ,I KRZHYHU RQHfV EHKDYLRU GRHV QRW HYRNH ZKDW RQH LQWHQGV D FRUUHFWLYH SURFHVV NLFNV LQ WR FUHDWH D FKDQJH LQ EHKDYLRU GHVLJQHG WR UHGXFH WKH GLVFUHSDQF\ EHWZHHQ LQWHQWLRQV DQG UHVXOWV &DUYHU DQG 6FKHLHU f H[SODLQ WKDW IHHGEDFN LV XVHG LQ GHVFULELQJ VXFK D V\VWHP EHFDXVH WKH FRQVHTXHQFH RI DQ DFWLRQ LV fIHG EDFNf LQWR WKH V\VWHP LQ WKH IRUP RI SHUFHSWLRQV ZKLFK DUH FKHFNHG DJDLQVW WKH UHIHUHQFH YDOXH LQ RUGHU WR GHWHUPLQH ZKDW VXEVHTXHQW DFWLRQ LV QHFHVVDU\ 7KH IHHGEDFN ORRS FRQVWLWXWHV D FRQWURO V\VWHP EHFDXVH LWV RYHUDOO HIIHFW LV WR fFRQWUROf EHKDYLRU VR WKDW DOO DFWLRQ HOLFLWV WKH UHVXOWV GHVLUHG 7KH ZRUG FRQWURO DOVR UHIOHFWV WKH LGHD WKDW HDFK HYHQW LQ WKH IHHGEDFN ORRS GHSHQGV RQ WKH RXWFRPH RI D SUHYLRXV SURFHVV 7KXV HDFK SULRU SURFHVV fFRQWUROVf ZKDW KDSSHQV QH[W 3RZHUV f RIIHUV WKH YLHZ WKDW IHHGEDFN ORRSV FDQ EH LQWHUFRQQHFWHG LQWR D KLHUDUFK\ RI IHHGEDFN ORRSV 7KXV SHRSOH KDYH ERWK KLJKOHYHO VXSHURUGLQDWHf DQG ORZ OHYHO VXERUGLQDWHf JRDOVUHIHUHQFH YDOXHV $FFRUGLQJ WR 3RZHUV WKH UHIHUHQFH YDOXH RI WKH ORZHUOHYHO IHHGEDFN ORRS LQ D KLHUDUFKLFDO V\VWHP LV SURYLGHG DV WKH EHKDYLRUDO RXWSXW RI D V\VWHP KLJKHU LQ WKH KLHUDUFK\ +LJKHURUGHU V\VWHPV GRQfW fEHKDYHf E\ GRLQJ SK\VLFDO DFWVf§UDWKHU WKH\ fEHKDYHf E\ SURYLGLQJ JXLGHV IRU DFWLRQ WR WKH V\VWHPV EHORZ WKHP RQ WKH KLHUDUFK\ 2QO\ WKH ORZHVW ORRSV DFWXDOO\ SURGXFH SK\VLFDO DFWV E\ FRQWUROOLQJ WKH

PAGE 156

PRYHPHQW RI PXVFOH JURXSV 5RVHQEDXP f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t 6FKHLHU f 3RZHUV ODEHOHG WKH KLJKHVW OHYHO LQ KLV WKHRU\ V\VWHP FRQFHSW FRQWURO 6\VWHP FRQFHSWV DUH DEVWUDFW TXDOLWLHV VXFK DV RQHfV JHQHUDOL]HG VHQVH RI VHOI DQGRU JHQHUDOL]HG VHQVH RI UHODWLRQVKLSV RU JURXS HJ IDPLO\f 7KXV LQ WKLV KLHUDUFKLFDO IHHGEDFN ORRS V\VWHP RQH V\VWHP DFWV E\ SURYLGLQJ UHIHUHQFH YDOXHV WR WKH V\VWHP GLUHFWO\ EHORZ LW WKHUHE\ JHQHUDWLQJ SXUSRVHIXO DFWLRQ 7KH IROORZLQJ UHSUHVHQWV KRZ 3RZHUV f PHWD WKHRU\ RI KLHUDUFKLFDO IHHGEDFN ORRSV FDQ EH ODLG RYHU WKH SUHVHQW VWXG\fV FRQVWUXFWV IRXQG WR EH VLJQLILFDQW LQ WKH LQWHUDFWLRQ RI VHOI DQG IDPLO\ V\VWHP 5HJDUGLQJ WKH VHOI 7KH V\VWHP FRQFHSW OHYHO RI WKH SHUFHSWXDO KLHUDUFK\ LV H[HPSOLILHG LQ WKH -HVQHVV PRGHO RI SHUVRQDOLW\ WKH SULQFLSOH OHYHO RI WKH SHUFHSWXDO KLHUDUFK\ LV H[HPSOLILHG LQ WKH 0$ GLPHQVLRQ RI WKH -HVQHVV

PAGE 157

LQYHQWRU\ 7KH SURJUDP OHYHO LV H[HPSOLILHG LQ WKH DGROHVFHQWfV DFWLRQV ERWK ZLWKLQ WKH IDPLO\ DQG LQ XOWLPDWHO\ FKRVHQ GHOLQTXHQW DFWV 5HJDUGLQJ WKH IDPLO\ V\VWHP 7KH V\VWHP FRQFHSW OHYHO RI WKH SHUFHSWXDO KLHUDUFK\ LV H[HPSOLILHG E\ 2OVRQ HW DOfV f PRGHO RI IDPLO\ IXQFWLRQLQJ WKH SULQFLSOH OHYHO LV H[HPSOLILHG E\ WKH IDPLO\ FRKHVLRQ GLPHQVLRQ WKH SURJUDP OHYHO LV H[HPSOLILHG E\ WKH IDPLO\fV DFWLRQV ZKLFK HIIHFW WKH GHYHORSPHQW RI WKH DGROHVFHQW 6\VWHP &RQFHSW /HYHO 3ULQFLSOH /HYHO 3URJUDP /HYHO 6HOI -HVQHVV 0RGHO RI 3HUVRQDOLW\ 6\VWHP ,QWHUQDO 3HUFHSWXDO 5HSUHVHQWDWLRQ RI )DPLO\ )XQFWLRQLQJ 6HOI 0$ 6\VWHP ,QWHUQDO 3HUFHSWXDO 5HSUHVHQWDWLRQ RI )DPLO\ &RKHVLRQ rr 1RWH $ SRVVLEOH LQWHUDFWLRQ PD\ H[LVW RYHU WLPH EHWZHHQ WKH VHOI DQG V\VWHP SULQFLSOH OHYHO ([HFXWLRQ RI WKH GHFLVLRQ IRU WKH DGROHVFHQW WR FRPPLW RU QRW FRPPLW D GHOLQTXHQW DFW )LJXUH 3RZHUV f PHWD WKHRU\ RI KLHUDUFKLFDO IHHGEDFN ORRSV DSSOLHG WR SHUVRQDOLW\ IDPLO\ IXQFWLRQLQJ DQG GHOLQTXHQF\

PAGE 158

$V %URQIHQEUHQQHUfV f HFRORJLFDO V\VWHPV PRGHO RI GHYHORSPHQW VXJJHVWV WKURXJKRXW WKH OLIH FRXUVH KXPDQ GHYHORSPHQW WDNHV SODFH WKURXJK SURFHVVHV RI SURJUHVVLYHO\ PRUH FRPSOH[ UHFLSURFDO LQWHUDFWLRQV EHWZHHQ DQ DFWLYH HYROYLQJ ELRSV\FKRORJLFDO KXPDQ RUJDQLVP DQG WKH SHUVRQV REMHFWV DQG V\PEROV LQ LWV LPPHGLDWH HQYLURQPHQW 7KH PRVW SRZHUIXO RI WKHVH IDFWRUV HVSHFLDOO\ LQ WKH HDUOLHU \HDUV DFFRUGLQJ WR %URQIHQEUHQQHU f DUH WKH SHUFHSWLRQV RI SUR[LPDO SURFHVVHV VXFK DV RQHfV WUDQVDFWLRQV ZLWK WKHLU IDPLO\ 7KXV WKH DGROHVFHQWfV SHUFHSWLRQV DQG WKH IDPLO\ PHPEHUfV SHUFHSWLRQV RI WKH WUDQVDFWLRQV WDNLQJ SODFH DPRQJ WKHP DW WKH SURJUDP OHYHO RI 3RZHUV PRGHO DUH PDMRU IRUFHV HIIHFWLQJ WKH FRXUVH RI ERWK WKH DGROHVFHQWfV GHYHORSPHQW DQG WKH IDPLO\fV GHYHORSPHQW 7KH DGROHVFHQWfV FKRLFHV DUH SDUWLFXODUO\ HIIHFWHG E\ WKH UHFLSURFDO LQWHUDFWLRQV ZKLFK WDNH SODFH EHWZHHQ IDFWRUV RI WKH DGROHVFHQWfV SHUVRQDOLW\ HJ 0$f DQG IDFWRUV RI WKH DGROHVFHQWfV LQWHUQDO UHSUHVHQWDWLRQV RI IDPLO\ IXQFWLRQLQJ HJ FRKHVLRQf %URQIHQEUHQQHU f 7KHVH LQWHUQDO LQWHUDFWLRQV IRU WKH DGROHVFHQW FRXOG EH GHVFULEHG DV H[HPSOLILFDWLRQV RI IHHGEDFN FRQWURO DV GHVFULEHG E\ 3RZHUV f 3RZHUV f PHWD WKHRU\ RI KLHUDUFKLFDO IHHGEDFN ORRSV FDQ QRZ VKHG OLJKW RQ WKH SRVVLEOH SURFHVVHV LQ ZKLFK WKH DGROHVFHQW LV HQJDJHG DV VKH GHFLGHV WR FRPPLW RU QRW FRPPLW GHOLQTXHQW DFWV &DYHU DQG 6FKHLHU f QRWHG WKDW SHRSOH RIWHQ WU\ WR UHFRQFLOH VHYHUDO GLIIHUHQW UHIHUHQFH YDOXHV DW RQFH ZLWKLQ WKH VDPH OHYHO RI WKH KLHUDUFK\ ,Q VRPH FDVHV WKHVH YDOXHV DUH FRPSDWLEOH ZLWK RQH DQRWKHU DQG LQ RWKHUV WKH\ DUH QRW 3XUVXLQJ RQH YDOXH FDQ FUHDWH GLVFUHSDQFLHV IRU WKH RWKHU (PPRQ t .LQJ f 7KH VHOIUHJXODWLRQ FRQVLGHUV WKLV GLVFUHSDQF\ DV WKH VRXUFH RI FRQIOLFW DQG DV WKH LPSHWXV IRU

PAGE 159

IXWXUH DFWLRQV FKRVHQ 7KXV 3RZHUV PRGHO ZRXOG VXJJHVW WKH DGROHVFHQWfV UHIHUHQFH YDOXHV IURP ERWK KLVKHU SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ FRXOG PXWXDOO\ FRQWULEXWH RU LQWHUDFW WR LPSDFW WKH DGROHVFHQWfV XOWLPDWH GHFLVLRQ WR FRPPLW RU QRW FRPPLW GHOLQTXHQW DFWV )ROORZLQJ WKH WKHRUHWLFDO JXLGDQFH RI %URQIHQEUHQQHU f DQG WKH PHWD WKHRU\ RI 3RZHUV VHYHUDO K\SRWKHVHV FRXOG EH GHYHORSHG )RU H[DPSOH RQH PD\ K\SRWKHVL]H WKDW LI DFURVV WLPH WKH DGROHVFHQWfV UHIHUHQFH YDOXHV DW WKH SULQFLSOH OHYHO DUH FRQJUXHQW DQG VKRZ D SUHIHUHQFH IRU UHVSHFWLQJ VRFLDO RUGHU WKHQ RQH ZRXOG H[SHFW WKDW WKH DGROHVFHQW ZLOO QRW FRQWLQXH D GHOLQTXHQW SDWWHUQ RI EHKDYLRU ,I WKH DGROHVFHQWfV UHIHUHQFH YDOXHV DUH LQFRQJUXHQW LH LQ FRQIOLFWf RQH PD\ H[SHFW WKH DGROHVFHQW WR HVFDODWH WR WKH PXOWLSOH RIIHQGHU SDWWHUQ $QG ILQDOO\ LI WKH DGROHVFHQWfV UHIHUHQFH YDOXHV DUH FRQJUXHQW DQG VKRZ D GLVUHJDUG RU GLVUHVSHFW IRU VRFLDO RUGHU RQH PD\ H[SHFW WKH DGROHVFHQW WR GHYHORS D FKURQLF RIIHQGHU SDWWHUQ 7KH WUHQGV VHHQ LQ 7DEOH UHJDUGLQJ IHPDOH GHOLQTXHQW SDWWHUQV SURYLGHV SDUWLDO VXSSRUW IRU IHPDOH FKURQLF RIIHQGHUV KDYLQJ FRQJUXHQW XQKHDOWK\ IDFWRUV RI SHUVRQDOLW\ LH 0$f DQG IDPLO\ IXQFWLRQLQJ LH FRKHVLRQf DQG IHPDOH ILUVW WLPH RIIHQGHUV KDYLQJ FRQJUXHQW KHDOWK IDFWRUV RI SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ )XWXUH ORQJLWXGLQDO UHVHDUFK ZRXOG EH QHHGHG WR H[SORUH WKH YDOLGLW\ RI WKHVH ILQGLQJV K\SRWKHVHV DQG DSSOLFDWLRQV RI WKH WKHRULHV SUHVHQWHG ,Q FORVLQJ 3RZHUVfV f PHWD WKHRU\ RI KLHUDUFKLFDO F\EHUQHWLF IHHGEDFN ORRSV SURYLGHV D PRGHO ZKLFK KHOSV WR LOOXVWUDWH KRZ WKH UHFLSURFDO LQWHUDFWLRQ RI VHOI DQG V\VWHP PD\ LQIOXHQFH YDULDWLRQV LQ UDWHV RI GHOLQTXHQW DFWV 6HYHUDO LQVLJKWV WKDW ZHUH SURSRVHG DV D UHVXOW RI DSSO\LQJ 3RZHUV PHWD WKHRU\ ZKHUH KLJKOLJKWHG IRU IXWXUH

PAGE 160

UHVHDUFK 7KHVH HQWDLOHG VXJJHVWLRQV WR H[SORUH WKH SRVVLEOH ZD\V WKDW YDU\LQJ FRPELQDWLRQV RI SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ PD\ LPSDFW WKH OHYHO RI GHOLQTXHQF\ RYHU WLPH &KDSWHU 6XPPDU\ 7KLV VWXG\ ZDV JXLGHG E\ D WUDQVDFWLRQDO DQG PXOWLOHYHO FRQFHSWXDOL]DWLRQ RI GHOLQTXHQF\ ULVN DQG SUHVXPHG WKDW WKH OHYHO RI GHYHORSPHQW RI DQWLVRFLDO EHKDYLRUV ZRXOG EH GHSHQGHQW RQ WKH LQWHUDFWLRQ RI LQGLYLGXDO DQG FRQWH[WXDO FKDUDFWHULVWLFV %URQIUHQEUHQQHU f :KLOH DGYDQFHV KDYH EHHQ PDGH WR VXEVWDQWLDWH WKH XWLOLW\ RI HFRV\VWHPLF PXOWLYDULDWH PRGHOV WR UHVHDUFK GHOLQTXHQF\ \HW WR EH IXOO\ H[SORUHG ZDV WKH H[LVWHQFH RI D SRVVLEOH UHODWLRQVKLS EHWZHHQ IDFHWV RI WKH DGROHVFHQWfV SHUVRQDOLW\ DQG SHUFHSWLRQV RI IDPLO\ IXQFWLRQLQJ DFURVV OHYHOV RI GHOLQTXHQF\ 7KH UHVXOWV RI WKH FXUUHQW VWXG\ SURYLGHG VWDWLVWLFDO HYLGHQFH ZKLFK DGGV WR WKH PHULW RI LQFOXGLQJ ZLWKLQ HFR V\VWHPLF PXOWLYDULDWH PRGHOV RI GHOLQTXHQF\ UDWH WKH YDULDEOHV RI DJH JHQGHU DQG WKH LQWHUDFWLRQ RI IDFHWV RI WKH DGROHVFHQWfV SHUVRQDOLW\ DQG IDPLO\ IXQFWLRQLQJ 7KLV FKDSWHU VXPPDUL]HG WKH SXUSRVH RI WKH VWXG\ LQFOXGLQJ D GHVFULSWLRQ RI WKH UHVHDUFK PHWKRGRORJ\ DQG VDPSOH $OVR SURYLGHG ZDV D VXPPDU\ HYDOXDWLRQ RI WKH K\SRWKHVHV D GLVFXVVLRQ RI WKH UHVXOWV UHODWHG WR WKH SULPDU\ UHVHDUFK TXHVWLRQV OLPLWDWLRQV RI WKH VWXG\ DQG WKHRUHWLFDO DQG SUDFWLFDO LPSOLFDWLRQ RI WKH ILQGLQJV )LQDOO\ UHFRPPHQGDWLRQV IRU IXWXUH UHVHDUFK ZHUH RIIHUHG DQG DQ LQWURGXFWLRQ WR 3RZHUVfV f 0HWD 7KHRU\ ZDV SURYLGHG 7KH LQWHQW RI WKLV VWXG\ ZDV WR IXUWKHU WKH ILHOG RI MXYHQLOH GHOLQTXHQF\ DQG VKHG OLJKW RQWR WKH SRVVLEOH ZD\V IXWXUH HIIRUWV PD\ KHOS WR FRPEDW WKH FRPSOH[ DQG FRVWO\ SUREOHP RI MXYHQLOH GHOLQTXHQF\

PAGE 161

$33(1',; $ -(61(66 3(5621$/,7< ,19(1725< 48(67,21 6+((7

PAGE 162

7+( -(61(66 ,19(1725< )2504 E\ &DUL ) -HVQHVV 3K' 7KLV ERRNOHW FRQWDLQV VWDWHPHQWV 5HDG HDFK RQH ,I !RX DJUHH ZLWK WKH VWDWHPHQW PDUN 7UXH &' ,I QRW PDUN )DOVH )f 1KNHDOO WKH PDUNV RQ WKH VHSDUDWH DQVZHU VKHHW GR QRW PDNH PDUNV R WKLV ERRNOHW 7KHUH DUH QR ULW RU ZURQJ DQVZHUV ,W LV RQO\ KRYY\RX IHG DERXW WKH VWDWHPHQW WKDW LV LQSRUWDQ/ PDUN HLWKHU WKH7RU )IRU HDFK UXUULEHU HYHQ m‘ WKRLAL \RX PD\ QRW DOZD\V IHHO SHUIHFWO\ VXUH DERXW WKH VWDWHPHQW PXOWSKHAOWRV\VMHYV ,1& 1LDJDUD )DOOV %RXOHYDUG 1RUWK 7RQDZDQGD 1< DQG &9HUOHD %RXOHYDUG 6XLWH 7RURQWR 2QWDULR 0+3 )D[ &RS\ULJKW 3OWUOLVKHG E\ 0UOWL+HDOWK 6\VWHPV ,QF 1LDJSUD )DOOV %RXOHYDUG 1RUWK 7FQDZDQGL 1< DQG 2YHUOHD %RXOHYDUG 6XLWH 7RUFQWD 2QWDULR 0+3

PAGE 163

$33(1',; % )$0,/< $'$37$%,/,7< $1' &2+(6,21 (9$/8$7,21 6&$/(6 )$&(6f

PAGE 164

)$&(6 ,, )DPLO\ 9HUVLRQ 'DYLG + 2OVRQ -R\FH 3RUWQHU t 5LFKDUG %HOO 'LUHFWLRQV 3OHDVH LQGLFDWH KRZ PXFK HDFK RI WKHVH VWDWHPHQWV GHVFULEH \RXU IDPLO\ QRZ 'HFLGH ZKHWKHU LW LV f $/0267 1(9(5 f 21&( ,1 $:+,/( f 620(7,0(6 f )5(48(17/< RU f $/0267 $/:$<6 WUXH RI \RXU IDPLO\ ,QGLFDWH WR WKH OHIW RI WKH LWHP WKH DSSURSULDWH QXPEHU $OPRVW 1HYHU 2QFH LQ $ZKLOH 6RPHWLPHV )UHTXHQWO\ $OPRVW $OZD\V )DPLO\ PHPEHUV DUH VXSSRUWLYH RI HDFK RWKHU GXULQJ GLIILFXOW WLPHV ,Q RXU IDPLO\ LW LV HDV\ IRU HYHU\RQH WR H[SUHVV KLVKHU RSLQLRQ ,W LV HDVLHU WR GLVFXVV SUREOHPV ZLWK SHRSOH RXWVLGH WKH IDPLO\ WKDQ ZLWK RWKHU IDPLO\ PHPEHUV (DFK IDPLO\ PHPEHU KDV LQSXW UHJDUGLQJ PDMRU IDPLO\ GHFLVLRQV 2XU IDPLO\ JDWKHUV WRJHWKHU LQ WKH VDPH URRP &KLOGUHQ KDYH D VD\ LQ WKHLU GLVFLSOLQH 2XU IDPLO\ GRHV WKLQJV WRJHWKHU )DPLO\ PHPEHUV GLVFXVV SUREOHPV DQG IHHO JRRG DERXW WKH VROXWLRQV ,Q RXU IDPLO\ HYHU\RQH JHWV KLVKHU RZQ ZD\ :H VKLIW KRXVHKROG UHVSRQVLELOLWLHV IURP SHUVRQ WR SHUVRQ )DPLO\ PHPEHUV NQRZ HDFK RWKHUnV FORVH IULHQGV ,W LV KDUG WR NQRZ ZKDW WKH UXOHV DUH LQ RXU IDPLO\ )DPLO\ PHPEHUV FRQVXOW RWKHU IDPLO\ PHPEHUV RQ SHUVRQDO GHFLVLRQV

PAGE 165

)DPLO\ PHPEHUV VD\ ZKDW WKH\ ZDQW :H KDYH GLIILFXOW\ WKLQNLQJ RI WKLQJV WR GR DV D IDPLO\ ,Q VROYLQJ SUREOHPV WKH FKLOGUHQn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nV IULHQGV )DPLO\ PHPEHUV DUH DIUDLG WR VD\ ZKDW LV RQ WKHLU PLQGV )DPLO\ PHPEHUV SDLU XS UDWKHU WKDQ GR WKLQJV DV D WRWDO IDPLO\ )DPLO\ PHPEHUV VKDUH LQWHUHVWV DQG KREELHV ZLWK HDFK RWKHU

PAGE 166

$33(1',; & '(02*5$3+,& ,1)250$7,21 3DUWLFLSDQW FRGH ILUVW DQG ODVW LQLWLDOf &RXQW\ 'RHV \RXU IDPLO\ UHFHLYH SXEOLF DVVLVWDQFH $)'&$9HOIDUHf"
PAGE 167

6723 +(5( 5(0$,1'(5 :,// %( ),//(' 287 %< 2)),&( 3(56211(/ /LVW RI RIIHQVHV 'DWH RIIHQVH &RPPLWWHG $JH DW WLPH RI RIIHQVH &RPPLWWHG DORQH &RPPLWWHG ZLWK RWKHUV

PAGE 168

$33(1',; /,1($5 6&25,1* $1' ,17(535(7$7,21 )25 )$&(6,,

PAGE 169

)$&(6 ,, /LQHDU 6FRULQJ t ,QWHUSUHWDWLRQ $GDSWDELOLW\ 9HU\ )OH[LEOH )OH[LEOH 6WUXFWXUHG 5LJLG )DPLO\ 7\SH %DODQFHG 0RGHUDWHO\ %DODQFHG 0LG5DQJH ([WUHPH &RKHVLRQ 9R\ &RQQHFWHG &RQQHFWHG 6HSDUDWHG 'LVHQJDJHG

PAGE 170

$33(1',; ( -(61(66 3(5621$/,7< ,19(1725 $16:(5 6+((7

PAGE 171

8L -(61(66 ,19(1725< $16:(5 6+((7 )$7+(5n6 2&&83$7,21 2. 75$'( B ',5(&7,216 5OWHNDQ ,} 8P QQ-QU 7 7U_ f I )O_ D 6R QZmQ WH DDFOL TDDGOQQ ,Q O[ ERQ0QO fm rf 0 +LQW 0LD Q\PEQU \RQ PDUW N ,ED XUQD DL ,ND QXPEQU DO 0P TQDDWODQ \DD DD DQQUDUOQJ 7 f§758( ) f§)$/6( 5RZ 6FRUH 5RZ 6FRUH 7 4 7 ) R ) 7 ) ’ 7 4 ) D 7 ) 7 ) 4 ) 4 7 ’ ) D ) 7 ’ ) D ’ ’ n ’ >@ D 4 * ’ D D ’ 4 J * ’ 4 * ’ ’ 4 ’ D * ’ ’ 4 D D ’ 4 ’ ’ * QR 4 D Q D 7 ) 7 ) 7 ) 7 ) 7 ) 7 ) 7 ) 7 ) 7 ) 7 ) ' * ’ ' 4 * 4 4 LQ 4 D 4 * ’ * ’ 4 ’ 4 * D 4 D ’ 4 ’ ’ D 4 4 4 ’ 4 D D 4 * * ’ D 4 4 * 4 LL D D 4 D D 4 * ’ D 4 4 D 4 4 ) 7 ) 7 ) 7 ) ) 7 ) 7 ) 7 ) 7 ) W ) 4 * ' ’ ’ D D * ’ * * 4 * D 4 D 4 ’ 4 ’ * ’ ’ 4 4 4 ’ 4 D 4 4 D ’ 4 D 4 * D 4 4 4 D D 4 D 60r 60 92 ,PP $rL $0$ :G 6$ 5HS 'DQ 27+(5 $$ $3 &): &)& 03 1$ 1; VH D

PAGE 172

$33(1',; ) -(61(66 3(5621$/,7< ,19(1725< 352),/( 6+((7

PAGE 173

-(61(66 ,19(1725< 352),/( 6+((7 0 I $Tr 2DW} 7DDWDG 2I.WU ,QIRUPDWLRQ 21 R 60 92 ,PP $Q $O 0$ :G 6$ 5DS 'DQ rr}} ,1'(; 27+LO 5RZ 6FRUH 76FRUH -HVQHVV ,QYHQWRU\ *RVVLFRWLRQ 6\VWHP 0 $$ $3 &I0 &)& 03 1$ 1; 6( &O 2RVVLFRWLRQL 1RWWV 60 92 $O 0$ :G 6$ 5DS B $62&,$/ 'DQ ,1'(; 27+(5 76FRUD 5DZ 6F RUD

PAGE 174

7$%/( 2) :(,*+76 )25 &20387$7,21 2) $62&,$/ ,1'(; WR :HLJKWV IRU %R\V WR :HLJKWV IRU *LUOV WR 6FRQ 5HS 6$ :G 0$ $ $X 92 60n 60 6FRQ 60 60f 92 $X $ 0$ :G 6$ 'HQ 6FRQ W ’ V E D % % WR Q  % 8 H 6 ,W %  % H 6 % -/ $GG :HLJKWV $GG :HLJKWV 60 92 $X 60f $ 0$ :G 6$ 5HS ER\Vf RU 'HQ JLUOVf BB 6XP UB $62&,$/ ,1'(; f r 7UDQVIHU WR RWKHU VLGH RI SURILOH W E

PAGE 175

5()(5(1&(6 $FKHQEDFN 7 0 t (GHOEURRN & f 0DQXDO IRU WKH FKLOG EHKDYLRU FKHFN OLVW DQG UHYLVHG FKLOG EHKDYLRU SURILOH %XUOLQJWRQ 97 4XHHQV &LW\ 3ULQWHUV $OH[DQGHU ) f 'HIHQVLYH DQG VXSSRUWLYH FRPPXQLFDWLRQ LQ QRUPDO DQG GHYLDQW IDPLOLHV -RXUQDO RI &RQVXOWDQWV DQG &OLQLFDO 3V\FKRORJ\ $OH[DQGHU ) :DOGURQ + % %DUWRQ & t 0DV & + f 7KH PLQLPL]LQJ RI EODPLQJ DWWULEXWLRQV DQG EHKDYLRUV LQ GHOLQTXHQW IDPLOLHV -RXUQDO RI &RQVXOWLQJ DQG &OLQLFDO 3V\FKRORJ\ $PHULNDQHU 0 0RQNV :ROIH 3 t 7KRPDV 6 f )DPLO\ LQWHUDFWLRQ DQG LQGLYLGXDO SV\FKRORJLFDO KHDOWK -RXUQDO RI &RXQVHOLQJ DQG 'HYHORSPHQWA f $QGUHZV $ %RQWD t +RJH 5 f &ODVVLILFDWLRQ HIIHFWLYH UHKDELOLWDWLRQ 5HGLVFRYHULQJ SV\FKRORJ\ &ULPLQDO -XVWLFH DQG %HKDYLRU $UEXWKQRW *RUGRQ $ t -XUNRYLF f 3HUVRQDOLW\ ,Q + & 4XD\ (Gf +DQGERRN RI MXYHQLOH GHOLQTXHQF\ SS f 1HZ
PAGE 176

%HDYHUV : 5 f 3V\FKRWKHUDS\ DQG JURZWK $7DPLO\V\VWHPVAHUVSHHWLYH 1HZ
PAGE 177

%URQIHQEUHQQHU 8 f 7KH &DPEULGJH 0$ +DUYDUG 8QLYHUVLW\ 3UHVV %URQIHQEUHQQHU 8 f ,QWHUDFWLQJ V\VWHPV LQ KXPDQ GHYHORSPHQW UHVHDUFK SDUDGLJPV 3UHVHQW DQG IXWXUH ,Q 1 %ROJHU $ &DVSL 'RZQH\ t 0 0RRUHKRXVH (GVf 3HUVRQV LQ FRQWH[W 'HYHORSPHQWDO SURFHVVHV SS f &DPEULGJH &DPEULGJH 8QLYHUVLW\ 3UHVV %URQIHQEUHQQHU 8 f (FRORJLFDO PRGHOV RI KXPDQ GHYHORSPHQW ,Q 7 +XVHQ t 7 1 3RVWOHWKZDLWH (GVf 7KH LQWHUQDWLRQDO HQF\FORSHGLD RI HGXFDWLRQ UG HGf SS f 1HZ
PAGE 178

&DQWHU 5 f 6H[ GLIIHUHQFHV LQ VHOIUHSRUW GHOLQTXHQF\ &ULPLQRORJ\ &DUYHU 6 t 6FKHLHU 0 ) (GVf f 3HUVSHFWLYHV RQ SHUVRQDOLW\ 0$ $OO\Q DQG %DFRQ &DVSL $ t %HUQ f 3HUVRQDOLW\ FRQWLQXLW\ DQG FKDQJH DFURVV WKH OLIH FRXUVH ,Q / 3HUYLQ (Gf +DQGERRN RI SHUVRQDOLW\ 7KHRU\ DQG UHVHDUFK 1HZ
PAGE 179

&RQGXFW 3UREOHPV 3UHYHQWLRQ 5HVHDUFK *URXS f $ GHYHORSPHQWDO DQG FOLQLFDO PRGHO IRU WKH SUHYHQWLRQ RI FRQGXFW GLVRUGHU 7KH )$67 75$&. SURJUDP 'HYHORSPHQWDO 3V\FKRSDWKRORJ\ &RZGHQ ( 3HWHUVRQ : 0 t 3DWFK $ 5 f 7KH 0&, YHUVH WKH -HVQHVV ,QYHQWRU\ DV D VFUHHQLQJ DQG FODVVLILFDWLRQ LQVWUXPHQW DW D MXYHQLOH FRUUHFWLRQDO &R[ 5 3 f $Q H[SORUDWLRQ RI WKH GHPRJUDSKLF DQG VRFLDO FRUUHODWHV RI FULPLQDO EHKDYLRU DPRQJ DGROHVFHQW PDOHV -RXPDO RI $GROHVFHQW +HDOWK &UDLJ 0 0 t *OLFN 6 f 7HQ \HDUV H[SHULHQFH ZLWK WKH *OLFN 6RFLDO 3UHGLFWLRQ 7DEOH &ULPH DQG 'HOLQTXHQF\ &UDLJ 0 0 t *OLFN 6 f 6FKRRO EHKDYLRU UHODWHG WR ODWHU GHOLQTXHQF\ DQG QRQGHOLQTXHQF\ &ULPLQROJLFD 'DGGV 0 f )DPLOLHV DQG WKH RULJLQV RI FKLOG EHKDYLRU SUREOHPV )DPLO\ 'HFNHU f 7KH HIIHFWV RI GLVVDGLVIDFWLRQ ZLWK SULRU PDWHUQDO DIIHFWLRQ FXUUHQW QHHG IRU JURXS LQFOXVLRQ DQG DQWLVRFLDO IXQFWLRQLQJ LQ PDOH DGROHVFHQWV 8QSXEOLVKHG GRFWRUDO GLVVHUWDWLRQ 8QLYHUVLW\ RI 0LVVRXUL&ROXPELD 'HPER 5 /D 9RLH / 6FKPHLGOHU t :DVKEXUQ 0 f 7KH QDWXUH DQG FRUUHODWHV RI SV\FKRORJLFDOHPRWLRQDO IXQFWLRQLQJ DPRQJ D VDPSOH RI GHWDLQHG \RXWK $ f 'RDQH $ f )DPLO\ LQWHUDFWLRQ DQG FRPPXQLFDWLRQ GHYLDQFH LQ GLVWXUEHG DQG QRUPDO IDPLOLHV $ UHYLHZ RI UHVHDUFK )DPLO\ 3URFHVV 'RGJH $ f 6RFLDO FRJQLWLRQ DQG FKLOGUHQfV DJJUHVVLRQ EHKDYLRU &KLOG 'HYHORSPHQW 'RGJH $ t )UDPH & 0 f 6RFLDO FRJQLWLYH ELDVHV DQG GHILFLWV LQ DJJUHVVLYH ER\V &KLOG 'HYHORSPHQW 'RGJH $ t 6RPEHUJ 5 f +RVWLOH DWWULEXWLRQDO ELDVHV DPRQJ DJJUHVVLYH ER\V DUH H[DFHUEDWHG XQGHU FRQGLWLRQV RI WKUHDW WR VHOI 'UXFNPDQ $ f $ IDPLO\ RULHQWHG SROLF\ IRU MXYHQLOH VWDWXV RIIHQGHUV -RXUQDO RI 0DUULDJH DQG WKH )DPLO\

PAGE 180

'XVWHU 7 f &ULPH \RXWK XQHPSOR\PHQW DQG WKH EODFN XUEDQ XQGHUFODVV &ULPH t 'HOLQTXHQF\ (GPDQ 6 2 &ROH $ t +RZDUG *6 f &RQYHUJHQW DQG GHVFULPLQDQW 9DOLGLW\ RI )$&(6,,, )DPLO\ DGDSWDELOLW\ DQG FRKHVLRQ )DPLO\3URFHVV (OOLRW 6 f
PAGE 181

)DUUHOO 0 3 t %DUQHV 0 f )DPLO\ V\VWHPV DQG VRFLDO VXSSRUW $ WHVW RI WKH HIIHFWV RI FRKHVLRQ DQG DGDSWDELOLW\ RQ WKH IXQFWLRQLQJ RI SDUHQWV DQG DGROHVFHQWV -RXUQDO RI 0DUULDJH DQG 7KH )DPLO\ )DUUHOO 0 3 %DUQHV 0 t %DQHUMHH 6 f )DPLO\ FRKHVLRQ DV D EXIIHU DJDLQVW WKH HIIHFWV RI SUREOHPGULQNLQJ IDWKHUV RQ SV\FKRORJLFDO GLVWUHVV GHYLDQW EHKDYLRU DQG KHDY\ GULQNLQJ LQ DGROHVFHQWV -RXPD/R/+HDOWO/DQG 6RFLD/%HKDYLRU )DUULQJWRQ 3 f 7KH IDPLO\ EDFNJURXQG RI DJJUHVVLYH \RXWK ,Q / $ +HUVRY 0 %HUJHU t 6KDIIHU (GVf $JJUHVVLRQ DQG DQWLVRFLDO EHKDYLRU LQ FKLOGKRRG DQG DGROHVFHQFH SS f 2[IRUG 3HUJDPRQ 3UHVV )DUULQJWRQ 3 f ,PSOLFDWLRQV RI FULPLQDO FDUHHU UHVHDUFK IRU WKH SUHYHQWLRQ RI RIIHQGLQJ -RXUQDO RI $GROHVFHQFH )DUULQJWRQ 3 f ,QWHUDFWLRQ EHWZHHQ LQGLYLGXDO DQG FRQWH[WXDO IDFWRUV LQ WKH GHYHORSPHQW RI RIIHQGLQJ ,Q 5 6LOEHUHLVHQ t ( 7RGW (GVf $GROHVFHQFH LQ FRQWH[W SSf 1HZ
PAGE 182

)HGHUDO %XUHDX RI ,QYHVWLJDWLRQ f 8QLIRUP FULPHB UHSRUWV O :DVKLQJWRQ '& $XWKRU )HGHUDO %XUHDX RI ,QYHVWLJDWLRQ f 8QLIRUP FULPH UHSRUWV :DVKLQJWRQ '& $XWKRU )HOGPDQ 5 $ &DSOLQJHU 7 ( t :RGDUVNL 6 6 f 7KH 6W /RXLV FRQXQGUXP 3URVRFLDO DQG DQWLVRFLDO ER\V WRJHWKHU 8QSXEOLVKHG 0DQXVFULSW )HOGPDQ 5 $ &DSOLQJHU 7 ( t :RGDUVNL 6 6 f 7KH 6W /RXLV FRQXQGUXP 7KH HIIHFWLYH WUHDWPHQW RI DQWLVRFLDO \RXWKV (QJOHZRRG &OLIIV 13UHQWLFH +DOO )RQVHFD $ & t
PAGE 183

*ROGVWHLQ $ 3 f 'HOLQTXHQWV RQ GHOLQTXHQF\ &KDPSDLJQ ,/ 5HVHDUFK 3UHVV *RUPDQ6PLWK 7RODQ 3+ =HOROOL $ t +XHVPDQQ /5 f 7KH UHODWLRQ RI IDPLO\ IXQFWLRQLQJ WR YLROHQFH DPRQJ LQQHUFLW\ PLQRULW\ \RXWKV -RXPD/RI )DPLO\ 3V\FKRORJ\ *RWWIUHGVRQ 0 5 t +LUVFKL 7 f $ JHQHUD/WKHRU\ RI FULPH 6WDQIRUG &$ 6WDQIRUG 8QLYHUVLW\ 3UHVV *RWWIUHGVRQ 0 5 t +LUFKL 7 f $JJUHVVLRQ ,Q 7 +LUFKL t 05 *RWWIUHGVRQ (GVf 7KHBJHQHUDOLW\BReGHYLDQFH SS f 1HZ %UXQVZLFN 17UDQVDFWLRQ 3XEOLVKHUV *RYH : 5 t &UXWFKILHOG 5 f 7KH IDPLO\ DQG MXYHQLOH GHOLQTXHQF\ *UDKDP 6 $ f 3UHGLFWLYH DQG FRQFXUUHQW YDOLGLW\ RI WKH -HVQHVV ,QYHQWRU\ $VRFLDO ,QGH[ :KHQ GRHV D GHOLQTXHQW EHFRPH D GHOLQTXHQW" -RXUQDO RI *URXS IRU WKH $GYDQFHPHQW RI 3V\FKLDWU\ f FRQIOLFW 1HZ
PAGE 184

+DQVRQ &/ +HQJJHOHU 6: +DHIOH :) t 5RGLFN -' f 'HPRJUDSKLF LQGLYLGXDO DQG IDPLO\ UHODWLRQVKLS FRUUHODWHV RI VHULRXV DQG UHSHDWHG FULPH DPRQJ DGROHVFHQWV DQG WKHLU VLEOLQJV f +DXVHU 6 3RZHUV 6 1RDP -DFREVRQ $ :HLVV % t )ROODQVKHH f )DPLOLDO FRQWH[W RI DGROHVFHQW HJR GHYHORSPHQW &KLOG 'HYHORSPHQW +DZNLQV t /DP 7 f 7HDFKHU SUDFWLFHV VRFLDO GHYHORSPHQW DQG GHOLQTXHQF\ ,Q %XUFKDUG t 6 1 %XUFKDUG (GVf 3UHYHQWLRQ RI GHOLQTXHQW EHKDYLRU SS f 1HZEXU\ 3DUN &$6DJH +DZNLQV t &DWDODQR 5 ) f VRFLDOGHYHORSPHQW VWUDWHJ\ 6HDWWOH :$ 'HYHORSPHQWDO 5HVHDUFK DQG 3URJUDPV +D]HOULJJ 0 &RRSHU + 0 t %RUGXLQ & 0 f (YDOXDWLQJ WKH HIIHFWLYHQHVV RI IDPLO\ WKHUDSLHV $Q LQWHJUDWLYH UHYLHZ DQG DQDO\VLV 3V\FKRORJLFDO %XOOHWLQ +HDYHQ 3 & / f 3HUVRQDOLW\ DQG VHOIUHSRUWHG GHOLQTXHQF\ $ ORQJLWXGLQDO DQDO\VLV -RXUQDO RI &KLOG 3V\FKRORJ\ DQG 3V\FKLDWU\ f +HQJJHOHU 6 : f 'HOLQTXHQF\ LQ DGROHVFHQFH 1HZEXUJ 3DUN &$ 6DJH +HQJJHOHU 6 : f 0XOWLGLPHQVLRQDO DQG FDXVDO PRGHOV RI GHOLQTXHQW EHKDYLRU ,Q 5 &RKHQ t $ 6LHJHO (GVf &RQWH[W DQG GHYHORSPHQW SS f +HQJJHOHU 6 : f 7UHDWPHQW RI YLROHQW MXYHQLOH RIIHQGHUV:H KDYH WKH NQRZOHGJH &RPPHQW RQ *RUPDQ6PLWK HW DO f f f +HQJJHOHU 6 :f %XUU+DUULV $ :f %RUGXLQ & 0f t 0F&DOOXP f 8VH RI WKH IDPLO\ DGDSWDELOLW\ DQG FRKHVLRQ HYDOXDWLRQ VFDOHV LQ FKLOG FOLQLFDO UHVHDUFK -RQPD/RI $EQRUPDO &KLOG 3V\FKRORJ\ +HQJJHOHU 6 : (GZDUGV t %RUGXLQ & 0 f 7KH IDPLO\ UHODWLRQV RI IHPDOH MXYHQLOH GHOLQTXHQWV -RXUQDO RI $EQRUPDO &KLOG 3V\FKRORJ\ +HQJJHOHU 6: 0HOWRQ *% 6PLWK /$ )RVWHU 6/ +DQOH\ -+ t +XWFKLQVRQ &0 f $VVHVVLQJ YLROHQW RIIHQGLQJ LQ VHULRXV MXYHQLOH RIIHQGHUV -RXUQDO RI $EQRUPDO &KLOG 3V\FKRORJ\ f

PAGE 185

+HQU\ % 0RIILWW 7 ( 5RELQV / 1 (DUOV ) t 6LOYLD 3 $ f (DUO\ IDPLO\ SUHGLFWRUV RI FKLOG DQG DGROHVFHQW DQWLVRFLDO EHKDYLRU :KR DUH WKH PRWKHUV RI GHOLQTXHQWV" &ULPLQDO %HKDYLRU DQG 0HQWDO +HDOWK +HVV 5' t +DQGHO f IDPLO\ OLIH &KLFDJR 8QLYHUVLW\ RI &KLFDJR 3UHVV $ SV\FKRORJLFDO DSSURDFKWR +HWKHULQJWRQ ( 0 6WRZLH 5 t 5LGEHUJ ( + f 3DWWHUQV RI IDPLO\ LQWHUDFWLRQ DQG FKLOG UHDULQJ DWWLWXGHV UHODWHG WR WKUHH GLPHQVLRQV RI MXYHQLOH GHOLQTXHQF\ -RXUQDO RI $EQRUPDO 3V\FKRORJ\ +LJJLQV 3 & t $OEUHFKW */ f +HOOILUH DQG GHOLQTXHQF\ UHYLVLWHG +LQGHODQJ 0 +LUVFKL 7 t :HLV f &RUUHODWHV RI GHOLQTXHQF\ 7KH LOOXVLRQ RI GLVFUHSDQF\ EHWZHHQ VHOIUHSRUW DQG RIILFLDO PHDVXUHV $PHULFDQ +LQGHODQJ 0 +LUVFKL 7 t :HLV f 0HDVXULQJ GHOLQTXHQF\ %HYHUO\ +LOOV 6DJH 3XEOLFDWLRQV +LUVFKL 7 f &DXVHV QI GHOLQTXHQF\ %HUNHOH\ &$ 8QLYHUVLW\ RI &DOLIRUQLD 3UHVV +RJH 5 $QGUHZV $ t /HVFKLHG $ : f 7HVW RI WKUHH K\SRWKHVHV UHJDUGLQJ WKH SUHGLFWRUV RI GHOLQTXHQF\ -RXUQDO RI $EQRUPDO &KLOG f +RJH 5 $QGUHZV $ t /HVFKLHG $ : f ,QYHVWLJDWLRQ RI YDULDEOH DVVRFLDWHG ZLWK SUREDWLRQ DQG FXVWRG\ GLVSRVLWLRQV LQ D VDPSOH RI MXYHQLOHV 8$ f +XHVPDQQ / 5 f $Q LQIRUPDWLRQSURFHVVLQJ PRGHO IUR WKH GHYHORSPHQW RI DJJUHVVLRQ $JJUHVVLYH %HKDYLRU +XHVPDQQ / 5 t (URQ / f &RJQLWLYH SURFHVVHV DQG WKH SHUVLVWHQFH RI DJJUHVVLYH EHKDYLRU $JJUHVVLYH %HKDYLRU -DIIH 3 /HVFKLHG $ : 6DV / t $XVWLQ : f $ PRGHO IRU WKH SURYLVLRQ RI FOLQLFDO DVVHVVPHQWV DQG VHUYLFHV EURNHUDJH IRU \RXQJ RIIHQGHUV 7KH /RQGRQ )DPLO\ &RXUW &OLQLF &DQDGLDQ 3V\FKRORJ\

PAGE 186

-HQVHQ&DPEHOO / *UD]LDQR : t +DLU ( & f 3HUVRQDOLW\ DQG UHODWLRQVKLSV DV PRGHUDWRUV RI LQWHUSHUVRQDO FRQIOLFW LQ DGROHVFHQFH 0HUULO/3DOPHU 4XDUWHUO\M f -HVQHVV & ) f 7KH -HVQHVV ,QYHQWRU\ 'HYHORSPHQW DQG YDOLGDWLRQ &DOLIRUQLD
PAGE 187

.DSODQ + % f 'HYLDQ/KHKDYLRWLQMOHIHQVH R/tHOI 1HZ
PAGE 188

/DXE -+ t 6DPSVRQ 5f 8QHPSOR\PHQW PDULWDO GLVFRUG DQG GHYLDQW EHKDYLRU 7KH ORQJWHUP FRUUHODWHV RI FKLOGKRRG PLVEHKDYLRU ,Q 7 +LUFKL t 05 *RWWIUHGVRQ (GVf 7KH JHQHUDOLW\ RI GHYLDQFH SS f 1HZ %UXQVZLFN 17UDQVDFWLRQ /DXULWVHQ / f 6LEOLQJ UHVHPEODQFH LQ -XYHQLOH GHOLQTXHQF\ )LQGLQJV IURP WKH QDWLRQDO \RXWK VXUYH\ &ULPLQRORJ\ f /H %ODQF 0 f )DPLO\ G\QDPLFV DGROHVFHQW GHOLQTXHQF\ DQG DGXOW FULPLQDOLW\ 3V\FKLDWU\ /H %ODQF 0 0FGXII 3 &KDUOHERLV 3 *DJQRQ / 6 t 7UHPEOD\ 5 ( f 6RFLDO DQG SV\FKRORJLFDO FRQVHTXHQFHV DW WHDUV ROG RI DQ HDUOLHU RQVHW RI VHOIUHSRUWHG GHOLQTXHQF\ 3V\FKLDWU\ B /H %ODQF 0 t 2XLPHW 0 f 7KH LQWHJUDWLYH WKHRU\ RI MXYHQLOH GHOLQTXHQW EHKDYLRU ,QWHUQDO VWUXFWXUH DQG 9DOLGDWLRQ $GYDQFHV LQ &ULPLQRORJLFDO 7KHRU\ /HH 5 ( t .ORSIHU & f &RXQVHORUV DQG MXYHQLOH GHOLQTXHQWV 7RZDUGV D FRPSUHKHQVLYH WUHDWPHQW DSSURDFK 3HUVRQQHO *XLGDQFH -RXUQDO /HH 5( t 3ULFKDUG 67 f &5(67 VHUYLFHV U+SURJUDLU/HYDOXDWLRQ 8QSXEOLVKHG PDQXVFULSW 3URSHUW\ RI &5(67 VHUYLFHV *DLQHVYLOOH )ORULGD /HPHU 5 0 f &KLOGUHQ DQG DGROHVFHQWV DV SURGXFHUV RI WKHLU RZQ GHYHORSPHQW 'HYHORSPHQWDO 5HYLHZ f /HPHU 5 0 f &KDQJLQJ RUJDQLVPFRQWH[W UHODWLRQV DV WKH EDVLF SURFHVV RI GHYHORSPHQW $ GHYHORSPHQWDO FRQWH[WXDO SHUVSHFWLYH 'HYHORSPHQWDO 3V\FKRORJ\ /HPHU 5 0 t 6SDQLHU % f $ G\QDPLF LQWHUDFWLRQDO YLHZ RI FKLOG DQG IDPLO\ GHYHORSPHQW ,Q 5 0 /HPHU t % 6DQLHU (GVf &KLOG LQIOXHQFHV RQ PDULWDO DQGODPLO\ LQWHUDFWLRQV SS f 1HZ
PAGE 189

/LGGOH + $ f &RQFHSWXDO DQG FOLQLFDO GLPHQVLRQV RI D PXOWLGLPHQVLRQDO PXOWLV\VWHPV HQJDJHPHQW VWUDWHJ\ LQ IDPLO\EDVHG DGROHVFHQW WUHDWPHQW 3V\FKRWKHUDS\ f /LQ 1 'HDQ $ t (QVHO : 1 f 6RFLDO VXSSRUW OLIH HYHQWV DQG GHSUHVVLRQ 1HZ
PAGE 190

0DJQXVVRQ f ,QGLYLGXDO GHYHORSPHQW $ KROLVWLF LQWHJUDWHG PRGHO ,Q 3 0HRQ + (OGHU -U t /XVFKHU (GVf ([DPLQLQJOLYHVLQ FRQWH[W 3HUVSHFWLYHV RQ WKH HFRORJ\ RI KXPDQ GHYHORSPHQW SS f :DVKLQJWRQ '& $PHULFDQ 3V\FKRORJLFDO $VVRFLDWLRQ 0DJQXVVRQ 6WDWWLQ + t 'XQHU $ f $JJUHVVLRQ DQG FULPLQDOLW\ LQ D ORQJLWXGLQDO SHUVSHFWLYH ,Q 7 9DQ 'XHVHQ t 6 $ 0HGQLFN (GVf $QWHFHGHQWV RI DJJUHVVLRQ DQG DQWLVRFLDO EHKDYLRU SS f %RVWRQ .OXZHU1LMKRII 0DVRQ ( t %UDPEOH : f 1HZ
PAGE 191

0F*XIILQ 3 t *RWWHVPDQ ,, f *HQHWLF LQIOXHQFHV RQ QRUPDO DQG DEQRUPDO GHYHORSPHQW SS f ,Q 0 5XWWHU t / +HUVRY (GVf7=KLOGDQG 6DQ 'LHJR &$ $FDGHPLF 3UHVV 0F/HRG .UXWWVFKQLWW & t 'RPILHOG 0 'HFHPEHUf 'RHV SDUHQWLQJ H[SODLQ WKH HIIHFWV RI VWUXFWXUDO FRQGLWLRQV RQ FKLOGUHQfV DQWLVRFLDO EHKDYLRU" $ FRPSDULVRQ RI EODFNV DQG ZKLWHV 6RFLDO )RUFHV f 0LQXFKLQ 6 f )DPLOLHV t IDPLO\ WKHUDS\ &DPEULGJH +DUYDUG 8QLYHUVLW\ 3UHVV 0LQXFKLQ 6 0RQWDOYR %* *XHPH\ % 5RVPDQ %/ t 6FKXPHU ) f )DPLOLHV RI WKH VOXPV $Q H[SORUDWLRQ RI WKHLU VWUXFWXUH DQ-UHDWPHQW 1HZ
PAGE 192

1LDUKRV ) t 5RXWK f 7KH UROH RI FOLQLFDO DVVHVVPHQW LQ WKH MXYHQLOH FRXUW 3UHGLFWRUV RI MXYHQLOH GLVSRVLWLRQV DQG UHFLGLYLVP Y f 1RY\ 0 *DD 3 )UDQNLHZLF] 5 /LEHUPDQ t $PHULNDQHU 0 f 7KH DVVRFLDWLRQ EHWZHHQ SDWWHUQV RI IDPLO\ IXQFWLRQLQJ DQG HJR GHYHORSPHQW RI WKH MXYHQLOH RIIHQGHU $GROHVFHQFHA f 1\H ) f )DPLO\ UHODWLRQVKLSV DQG GHOLQTXHQW EHKDYLRU 1HZ
PAGE 193

2OVRQ '+ 6SUHQNOH '+ t 5XVVHOO &6 f &LUFXPSOH[ 0RGHO RI 0DULWDO DQG )DPLO\ 6\VWHPV &RKHVLRQ DQG DGDSWDELOLW\ GLPHQVLRQV IDPLO\ W\SHV DQG FOLQLFDO DSSOLFDWLRQV )DPLO\ 3URFHVV 2OVRQ '+ t :LOVRQ f )$&(6 ,, XSGDWH /LQHDU VFRULQJ DQG LQWHUSUHWDWLRQ ,Q + 2OVRQ DQG 7LHVHO (GVf )DFHV ,, /LQHDU VFRULQJ t LQWHUSUHWDWLRQ SS f )DPLO\ 6RFLDO 6FLHQFH 0FQHDO +DOO 8QLYHUVLW\ RI 0LQQHVRWD 6W 3DXO 0LQQHVRWD 3DOPHU 7 f 7KH \RXWK DXWKRULW\fV FRPPXQLW\ WUHDWPHQW SURMHFW )HGHUDO 3DULV f $QWLVRFLDO SHUVRQDOLW\ GLVRUGHU $ ELRSV\FKRVRFLDO PRGHO &DQDGLDQ -RXUQDO RI 3V\FKLDWU\ f 3DWWHUVRQ 5 f $ VRFLDO OHDUQLQJ DSSURDFK 9R/ &RHUFLYH IDPLO\ SURFHVV (XJHQH 25 &DVWDOLD 3DWWHUVRQ 5 f 3HUIRUPDQFH PRGHOV IRU DQWLVRFLDO ER\V $PHULFDQ 3V\FKRORJLVWB f 3DWWHUVRQ 5 t %DQN / f 6RPH DPSOLI\LQJ PHFKDQLVPV IRU SDWKRORJLF SURFHVVHV LQ IDPLOLHV ,Q 0 5 *XQQDU t ( 7KHOHQ (GVf 6\VWHPV DQG +LOOVGDOH 1/DZUHQFH (UOEDXP 3DWWHUVRQ 5 'H%DU\VKH t 5DPVH\ ( f $ GHYHORSPHQWDO SHUVSHFWLYH RQ DQWLVRFLDO EHKDYLRU $PHULFDQ 3V\FKRORJLVW f 3DWWHUVRQ 5 'LVKLRQ 7 t %DQNV / f )DPLO\ LQWHUDFWLRQV $ SURFHVV PRGHO RI GHOLQTXHQF\ WUDLQLQJ $JJUHVVLYH %HKDYLRU 3DWWHUVRQ 5 t 'LVKLRQ 7 f &RQWULEXWLRQV RI IDPLOLHV DQG SHHUV WR GHOLQTXHQF\ &ULPLQRORJ\B 3DWWHUVRQ 5 t 6WRXWKDPHUORHEHU 0 f 7KH FRUUHODWLRQ RI IDPLO\ PDQDJHPHQW SUDFWLFHV DQG GHOLQTXHQF\ &KLOG 'HYHORSPHQW - 3KDUHV 9 t &RPS£V % ( f 7KH UROH RI IDWKHUV LQ FKLOG DQG DGROHVFHQW SV\FKRSDWKRORJ\ 0DNH URRP IRU GDGG\ 3V\FKRORJLFD/%XOOHWLQ 3RZHU 0$VK 30 6FKRHQEHUJ ( t 6RUH\ (& f 'HOLQTXHQF\ DQG WKH IDPLO\ %ULWLVK -RXUQDO RI 6RFLDO :RUN

PAGE 194

3RZHUV : 7 f %HKDYLRU 7KH FRQWURO RI SHUFHSWLRQ &KLFDJR $OGLQH 3UDQJH 0 *UHHQEDXP 3 ( 6LOYHU 6 ( )LHGPDQ 5 0 .XWDVK t 'XFKQRZVNL $ f )DPLO\ IXQFWLRQLQJ DQG SV\FKRSDWKRORJ\ DPRQJ DGROHVFHQWV ZLWK VHYHU HPRWLRQDO GLVWXUEDQFHV -RXUQDO RI $EQRUPDO &KLOG 3V\FKRORJ\ f 3XONNLQHQ / f 6HDUFK IRU DOWHUQDWLYHV WR DJJUHVVLRQ LQ )LQODQG ,Q $ 3 *ROGVWLHQ t 0 6HJDOO (GVf $JJUHVVLRQ LQ JOREDO SHUVSHFWLYH SS f 1HZ
PAGE 195

5RVHQEDXP $ f +LHUDUFKLFDO RUJDQL]DWLRQ RI PRWRU SURJUDPV ,Q 6 :LVH (Gf 1HXUDO DQG EHKDYLRUDO DSSURDFKHV WR KLJKHU EUDLQ IXQFWLRQ SS f 1HZ
PAGE 196

6DXQGHUV 5 t 'DYLV 0 % f 7KH YDOLGLW\ RI WKH -HVQHVV ,QYHQWRU\ ZLWK %ULWLVK GHOLQTXHQWV %ULWLVK -RXUQDO RI 6RFLDO DQG &OLQLFDO 3V\FKRORJ\ 6FKROWH ( 0 f ,GHQWLILFDWLRQ RI FKLOGUHQ DW ULVN DW WKH SROLFH VWDWLRQ DQG WKH SUHYHQWLRQ RI GHOLQTXHQF\ 3V\FKLDWU\ 6FKZHLW]HU 5 6HWK6PLWK 0 t &DOODQ 9 f 7KH UHODWLRQVKLS EHWZHHQ VHOIHVWHHP DQG SV\FKRORJLFDO DGMXVWPHQW LQ \RXQJHU DGROHVFHQWV -RXUQDO RI 6KDPVLH t +OXFK\ & f
PAGE 197

6Q\GHU + t 3DWWHUVRQ 5 f )DPLO\ LQWHUDFWLRQ DQG GHOLQTXHQW EHKDYLRU ,Q +& 4XD\ (Gf +DQGERRN RI GHOLQTXHQF\ SS f 1HZ
PAGE 198

7RODQ 3+ Df 6RFLRHFRQRPLF IDPLO\ DQG VRFLDO VWUHVV FRUUHODWHV RI DGROHVFHQW DQWLVRFLDO DQG GHOLQTXHQW EHKDYLRU -RXUQDO RI $EQRUPDO &KLOG SV\FKRORJ\ 7RODQ 3+ Ef 'HOLQTXHQW EHKDYLRUV DQG PDOH DGROHVFHQW GHYHORSPHQW $ 7RODQ 3 + f 3DWKZD\VB RI DGROHVFHQW DQWLVRFLDO EHKDYLRU 1,0+ *UDQW 3URSRVDO 52, 0+ 7RODQ 3 + %OLW] & 'DYLV / )LVKHU $ 6FKZDUW] / t 7KRPDV 3 1RYHPEHUf 6WUHVV FRSLQJ DQG GHYHORSPHQW RI DGROHVFHQW GHOLQTXHQF\ 3DSHU SUHVHQWHG DW WKH DQQXDO PHHWLQJ RI WKH $PHULFDQ 6RFLHW\ IRU &ULPLQRORJ\ %DOWLPRUH 0' 7RODQ 3+ &URPZHOO 5( t %UDVV 0 f )DPLO\ 7KHUDS\ ZLWK 'HOLQTXHQWV $ FULWLFDO UHYLHZ RI WKH OLWHUDWXUH )DPLO\ 3URFHVV 7RODQ 3 + t *XHUUD 1 f :KDW ZRUNV LQ UHGXFLQJ DGROHVFHQW YLROHQFH $Q HPSLULFDO UHYLHZ RI WKH ILHOG %RXOGHU &2 8QLYHUVLW\ RI &RORUDGR &HQWHU IRU WKH 6WXG\ RI 3UHYHQWLRQ RI 9LROHQFH ,QVWLWXWH IRU %HKDYLRUDO 6FLHQFHV 7RODQ 3 + t *XHUUD 1 f $ GHYHORSPHQWDO DSSURDFK WR DGROHVFHQW DQWLVRFLDO EHKDYLRU 0DQXVFULSW VXEPLWWHG IRU SXEOLFDWLRQ $YDLODEOH IURP WKH ILUVW DXWKRU 8QLYHUVLW\ RI ,OOLQRLV DW &KLFDJR ,Q 3+ 7RODQ t % &RKOHU (GVf +DQGERRN RI FOLQLFDO UHVHDUFK DQG SUDFWLFH ZLWK DGROHVFHQWV SS f 1HZ
PAGE 199

7RODQ 3 + 3HQW] 0 $ $XSSRUOH t 'DYLV / f 6L[WHHQ \HDUV RI VRFLDO VNLOOV WUDLQLQJ ZLWK DGROHVFHQWV $ FULWLFDO UHYLHZ RI WUHQGV GLPHQVLRQV DQG RXWFRPHV ,Q 3+ 7RODQ t % &RKOHU (GVf f +DQGERRNV FOLQLFDO[HVHDUFK DQG SUDFWLFH ZLWK DGROHVFHQWV SS f 1HZ
PAGE 200

:HUWKHLP ( 6 f )DPLO\ XQLW WKHUDS\ DQG WKH VFLHQFH DQG WRSRORJ\ RI IDPLO\ V\VWHPV )DPLO\ 3URFHVV :HVW 't )DUULQJWRQ 3 f 7KH GHOLQTXHQW ZD\ ROLIH 1HZ
PAGE 201

%,2*5$3+,&$/ 6.(7&+ -RKQ &KDUOHV &KXFNf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t 0DUULDJH DQG )DPLO\ &RXQVHOLQJ 'XULQJ WKLV WLPH LQ WKH VXPPHU RI &KXFN PDUULHG 7DOL /\QQ &LOEULWK D 3DQDPD &LW\ VFKRROPDWH DQG IHOORZ 8QLYHUVLW\ RI )ORULGD VWXGHQW &KXFN ZDV DFFHSWHG LQWR WKH GRFWRUDO SURJUDP LQ &RXQVHORU (GXFDWLRQ DW WKH 8QLYHUVLW\ RI )ORULGD LQ +LV DUHD RI VSHFLDOL]DWLRQ ZDV 0DUULDJH DQG )DPLO\ &RXQVHOLQJ ZLWK D 6XE6SHFLDOL]DWLRQ LQ $GROHVFHQFH DQG 'HOLQTXHQF\

PAGE 202

'XULQJ KLV JUDGXDWH VWXGLHV &KXFN ZDV LQGXFWHG LQWR PXOWLSOH KRQRU VRFLHWLHV LQFOXGLQJ :KRnV :KR $PRQJ &ROOHJH 6WXGHQWV f 3VL &KL 1DWLRQDO +RQRU 6RFLHW\ LQ 3V\FKRORJ\ f 3L /DPGD 7KHWD 1DWLRQDO +RQRU DQG 3URIHVVLRQDO $VVRFLDWLRQ LQ (GXFDWLRQ f .DSSD 'HOWD 3L ,QWHUQDWLRQDO +RQRU 6RFLHW\ ,Q (GXFDWLRQ f DQG &KL 6LJPD ,RWD &RXQVHOLQJ $FDGHPLF DQG 3URIHVVLRQDO +RQRU 6RFLHW\ ,QWHUQDWLRQDO f &KXFN ZDV DOVR 1RPLQDWHG DV nV 'RFWRUDO 6WXGHQW RI 7KH
PAGE 203

4XDOLW\ 4XHVW LV WKH SURYLGHU RI ([FHO$5DWH VHUYLFHV DQ ,QWHUQHW EDVHG VHW RI VXUYH\LQJ DQG HYDOXDWLRQ VHUYLFHV IRU HGXFDWLRQDO LQVWLWXWLRQV DQG FRUSRUDWLRQV &KXFNfV UROHV LQFOXGH EHLQJ DQ DFFRXQW UHSUHVHQWDWLYH DQ HQWUHSUHQHXULDO LQYHVWPHQW FRXQVHORU D PDUNHWLQJ DGYLVRU DQG WKH UHIHUUDO DJHQW IRU WKH 4XDOLW\ 4XHVW HPSOR\PHQW DVVLVWDQFH SURJUDP &KXFN DQG 7DOL PRYHG WR $FZRUWK *HRUJLD LQ WKH VXPPHU RI IROORZLQJ 7DOLfV DGPLVVLRQ WR WKH 'RFWRUDWH RI &KLURSUDWLF SURJUDP DW /LIH 8QLYHUVLW\ LQ 0DULHWWD *HRUJLD :KLOH LQ *HRUJLD &KXFN EHFDPH OLFHQVHG DV D 0DUULDJH DQG )DPLO\ 7KHUDSLVW E\ WKH VWDWHV RI *HRUJLD DQG )ORULGD +H LV FXUUHQWO\ LQ SULYDWH SUDFWLFH ZLWK *HUDOG -HQQLQJV 3K' /3& t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

PAGE 204

, FHUWLI\ WKDW KDYH UHDG\ WKLV VWXGHQW DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHGUHHRI 'REWSURI L5ALLORVRSKA f§-0/ƒ ?$O?-XEL!9e 3HWHU $ 6KHUUDUG &KDLU $VVRFLDWH 3URIHVVRU RI &RXQVHORU (GXFDWLRQ FHUWLI\ WKDW KDYH UHDG\ WKLV VWXGHQW DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ n‘IOnLn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nnRI 'RFWRU RI 3KLORVRSK\ $ 6LOYLD (FKHYDUULD 5DIXOV $VVLVWDQW 3URIHVVRU RI &RXQVHORU (GXFDWLRQ FHUWLI\ WKDW KDYH UHDG\ WKLV VWXGHQW DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ $XJXVW 'HDQ *UDGXDWH 6FKRRO

PAGE 205

83 PR L P WX0 81,9(56,7< 2) )/25,'$


RATE OF JUVENILE DELINQUENCY
ACROSS
FAMILY FUNCTIONING AND PERSONALITY
By
JOHN C. CLUXTON
A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY
UNIVERSITY OF FLORIDA
1999

Copyright 1999
By
John C. Cluxton

This dissertation is dedicated
to all of those throughout my life
who believed and encouraged me to say
“I can.”
And
To all of my family and friends
who continue to stand by me
while I strive to have
my moments of
“I did it.”

ACKNOWLEDGMENTS
I extend my deepest appreciation to everyone who has stood by me while I’ve
slowly progressed, like the river that eventually wins over the rock, through to the
completion of this dissertation.
I extend special thanks to Dr. Bob and Mrs. Pat Lee for giving me an opportunity
to work and train with the challenging juvenile delinquent clientele at C.R.E.S.T.
Services Inc. Through their ever present guidance and passion, the Lees helped me to
develop a holistic understanding of the complex delinquent population.
I owe a great debt of gratitude to my colleagues and friends at the University of
Florida Department of Counselor Education and to both the Alachua and the Columbia
County Departments of Juvenile Justice. The collection, scoring and success of this
dissertation would not have been possible without their help.
I feel very fortunate to have been involved in a graduate program which offered
such diverse perspectives. Throughout my graduate education the professors encouraged
me to develop my own views based on coherent theory, clinical experience and solid
research. I also want to thank the wonderful group of professionals on my committee who
encouraged me to follow my own views while offering me the guidance, feedback, and
expertise needed to complete my dissertation. Specifically, I thank Dr. Silvia E. Rafuls
for her clinical supervision of my training and her challenging questions which led to
IV

ways to improve my research; Dr. Robert D. Myrick for his instruction and expertise
working with and understanding the adolescent population; and Dr. M. David Miller for
his statistical guidance and ability to instill within me a sense of confidence in my ability
to accomplish the design and analysis of this dissertation.
I offer a special thanks to Dr. Peter A. D. Sherrard, not only for chairing my
committee, but more importantly, for his overall impact on my professional development.
I will be forever grateful for the many times I experienced Dr. Sherrard’s artistry of
teaching. He was able to create for me a sense of genuine support as he helped me to
understand the connections between the little things, while at the same time, challenged
me to develop an understanding of the bigger picture.
Finally, I thank my family and friends who have supported me. Their continuous
encouragement helped fuel my persistence and ultimate ability to complete this
dissertation. I especially thank my wife, Tali, who fought beside me through the
frustrations and sacrifices. She helped to energize me through her challenges to reach
completion. Most importantly, Tali offered her love and her belief that I could indeed
succeed.
Now that I have finished this dissertation, I know the answer to the question,
“How did the turtle win the race?” He did it slowly, with persistent focus, and most
importantly, always with the support of those who believed in him.
v

TABLE OF CONTENTS
page
ACKNOWLEDGMENTS iv
LIST OF TABLES x
LIST OF FIGURES xi
ABSTRACT xii
CHAPTERS
1 INTRODUCTION 1
Scope of the Problem 2
Theoretical Framework 9
Eco-Systemic Model of Human Development 10
Construct of Personality 14
Circumplex Model of Marital and Family Systems 18
Rationale for the Study 20
Statement of the Problem 21
Need for the Study 21
Purpose of the Study 24
Research Questions 25
Definition of Terms 27
Organization of the Study 31
2 REVIEW OF THE LITERATURE 33
Introduction 33
Personality and Delinquency 34
Family Functioning and Delinquency 41
Structural Variables 41
Family Functioning 43
Circumplex Model of Marital and Family Systems 45
Adaptability 49
Cohesion 50
vi

Eco-Systemic Model of Human Development 53
Relationship Between Family Functioning and Personality 57
Reciprocal Nature of Variables on Development 59
Protective and Risk Factors 61
Goodness of Fit 65
Summary 67
3 METHODOLOGY 68
Statement of Purpose 68
Delineation of Relevant Variables 69
Dependent Variable 69
Independent Variables 69
Age 69
Gender 70
Race 71
Adaptability 72
Cohesion 72
Social maladjustment scale (SA) 72
Manifest aggression scale (MA) 72
Asocial index (AI) 73
Hypotheses 73
Data Analysis 77
Description of the Population 79
Sampling Procedures 80
Sample 81
Data Collection 82
Instrumentation 83
Jesness Personality Inventory 83
Family Adaptability and Cohesion Evaluation Scales
(FACES II) 87
Summary 91
4 RESULTS 92
Introduction 92
Demographic Characteristics of the Research Sample 93
Descriptive Data on Categorical Variables 94
Gender 94
Ethnicity 95
vii

Descriptive Data on Interval Variables 96
Age 96
Cohesion Scale 96
Adaptability Scale 97
Social Maladjustment Scale 98
Manifest Aggression Scale 98
Asocial Index 99
Inferential Statistical Analysis Procedures 100
Bivariate Logistic Comparisons 102
Multinomial Logistic Regression Results 104
Evaluation of Hypotheses 106
Summary Ill
5 DISCUSSION 113
Introduction 113
Overview of Study 113
Evaluation of Hypotheses 116
Discussion of Results 119
Relationship of Age to Rate of Juvenile Delinquency 119
Relationship of Gender to Rate of Juvenile Delinquency 120
Relationship of Race to Rate of Juvenile Delinquency 121
Relationship of Personality and Family Functioning
to Rate of Juvenile Delinquency 122
Research question 6 & 7 123
Research question 5 125
Limitations of Study 131
Practical Implications of the Results 134
Assessment 134
Training and Practice 135
Social Policy 136
Recommendations 136
Meta Theory of Hierarchical Cybernetic Feedback Loops 140
Chapter Summary 147
APPENDICES
A JESNESS PERSONALITY INVENTORY 149
viii

B FAMILY ADAPTABILITY AND COHESION EVALUATION SCALES
(FACES-II) 151
C DEMOGRAPHIC INFORMATION 153
D LINEAR SCORING AND INTERPRETATION FOR FACES-II 156
E JESNESS PERSONALITY INVENTORY ANSWER SHEET 158
F JESNESS PERSONALITY INVENTORY PROFILE SHEET 160
REFERENCES 162
BIOGRAPHICAL SKETCH 188
IX

LIST OF TABLES
Table page
1 Frequency Distribution by Gender and Level of Delinquent Offending 94
2 Frequency Distribution by Gender and Ethnicity 95
3 Descriptive Data on Interval Variables 99
4 Bivariate Comparison Results 103
5 Multinomial Logistic Regression Results for Model 1 104
6 Multinomial Logistic Regression Results for Model 2 105
7 Statistical Tests of Hypotheses 110
8 Frequency Distribution of Males by Rate of Offending Across
Combinations of Cohesion (C) and Manifest Aggression (MA) 128
9 Frequency Distribution of Females by Rate of Offending Across
Combinations of Cohesion (C) and Manifest Aggression (MA) 129
x

LIST OF FIGURES
Eigure page
1 Circumplex Model of Marital and Family Systems 19
2 Thee-Dimensional Family Circumplex Model 88
3 Powers (1973) meta theory of hierarchical feedback loops applied
to personality, family functioning, and delinquency 144
X)

Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy
RATE OF JUVENILE DELINQUENCY
ACROSS
FAMILY FUNCTIONING AND PERSONALITY
By
John C. Cluxton
August 1999
Chairperson: Dr. Peter A. D. Sherrard
Major Department: Counselor Education
This study was guided by a transactional and eco-systemic conceptualization of
delinquency risk and predicted that the level of development of antisocial behaviors is a
function of the interaction among individual and contextual characteristics. While strides
in the literature have been made to substantiate the usefulness of eco-systemic
multivariate models in delinquency research, this study investigated the yet to be ful 1 \
explored existence of a possible relationship between facets of the adolescent’s
personality and perceptions of family functioning across rates of delinquency.
The research was based on a sample consisting of 169 delinquent African-
American and Caucasian adolescents who ranged from 13 to 18 years. The subjects fit
into one of three rates of offending: first time offenders (having only one charge),
multiple offenders (having 2 to 4 charges) and chronic offenders (having 5 or more
XU

charges). Each subject's personality was assessed through the use of the Jesness
Personality Inventory. Each subject’s perception of family functioning was assessed
through the use of the Family Adaptability and Cohesion Evaluation Scale (FACES-II).
The data were analyzed using multinomial logistic and bivariate logistic regression
procedures.
The results of the current study provide statistical evidence which supports the
need to include within eco-systemic multivariate models of delinquency rate the variables
of age, gender and the interaction of facets of the adolescent’s personality (Manifest
Aggression) and family functioning (Cohesion). These findings support the need for
future research which is guided by eco-systemic multivariate models of delinquency risk
to explore further the complex relationship between theories of personality and family
functioning across rates of juvenile delinquent offending. A meta model which outlines a
theory of hierarchical cybernetic feedback loops was presented to provide insight and
guidance for future research and elucidate the processes at work between the rate of
juvenile delinquency across personality and family functioning.
XIII

CHAPTER I
INTRODUCTION
There is an ancient fable out of India reported by Karen Backstein (1992) which
tells of six blind men who encounter an elephant for the first time. Each touches a
different part of the immense animal and each one’s description elicits a distinctly
different image of the animal which each believes is an accurate picture of what the
animal is truly like. However, the wise Rajah advises them to combine each of their
perspectives in order to gain a greater understanding of the nature and identity of the
elephant.
The study of juvenile delinquency is currently going through a similar evolution.
Rather than take a singular view (biological, psychological, or sociological) in the
etiology of delinquency, much of the field is pursuing a more holistic eco-systemic view
of self and system development (Bogenschneider, 1996, Bronfenbrenner, 1979;
Henggeler, 1989; Lemer, 1991; Liddle, 1995; Magnusson, 1995; Moffitt, 1993; Salts,
Lindholm, Goddard, & Duncan, 1995; Mulvey, Arthur, Reppucci, 1993; Paris, 1996;
Reid, 1993; Tolan & Loeber, 1993; Yoshikawa, 1994; Worden, 1991). This new
approach to delinquency, proposes that the relationship between an adolescent’s
personality and family functioning is likely to influence his/her rate of juvenile
delinquent acts. Presently, little is known about this hypothesized relationship in the
study of juvenile delinquency so this study has theoretical implications regarding the
1

2
importance of personality and family functioning in the promising eco-systemic approach
to delinquency and practical applications in the areas of research, training, practice and
social policy.
The purpose of this study was to determine if there exists a relationship between
personality and family functioning across the rate of delinquency.
Scope of the Problem
The extent and costs of juvenile delinquency compounds the urgency for research
which contributes to the understanding and ultimate efforts to decrease juvenile
delinquency. From 1988 to 1992, juvenile violent crime arrests increased 47% (whereas
adult violent crime arrests increased 19%). Increases in juvenile arrests for specific
offenses were murder (51%), Rape (17%), Robbery (50%), and aggravated assault (49%)
(Snyder, 1994). From 1988 through 1992, the number of delinquent cases disposed by
juvenile courts increased 26%. During the same period, Juvenile Courts disposed 56%
more violent cases, including 55% more homicide and 80% more aggravated assault
cases (Butts. Snyder, & Finnegan, 1994). According to a report by Butts (1994), juvenile
courts in the United States handled almost one and a half million delinquency cases in
1992, a 26% increase over the 1988 cases load. Were this rate to continue, that load
would double approximately every 12 years (rule of 70) (Williams & Rogers, 1996).
Further, according to the Federal Bureau of Investigations (FBI) Uniform Crime Reports
(1994), law enforcement agencies made 2.0 million arrests of juveniles (people below the
age of 18) in 1993. Juveniles were responsible for 17% of all arrests in 1993.

3
Between 1989 and 1993, the total number of juveniles increased 13% (FBI, 1994).
Juveniles committed 13% of all violent crimes (i.e., homicide, rapes, robberies, and
aggravated assaults) in the United States in 1993 (as measured by crimes that were
cleared by arrests) (FBI, 1994). In 1993, juveniles accounted for 13% of the U.S.
population, were responsible for 9% of all murder clearances in the United States, 14% of
forcible rapes, 17% of robberies, and 13% of all aggravated assaults (FBI, 1994).
The most recent FBI Uniform Crime Reports (1997) on juvenile crime are a bit
more encouraging. The juvenile arrest rates for violent crime dropped 9% from 1995 and
12% from 1994, marking the second year of decline after steady increases the previous
six years. The juvenile arrest rate for robbery dropped 10% between 1995 and 1996,
while the juvenile arrest rate for aggravated assault dropped 9%. The juvenile arrest rate
for burglary in 1996 is 45% lower than 1980, while the arrest rate for motor vehicle theft
is the lowest since 1987 and the rate for arson the lowest since 1992. While there appears
to be a slowing in the rate of juvenile delinquency, we are no where near the low rates of
1950s (Loeber, 1990). Juvenile delinquency continues to exact a high toll on society and
causes great emotional and interpersonal costs to the adolescent and those around them
(Gorman-Smith, Tolan, Zelolli, & Huesmann, 1996; Laub & Sampson, 1994; Cohen,
Miller, & Rossman, 1994).
The costs of delinquency to society in resources and funds are enormous. The
United States spends more than 1 billion dollars a year to maintain our juvenile justice
system (Patterson, DeBaryshe,& Ramsey, 1989). The average cost of incarcerating a
minor has risen from $29,000 in 1992 (Children’s Defense Fund, 1992) to $36,000 per

4
year in 1998 (Quinn, 1998). The Rand corporation reported that in the United States, the
expected crime and correction costs for one chronic juvenile offender was $225,000 to
$350,000 over his or her life time, based on 1.5 arrests a year over 13.3 years of crime.
This figure does not include the cost of the damage to other people’s property (Shamsie
& Hluchy, 1991). The yearly cost of school vandalism alone is estimated to be one-half
billion dollars (Feldman, Caplinger, & Wodarski, 1981). The chronic offenders (five or
more offenses) alone exact an enormous monetary cost to society in police hours, court
time, failed attempts at rehabilitation and billions of dollars spent to repair the tangible
consequences of such offending (Lynam, 1996). These costs are staggering considering
that chronic offenders may only make up 5-6% of the total delinquent population, yet are
reported to be responsible for 50-60% of known crimes (see, Farrington, Ohlin & Wilson,
1986).
There are many personal costs of delinquency that impact an adolescent when
according to Steinborg (1991), changes are occurring in an adolescent’s life faster and
greater than at any other time except infancy. Adolescents are faced with understanding
and accepting their own biological changes, becoming comfortable with their sexuality
(particularly the emergence of sexual preference), choosing their occupational identity
and negotiating their developmental struggle towards autonomy and independence
(Kinney & Leaton, 1983). These complex tasks in development are negatively impacted
by delinquency. For example, Patterson, DeBaryshe, and Ramsey (1989) reported that
antisocial children are likely to experience major adjustment problems in the area of
academic achievement and peer social relations (Kazdin, 1987; Walker, Shinn, O’Neill,

5
& Ramsey, 1987; Wilson & Hermstein, 1985). Jessor (1991) concluded that high risk
behaviors such as delinquency can jeopardize the accomplishment of normal
developmental tasks, the fulfilment of expected social roles, the acquisition of essential
skills, the achievement of a sense of adequacy and competence, and the appropriate
preparation for transition to the next stage in the life trajectory (i.e., young adulthood).
Perhaps one of the greatest personal costs is the waste of a young person’s life, who, after
chronically offending, may never realize his/her potential, but rather spends most of the
time in and out of institutions.
Efforts to study and look for answers to delinquency are complicated when
considering how to distinguish among the types of juvenile delinquents. The historical
approach of comparing delinquent to non-delinquent groups has more recently been
viewed as too gross a distinction due to the shear frequency of delinquent acts during
adolescence (Lau & Leung, 1992; Tolan & Loeber, 1993). It has been reported that 88%
of juveniles confess to committing at least one chargeable offense (Williams & Gold,
1982). In adolescence (age 13-18) more than 50% admit to theft, 35% admit to engaging
in more than one type of antisocial behavior, such as aggression, drug abuse, arson and
vandalism (See Elliot, Ageton, Huizinga, Knowles, & Carter, 1983; Feldman, Caplinger,
& Wodarski, 1983; Moffitt, Silva, Lynam & Henry, 1994; William & Gold, 1982).
Actual rates of delinquent behavior soar so high during adolescence that participation in
delinquent behavior appears to be a normal part of teen life (Elliot, Ageton, Huizinga,
Knowles, & Carter, 1983; Elliot, Huizinga, & Menard, 1989; Moffitt, 1993; Tolan &
Loeber, 1993; Tolan & Guerra, 1992; Tolan & Lorion, 1988).

6
Indeed, numerous rigorous self-report studies have now documented that it is statistically
aberrant to refrain from crime during adolescence (Elliot, Ageton, Huizinga, Knowles, &
Carter, 1983; Hirschi, 1969; Moffitt & Silva, 1988).
Thus, following that involvement in antisocial behavior of some sort is almost
universal among American adolescents and recognizing that differences have been found
between transient (few offenses) and chronic (five or more offenses) involvement in
delinquency (Lorion, Tolan, & Wahlar, 1987; Moffitt & Silva, 1988; Quay, 1987;
Shannon, 1978; Tolan, 1987; Tolan, Lorion, 1988; West & Farrington, 1977) various
levels of involvement should be distinguished when studying the delinquent population
(Tolan & Loeber, 1993; Tolan, Cromwell, & Brasswell, 1986). Adding to the complexity
of studying this population is the finding that most adolescents committing antisocial acts
engage in a large variety of acts termed “Cafeteria-style offending” (Farrington, 1990;
Gottfredson & Hirschi, 1994; Haapasalo & Hamalainen, 1996; Klein, 1984,1989). To
account for these concerns, this study utilized frequency of offending (rate) to distinguish
delinquents within the collected sample population. Frequency is a method of
measurement common in delinquency research and has shown high reliability and
validity (Cox, 1996; Lau & Leung, 1992; Leug & Drasgow, 1986; Lynam, 1996;
Spiuack, Marcus, & Swift, 1986). The following will further explore the complexity of
delinquency and present the guiding theoretical lenses used to understand and investigate
delinquency in the current study.
The high costs and wide spread occurrence of delinquency has spurred many
efforts to discover what factors contribute to the understanding and explanation of the

7
varying levels in delinquency among the youth. Many of these factors purposed by
criminologists and psychologists alike include: poverty, lack of bonding to societal
institutions, bonding to deviant peer groups, low intelligence, availability of drugs and
guns, genetic predisposition, neurological and biological factors, differences in
personality, family background, family functioning and family risk factors (Binder, Geis,
& Bruce, 1988; Elliot, Huizinga, & Ageton, 1985; Farrington, Loeber, Elliott, Hawkins,
Kandel, Klein, McCord, Rowe, & Tremblay, 1990; Goldstein, 1990; Hirschi, 1969;
Jesness, 1996; Loeber & Stouthamer-Loeber, 1986; Patterson, DeBarshe, & Ramsey,
1989; Walsh & Olson, 1989; Yoshikawa, 1994).
More recent views in the field of juvenile delinquent study support the notion that
delinquency is a result of many complex interacting factors, thus having no single factor
explaining its occurrence (Benda, 1987; Bogenschneider, 1996; Calabrese & Adams,
1990; Marsh, Clement, Stoughton, & Marckioni, 1986; Jesness, 1996; Salts, Lindholm,
Goddard, & Duncan, 1995; Tolan & Loeber, 1993; Tolan, Cromwell, & Brasswell, 1986;
Worden, 1991). Consistent with this view and providing the theoretical bases for this
study, was the theoretical works of Bronfenbrenner (1979).
Bronfenbrenner’s (1979) holistic eco-systemic view of self and system
development has gained wide support in the literature as a theoretical model providing a
viable frame that can explain the need for a multivariate approach in the understanding,
treatment, and prevention of juvenile delinquency (Bogenschneider, 1996, Henggeler,
1989, Liddle, 1995; Moffitt, 1993; Salts, Lindholm, Goddard, & Duncan, 1995; Paris,
1996; Reid, 1993; Tolan & Loeber, 1993; Yoshikawa, 1994; Worden, 1991).

8
Bronfenbrenner’s (1988) theory has at its foundation the premise that human
development occurs as a joint function between the characteristics of the person and the
environment.
The empirical literature strongly supports Bronfenbrenner’s view of behavior in
which criminal behavior is multidetermined by the reciprocal interplay of characteristics
of the individual youth and the key social systems in which the youths are embedded (i.e.,
family, peer, school, neighborhood, etc.) (Elliot, 1994; Hawkins, & Catalano, 1993;
Henggeler, 1989, 1996; Thomberry, Huizinga, & Loeber, 1995; Tolan, Guerra, 1994).
Considered most influential on human development are the proximal environmental and
organismic influences (Bronfenbrenner, 1988). Proximal influences emanate either from
within the person, or from physical features, objects, and persons in the immediate face to
face setting (Bronfenbrenner, 1988). Two proximal influences which have been supported
in the literature to be related to delinquency and were the focus of the current study of
adolescent rate of delinquent offending were the adolescent’s personality and the
adolescent’s perception of their family functioning.
Personality factors have for a long time occupied an important role and been
linked in research to antisocial and delinquent behavior (Dembo, La Voie, Schmeider, &
Washburn, 1987; Farrington, 1990; Fonseca & Yule, 1995; Gold, 1978; Heaven, 1996;
Hoge, Andrews, Lesheid, 1994; Jesness, 1996; Roderts, Schmitz, Pinto, & Cain, 1990;
Rutter & Rutter, 1993; Salts, Lindholm, Goddard, & Duncan, 1995; Paris, 1996; Tolan &
Loeber, 1993; Quay, 1987). Family factors have also consistently been strongly related to
delinquency in studies and reviews of antisocial and delinquent behavior (Chamberlain &

9
Rosicky, 1995; Hazelrigg, Cooper, & Borduin, 1987; Lauritsen, 1993; Loeber & Hay,
1994; ;Henggeler, 1989; Loeber & Dishion, 1983; Tolan, Cromwell, & Brasswell, 1986;
Wasserman, Miller, Pinner, & Jaramillo, 1996; Loeber & Stouthamer-Loeber, 1986;
Snyder & Patterson, 1987; Tolan & Loeber, 1993).
Based on Bronfenbrenner’s (1979) model, an expected relationship was expected
to exist between an adolescent’s personality and their perception of family functioning
across their rate of delinquent offending. Bronfenbrenner’s (1979) holistic eco-systemic
model provided the theoretical frame to validate the growing consensus within the field
of delinquency research for the need to explore the existence of a possible relationship
between personality and family functioning across rate of delinquent offending
(Arbuthnot, Gordon, & Jurkovic, 1987; Cox, 1996; Jesness, 1996; Jessor, 1991; Le
Blanc, 1992; Lorion, Tolan, & Wahlar, 1987; Quay, 1987; Sameroff & Chandler, 1975;
Shaw & Scott, 1991; Tolan, Cromwell, & Brasswell, 1986). Thus, the purpose of this
study was to determine if there exists a relationship between personality and family
functioning across the rate of delinquency. This study addressed this recognized gap in
the understanding of delinquency and provides information which has theoretical and
practical implications for the understanding and future work with the complex and costly
problem of Juvenile delinquency.
Theoretical Framework
Bronfenbrenner’s holistic eco-systemic model of human development has been
embraced by many in delinquency research due to the growing trend to utilize

10
multivariate models to explore the etiology, treatment and prevention of delinquency
(Tolan & Loeber, 1993). In agreement with the multivarite approach, this study also
utilized Bronfenbrenner’s (1979) model of human development to provide the theoretical
grounds to investigate the existence of a relationship between the proximal characteristics
of the person (i.e., personality) and the environment (i.e., family functioning) on the
directions of human social development as seen through the adolescent’s rate of
delinquent offending. The following will be a presentation of Bronfenbrenner’s eco-
systemic model (1979), followed by Jesness’s (1996) construct of personality and Olson,
Russell and Sprenkle’s (1983) Circumplex Model of Marital and Family Systems.
Eco-Systemic Model of Human Development
Bronfenbrenner, (1995) offered the following two propositions as defining
properties to his ecological systems theory:
Proposition 1: Especially in its early phases, and to a great extent
throughout the life course, human development takes place through
processes of progressively more complex reciprocal interaction between
an active, evolving biopsychological human organism and the persons,
objects, and symbols in its immediate environment. To be effective, the
interaction must occur on a regular basis over extended periods of time.
Such enduring forms of interaction in the immediate environment are
referred to as proximal processes. Examples of enduring patterns of
proximal processes are found in parent-child and child-child activities,

11
groups or solitary play, reading, learning new skills, studying, athletic
activities, and performing complex tasks (Bronfenbrenner, 1995, p. 620).
Proposition 2: The form, power, content, and direction of the
proximal processes effecting development vary systematically as a joint
function of the biopsychological characteristics of the developing person;
of the environment, both immediate and more remote, in which the
processes are taking place; and the nature of the developmental outcomes
under consideration (Bronfenbrenner, 1995, p. 620).
According to Bronfenbrenner (1979), children are shaped not only by their
personal attributes, but also by the ever-widening environments in which they develop.
Children are influenced first and foremost by their family, but also by their peers, school
and communities (Bogenschneider, 1996). From the ecological perspective the
environmental influence is not limited to a single immediate setting, but is extended to
incorporate interconnections between such settings, as well as, the external influences
emanating from the larger surroundings. Thus, the ecological environment is conceived
by Bronfenbrenner (1979) in a topologically nested arrangement of concentric structures
with each containing the next. The structures are referred to as micro-, meso-, exo-, and
macrosystems. This study focused on the microsystem, therefore more emphasis will be
placed on its explanation.
The microsystem refers to a pattern of activities, roles, and interpersonal relations
experienced by the developing person in a given setting with particular physical and

12
material characteristics (Bronfenbrenner, 1979). Thus, it involves the structures and
processes taking place in an immediate face to face setting containing the developing
person (e.g., family, school, peer group, workplace, etc.). Contained within the
microsystem are the more powerful proximal influences such as personality and family
functioning. Of critical importance to Bronfenbrenner (1979) is not only the objective
properties of the environment, but also the way in which these properties are perceived by
the persons in the environment. Put simply, the aspects that are seen as most powerful in
shaping psychological growth are those that have meaning to the person in a given
situation. For this reason, the current study was most concerned with the perceptions of
the adolescent when assessing personality and family functioning.
The three remaining progressively more comprehensive levels include the meso-,
exo-, and macrosystem. The mesosystem comprises the linkages and processes taking
place between two or more settings containing the developing person. The exosystem
comprises the linkages and processes taking place between two or more settings, at least
one of which does not contain the development person, but in which events occur that
indirectly influence processes within the immediate setting in which the developing
person lives. And finally, the Macrosystem consists of the overarching pattern of micro-,
meso-, and exosystems characteristic of a given culture or subculture, with particular
reference to the belief system, bodies of knowledge, material resources, customs, life¬
styles, opportunity structures, hazards, and life course options that are embedded in each
of these broader systems (Bronfenbrenner, 1994).

13
Further, two recent additions include the chronosystems (changes or consistencies over
time) and the inclusion of the genetic inheritance in the ecological perspective
(reconceptualization of the role of genetics in human development) (see Bronfenbrenner,
1994).
A basic tenet of the ecological perspective is the implied fit between the
characteristics of a living organism and its surroundings (Bronfrenbrenner, 1988). Thus,
for example, according to Worden (1991) the person brings a unique mixture of
temperament, personality, intelligence, and developmental history to a given context
which, in turn, possesses its own requirements: Intrapersonal dynamics interact with
interpersonal forces. The “goodness of fit” between these two is then the soil of adaptive
or maladaptive psychological and social functioning (Rutter & Rutter, 1993; Thomas &
Chess, 1977; 1980; Lemer, 1982). Thus, optimal development does not directly derive
from either the nature of the child’s characteristics per se or the demands of the contexts
within which the child functions. Instead, if a child’s characteristics match (or fit) the
demands of a particular setting, adaptive outcomes will accrue (Worden, 1991). In
contrast, disturbed behavioral functioning is manifested in a “poor fit” between
environment expectations and demands and the capacities of the child at a particular le\ el
of development (Thomas & Chess, 1980).
In closing, Bronfenbrenner’s (1979) eco-systemic view of development not only
recognizes characteristics of the person and the environment as critical to development,
but holds that an interaction between the two is the general focus of eco-systemic based
research. Interactional studies in delinquency are in the minority resulting in far more

14
known about main effects than interactional effects (Farrington, 1995; Hoge, Andrews, &
Leshied, 1994; Tolan, 1987). According to Bronfenbrenner (1979), the interactional
emphasis of the eco-systemic approach is due to the theoretical view that there exists a
reciprocal nature of development. Development is seen as a two way street that entails
changes: environmental demands change, behavior changes, attitudes change, and self¬
perceptions change. The “goodness of fit” fluctuates as environmental expectations and
demands change or as the person’s expectations and self-perceptions change; change in
one effects changes in the other (Worden, 1991). As already mentioned, while it is
important to consider both the environmental influences and the child’s influences,
Bronfenbenner (1979) highlights that when considering the environmental influences,
what matters for behavior and development is the environment as it is “perceived” rather
than as it may exist in “objective” reality. Thus, ultimately, development is defined as the
person’s evolving conception of the ecological environment, and his/her relation to it, as
well as the person’s growing capacity to discover, sustain, or alter its properties
(Bronfenbrenner, 1979).
Construct of Personality
The construct of personality in this study was grounded in Jesness’s (1996)
Jesness Personality Inventory. Jesness (1996) sites the early influences of Marguarite
(Grant) Warren and her sentinel work on I-level theory of personality (Sullivan, Grant, &
Grant, 1957) as playing a major role in the foundations of the Jesness Personality
Inventory Classification system and his articulation of personality characteristics defining
the construct of personality.

15
The following will review this study’s adopted core structure of personality, the defining
elements of Jesness’s construct of personality, and will close with a discussion of which
facets of the Jesness Personality Inventory were utilized in the present study.
The core structure of personality as presented by Sullivan, Grant, and Grant
(1957), has as a basic premise that human organisms tend to break experience into its
fundamental elements to provide reference points in adjusting to the complex stimulus
structure of the external world. According to Sullivan et al. (1957), these reference points
are not isolated from one another, but are merged in a basic, central reference scheme or
cognitive world, in which the experienced world of the person is integrated with, and
modified by, personal needs and expectations. The nature and quality of perception and
experience impact the developmental expectations and hypotheses about reference points
and so determine behavioral consequences of experience.
According to Jesness and Wedge (1984), the individual’s perception of his or her
world is theorized to be constantly shaped by unique and ever-changing personal
cognitive lens. Consequently, these expectations and hypotheses influence all the
individual’s interpretations of and responses to the environment. Thus, it is believed that
over time a fairly consistent set of expectations and attitudes is established to form the
interpreting and working philosophy of life. It is this nexus of gradually expanding
experience, expectations, hypotheses, and perceptions which make up the core of
personality (Sullivan et al, 1957).
Jesness adds to the work of Sullivan, Grant, and Grant (1957) by providing ten
personality characteristics and an index of delinquency (A-Social Index). These

16
personality characteristics make up the construct of personality and are measured by the
Jesness Personality Inventory. Jesness (1996) views the delinquent population as a
heterogeneous group which can be distinguished not only by the number of offenses, but
by their personality profile. The personality profile as measured by the Jesness
Personality Inventory consists of the following personality dimensions (Jesness, 1996, p.
5):
Social Maladjustment Scale (SM): Social maladjustment refers to a set of attitudes
associated with inadequate or disturbed socialization. Here, social maladjustment
is defined by the extent to which individuals share attitudes of persons who do not
meet personal needs and environmental demands in socially approved ways.
Value Oriented Scale (VO): Value orientation refers to a tendency to share attitudes and
opinions characteristic of a person in the lower socioeconomic classes.
Immaturity Scale (Imm): Immaturity reflects a tendency to display attitudes and
perceptions of self and others that are usual for a person of a younger age than the
subject.
Autism Scale (Au): Autism measures a tendency to distort reality, and in thinking and in
perceiving, according to one’s personal desires or needs.
Alienation Scale (Al): Alienation refers to the presence of distrust and estrangement in a
person’s attitudes towards others, especially towards those representing authority.
Manifest Aggression Scale (MA): Manifest aggression reflect an awareness of unpleasant
feelings (especially anger and frustration), a tendency to react readily with those
feelings, and discomfort concerning the presence and control of those feelings.

17
Withdrawal-Depression Scale (Wd): Withdrawal-depression indicates the extent of an
individual’s dissatisfaction with him-or herself and others, in a tendency towards
isolation.
Social Anxiety Scale (SA): Social anxiety refers to feelings of anxiety and to conscious
emotional discomfort in interpersonal relations.
Repression Scale (Rep): Repression reflects the exclusion from conscious awareness of
feelings that the individual normally would be expected to experience, or a failure
to label these emotions.
Denial Scale (Den): Denial indicates a reluctance to acknowledge unpleasant events or
conditions encountered in daily living.
Asocial Index (AI): The asocial index reflects a generalized disposition to resolve social
or personal problems in ways that show a disregard for social customs or rules.
The current study focused on the SM, MA, and AI Jesness personality scales.
These three have consistently been found to distinguish among levels of delinquency
(Dembo, La Voie, Schmeidler, & Washburn, 1987; Graham, 1981; Kunce & Hemphill,
1983; Martin, 1981; Martin & Murphy, 1993; Sorensen & Johnson, 1996). Though the AI
is a personality profile composite score of all 10 personality characteristics reflecting the
generalized tendency to behave in ways that transgress established rules, the SM and MA
have been found to stand out in their own right as important personality characteristics to
consider in distinguishing among the delinquent population (Jesness, 1996).

18
The construct of family functioning is grounded in Olson, Russell and Sprenkle’s
(1983) Circumplex Model of Marital and Family Systems as tested by the FACES-II. The
Circumplex Model of Marital and Family Systems consists of three central dimensions of
family behavior which are integrated in the model: adaptability, cohesion, and
communication (Thomas and Olson, 1993). The following will be a review of the
Circumplex Model which was utilized in the current study.
The two primary dimensions of family interaction in this model are adaptability
and cohesion (Olson, Mccubbin, Bames, Larson, Muxen, & Wibson, 1985). Family
adaptability is defined as "the ability of a marital or family system to change its power
structure, role relationships, and relationship rules in response to situational and
developmental stress" (Olson, Russell, & Sprenkle, 1983, p. 70). There are four levels of
adaptability ranging from extremely low (rigid), to moderate (structured, flexible), to
extremely high (chaotic). Family cohesion is defined as "the emotional bonding that
family members have towards one another" (Olson et al., 1983, p.70). Within the
Circumplex Model there are four levels of cohesion ranging from extremely low
(disengaged), to moderate (separated, connected), to extremely high (enmeshed).
The two dimensions of cohesion and adaptability with their four levels are
arranged orthogonally to form the Circumplex Model. Thus, the Circumplex Model
yields 16 possible combinations of cohesion and adaptability. The four types in the center
of the model are called Balanced types because they represent a balance between the
extremes of the cohesion and adaptability continua. The eight Mid-Ranged family types

19
are Extreme on one dimension and Balanced on the other. Then finally, there are the four
Extreme types. These are families who are existing at either extreme of the cohesion and
the adaptability continua at the same time.
The third dimension of The Circumplex Model is family communication. Family
communication is seen as critical in facilitating movement along the two dimensions of
adaptability and cohesion (Olson et. al., 1979). It is hypothesized that families who are
typed in the Balanced area of the Circumplex Model have better communication skills
than families in the Extreme types (Walsh, 1993).
Low COHESION
High
DISENGAGED SEPARATED CONNECTED ENMESHED
CHAOTIC
High
I
A
D
A
P FLEXIBLE
T
A
B
I
L
I
T STRUCTURED
Y
1
Low
RIGID
BALANCED
MID-RANGE
EXTREME
Figure 1 Circumplex Model of Marital and Family Systems

20
The Circumplex Model assumes there is a curvilinear relationship between the
two central dimensions (cohesion and adaptability) and family functioning. Those
families who exist in the mid ranges of cohesion and adaptability (Balanced) are
hypothesized to be most viable for healthy family functioning and development (Olson,
1989). These balanced families have moderate cohesion (separated, connected)
representing a balance between too little closeness (disengaged) and too much closeness
(enmeshed) in the family. Similarly, balanced families also have moderate adaptability
(structured, flexible) representing a balance between too little change (rigid) and too
much change (chaotic) in the family. Families found to range in the extremes of cohesion
and adaptability are generally seen as most dysfunctional and problematic in terms of
family functioning and development (Olson, Sprenkle, & Russuel, 1979).
Rationale dor the Study
This study was theoretically grounded in an eco-systemic theory of self and
system development. Bronfenbrenner’s (1979) Social Ecological model of human
development provided the fundamental theoretical justification for investigating if a
relationship between personality (i.e., characteristics of the self) and family functioning
(i.e., environmental characteristics of the system), existed across levels of delinquent
offending (i.e., social development). The construct of personality was grounded in
Jesness’s (1996) Jesness Personality Inventory which identified ten personality
characteristics and an index of delinquency (Asocial Index). The construct of family
functioning was grounded in Olson, Russell and Sprenkle’s (1983) Circumplex Model of

21
Marital and Family Systems as tested by the FACES-II. Thus, this study was guided by a
transactional and multilevel conceptualization of delinquency risk and presumed that the
development of antisocial behaviors was dependent on the interaction of individual and
contextual characteristics (Bronfenbrenner, 1979).
Statement of the Problem
The relationship between family functioning (cohesion and adaptability) as seen
through the lens of the family Circumplex model (Olson et. al., 1983) and personality
(social maladjustment, manifest aggression, and asocial index) as grounded in the Jesness
personality inventory (Jesness, 1996) across rates of delinquency was unknown. The
following will address the need for the study.
Need fot the Study
As established above, the wide extent and high costs of juvenile offending
compounds the urgency for research which contributes to the understanding and ultimate
efforts to decrease juvenile delinquency. Research efforts which attempt to further the
field of study in juvenile delinquency are considered an excellent investment in the future
of our nation that can be postponed only at great cost to society (Bogenschneider, 1996;
Committee on Economic Development, Research and Policy, 1987). A theoretically
supported question (Bronfenbrenner, 1979) and recognized gap in the field of juvenile
delinquent study (Arbuthnot, Gordon, & Jurkovic 1987; Cox, 1996; Jesness, 1996;
Jessor, 1991; Le Blanc, 1992; Lorion, Tolan, & Wahlar, 1987; Quay, 1987; Sameroff &

22
Chandler, 1975; Shaw & Scott, 1991; Tolan, Cromwell, & Brasswell, 1986) of which this
study addressed was, “Does a relationship exist between an adolescent’s personality and
his/her perception of family functioning across his/her rate of delinquent offending while
holding age, race and gender constant?”
It was the position of this researcher that if it were known whether this
hypothesized relationship existed, there would be implications for theory, research,
training, practice and social policy. Such knowledge would encourage critical appraisal of
existing theoretical approaches to juvenile delinquency. If no relationship was found, then
attention could be paid to expanding the understanding of juvenile delinquency from the
theoretical perspectives of personality and family functioning in isolation of each other.
Further, no relationship found could be interpreted to challenge the theoretical
underpinnings of Bronfenbrenner’s (1979) model in regards to juvenile delinquency. If a
relationship was found, then further attention could be given to the critical examination of
the role of personality and family functioning taken together. This would be consistent
with Bronfenbrenner’s (1979) Social Ecological model of human development when
exploring juvenile delinquency.
This knowledge also could facilitate further research into what is considered
critical regions of assessment in juvenile delinquents. For example, the importance of
careful and accurate assessment which contributes to juvenile justice correctional
decisions (Andrews, Bonta, and Hoge, 1990; Hoge, Andrews, and Leschied, 1995; Jaffe,
Leschied, Sab, and Austin, 1985), the ability to target those juveniles who are most in
need of limited treatment resources (Farrington, 1995) as well as the areas to be addressed

23
in a treatment strategy dealing with a juvenile delinquent client (Henggeler, 1989;
Loeber, 1990; Mulvey, Arthur, Reppucci, 1993; Tolan and Mitchell, 1989) could all be
influenced by the findings of this study. If no relationship was found, researching the
significance of assessing personality and family functioning independently regarding the
above examples could be pursued. If a relationship was found, further efforts could be
made to explore the interaction of personality and family functions when assessing for the
above examples. Further, finding a relationship would contribute to the need for research
efforts to go beyond the cross-sectional study design, as was the case in this study, to a
longitudinal design. This would allow an exploration into what intervals of time one
should reassess the relationship between the adolescent’s personality and family
functioning when addressing the above examples.
The findings of this study could be seen to have implications for counselors in
training and in practice when applied to the counseling needs of juvenile delinquents. If
no relationship was found, less importance may have been placed in gaining
understanding of the relationship between theories of personality and family functioning
when considering treatment approaches for the delinquent population. If a relationship
was found, greater importance would need to be placed on adopting a more holistic eco-
systemic stance including personality and family functioning when considering
approaches to counseling and understanding the juvenile population.
Finally, social policy could be influenced by the findings of this study. According
to Garbarino (1993), when we are talking about social policy we are talking about what
we think is simultaneously desirable and attainable: A statement of will, a statement of

24
goals, and the social maps that we see giving us the route to attain these goals. Social
policy informs clinical practice and it indirectly sets the agenda for clinical practice.
Social policy offers a definition of what the issues are, and it shapes the means available
to address these issues (Garbarino, 1993). The design of social policy is greatly
influenced by fundamental assumptions or conclusions about the nature of both social
problems and adolescents. If no relationship was found, grounds to influence the social
policies to fund research and programs which have little concern for the interaction of
personality and family functioning when dealing with the juvenile delinquent population
would be established. If a relationship was found, not only would grounds for funding
research and programs which take into consideration the relationship of personality and
family functioning strengthen, but also policies instructing state juvenile justice
assessment approaches may be influenced to consider the adolescent’s personality and
family functioning as well.
Purpose of the Study
The purpose of this study was to further efforts in the determination of the
existence of a relationship between personality and family functioning across the rate of
delinquency. The findings contribute to addressing the recognized gap in the
understanding of delinquency and provide information which has theoretical and practical
implications for the understanding and future work with the complex and costly problem
of Juvenile delinquency.

25
Research Questions
The independent variables that were included in the collection of original research
questions (as listed below) were: age, gender, race, adaptability, cohesion, social
maladjustment, manifest aggression, and asocial index. The dependent variable referred
to in these research questions was the rate of juvenile delinquency as measured by
number of criminal charges. The primary research question addressed in the current study
was, “Does a relationship exist between an adolescent’s personality and his/her
perception of family functioning across his/her rate of delinquent offending while holding
age, race and gender constant?” Each listed research question below that pertained to an
interaction between personality and family functioning was developed to provide the
inferences needed in their own right to address the primary research question. The
research questions including interactions were questions 4, 5, 6, 7, 8, and 9. The
remaining questions were developed to address age (question 1), gender (question 2),
and race (question 3).
However, due to multi-colinearity concerns, of the research questions listed
below, 4, 8, and 9 were unable to be addressed. Nevertheless, sufficient inferences needed
to address the primary research question was gained through addressing the remaining
research questions (5, 6, and 7). All of the corresponding tested hypotheses with their
required modifications due to multi-colinearity concerns are presented in chapter 3. The
primary changes revolved around limiting the number of variables that were controlled
for. The following is a list of the research questions that were originally purposed to be
addressed in this study.

26
1. What is the relationship between age and rate of juvenile delinquency as
measured by number of criminal charges while holding gender, race, adaptability,
cohesion, social maladjustment, manifest aggression, and asocial index constant?
2. What is the relationship between gender and rate of juvenile delinquency as
measured by number of criminal charges while holding age, race, adaptability, cohesion,
social maladjustment, manifest aggression, and asocial index constant?
3. What is the relationship between race and rate of juvenile delinquency as
measured by number of criminal charges while holding age, gender, adaptability,
cohesion, social maladjustment, manifest aggression, and asocial index constant?
4. What is the relationship between family cohesion as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal charges as one varies
across scores of social maladjustment as measured by Jesness personality inventory while
holding age, gender, race, adaptability, manifest aggression, and asocial index constant?
5. What is the relationship between family cohesion as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal charges as one varies
across scores of manifest aggression as measured by Jesness personality inventory while
holding age, gender, race, adaptability, social maladjustment, and asocial index constant?
6. What is the relationship between family cohesion as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal charges as one varies
across scores of asocial index as measured by Jesness personality inventory while holding
age, gender, race, adaptability, social maladjustment, and manifest aggression constant?

27
7. What is the relationship between family adaptability as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal charges as one varies
across scores of social maladjustment as measured by Jesness personality inventory while
holding age, gender, race, cohesion, manifest aggression, and asocial index constant?
8. What is the relationship between family adaptability as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal charges as one varies
across scores of manifest aggression as measured by Jesness personality inventory while
holding age, gender, race, cohesion, social maladjustment, and asocial index constant?
9. What is the relationship between family adaptability as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal charges as one varies
across scores of asocial index as measured by Jesness personality inventory while holding
age, gender, race, cohesion, social maladjustment, and manifest aggression, constant?
Definitiomof Terms
For the purposes of this study, the terms listed below were defined as follows:
Adolescence refers to the period of life between childhood and adulthood, and for
the purposes of this study referred to those individuals who ranged in age from 13 to 18.
Asocial Index (AI): The asocial index reflects a generalized disposition to resolve
social or personal problems in ways that show a disregard for social customs or rules
(Jesness, 1996, p. 6). Discriminate Functional Analysis was used to create this scale
which combines scores from all the other personality scales to best distinguish

28
delinquents (Jesness, 1996). For the purposes of this study AI was determined through the
use of the Jesness Personality Inventory.
Balanced family types are those families who exist in the mid ranges of cohesion
and adaptability. These families are hypothesized to be most viable for healthy family
functioning and development (Olson, 1989).
Delinquency, is defined as behavior that has caused or could cause adjudication of
a person no older than 18 (Tolan, Cromwell, & Brasswell, 1986).
Delinquent adolescents, for the purposes of this study were adolescents between
the ages of 12 and 19 years old who had been charged with a minimum of one illegal
offense as filed with the Department of Juvenile Justice.
Development, as defined through the lens of eco-systemic theory is seen as the
person’s evolving conception of the ecological environment, and his/her relation to it, as
well as the person’s growing capacity to discover, sustain, or alter its properties
(Bronfenbrenner, 1979). Fundamental to this view is the belief that development results
as a function of characteristics of the individual and his/her environment
(Bronfenbrenner, 1988). For the purposes of this study, increased levels of delinquent
offending suggested the presence of less healthy social development.
Eco-systemic theory purports that children are shaped not only by their personal
attributes, but also by the ever-widening environments in which they develop
(Bronfenbrenner, 1979). Children are influenced first and foremost by their family, but
also by their peers, school and communities (Bogenschneider, 1996). From the ecological
perspective the environmental influence is not limited to a single, immediate setting, but

29
is extended to incorporate interconnections between such settings, as well as the external
influences emanating from the larger surroundings. Thus, as Bronfenbrenner (1979)
noted, research that investigates the adolescent’s transactions within different systems
greatly facilitates our understanding of the etiology of deviant behavior.
Extreme family types are those families found to range in the extremes of
cohesion and adaptability. These families are generally seen as most dysfunctional and
problematic in terms of family functioning and development (Olson, Sprenkle, &
Russuel, 1979).
Family Adaptability is defined as the extent to which the family system is flexible
and able to change its power structure, role relationships, and relationship rules in
response to situational and developmental stress (Olson et al., 1985). For the purposes of
this study, adaptability was determined by the adaptability score from FACES-II.
FamilyJZohesion is defined as “the emotional bonding that family members have
towards one another” (Olson et al., 1983, p.70). Cohesion incorporates concepts of
emotional bonding, boundaries, coalitions, time, space, friends, decision making,
interests, and reaction (Olson et al., 1985). For the purposes of this study, cohesion was
determined by the cohesion score from FACES-II.
Family functioning for the purposes of this study was grounded in Olson, Russell
and Sprenkle’s (1983) Circumplex Model of Marital and Family Systems as tested by the
FACES-II. The level of family functioning varies from healthy to less healthy as families
move form balanced family types to extreme family types respectively.

30
Family cohesion and adaptability are the core factors making up the construct of family
functioning (Olson et. al, 1985).
Manifest aggression (MA): Manifest aggression reflects an awareness of
unpleasant feelings (especially anger and frustration), a tendency to react readily with
those feelings, and discomfort concerning the presence and control of those feelings
(Jesness, 1996, p. 5). For the purposes of this study MA was determined by the score on
the MA scale of the Jesness Personality Inventory.
The microsystem refers to a pattern of activities, roles, and interpersonal relations
experienced by the developing person in a given setting with particular physical and
material characteristics (Bronfenbrenner, 1979). Thus, it involves the structures and
processes taking place in an immediate face to face setting containing the developing
person (e.g., family, school, peer group, workplace, etc.).
Personality for the purposes of this study was grounded in Jesness’s (1996)
Jesness Personality Inventory. Central to defining the construct of personality in the
current study was the asocial index. Further, the personality characteristics of social
maladjustment and manifest aggression were included as relevant personality
characteristics influencing the development of delinquency (Jesness, 1996).
The proximal influences which are contained within the microsystem and were
relevant to the current study included personality and family functioning. These two
influences interact to form proximal processes which are viewed to directly effect the
course of an individual’s development (Bronfenbrenner, 1995).

31
í: Social maladjustment refers to a set of attitudes
associated with inadequate or disturbed socialization. Here, social maladjustment is
defined by the extent to which individuals share attitudes of persons who do not meet
personal needs and environmental demands in socially approved ways (Jesness, 1996, p.
5). For the purposes of this study SM was determined by the score on the SM scale of the
Jesness Personality Inventory.
Rate of juvenile delinquency for the purposes of this study, was comprised of the
total current number of illegal charges with which an adolescent has accrued over their
life time as filed within the juvenile court system at the time of data collection. The rate
was then delineated by categories of frequency of offending which included: first time
offenders (having only one charge), multiple offenders (having 2 to 4 charges) and
chronic offenders (having 5 or more charges) (Tracy, Wolfgang, & Figlio, 1990;
Wolfgang, Figlio, & Sellin, 1972).
Organization of the Study
The remainder of this study is organized into four chapters. Chapter 2 will present
a review of the related literature. Chapter 3 will describe the purpose and methodology
containing a statement of purpose, including delineation of relevant variables,
hypotheses, data analysis, description of the population, sampling procedures, sample,
data collection, and instrumentation. The results of the statistical analysis will be reported
in chapter 4. The study will conclude in chapter 5 where there will be a discussion of the
results as compared to the literature and the theories utilized.

32
Chapter 5 will also include a discussion of the limitations of the study, practical
implications of the results and recommendations for future research.

CHAPTER 2
REVIEW OF THE LITERATURE
Introduction
Adolescence is marked by dramatic changes in the individual and his/her
relationships with significant others and society. It is a time of magnificent promise and
insidious risk (Cox, 1996; lessor, 1991). Adolescence marks a long process of
experimentation which is essential to self definition. The adolescent and their family
mutually influence each other across time. The adolescent’s family must adjust to this
process by providing an environment which helps the adolescent to evaluate the outcome
of these changes. Overall, adaptions in family organization including changes in cohesion
and adaptability are required to meet these tasks of adolescence (Worden, 1991) as the
family is transformed from a unit geared to protect and nurture young children to one that
prepares them to enter the world of adult responsibilities and commitments (Garcia-Preto,
1988). The interplay or fit between the characteristics of the adolescent and the family
become the soil which generates adaptive or maladaptive psychological and social
development/functioning (Bronfrenbrenner, 1988; Rutter & Rutter, 1993; Thomas &
Chess, 1977; 1980; Lemer, 1982, Worden, 1991).
Bronfenbrenner (1979), who provided the guiding theory of this study, views
social development (level of delinquency) as a function of characteristics of the
33

34
individual (e.g., personality) and the environment (e.g., family). The present study was
designed to test that functional relationship by addressing the question, “Does a
relationship exist between an adolescent’s personality (i.e., characteristics of the self) and
his/her perception of family functioning (i.e., environmental characteristics of the system)
across his/her rate of delinquent offending (i.e., social development) while holding
relevant factors such as age, gender, and race constant?”
Chapter II will review the relevant literature to provide a context for
understanding the relationship between: (a) personality and delinquency, (b) family
functioning and delinquency, and ( c ) Bronfenbrenner’s (1979) Eco-Systemic Model of
Human Development and delinquency.
Personality and Delinquency
Personality factors have been linked in research to antisocial and delinquent
behavior for a long time (Dembo, La Voie, Schmeider, & Washburn, 1987; Eysenck &.
Gudjonsson, 1989; Farrington, 1990; Fonseca & Yule, 1995; Gold, 1978; Guerra, 1987:
Heaven, 1996; Hoge, Andrews, Lesheid, 1994; Jesness, 1996; Roderts, Schmitz, Pinto.
Cain, 1990; Moffitt, 1993; Paris, 1996; Rutter & Giller, 1983; Rutter & Rutter, 1993;
Salts, Lindholm, Goddard, & Duncan, 1995; Sorensen & Johnson, 1996; Tolan & Loeber.
1993; Quay, 1987). Jessor (1982), Shaw & Scott (1991) and, more recently, Jensen-
Campbell, Graziano, and Hair (1996) have emphasized the importance of recognizing that
personality factors are essential to a theoretical understanding of the way in which
adolescents with problem behaviors perceive their environment.

35
For example, recent efforts have operationalized and validated factors relevant to a theory
of criminal or antisocial personality to provide a viable explanation for the considerable
continuity over time in the relative levels of both offending and antisocial behavior
(Farrington, 1990; Frichette & LeBlanc, 1987; Jesness, 1996; Le Blanc, McDuff,
Charlebois, Gagnon, & Tremblay, 1991; Lytton, 1990; Shaw & Bell, 1993 and Quay,
1987).
Dembo, LaVoie, Schmeidher, and Washburn (1987) have suggested that to
neglect the psychological dimension of the adolescent precludes a deeper understanding
of the motivational bases of their behavior. Loeber and Dishion (1983) observed that the
general interest in identifying psychological variables related to delinquency stems from
the promising proposition that if such variables exist, then children at risk for
delinquency could be identified and targeted for preventive intervention.
Part of what makes an individual unique is their distinctive personality. From
birth, children are viewed as varying in their constitutional makeup or temperament
which provides the foundation of their own unique personality style (Kohnstamm, Bates,
& Rothbart, 1989; Garrison & Earls, 1987; Rutter & Rutter, 1993). Personality refers to
the pattern that each person, as a thinking being, develops as a way of dealing with their
temperamental traits, their encounters with various social contexts, and their life
experiences (Rutter & Rutter, 1993). Personality involves sets of cognitions about
ourselves, our relationships, and our interactions with the environment which constitute
the self-system and contains such qualities as self-esteem, self-efficacy, and social
problem-solving skills (Rutter & Rutter, 1993). The core structure of personality is based

36
in the human inclination to break experience into its fundamental elements to provide
reference points in adjusting to the complex stimulus structure of the external world
(Sullivan, Grant, & Grant, 1957). The merging of these reference points establishes a
basic central reference scheme or cognitive world, in which the experienced world of the
person is integrated with, and modified by, personal needs and expectations (Sullivan et
al, 1957). Consequently, these expectations, personal needs and hypotheses influence all
the individual’s interpretations of and responses to the environment (Jesness & Wedge,
1984). Thus, over time, a fairly consistent set of expectations and attitudes is established
as an interpreting and working philosophy of life. Sullivan et al, (1957) suggests that it is
this nexus of gradually expanding experience, expectations, hypotheses, and perceptions
which make up the core of the personality.
Implicit in personality formation is the consistency or stability across time of its
makeup within an individual (Brook, Whiteman, Normura, Gordon, & Cohen, 1988;
Caspi & Bern, 1990; Tolan & Loeber, 1993). Many researchers have established a link
between early temperament and later personality (Caspi, Henry, McGee, Moffitt, and
Silva, 1995; Caspi, & Silva, 1995; Lynam, 1996). Tolan and Thomas (1995) reported
that Nagin and Farrington’s (1992) test of Farrington and West’s (in press) Cambridge
data suggests that persistent personality traits offered a reasonable explanation for the
numbers of convictions for criminal offenses among their 411 urban male sample, which
was followed from age 8 to 32. Nagin and Farrington’s (1992) results support the
contention of Wilson and Hermstein (1985) and Gottfredson and Hirschi (1990) who
state that criminal activity level is primarily due to stable individual differences and not

37
situational or dynamic characteristics, such as timing of delinquent onset. Tolan and
Thomas (1995) and Tolan and Loeber (1993) agree that stable individual characteristics
are more influential than dynamic and situational influences, especially for those with
more extreme delinquency patterns (e.g., multiple arrests).
Continued evidence supporting the stability of personality over time has
strengthened the efforts to identify personality characteristics which differentiate types of
delinquents and levels of delinquency (See Mulvey, Arthur, Reppucci, 1993). According
to Quay (1987), several studies offer convergent support for a few distinct behavioral
subtypes which have shown promising, but mixed results. For example, factor analytic
studies of data from behavioral check lists (Achenback & Edelbrook, 1983; Quay &
Peterson, 1983) have identified four categories: undersocialized aggressive, socialized
aggressive, attention deficit, and anxious withdrawn. Similarly, (Mulvey, Aurthur and
Reppucci, 1993), research rooted in the California I-Level system of the 1970's (Jesness,
1971) found three subtypes of delinquents: passive conformist, power-oriented, and
neurotic (Palmer. 1974). Gold, (1978), Kaplan, (1980), Wells, & Rankin, (1993)
identified lower level of self-esteem as a common personality trait among delinquents.
Loeber, (1982). Loeber, (1990), Lorion et al. (1987), Patterson, (1986), and Tolan &
Mitchell, (1989) identified elevated measures of aggression as a common trait.
Measures of individual aggression have been viewed as the most useful form of
delineating delinquents followed second by indices of family systemic functioning
(Tolan, Cromwell, & Brass, 1986; Lorion, Tolan, & Wahlar, 1987). In a review provided
by Loeber and Stouthamer-Loeber (1987) it was concluded that 70 to 90 percent of

38
violent offenders had been highly aggressive when young (Farrington, 1978; Magnusson,
Stattin & Duner, 1983; Robins, 1966). Blumstein, Farrington, and Moitra, (1985), Craig
and Glick, (1968), Eron and Huesmann, (1990), Farrington (1995), and Pulkkinen,
(1983) all reported that elevated levels of aggressive tendencies correlated with violent
and chronic delinquent offending.
To illustrate the pervasiveness of aggression in antisocial youth, the following
will summerize five constructs of cognitive activity levels or styles related to increased
risks of delinquency as provided by Tolan and Loeber (1993). First, antisocial children
tend to utilize aggressive social cognitions in evaluating problems (Dodge, 1980; Dodge
& Frame, 1982; Guerra, Tolan, Huesmann, Van Acker, & Eron, 1990; Huesmann, 1988;
Huesmann & Eron, 1984). Second, antisocial children and adolescents tend to over label
individuals’ behavior as motivated by aggression and to apply aggressive responses to
problem-solving (Dodge & Somberg, 1987). Antisocial children are often less aware of
the impact of such behavior on others (Guerra & Slaby, 1990) and are less able to take the
perspective of others in social interactions (Guerra, Eron, Huesmann, Tolan, & Van
Acker, 1991; Huesmann & Eron, 1984). Third, they evidence limited moral reasoning
skills (Guerra & Slaby, 1989,1990), and fourth, a low social skills level is often seen
which further contributes to their increased risk for antisocial behavior (Tolan, Pentz,
Aupporle, & Davis, 1990).

39
And finally, fifth, antisocial adolescents tend to have lower ability to generate competent
social dilemma solutions, tend to have less competent and less broad range of coping
skills (Tolan, Blitz, Davis, Fisher, Schwartz, & Thomas, 1990), and utilize more direct
(passive) as well as aggressive coping responses to stress (Tolan & Gorman-Smith,
1991).
While aggression is among the strongest facets of personality useful in delineating
risk of delinquency, it is merely one element of a more general antisocial tendency or
personality which may arise in childhood and could continue through the teenage and
adult years leading to increased offending (Farrington, 1995; West & Farrington, 1977).
For example, Hoge, Andrews, and Leshied (1994) utilized a sample of 338 mostly more
serious male and female offenders ranging in age from 12-17 to explore the independent
contribution of a general antisocial attitude variable in predicting delinquent activity. The
authors concluded that an antisocial attitude variable reflecting criminal or otherwise
antisocial attitudes, made a significant contribution to the prediction of criminal activity
independent of the family and peer association variables. This result was seen as
consistent with those reported by Glueck and Glueck (1950) and Guerra (1989) and
emphasizes the importance of antisocial/antiauthority/procriminal attitudes and beliefs in
the promotion of criminal behavior in young people.
Taking the above personality findings into consideration, the present study
utilized Jesness’s (1996) Jesness Personality Inventory to operationalize and define the
construct of personality. Building on the defining personality work of Sullivan, Grant,
and Grant (1957), Jesness identified ten personality characteristics and an index of

40
delinquency (Asocial Index). Of these personality scales, the current study focused on the
social maladjustment (SM), manifest aggression (MA) and asocial index (AI). The
primary reasons these three were chosen was the importance of considering facets of
personality which pertain to amounts of aggression, the inappropriate usage of aggression
and a general antisocial attitudes in the delineation of delinquency.
SM refers to a set of attitudes associated with inadequate or disturbed
socialization. Here, social maladjustment is defined by the extent to which individuals
share attitudes of persons who do not meet personal needs and environmental demands in
socially approved ways (Jesness, 1996). MA reflects an awareness of unpleasant feelings
(especially anger and frustration), a tendency to react readily with those feelings, and
discomfort concerning the presence and control of those feelings (Jesness, 1996). AI is a
personality profile composite score of all 10 personality characteristics reflecting a
generalized disposition to resolve social or personal problems in ways that show a
disregard for social customs or rules (Jesness, 1996). These three have consistently been
found to distinguish among levels of delinquency (Dembo, La Voie, Schmeidler, &
Washburn, 1987; Graham, 1981; Jesness, 1996; Kunce & Hemphill, 1983; Martin, 1981;
Martin & Murphy, 1993; Sorensen «fe Johnson, 1996). It is clear from the above review
that personality is an important factor in the exploration of delinquency. The following
will be a review of what empirical and theoretical role the family plays in the exploration
of delinquency.

41
Family Functioning and Delinquency
Similar to personality factors, family factors have also been found to strongly
relate to delinquency in studies and reviews of antisocial and delinquent behavior
(Chamberlain & Rosicky, 1995; Hazelrigg, Cooper, & Borduin, 1987; Lauritsen, 1993;
Loeber & Hay, 1994; Henggeler, 1989; Johnson, Su, Gerstein, Shin, & Hoffman, 1995;
Loeber & Dishion, 1983; Tolan, Cromwell, & Brass, 1986; Wasserman, Miller, Pinner, &
Jaramillo, 1996; Loeber & Stouthamer-Loeber, 1986; Loeber, 1990; Snyder & Patterson,
1987; Tolan & Loeber, 1993). Research involving the role of the family in delinquency
has been investigated from many different perspectives. Tolan et al (1986) breaks the
research down into two primary categories. First, the earlier research focused more
heavily on structural variables. Second, and perhaps more of a direct indicator of the
family's role in delinquency is family interaction style and emotional atmosphere or more
commonly termed, “family functioning” variables. The following will be a review of
research findings from the structural and family functioning categories, an explanation of
the Circumplex Model of Marital and Family Systems ( Olson, Russell, & Sprenkle,
1983) chosen to theoretically conceptualize family functioning, and relevant research
findings relating the Circumplex model to delinquency.
Structural Variables
As denoted by Tolan et al (1986), the majority of early research focused on
structural variables such as father's absence. Much of the broken home research could be
considered to fall under this category. A fairly current comprehensive critique attempting
to clarify the relationship between the broken home and juvenile delinquency conducted

42
by Free (1991) offers an excellent review of this category and broader demographic
variables. Free’s findings, which are constant with a study conducted by Wells and
Rankin (1991), suggest that the broken home is more strongly related to minor offenses
than to serious offenses. Further, Free (1991) found that the effects of father absence and
the presence of a stepparent on delinquency were inconclusive and some evidence was
found supporting variations to the broken home/delinquency relationship depending on
gender, race, socioeconomic status, and neighborhood. Inconclusive findings precluded
Free (1991) from being able to discern a clear evaluation regarding the impact of the
timing of the break (childhood verses adolescence) or reasons for the break (divorce
versus death) on delinquency.
A review provided by Yoshikawa (1994), concluded that effects of family
structural variables such as broken homes, separation from parents, and number of
parents in the family, were indirectly mediated by parenting variables which are often
considered variables of family functioning (Bates, Bayles, Bennett, Ridge, & Brown,
1991; Cohen & Brooks, 1987; Craig & Glick, 1963; Laub & Simpson, 1988; Liska &
Reed, 1985; McCord, 1979; Patterson, 1982). General findings across the field of
delinquency have lead to the conclusion by many in the field that family structure appears
to be of little significance in over all juvenile delinquency, especially when controlling
for family functioning (Cemkovich & Giordano, 1987; Henggeler, 1989; Lauritsen, 1993;
Loeber & Stouthamer-Loeber, 1986; Lorion, Tolan, & Wahlar, 1987; Rosen, 1985;
Tolan, 1987 ; Tolan et. al, 1986; Tolan & Loeber, 1993; Tolan & Lorion, 1988 Tolan &
Mitchell, 1989; Yoshikawa, 1994).

43
Thus, as Nye (1958, p.34), an early researcher in the field of delinquency concluded, “It
is not the structure of the family per se which is causally related to delinquency, but
rather the actual relationships and interactional patterns which are the key variables.”
Family Functioning
Family functioning was denoted by Tolan et al (1986) as the more recent and
primary category of family variables which play a major role in the development and
maintenance of juvenile delinquency. Family functioning variables are mainly seen to
consist of qualities including family interactional style and emotional atmosphere. The
following is a summary of five family functioning characteristics or interactions within
families having antisocial children which distinguish them from other families as outlined
by Tolan and Mitchell (1989) and corroborated by many other researchers (Chamberlain
& Rosicky, 1995, Henggeler, 1989; Henggeler, Melton, Smith, Foster, Hanely, &
Hutchinson, 1993; Lyton, True, Eisen, 1995; McGuffin & Gottesman, 1985; Wasserman,
Miller, Pinner, & Jarmillo, 1996; Yoshikawa, 1994).
First, families having delinquents often demonstrate long-standing and high
frequency levels of parental conflict, especially around discipline and value directives to
the children (Alexander, 1973; Hetherington, Stowie, & Ridberg, 1971; Reiss, 1981;
Singer, 1974). These families are often market by inconsistent disciplinary practices and
unintentional parental reinforcement (McCord, 1979; Patterson, & Stouthamer-loeber,
1984). Second, the direction of conversations and more importantly the influence of
power on family decisions is rarely differentially influenced between parents and children
(Alexander, 1973; Hetherington et al., 1971; Minuchin, Montalvo, Gurmey, Rosman, &

44
Schumer, 1967). Third, family interactions are frequently coercive for all involved
(Patterson, 1986). As a result of the coercive nature of relationships, positive expressions
seldom occur and they are unlikely to be followed by positive responses (Alexander,
1973). Similarly, Hanson, Henggeler, Haefele, & Rodick (1984), Power, Ash,
Schoenberg, and Sorey (1974), and Salts, Lindholm, Goddard, & Duncan, (1995) have all
suggested that in general, research supports the observation that families of delinquents
tend to exhibit more conflict than families of non-delinquents. Overall, this third point
emphasizes a general lack of positive affect in delinquent family interactions.
Fourth, according to Tolan and Mitchell (1989), communication in these families
is more often misperceived and labeled as aggressive than in other families (Alexander,
1973). There is a heightened tendency in the entire family to be suspicious of the
motivations of others and to assume intentional aggression. This propensity is usually
more prominent in the identified patient. Systemically, this leads to less emotional
cohesion, especially during times of conflict (Hanson, Henggeler, Haefle, & Rodick,
1984; Henggeler, 1989; Tolan, 1987;1988a; Tolan & Loeber, 1993). The fifth and final
discriminating characteristic of these families, is that a large percentage of
communication time is dominated by one or two members with an implicit or sometimes
explicit message proclaiming a lack of willingness to compromise. Similarly, family
problem-solving interactions are often viewed by members as threatening and as a
situation of competitiveness rather than joint challenge (Reiss, 1981). In sum, according
to this fifth point, it is Tolan and Mitchell’s (1989) conclusion that much of the
communication is defensive, hostile, and aimed at maintaining one’s safety.

45
Other summaries have listed similar distinguishing characteristics. For example,
the review offered by Scholte (1992), found major family risk factors regarding
delinquency included: (1) severe family conflict, (2) insecure attachments, (3) poor
supervision, (4) nondemocratic child-rearing practices, and (5) antisocial behavior at
home. Taking this review of the characteristics of delinquent families into consideration,
it is not surprising that many researchers have found between 30 and 40 percent of
variation in child antisocial behavior to be due to poor parenting and family interaction
variables, (i.e., poor family functioning) (e.g., Baldwin & Skinner, 1988; Patterson, 1986;
Patterson, Debaryshe, & Ramsey, 1989; Patterson, Dishion, & Banks, 1984).
The following will be an explanation of the Circumplex model which was used in
the current study. This theoretical model will help provide insights into the mechanisms
and characteristics within the family system which may effect the level of delinquency.
The current study utilized the Circumplex Model of Marital and Family Systems
(Olson, Sprenkle, & Russell, 1979; Olson, Russell, & Sprenkle, 1983, 1989) to
theoretically conceptualize family functioning. This model was developed in an attempt
to bridge the gap between research, theory, and practice (Olson, 1986). The core
components of this systems theory (cohesion and adaptability) were derived out of an
attempt to delineate two aspects of marital and family behavior that appear as underlying
dimensions for the multitude of concepts in the family field (Olson, Sprenkle, & Russell,
1979).

46
A review of the literature conducted by Olson et al (1979) brought to light over 50
concepts related to one or both of these dimensions. For example, as illustrated by
Edman, Cole and Howard (1990), related to cohesion are Minuchin's (1974) concepts of
boundaries, disengagement, and enmeshment, Bowen's (1959) concepts of emotional
divorce, differentiation, and emotional fusion, Hess and Handel's (1959) concepts of
separateness and connectedness, and Wynne and his colleagues' (1958) concepts of
pseudohostility, mutuality, and pseudomuality. Related to adaptability are the Kieman
and Tallman's (1972) concepts of flexibility and spousal adaptability, Wertheim's (1975)
concepts of morphostasis and morphogenesis and the Group for the Advancement of
Psychiatry's (1970) concepts of role agreement, and flexible leadership. These concepts
along with the foundations of general systems theory (Buckley, 1967) have all played a
role in the theoretical formulations of family functioning as modeled by the Circumplex
model. In the current study, this model was measured through the use of the FACES-II.
The following will be an overview of the Circumplex Model of Marital and Family
Systems followed by research relating this model to delinquency.
Cohesion and adaptability are the two primary qualities used in the Circumplex
model to delineate the levels of family functioning. Family functioning is defined to
range from the most healthy or Balance family types, to Mid-Range, to the least healthy
or Extreme family types. The level of communication within the family is the third
dimension of the model. Communication is hypothesized to facilitate the family’s ability
to shift upwards from lower levels of functioning or, if poor communication is present,
deteriorate to lower levels of family functioning.

47
To determine a family’s overall level of family functioning from this perspective,
their quality of cohesion and adaptability must be established. Family cohesion is
defined as "the emotional bonding that family members have towards one another"
(Olson, Russell, & Sprenkle, 1983, p. 70). Cohesion is seen as varying along a continuum
consisting of four basic levels. These levels vary from the extremely low (disengaged), to
moderate (separated, connected), to extremely high (enmeshed). Similarly, adaptability is
defined to also vary along a continuum consisting of four basic levels. These levels vary
from extremely low (rigid), to moderate (structured, flexible), to extremely high
(chaotic). Family adaptability is defined as "the ability of a marital or family system to
change its power structure, role relationships, and relationship rules in response to
situational and developmental stress" (Olson et al., 1983, p.70).
To understand the meaning behind the levels of family functioning it is important
to understand the central hypothesis to the Circumplex model. This model hypothesizes
the existence of a curvilinear relationship between the dimensions of cohesion and
adaptability and family functioning (Olson, McCubbin, Bames, Larson, Muxen, &
Wilson, 1985). Thus, as previously outlined, those families who exist in the mid ranges of
cohesion and adaptability (Balanced family types) are hypothesized to be most viable for
healthy family functioning and development (Olson, 1989). The balanced families have
moderate cohesion (separated, connected) representing a balance between too little
closeness (disengaged) and too much closeness (enmeshed) in the family. Similarly,
balanced families also have moderate adaptability (structured, flexible) representing a
balance between too little change (rigid) and too much change (chaotic) in the family.

48
Families found to range in the extremes of cohesion and adaptability (Extreme
family types) are generally seen as most dysfunctional and problematic in terms of family
functioning and development (Olson, Sprenkle, & Russuel, 1979). It is also hypothesized
that families who are of Balanced type have better communication skills than families in
the Extreme types (Olson, 1989). Overall, the Circumplex model is clearly defined and
easily measurable (FACES-II) which contributed to its utility in distinguishing levels of
family functioning.
The utility and theoretical tenets postulated by the Circumplex model have been
substantiated throughout the literature. For example, it has been clearly established that
the Circumplex model can reliably discriminate between problem families and non-
symptomatic families (Walsh, 1993). Also, Olson (1994) has made a strong case
substantiating the underlying curvilinear hypothesis of the Circumplex model.
Further support also exists within the literature for the model’s hypothesis which
suggests that lower functioning families such as families with delinquents would reflect
more troubled communications than higher functioning families. For example, in relation
to communication, such families have been associated with inconsistent family
communication patterns (Lessin & Jacob, 1984), high amounts of paternal and maternal
defensive communication in competitive contexts (Alexander, Waldron, Barton, & Mas,
1989), and generally aggressive and unclear communications styles (Alexander, 1973;
Tolan & Mitchell, 1989).
Most relevant to the present study was the support found across several reviews of
the Circumplex model’s utility to distinguish among levels of delinquency (e.g., Geismar

49
& Wood, 1986; Henggeler, 1989). Findings similar to the above reviewed have
contributed to prominent researchers in the field of delinquency to indorse the
Circumplex model as a family systems model of choice in the area of delinquency
research and treatment (Henggeler, 1989; Maynard & Hultquist, 1988; Tolan & Lorion,
1988; Worden, 1991). The following will be a review of research findings relating the
two central dimensions of the Circumplex Model (adaptability and cohesion) to
delinquency.
While still supported, the dimension receiving the least empirical backing has
been the adaptability dimension of the Circumplex model. This dimension has not
consistently been shown to discriminate between levels of delinquency (Cox, 1996;
Hanson, Henggeler, Haefle, & Rodick, 1984, Henggeler, Melton, Smith, Foster, Hanley,
& Hutchinson, 1993; Krohn, Stem, Thomberry, & Jang, 1992; Tolan, 1988a). According
to Henggeler (1989), this may be due to sampling and measurement differences. While
according to Olson (1994), it may be more an artifact of the current likert scale design
utilized in the FACES-II.
However, other studies have utilized the FACES and demonstrated a relationship
between the extremes of adaptability and levels of delinquency. For example, in a sample
of juvenile offenders, Rodick, Henggeler, and Hanson (1986), found that families of
delinquents were more chaotic and disorganized. Blaske, Borduin, Henggeler, and Mann
(1989) found that the families of adolescent offenders, especially violent offenders, were
more rigid and inflexible.

50
Similarly, the studies of McGaha and Fournier (1988) exploring families having
violent offenders and Henggeler, Burr-Harris, Borduin, and McCallum, (1991) studying
families with repeat adolescent offenders, each found scores suggesting these families
existed in the extremes of adaptability as measured by the FACES. Though mixed
findings exist, reviewers have generally concluded that a link appears to exits between
adolescent antisocial behavior and both low family adaptability (rigid family structure)
and high family adaptability (chaotic family structure) (e.g., Geismar & Wood, 1986;
Henggeler, 1989).
Cohesion
The relationship between many different forms of cohesion in family systems and
delinquency has been strongly supported in the literature. For instance, Patterson,
DeBaryshe, and Ramsey (1989), characterized families of antisocial children to have little
parental involvement with their children; Phares and Compás (1992), reported that many
researchers have found delinquent families to have conflictual, unaffectionate father son
relations and to have generally poor parental relations, and Johnson, Su, Gerstein, Shin,
and Hoffman, (1995) determined that research has consistently shown that a low degree
of parental support (i.e., parental interest, understanding, supervision, discipline,
encouragement and love) is a key determinant of poor psychosocial adolescent
functioning including delinquency. Further, Krohn, Stem, Thomberry, and Jang (1992),
Moffitt (1993), Lauritsen (1993), and Salts, Lindholm, Goddard, and Duncan, (1995)
have all concluded that low family cohesion or low family attachment bonds were among
the strongest predictors of delinquent and persistent antisocial behavior.

51
Other examples strengthening the link between family cohesion and delinquency
are Shaw and Bell’s (1993) conclusions that family factors involving discipline and the
quality of parent-child relations are at the for front of meta-analyses in the delinquency
field and Rosen’s (1985) determination that after a comprehensive review of the
literature, no matter how delinquency is defined or measured or what population is being
studied, the research consistently shows that poor parent-child relationships, no matter
how defined or measured are associated with higher levels of delinquency. And finally,
Tolan, Cromwell, and Brass (1986), concluded that the literature strongly demonstrates
family cohesion and parental discipline as the variables which most strongly
differentiated levels of delinquents second only to individual aggression.
Similarity, research specifically reporting on the cohesion dimension of the
Circumplex model has also shown a consistent relationship between levels of cohesion
and levels of delinquency. For example, a study conducted by McGaha and Fournier
(1988) found that families having violent offenders exist in the extremes of cohesion as
measured by the FACES. A study conducted by Henggeler, Melton, Smith, Foster,
Hanley and Hutchinson ( 1993) with a sampled of 87 serious juvenile offenders from
disadvantaged families, found cohesion correlated with non-violent and violent
offending. Further, while studying general delinquency, Maynard and Hultquist (1988)
found that among their small sample of delinquents, 44 percent of the families fell in the
extreme range, 48 percent were mid-range, and 2 percent were in the balanced range.
Maynard and his associate concluded that from their sample it would seem deviant
behavior of the youths may be indicative of overall family dysfunction.

52
These findings are consistent with other researchers findings in that FACES scores tend
to be in the extreme ranges of cohesion for families with delinquent youth (Hanson,
Henggeler, Haefle, & Rodick, 1984; Rodick, Henggeler, & Hanson, 1986; Tolan, 1988a).
Following that the current study explored the rate of delinquency, of particular
interest were findings surrounding rates of delinquency and cohesion as measured by the
FACES. For example, Druckman (1979) found that juveniles in her study with the
highest recidivism rates came from families in the extreme enmeshed category.
Henggeler, Burr-Harris, Borduin, and McCallium (1991) researching families with repeat
adolescent offenders, also found scores indicating these families existed in the extremes
of cohesion. Finally, Cox (1996) concluded that her results indicated the frequency of
arrest not severity of crime most correlated with extremes of the cohesion range. Cox
(1996) also reported, though not statistically significant, that severity of crime correlated
negatively with a measure of self-esteem.
Overall, the presented studies and other reviews (e.g., Geismar & Wood, 1986;
Henggeler, 1989) support the existence of a relationship between levels of adolescent
antisocial behavior and both low family cohesion (disengaged family structure) and in a
few cases, for high family cohesion (enmeshed family structure). In sum, the empirical
literature provides ample support for the utility of the Circumplex model to distinguish
levels of delinquency and to provide insight into the relationship between family
functioning and delinquency.

53
The following review of Bronfenbrenner’s (1979) holistic eco-systemic model of human
development outlines the theoretical grounds utilized to justify the current study’s
exploration of the existence of a relationship between family functioning and personality
across the rate of delinquency.
Bronfenbrenner’s ecological paradigm, first introduced in the 1970s
(Bronfenbrenner 1974, 1976, 1977,1979), represented a reaction to the restricted scope
of most research then being conducted by developmental psychologists (Bronfenbrenner,
1994). According to Bronfenbrenner (1994) the primary scientific aim of this ecological
approach is not to claim answers, but to provide a theoretical framework that, through its
application, will lead to further progress in discovering the processes and conditions that
shape the course of human development. Many researchers in the field of juvenile
delinquency have recognized Bronfenbrenner’s (1979) Eco-Systemic Model of Human
Development as a viable frame to explain the need for a multivariate approach in the
understanding, treatment, and prevention of juvenile delinquency (Bogenschneider, 1996;
Henggeler, 1989; Lemer, 1991; Liddle, 1995; Magnusson, 1995; Moffitt, 1993; Salts,
Lindholm, Goddard, & Duncan, 1995; Mulvey, Arthur, Reppucci, 1993; Paris, 1996;
Reid, 1993; Tolan & Loeber, 1993; Yoshikawa, 1994; Worden, 1991).

54
The current study utilized Bronfenbrenner’s model to justify the investigation of the
existence of a relationship between personality (i.e., characteristics of the self) and family
functioning (i.e., environmental characteristics of the system) across levels of delinquent
offending (i.e., social development).
The following will be a discussion of Bronfenbrenner’s (1979) Eco-Systemic
Model with a focus on the proximal influences of family functioning (in particular
cohesion and adaptability) and personality on development. This will be followed by a
discussion of the theorized reciprocal nature of personality and family functioning and
their possible risk and protective influences on development. The section will close with
an explanation of the eco-systemic position of “goodness of fit” as related to one’s
developmental outcome. Relevant research from the field of juvenile delinquency will be
included throughout this discussion.
Bronfenbrenner’s (1979) Eco-Systemic Model has at its foundation the premise
that human development occurs as a joint function of characteristics of the person and the
environment. In essence, this model theorizes that a complexity of multiple factors, rather
than a single factor, influences human development and social functioning. A relevant
area of support for this position has been the discovery that the development of
delinquency is a result of many complex interacting factors (Benda, 1987;
Bogenschneider, 1996; Calabrese & Adams, 1990; Marsh, Clement, Stoughton, &
Marckioni, 1986; Jesness, 1996; Salts, Lindholm, Goddard, & Duncan, 1995; Tolan &
Loeber, 1993; Tolan, Cromwell, & Brass, 1986; Worden, 1991). According to
Bronfenbrenner’s model, the multiple factors of influence on development emanate from

55
several levels of the ecosystem. These levels vary from those directly including the
individual to more distal factors within the environment not necessarily including the
individual. Bronfenbrenner (1979) describes the ecosystem to be a topologically nested
arrangement of concentric structures with each containing the next. As previously
reviewed, these structures are referred to as micro-, meso-, exo-, and macrosystems. The
microsystem was most relevant to the current study and will be the focus of the current
literature review.
The microsystem refers to a pattern of activities, roles, and interpersonal relations
experienced by the developing person in a given setting with particular physical and
material characteristics (Bronfenbrenner, 1979). Thus, it involves the structures and
processes taking place in an immediate face to face setting containing the developing
person (e.g., family, school, peer group, workplace, etc.). For example, beyond the
previously established relationship of personality and delinquency and family functioning
and delinquency, is evidence relating ones peer group ( Elliot et al., 1985; Erickson &
Jensen, 1977; Dodge, 1980; Patterson & Dishion, 1985; Tolan, 1988b; Tolan, 1990;
Tolan & Loeber, 1993 ), School (Hawkins & Lam, 1987; Salts, Lindholm, Goddard, &
Duncan, 1995;), job site (Duster, 1987; Fagan & Wexler, 1987; Hirschi, 1969; Tolan,
1988b), Church (Higgins & Albrecht, 1977), and community (Bogenschneider, 1996) to
levels of delinquency.
Bronfenbrenner, (1988) considers the most influential forces on human
development to be the proximal environmental and organismic influences within the
microsystem. These proximal influences emanate either from within the person, or from

56
physical features, objects, and persons in the immediate face to face setting
(Bronfenbrenner, 1988). The two proximal influences of focus in the current study were
the adolescent’s personality and the adolescent’s family functioning. The relationship
between these two proximal influences along with other various variables of influence on
development were theorized to be reciprocal in nature and to culminate into the forces
determining the outcomes of development (Bronfenbrenner, 1979).
The basic nature of the relationship between the influencing variables on
development is described in Bronfenbrenner’s (1995) two defining properties of his
ecological systems theory. As previously reviewed, according to Proposition 1,
especially in its early phases, and to a great extent throughout the life course, human
development is seen to takes place through processes of progressively more complex
reciprocal interaction between an active, evolving biopsychological human organism and
the persons, objects, and symbols in its immediate environment. According to
Bronfenbrenner (1995), in order for these interactions to be effective, they must occur on
a regular basis over extended periods of time. These enduring forms of interaction in the
immediate environment are between the proximal influences and are referred to as
proximal processes. Examples of enduring patterns of proximal processes are found in
parent-child and child-child activities, groups or solitary play, reading, learning new
skills, studying, athletic activities, and performing complex tasks (Bronfenbrenner, 1995).
Further, according to Proposition 2, the form, power, content, and direction of the
proximal processes effecting development vary systematically as a joint function of the
biopsychological characteristics of the developing person; of the environment, both

57
immediate and more remote, in which the processes are taking place; and the nature of
the developmental outcomes under consideration (Bronfenbrenner, 1995). Thus, as many
researchers from the eco-systemic approach have supported, rather than view the primacy
of one factor over another’s influence on developmental outcomes, more a reciprocal
interaction of factors would be expected to exist (Bogenschneider, 1996; Borduin, Pruitt,
Henggeler, 1985; Bronfenbrenner, 1995; Calabrese & Adams, 1990; Cohen & Siegel,
1991; Dadds, 1987; Farrington, 1995; Henggeler, 1989; Lemer, 1991; McLeod,
Kruttschnitt, & Domfield, 1994; Wasserman, Miller, Pinner, & Jaramillo, 1996;
Magnusson, 1995; Paris, 1996; Sameroff, 1975; Shaw & Bell, 1993; Tolan & Leober,
1993; Walsh, Craik, & Price, 1992). The following will be a discussion of the
relationship between the proximal influences of family functioning (in particular cohesion
and adaptability) and personality.
Relationship Between Family Functioning and Personality
Psychological health was the focus of much of the earlier work exploring the
relationship between family functioning and developing children and adolescents. For
example, Minuchin, Rossman, and Baker’s (1978) work lead them to conclude that the
emotional boundaries of family members (i.e., cohesion) and family adaptation to
developmental and external pressures (i.e., adaptability) appear to have a curvilinear
relationship to the psychological health of family members. The extremes in either
parameter, according the Minuchin et al. (1978) appeared to characterize dysfunctional
family systems and to contribute to poor psychological health.

58
This conclusion, especially in relation to cohesion, has since been supported by many
others in the field (Amerikaner, Monks, Wolfe, & Thomas, 1994; Bames & Farrell, 1992;
Farrell & Bames, 1993; Farrell, Bames, Banerjee, 1995; Lin, Dean, & Ensel, 1985;
Prange, Greenbaum, Silver, Friedman, Kutash, & Duchnowski, 1992; Walsh & Olson,
1989).
Other researchers have focused on the relationship of family functioning and
personality development in specific. For example, similar to Bronfenbrenner (1979),
Loevinger (1976) purports that personality or ego development is stimulated by the
interpersonal environment, especially the intrafamilial environment. Loevinger theorized
that parents can function as pacers or factors of equilibrium in their child’s ego growth.
More recently, Novy, Gaa, Frankiewicz, Liberman, and Amerikaner, (1992) working
from Loevinger’s theory, sampled 61 nonchronic juvenile offenders and their parents and
found an association between FACES-II scores of cohesion and adaptability and the
juvenile offender’s level of ego development. Results revealed functional levels of family
functioning were associated with higher levels of ego development while lower levels of
ego development were associated with both the parent’s and the adolescent’s view of a
dysfunctional range of cohesion and adaptability. Some variations were reported by Novy
et al. (1992) depending on match or mismatch of parental and adolescent view of family
functioning.
A further example of specific work exploring the importance of the quality of
family interactions in ego development is a study conducted by Hauser, Powers, Noam,
Jacobson, Weiss, and Follanshee (1984). These researchers found that family interactions

59
emphasizing warmth, acceptance, and understanding tend to support higher levels of ego
development and identity clarification in adolescents. Further, Hauser et al. (1984)
concluded that the absence of such positive interactions and the presence of their negative
counterparts (devaluing, indifference) are associated with diminished levels of adolescent
ego development.
In general, consistent support has been found to demonstrate that the extremes of
the cohesion and adaptability dimensions are more associated with poor development of
personality, while more functional levels of cohesion and adaptability are more associated
with healthy development of personality (e.g., Beavers, 1977; Prange, Greenbaum, Silver,
Friedman, Kutash, & Duchnowski, 1992; Walsh & Olson, 1989).Thus, the eco-systemic
position of a hypothesized relationship between the proximal influences of family
functioning and personality could be interpreted to have empirical support. The focus of
this review now turns to literature more specifically supporting the hypothesized
reciprocal nature of the relationship between the two proximal influences of personality
and family functioning.
Reciprocal Nature of Variables on Development
The reciprocal nature of the relationship between family functioning and
personality can be interpreted to gain support through a study conducted by Smets and
Hartup (1988). The primary goal of their study was to explored the relationship between
cohesion and adaptability and child symptomatology while controlling such factors as
personality. Their sample consisted of 120 families and their children who ranged
between the ages of 6 and 16. All of these families were referred to one of six out patient

60
clinics in Northern Wisconsin for treatment. Smets and Hartup (1988) reported that
extreme range scores on the FACES-II for cohesion and adaptability were associated
more with low self-esteem than were midrange family functioning scores. The results
could be seen to supported the position that a child’s self-esteem and sense of self-
efficacy is tied to their family system.
Further, Smets and Hartup (1988) emphasized that due to the correlational nature
of the statistics used, caution is necessary when attempting to make causal interpretations.
The authors suggested that low self-esteem (and concomitant behavioral manifestations)
may be disruptive factors within the family, but the reverse may also be true. Thus, a
reciprocal model may be seen to exist. The dysfunctional family system may lower the
self-esteem of the child, but at the same time, the defensive tactics used by the children
with low feelings of self-worth probably also reduce the effectiveness of the family
system to function.
Similarly, according to Wasserman, Miller, Pinner, and Jaramillo, (1996) grounds
exist supporting the view that the juxtaposition of a difficult child (e.g., impulsive,
aggressive) with an adverse family context (e.g., incompetent parenting) may initiate risk
for a persistent pattern of oppositional and antisocial behavior through a transactional or
reciprocal process between the family and the child. Other researcher have concurred
with this interpretation (e.g., Cicchetti & Richters, 1993; Conduct Problems Prevention
Research Group, 1992; Moffitt, 1993).
In sum, the evidence provided by Smets and Hartup (1988) and Wasserman,
Miller, Pinner, and Jaramillo, (1996) are consistent with many other researchers who

61
have supported the reciprocal nature of family functioning and personality on the
outcome of development (Bronfenbrenner, 1979; Brooks, Whiteman, Normura, Gordan,
& Cohen, 1988; McLeod, Kruttschnitt, & Domfeld, 1994; Lemer & Spanier, 1978; Tolan
& Mitchell, 1989; Shaw & Bell, 1993; Wasserman, Miller, Pinner, & Jaramillo, 1996).
The following section will bring to light the possible influences of the protective and risk
factors associated with family functioning and personality on development. This is seen
to further strengthen the existence of a possible relationship between family functioning
and personality upon the rate of delinquency.
Protective and Risk Factors
The complex impact on the course of development that the existence of a
reciprocal relationship between family functioning and personality appear to have is
further strengthened by evidence of each factor’s risk and/or protective influences.
According to Bogenschneider (1996) the acknowledgment of possible risk and protective
aspects of variables on the outcome of development is an important facet to an eco-
systemic orientation. The following will be a review of the defining properties of
protective and risk influences along with possible specific family functioning and
personality examples of these influences on delinquency.
Protective factors are qualities or conditions that moderate a juvenile’s exposure
to risk (Wilson & Howell, 1994). They are considered by both Garmezy (1985) and
Rutter (1990) to mitigate the impact of risk on adolescent behavior and development. In
essence, their role is to modify the response to later adversity rather than to foster normal
development in any direct sense (Rutter, 1985). However, this does not imply that

62
protective factors can not impact development directly (Farrell, Barnes, & Banerjee,
1995). Risk factors on the other hand are qualities or conditions that directly contribute to
dysfunction (Rutter, 1990). Thus, in general, protective factors or processes are not
simply the opposite if risks; protective processes do not load directly to an outcome, as
risks do, but rather operate when a risk is present (Rutter, 1987).
Further, it can be seen as evident that risk factors operate in a cumulative and
interactive fashion. This is based on a review of several longitudinal studies exploring the
impact of multiple risks on child development and delinquency (Yoshikawa, 1994).
According to Yoshikawa (1994), a multiplicative, rather than simply additive, relation is
often found between the number of risk factors and likelihood of dysfunction. Risk
factors can interact (or, to use Rutter’s (1979) term, “potentiate” each other) to greatly
increase chances of later dysfunction. For example, Kolvin, Miller, Fleeting, and Kolvin
(1988) explored multiple risk factors measured during the first 5 years of a Newcastle,
England, Birth cohort of 847 children. It was found that the mean number of criminal
offenses committed up to the age of 33 was 0.7 for those with no risk factors present, 2.9
for those with one or two, and 5.1 for those with 3 or more. These findings are consistent
with other studies exploring the cumulative impact of multiple risk factors and level of
antisocial behavior (Leober, 1990; Saner & Ellickson, 1996).
Across the literature protective and risk factors have been categorized by several
authors in similar ways. These include lessor’s (1991) social environment and personality
domains, Wilson, JD, and Howell’s (1994) individual characteristics, bonding (inside and
outside the family), and healthy beliefs and clear standards of behavior categories, Moen

63
and Erickson’s (1995) social and personal resources, Garmezy’s (1985) personality
features, family cohesion, and external support features, and Bogenshneider’s (1996)
breakdown by individual, family, peer, school, work setting, and community levels.
Consistent across all of these examples is the inclusion of an individual level and an
environmental level. This parallels the eco-systemic position that development results
from a function of forces including the individual and the environment. The following
review of protective and risk factors as related to levels of delinquency will focus on
family functioning and personality influences.
Qualities of family function which may act as protective factors indirectly
contributing to a decreased level of delinquency include: healthy levels of family
cohesion or family bonds (Bogenshneider, 1996; Hirschi, 1969, Garmezy, 1985, Jessor,
1991; Moen & Erickson, 1995; Paris, 1996; Rosen, 1985; Rutter, 1979; Wilson, JD, &
Howell, 1994), effective and nurturing parenting (Farrington & West, 1981; Liddle, 1995;
McCord, 1986; Pulkkinen, 1983), clear standards of family behavior (Wilson, JD, &
Howell, 1994), the absence of family discord (Garmezy, 1985; Hirschi, 1969, Moen ¿L
Erickson, 1995; Rutter, 1979), and intimate family communication (Hirschi, 1969).
Qualities of family function which may act as risk factors directly contributing to an
increased level of delinquency include: insecure attachments (Bogenscheider, 1996:
Campbell, 1990), chaotic family environment (Paris, 1996), parental instability (Paris,
1996), poor parent child rearing practices (Bogenschneider, 1996; Leober, 1990; Paris,
1996), unclear family rules, expectations, and rewards (Bogenschneider, 1996), and
general family dysfunction (Leober, 1990; Paris, 1996). These examples provide a similar

64
profile to the Circumplex model. Thus, is would appear that aspects of the balanced
regions of cohesion and adaptability could act similarly to protective factors while, the
extremes could act similar to the risk factors.
Qualities of personality which may act as protective factors indirectly contributing
to a decreased level of delinquency include: positive self-esteem (Bogenschneider, 1996;
Heaven, 1996; McFarlane, Bellissimo, & Norman, 1994; Schweitzer, Seth-Smith &
Callan, 1992), resilient temperament (Rutter, 1990; Wilson, JD, & Howell, 1994),
psychological hardiness (Kobasa, 1979; Amerikaner, Monks, Wolfe, & Thomas, 1994),
health temperamental, cognitive, and emotional resources (Quay, 1987), high value on
academic achievement (Jessor, 1991), healthy beliefs and a clear standard of behavior
(Wilson, JD, & Howell, 1994), high intolerance of deviance (Jessor, 1991), altruism and
basic values (Moen & Erickson, 1995), well developed social and intellectual skills
(Bogenschneider, 1996), and a positive social orientation (Wilson, JD, & Howell, 1994).
Qualities of personality which may act as risk factors directly contributing to an increased
level of delinquency include: antisocial/antiauthority/procriminal attitudes (Farrington,
1995; Glueck & Glueck, 1950; Guerra, 1989; Hoge, Andrews, & Leshied, 1994; Jesness,
1996), high levels of alienation or rebelliousness (Bogenschneider, 1996)
high levels of aggression (Blumstein, Farrington, & Moitra, 1985; Craig & Glick, 1968;
Eron & Huesmann, 1990; Farrington, 1995; Pulkkinen, 1983), having multiple factors of
Asocial personality disorder or factors of Conduct disorder (Paris, 1996),
impulsive disposition (Kagan, 1994), and high behavioral activation levels (Paris, 1996).
These examples provide a similar profile to the personality characteristics assessed in the

65
current study. Thus, this would imply that varying levels of the SM, MA, and AI scales in
the Jesness Personality Inventory may also represent risk factors when extremely
elevated.
The above review provides considerable evidence of the multiple way in which an
interaction between characteristics of family functioning and personality may be
expressed as forms of risk and protective factors influencing each other and development.
In essence, protective and risk factors contribute to the reciprocal dance between the
proximal influences and may effect the odds or probabilities that the levels of delinquent
offending may vary. Protective and risk factors are another facet of the eco-systemic
orientation which suggests that there may existence an interaction between family
functioning and personality on the rate of delinquency. The following section will
provide insight into how the eco-systemic model emphasizes the quality of the
relationship or “goodness of fit” between the individual and environment which may
contribute to the individual’s developmental outcomes.
Goodness of Pit
The protective and risk influences along with the reciprocal nature of family
functioning and personality are viewed to contribute to the forces shaping the outcome of
development. These factors add to the complexity of the fit between the individual and
the environment. According to the eco-systemic model, the overall “goodness of fit”
between the characteristics of a living organism and its surroundings may result in the
formation of adaptive or maladaptive psychological and social functioning
(Bronfenbrenner, 1988; Lemer, 1982; Rutter & Rutter, 1993; Thomas & Chess, 1977;

66
1980; Worden, 1991). In general, during the interaction of intrapersonal dynamics with
interpersonal forces, if a child’s characteristics match (or fit) the demands of a particular
setting, adaptive outcomes may accrue, but if a “poor fit” between environmental
expectations and demands and the capacities of the child at a particular level of
development exist, disturbed behavioral functioning may instead manifested (Thomas &
Chess, 1980; Worden, 1991).
When considering a developmental outcome, Bronfenbrenner’s (1995) Eco-
Systemic Model of Human Development recommends factoring into the evaluation the
“goodness of fit” for the individual throughout the interaction between many
characteristics of the individual and multiple levels of the environment over time. Thus,
as strongly supported by the empirical literature, Bronfenbrenner’s (1979) overall view of
criminal behavior is that it is multi-determined by the reciprocal interplay of
characteristics of the individual youth and the key social systems in which the youths are
embedded (i.e., family, peer, school, neighborhood, community) (Bogenschneider, 1996;
Elliot, 1994; Hawkins & Catalano, 1993; Henggeler, 1989, 1996; Thomberry, Huizinga,
& Loeber, 1995: Tolan & Guerra, 1994).
Further, the eco-systemic model theorizes that playing a dominate role in this
process are the proximal influences located within the microsystem (Bronfenbrenner,
1979). Thus, the eco-systemic model provided the theoretical justification for the current
study’s examination of the existence of a relationship between the proximal influences of
family functioning and personality upon the rate of delinquency.

67
Summary
In summary, a review of the literature was presented which included significant
theoretical and empirical evidence relating personality, family functioning and
Bronfenbrenner’s (1979) eco-systemic model of human development to rate of juvenile
delinquency. A significant gap in the literature exists regarding the exploration of the
existence of a relationship between personality and family functioning across the rate of
delinquency (Arbuthnot, Gordon, & Jurkovic, 1987; Jesness, 1996; Le Blanc, 1992;
Lorion, Tolan, & Wahlar, 1987; Mulvey, Arthur, & Reppucci, 1993; Tolan, Cromwell, &
Brass, 1986). Bronfenbrenner’s (1979) Eco-Systemic Model of Human Development was
presented to provide the theoretical justification for the current study’s attempt to fill this
gap through addressing the question “Does a relationship exist between an adolescent’s
personality (i.e., characteristics of the self) and his/her perception of family functioning
(i.e., environmental characteristics of the system) across his/her rate of delinquent
offending (i.e., social development) while holding relevant factors such as age, gender,
and race constant?

CHAPTER THREE
METHODOLOGY
This chapter will address the following topics: (a) statement of purpose, (b)
relevant variables, (c) hypotheses, (d) data analysis, (e) description of the population, (f)
sampling procedures, (g) sample, (h) data collection, and (i) instrumentation.
Statement of Purpose
This study is based on the eco-systemic view that children are shaped not only by
their personal attributes, but also by the ever-widening environments in which they
develop (Bronfenbrenner, 1979). Central to the course of social development is the
interplay between proximal characteristics of the child and their environment
(Bronfenbrenner, 1988). Yet to be fully explored in the field of delinquent study is the
possible existence of a relationship between two relevant proximal influences known as
personality and family functioning. This study was designed to investigate the existence
of a relationship between personality and family functioning across the rate of juvenile
delinquency.
68

69
Delineation of Relevant Variables
DependenLYariable
The dependent variable was the adolescent’s rate of juvenile delinquency. It was
comprised of the total number of illegal charges with which an adolescent has accrued
over their life time as filed within the juvenile court system at the time of data collection.
This variable was broken into three frequencies of offending which included: first time
offender (having only one charge), multiple offender (having 2 to 4 charges) and chronic
offender (having 5 or more charges) (Hindelang, Hirschi, & Weis, 1981; Tracy,
Wolfgang, & Figlio, 1990; Wolfgang, Figlio, & Sellin, 1972). Utilizing frequency is a
method of measurement common in delinquency research and has shown high reliability
and validity (Cox, 1996; Lau & Leung, 1992; Leug & Drasgow, 1986; Lynam, 1996;
Smith, Visher, & Jarjoura, 1991; Spiuack, Marcus, & Swift, 1986). The utilization of
official records of one’s frequency of charges was chosen following that official records
of arrests or court contacts are the most widely reported figures used in the literature
(Mulvey, Arthur, & Reppucci, 1993).
Independent Variables
Age, for the purposes of this study was defined as the listed length of time one has
been alive as provided by the respondent in whole numbers on the demographic
questionnaire. The role of age in understanding delinquency has been fraught with
inconsistent findings. For example, Hindelang, Hirschi, and Weis, (1981) used National
Crime Survey data for 1973-1977 and documented very dramatic age specific variations
in differences of delinquent crime rates. Tolan and Loeber (1993) reported age correlates

70
positively in adolescence with the overall prevalence of antisocial involvement with a
peak at age 16 for serious offending and dropping off around 17-19. Smith, Visher, and
Jaroura (1991) found age among active offenders did not relate to the frequency of
delinquency activity. From a different view, Smets, and Hartup (1988) and Olczak,
Parcell, and Sttot (1983) both made very strong cases to control for age due to the
possible developmental difference effecting family relations and ultimately levels of
delinquency.
Gender, for the purposes of this study was defined as the indication of male or
female on the demographic questionnaire by the respondent. The role of gender in
understanding delinquency has been debated in the literature (see Yoshikawa, 1994).
Many researchers have found males to have higher rates of offending both according to
official records and self-report data (Canter, 1982; Elliot, Huizinga, & Menard, 1989;
Hindelang, Hirschi, & Weis, 1981; Sander & Ellickson, 1996; Smith, Visher, & Jaroura,
1991; Tracy, Wolfgang, & Figlio, 1990; Wemer & Smith, 1992) while others have found
no difference in delinquency as a result of gender (Blumstien, Alfred, Cohen, Roth, &
Visher, 1986; Shaw & Scott, 1991). Recently, though only one in four juveniles were
female in the state of Florida during 1994-95, female juvenile crime increased at a faster
rate (55%) than male juvenile crime (23-26%) in Florida during 1994-95 (Department of
Juvenile Justice, 1996).

71
Further gender difference supported by research include, the view that families of female
delinquents are more dysfunctional than families of male delinquents (Henggeler,
Edwards, & Borduin 1987) and that male delinquents are found
to be more vulnerable than girls to family risk for antisocial behavior and delinquency
(Rutter & Giller, 1983; Yashikawa, 1994; Zaslow & Hayes, 1986).
Race, for the purposes of this study was defined as the indication of Caucasian
(White), African American (Black), Hispanic or other by the respondent on the
demographic questionnaire. The focus of this review will be on findings for White and
Black adolescents because these two ethnic groups made up 95% of the available data
sample and constituted all of the reduced sample analyzed in this study.
Predictors such as low levels of family affection and high levels of family conflict
have been found to be associated with White and Black levels of general delinquency
(Doane, 1978; Gove & Crutchfield, 1982; Henggeler, 1989; Salts, Linholm, Goddard, &
Duncan, 1995; Tolan & Lorion, 1988). When considering family cohesion, dysfunctional
levels reflecting enmeshed family systems have been associated with high levels of
offending in the Black youth (Rodick, Henggeler, & Hanson, 1986) while extremely low
levels reflecting disengaged family systems have been associated with high levels of
offending for White adolescents (Tolan, 1988a). Differences in frequency rates have also
been found based on race (Elliot, Huizinga, & Ageton, 1985; Smith, Visher, & Jarjoura,
1991; Tolan & Loeber, 1993; Hindelang, Hirschi, & Weis, 1981).

72
For example, Elliot and Ageton (1980) and Short (1990) found significantly greater
delinquent and violent behavior for Black youth than White when utilizing police and
court data. Interestingly, self-report studies consistently have been found to reflect no
difference in delinquent behavior by race (Salts, Linholm, Goddard, & Duncan, 1995).
Adaptability, was defined as the extent to which the family system was flexible
and able to change its power structure, role relationships, and relationship rules in
response to situational and developmental stress (Olson et al., 1985). For the purposes of
this study, adaptability was determined by the adaptability score from FACES-II.
Cohesion, was defined as “the emotional bonding that family members had
towards one another” (Olson et al., 1983, p.70). Cohesion incorporates concepts of
emotional bonding, boundaries, coalitions, time, space, friends, decision making,
interests, and reaction (Olson et al., 1985). For the purposes of this study, cohesion was
determined by the cohesion score from FACES-II.
SociaLmaladjustnienLscale. (SM), Social maladjustment referred to a set of
attitudes associated with inadequate or disturbed socialization. Here, social
maladjustment was defined by the extent to which individuals shared attitudes of persons
who did not meet personal needs and environmental demands in socially approved ways
(Jesness, 1996, p. 5). For the purposes of this study SM was determined by the score on
the SM scale of the Jesness Personality Inventory.
Manifest aggression scale.(MA), Manifest aggression reflected an awareness of
unpleasant feelings (especially anger and frustration), a tendency to react readily with
those feelings, and discomfort concerning the presence and control of those feelings

73
(Jesness, 1996, p. 5). For the purposes of this study, MA was determined by the score on
the MA scale of the Jesness Personality Inventory.
Asocial index (AI), The asocial index reflected a generalized disposition to
resolve social or personal problems in ways that showed a disregard for social customs or
rules (Jesness, 1996, p. 6). Discriminant Function Analysis was used to create this scale
which combines scores from all the other personality scales to best distinguish
delinquents (Jesness, 1996). For the purposes of this study AI was determined through the
use of the Jesness Personality Inventory.
Hypotheses
The following is a presentation of the original hypotheses proposed and the
modified hypotheses that were tested in this study. Modifications were made to the
original hypotheses due to concerns of multicolinearity found in the original full logistic
regression model. While modifications resulted in hypotheses 4, 8, and 9 being left
untestable, the remaining hypotheses differed simply by the number of variables being
controlled during analysis.
Ho,: (Original) There is no relationship between age and rate of juvenile delinquency
as measured by number of criminal charges while holding gender, race,
adaptability, cohesion, social maladjustment, manifest aggression, and
asocial index constant.

74
(Tested)There is no relationship between age and rate of juvenile delinquency as
measured by number of criminal charges while holding gender, race,
cohesion, manifest aggression, and asocial index constant.
Ho2: (Original) There is no relationship between gender and rate of juvenile
delinquency as measured by number of criminal charges while holding
age, race, adaptability, cohesion, social maladjustment, manifest
aggression, and asocial index constant.
(Tested) There is no relationship between gender and rate of juvenile delinquency
as measured by number of criminal charges while holding age, race,
cohesion, manifest aggression, and asocial index constant.
Ho3: (Original) There is no relationship between race and rate of juvenile delinquency
as measured by number of criminal charges while holding age, gender,
adaptability, cohesion, social maladjustment, manifest aggression, and
asocial index constant.
(Tested) There is no relationship between race and rate of juvenile delinquency as
measured by number of criminal charges while holding age, gender,
cohesion, manifest aggression, and asocial index constant.
Ho4: (Original and Untestable) The relationship between family cohesion as measured
by FACES-II and rate of juvenile delinquency as measured by number of
criminal charges will not vary as a function of social maladjustment as
measured by Jesness personality inventory while holding age, gender,
race, adaptability, manifest aggression, and asocial index constant.

75
Ho5: (Original) The relationship between family cohesion as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal
charges will not vary as a function of manifest aggression as measured by
Jesness personality inventory while holding age, gender, race, adaptability,
social maladjustment, and asocial index constant.
(Tested) The relationship between family cohesion as measured by FACES-II and
rate of juvenile delinquency as measured by number of criminal charges
will not vary as a function of manifest aggression as measured by Jesness
personality inventory while holding age, gender, race, and asocial index
constant.
Ho6: (Original) The relationship between family cohesion as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal
charges will not vary as a function of asocial index as measured by Jesness
personality inventory while holding age, gender, race, adaptability, social
maladjustment, and manifest aggression constant.
(Tested) The relationship between family cohesion as measured by FACES-II and
rate of juvenile delinquency as measured by number of criminal charges
will not vary as a function of asocial index as measured by Jesness
personality inventory while holding age, gender, race, and manifest
aggression constant.

76
Ho7: (Original) The relationship between family adaptability as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal
charges will not vary as a function of social maladjustment as measured by
Jesness personality inventory while holding age, gender, race, cohesion,
manifest aggression, and asocial index constant.
(Tested) The relationship between family adaptability as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal
charges will not vary as a function of social maladjustment as measured by
Jesness personality inventory while holding age, gender, and race constant.
Hog: (Original) The relationship between family adaptability as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal
charges will not vary as a function of manifest aggression as measured by
Jesness personality inventory while holding age, gender, race, cohesion,
social maladjustment, and asocial index constant.
(Tested) The relationship between family adaptability as measured by FACES-II
and rate of juvenile delinquency as measured by number of criminal
charges will not vary as a function of manifest aggression as measured by
Jesness personality inventory while holding age, gender, race, cohesion,
social maladjustment, and asocial index constant.

77
Ho9: (Original and Untestable) The relationship between family adaptability as
measured by FACES-II and rate of juvenile delinquency as measured by
number of criminal charges will not vary as a function of asocial index as
measured by Jesness personality inventory while holding age, gender,
race, cohesion, social maladjustment, and manifest aggression, constant.
Data Analysis
Multinomial logistic regression was used to evaluate the significance of variance
explained in the dependent variable (rate of juvenile delinquency) by combinations of this
study’s set of selected independent variables [age (A), gender (G), race (R), adaptability
(ADP), cohesion (C), social maladjustment (SM), manifest aggression (MA), and asocial
index(AI)]. Forms of multinomial regression analysis such as multinomial logistic
regression analysis are supported in the delinquency literature as statistical methods
useful in exploring multivariate models of delinquency (Farrington, 1994; Hoge,
Andrews, & Leshied, 1994; Salts, Linholm, Goddard, & Duncan, 1995; Scholte, 1992;
Tolan, 1987; Tolan & Lorion, 1988; Wasserman, Miller, Pinner, & Jaramillo, 1996). The
use of multinomial logistic regression analysis allowed the analysis of the relationships
between the independent variables while controlling for the other independent variables
of interest. The following multinomial logistic regression model was originally purposed:
Rate of delinquency = A+G+R+C+ADP+SM+MA+AI+C,AI+ADP,AI+C,SM+C,MA+ADP,SM+ADP,MA

78
Due to discovering multi-colinearity concerns (strong correlations between certain
variables within the full original model), the full model was modified to form two
reduced multinomial logistic regressions models (Model 1 & Model 2). Model 1 was
designed to primarily address hypotheses 1, 2, 3, 5, and 6. Model 2 was run to provide
information regarding the primary nature of hypothesis 7. As stated earlier, hypotheses 4,
8, and 9 were left untestable. The following were the modified multinomial logistic
regression models run in analysis:
Model 1: Rate of delinquency = A+G+R+C+MA+AI+C,AI+C,MA
Model 2: Rate of delinquency = A+G+R+ADP+SM+ADP,SM
The following basic procedural format was followed in the analysis. Upon
discovering that the general model was significant at the a = .05 level, the conclusion was
made that at least one of the independent variables in that model of focus was related to
the dependent variable while controlling for the other independent variables. The next
step in analysis was then to review the partial logistic regression coefficients
corresponding to the hypotheses for significance at the a = .05 level. Consistent with
socio-ecological research (Bronfenbrenner, 1979), the significance of any interaction term
in one of the multinomial logistic regression models was of greatest interest. According
to Bronfenbrenner (1979), the interactional emphasis of the eco-systemic approach is due
to the theoretical view that there exists a reciprocal nature to development especially
between the proximal influences.

79
Thus, of greatest concern was the interaction terms which contained the theoretically and
empirically relevant aspects of the adolescent’s personality and perception of family
functioning.
Finding a significant interaction term was interpreted as statistical evidence to
reject that term’s null hypothesis (no relationship exists) and instead was seen as
statistical evidence in favor of accepting that terms alternative hypothesis that a
relationship does exist. Evidence resulting in rejecting an interaction term was interpreted
to provide statistical grounds to suggest that (at a probability greater that chance) the
answer was “yes” to the primary research question, “Does a relationship exist between an
adolescent’s personality and his/her perception of family functioning across his/her rate
of delinquent offending while holding age, gender, and race constant?”
The analysis run also included multiple single variable logistic regression models
to explore the relationship between each independent variable and the dependent variable.
This multiple bivariate analysis was seen to add to the investigation of the independent
variables with the dependent variable and allowed for a comparisons between the
bivariate and the multinomial logistic regression models (1&2) which contain more
control variables.
Description of the Population
The population specifically targeted for this study was adolescents involved in the
Department of Juvenile Justice system in the State of Florida who range in age between
13 and 18. The entire research sample was drawn from this group. The Department of

80
Juvenile Justice (DJJ) (1996) provided the following demographics for the year’s total
population of delinquency cases received in the state of Florida: (a) regarding age - 88%
of the cases were filed for adolescents ranging in age between 13 and 18, (b) regarding
gender - 77% of all cases consisted of male adolescents and 23% consisted of female
adolescents, and (c) regarding race - 57% were White, 42% were Black, and 1% were
other.
Sampling Procedures
Data were collected from two separate DJJ districts which included 16 counties
located geographically in North Central Florida. The data were collected by a private
counseling agency who specializes in counseling the juvenile delinquent population. This
agency routinely collected assessment information for the purposes of research and
treatment. All of the cases referred to this private agency for counseling were received
from the DJJ. Thus, the subjects for this study were drawn from the total data file
previously collected by this private agency during the period 4/1/96 to 8/31/96. The data
made available for this study had no identifying information to assure the confidentiality
of the subjects to be included in this study.
The questionnaires were administered during the first interview by the agency
counselors. These counselors were (at a minimum) all advanced graduate students
(beyond Master’s level) in training in mental health fields at the University of Florida.
Prior to interviewing the court referred clients, each counselor received agency training in
administering the questionnaires.

81
The clients were verbally informed that any information used for research purposes
would have no identifying information to assure their anonymity.
Sample
The full sample available for this study was previously collected by a private
agency drawing from the 16 surrounding counties in North Central Florida between
4/1/96 to 8/31/96. Though the full sample consisted of 184 subjects, this sample was
reduced to 169 due to an insufficient number of subjects in all ethnic categories for
comparisons and some subjects falling outside the study’s defined age range (13 to 18).
The reduced sample included only subjects from the White and Black ethnic groups. As
consistent with an earlier census of this private agency’s clientele (Lee & Prichard, 1991),
80% of the subjects lived in families with income below poverty level as determined by
receiving AFDC/ Welfare or not.
Family structures varied from those having a single parent and one child to those
having both parents or a variation of grandparents and multiple siblings. The vast
majority lived in a non-nuclear family configuration. This wide variation in family
structure was not viewed to be of great concern due to the findings that family structure
appears to be of little significance in overall juvenile delinquency especially when
controlling for family functioning (Cemkovich & Giordano, 1987; Henggeler, 1989;
Lauritsen, 1993; Lorion, Tolan, & Wahlar, 1987; Rosen, 1985; Tolan et. al, 1986; Tolan
& Loeber, 1993; Tolan & Mitchell, 1989; Yoshikawa, 1994).

82
The analyzed sample, was fairly representative in demographics to the year’s total
population of delinquency cases received in the State of Florida: (a) regarding age, the
subjects range between 13 and 18 years old which is consistent with the majority of cases
referred to juvenile court, (b) regarding gender, 78% of subjects consist of male
adolescents and 22% consist of female adolescents, and (c) regarding race, 47% of
subjects were White and 52%were Black. The subjects range between 1 and 36 charges
with the majority of subjects ranging between 1 and 9 charges. There also appeared to
exist a sufficient number of subjects in the three levels of offending to be studied: 41
subjects are first time offenders (having only one charge), 48 subjects are multiple
offenders (having 2 to 4 charges), and 80 subjects are chronic offenders (having 5 or
more charges).
Data Collection
The data were collected through a private counseling agency which asked referred
clients in the initial interview to complete the assessment package containing the Jesness
Personality Inventory Question (see Appendix A) and JI Answer Sheet (see Appendix E),
the Family Adaptability and Cohesion Scales (FACES-II) (see Appendix B) and a
demographic information sheet (see Appendix C). The assessment took approximately 35
to 45 minutes to complete. The Florida Department of Juvenile Justice provided
information in reference to number of charges for each subject. The identifying
information was removed and a participant code was given.

83
Each assessment package was put in its own data packet for research purposes. The data
packets were scored and analyzed by this researcher.
Instrumentation
In addition to a demographic questionnaire (Appendix C) assessing number of
charges, county, income status, gender, age, race, and current family members at home,
there were two standardized instruments relevant to this study: (a) Jesness Personality
Inventory (Appendix A & F) and (b) Family Adaptability and Cohesion Scales (FACES-
II, Appendix B).
Jesness Personality Inventory
The independent variables for the construct of personality in the study included,
social maladjustment (SM), manifest aggression (MA), and asocial index (AI). These
were measured by the Jesness Personality Inventory (JI). The original version of the JI
was developed as part of the Fricot Ranch Study in California (Jesness, 1965, 1971)
which was a five-year project whose goal was to evaluate the effectiveness of an
intensive institutional treatment program for young male delinquents. The study was
sponsored by the Rosenburg Foundation through a grant to the California State Youth
Authority. The original norming and validation studies were based on a sample of 970
male delinquents and 1,075 male nondelinquents between the ages of 8 and 18, and on a
sample of 450 female delinquents and nondelinquents ranging in age from 11 to 18. All
delinquents were adjudicated, and most were awaiting placement in California Youth
Authority (CYA) institutions. The nondelinquent sample was obtained at 10 public

84
schools in northern California (Jesness, 1996). In the early 1960s, the JI was modified so
that it could be used with older male adolescents (Jesness, 1962, 1963), and further
revised in 1972 making the instrument appropriate for use with adults and for females
(Jesness, 1983). The most recent changes to content were made in 1986 (Jesness, 1996).
The JI is an easily administered 155 item true-false inventory written at the third
grade reading level (Sorensen & Johnson, 1996). It is useful in identifying personality
characteristics of delinquents. The JI is multidimensional in that it provides age-normed T
scores on ten of eleven personality characteristics and a graphic profile that illustrates
various personality types. It also provides a single index (AI) of personality tendencies
predictive of social and personality problems (Martin & Murphy, 1993). Three
personality characteristics are criterion referenced trait scales (social maladjustment,
value oriented, and immaturity) and seven are cluster analyzed personality scales (autism,
alienation, manifest aggression, withdrawal-depression, social anxiety, repression, and
denial) and one (asocial index) is a composite personality index derived from
discriminant analysis to predict level of delinquency status utilizing all the other scale
scores (Jesness & Wedge, 1983).
The JI has been supported by many research findings in the field as a valid and
reliable instrument for distinguishing among delinquents via personality characteristics
(Jesness, 1996). While general support for reliability and validity will be reviewed, focus
will be give to the SM, MA and AI scales due to their use in this study. Jesness (1996)
reports a test-retest (8 months) reliability of .79 for SM and .76 for MA based on a
sample of 131 delinquents ages 14 to 21. Wright and Jesness (1981) reported a test-retest

85
reliability (one week) of .74 for AI. Note was made in the Jesness Inventory manual
manual (Jesness, 1996) regarding concern for the test-retest reliability for AI on children
below 15 for long periods of time. Regarding alpha reliabilities, Le Blanc, Mcduff,
Charlebois, Gagnon, & Tremblay, (1991) reported .90 for SM and .82 for MA. Further,
exploring the ability to falsify JI responses, the JI was administered to 57 delinquents at a
CYA reception center under the instructions that the findings would be solely for research
purposes (honest run). The next day the JI was given again with the instructions that the
findings would be used to judge the kids with the goal to encourage them to answer in a
way favorable for themselves (fake good run). Results revealed fairly stable scores with
some variation in SM, but no change in over all composite AI score (Jesness, 1996).
According to Le Blanc (1990), the concurrent, discriminant, and predictive
validity of the JI scales were controlled on a sample of 6,604 adolescents between the
ages of 10 and 18. Most of the scales correlated higher with scales of their domain than
with scales from another domain, most of the scales discriminated between past, actual
and subsequent self-reported delinquency and problem behaviors, and, finally, that most
of them distinguished between presence or absence of official delinquency and adult
criminality. Similarly, a review by Quay (1987) provides considerable evidence
supporting the concurrent, convergent, and predictive validity of the JI. Quay’s review
includes numerous findings reported by Baker and Spielberg (1970), Cowden, Peterson
and Patch (1969), Graham (1981), Martin (1981), Saunders and Davis (1976), Vallance
and Forrest (1971) and Yiannakis (1976). Quay (1987) concluded that the JI promises to
represent a valuable addition to the delinquency research’s armamentarium.

86
In general, the bulk of the research on the JI is in the area of differentiating groups
of delinquents. For instance, Cowden, Peterson, and Pacht (1969), found the JI cores
differentiated well-adjusted from poorly adjusted youth within an institution; Stott and
Olczak (1978) showed that JI scales differentiated juvenile delinquents from status
offenders; Sauders and Davis (1976) found that certain sub scales differentiated between
institutionalized delinquents and probationers; Graham (1981) found that consistently
higher AI scores distinguished among levels of offending (first offense, 2 offences, more
than 2) and found the AI predicted who of the first time offenders would re-offend in a
one year follow up; Martin (1981) found that consistently higher AI, SM, VO, AU, MA
and DEN scores distinguished among levels of institutionalized delinquents (those
formally adjudicated by the court system for two or more charges and those not formally
charged) and a socially acting out noninstitutionalized control group; and finally Kunce
and Hemphill (1983) investigated the validity implications of the JI for 1,122
institutionalized male adolescent delinquents and found that AI, SM, AU, and MA
correlated positively with frequency of prior arrests and number of previous
institutionalizations. Consistent with a review conducted by Quay (1987), the results of
this review of the Jesness Inventory found ample support for the use of the JI for research,
diagnostic purposes and the general assessment of adolescent social maladjustment.
Administration of the JI requires a question booklet (Appendix A), an answer
sheet (Appendix E) and a pencil. Currently there is available a “QuickScore Form” which
illuminates the need for the scoring stencils (Jesness, 1996). The traditional method was
used in the collection of the available data for this study. Respondents were asked to read

87
the question sheet and fill in the appropriate true or false response on the answer sheet.
Emphasis was made to assure they knew there are no right or wrong answers.
The traditional method for scoring was used as opposed to the recently released
QuickScore Form method. To traditionally score the test requires (1) a set of ten scoring
stencils; (2) a set of norms for males and females of all ages; and (3) profile sheets (see
Appendix F). The scales were scored by placing stencils over the answer sheet. Raw
scores were obtained by totaling the number of marked responses that showed through
the stencils for each scale. These totals were written in the proper spaces on the answer
sheet. The raw score for each subject was then transferred to the profile sheet. The
Asocial Index was obtained using the computational box on the reverse side of the profile
sheet. The AI was derived by utilizing the conversion table of the profile sheet to finding
the various weighted scores based on the required JI scale raw scores. The next step was
to determine the T scores by locating the T-score equivalent of each raw score in the
manual tables matching the subjects age and sex. The AI score was found by taking the
raw AI score and matching it in the manual table to gain the converted score. These
converted scores were then plotted on the profile sheet. Due to the current study not
utilizing the 1 Level Classification, the I Level Classification scoring process will not be
reviewed.
Family Adaptability and Cohesion Scales (FACES-II)
The independent variables of cohesion and adaptability were measured by
FACES-II. The original version was developed by Olson, Russell, and Sprenkle in 1979
as an outgrowth of their Circumplex Model of Marital and Family Systems. Using factor

88
analysis and alpha reliability, the scale was reduced from 90 items to 50. In 1983, the 50
item scale was administered to 2,400 individuals in Olson’s study of normal families
across the family life cycle (Olson, McCubbin, Bames, Larsen, Muxen, & Wilson, 1985),
and with factor analysis and alpha reliability analysis, the scale was reduced to 30 items.
In 1989, the FACES-III was developed and currently the FACES IV is to be completed
by the summer of 1999 (personal communication, L. Knutson, December, 1998). For the
current study, Olson advised that the FACES-II be utilized (personal communication, D.
Olson, February 1996).
FACES-II is a 30 item instrument written at the seventh grade level which allows
children as young as 12 to easily understand the items (Olson, Pontner, & Bell, 1985). Of
the 30 items, 16 measure cohesion and 14 measure adaptability. Two items on each of the
following eight concepts relate to cohesion: emotional bonding, family boundaries,
coalitions, time, space, friends, decision making, interests/recreation. Two or three items
for the six concepts relate to adaptability: assertiveness, leadership, discipline,
negotiation, roles, and rules (Smart, Chibucos, & Didier, 1990).
FACES-II has been used in a variety of instances with large numbers of adult and
adolescent family members. Olson, McCubbin, Bames, Larsen, Muxen, and Wilson,
(1985) reported in regards to the reliability of FACES-II, internal consistency for the
whole scale came to .90 and test-retest reliability (4-5 weeks) was .83 for cohesion and
.80 for adaptability. Very good evidence is reported for the face and content validity and
good evidence (linear relationship) is reported for the concurrent validity (Olson,
McCubbin, Bames, Larsen, Muxen, & Wilson, 1985).

89
The FACES-II can be administered on an individual or total family member basis
(Olson, McCubbin, Barnes, Larsen, Muxen, & Wilson, 1985). The FACES-II was
administered to the referred adolescent only in the current available data sample. This
was interpreted as consistent with the Bronfenbenner’s (1979) eco-systemic theory.
Bronfenbenner (1979) highlights that when considering the environmental influences
(i.e., family), what matters for behavior and development is the environment as it is
“perceived” rather than as it may exist in “objective” reality. Therefore, in the current
study, only the adolescent’s view on the FACES-II was required and utilized.
The respondents were asked to read the statements and decide for each one how
frequently, on each scale that ranges from 1 (almost never) to 5 (almost always), the
described behavior occurred in his/her family. Linear scoring and interpretations were
used based on the recommendations of Olson and Wilson (1991). Olson and Wilson
(1991), reported that it is appropriate to utilize the same cutting points for the four
levels of cohesion and adaptability. However, Olson and Wilson (1991) also reported that
the categories of enmeshed and chaotic are no longer measured. Instead, "very connected"
and "very flexible" are more appropriate concepts for scores in that range. Further, once
adaptability and cohesion are converted into a Family Type score ranging from 1 to 8, the
Family types now range from Extreme type to Mid-range to Moderately Balanced to
highest scores reflecting a Balanced Family Type. This would allow the optional use of
the Three-Dimensional Family Circumplex Model (See Olson & Wilson, 1991).

90
SYSTEM TYPES
j 7¿\ EXTREME
Figure.2 Three-Dimensional Family Circumplex Model
The following will present the linear method of scoring the FACE II that was used
in the current study. For cohesion, the first step was to sum items 3, 9, 15, 19, 25, and 29
and subtract that figure from 36. The second step was to sum all other odd numbers plus
item 30. The third step was to add the figure from step 1 and step 2 to obtain a total
cohesion score. The final range of an individual score on cohesion should be between 15-
70. Adaptability was done in a similar fashion. The first step was to sum items 24 and 28
and subtract that figure from 12. The second step was to sum all other even numbers
except item 20. The third step was to add the figure from step 1 and step 2 to obtain the
adaptability score. The final range of an individual score on adaptability should be
between 15-70.

91
After obtaining the total cohesion and adaptability scores, the corresponding 1-8
score for each dimension on the “Linear Scoring and Interpretation” chart (Appendix D)
were located. The family type (score range 1-8) was obtained by adding the 1-8 Cohesion
and Adaptability scores and dividing by 2. For the purposes of the current study the linear
score totals for cohesion and adaptability were utilized.
Summary
Chapter 3 clarified the statement of purpose, the relevant variables that were
included in the study, the hypotheses, and the data analysis. Also included was a
description of the population, the sampling procedures used, the sample analyzed, the
data collection procedures, and the instrumentation utilized. Chapter 4 will review the
procedures utilized in the current study and present the descriptive and inferential
findings of the study as they related to the research questions and hypotheses posed.

CHAPTER 4
RESULTS
Introduction
This study was designed to address the question, “Does a relationship exist
between an adolescent’s personality (i.e., characteristics of the self) and his/her
perception of family functioning (i.e., environmental characteristics of the system) across
his/her rate of delinquent offending (i.e., social development) while holding relevant
factors such as age, gender, and race constant?” An answer to this question could have
wide implications for theory, research, training, practice and social policy. The findings
of this study will also contribute to the literature on juvenile delinquency.
Bronfenbrenner’s (1979) Social Ecological Model of Human Development
provided the theoretical justification for exploring the existence of this relationship. The
central premise of Bronfenbrenner’s model is that human development occurs as a joint
function of characteristics of the person (e.g., personality) and the environment (e.g.,
family functioning). Of specific focus in this study was the proximal influences of
personality and family function upon rate of juvenile delinquency. The construct of
personality was grounded in Jesness’s (1996) Jesness Personality Inventory which was
the assessment instrument used to attain the scores on the social maladjustment scale
(SM), manifest aggression scale (MA) and asocial index (AI).
92

93
The construct of family functioning was grounded in Olson, Russell and Sprenkle’s
(1983) Circumplex Model of Marital and Family Systems and the FACES-II inventory
which was the assessment instrument used to assess family cohesion and adaptability.
This study’s available sample was comprised of 184 juvenile delinquents who
were previously assessed by a private counseling agency. To conform to this study’s
defined age range (13 to 18), 7 subjects outside this age range were removed. Further,
due to an insufficient number of subjects within all ethnic categories collected, the sample
was reduced by an additional 8 subjects to permit comparisons of White and Black
subjects only. Thus, data analysis was run on the reduced sample of 169 subjects.
The purpose of this chapter is to report the findings. This chapter also contains
further descriptive statistics of the sample utilized for analysis and of subject performance
on the assessment instruments across the rates of offending. Finally, a review of the data
analysis and a discussion of this study’s research hypotheses are discussed in terms of
outcome testing.
Demographic Characteristics of the Research Sample
The following will provide the descriptive statistics of the data. The descriptive
statistics illustrated are sectioned by categorical variables and interval variables. The
categorical variables included gender and race. The interval variables included age and
the scores on adaptability, cohesion, social maladjustment, manifest aggression, and
asocial index. Descriptive statistics are also provided for the categorical dependent
variable (rates of offending).

94
Descriptive Data on Categorical Variables
Gender
The total sample of 184 juvenile delinquents was primarily comprised of males.
There were 143 males (78%) and 41 females (22%). Due to an insufficient number of
subjects to represent the other ethnicities, the sample was reduced to 169 subjects which
included 13 to 18 year old adolescents who were of White and Black ethnicity. The
reduced sample for analysis consisted of 131 males (78%) and 38 females (22%). Though
males far out numbered the females in this sample, this ratio is consistent with the
percentages for the total population reported for Florida (77% males & 23% females) by
the Florida Department of Juvenile Justice (1996). Table 1 indicates the frequency of
males and females across the level of delinquent offending within the analyzed sample.
Table 1
Frequency Distribution hyJjender andLLeveLof Delinquent Offending
Gender
n First Time Offender
n (%) n (%)
Multiple Offender
n (%)
Chronic Offender
n (%)
Male
131 (78)
23 (14)
38 (22)
70 (41)
Female
38 (22)
18(11)
10(6)
10(6)
Total
169 (100.00)
41 (24)
48 (28)
80 (47)

95
Ethnicity
Of the total sample (184 subjects), 49% (n = 91) identified themselves as Black,
46% (n = 85) identified themselves as White, 2% (n = 3) identified themselves as
Hispanic and 3% (n = 5) identified themselves as other. Though the percentages of
White and Black subjects far out way the percentages of other ethnic groups, this is fairly
consistent with the percentages for the total population reported in Florida (57% White,
42% Black, and 1% were other.) by DJJ (1996). However, due to an insufficient number
of subjects in the other ethnic categories for comparisons, the sample was reduced to
include only White and Black subjects. The reduced sample for analysis consisted of 53%
(n = 89) who identified themselves as Black and 47% (n = 80) who identified themselves
as White. Table 2 indicates the frequency of males and females across the ethnic
categories within the analyzed sample.
Table 2
Frequency Distribution by Gender and Ethnicity
Gender
n
White
Black
n (%)
n (%)
n (%)
Male
131(78)
64 (38)
67 (40)
Female
38 (22)
16(9)
22 (13)
Total
169 (100.00)
80 (47)
89 (53)

96
Descriptive Data on Interval Variables
The following will be a comparison of the interval variables across both the rates
of offending and the total crime means within each rate. The rate was delineated into
categories of frequency of offending which include: first time offenders (having only one
charge), multiple offenders (having 2 to 4 charges) and chronic offenders (having 5 or
more charges) (Tracy, Wolfgang, & Figlio, 1990; Wolfgang, Figlio, & Sellin, 1972). The
categorical dependent variable will be used to organize the illustration for the descriptive
statistics conducted upon the interval variables. There were 41 subjects at the first time
offender rate, 48 subjects at the multiple offender rate, and 80 subjects at the chronic
offender rate. The total crime means across each of the three rates of offending were a
mean of 1 for first time offenders, 2.8 for multiple offenders, and a mean of 9.46 for
chronic offenders. The remaining descriptive statistics relate to the sample of 169
subjects analyzed unless otherwise stated. Table 2 indicates the descriptive data compiled
on the interval variables (age, cohesion, adaptability, SM, MA, AI, and rate of offending).
Age
Subjects in the analyzed sample ranged in age form 13 to 18 years old. The mean
age for first time offenders was 15.10 (SD = 1.74). The mean age for multiple offenders
was 15.58 (SD = 1.46). The mean age for chronic offenders was 16.02 (SD = 1.44).
The FACES-II was utilized to assess family cohesion. The linear scoring and
interpretations were used based on the recommendations of Olson and Wilson (1991).
Olson and Wilson (1991) reported the cutting points for the four levels of cohesion

97
remain the same, except the category of enmeshed is no longer measured. Instead, "very
connected" is a more appropriate concept for scores in that range. The raw cohesion
scores were used in analysis. Cohesion scores range from a low of 15 to 50 reflecting the
extreme range (disengaged), scores of 51 to 70 reflecting the mid-ranges (separate and
connected) and scores of 71 to 80 reflecting the very connected range of cohesion.
Descriptive analysis revealed that the mean cohesion score for the analyzed
sample was 52.06 (SD = 12.37). The mean cohesion score for first time offenders was
55.44 (SD = 13.85). The mean cohesion score for multiple offenders was 48.58 (SD =
11.73). The mean cohesion score for chronic offenders was 52.41 (SD =11.51).
Adaptability Scale
The FACES-II was utilized to assess family adaptability. The linear scoring and
interpretations were used based on the recommendations of Olson and Wilson (1991).
Olson and Wilson (1991) reported the cutting points for the four levels of adaptability
remain the same, except the category of chaotic is no longer measured. Instead, "very
flexible" is a more appropriate concept for scores in that range. The raw adaptability
scores were used in analysis. Adaptability scores range from a low of 15 to 39 reflecting
the extreme range (rigid), scores of 40 to 54 reflecting the mid-ranges (structured and
flexible) and scores of 55 to 70 reflecting the very flexible range of adaptability.
Descriptive analysis revealed that the mean adaptability score for the analyzed
sample was 43.34 (SD = 8.6). The mean adaptability score for first time offenders was
44.36 (SD = 9.65). The mean adaptability score for multiple offenders was 41.54 (SD =
9.66). The mean adaptability score for chronic offenders was 43.90 ( SD = 7.32).

98
Social Maladjustment Scale
The Jesness Personality Inventory was utilized to assess the social maladjustment
score. In order to conduct statistical analysis, the raw SM scores were converted to T-
scores that generally range from 20 to 90. Scores elevated beyond a T-score of 50 are
considered to be more indicative of a personality profile consistent with increased
juvenile offending. Descriptive analysis revealed that the mean social maladjustment
score for the analyzed sample was 68.30 (SD = 14.77). The mean social maladjustment
score for first time offenders was 65.17 (SD = 13.24). The mean social maladjustment
score for multiple offenders was 69.79 (SD = 14.22). The mean social maladjustment
score for chronic offenders was 69.01 ( SD = 15.73).
Manifest Aggression Scale
The Jesness Personality Inventory was utilized to assess the manifest aggression
score. In order to conduct statistical analysis, the raw MA scores were converted to T-
scores that generally range from 20 to 90. Scores elevated beyond a T-score of 50 are
considered to be more indicative of a personality profile consistent with increased
juvenile offending. Descriptive analysis revealed that the mean manifest aggression score
for the analyzed sample was 56.36 (SD = 12.71). The mean manifest aggression score for
first time offenders was 55.80 (SD = 13.33). The mean manifest aggression score for
multiple offenders was 57.20 (SD = 12.20).The mean manifest aggression score for
chronic offenders was 56.14 ( SD = 12.82).

99
Asocial Index
The Jesness Personality Inventory was utilized to assess the asocial index. In
order to conduct statistical analysis, the appropriate procedures were utilized to derive the
AI raw score which was then converted to the AI standard score. The standard scores can
range from 25 to 90. Standard scores elevated beyond 50 are considered to be more
indicative of a personality profile consistent with increased juvenile offending. For
example, Jesness (1996) reports a standard score of 66 is 90% accurate in classifying
individuals as delinquent verses non-delinquent. Descriptive analysis revealed that the
mean asocial index score for the analyzed sample was 67.16 (SD = 14.40). The mean
asocial index for first time offenders was 65.39 (SD = 14.21). The mean asocial index for
multiple offenders was 65.93 (SD = 14.19).The mean asocial index for chronic offenders
was 68.81 (SD = 14.60).
Table 3
Descriptive Data on Interval Variables
Factor by Offender Rate
Total Crime Mean
n
M
SD
Age
First
1.00
41
15.10
1.74
Multiple
2.86
48
15.58
1.46
Chronic
9.46
80
16.02
1.44
Total
5.53
169
15.67
1.56
CohesionScale (FACES-II)
First
1.00
41
54.44
13.85
Multiple
2.86
48
48.58
11.73
Chronic
9.46
80
52.41
11.51
Total
5.53
169
52.06
12.37

Table 3
(Continued)
100
Factor by Offender Rate Total Crime Mean n M SD
Adaptability Scale (FACES-II)
First
1.00
41
44.36
9.65
Multiple
2.86
48
41.54
9.66
Chronic
9.46
80
43.90
7.32
Total
5.53
169
43.34
8.60
First
1.00
41
65.17
13.24
Multiple
2.86
48
69.79
14.22
Chronic
9.46
80
69.01
15.73
Total
5.53
169
68.30
14.77
Manifest Aggression Scale (Jesness Personality Inventory)
First
1.00
41
55.80
13.33
Multiple
2.86
48
57.20
12.20
Chronic
9.46
80
56.14
12.82
Total
5.53
169
56.36
12.71
First
1.00
41
65.39
14.21
Multiple
2.86
48
65.93
14.19
Chronic
9.46
80
68.81
14.60
Total
5.53
169
67.16
14.40
Inferential Statistical Analysis Procedures
All data were analyzed using SYSTAT for Windows: Statistics, Version 7.0
Edition. As described in Chapter 3, logistic regression was the form of regression utilized

101
due to the dependent variable being categorical. Simple single variable logistic regression
models were utilized to investigate the bivariate relationships between each independent
variable and the levels of the dependent variable. Multinomial logit analyses were also
conducted to investigate the primary research questions. Wald chi square was the test
statistic for each logistic model. Following that all hypotheses were non directional, the
Type I error rate was established at the a = .05 level of significance (i.e., p < .05) (Mason
& Bramble, 1989). This established significance level determined the basis upon which
the decisions were made either to accept or reject the null hypotheses.
To address the nine hypotheses, the original proposed full multinomial logistic
regression model was designed to include as the main effect independent variables: age
(A), gender (G), race (R), adaptability (ADP), cohesion (C), social maladjustment (SM),
manifest aggression (MA), and asocial index (AI). The interaction terms were to include
C, AI + ADP, AI + C, SM + C, MA + ADP, SM + ADP, MA. The subject’s rate of
offending was identified as the dependent variable. The multinomial logistic regression
method would statistically control each listed independent variable while considering the
significance of other input variables in that model.
However, upon verification of the assumptions corresponding to the use of
logistic regression analysis on the purposed full model, multi-colinearity concerns were
found to exist between adaptability and cohesion (r = .62) and SM with both MA (r = .76)
and AI (r = .64). As a result, adaptability and SM were removed from the full logistic
regression model and run in a separate logistic model which also included race, gender
and age. Adaptability was chosen to be removed from the full original model due to

102
cohesion’s stronger support in the delinquency literature. SM was removed from the full
original model to allow more personality variables to remain in the modified Model 1.
These modifications to the original full logit model rendered untestable
hypotheses 4, 8, and 9. However, while the number of variables controlled for was
reduced, alternate logit models were run which allowed the primary comparisons
proposed in hypotheses 1, 2, 3, 5 and 7 to be addressed.
The main multinomial logistic regression model (Model 1) was developed to
address the primary nature of hypotheses 1, 2, 3, 5, and 6. For the purposes of exploring
the relationships between the removed independent variables (adaptability and SM) and
delinquency, a second logistic regression model (Model 2) was run. Model 2 was run to
provide information regarding the primary nature of hypothesis 7. The modified logistic
regression models run did provide the statistical inferences needed to address this study’s
primary research question exploring the existence of as relationship between personality
and family functioning across rate of delinquency. The following will be a review of the
bivariate comparisons, the multinomial logistic regression models run and the results
discussed in relation to the hypotheses in question.
Bivariate Logistic Comparisons
Multiple single variable logistic regression models were run to explore the
relationship between each independent variable and the dependent variable. The purpose
of these comparisons was to explore the significance of the relationship between each
independent variable and the rates of offending. The primary limitation of multiple
bivariate comparisons verses including all the independent variables in the same model

103
was the loss of controlling for variance explained in the dependent variable by the other
empirically or theoretically relevant independent variables. Therefore, the confidence in
the inferences made regarding the variance explained as a result of the independent
variable in bivariate analysis was more limited. Despite this weakness, multiple bivariate
analysis added to the investigation of the independent variables with the dependent
variable and allowed for a comparisons between the bivariate and the multinomial logistic
regression models (1&2) which contain more control variables.
The results of the bivariate analysis revealed significance was achieved gender,
chi-square = 14.06, p < .05; and cohesion, chi-square = 6.71, p < .05. Significance was
not achieved for age, race, adaptability, SM, MA, or AI at p < .05. Table 3 summarizes
the results of the bivariate analysis.
Table 4
Bivariate Comparison Results
Input variable
DF
Wald Chi-Square
PR > Chi-Square
Age
2
9.42
0.8537
Gendera
2
14.06
0.0009a
Race
2
3.22
0.2001
Cohesion3
2
6.71
0.0349a
Adaptability
2
2.94
0.2301
SM
2
2.50
0.2870
MA
2
0.32
0.8538
AI
2
2.02
0.3647
Significant at p < .05.

104
Multinomial Logistic Regression Results
Model 1. This model was designed to primarily address hypotheses 1, 2, 3, 5, and
6. The main effect independent variables included: age (A), gender (G), race (R),
cohesion (C), manifest aggression (MA), and asocial index (AI). The interaction terms
included: C, MA and C, AI. The subject’s rate of offending was identified as the
dependent variable. The main effect independent variables found to achieve significance
included age, chi-square = 7.06, p < .05; gender, chi-square = 18.79, p < .05; cohesion,
chi-square = 6.89, p < .05, and MA, chi-square = 7.79, p < .05. The main effect
independent variables found not to achieve significance at p < .05 were race and asocial
index. The interaction term which achieved significance was Cohesion crossed with MA,
chi-square = 6.66, p < .05;. Significance was not achieved for the interaction term
including Cohesion and AI at p < .05. Table 4 summarizes the results of the multinomial
logistic regression Model 1.
Table 5
Input variable
DF
Wald Chi-Square
PR > Chi-Square
Age3
2
7.06
0.0293a
Gender3
2
18.79
0.00008a
Race
2
7.06
0.1560
Cohesion3
2
6.89
0.0320a
MA3
2
7.79
0.0204a
AI
2
4.03
0.1336

105
Table 5
(Continued)
Model 1
Input variable
DF
Wald Chi-Square
PR > Chi-Square
C, MAa
2
6.66
0.0358a
C, AI
2
2.96
0.2280
a Significant at p < .05.
Model 2. This model was designed to primarily address hypotheses 7. The main
effect independent variables included: age (A), gender (G), race (R), adaptability (ADP),
and social maladjustment (SM). The interaction term was ADP, SM. The subject’s rate of
offending was identified as the dependent variable. The main effect independent variables
found to achieve significance included age, chi-square = 10.10, p < .05; and gender, chi-
square = 15.77, p < .05. The main effect independent variables found not to achieve
significance at p < .05 were race, Adaptability and SM. The interaction term (ADP, SM)
did not achieve significance at p < .05. Table 5 summarizes the results of the
multinomial logistic regression Model 2.
Table 6
MulitnomialXogistic RegressionJlesulti For Model 2
Input variable DF Wald Chi-Square PR > Chi-Square
Agea 2 10.10 0.0064a
Gendera 2 15.77 0.0004a
Race 2 3.45 0.1777

106
Table 6
(Continued)
Input variable
DF
Wald Chi-Square
PR > Chi-Square
ADP
2
4.54
0.1036
SM
2
3.30
0.1927
ADP, SM
2
3.98
0.1368
a Significant at p < .05.
Evaluation^ Hypotheses
Nine hypotheses were originally purposed in this research study to assess the
existence of a possible relationship between personality and family functioning across an
adolescent’s rate of offending. As a result of multicolinearity concerns, the original full
multinomial model was modified to form two multinomial logistic regression models (1
& 2). Model 1 was designed to address hypotheses 1, 2, 3, 5, and 6. Model 2 was
designed to address hypotheses 7. Hypotheses 4, 8, and 9 were left untestable. Further,
multiple single bivariate logistic comparisons were made between each independent
variable and the dependent variable to contribute to inferences made. Thus, two
multinomial logistic regression models and their corresponding partial logistic regression
coefficients were utilized to test each hypothesis for statistical significance. Data obtained
from the study either supported the acceptance or rejection of the null hypotheses. The
following will be an evaluation of each modified hypothesis tested based on the statistical

107
findings of this study. Table 5 summarizes the statistical tests and decisions made on each
hypothesis.
Hypothesis 1 proposed that there is no relationship between age and rate of
juvenile delinquency as measured by number of criminal charges while holding gender,
race, cohesion, manifest aggression, and asocial index constant. The results of the
multinomial logistic regression and corresponding partial logistic regression coefficient in
Model 1 demonstrated that the main effect for age attained statistical significance
with a chi-square = 7.06, p < .05. Based on these results, data from the study supported
the rejection of null hypothesis 1 (main effect for age). Support was also found for the
significance of age in model 2 (chi-square = 15.77, p < .05.) but not in the bivariate
analysis at p < .05.
Hypothesis^ proposed that there is no relationship between gender and rate of
juvenile delinquency as measured by number of criminal charges while holding age, race,
cohesion, manifest aggression, and asocial index constant. The results of the multinomial
logistic regression and corresponding partial logistic regression coefficient in Model 1
demonstrated that the main effect for gender attained statistical significance with a chi-
square = 18.79, p < .05. Based on these results, data from the study supported the
rejection of null hypothesis 2 (main effect for gender).
Support was also found for the significance of gender in model 2 (chi-square = 16.85, p <
.05.) and in the bivariate analysis (chi-square = 14.06, p < .05).
Hypothesis^ proposed that there is no relationship between race and rate of
juvenile delinquency as measured by number of criminal charges while holding age,

108
gender, cohesion, manifest aggression, and asocial index constant. The results of the
multinomial logistic regression and corresponding partial logistic regression coefficient in
Model 1 demonstrated that no statistical evidence was established to support the rejection
of null hypothesis 3 (the main effect for race) at p < .05. Similarly, results from Model 2
and bivariate analysis also found race did not achieve significance at p < .05.
that the relationship between family cohesion as measured
by FACES-II and rate of juvenile delinquency as measured by number of criminal
charges will not vary as a function of social maladjustment as measured by Jesness
personality inventory while holding age, gender, race, adaptability, manifest aggression,
and asocial index constant. Due to multi-colinearity concerns this hypothesis was
untestable. Bivariate logistic analysis was completed on each variable and revealed
significance for cohesion (chi-square = 6.71, p < .05) but not for SM at p < .05.
Hypothesis^ proposed that the relationship between family cohesion as measured
by FACES-II and rate of juvenile delinquency as measured by number of criminal
charges will not vary as a function of manifest aggression as measured by Jesness
personality inventory while holding age, gender, race, and asocial index constant. The
results of the multinomial logistic regression and corresponding partial logistic regression
coefficient in Model 1 demonstrated that the interaction term between cohesion and MA
attained statistical significance with a chi-square = 6.66, p < .05. Based on these results,
data from the study supported the rejection of null hypothesis 5 (the interaction term
including cohesion and MA).

109
Hypothesis 6 proposed that the relationship between family cohesion as measured
by FACES-II and rate of juvenile delinquency as measured by number of criminal
charges will not vary as a function of asocial index as measured by Jesness personality
inventory while holding age, gender, race, and manifest aggression constant. The results
of the multinomial logistic regression and corresponding partial logistic regression
coefficient in Model 1 demonstrated that the interaction term between cohesion and
asocial index did not attain statistical significance at p < .05. Based on these results,
insufficient statistical evidence was found to support the rejection of null hypothesis 6
(interaction term including cohesion and asocial index).
Hypothesis 7 proposed that the relationship between family adaptability as
measured by FACES-II and rate of juvenile delinquency as measured by number of
criminal charges will not vary as a function of social maladjustment as measured by
Jesness personality inventory while holding age, gender, and race constant. The results of
the multinomial logistic regression and corresponding partial logistic regression
coefficient in Model 2 demonstrated that the interaction term between Adaptability and
SM did not attained statistical significance at p < .05. Based on these results, insufficient
statistical evidence was found to support the rejection of null hypothesis 7 (interaction
term including adaptability and SM).
Hypothesis 8 proposed that the relationship between family adaptability as
measured by FACES-II and rate of juvenile delinquency as measured by number of
criminal charges will not vary as a function of manifest aggression as measured by
Jesness personality inventory while holding age, gender, race, cohesion, social

110
maladjustment, and asocial index constant. Due to multi-colinearity concerns this
hypothesis was untestable. Bivariate logistic analysis was completed on each variable and
revealed insufficient statistical evidence to support the achievement of significance for
either adaptability or MA at p < .05.
Hypothesis 9 proposed that the relationship between family adaptability as
measured by FACES-II and rate of juvenile delinquency as measured by number of
criminal charges will not vary as a function of asocial index as measured by Jesness
personality inventory while holding age, gender, race, cohesion, social maladjustment,
and manifest aggression, constant. Due to multi-colinearity concerns this hypothesis was
untestable. Bivariate logistic analysis was completed on AI and the rate of offending and
revealed insufficient statistical evidence to support the achievement of significance for AI
at p < .05.
Table 7
Statistical Tests of Hypotheses
Hypothesis Statistical
Model
Input
variable
Wald
Chi-Square
PR >
Chi-Square
Decision
Hoj
One
Age3
7.06
0.0293 3
Reject
Ho2
One
Gender3
18.79
0.00008 3
Reject
Ho3
One
Race
7.06
0.1560
Not Reject
Ho4
None
C, SM
—
—
Untestable
o
X
One
C, MA 3
6.66
0.0358 3
Reject
Ho6
One
C, AI
2.96
0.2280
Not Reject

Ill
Table 7
(Continued)
Hypothesis
Statistical
Model
Input
variable
Wald
Chi-Square
PR >
Chi-Square
Decision
Ho7
Two
ADP, SM
3.98
0.1368
Not Reject
Ho8
None
ADP, MA
—
—
Untestable
Ho9
None
ADP, AI
—
—
Untestable
a Significant at p < .05.
Summary
In summary, descriptive analysis of the data revealed a sample of adolescents who
varied on demographic characteristics and rate of offending. The sample was reduced
from 184 subjects to 169 Black and White subjects ranging in age from 13 to 18 years
old. Inferential analysis was conducted through the use of multinomial logistic regression
and bivariate logistic regression. This study’s utilization of a multinomial type of
regression is consistent with the practices of others in the field of juvenile delinquent
study who are exploring multivariate models of delinquency (Farrington, 1994; Hoge,
Andrews, & Leschied, 1994; Salts, Lindholm, Goddard, & Duncan, 1995; Scholte, 1992;
Tolan, 1987; Tolan & Lorion, 1988; Wasserman, Miller, Pinner, & Jaramillo, 1996). The
use of multinomial logistic regression permitted the analysis of the relationship between
the dependent variable and various independent variables while controlling for other
independent variables in the model. Bivariate logistic comparisons were also provided.
Due to concerns of multi-colinearity, hypotheses 4, 8, and 9 were untestable. The

112
results of the statistical analysis for this sample revealed insufficient statistical evidence
to support the rejection of null hypothesis 3, 6, and 7. Therefore, no evidence was found
to support a relationship between the input variables of race or the interaction terms of
either cohesion & asocial index or adaptability & social maladjustment with the
dependent variable (rate of offending). However, sufficient statistical evidence was found
to reject null hypothesis 1, 2, and 5. Therefore, supporting the existence of a significant
relationship between the input variables of age, gender, and the interaction of cohesion
and manifest aggression with the dependent variable (rate of offending). Chapter 5 will
present an overview of the study, a discussion of the results, the limitations of the study,
practical implications and recommendations for future research.

CHAPTER 5
DISCUSSION
One of the greatest mistakes that can be made is to assume
that simple ways can be found to solve juvenile
delinquency. There are no philosopher’s stones, one-a-day
medicines, or special formulas to change young people
caught up in crime and the juvenile justice system. (Lee &
Klopfer, 1978)
Introduction
This chapter summarizes the purpose of the study including a description of the
research methodology and sample. Also provided is a summary evaluation of the
hypotheses, a discussion of the results related to the primary research questions,
limitations of the study, and theoretical and practical implication of the findings. Finally,
recommendations for future research will be offered and an introduction to Powers’s
(1973) Meta Theory of Hierarchical Cybernetic Feedback Loops is presented. Powers’s
meta theory offers an alternative explanation of the processes at work between
personality and family functioning on the rate of juvenile delinquent offending and may
inspire future research on this topic.
Overview of Study
A growing consensus in the field of juvenile delinquent study supports the view
that the development and maintenance of juvenile offending is a result of many complex
113

114
factors (Benda, 1987; Bogenschneider, 1996; Calabrese & Adams, 1990; Marsh,
Clement, Stoughton, & Marckioni, 1986; Jesness, 1996; Salts, Lindholm, Goddard, &
Duncan, 1995; Tolan & Loeber, 1993; Tolan, Cromwell, & Brasswell, 1986; Worden,
1991). Thus, many current researchers support the use of multivariate ecosystemic
models to investigate the development, prevention, and treatment of juvenile delinquency
(Bogenschneider, 1996, Bronfenbrenner, 1979; Henggeler, 1989; Lemer, 1991; Liddle,
1995; Magnusson, 1995; Moffitt, 1993; Salts, Lindholm, Goddard, & Duncan, 1995;
Mulvey, Arthur, Reppucci, 1993; Paris, 1996; Reid, 1993; Tolan & Loeber, 1993;
Yoshikawa, 1994; Worden, 1991). Consistent with this approach, the current study
utilized Bronfenbrenner’s Eco-Systemic Model of Human Development to guide the
investigation of a possible relationship between personality and family functioning across
the rate of juvenile delinquent offending.
The primary purpose of this study was to address the question, “Does a
relationship exist between an adolescent’s personality (i.e., characteristics of the self) and
his/her perception of family functioning (i.e., environmental characteristics of the system)
across his/her rate of delinquent offending (i.e., social development) while holding
relevant factors such as age, gender, and race constant?” The construct of personality v\ as
grounded in the Jesness Personality Inventory (1996), which was the assessment
instrument used to attain the scores on the social maladjustment scale (SM), manifest
aggression scale (MA) and asocial index (AI).

115
The construct of family functioning was grounded in Olson, Russell and Sprenkle’s
(1983) Circumplex Model of Marital and Family Systems and FACES-II which was the
assessment instrument utilized to assess family cohesion and adaptability.
A private counseling agency in North Central Florida had previously used
FACES-II and the Jesness Personality Inventory to assess its clients at intake and made a
data set of 184 anonymous juveniles available for this study. The original sample was
reduced to conform to the age range defined in the study and to provide a sufficient
number of subjects in each ethnic category for comparison. As a result, the sample
analyzed consisted of 169 Black and White adolescents who ranged from 13 to 18 years
old.
Descriptive analysis revealed that 78% of the analyzed sample consisted of males,
22% females, 53% were Black and 47% were White. This distribution is consistent with
the gender and ethnic distribution seen in the offender population as reported by the State
of Florida Department of Juvenile Justice (DJJ, 1996).
Through the use of multinomial logistic regression, it was possible to hold one or
more of the independent variables constant in order to determine the significance of a
single input variable’s relationship to the dependent variable. This method also made it
possible to determine if two variables interacted with one another in predicting the
variance in the dependent variable while controlling for the other input variables. The
findings of this study have both theoretical and practical implications. Further, the
findings contribute to filling the gap in the literature exploring the existence of a
relationship between personality and family functioning across rate of delinquent

116
offending. The following is a summary evaluation of the research hypotheses in light of
the statistical findings.
Evaluation of Hypotheses
The statistical analysis directly pertaining to the hypotheses involved running two
multinomial logistic regression models (1 & 2). The original full multinomial logistic
regression model was reduced to form Model 1 and Model 2 due to multicolinearity
concerns between several independent variables. Model 1 was designed to address
hypotheses 1, 2, 3, 5, and 6. Model 2 was designed to address hypothesis 7. These
modifications left hypothesis 4, 8, and 9 untestable. Though not directly utilized to test
the hypotheses, bivariate logistic regression comparisons were also run to further assess
the relationship between the independent variables and the dependent variable. The
following will be a summary of the hypotheses tested and the corresponding statistical
results.
HypothesisJ. tested the main effect for age as it related to rate of juvenile
delinquency. The results revealed that sufficient statistical evidence was found to
demonstrate that age had achieved significance in Model 1 with a chi-square = 7.06, p <
.05. Support was also found for the significance of age in Model 2 (chi-square = 15.77, p
< .05.) but not in the bivariate analysis at p < .05.
tested the main effect for gender as it related to rate of juvenile
delinquency. The results revealed that sufficient evidence was attained to demonstrate
that gender had achieved significance in Model 1 with a chi-square = 18.79, p < .05.

117
Support was also found for the significance of gender in Model 2 (chi-square = 16.85, p <
.05.) and in the bivariate analysis (chi-square = 14.06, p < .05).
Hypothesis 3 tested the main effect for race as it related to rate of juvenile
delinquency. The results revealed that insufficient statistical evidence was found in
Model 1 to support the rejection of hypotheses 3 at p < .05. Similarly, results from Model
2 and bivariate analysis also found race did not achieve significance at p < .05.
was designed to test the interaction of family cohesion and social
maladjustment as related to rate of juvenile delinquency. However, due to multi¬
colinearity concerns this hypothesis was untestable. Although the interaction of cohesion
and SM was not explored, bivariate logistic analysis revealed significance was achieved
for cohesion (chi-square = 6.71, p < .05) but not for SM at p < .05.
Hypothesis 5 tested the interaction of family cohesion and manifest aggression as
related to rate of juvenile delinquency. The results revealed that sufficient evidence was
found in Model 1 with a chi-square = 6.66, p < .05. to demonstrate that an interaction
between C and MA may exist.
Hypothesis 6 tested the interaction of family cohesion and asocial index as it
related to rate of juvenile delinquency. The results revealed insufficient evidence in
Model 1 to support the rejection of hypothesis 6 at p < .05.
Hypothesis 7 tested the interaction of family adaptability and social
maladjustment as related to rate of juvenile delinquency. The results revealed that
insufficient evidence was found in Model 2 to support the rejection of hypothesis 7 at p <
.05.

118
Hypothesis 8 was designed to test the interaction of family adaptability and
manifest aggression as related to rate of juvenile delinquency. However, due to multi¬
colinearity concerns this hypothesis was untestable. Although the interaction of
adaptability and MA was not explored, bivariate logistic analysis revealed insufficient
statistical evidence to support the achievement of significance for either adaptability or
MA at p < .05.
Hypothesis 9 was designed to test the interaction of family adaptability and
asocial index as related to rate of juvenile delinquency. However, due to multi-colinearity
concerns this hypothesis was untestable. Although the interaction of adaptability and AI
was not explored, bivariate logistic analysis revealed insufficient statistical evidence to
support the achievement of significance for AI and rate of offending at p < .05.
In summary, the null hypotheses 1 (main effect for age), 2 (main effect for
gender), and 5 (interaction term for C & MA) were rejected and no statistical evidence
was found to support the rejection of null hypothesis 3 (Main effect for race), 6
(interaction term for C & AI), and 7 (interaction term for ADP & SM). Hypotheses 4, 8,
and 9 were untestable due to modifications as a result of multi-colinearity concerns. The
bivariate analysis revealed significant results for gender and cohesion. Contrary to the
multinomial models, age was not found to achieve bivariate significance. Further, while
MA was found to be contained in a significant interaction term with cohesion, the
bivariate comparison for MA did not attain significance.

119
Discussion of Results
The results of the multinomial logisitic regression analysis revealed support for
and a lack of support for several of the hypothesis tested. The following discussion of the
results will address each of this study’s research questions.
Relationship of Age to Rate of Juvenile Delinquency
The purpose of research question 1 was to investigate the relationship between
age and rate of juvenile delinquency while controlling for other relevant variables.
Hypothesis 1 tested the main effect for age as it related to rate of juvenile delinquency
while controlling for other relevant input variables. Sufficient statistical evidence was
found to demonstrate that age had achieved significance in the multinomial logistic
regression Model 1 with a chi-square = 7.06, p < .05. Support was also found for the
significance of age in Model 2 (chi-square = 15.77, p < .05.) but not in the bivariate
analysis at p < .05.
This study’s significant effect for age supports the findings of Hindelang, Hirschi,
and Weis, (1981) and Tolan and Loeber (1993) who reported a relationship between age
and rates of delinquent offending. The current multinomial findings are in direct contrast,
however, to Smith, Visher, and Jarjoura (1991) who found no relationship between age
among active offenders and the frequency of delinquent activity. The statistics used and
the cross sectional design of the current study constrain conjecture about the causal nature
of this relationship. For example, did age reflect a direct cause to level of offending? Was
it an indirect effect reflecting developmental differences effecting family relations which
then effected levels of delinquency (as suggested by Smets and Hartup, 1988, and Olczak,

120
Parcell, and Sttot, 1983)? Or was age significant simply because among our sample, the
older adolescents had more time to acquire more charges. The differences in mean ages in
this sample (from 15.10 for first time offenders to 16.02 for chronic offenders) could be
said to support this latter conclusion.
The current finding of a significant age effect provides support for
Bronfenbrenner’s eco-systemic model. Age would appear to be a significant characteristic
of an adolescent which effects the course of his/her social development. In general, this
study’s findings on the role of age suggest the need to control for age when exploring a
multivariate model’s ability to explain the variance in the rate of delinquent offending.
Relationship of Gender to Rate of Juvenile Delinquency
The purpose of research question 2 was investigate the relationship between
gender and rate of juvenile delinquency while controlling for other relevant variables.
Hypothesis 2 tested the main effect for gender as it related to rate of juvenile delinquency
while controlling for other relevant input variables. Sufficient evidence was attained to
demonstrate that gender had achieved significance in the mulinomial logistic regression
Model 1 with a chi-square = 18.79, p < .05. Support was also found for the significance
of gender in Model 2 (chi-square = 16.85, p < .05.) and in the bivariate analysis (chi-
square = 14.06, p < .05).
These finding regarding gender are consistent with many other studies in the
delinquency literature (Canter, 1982; Elliot, Huizinga, & Menard, 1989; Hindelang,
Hirschi, & Weis, 1981; Saner & Ellickson, 1996; Smith, Visher, & Jarjoura, 1991; Tracy,
Wolfgang, & Figlio, 1990; Werner & Smith, 1992; Yoshikawra, 1994). While other

121
researchers have found no difference due to gender (Blumstien, Cohen, Roth, & Visher,
1986; Shaw & Scott, 1991), the current study’s results would suggest the need to consider
controlling for gender in the exploration of the complex factors effecting delinquency.
The current finding of a significant gender effect provides support for Bronfenbrenner’s
eco-systemic model. Gender would appear to be a significant characteristic of an
adolescent which effects the course of his/her social development and should be
controlled for in multivariate delinquency studies.
Relationship of Race to Rate of Juvenile Delinquency
The purpose of research question 3 was to investigate the relationship between
race and rate of juvenile delinquency while controlling for other relevant variables.
Hypothesis 3 tested the main effect for race as it related to rate of juvenile delinquency
while controlling for other relevant input variables. Insufficient statistical evidence was
found in the mulinomial logistic regression Model 1 to support the rejection of
hypotheses 3 at p < .05. Similarly, results from Model 2 and bivariate analysis also found
race did not achieve significance at p < .05. It is important to realize that the analyzed
sample was made up of Caucasian (White) and African American (Black) youth only.
This restricts the generalization of these findings.
While keeping in mind the sample consisted of only White and Black youth,
finding a lack of support for a relationship between race and official measures of rate of
delinquency is contrary to the majority of study’s reviewed (Elliot & Ageton, 1980;
Elliot, Huizinga, & Ageton, 1985; Short, 1990; Smith, Visher, & Jarjoura, 1991; Tolan &
Loeber, 1993; Hindelang, Hirschi, & Weis, 1981).

122
This study’s findings on race are similar to the self-report studies which generally have
found no difference in delinquent behavior by race (Salts, Linholm, Goddard, & Duncan,
1995).
Finding that race was not a supported significant effect in predicting rates of
delinquency among our sample could challenge the role of race in Bronfenbrenner’s eco-
systemic model. Based on the finding of this study, race as restricted to Black and White
ethnic groups would not appear to be a significant characteristic of an adolescent
contributing to the effects on the outcome of social development.
Relationship of Personality and Family Functioning.to Rate of Juvenile Delinquency
The primary research question addressed in the current study was, “Does a
relationship exist between an adolescent’s personality and his/her perception of family
functioning across his/her rate of delinquent offending while holding age, race and gender
constant?” To address this question, several independent research questions (4, 5, 6, 7, 8,
and 9) and corresponding hypotheses pertaining to an interaction between personality and
family functioning were developed. Each of these research questions and corresponding
hypotheses taken alone were designed to provide the inference needed to address the
above question. Due to multi-colinearity concerns research questions 4, 8, and 9 were not
included in analysis. Nevertheless, the remaining research questions and corresponding
hypotheses (5, 6, and 7) provided sufficient inferences needed to address the primary
research question. The following discussion will address research questions 6 and 7 first,
and then research question 5.

123
Research questions 6 & 7
Research questions 6 and 7 and the corresponding hypotheses investigated two
different interactions pertaining to the relationship of personality and family functioning
with the rate of juvenile delinquency. Hypothesis 6 tested the interaction term including
C, AI and hypothesis 7 tested the interaction term including ADP, SM. The results
revealed insufficient evidence in Model 1 to support the rejection of hypothesis 6 at p <
.05 and insufficient evidence in Model 2 to support the rejection of hypothesis 7 at p <
.05. Since neither of these interaction terms were found to attain significance, the main
effect variables included in each of these interactions other than cohesion were checked
for significance. The main effect for cohesion was not checked because it was also
included in a second significant interaction term corresponding to hypothesis 5.
Upon reviewing the results of both the multinomial logistic regression models and
the bivariate comparisons, significance at p < .05 was not found to exist for ADP, SM, or
AI. The following will be a discussion of each of these variables as related to findings
within the delinquency literature.
Adaptability as measured by the FACES, has a history of inconsistent findings in
discriminating levels of juvenile delinquency. The current study’s discovery that within
the sample collected, adaptability did not achieve significance in either the multinomial
logistic regression model or the bivariate comparisons continues to raise doubt in the
utility of this dimension of family functioning to discriminate levels of delinquency. This
finding is consistent with others in the field of delinquency research (Cox, 1996; Hanson,
Henggeler, Haefle, & Rodick, 1984, Henggeler, Melton, Smith, Foster, Hanley, &

124
Hutchinson, 1993; Krohn, Stem, Thomberry, & Jang, 1992; Tolan, 1988a). According to
Olson (1994), inconsistent findings regarding the FACES assessment of adaptability may
be an artifact of the current likert scale design utilized in the FACES-II rather than an
indication of a theoretical weakness.
While adaptability did not distinguish among the levels of delinquents within the
current study, the range of mean adaptability scores found (41.54 to 44.36) did suggest
that all the subjects should be classified as coming from a mid-range family type rather
than a balanced family type. This is consistent with others who have found adaptability to
distinguish between non-delinquents (who generally come from balanced families) and
delinquents (who generally are found to come from mid-range to extreme family types)
(e.g., Blaske, Borduin, Henggeler, & Mann, 1989; Geismar & Wood, 1986; Rodick,
Henggeler, & Hanson, 1986)
In sum, that adaptability was found to correctly identify all delinquent subjects
supports the theoretical construct of adaptability. However, the findings of this study
negates the utility of the FACES-II assessment of adaptability as a family functioning
characteristic in multivariate models investigating levels of delinquency among the
population of juvenile delinquents.
Social maladjustment^nd asocial index: The current study’s discovery that within
the sample collected. SM and AI did not achieve significance in either the multinomial
logistic regression model or the bivariate comparisons raised doubt in the utility of these
aspects of personality to discriminate levels of delinquency. These findings are consistent
with a minority in the field of delinquency research who have utilized the Jesness

125
Inventory (e.g., Jesness, 1971b; Saunders & Davies, 1976; Shark & Handal, 1977).
However, these findings stand in direct contrast to the majority of the researchers who
have utilized the Jesness Inventory (e.g., Cowden, Peterson, & Patch, 1969; Decker,
1979; Dembo, La Voie, Schmeidler, & Washburn, 1987; Graham, 1981; Jesness, 1996;
Kunce & Hemphill, 1983; Martin, 1981; Martin & Murphy, 1993; Roberts, Schmitz,
Pinto, & Cain, 1990; Saunders & Davies, 1976; Sorensen & Johnson, 1996; Stott &
Olczak, 1978).
The range of mean scores for SM (i.e., 65.17 to 69.01) and for AI (i.e., 65.39 to
68.81) while not discriminating across levels of delinquency among the sample of
delinquents, are both within the ranges characteristic of youthful offenders (Jesness,
1996).
In sum, this study supports the findings of many researchers (e.g., Hoge,
Andrews, & Leshied, 1994; Glueck & Glueck, 1950; Guerra, 1989) that general
antisocial/antiauthority/procriminal personality attitudes such as SM and AI are
commonly found within the delinquent population. However, the findings do not support
the Jesness Inventory’s assessment of SM and AI as a discriminator to discriminate
among levels of youthful offenders within the delinquent population.
Research question 5
Research question 5 and the corresponding hypothesis investigated a different
theoretically and empirically supported interaction pertaining to the relationship of
personality and family functioning with rate of juvenile delinquency. Hypothesis 5 tested
the interaction term including C, MA. Sufficient evidence was found to demonstrate that

126
an interaction between C and MA attained statistical significance in Model 1 with a chi-
square = 6.66, p < .05. Because a significant interaction effect for MA and C was
discovered, the main effects for cohesion and manifest aggression were not investigated.
This was consistent with the standard practices of statistical analysis stating that it is
inappropriate to explore the lower order main effect terms if the higher order term
including these variables is found to attain significance (Borg and Gall, 1989).
The interaction demonstrated in question 5 indicates that the cohesion dimension
of the Circumplex model appears to be a relevant factor associated with delinquency.
This is consistent with many other studies in the field of juvenile delinquent study (e.g.,
Cox, 1996; Druckman, 1979; Geismar & Wood, 1986; Hanson, Henggeler, Burr-Harris,
Borduin, & McCallium, 1991; Henggeler, 1989; Henggeler, Haefle, & Rodick, 1984;
Henggeler, Melton, Smith, Foster, Hanley, & Hutchinson, 1993; Maynard & Hultquist,
1988; McGaha & Fournier, 1988; Rodick, Henggeler, & Hanson, 1986; Tolan, 1988a).
The interaction demonstrated in question 5 also revealed that the MA of the Jesness
personality inventory appears to be a relevant factor associated with delinquency. This
too is consistent with many studies in the field of juvenile delinquent study (e.g.,
Cowden, Peterson, & Patch, 1969; Decker, 1979; Dembo, La Voie, Schmeidler, &
Washburn, 1987; Graham, 1981; Jesness, 1996; Kunce & Hemphill, 1983; Martin, 1981;
Martin & Murphy, 1993; Roberts, Schmitz, Pinto, & Cain, 1990; Saunders & Davies,
1976; Sorensen & Johnson, 1996; Stott & Olczak, 1978).
The significant interaction found in question 5 also provides statistical evidence
which suggests that characteristics of the person and the environment may have a

127
reciprocal influence on the outcomes of social development. This is in line with the
findings of many other researchers (Bronfenbrenner, 1979; Brooks, Whiteman, Nomura,
Gordan, & Cohen, 1988; Cicchetti & Richters, 1993; McLeod, Kruttschnitt, & Domfeld,
1994; Lemer & Spanier, 1978; Problems Prevention Research Group, 1992; Moffitt,
1993; Tolan & Mitchell, 1989; Shaw & Bell, 1993; Smets & Hartup, 1988; Wasserman,
Miller, Pinner, & Jaramillo, 1996). More specifically, finding this significant interaction
term implies that the complex interactional nature of aspects of the adolescent’s
personality (i.e., MA) and perception of family function (i.e., cohesion) should be taken
into account when utilizing multivariate models to study levels of juvenile delinquency.
Though not a research question asked in the current study, the next question raised
could be, “If MA and cohesion are related, how do they relate?” Unfortunately, due to the
crossectional design and correlational nature of the statistical procedures used in the
current study, little insight into the exact nature of this relationship between cohesion and
manifest aggression can be deduced (Shaw & Scott, 1991; Scholte, 1992). Thus, the exact
nature of the relationship between cohesion and manifest aggression remains unknown
and open for further research.
While acknowledging these limitations, some limited insight into how the
interaction of cohesion and manifest aggression can be gained from Table 8 (male
subjects) and Table 9 (female subjects). These two tables provide the percentages of male
or female subjects in each level of offending across the varying combinations of high and
low cohesion and manifestation aggression.

128
A further statistical limitation to the strength of inferences made from the patterns seen in
these tables, is the small number of subjects per category.
Computations within Table 8 and Table 9 were based on the following criteria.
High or healthy cohesion was defined as scores on the FACES-I1 reflecting mid to
balanced range (a cohesion score of 51 or higher). Low or unhealthy cohesion was
defined as scores on the FACES-II reflecting the extreme disengaged range (a cohesion
score of 50 or lower). High or unhealthy manifest aggression was defined as scores on the
Jesness Personality Inventory found to exist one standard deviation above the mean (a
score of 60 or higher). Low manifest aggression was defined as a score found to exist at
or below the mean (a score of 50 or lower).
Table 8
Frequency Distribution of Males by Rate of Offending Across Combinations of Cohesion
Level of
Offending
Low C
High MA
n(%)
Low C
Low MA
n(%)
High C
High MA
n(%)
High C
Low MA
n(%)
Chronic Offender
16(23)
3(4)
13(19)
19(27)
Multiple Offender
11(29)
3(8)
6(16)
5(13)
First Time Offender
7(30)
1(4)
3(13)
6(26)
Nole. The values represent the percentages of the total number of male subjects across
each level of offending and within the specific combination of levels of cohesion and
manifest aggression.

129
Table 9
Frequency Distribution of Females
Level of
Offending
Low C
High MA
n(%)
Low C
Low MA
n(%)
High C
High MA
n(%)
High C
Low MA
n(%)
Chronic Offender
4(40)
3(30)
1(10)
1(1)
Multiple Offender
3(30)
1(10)
1(10)
3(30)
First Time Offender
3(17)
2(11)
3(17)
6(33)
Note. The values represent the percentages of the total number of female subjects across
each level of offending and within the specific combination of levels of cohesion and
manifest aggression.
Table 8 and Table 9 reveal several interesting patterns related to the interaction of
cohesion and manifest aggression. First time female offenders where found to have a
higher percentage of subjects within the more healthy ranges of cohesion and manifest
aggression (33%) than within the unhealthy ranges of cohesion and manifest aggression
(17%). Female chronic offenders where found to have a higher percentage of subjects
within the unhealthy ranges of cohesion and manifest aggression (40%) than within more
healthy ranges of cohesion and manifest aggression (1%). The pattern within the female
multiple offenders and across the male offenders was less clear.
When comparing the mixed levels of healthy and less healthy cohesion and
manifest aggression across the levels of male offending in Table 9, males have a higher

130
percentage of subjects in the healthy cohesion and high manifest aggression combinations
than within the unhealthy cohesion and low manifest aggression combinations. The
greatest difference in this pattern is seen in the male chronic offender level (19% verses
4%). The opposite pattern is reflected in the female chronic offenders (Table 8) which
demonstrate a higher percentage of subjects within the unhealthy cohesion and low
manifest aggression (30%) than within the healthy cohesion and high manifest aggression
(10%). This may suggest that especially for chronic offenders with mixed levels of
healthy and less healthy cohesion and manifest aggression, males are more influence by
poor levels of personality (i.e., MA) while females are more influenced by poor levels of
family functioning (i.e., cohesion). It should be cautioned again that due to the limitations
which result form this study’s crossectional and correlational design coupled with this
study’s extremely small number of subjects within each comparison, little weight can be
given to these patterns until further exploration and verification by future research.
Despite the limitations within the current study to infer the exact nature of the
relationship between cohesion and manifest aggression, the discovery of a significant
interaction term pertaining to family functioning and personality provided support for an
answer of “yes” to this study’s primary research question. Thus, statistical evidence was
found to suggest there may exist a relationship between personality and the adolescent’s
perception of family functioning across his/her rate of offending while holding relevant
factors such as age, gender, and race constant.

131
Specifically, the current findings provide support for Bronfenbrenner’s (1979) theoretical
model and for the utilization of aspects of both the Circumplex Model of Marital and
Family Functioning (Olson et al. 1983) and the Jesness Personality Inventory (Jesness,
1996) when studying levels of juvenile delinquency.
Limitations of Study
The results and implications drawn from this study must be assessed within the
context of its limitations. The following are considered to be limitations of the study.
1. The self-report methods of assessment used are vulnerable to respondent
biases (McCubbin & Thompson, 1991). Self-report methods raise
concerns over the honesty of the respondent in answering the questions
and addressing each question rather than just marking answers (Christmas
Treeing). Having the interviewer present during the entire administration
of the assessment instruments helped to guard against this limitation.
2. Mono operational bias comes into play when only one method of
assessment is utilized to assess a construct. This was the case in the
present study. This limitation was countered by selecting very reliable and
valid measures of the constructs under investigation. Further, the construct
of family functioning is based solely on the view of the adolescent rather
than the averaging of all the family members as supported by Olson,
McCubbin, Bames, Larsen, Muxen, & Wilson (1985).

132
This method was chosen based on the theoretical justifications of the
grounding theory for this study (Bronfenbrenner, 1979).
3. The method utilized in the present study to assess one’s rate of
delinquency could limit the generalizability of the findings for some types
of delinquents. The method used was the calculation of officially reported
charges. There is a continuing debate of whether official records should be
used or self-report measures in measuring delinquency (Rosen, 1985;
Tolan & Loeber, 1993; Yoshikawa, 1994). Many have reported that self-
report measures provide a better assessment of minor offenses and official
data are quite accurate in identifying chronic or severe offending
(Hindelang, Hirschi, & Weis, 1979; West & Farrington, 1973). Though it
is recommended that one should indicate which method is used in their
study, the growing consensus is that official and self-report measures are
both valid and reliable methods to utilize (Rosen, 1985).
4. The sample collected was drawn from small rural communities in North
Central Florida. Though the sample was representative of the
demographics recorded in the total population of delinquency cases
received in the State of Florida (DJJ, 1996), concern over generalizing
beyond the State of Florida could be raised. Further, since the sample
consisted only of White and Black adolescents, generalization is limited to
these two ethnic groups. The use of random selection and a broader range
of ethnic groups would have provided stronger support for

133
external validity. In the current study, random selection was not utilized,
but rather clients were court referred and taken on an as seen basis.
5. The correlational method of logistic regression was utilized in the current
study to explore the relationships between the independent variables and
the dependent variable. Strong conclusions generally are not made
regarding cause-and-effect relationships from correlational data.
Correlation coefficients are best used to measure the degree of relationship
between variables and to provide information for future studies utilizing
more appropriate designs for making cause-and-effect inferences (Borg
and Gall, 1989).
6. The current study utilized a cross-sectional design rather than a
longitudinal design. According to Scholte (1992) and Shaw and Scott
(1991), forms of regression analysis on cross-sectional data provide little
information about effects and minimal empirical demonstration of the
direction of effects. Therefore, while the relationships between personality
and family functioning may be established, the use of longitudinal data is
needed to assess the nature and conclusions regarding causal or directional
effects of the variables explored.

134
Practical Implications of the Results
The theoretical implications of the findings to this study’s grounding theories
posited by Bronfenbrenner (1979), Olson, Sprenkle, and Russell, (1979), and Jesness
(1996) have been presented above. This current section will present a number of evident
practical implications of the findings.
Thorough assessment is necessary to furthering any understanding. To best assess
an issue like delinquency, it is helpful to know what to assess. To know what to assess, it
is professionally responsible to have theoretical and empirical grounds to guide
assessment. The current study not only provided statistical grounds for the need to
include the assessment of the interaction of aspects of personality (e.g., MA) and aspects
of family functioning (e.g., cohesion) but also provided support for the holistic eco-
systemic approach to assessing and understanding rates of juvenile delinquency.
Thus, the current study’s findings contribute to our understanding of the
interactions of personality and family functioning upon rate of juvenile delinquency and
may impact many critical regions of assessment in juvenile delinquency. The current
findings support the utilization of the eco-systemic approach to assessment and provide
support for including gender, age, and the interaction of personality and family
functioning in the assessment strategy. These findings coupled with a general
multisystemic approach to assessment may lead to new insights into assessment, and
improve the information gathered to guide juvenile justice correctional decisions
(Andrews, Bonta, and Hoge, 1990; Hoge, Andrews, and Leschied, 1995; Jaffe, Leschied,

135
Sab, and Austin, 1985), increase the ability to target those juveniles who are most in need
of limited treatment resources (Farrington, 1995; Niarhos & Routh, 1992). Further, these
findings coupled with the multisystemic approach may better direct us to identifying what
areas to be addressed in a treatment strategy dealing with the juvenile delinquent clientele
(Henggeler, 1989; Loeber, 1990; Mulvey, Arthur, & Reppucci, 1993; Tolan & Mitchell,
1989).
The findings have implications for counselors in training and in practice who need
to know the counseling needs of juvenile delinquents. Loeber (1990) believes there exists
a strong need to improve training for professionals and para-professionals working with
this population. Other than clinical experience, many therapists and therapists in training
have not received adequate preparation to understand and work with the delinquent
population and their families (Liddle, 1995). The findings of this study would support the
adoption of a more holistic eco-systemic stance including personality and family
functioning when considering approaches to counseling and understanding the juvenile
delinquent population.
For example, Henggeler (1989) utilizing the work of Bronfenbrenner (1979) has
developed and empirically supported an eco-systemically based multisystemic therapeutic
approach to working with the delinquent and severely delinquent populations and their
families (Henggeler, 1991). This is a promising approach to treating and understanding
the delinquent population (Chamberlain & Rosicky, 1995; Kazdin, 1987; Liddle, 1995;
Tolan & Loeber, 1993).

136
Though the current study’s findings may challenge this approach to include more in depth
aspects of personality in assessment and treatment, this approach still gains support by
this study’s findings. Thus, greater confidence can be placed in such ecosystemic models
which have the potential to guide efforts to improve training and practice with the
difficult juvenile delinquent population.
Social Policy
The design of social policy is greatly influenced by fundamental assumptions or
conclusions about the nature of both social problems and adolescents (Garbarino, 1993).
The findings of this study shed insight into the factors related to the rate of juvenile
delinquency and support the use of a holistic eco-systemic approach. Thus, this study
provides grounds for policies which support funding research and programs that utilize
the eco-systemic approach and take into consideration age, gender, and the relationship of
personality (e.g. manifest aggression) and family functioning (e.g. cohesion) when
addressing the rates of the juvenile delinquent population. Further, the findings may
impact the policies instructing state juvenile justice assessment approaches by suggesting
the need to consider the interaction of adolescent personality and family functioning in
assessment and possibly prevention and treatment of this population.
Recommendations
The current study contributes to the establishment of empirical evidence which
supports the existence of a relationship between the rate of juvenile delinquency across

137
family functioning and personality. It is clear that more research is needed to substantiate
this relationship and to better understand the precise nature of the relationship between
rate of juvenile delinquency across family functioning and personality. The following
will include recommendations for future research based on the results of the current
study. Also included will be the presentation of a theoretical model which may help to
guide future research through offering an explanation of the processes at work between
personality and family functioning on the rate of juvenile delinquent offending.
1. Similar studies should be conducted to replicate and extend the study
particularly through examining the relationships among the constructs as
they evolve over time. The focus of such studies would be on further
examining the exact nature of the relationships between constructs on the
development of levels of delinquency. A longitudinal study may reveal
evidence for example that the relationships of these constructs on the level
of delinquency may vary due to different developmental levels of the
adolescent (Smets & Hartup, 1988). Or a longitudinal study may bring to
light if and how the interaction of these constructs may influence multiple
pathways leading to the development of varying levels of delinquency
(Henry, Moffitt, Robins, Earls, & Silvia, 1993; Moffitt, 1993; Tolan &
Loeber, 1993).
According to the eco-systemic model of human development
(Bronfenbrenner, 1979), the relationships between the characteristics of

138
the child and the environment are reciprocal over time. Many researchers
support the need for a designed longitudinal study to capture the dynamic
nature in the transactions between characteristics of the child and the
environment rather than crossectional studies which take a “snap shot” of
the story with a focus on one moment in time (Bronfenbrenner, 1995;
Moffitt, 1993; Sameroff, 1975; Scholte, 1992; Shaw & Scott, 1991; Tolan
& Thomas, 1994; Tolan & Loeber, 1993). It is through a continuous
assessment of the transactions between characteristics of the child and
their environment that the determinations of how those transactions
facilitate or hinder adaptive integrations by the child will become better
understood. New longitudinal research such as this may best shed light
into the developmental process around levels of juvenile delinquency.
2. Other studies should further research aspects of the interaction between
MA and cohesion upon rates of juvenile delinquency. Studies which
investigate other aspects of both aggression and family cohesion would
add to the understanding of how these two qualities relate and impact the
rate of delinquency.
3. Studies of different aspects of personality or family functioning in general
are recommended and would broaden the scope of understanding in
delinquency. For example, regarding different aspects of personality, a
study utilizing the many other Jesness Personality Inventory
characteristics that were not included in the current study is recommended.

139
Another example would be the exploration of the interactions of
personality disorders of the adolescent such as Conduct Disorder with
family functioning upon the rate of delinquency. The research on the
etiology and relations of Conduct Disorder and family functioning has
been found to be very similar to that found in delinquency (Coie & Jacobs,
1993; Offord, 1989; Paris, 1996; Rutter & Giller, 1983).
Regarding a different aspect of family functioning, further studies
exploring interactions of personality and parenting upon the rates of
delinquent offending are needed (Brooks, Whiteman, Nomura, Gordon, &
Cohen, 1988; McLeod, Kruttschnitt, & Domfeld, 1994; Moffitt, 1993;
Patterson & Bank, 1989; Tolan & Thomas, 1995; Wasserman, Miller,
Pinner, & Jaramillo, 1996). Similarly, though this study focused on the
adolescent’s personality and perception of family functioning, studies
exploring family functioning and the parent’s personality upon the level of
juvenile offending in the offspring are needed. Phares and Compás (1992),
have found significant findings in this area of research. Such future studies
would add to the understanding of the complexity in the eco-systemic
understanding of delinquency development.
4. Several recommendations can be made to strengthen or further the
replication efforts of the current study. These include: A). Rather than one
assessment measure of each construct assessed, it is recommended
multiple measures be used to eliminate a mono-operational bias. For

140
example, though the current findings did not find adaptability to attain
significance with the FACES-II assessment measure, future studies may
want to also include the utilization of the new FACES IV. This assessment
measure may contribute to the ability of multiple measures of family
functioning to uncover different relevant aspects of the interaction
between family adaptability and personality across rates of delinquency.
B.) Future studies should make use of a longitudinal design to attain
stronger directional inferences. C.) It is recommended that greater
generalization of findings would be gained through including a more
diverse sample of ethnic groups. And finally, D.) less validity threats to
future research would be found following the use of random selection.
The following will be an introduction to Powers’s (1973) Meta Theory of
Hierarchical Cybernetic Feedback Loops. Powers’s meta theory (1973) is presented to
provide a theoretical model which may help to guide future research and offer an
explanation of the processes at work between personality and family functioning on the
rate of juvenile delinquent offending.
Bronfenbrenner’s (1979) Social Ecological model of human development
provides a fundamental theoretical justification for investigating the relationship between
personality (i.e., self) and family functioning (i.e., system) across levels of delinquent

141
offending. However, other than stressing the contributions to the adolescent’s social
development of the reciprocal relationship between characteristics of the adolescent (e.g.,
personality) and the environment (e.g., family functioning), Bronfenbrenner’s theory
offers little explanation of how this relationship culminates into acts of delinquency.
Powers’s (1973) meta theory of Hierarchical Cybernetic Feedback loops can be seen as a
model which helps to illustrate how the reciprocal interaction of self and system may
influence variations in delinquent acts. The following discussion will provide an
explanation of how Powers’s (1973) meta theory as described by Carver and Scheier
(1992) relates to self, family system and the decisions to act. This section will close with
this model’s possible use in illustrating how the expected relationship between self and
system may influence the rate of one’s delinquent acts. Suggestions for future research
are included.
To begin at the level of the self, Carver and Scheier (1992) suggest people form
behavioral intentions. Forming an intention reflects a subtle mental algebra, integrating
several kinds of information which then results in a probability of doing the behavior. If
the probability is high enough, an intention is formed and the behavior is carried out.
Forming an intention refers to the process of establishing a particular goal for one’s future
action. Once a goal has been set and an intention formed the accuracy of the behavior
chosen to match the intention and the actual carrying out of the action is guided by
feedback control (Powers, 1973).
The basic unit of operation in feedback control is the feedback loop. This is a self¬
regulation control system. For self-regulation to occur, first one must have a value to self-
M

142
regulate towards— A reference value, goal, or standard of comparison for one’s behavior.
The second thing needed for feedback control is a perception of one’s present behavior
and its effects. Third, self-regulation by feedback control requires a periodic comparison
of these perceptions with one’s reference value (through a mechanism termed a
“comparator”). If one’s behavior is efficacious (i.e., having the desired effect), the
comparison shows no discrepancy, and they continue to act as before. If however, one’s
behavior does not evoke what one intends, a corrective process kicks in to create a change
in behavior designed to reduce the discrepancy between intentions and results.
Carver and Scheier (1992), explain that feedback is used in describing such a
system because the consequence of an action is “fed back” into the system in the form of
perceptions, which are checked against the reference value in order to determine what
subsequent action is necessary. The feedback loop constitutes a control system because
its overall effect is to “control” behavior so that all action elicits the results desired. The
word control also reflects the idea that each event in the feedback loop depends on the
outcome of a previous process. Thus, each prior process “controls” what happens next.
Powers (1973) offers the view that feedback loops can be interconnected into a
hierarchy of feedback loops. Thus, people have both high-level (superordinate) and low -
level (subordinate) goals/reference values. According to Powers the reference value of the
lower-level feedback loop in a hierarchical system is provided as the behavioral output of
a system higher in the hierarchy. Higher-order systems don’t “behave” by doing physical
acts—rather, they “behave” by providing guides for action to the systems below them on
the hierarchy. Only the lowest loops actually produce physical acts, by controlling the

143
movement of muscle groups (Rosenbaum, 1987, 1990). Each feedback loop level in the
hierarchy monitors perceptual input at its own level, and each level adjusts output to
minimize discrepancies at that level.
Powers proposed that human action involves nine levels of control. The three
levels that are most relevant here include program, principle and the highest, system
concept control. Program level, the lowest of these three, specifies a general course of
action which executes specific behavioral intentions. Principle control, describes more
general guidelines for action than does program control. Principles specify overriding
qualities of behavior, which can be manifested in many different programs. Principles
help one to decide what programs to undertake or what choice to make as one moves
through a program (Carver & Scheier, 1992).
Powers labeled the highest level in his theory, system concept control. System
concepts are abstract qualities such as one’s generalized sense of self and/or generalized
sense of relationships or group (e.g., family). Thus, in this hierarchical feedback loop
system one system
acts by providing reference values to the system directly below it, thereby generating
purposeful action.
The following represents how Powers (1973) meta theory of hierarchical feedback
loops can be laid over the present study’s constructs found to be significant in the
interaction of self and family system. Regarding the self: The system concept level of the
perceptual hierarchy is exemplified in the Jesness model of personality; the principle
level of the perceptual hierarchy is exemplified in the MA dimension of the Jesness

144
inventory; The program level is exemplified in the adolescent’s actions both within the
family and in ultimately chosen delinquent acts. Regarding the family system: The
system concept level of the perceptual hierarchy is exemplified by Olson et al’s (1983)
model of family functioning; the principle level is exemplified by the family cohesion
dimension; the program level is exemplified by the family’s actions which effect the
development of the adolescent.
System Concept Level
Principle Level
Program Level
Self: Jesness Model
of Personality
System: Internal Perceptual
Representation of Family
Functioning
Self: MA
System: Internal Perceptual
Representation of Family
Cohesion
** Note: A possible interaction
may exist over time between the
self and system principle level
Execution of the decision for
the adolescent to commit or
not commit a delinquent act.
Figure 3
Powers (1973) meta theory of hierarchical feedback loops applied
to personality, family functioning and delinquency.

145
As Bronfenbrenner’s (1995) ecological systems model of development suggests,
throughout the life course human development takes place through processes of
progressively more complex reciprocal interactions between an active evolving
biopsychological human organism and the persons, objects, and symbols in its immediate
environment. The most powerful of these factors, especially in the earlier years according
to Bronfenbrenner (1995), are the perceptions of proximal processes such as one’s
transactions with their family. Thus, the adolescent’s perceptions and the family
member’s perceptions of the transactions taking place among them at the program level
of Powers model are major forces effecting the course of both the adolescent’s
development and the family’s development. The adolescent’s choices are particularly
effected by the reciprocal interactions which take place between factors of the
adolescent’s personality (e.g., MA) and factors of the adolescent’s internal
representations of family functioning (e.g., cohesion) (Bronfenbrenner, 1995). These
internal interactions for the adolescent could be described as exemplifications of feedback
control as described by Powers (1973).
Powers (1973) meta theory of hierarchical feedback loops can now shed light on
the possible processes in which the adolescent is engaged as s/he decides to commit or
not commit delinquent acts. Caver and Scheier (1992) noted that people often try to
reconcile several different reference values at once within the same level of the hierarchy.
In some cases, these values are compatible with one another and in others they are not.
Pursuing one value can create discrepancies for the other (Emmon & King, 1988). The
self-regulation considers this discrepancy as the source of conflict and as the impetus for

146
future actions chosen. Thus, Powers model would suggest the adolescent’s reference
values from both his/her personality and family functioning could mutually contribute or
interact to impact the adolescent’s ultimate decision to commit or not commit delinquent
acts.
Following the theoretical guidance of Bronfenbrenner (1995) and the meta theory
of Powers, several hypotheses could be developed. For example, one may hypothesize
that if across time the adolescent’s reference values at the principle level are congruent
and show a preference for respecting social order, then one would expect that the
adolescent will not continue a delinquent pattern of behavior. If the adolescent’s reference
values are incongruent (i.e., in conflict), one may expect the adolescent to escalate to the
multiple offender pattern. And finally, if the adolescent’s reference values are congruent
and show a disregard or disrespect for social order, one may expect the adolescent to
develop a chronic offender pattern. The trends seen in Table 8 regarding female
delinquent patterns provides partial support for female chronic offenders having
congruent unhealthy factors of personality (i.e., MA) and family functioning (i.e.,
cohesion) and female first time offenders having congruent health factors of personality
and family functioning. Future longitudinal research would be needed to explore the
validity of these findings, hypotheses and applications of the theories presented.
In closing, Powers’s (1973) meta theory of hierarchical cybernetic feedback loops
provides a model which helps to illustrate how the reciprocal interaction of self and
system may influence variations in rates of delinquent acts. Several insights that were
proposed as a result of applying Powers meta theory where highlighted for future

147
research. These entailed suggestions to explore the possible ways that varying
combinations of personality and family functioning may impact the level of delinquency
over time.
Chapter Summary
This study was guided by a transactional and multilevel conceptualization of
delinquency risk and presumed that the level of development of antisocial behaviors
would be dependent on the interaction of individual and contextual characteristics (
Bronfrenbrenner, 1979). While advances have been made to substantiate the utility of
eco-systemic multivariate models to research delinquency, yet to be fully explored was
the existence of a possible relationship between facets of the adolescent’s personality and
perceptions of family functioning across levels of delinquency. The results of the current
study provided statistical evidence which adds to the merit of including within eco-
systemic multivariate models of delinquency rate the variables of age, gender and the
interaction of facets of the adolescent’s personality and family functioning.
This chapter summarized the purpose of the study including a description of the
research methodology and sample. Also provided was a summary evaluation of the
hypotheses, a discussion of the results related to the primary research questions,
limitations of the study, and theoretical and practical implication of the findings. Finally,
recommendations for future research were offered and an introduction to Powers’s (1973)
Meta Theory was provided. The intent of this study was to further the field of juvenile
delinquency and shed light onto the possible ways future efforts may help to combat the
complex and costly problem of juvenile delinquency.

APPENDIX A
JESNESS PERSONALITY INVENTORY QUESTION SHEET

THE JESNESS INVENTORY (FORMQ
by Cari F. Jesness, PhD.
This booklet contains 155 statements. Read each one If you agree
with the statement, mark True CD. If not, mark False (F). Nhkeall the
marks on the separate answer sheet: do not make marks o this booklet.
There are no ri$t or wrong answers. It is only hovvyou fed about the
statement that is inportanL mark either theTor Ffor each runtier, even
«' tha^i you tiny not always feel perfectly sure about the statement
mljlti-he^lthsysievb; INC
908 Niagara Falls Boulevard, North Tonawanda, NY 14120-2060
1-800456-3003
and
65 CVerlea Boulevard, Suite 210, Toronto, Ontario M4H1P1
1-800268-6011 Fax 1416424-1736
Cqpryricfi 1962 1992 PlhUshed by Mrlti-Health Systerm Inc. 908 Niagara Falls Boulevard, North
Tcnawandi NY 141202060 and 65 Overlea Boulevard, Suite 210, Torcnta Ontario M4H1P1
149

APPENDIX B
FAMILY ADAPTABILITY AND COHESION EVALUATION SCALES (FACES)

FACES II: Family Version
David H. Olson, Joyce Portner & Richard Bell
Directions: Please indicate how much each of these statements describe your family now.
Decide whether it is (1) ALMOST NEVER, (2) ONCE IN AWHILE, (3) SOMETIMES,
(4) FREQUENTLY, or (5) ALMOST ALWAYS true of your family. Indicate to the left
of the item the appropriate number.
1 2 3 4 5
Almost Never Once in Awhile Sometimes Frequently Almost Always
1. Family members are supportive of each other during difficult times.
2. In our family, it is easy for everyone to express his/her opinion.
3. It is easier to discuss problems with people outside the family than with other
family members.
4. Each family member has input regarding major family decisions.
5. Our family gathers together in the same room.
6. Children have a say in their discipline.
7. Our family does things together.
8. Family members discuss problems and feel good about the solutions.
9. In our family, everyone gets his/her own way.
10. We shift household responsibilities from person to person.
11. Family members know each other's close friends.
12. It is hard to know what the rules are in our family.
13. Family members consult other family members on personal decisions.
151

152
14. Family members say what they want.
15. We have difficulty thinking of things to do as a family.
16. In solving problems, the children's suggestions are followed.
17. Family members feel very close to each other.
18. Discipline is fair in our family.
19. Family members feel closer to people outside the family than to other family
members.
20. Our family tries new ways of dealing with problems.
21. Family members go along with what the family decides to do.
22. In our family, everyone shares responsibilities.
23. Family members like to spend their free time with each other.
24. It is difficult to get a rule changed in our family.
25. Family members avoid each other at home.
26. When problems arise, we compromise.
27. We approve of each other's friends.
28. Family members are afraid to say what is on their minds.
29. Family members pair up rather than do things as a total family.
30. Family members share interests and hobbies with each other.

APPENDIX C
DEMOGRAPHIC INFORMATION
Participant code (first and last initial):
County:
Does your family receive public assistance (AFDCAVelfare)? Yes No
Gender:
Current Age:
Ethnic Identity: Black: White: Hispanic: Other:
List current family members at home (no names, list their estimated age on the blank
spaces):
mother step-mother grandmother mom’s boyfriend father _
step-father grandfather dad’s girlfriend
brothers _
sisters
Other(s) - List how related and estimated age only (no names):
153

154
STOP HERE!!!!!
REMAINDER WILL BE FILLED OUT BY OFFICE PERSONNEL.
List of offenses
Date offense
Committed
Age at time
of offense
Committed
alone
Committed
with others
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.

APPENDIX D
LINEAR SCORING AND INTERPRETATION FOR FACES-II

FACES II: Linear Scoring & Interpretation
Adaptability
8
70
65
Very
Flexible
7
64
55
6
54
50
Flexible
5
49
46
4
45
43
Structured
3
42
40
2
39
30
Rigid
1
29
15
Family Type
8
Balanced
7
6
5
Moderately
Balanced
4
3
Mid-Range
2
1
Extreme
Cohesion
8
80
74
Voy
Connected
7
73
71
6
70
65
Connected
5
64
60
4
59
55
Separated
3
54
51
2
50
35
Disengaged
1
34
15
156

APPENDIX E
JESNESS PERSONALITY INVENTOR ANSWER SHEET

Ui
00
JESNESS INVENTORY ANSWER SHEET
FATHER S OCCUPATION OR TRADE _
DIRECTIONS: Hadan In th* boaat vndar T (Trua) or F (Fait*) To tKow your mpMtt to aach quttilon In th* booWat.
la caraful to •** that th* numbar you mark k th* uma at tha numbar of Hva q watt ion you oto antworin*.
T — TRUE
F — FALSI
Row Scoro
Row Scora
T
136 0
137 0
130 0
139 0
140 Q
1
T
G
F
G
16 o
F
D
31
T
a
F
â–¡
T
46 Q
F
a
T
61 0
F
a
76
T
a
F
â–¡
91 Q
F
a
T
106 Q
F
a
121 0
F
G
T
141 â–¡
F
0
2
â–¡
â–¡
'7 a
0
32
G
â–¡
47 []
a
62 0
a
77
a
a
92 â–¡
a
107 Q
a
122 0
a
142 0
â–¡
3
a
0
18 Q
a
33
G
0
48 g
G
63 G
â–¡
78
0
0
93 0
a
108 0
0
123 0
G
143 0
â–¡
4
â–¡
0
19 o
0
34
a
â–¡
49 0
G
64 0
â–¡
79
a
a
94 â–¡
a
109 0
a
124 0
G
144 0
0
5
â–¡
0
20 Q
â–¡
35
a
â–¡
50 0
0
65 0
a
80
a
a
95 Q
a
110 a
a
125 0
a
145 0
G
T
F
T
F
T
F
T
F
T
F
T
F
T
F
T
F
T
F
T
F
6
D
D
21 G
G
36
a
â–¡
51 D
0
66 0
â–¡
81
G
a
96 G
a
in a
a
126 0
G
146 0
G
7
D
G
22 G
0
37
a
â–¡
52 0
G
67 â–¡
0
82
Q
a
97 0
G
112 G
a
127 0
a
147 0
a
8
â–¡
a
23 Q
D
38
a
â–¡
53 D
a
60 Q
0
83
G
a
90 Q
a
113 Q
a
128 0
a
148 0
0
9
G
a
24 Q
0
39
G
â–¡
54 0
a
69 G
â–¡
84
a
a
99 Q
a
114 G
a
129 0
a
149 0
a
10
a
a
25 Q
D
40
a
0
55 0
a
70 0
G
85
a
0
100 Q
a
115 0
a
130 0
0
150 0 0
1
F
T
F
T
F
T
F
?
F
T
F
T
F
T
F
T
F
T
F
11
G
0
26 Q
0
41
a
â–¡
56 0
D
71 G
0
86
D
G
101 â–¡
a
116 0
a
131 0
a
151 0
a
12
G
a
27 G
0
42
G
â–¡
57 0
G
72 Q
D
87
G
a
102 Q
a
117 G
a
132 Q
a
152 0
D
13
a
0
28 Q
â–¡
43
a
â–¡
58 0
G
73 G
0
88
a
a
103 G
0
118 0
a
133 0
0
153 0
Q
14
a
a
29 0
â–¡
44
a
0
59 G
a
74 0
a
89
a
a
104 0
a
119 0
a
134 0
G
154 0
a
15
G
Q
30 G
0
45
a
D
60 0
a
75 Q
0
90
a
G
105 Q
a
120 Q
a
135 0
a
155 Q
a
SM* SM VO Imm A
A1
MA Wd
SA Rep
Dm OTHER
AA
AP CW
CFC
MP NA
NX
se a

APPENDIX F
JESNESS PERSONALITY INVENTORY PROFILE SHEET

JESNESS INVENTORY PROFILE SHEET
M f Aq* Oat» Taatad.
OlK*f Information
ON
o
SM VO Imm Aw Al MA Wd SA Rap Dan
*214*47»» 10 INDEX OTHB
Row Score
T-Score
Jesnets Inventory Oosucotion System
1-2
1-3
M
AA AP
CfM CFC MP
NA NX SE Cl
Oossicotion:.
Notts:
SM VO
Al MA Wd SA Rap
_ ASOCIAL
Own INDEX OTHER
TScoca
Raw Sc ora

161
TABLE OF WEIGHTS FOR COMPUTATION OF ASOCIAL INDEX
to
Weights for Boys
to
Weights for Girls
to
Scon
Rep
SA
Wd
MA
A1
Au
VO
SM'
SM
Scon
SM
SM’
VO
Au
A1
MA
Wd
SA
Den
Scon
t
0
0
â–¡
0
1
1
0
15
1
1
1
21
0
1
0
1
0
0
0
1
2
0
1
0
0
1
1
1
15
2
2
2
22
0
1
1
1
1
1
1
2
3
0
1
0
1
2
2
1
16
3
3
4
22
1
2
1
2
1
1
1
3
4
1
2
1
1
3
2
1
1 7
4
4
5
22
1
2
2
2
1
1
2
4
5
1
2
1
1
4
3
1
10
5
5
6
23
1
3
2
3
2
2
2
5
&T
1
2
1
1
4
3
2
19
5>
6
7
¿3
1
3
3
3
2
2
2
6
7
1
3
1
2
5
4
2
20
6
7
8
24
1
4
3
4
2
2
3
7
a
1
3
1
2
6
4
2
21
7
8
10
24
1
5
4
5
2
2
3
8
9
1
4
1
2
6
5
2
22
8
9
11
24
1
5
4
5
3
3
4
9
10
1
4
1
2
7
5
3
22
9
10
12
25
2
6
4
6
3
3
4
to
n
2
4
1
3
8
6
3
23
10
H
1 3
¿5
2
6
5
6
3
3
5
11
12
2
5
2
3
8
6
3
24
11
12
14
25
2
7
5
7
4
4
5
12
13
2
5
2
3
9
7
3
25
12
U
16
26
2
8
6
0
4
4
5
13
14
2
É
2
3
10
7
4
26
1 3
14:
17
26
2
8
6
6
4
4
6
14
15
2
6
2
4
11
8
4
27
1 4
1S,
1 8
27
2
9
7
9
5
5
6
15
It
6
2
4
1 1
8
4
28
14
i 6
19
27
2
9
7
9
5
5
7
17
7
2
4
12
9
4
29
1 5
17
20
27
3
10
7
10
5
5
7
17
16
7
2
4
1 3
9
5
29
16
18
22
28
3
10
8
11
6
5
7
16
19
8
3
5
13
10
5
30
17
19
23
28
3
11
8
11
6
6
8
79
20
6
3
5
14
1 1
5
31
18
20
24
28
3
12
9
12
6
6
8
20
21
8
3
5
1Í
11
5
32
19
21
25
29
3
12
9
12
6
6
21
22
9
3
5
16
12
6
33
20
22
26
29
3
1 3
10
13
7
7
22
23
9
3
6
16
12
6
34
21
23
20
30
4
1 3
10
14
7
7
23
24
10
3
6
17
13
6
35
22
24
29
30
4
14
11
14
7
7
24
25
6
18
1 3
7
36
23
30
30
4
14
11
15
?5
26
6
18
14
7
37
23
26
31
31
4
15
11
15
26
27
7
14
7
37
24
27
32
31
4
16
16
27
24
7
1 5
7
38
25
2B
34
31
4
16
16
2»
29
7
8
39
26
29
35
32
5
17
29
30
7
8
27
30
36
5
IB
30
0
8
28
31
37
5
10
8
29
32
38
5
9
30
33
40
5
9
31
34
41
5
2
32
35
JL2
5
Add Weights:
Add Weights:
SM
VO
Au
SM’
A1
MA
Wd
SA
Rep (boys) or
Den (girls) =__
Sum, ==r_
ASOCIAL
INDEX •
* Transfer to other side of profile
9
32
36
43
10
33
37
44
10
34
38
46
10
35
39
47
36
40
40
37
41"
49
38
42
50
39
43
52
40
44
53
41
45
54
41
46
55
42
47
56
43
48
58
44
49
59
45
50
60
4e
b!
61
47
52
62
40
53
64
49
54
65
50
55
66

REFERENCES
Achenback, T. M., & Edelbrook, C. (1983). Manual for the child behavior check
list and revised child behavior profile. Burlington, VT: Queens City Printers.
Alexander, J. F. (1973). Defensive and supportive communication in normal and
deviant families. Journal of Consultants and Clinical Psychology, 40, 223-231.
Alexander, J. F., Waldron, H. B., Barton, C., & Mas, C. H. (1989). The
minimizing of blaming attributions and behaviors in delinquent families. Journal of
Consulting and Clinical Psychology, 57, 19-24.
Amerikaner, M., Monks, G., Wolfe, P., & Thomas, S. (1994). Family interaction
and individual psychological health. Journal of Counseling and Development, 72
(614-620).
Andrews, D. A., Bonta, J., & Hoge, R. D. (1990). Classification effective
rehabilitation: Rediscovering psychology. Criminal Justice and Behavior, 17, 19-52.
Arbuthnot, J., Gordon, D. A., & Jurkovic, G. J. (1987) . Personality. In H. C.
Quay (Ed.), Handbook of juvenile delinquency, (pp. 139-183). New York: Wiley.
Backstein, K. (1992).
. New York: Scholastic inc.
Baker, J. W., & Spielberg, M. J. (1970). A descriptive personality study of
delinquency-prone adolescents. Journal of Research in Crime and Development, 7, 11-23.
Baldwin, D. V., & Skinner, M. L. (1988). A^stmcturaLmodelior^ntisocial
behaviocGeneralizationtO-single-mother families. Manuscript submitted for publication.
Barnes, G. M., & Farrell, M. P. (1992). Parental support and control as predictors
of adolescent drinking, delinquency, and related problem behaviors. Journal of Marriage
^54, 763-776.
Bates, J. E., Bayles, K., Bennett, D. S., Ridge, B., & Brown, M. M. (1991).
Origins of externalizing behavior problems at eight years of age. In D. J. Pepler & K. H.
Rubin (Eds.), The development and treatment of childhood aggression (pp. 93-120) .
Hillsdale, NJ: Erlbaum.
162

163
Beavers, W. R. (1977). Psychotherapy and growth: ATamily_systems4ierspectiyje.
New York: Brunner/Mazel.
Benda, B. (1987). Comparison of rates of recidivism among status offenders and
delinquents. Adolescence,22 (86), 445-458.
Binder, A, Geis, G., & Bruce, D., (1988) . Juvenile delinquency: Historical,
cultural, legal perspectives. New York: Macmillan.
Blaske, D. M., Borduin, C. M., Henggeler, S. W., & Mann, B. J. (1989).
Individual, family, and peer characteristics of adolescent sex offenders and assaultive
offenders. Developmental Psychology, 25, 846-855.
Blumstein, A., Cohen, J., Jeffery, R. & Christy A. Visher, (Eds.), (1986) .
Criminal careers and “career criminals,” Vol. I, Report of the panel on research on
criminal careers, National Research Council. Washington, DC: National Academy Press.
Blumstein, A., Farrington, D. P., & Moitra, S. (1985). Delinquency careers:
Innocent, desisters, and persisters. In M. Tonry & N. Morris (Eds.), Crime_and Justice
(vol. 6) . Chicago: University of Chicago Press.
Bogenschneider, K., (1996). Family related prevention programs: An ecological
risk/protective theory for building prevention programs, policies, and community
capacity to support youth. Family Relations, 45, 127-138.
Borduin, C. M., Pruitt, J. A., & Henggeler, S. W. (1985) . Family interactions in
black, lower-class families with delinquents and non-delinquent adolescent boys. _The
Borg, W. R., & Gall, M. D. (1989). Educational research! An introduction, Lift
edition. White Plains, NY: Longman.
Bowen, M. (Workshop, 1959), (1961) . The family as the unit of study and
treatment: 1. Family psychotherapy. American Journal of Orthopsychiatry, 31, 40-60.
Bronfenbrenner, U., (1974) . Developmental research, public policy, and the
ecology of childhood. Child Development, 45 (1), 1-5.
Bronfenbrenner, U., (1976) . The experimental ecology of education. Teaching
College Rec. 78 (2), 157-204.
Bronfenbrenner, U., (1977). Towards an experimental ecology of human
development. American_Psychologist, 32, 515-531.

164
Bronfenbrenner, U., (1979) . The <
Cambridge, MA: Harvard University Press.
Bronfenbrenner. U., (1988) . Interacting systems in human development research
paradigms: Present and future. In N. Bolger, A. Caspi, G. Downey. & M. Moorehouse
(Eds.), Persons in context: Developmental processes (pp. 25-49). Cambridge:
Cambridge University Press.
Bronfenbrenner, U. (1994). Ecological models of human development. In T.
Husen & T. N. Postlethwaite (Eds.), The international encyclopedia of education (3rd ed.),
(pp. 3, 1643-1647). New York: Pergamon.
Bronfenbrenner, U., (1995). Developmental ecology through space and time: a
future perspective. In P. Meon, G. H. Elder, Jr. & K. Luscher (Eds.), Examining lives in
context: Perspectives on the ecology of human development. (pp. 619-647). Washington
DC: American Psychological Association.
Brooks, J. S., Whiteman, Gordon, A. S. & Books, W. D. (1984) . Parental
determinants of female adolescent marijuana use. Developmental Psychology, 20 1032-
1043.
Brooks, J. S., Whiteman, M., Nomura, C., Gordon, A. S., & Cohen, P. (1988).
Personality, family, and ecological influences on adolescent drug use: a developmental
analysis. Parental determinants of female adolescent marijuana use. Developmental
Psychology, 20 1032-1043.
Bureau of Data and Research Department of Juvenile Justice, (1996) . Profile of
delinquency cases and youths referred at each stage of the juvenile justice system 1990-
91 through 1994-95. (Report No. 23). Tallahassee, Florida.
Butts. J.A.. (1994). Offenders in Juvenile Court, 1992 Juvenile Justice .Bulletin,
Washington. DC: U.S. Department of Justice.
Butts, J.A., Snyder, H.N., & Finnegan, T.A., (1994) . Juvenile court statistics
1992. Washington. DC: U.S. Department of Justice, Office if Juvenile Justice and
Delinquency Prevention.
Calabrese, R. L., & Adams, J. (1990). Alienation: A cause of juvenile
delinquency. Adolescence, XXV (98), 435-450.
Campbell, S. B. (1990). Behavior problemsin preschool children: Clinical and
developmental issues. New York: Guilford Press.

165
Canter, R. J., (1982) . Sex differences in self-report delinquency. Criminology, 20,
373-393.
Carver, S., & Scheier, M. F. (Eds.) . (1992) . Perspectives on personality. MA:
Allyn and Bacon.
Caspi, A., & Bern, D. (1990). Personality continuity and change across the life
course. In L. Pervin (Ed.), Handbook of personality: Theory and research. New York:
Guilford Press.
Caspi, A., Henry, B., McGee, R. O., Moffitt, T. E., & Silva, P. A. (1995).
Temperamental origins of child and adolescent behavior problems: From age 3 to age 15.
55-68.
Cemkovich, S. A., Goirdano, P. C. (1987) . Family relationships and delinquency.
Criminology.,25, 295-321.
Chamberlain, P., & Rosicky, J. G. (1995). The effectiveness of family therapy in
the treatment of adolescents with conduct disorders and delinquency, Journal of Marital
(4), 441-459.
Children’s Defense Fund, (1992). The state <
Washington DC: Author.
Cicchetti, D. R., & Richters, J. E. (1993) . Developmental considerations in the
investigation of conduct disorder. Developmental Psychopathology, 5 331-344.
Cohen, M. A., Miller, T. R., & Rossman, S. B., (1994) . The cost and
consequences of violent behavior in the United States. In A. J. Reiss, Jr., & J. A. Roth
(Eds.), Understandingnnd preventing violence (pp. 67-166). Washington, DC: National
Research Counsel, National Academy press.
Cohen, P., & Brooks, J., (1987) . Family factors related to the persistence of
psychopathology in childhood and adolescence. Psychiatry,Jii), 332-345.
Cohen, R., & Siegel, A. W. (1991). Context and development. Hillsdale, New
Jersey: Lawrence Erlbaum Associates.
Coie, J. D., & Jacobs, M. R. (1993). The role of social context in the role of
conduct disorder. Development and Psychopathology, 5 263-275.
Committee on Economic Development, Research and Policy. (1987). Children in
New York: Author.

166
Conduct Problems Prevention Research Group (1992) . A developmental and
clinical model for the prevention of conduct disorder: The FAST TRACK program.
Developmental Psychopathology, 4, 509-527.
Cowden, J. E., Peterson, W. M. & Patch, A. R. (1969) . The MCI verse the
Jesness Inventory as a screening and classification instrument at a juvenile correctional
Cox, R. P. (1996). An exploration of the demographic and social correlates of
criminal behavior among adolescent males. Joumal of Adolescent Health, 19,17-24.
Craig, M. M., & Glick, S. J. (1963). Ten years experience with the Glick Social
Prediction Table. Crime and Delinquency, 9, 249-261.
Craig, M. M., & Glick, S. J. (1968). School behavior related to later delinquency
and non-delinquency. Criminológica, 5, 17-27.
Dadds, M. (1987). Families and the origins of child behavior problems. Family
341-357.
Decker, G. (1979) . The effects of dissadisfaction with prior maternal affection
current need for group inclusion
adolescents.
Unpublished doctoral dissertation, University of Missouri-Columbia.
Dembo, R., La Voie, L, Schmeidler, J., & Washburn, M. (1987). The nature and
correlates of psychological/emotional functioning among a sample of detained youth.
Doane, J. A., (1978) . Family interaction and communication deviance in
disturbed and normal families: A review of research. Family Process, 17, 357-376.
Dodge, K. A. (1980). Social cognition and children’s aggression behavior. .Child
Development, 53,162-170.
Dodge, K. A., & Frame, C. M. (1982). Social cognitive biases and deficits in
aggressive boys. Child Development, 53, 620-635.
Dodge, K. A., & Somberg, D. R. (1987). Hostile attributional biases among
aggressive boys are exacerbated under conditions of threat to self. Child Development,
58, 213-224.
Druckman, J. A., (1979). A family oriented policy for juvenile status offenders.
Journal of Marriage and the Family, 3, 627-636.

167
Duster, T. (1987). Crime, youth unemployment, and the black urban underclass.
Crime & Delinquency, 33, 300-316.
Edman, S. O., Cole, D. A., & Howard, G.S. (1990). Convergent and descriminant
Validity of FACES-III: Family adaptability and cohesion. Family.Process., 29, 95-103.
Elliot, D. S., (1994). Youth violence: An overview. Boulder, Co: University of
Colorado, Center for the Study and Prevention of Violence, Institute for Behavioral
Sciences.
Elliot, D. S., & Ageton, S. S., (1980). Reconciling race and class differences in
sef-reported and official estimates of delinquency. American Sociological Review, 45,
95-110.
Elliot, D. S., Ageton, S. S., Huizinga, D., Knowles, B. A., & Carter, R. J.,
(1983). The prevalence and incidence of delinquent behavior: 1976-1980. (National
Youth Survey Report No. 26). Boulder, Co: Behvaioral Research Institute.
Elliot, D. S., Huizinga, D., & Ageton, S. S., (1985).
dmgjise. Beverly hills, CA: Sage.
Elliot, D. S., Huizinga, D., & Menard, S., (1989) . Multiple problem youth:
3. New York: Springer-Verlag.
Emmons, R. A., & King, L. A. (1988) . Conflict among personal strivings:
Immediate and long-term implications for psychological and physical well-being. Journal
oLpersonality and Social Psychology, 54, 1040-1048.
Erickson, M. L., & Jensen, G. F. (1977). Delinquency is still group behavior!
Toward revitalizing the group premise in the sociology of deviance. Journal of Criminal
LasLandLCriminology, 68, 262-273.
Eron, L. D. & Huesmann, L.R. (1990). The stability of aggression behavior—
even unto third generation. In M. Lewis & S. M. Miller (Eds.), Handbook of
(pp. 147-156). New York: Plenum Press.
Eysenck, H. J., & Gudjonsson, G. H., (1989) . The causes and cures of
criminality. New York: Plenum Press.
Fagan, J., & Wexler, S. (1987). Family origins of violent delinquents.
ology, 25, 643-699.

168
Farrell, M. P., & Barnes, G. M. (1993) . Family systems and social support: A test
of the effects of cohesion and adaptability on the functioning of parents and adolescents.
Journal of Marriage and The Family. 55. 119-132.
Farrell, M. P., Barnes, G. M., & Banerjee, S. (1995). Family cohesion as a buffer
against the effects of problem-drinking fathers on psychological distress, deviant
behavior, and heavy drinking in adolescents. JoumaLoLHealtlLand SociaLBehavior,-36,
377-385.
Farrington, D. P. (1978). The family background of aggressive youth. In L. A.
Hersov, M. Berger, & D. Shaffer (Eds.), Aggression and antisocial behavior in childhood
and adolescence (pp. 73-93) . Oxford: Pergamon Press.
Farrington, D. P. (1990) . Implications of criminal career research for the
prevention of offending. Journal of Adolescence, 13, 93-113.
Farrington, D. P. (1994). Interaction between individual and contextual factors in
the development of offending. In R. K. Silbereisen & E. Todt (Eds.), Adolescence in
context (pp.366-389). New York: Springer-Verlag.
Farrington, D. P. (1995). The twelfth Jack Tizard Memorial Lecture* The
development of offending and antisocial behavior from childhood: Key findings from the
Cambridge Study in delinquent development. Journal nLChildPsychologyjnd
Psychiatry^ 36Q, (6), 929-964.
Farrington, D. P., Loeber, R., Elliott, D. S., Hawkins, J. D., Kandel, D. B.,
Klein, M. W., McCord, J., Rowe, D. C., & Tremblay, R. E., (1990). Advancing
knowledge about the onset of delinquency and crime. In B.B. Lahey & A. E. Kazdin
(Eds.), Advanceslnclinical childpsychologyLVol. 13. (pp. 283-342). New York:
Plenum Press.
Farrington, D. P., Ohlin, L. E., & Wilson, J. Q. (1986) . Understanding and
controlling crime: Toward a new research strategy. New York: Springer-Verlag.
Farrington, D. P., & West, D. J. (in press). The Cambridge Study in delinquent
development: A long-term follow-up of 411 London males. In G. Kaiser & H. J. Kerener
(Eds.). Criminality; Personality ^behavior, life-history, Heidelberg: Springer-Verlag.
Farrington, D. P., & West, D. J. (1981) . The Cambridge Study in delinquent
development. In S. A. Mednick & A. E. Baert (Eds.), Prospective longitudinal research.
New York: Oxford University Press (pp. 137-145).

169
Federal Bureau of Investigation, (1994). Uniform crime, rep.orts.1993.
Washington DC: Author.
Federal Bureau of Investigation, (1997). Uniform crime reports 1996.
Washington DC: Author.
Feldman, R. A., Caplinger, T. E., & Wodarski, S. S., (1981). The St. Louis
conundrum: Prosocial and antisocial boysJogether. Unpublished Manuscript.
Feldman, R. A., Caplinger, T. E., & Wodarski, S. S., (1983). The St. Louis
conundrum: The effective treatment of antisocial youths. Englewood Cliffs, NJ: Prentice-
Hall.
Fonseca, A. C., & Yule, W. (1995) . Personality and antisocial behavior in
children and adolescents: An enquiry into Eysenick’s and Gray’s Theories.
(6), 767-781.
Frichette, M., & LeBlanc, M., (1987)
Que: Gaetan Morin.
5. Chicoutimi
Garbarino, J., (1993) . Enhancing adolescent development through social policy.
In P.H. Tolan, & B. J. Cohler (Eds.), Handbook of clinical research and practice with
adolescents, (pp. 469-488). New York: Wiley.
Garcia-Preto, N. (1988) . Transformation of the family system in adolescence. In
B. Carter & M. McGolderick (Eds.), The changing family life cycle. Boston: Allyn &
Bacon.
Garmezy, N. (1985) . Stress resistant children: The search for protective factors.
Pergamon Press.
Garrison, W., & Earls, F. (1987) . Temperament and child psychopathology
Newbury park: Sage.
Geismar, L. L., & Wood, K. (1986) . Family and delinquency: Resocializing the
young offender. New York: Human Science Press.
Glueck, S., & Glueck, E. T. (1950). Unraveling juvenile delinquency.
Cambridge, MA: Harvard University Press.
Gold, M., (1978). Scholastic experience, self-esteem, and delinquent behavior: a
Theory for alternative schools. Crime & Delinquency, 34, 290-308.

170
Goldstein, A. P., (1990). Delinquents on delinquency. Champaign, IL: Research
Press.
Gorman-Smith, D., Tolan, P.H., Zelolli, A., & Huesmann, L.R. (1996). The
relation of family functioning to violence among inner-city minority youths. JoumaLof
Family Psychology, 10, 115-129.
Gottfredson, M. R., & Hirschi, T. (1990). A generaLtheory of crime. Stanford,
CA: Stanford University Press.
Gottfredson, M. R., & Hirchi, T. (1994) . Aggression. In T. Hirchi & M.R.
Gottfredson (Eds.), The_generality_o£deviance, (pp. 23-45). New Brunswick, NJ:
Transaction Publishers.
Gove, W. R., & Crutchfield, R. D. (1982). The family and juvenile delinquency.
301-319.
Graham, S. A. (1981) . Predictive and concurrent validity of the Jesness
Inventory Asocial Index: When does a delinquent become a delinquent? Journal of
Consulting and Clinical Psychology, 49, 740-742.
Group for the Advancement of Psychiatry (1970).
conflict. New York: Science House.
Guerra, N. G. (1989). Consequential thinking and self-reported delinquency in
high-school youth. Criminal Justice and Behavior, 16, 440-454.
Guerra, N. G., Eron, L. D., Huesmann, L. R., Tolan, P. H., & Van Acker, R.
(1991). A cognitive/ecological approach to the prevention and mitigation of violence and
aggression in.urban minority youth. Manuscript submitted for publication.
Guerra, N. G., & Slaby, R. G. (1989). Evaluating factors in social problem
solving by aggressive boys. JoumaLof Abnormal Child Psychology, 17, 277-289.
Guerra, N. G., & Slaby, R. G. (1990) . Cognitive mediators of aggression in
adolescent offenders: 2. Intervention. Developmental Psychology, 26 (2), 269-277.
Guerra, N. G., Tolan, P. H., Huesmann, R., Van Acker, R., & Eron, L. (1990).
Proposal, R18 MH48034. gh^isley
Haapasalo, J., & Hamalainen, T. (1996). Childhood family problems and current
psychiatric problems among young violent and poverty offenders. Journal of American
34 (10), 1394-1401.

171
Hanson, C.L., Henggeler, S.W., Haefle, W.F., & Rodick, J.D. (1984).
Demographic, individual, and family relationship correlates of serious and repeated crime
among adolescents and their siblings.
(4), 528-538.
Hauser, S., Powers, S., Noam, G., Jacobson, A., Weiss, B., & Follanshee, D.
(1984). Familial context of adolescent ego development. Child Development, 55, 195-
213.
Hawkins, D. J., & Lam, T. (1987). Teacher practices, social development, and
delinquency. In J. D. Burchard & S. N. Burchard (Eds.), Prevention of delinquent
behavior (pp. 241-274). Newbury Park. CA:Sage.
Hawkins, J. D., & Catalano, R. F., (1993)
social-development strategy, Seattle, WA: Developmental Research and Programs.
Hazelrigg, M. D., Cooper, H. M., & Borduin, C. M. (1987). Evaluating the
effectiveness of family therapies: An integrative review and analysis. Psychological
Bulletin,,101, 428-442.
Heaven, P. C. L. (1996) . Personality and self-reported delinquency: A
longitudinal analysis. Journal of Child Psychology and Psychiatry, 37 (6), 747-751.
Henggeler, S. W. (1989). Delinquency in adolescence. Newburg Park, CA: Sage
Henggeler, S W. (1991) . Multidimensional and causal models of delinquent
behavior. In R. Cohen & A. Siegel (Eds.), Context and development (pp. 211-231).
Henggeler, S. W. (1996). Treatment of violent juvenile offenders-We have the
knowledge: Comment on Gorman-Smith et al. (1996).,
(2), (1996).
Henggeler. S. W„ Burr-Harris, A. W„ Borduin, C. M„ & McCallum, G. (1991).
Use of the family adaptability and cohesion evaluation scales in child clinical research.
JonmaLof Abnormal Child Psychology, 19, 53-63.
Henggeler, S. W., Edwards, J., & Borduin, C. M. (1987) . The family relations of
female juvenile delinquents. Journal of Abnormal Child Psychology, 15, 199-209.
Henggeler, S.W., Melton, G.B., Smith, L.A., Foster, S.L., Hanley, J.H., &
Hutchinson, C.M. (1993). Assessing violent offending in serious juvenile offenders.
Journal of Abnormal Child Psychology, 21 (3), 233-242.

172
Henry, B., Moffitt, T. E., Robins, L. N., Earls, F., & Silvia, P. A. (1993). Early
family predictors of child and adolescent antisocial behavior: Who are the mothers of
delinquents? Criminal Behavior and Mental Health, 3, 97-118.
Hess R.D., & Handel, G. (1959)
family life. Chicago: University of Chicago Press.
A psychological approachto
Hetherington, E. M., Stowie, R., & Ridberg, E. H. (1971). Patterns of family
interaction and child rearing attitudes related to three dimensions of juvenile delinquency.
Journal of Abnormal Psychology, 77, 160-176.
Higgins, P. C., & Albrecht, G.L. (1977). Hellfire and delinquency revisited.
Hindelang, M. J., Hirschi, T., & Weis, J. G. (1979). Correlates of delinquency:
The illusion of discrepancy between self-report and official measures. American
1, 995-1014.
Hindelang, M. J., Hirschi, T., & Weis, J. G. (1981). Measuring delinquency.
Beverly Hills: Sage Publications.
Hirschi, T. (1969). Causes nf delinquency. Berkeley, CA: University of
California Press.
Hoge, R. D., Andrews, D. A., & Leschied, A. W. (1994). Test of three
hypotheses regarding the predictors of delinquency. Journal of Abnormal Child
(5), 547-559
Hoge, R. D., Andrews, D. A., & Leschied, A. W. (1995). Investigation of
variable associated with probation and custody dispositions in a sample of juveniles.
U2A (3), 279-286.
Huesmann, L. R. (1988). An information-processing model fro the development
of aggression. Aggressive Behavior, 14, 12-24.
Huesmann, L. R., & Eron, L. D. (1984) . Cognitive processes and the persistence
of aggressive behavior. Aggressive Behavior, 10, 243-251.
Jaffe, P. G., Leschied, A. W., Sas, L., & Austin, G. W., ( 1985). A model for the
provision of clinical assessments and services brokerage for young offenders: The
London Family Court Clinic. Canadian Psychology, 26, 54-61.

173
Jensen-Cambell, L., Graziano, W. G., & Hair, E. C. (1996) . Personality and
relationships as moderators of interpersonal conflict in adolescence. MerrilL-Palmer
Quarterly+A2 (1), 148-164.
Jesness, C. F. (1962). The Jesness Inventory: Development and validation.
California Youth Authority Research Report No. 29.
Jesness, C. F. (1963). The Jesnesslnventory: Redevelopment and renovation.
Sacramento: California Youth Authority.
Jesness, C. F. (1965). The Frico! JLanchLSludy. Sacramento: California Youth
Authority.
Jesness, C. F. (1971a). Comparative effectiveness of two institutional treatment
programs for delinquents. Child Care Quarterly, 1, 119-130.
Jesness, C. F. (1971b). The Preston Typology Study: An experiment with
different treatment in an institution. Journal of Researchin Crime & Delinquency, 8, 38-
52.
Jesness, C. F. (1983). Manual, theJesness Inventory iRev. ed.). Palo Alto:
Consulting Psychologist Press.
Jesness, C. F. (1996). Manual^ theJesness Inventory. New York: Multi-Health
Systems Inc.
Jesness, C. F., & Wedge, R. F. (1984) . Validity of a revised Jesness Inventory I-
Level Classification with delinquents. Journal ofüounseling and Clinical Psychology, 52
(6), 997-1010.
Jessor, R. (1982). Critical issues in research on adolescent health promotion. In
T. J. Coates, A. C. Peterson, & C. L. Perry (Eds.), Promoting adolescent health:A dialog
on researchand practice. New York: Academic Press.
Jessor, R. (1991). Risk behavior in adolescence: A psychosocial frame-work for
understanding and action. Journal of Adolescent Health, 12, 597-605.
Johnson, R. A., Su, S. S., Gerstein, D. R., Shin, H-C., & Hoffman, J. P. (1995),
Parental influence on deviant behavior in early adolescence: A logistic response analysis
of age-and gender-differentiated effects. Journal of Quantitative Criminology, 11 (2),
167-193.
Kagan, J. (1994). Galenls Prophecy. New York: Basic .

174
Kaplan, H. B. (1980). DeYianLbehaviorinjiefense oLself. New York: Academic
Press.
Kazdin, A. E. (1987) . Treatment of antisocial behavior in children: current status
and future directions. Psychological Bulletin, 102 (2), 187-203.
Kieman, D., & Tallman, I. (1972) . Spousal adaptability: An assessment of
marriage competence. Journal of Marriage andihe Family, 34, 247-256.
Kinney, J., & Leaton, G. (1983). Loosening the.grip St. Louis, MO: National
Institute on Drug Abuse.
Klein, M. W. (1984). Offense specialization and versatility among juveniles. JJie
British Journal of Criminology, 24, 185-194.
Klein, M. W. (1989).
delinquency. The Netherlands: Kluwer.
Kobasa, S. C. (1979). Stressful life events, personality, and health: An inquiry
Kohnstamm, G. A., Bates, J. E., & Rothbart, M. K. (1989) . Temperament in
childhood. Chichester: Wiley.
Kolvin, I., Miller, F. J. W., Fleeting, M., & Kolvin, P. A. (1988). Social and
parenting factors affecting criminal-offending rates. British Journal of Psychiatry, 152,
80-90.
Krohn, M. D., Stem, S. B., Thomberry, T. P., & Jang, J. S. (1992). The
measurement of family process variables: The effect of adolescent and parent perceptions
of family life on delinquent behavior. Journal of i^uantitative Criminology, 8 (3), 287-
315.
Kunce, J., & Hemphill, H. (1983). Delinquency and Jesness inventory scores.
JoumaLofJPersonality Assessment, 42, 632-634.
Lau, S., & Leung, K. (1992). Self-concept, delinquency, relations with parents
and school and Chinese adolescents’ perception of personal control. Personality and
615-622
Laub, J.H., & Sampson, R.J. (1988). Unraveling families and delinquency: A
meta analysis of the Gluecks’ data. Criminology^), 355-380.

175
Laub, J.H., & Sampson, R.J. (1994). Unemployment, marital discord, and deviant
behavior: The long-term correlates of childhood misbehavior. In T. Hirchi & M.R.
Gottfredson (Eds.), The generality of deviance (pp. 235-252). New Brunswick, NJ:
Transaction.
Lauritsen, J. L. (1993) . Sibling resemblance in Juvenile delinquency: Findings
from the national youth survey. Criminology, 31 (3), 387-409.
Le Blanc, M. (1992). Family dynamics, adolescent delinquency, and adult
criminality. Psychiatry, 55, 336-353.
Le Blanc, M., Mcduff, P., Charlebois, P., Gagnon, L. S., & Tremblay, R. E.
(1991). Social and psychological consequences, at 10 tears old, of an earlier onset of
self-reported delinquency. Psychiatry,_54, 133-147.
Le Blanc, M., & Ouimet, M. (1990). The integrative theory of juvenile delinquent
behavior: Internal structure and Validation. Advances in Criminological Theory, 4.
Lee, R. E., & Klopfer, C. (1978). Counselors and juvenile delinquents: Towards a
comprehensive treatment approach. Personnel Guidance Journal 194-197.
Lee, R.E., & Prichard, S.T. (1991). CREST services 89z9(Lprogram_evaluation.
Unpublished manuscript, Property of CREST services, Gainesville Florida.
Lemer, R. M. (1982). Children and adolescents as producers of their own
development. DevelopmentaLReview, 2 (4), 342-370.
Lemer, R. M. (1991). Changing organism-context relations as the basic process
of development: A developmental contextual perspective. Developmental Psychology.
27-32.
Lemer, R. M., & Spanier, G. B. (1978). A dynamic interactional view of child
and family development. In R. M. Lemer & G. B. Sanier (Eds.), Child influences on
marital andiamily interactions (pp. 1-22). New York: Academic Press.
Lessin, S., & Jacob, T. (1984) . Multichannel communication in normal and
delinquent families. Journal of Abnormal Child Psychology, 12, 369-384.
Leug, K., & Drasgow, F. (1986). Relation between self-esteem and delinquent
behavior in three ethnic groups: An application of item response theory. Journal ofLCross-
151-167.

176
Liddle, H. A. (1995) . Conceptual and clinical dimensions of a multidimensional,
multisystems engagement strategy in family-based adolescent treatment. Psychotherapy,
32 (1), 39-58.
Lin, N., Dean, A., & Ensel, W. N. (1985) . Social support, life events, and
depression. New York: Academic Press.
Liska, A. E., & Reed, M. D. (1985). Ties to conventional institutions and
delinquency: Estimating reciprocal effects. American Sociological Review, 50, 547-560.
Loeber, R. (1982). The stability of antisocial and delinquent child behavior. Child
Development, 53, 1431-1446.
Loeber, R. (1990). Development and risk factors of juvenile antisocial behavior
and delinquency. Clinical Psychology_Review, lQ, 1-41.
Loeber. R., & Dishion, T. (1983) . Early predictors of male delinquency: A
review. Psychological Bulletin, 94, 68-99.
Loeber, R., & Hay, D. F. (1994). Developmental approaches to aggression and
conduct problems. In M. Rutter & D. F. Hay (Eds.), Development through life: A
handhookfor clinicians. (pp. 488-516). Boston: Blackwell Scientific.
Loeber, R., & Stouthamer-Loeber, M. (1986) . Family factors as correlates and
predictors of juvenile conduct problems and delinquency. In N. Morris & M. Tonry
(Eds.), Crime and justice: An annual review oLresearch, 7, 29-149. Chicago: University
of Chicago Press.
Loeber, R., & Stouthamer-Loeber, M. (1987). Prediction. In H. C. Quay (Ed.),
Handbooknfjuvenile delinquency (pp. 325-382). New York: Wiley.
Loevinger, J. (1976). Ego development. San Fransisco: Jossey-Bass.
Lorion, R. P., Tolan, P. H., & Wahlar, R.G., (1987). Prevention. In H. Quay
(Ed.), TheJiandhook of juvenile^delinquency (pp. 383-416). New York: Wiley.
Lynam, D. R., (1996). Early identification of chronic offenders: Who is the
(2), 209-234.
Lyton, M. J., True, W. R., Eisen, S. A. (1995). Differential heritability of adult
and juvenile antisocial traits. Archive nLGeneral Psychiatry Ji2, 906-915.
Lytton, H. (1990) . Child and parent effects in boys’ conduct disorder: A
reinterpretation. DevelopmentaLPsychology^ 26 (5), 683-697.

177
Magnusson, D, (1995) . Individual development: A holistic integrated model. In
P. Meon, G. H. Elder Jr. & K. Luscher (Eds.), Examininglivesin context: Perspectives
on the ecology of human development (pp. 19-60). Washington DC: American
Psychological Association.
Magnusson, D., Stattin, H., & Duner, A. (1983) . Aggression and criminality in a
longitudinal perspective. In K. T. Van Duesen & S. A. Mednick (Eds.), .Antecedents of
aggression and antisocial behavior (pp. 277-302). Boston: Kluwer-Nijhoff.
Mason, E. J., & Bramble, W. J. (1989).
New York: McGraw-Hill.
Marsh, D., Clement, J., Stoughton, N., & Marckioni, F. (1986). Patterns of
juvenile criminal activity as a function of demographic, family, and individual variables.
_42, 658-663.
Martin, R. (1981). Cross-validation of the Jesness Inventory with delinquents and
Maynard, P.E., & Hultquist, A. (1988). The circumplex model with adjudicated
youths' families. Special issue: Circumplex model: Systemic assessment and treatment of
families. JoumaLof JBsychotherapy.nndJheT'nmily, 4 (1-2), 249-266.
Martin, M., & Murphy, S. (1993). A Jesness comparison of “high risk” Jr. high
students with “high achievers”, and with student’s attending a provincial training school.
Guidance and Counseling, 8 (5), 37-58.
McCord, J. (1979). Some child-rearing antecedents of criminal behavior in adult
McCord, J. (1986). Instigation and insulation: How families affect antisocial
aggression. In J. Block, D. Olweus, & M. Radke-Yarrow (Eds.), Development of
antisocial and prosocial behavior (pp. 343-357). San Diego, CA: Academic Press.
McCubbin, H., & Thompson, A. I. (Eds.). (1991)m. Family assessment
i, Madison, WI: University of Wisconsin-Madison.
McFarlane, A. H., Bellissimo, A., & Norman, G. R. (1994). Family Structure,
Family functioning, and adolescent well-being: The transcendent influence of parental
McGaha, J. E., & Fournier, D. G. (1988). Juvenile justice and the family: A
systems approach to family assessment. Marriage and Family Review, 12, 155-176.

178
McGuffin, P, & Gottesman, II (1985) . Genetic influences on normal and
abnormal development (pp. 17-33). In M. Rutter & L. Hersov (Eds.),TZhildand
San Diego, CA: Academic Press.
McLeod, J. D., Kruttschnitt, C., & Domfield, M. (1994, December). Does
parenting explain the effects of structural conditions on children’s antisocial behavior? A
comparison of blacks and whites. Social Forces,73 (2), 575-604.
Minuchin, S. (1974). Families & family therapy. Cambridge: Harvard University
Press.
Minuchin, S., Montalvo, B.G., Guemey, B., Rosman, B.L., & Schumer, F. (1967).
Families of the slums: An exploration of their structure anJreatment. New York: Basic
Books.
Minuchin, S., Rossman, B.L., & Baker, L. (1978). Psychosomatic families.
Cambridge, MA: Harvard University Press.
Moen, P., & Erickson, M. (1995). Linked lives: A transgenerational approach to
resilience. In P. Moen , G. H. Elder, Jr. & K. Luscher (Eds.), Examininglivesin context:
Psychological Association, (pp. 169-210).
Moffitt, T. E. (1993) . Adolescence-limited and life-course persistent antisocial
behavior: A developmental taxonomy. Esychologicalj-eview^lOO, 674-701.
Moffitt, T. E., & Silva, P. A., (1988) . Self-reported delinquency: Results from an
instrument for New Zealand. Australian and New Zealand JoumaLof Criminology, 21,
227-240.
Moffitt. T. E., Silva, P. A., Lynam, D. R., & Henry, B. C., (1994). Self-reported
delinquency at age-18: New Zeland’s Multidisciplinary Health and Development Study.
In Junger-Tas <£: G. J. Terlow (Eds.), International self-reported delinquency, (pp. 354-
369). Amsterdam: Kugler.
Mulvey, E. P., Arthur, M. W., & Reppucci, N. D. (1993) . The prevention and
treatment of juvenile delinquency: A review of the research. Clinical-Psychology Reveiw,
13,133-167.
Nagin, D., & Farrington, D. P., (1992). The stability of criminal potential from
childhood to adulthood. Criminology, 30, 235-260.

179
Niarhos, F. J., & Routh D. K. (1992). The role of clinical assessment in the
juvenile court: Predictors of juvenile dispositions and recidivism.
yJ21 (2), 151-159.
Novy, D. M., Gaa, J. P., Frankiewicz, R. G., Liberman, D., & Amerikaner, M.
(1992). The association between patterns of family functioning and ego development of
the juvenile offender. Adolescence, 27 (105), 25-35.
Nye, F. I. (1958) . Family relationships and delinquent behavior. New York:
Wiley.
Offord, D. R. (1989). Conduct disorder: Risk factors and prevention. In D.
Shaffer, L Philip, & N. B. Enzer (Eds.), Prevention of mental disorders, alcohol and other
drug use in children and adolescents. Rockville, MD: Office for Substance Abuse
Prevention.
Olczak, P.V, Parcell, S.R., & Stott, M.W. (1983). Defining juvenile delinquency:
Specificity of the research sample and the right to treatment. Journal_of Clinical
Psychology^ (6), 1007-1012.
Olson, D.H. (1986). Circumplex Model VII: Validation studies and FACES III.
FamilyProcess, 25, 337-351.
Olson, D. H., (1989). Circumplex model of family systems VIII: Family
assessment and intervention. In D. H. Olson, C. S. Russell, & D. H. Sprenkle, (Eds.),
Circumplex model: Systemic assessment and treatment of families, (pp. 7-50). New
York, London: The Haworth Press.
Olson, D. H. (1994). Commentary-Curvilinearity survives: The world is not flat.
Family Process, 33 471-478.
Olson, D.H., McCubbin, H.I., Bames, H., Larsen, A., Muxen, M., & Wilson, M.
(1985). Family inventories. St. Paul, MN: Family Social Science, University of
Minnesota.
Olson, D. H., Pomter, J., & Lavee, Y. (1985) . FACES III. Family Social
Sciences, University of Minnesota, St. Paul, Minnesota.
Olson, D.H., Russell, C.S., & Sprenkle, D.H. (1983). Circumplex model of
marital and family systems: VI. Theoretical update. EamilyJProcess,^22, 69-83.
Olson, D. H., Russell, C. S., & Sprenkle, D. H. (1989). Circumplexmodel:
Syslemioassessment and treatmenLof families. New York, London: The Haworth Press.

180
Olson, D.H., Sprenkle, D.H., & Russell, C.S. (1979). Circumplex Model of
Marital and Family Systems I: Cohesion and adaptability dimensions, family types, and
clinical applications. Family Process, 18, 3-28.
Olson, D.H., & Wilson (1991). FACES II update: Linear scoring and
interpretation. In D. H. Olson and J. Tiesel, (Eds.), Faces II: Linear scoring &
interpretation (pp. 2-4). Family Social Science, 290 Mcneal Hall, University of
Minnesota, St. Paul, Minnesota 55108.
Palmer, T. (1974) . The youth authority’s community treatment project. Federal
3-14.
Paris, J. (1996). Antisocial personality disorder: A biopsychosocial model.
Canadian Journal of Psychiatry, 41 (2), 75-80.
Patterson, G. R. (1982). A social learning approach: VoL 3. Coercive family
process. Eugene, OR: Castalia.
Patterson, G. R. (1986). Performance models for antisocial boys. American
Psychologist,_41 (4), 432-444.
Patterson, G. R., & Bank, L. (1989). Some amplifying mechanisms for
pathologic processes in families. In M. R. Gunnar, & E. Thelen (Eds.), Systems and
Hillsdale, NJ: Lawrence Erlbaum.
Patterson. G. R., DeBaryshe, D., & Ramsey, E. (1989). A developmental
perspective on antisocial behavior. American Psychologist, 44 (2), 329-335.
Patterson, G R., Dishion, T. J., & Banks, L. (1984). Family interactions: A
process model of delinquency training. Aggressive Behavior, 10, 253-267.
Patterson, G R., & Dishion, T. J. (1985). Contributions of families and peers to
delinquency. Criminology,_23, 63-79.
Patterson, G. R., & Stouthamer-loeber, M. (1984). The correlation of family
management practices and delinquency. Child Development J55, 1299-1307.
Phares, V., & Compás, B. E. (1992) . The role of fathers in child and adolescent
psychopathology: Make room for daddy. PsychologicaLBulletin, 1, 387-412.
Power, M.J., Ash, P.M., Schoenberg, E., & Sorey, E.C. (1974). Delinquency and
the family. British Journal of Social Work, 4, 13-38.

181
Powers, W. T. (1973). Behavior: The control of perception. Chicago: Aldine.
Prange, M., Greenbaum, P. E., Silver, S. E., Fiedman, R. M., Kutash, K., &
Duchnowski, A J. (1992 ). Family functioning and psychopathology among adolescents
with sever emotional disturbances. Journal of Abnormal Child Psychology. 20 (1), 83-
102.
Pulkkinen, L. (1983). Search for alternatives to aggression in Finland. In A. P.
Goldstien & M. Segall (Eds.), Aggression in global perspective, (pp. 104-144). New
York: Pergamon Press.
Quay, H. C. (Ed.). (1987). Handbook of Juvenile delinquency. New York: Wiley.
Quay, H. C., & Peterson, D. R. (1983). Interim manual for the revised behavior
check list. (Available from E. P. Mulvey, Box 248074, University of Miami, Coral
Gables, FL 33124).
Quinn, C. (1998, June 6). The court tries new tack to reform repeat offenders.
Cleveland Plain Dealer, pp. 1-B, 4-B.
Reid, J.B. (1993) . Prevention of conduct disorder before and after school entry:
Relating interventions to developmental findings. Development and Psychopathology, 5,
243-262.
Reiss, D. (1981).
University Press.
. Cambridge, MA: Harvard
Roberts, G., Schmitz, K., Pinto, J., & Cain, S. (1990). The MMPI and Jesness
Inventory as measures of effectiveness on an inpatient conduct disorder treatment unit.
Adolescence, XXV (100), 989-996.
Robins, L. N. (1966). Deviant_children grow up: A sociological and psychiatric
study_of^sociopathic personality. Baltimore: Williams & Wilkins.
Rodick, J.D., Henggeler, S.W., & Hanson, C.L. (1986) . An evaluation of the
family adaptability and cohesion evaluation scales and the circumplex model. Journal of
AhnoimaTChikLPsychology, 14 (1), 77-87.
Rosen, L. (1985). Family and delinquency: Structure or functioning?
Criminology, 23 (3), 553-573.

182
Rosenbaum, D. A. (1987) . Hierarchical organization of motor programs. In S.
Wise (Ed.), Neural and behavioral approaches to higher brain function (pp. 45-66). New
York: Willey.
Rosenbaum, D. A. (1990). Human motor control. San Diego, Ca: Academic
press.
Rutter, M. (1979) . Protective factors in children’s response to stress and
disadvantages. In M. W. Kent & J. E. Rolf (Eds.), Primary preventioiLof
University Press of New England.
Rutter, M. (1985) . Resilience in the face of adversity: Protective factors in the
face of resistance to psychiatric disorders. British Journal of Psychiatry,_147, 598-611.
Rutter, M. (1987). Psychosocial resilience and protective mechanisms. American
l, 316-331.
Rutter, M. (1990). Psychosocial resilience and protective mechanisms. In J. Rolf,
A. S. Masten, D. Cicchetti, K. H. Nuechterlein & S. Weintraub (Eds.), Risk and
protective factors in the development of psychopathology (pp. 181-214). Cambridge,
Englind: Cambridge University Press.
Rutter, M., & Giller, H. (1983) .
New york: The Guilford Press.
Rutter, M., & Rutter, M. (1993).
across the life span. New York: Basic.
Salts, C J., Lindholm, B. W., Goddard, H. W., & Duncan, S. (1995). Predictive
variable of violent behavior in adolescent males. Youth ¿¿Society. 26 (3), 377-399.
Sameroff, A. J. (1975). Early influence on development: Factor or fancy. Merrill-
Palmer Quarterly, 21 (4), 265-522.
Sameroff, A. J., & Chandler, M. J. (1975) . Reproductive risks and te contimuum
of caretaking casualty. In F. D. Honowitz, M., Hetherington, S. Scarr-Salapatek, & G.
Siegel (Eds.), Review of chikLdavelopment research (pp. 87-244). Chicago: University of
Chicago.
Saner, H., & Ellickson, P. (1996) . Concurrent
94-103.
risk factors for adolescent violence.

183
Saunders, G. R. & Davis, M. B. (1976). The validity of the Jesness Inventory
with British delinquents. British Journal of Social and Clinical Psychology, 15, 33-39.
Scholte, E. M. (1992). Identification of children at risk at the police station and
the prevention of delinquency. Psychiatry, 55, 354-369.
Schweitzer, R., Seth-Smith, M., & Callan, V. (1992). The relationship between
self-esteem and psychological adjustment in younger adolescents. Journal of
Shamsie, J., & Hluchy, C. (1991) . Youth with conduct disorder; a challenge to be
met. Canadian Journal of Psychiatry,^6, 405-414.
Shannon, L. W. (1978). A longitudinal study of delinquency and crime. In C.
Wellford (Ed.), Quantitative studies in criminology, (pp. 121-146). Beverly Hills, CA:
Sage.
Shark, M. L., & Handal, P. J. (1977). Comments-Reliability and validity of the
Jesness Inventory: A caution. Journal of Consulting and Clinical Psychology, 45 (4), 692-
695.
Shaw, D. S., & Bell, R. (1993). Developmental theories of parental contributors
to antisocial behavior. Journal of Abnormal Child Psychology, 21 (5), 493-518.
Shaw, J. & Scott, W. (1991) . Influences of parent discipline style in delinquent
behavior: The mediating role of control orientation. Australian Journal of Psychology,
43, 61-67.
Short, J. F. (1990). DelinquencyiandjSQciely. Englewood Cliffs, NJ: Prentice Hall.
Singer, M. (1974). Delinquency and family disciplinary configurations: An
elaboration of the superego lacunae concept. Archives of General Psychiatry, 21, 795-
798.
Smets, A. C., & Hartup, W. W. (1988) . Systems and symptoms: Family
Cohesion/adaptability and childhood behavior problems. Journal of Ahnormal Child
Psychology, 16 (2), 233-246.
Smith, D.A., Visher, C.A., & Jarjoura, G.R. (1991) . Dimensions of delinquency:
Exploring the correlates of participation, frequency, and persistence of delinquent
Snyder, H. (1994). Are juveniles driving the violent crime trends? Facts Sheet #
16. Washington, DC: Office of Juvenile Justice and Delinquency Prevention.

184
Snyder, H., & Patterson, G. R., (1987). Family interaction and delinquent
behavior. In H.C. Quay (Ed.), Handbook of delinquency, (pp. 216-243). New York:
Wiley.
Sorensen, E., & Johnson, E. (1996). Subtypes of incarcerated delinquents
constructed via cluster analysis. Journal of Child Psychology ancLPsychiatry, 37, 293-
303.
Spiuack, G., Marcus, J., & Swift, M., (1986). Early class room behaviors and
later misconduct. Developmental Psychology, 22, 124-131.
Steinborg, L., (1991) . Adolescent transitions and alcohol and other drug use
prevention. Preventing adolescent drug use: From theoryto, practice (Office of Substance
Abuse Prevention Monograph 8, pp. 13-51). Washington DC: U. S. Department of Health
and Human Services.
Stott, M. W., & Olczak, P. V. (1978). Relating personality characteristics to
juvenile offense categories: Differences between status offenders and juvenile
delinquents. Journal of Clinical Psychology, 34, 80-84.
Sullivan , C. E., Grant, J. D., & Grant, M. Q. (1957). The development of
interpersonal maturity: Application to delinquency. Psychiatry_20, 373-385.
Thomas, A., & Chess, S. (1977) . Temperament and development. New York:
Brunner/Mazel.
Thomas, A., & Chess, S. (1980) .
York: Brunner/Mazel.
Thomas, V., & Olson, D.H. (1993). Problem families and the circumplex model:
Observational assessment using the Clinical Rating Scale (CRS). Journal of MaritaLand
Family Therapy, 19 (2), 159-175.
Thomberry, T. P., Huizinga, D., & Loeber, R. (1995) . The prevention of serious
delinquency and violence: Implications from the program research on the causes and
correlates of delinquency. In J. C. Howell, B. Krisberg, J. D. Hawkins & J. J. Wilson
(Eds.), Source book: Serious. violent, and chronic juvenile offenders (pp. 213-237).
Thousand Oaks, CA: Sage.
Tolan, P.H. (1987) . Implications of age of onset for delinquency risk. Journal of
y, 15 (1), 47-65.

185
Tolan, P.H. (1988a). Socioeconomic, family, and social stress correlates of
adolescent antisocial and delinquent behavior.
1Ú, 317-331.
Tolan, P.H. (1988b). Delinquent behaviors and male adolescent development: A
preliminary study. Journal of Youth and Adolescence, 17, 413-427.
Tolan, P. H. (1990 ). Pathways_ of adolescent antisocial behavior. NIMH Grant
Proposal ROI MH45936.
Tolan, P. H., Blitz, C., Davis, L. Fisher, A., Schwartz, L., & Thomas, P. (1990,
November). Stress, coping, and development of adolescent delinquency. Paper presented
at the annual meeting of the American Society for Criminology, Baltimore, MD.
Tolan, P.H., Cromwell, R.E., & Brass, M., (1986). Family Therapy with
Delinquents: A critical review of the literature. Family Process, 25, 619-650.
Tolan, P. H., & Guerra, N. (1994). What works in reducing adolescent violence:
An empirical review of the field. Boulder, CO: University of Colorado, Center for the
Study of Prevention of Violence, Institute for Behavioral Sciences.
Tolan, P. H., & Guerra, N. (1992). A developmental approach to adolescent
antisocial behavior. Manuscript submitted for publication. Available from the first author.
University of Illinois at Chicago. In P.H. Tolan, & B. J. Cohler (Eds.), Handbook of
clinical research and practice with adolescents, (pp. 307-331). New York: Wiley.
Tolan, P. H., & Gorman-Smith, D. (1991, June) . Coping by urban youth: Critical
dimensions for prevention. Paper presented at the third Biennial Conference on
Community Research and Action, Tempe, AZ.
Tolan, P. H., & Loeber, R. (1993). Antisocial behavior. In P.H. Tolan, & B. J.
New York: Wiley.
Tolan. P.H..& Lorion, R.P. (1988). Multivariate approaches to the identification
of delinquency proneness in adolescent males. American Journal of Community
Psychology, 16 (4), 547-561.
Tolan, P.H., & Mitchell, M.E. (1989). Families and the therapy of antisocial and
delinquent behavior. Journal of Psychotherapy and the Family, 6 (3-4), 29-48.

186
Tolan, P. H., Pentz, M. A., Aupporle, D., & Davis, L. (1990). Sixteen years of
social skills training with adolescents: A critical review of trends, dimensions, and
outcomes. In P.H. Tolan, & B. J. Cohler (Eds.), (1993). Handboolcof clinicalxesearch
and practice with adolescents (pp. 307-331). New York: Wiley.
Tolan, P.H., & Thomas, P. (1995). The implications of age of onset for
delinquency risk II: Longitudinal data. JoumalDLAhnonnal ChilcLPsychology, 23 (2),
157-181.
Tracy, P. E., Wolfgang, M. E., & Figlio, R. M. (1990) . Delinquency^areersJn
two hirth cohorts. New York: Plenum Press.
Vallance, R. C., & Forrest, A. R. (1971). The study of the Jesness Inventory with
Walker, H. M., Shinn, M. R., O’Neill, R. E., & Ramsey, E. (1987) . Longitudinal
assessment and long-term follow-up of antisocial behavior in fourth-grade boys:
Rationale, methodology, measures, and results. Remedial and Special Education, 8, 7-16.
Walsh, F. (1993).
New York: Guilford Press.
Walsh, F., & Olson, D. H. (1989) . Utility of the circumplex model with severely
dysfunctional family systems. In D.H. Olson, C.S. Russell, & D.H. Sprenkle (Eds.),
Circumplex Model: Systemic assessment and treatment oLfamilies,. (2ncLEd.) (pp. 51-78).
New York, London: Haworth Press..
Walsh, W. B, Craik, K. H., & Price, R. H. (1992). Eerson^environment
psychology ^Modules and perspectives. Hillsdale, New Jersey: Lawrence Erlbaum
Associates.
Wasserman, G. A., Miller, L. S., Pinner, E., & Jaramillo, B. (1996, September).
Parenting predictors of early conduct problems in urban, high-risk boys. Journal of
/, 35 (9), 1227-1236.
Wells, L. E., & Rankin, J. H. (1983). Self-concept as a mediating factor in
delinquency. Social PsychologyQuarterly, 46, 11-22.
Wells, L. E., & Rankin, J. H. (1991, February). Families and delinquency: A
meta-analysis of the impact of broken homes. Social Prohlems, 38 (1), 71-93.
Wemer, E. E., & Smith, R. S. (1992)
L Ithaca, NY: Cornell University Press.

187
Wertheim, E. S. (1975). Family unit therapy and the science and topology of
family systems. Family .Process,12, 361-376.
West, D.J., & Farrington, D. P., (1977). The delinquent way o¿life. New York:
Crane Russak.
West, D.J., & Farrington, D. P., (1973). Wholiecomes delinquent? London:
Heinemann.
Williams, J. D., & Rogers, J. R. (1996). Predicting outcomes with juvenile court
case histories. Juvenile and Family Court Journal 41-55.
Williams, J. R., & Gold, M., (1982) . From delinquent behavior to official
delinquency. Social Problems, 20, 209-229.
Wilson, J. J., & Howell, J. C. (1994) . Serious and juvenile crime: A
comprehensive strategy. Juvenile and Family Court Journal 3-14.
Wilson, J. Q., & Hermstein, R. J. (1985) . Crime and human nature. Schumann
and Schuster.
Wolfgang, M.E., Figlio, R.M., & Sellin, T. (1972) . Delinquency in a birth cohort.
Chicago: University of Chicago Press.
Worden, M. (1991)
s: An introduction to
New York, London, Sydney: The Haworth Press.
Wynne, L.C., Rycoff, I. M., Day, J., & Hirsch, S. I. (1958). Pseudo-mutuality in
the family relationships of schizophrenics. Psychiatry, 21, 205-220.
Yiannakis, A. (1976). Delinquent tendencies and participation in an organized
sports program. Research Quarterly, 47, 376-384.
Yoshikawa, H. (1994) . Prevention and cumulative protection: Effects on early
family support and education on chronic delinquency and its risks. Psychological
Bulletin, 115 (1), 28-54.
Zaslow, M. J., & Hayes, C. D. (1986). Sex differences in children’s response to
psychological stress: Toward a cross-context analysis. In M. E. Lamb, A. L. Brown & B.
Rogoff (Eds.), Advances inDevelopmental psychology Vol. 4, (pp. 285-337). Hillsdale,
NJ: Erlbaum.

BIOGRAPHICAL SKETCH
John Charles (Chuck) Cluxton is the oldest of two sons bom to Dr. John Franklin
and Janice Siwik Cluxton on January 15, 1965, in Gainesville, Florida. After the loss of
his father in 1978, he was fortunate to have gained his step-father William H. Hall and
family in 1980. Chuck graduated from Bay High School in Panama City, Florida, in 1983
and received his Associates of Arts degree with a major in psychology at Gulf Coast
Community College, Panama City, Florida, in 1986.
Chuck moved to Gainesville, Florida in 1987 to attend the University of Florida
where he earned his Bachelor of Science degree in 1989, with a major in psychology and
a minor in sociology. After a three-month counseling internship at the Life Management
Center of Northwest Florida located in Panama City, Florida, he enrolled as a graduate
student in the University of Florida Department of Counselor Education in 1989 and
graduated in 1993, receiving the Master of Education and Education Specialist degrees in
Mental Health Counseling & Marriage and Family Counseling. During this time, in the
summer of 1990, Chuck married Tali Lynn Cilbrith, a Panama City schoolmate and
fellow University of Florida student. Chuck was accepted into the doctoral program in
Counselor Education at the University of Florida in 1994. His area of specialization was
Marriage and Family Counseling with a Sub-Specialization in Adolescence and
Delinquency.
188

189
During his graduate studies, Chuck was inducted into multiple honor societies,
including Who's Who Among College Students (1988), Psi Chi, National Honor Society
in Psychology (1988-89), Pi Lamda Theta, National Honor and Professional Association
in Education (1991), Kappa Delta Pi, International Honor Society In Education (1991),
and Chi Sigma Iota, Counseling Academic and Professional Honor Society International
(1992). Chuck was also Nominated as 1996's Doctoral Student of The Year Chi Sigma
Iota’s Beta Chapter.
During his graduate studies, Chuck served as a Teaching Assistant for several
graduate classes in the Counselor Education Department and co-published a series of
study guides designed to help students master graduate level statistics. He also provided
individual and group clinical supervision for graduate students from the University of
Florida’s departments of Counselor Education, Rehabilitation Counseling and Clinical
and Counseling Psychology from 1991 to 1997.
Chuck worked for CREST Services from 1991 to 1996, and following the
completion of the contract between CREST Services and The Florida Department of
Juvenile Justice, he worked for Diversified Human Services, Gainesville, Florida, from
1997 to 1998 as Director of the Youth and Family Services division. In both agencies,
Chuck supervised clinical staff, administered programs, designed counseling modules,
and provided individual, group and family counseling services to children and
adolescents adjudicated delinquent by the juvenile court system.
He has played a role in the formation and implementation of a new Internet based
corporation called Quality Quest L.L.C., Eagle Lake, Maine, since the spring of 1997.

190
Quality Quest is the provider of Excel-A-Rate services, an Internet based set of
surveying and evaluation services for educational institutions and corporations. Chuck’s
roles include being an account representative, an entrepreneurial investment counselor, a
marketing advisor, and the referral agent for the Quality Quest employment assistance
program.
Chuck and Tali moved to Acworth, Georgia in the summer of 1998 following
Tali’s admission to the Doctorate of Chiropratic program at Life University in Marietta,
Georgia. While in Georgia, Chuck became licensed as a Marriage and Family Therapist
by the states of Georgia and Florida. He is currently in private practice with Gerald D.
Jennings, Ph.D., L.P.C., & Associates in Rome, Georgia. Beyond providing individual,
group, family, and marriage therapy, he also provides clinical supervision to psychology
students at Berry College in Rome, Georgia. Further, he continues to develop and
implement a wide variety of counseling programs for the adolescent and delinquent
population.
He plans to continue counseling and designing counseling programs for the
development of youth and their families. These programs will be designed for the
improvement of the overall efforts in prevention and treatment of the adolescent and
delinquent population.

I certify that I have ready this student and that in my opinion it conforms
to acceptable standards of scholarly presentation is fully adequate, in scope and
quality, as a dissertation for the dedree/of Dobtprof iR^iilosoph^
]j2a£L\ \J[ /vJyAP^r
Peter A. D. Sherrard, Chair
Associate Professor of Counselor Education
I certify that I have ready this student and that in my opinion it conforms
to acceptable standards of scholarly presentation is fully adequate, in scope and
quality, as a dissertation for the degree of Doctor of Philosophy.
2
'â– fl'i'X.i
M. David Miller
Professor of Educational Psychology
I certify that I have ready this student and that in my opinion it conforms
to acceptable standards of scholarly presentation is fully adequate, in scope and
quality, as a dissertation for the degree of Doctor of Philosophy.
D- j
Robert D. Myrick (2
Professor of Counselor Education
I certify that I have ready this student and that in my opinion it conforms
to acceptable standards of scholarly presentation is fully adequate, in scope and
quality, as a dissertation for the deg^pe"of Doctor of Philosophy.
A
J
Silvia Echevarria Rafuls
Assistant Professor of Counselor Education
I certify that I have ready this student and that in my opinion it conforms
to acceptable standards of scholarly presentation is fully adequate, in scope and
quality, as a dissertation for the degree of Doctor of Philosophy.
August 1 999
Dean, Graduate School

UP
mo
1989
, ojdñ
UNIVERSITY OF FLORIDA
3 1262 08555 1470