You are on page 1of 19

'DWD0RGHOV7KHRU\DQG5HDOLW\7KH6WUXFWXUHRI'HPRJUDSKLF.

QRZOHGJH
7KRPDV.%XUFK
3RSXODWLRQ6WXGLHV&HQWUH
8QLYHUVLW\RI:HVWHUQ2QWDULR
/RQGRQ2QWDULR&DQDGD1$&
7%XUFK#XZRFD
>5HYLVHGGUDIW0DUFK@
,QWURGXFWLRQ
7KHFHQWUDODUJXPHQWRIWKLVSDSHULVWKDWWKHGHYHORSPHQWRIGHPRJUDSK\DVD
VFLHQFHKDVEHHQKDPSHUHGE\FRQIXVHGLGHDVDQGLQFRQVLVWHQWSUDFWLFHZLWKUHVSHFWWR
VFLHQWLILFPHWKRGRORJ\,QSDUWLFXODUGHPRJUDSK\KDVEHHQSUHRFFXSLHGZLWKHPSLULFDO
GDWDDQGZLWKWHFKQLTXHVIRUWKHDQDO\VLVRIHPSLULFDOGDWDWRWKHQHJOHFWRIWKH
V\VWHPDWLFGHYHORSPHQWRIWKHRU\7KHRU\GHYHORSPHQWLQWXUQKDVEHHQKDPSHUHGE\
WKHZLGHVSUHDGDFFHSWDQFHRIWKHPHWKRGRORJLFDOLGHDVRIORJLFDOSRVLWLYLVP>WKH
SKLORVRSK\RIVFLHQFHRI1DJHODQG+HPSHOEXWDOVRDVWDWLVWLFDOWUDGLWLRQWUDFLQJEDFNWR
.DUO3HDUVRQ@DFFRUGLQJWRZKLFKVRFLDOVFLHQFHWKHRU\LISRVVLEOHDWDOOPXVWEDVHGRQ
HPSLULFDOJHQHUDOLVDWLRQVSUHIHUDEO\XQLYHUVDOHPSLULFDOJHQHUDOLVDWLRQV
:LWKUHVSHFWWRDEVWUDFWDQDO\WLFWKHRU\DQGDEVWUDFWPRGHOVGHPRJUDSK\KDV
EHHQVFKL]RLG)HZGHPRJUDSKHUVZRXOGGHQ\WKHYDOLGLW\RIWKHVWDEOHSRSXODWLRQ
PRGHORURILWVIUXLWIXOQHVVLQJHQHUDWLQJVXEVWDQWLYHFRQFOXVLRQVHYHQWKRXJKIHZUHDO
ZRUOGSRSXODWLRQVFORVHO\ILWWKHVWDEOHPRGHO%\FRQWUDVWDEVWUDFWEHKDYLRXUDOWKHRULHV
VXFKDVWUDQVLWLRQWKHRU\RUWKHPLFURHFRQRPLFWKHRU\RIGHPRJUDSKLFEHKDYLRXUDUH
RIWHQGLVPLVVHGRQWKHJURXQGVWKDWWKH\DGPLWRIHPSLULFDOH[FHSWLRQVRUDUH
XQUHDOLVWLF7KHWHQGHQF\LVWRGUDZDVKDUSOLQHEHWZHHQIRUPDOGHPRJUDSK\EXLOWRQ
QHFHVVDU\UHODWLRQVKLSVDQGEHKDYLRXUDOGHPRJUDSK\EXLOWRQHPSLULFDOJHQHUDOLVDWLRQV
UHJDUGLQJFRQWLQJHQWUHODWLRQVKLSV
,QVLJKWLQWRWKHVHPHWKRGRORJLFDOLVVXHVFDQEHJDUQHUHGIURPDFRQVLGHUDWLRQRI
WZROHDGLQJGHPRJUDSKHUVRIWKHODVWKDOIRIWKHWKFHQWXU\$QVOH\&RDOHDQG1DWKDQ
.H\ILW]&RDOHWRWKHEHVWRIP\NQRZOHGJHKDVQHYHUZULWWHQV\VWHPDWLFDOO\RQWKH
PHWKRGRORJ\RIGHPRJUDSK\VRRQHPXVWORRNDWKLVDFWXDOZRUNDQGPHWKRGRORJLFDO
UHPDUNVPDGHWKHUHLQRIWHQLQSDVVLQJ,QWKHFDVHRI.H\ILW]ZHFDQWXUQWRD


7KLVSDSHUKDVEHHQSUHSDUHGIRUDZRUNVKRSRQ$JHQW%DVHG&RPSXWDWLRQDO'HPRJUDSK\DWWKH0D[
3ODQFN,QVWLWXWHIRU'HPRJUDSKLF5HVHDUFK5RVWRFN*HUPDQ\)HEUXDU\)UDQFHVFR&%LOODUL
DQG$OH[LD)UQNUDQ]3UVNDZHW]RUJDQLVHUV2QJRLQJUHVHDUFKRQPRGHOOLQJDQGGHPRJUDSKLFWKHRU\KDV
EHHQVXSSRUWHGE\WKH6RFLDO6FLHQFHVDQG+XPDQLWLHV5HVHDUFK&RXQFLORI&DQDGD

$QRWKHUIDFWRUQRWIXUWKHUGLVFXVVHGKHUHKDVEHHQWKHKHDY\LQYROYHPHQWRIGHPRJUDSK\LQSXUHO\
GHVFULSWLYHZRUNGXHWRLWVFORVHDVVRFLDWLRQZLWKJRYHUQPHQWVWDWLVWLFDOEXUHDXVZKRVHFHQWUDOPDQGDWHLV
GHVFULSWLRQQRWWKHDGYDQFHPHQWRIGHPRJUDSKLFVFLHQFHDVVXFK7KLVFORVHDVVRFLDWLRQFOHDUO\KDVKDG
DGYDQWDJHVIRUGHPRJUDSK\EXWDOVRFRVWV

SDSHUPRUHRUOHVVQHJOHFWHGLQZKLFKKHDUJXHVWKDWPXFKRIRXUEHVWGHPRJUDSKLF
NQRZOHGJHZDVSURGXFHGE\WKHXVHRIDEVWUDFWPRGHOVQRWE\PHDQVRIGDWDDQDO\VLV
,QWHUHVWLQJO\&RDOHUHOLHGKHDYLO\RQDEVWUDFWPRGHOVLQPXFKRIKLVHDUOLHUZRUN
RQVXFKIRUPDOWRSLFVDVWKHGHPRJUDSK\RISRSXODWLRQDJLQJEXWDOVRRQVXFK
EHKDYLRXUDOWRSLFVDVWKHLPSDFWRIKLJKIHUWLOLW\DQGUDSLGSRSXODWLRQJURZWKRQ
HFRQRPLFGHYHORSPHQWLQORZLQFRPHFRXQWULHV,QKLVODWHUZRUNRQKLVWRULFDOIHUWLOLW\
WUDQVLWLRQVLQ(XURSH&RDOHVHHPVWRKDYHUHYHUWHGWRDUDGLFDOSRVLWLYLVWDSSURDFKQRW
ZLOOLQJWRJHQHUDOLVHEH\RQGWKHGDWDDQGHQGLQJZLWKDVRPHZKDWDQWLFOLPDFWLF
UHVWDWHPHQWRIWUDQVLWLRQWKHRU\UHPLQLVFHQWRI1RWHVWHLQVVWDWHPHQWVIRUW\\HDUVHDUOLHU
,WLVDUJXDEOHWKDWWKHWKHRUHWLFDOUHWXUQVWRWKHKHDY\LQYHVWPHQWRIWLPHPRQH\DQG
SHUVRQQHOLQWRWKH(XURSHDQIHUWLOLW\SURMHFWZHUHGLVSURSRUWLRQDWHO\VPDOO+REFUDIW
KDVUHFHQWO\PDGHWKHVDPHDUJXPHQWZLWKUHVSHFWWRWKH:RUOG)HUWLOLW\6XUYH\DQGLWV
VXFFHVVRUV>QRWDEO\WKH'HPRJUDSKLFDQG+HDOWK6XUYH\V@
.H\ILW]VFODLPIRUWKHJUHDWHUIUXLWIXOQHVVRIDEVWUDFWPRGHOOLQJRYHUGDWDDQDO\VLV
LVQHLWKHUQHZQRUXQLTXH'HVFDUWHVIDYRXUHGWKRXJKWRYHUREVHUYDWLRQDVWKHZD\WR
NQRZOHGJHWKHQHZVFLHQWLVWVVXFKDV)UDQFLV%DFRQIDYRXUHGREVHUYDWLRQ>GDWD@-RKQ
/RFNHDWWHPSWHGDV\QWKHVLVWKDWFRPHVFORVHWRDEDODQFHGYLHZRIHPSLULFDOVFLHQFH
H[SHULHQFHDQGUHIOHFWLRQRQH[SHULHQFHRUREVHUYDWLRQDQGWKHRU\0RUHUHFHQWO\.DUO
3HDUVRQDQG5RQDOG)LVKHUDUHUHSXWHGWRKDYHSDUWHGZD\VRYHUWKHLVVXHRI
FRUUHODWLRQDOVWXGLHVRIODUJHVDPSOHV>GDWD@YHUVXVH[SHULPHQWVRQVPDOOHUVDPSOHVWRWHVW
LGHDVDERXWPHFKDQLVPV>WKHRU\@
-RKQ3ODWW>@LQDFODVVLFSDSHURQVFLHQWLILFPHWKRGRORJ\UHFDOOVD
FRQIHUHQFHRQPROHFXODUELRORJ\DWZKLFKWKHRUHWLFDOPRGHOOHUVZHUHFULWLFLVHGE\
HPSLULFLVWV/HR6]LODUGLVTXRWHGDVFRPPHQWLQJDERXWSURWHLQV\QWKHVLVRUHQ]\PH
IRUPDWLRQWKDW,I\RXGRVWXSLGH[SHULPHQWVDQGILQLVKRQHD\HDULWFDQWDNH\HDUV
%XWLI\RXVWRSGRLQJH[SHULPHQWVIRUDOLWWOHZKLOHDQGWKLQNKRZSURWHLQVFDQSRVVLEO\
EHV\QWKHVL]HGWKHUHDUHRQO\DERXWGLIIHUHQWZD\VQRW$QGLWZLOOWDNHRQO\DIHZ
H[SHULPHQWVWRGLVWLQJXLVKWKHVH>3ODWW@$QHPSLULFDOUHVHDUFKHULVUHSRUWHGWRKDYH
UHSOLHG<RXNQRZWKHUHDUHVFLHQWLVWVDQGWKHUHDUHSHRSOHLQVFLHQFHZKRDUHMXVW
ZRUNLQJZLWKWKHVHRYHUVLPSOLIHGPRGHOV\VWHPV'1$FKDLQVDQGLQYLWURV\VWHPV
ZKRDUHQRWGRLQJVFLHQFHDWDOO>S@7KHVXEVHTXHQWKLVWRU\RIPROHFXODUELRORJ\
VXJJHVWVZKRZDVRQWKHULJKWWUDFN
.H\ILW]VYLHZLVHFKRHGDQGVXSSRUWHGE\DZLGHYDULHW\RIZULWLQJVRQVFLHQWLILF
PHWKRGRORJ\DOOVHHNLQJDQDOWHUQDWLYHDSSURDFKWRORJLFDOSRVLWLYLVPVHHQDVOHDGLQJWR
GHDGHQGVDQGWKHRUHWLFDOIUXVWUDWLRQ$VH[DPSOHV,FLWHDQGEULHIO\GLVFXVVDQHDUO\
VWDWHPHQWE\(XJHQH0HHKDQ>@DSROLWLFDOVFLHQWLVWVRPHUHSUHVHQWDWLYHDXWKRUVRI
WKHVHPDQWLFVFKRROLQWKHSKLORVRSK\RIVFLHQFH>*LHUH@DQG&DUWZULJKW@
DQGDUHFHQWFDOOIRUDUHWXUQWRDEVWUDFWDQDO\WLFWKHRU\DQGWKHVHDUFKIRUVRFLDO
PHFKDQLVPVE\DQXPEHURIVRFLRORJLVWV>+HGVWU|PDQG6ZHGEHUJ@
7KHVHLVVXHVFDQEHFRQYHQLHQWO\GLVFXVVHGE\PHDQVRIDGLDJUDPRIWKH
FORVHQHVVRUGLVWDQFHDPRQJIRXUNH\HOHPHQWVLQVFLHQFHQDPHO\GDWDPRGHOVWKHRU\
DQGUHDOLW\ZLWKDSSURSULDWHGLVWLQFWLRQVDPRQJYDULRXVW\SHVRIPRGHOV


7KLVPHWKRGRORJLFDOWKLQNLQJDORQJZLWKWKHUHFHQWKLVWRU\RIGHPRJUDSKLF
UHVHDUFKSRLQWWRWKHYDOXHRIJUHDWHUUHVSHFWIRUDQGDWWHQWLRQWRDEVWUDFWPRGHOVLQ
GHPRJUDSK\7KH\DOVRVXJJHVWDEDQGRQLQJWKHVKDUSGLVWLQFWLRQEHWZHHQIRUPDODQG
EHKDYLRXUDOGHPRJUDSK\RQWKHJURXQGVWKDWDOOJRRGVFLHQWLILFWKHRULHVRUPRGHOVDUH
LQIDFWIRUPDO6LPLODUO\WKHGLVWLQFWLRQEHWZHHQWKHRU\DQGPRGHOVLVPLQLPLVHG
VLQFHDULJRURXVWKHRUHWLFDOVWDWHPHQWZLOOVKDGHRIILQWRDPRGHO)LQDOO\JLYHQWKH
FRPSOH[LW\RIWKHUHDOZRUOGDQGWKHDELOLW\RIWKHFRPSXWHUDLGHGVFLHQWLVWWRKDQGOH
ODUJHUDPRXQWVRIFRPSOH[LW\PXFKRIRXUPRUHIUXLWIXOWKHRUHWLFDOZRUNZLOOFRQVLVWRI
FRPSXWHUPRGHOOLQJ>%XUFKIRUWKFRPLQJ@7KHSHUYDVLYHEXWIDOVHFRQWUDVW
EHWZHHQWKHRU\DVYHUEDODQGPRGHOOLQJDQGHPSLULFDOUHVHDUFKDVTXDQWLWDWLYHZLOOEH
DEDQGRQHG
7KH0HWKRGRORJ\RI$QVOH\-&RDOH
%\DOODFFRXQWV$QVOH\&RDOHKDVEHHQRQHRIWKHPRVWYHUVDWLOHFUHDWLYHDQG
LQIOXHQWLDOGHPRJUDSKHUVRIWKHODWHWKFHQWXU\/LNHPRVWGHPRJUDSKHUVKHZDVQRW
VHOIFRQVFLRXVRUH[SOLFLWDERXWWKHPHWKRGRORJ\RIGHPRJUDSK\ORJLFDQG
HSLVWHPRORJ\DVRSSRVHGWRWHFKQLTXH,PSOLFLWO\KLVZRUNPLJKWEHWDNHQWRVXJJHVW
DPELYDOHQFHUHJDUGLQJWKHSURSHUUROHVRIGDWDPRGHOVDQGWKHRU\RUDWOHDVWVRPH
FKDQJLQJHPSKDVHVRYHUWLPH
$OHLWPRWLYRIKLVFDUHHULVIRUPDOPDWKHPDWLFDOPRGHOOLQJRIGHPRJUDSKLF
G\QDPLFVSRSXODULVLQJDQGH[WHQGLQJWKHZRUNRI/RWNDDQGRWKHUHDUO\SLRQHHUV7KLV
ZRUNUHOLHVRQPDWKHPDWLFDOO\QHFHVVDU\UHODWLRQVKLSVLQKLJKO\DEVWUDFWSRSXODWLRQ
PRGHOVZLWKWKHVWDEOHPRGHODVFHQWUDO*HQHUDOLVDWLRQVHPHUJHIURPWKHPRGHOVUDWKHU
WKDQIURPH[WHQVLYHHPSLULFDOUHVHDUFK$SULPHH[DPSOHLVKLVZRUNRQWKH
GHPRJUDSKLFGHWHUPLQDQWVRIDJHVWUXFWXUH>VHHIRUH[DPSOH&RDOH@8VLQJWKH
VWDEOHPRGHODQGWKHVWDQGDUGSURMHFWLRQPRGHOKHFRQFOXGHGWKDWIHUWLOLW\YDULDWLRQ
JHQHUDOO\KDVDSSUHFLDEO\PRUHLPSDFWRQDJHVWUXFWXUHWKDQPRUWDOLW\YDULDWLRQDQGWKDW
WKHHIIHFWVRIPRUWDOLW\DUHKHDYLO\GHSHQGHQWRQWKHDJHSDWWHUQRIFKDQJHZLWKWKH
SRVVLELOLW\WKDWVRPHSDWWHUQVRIFKDQJHLQRYHUDOOPRUWDOLW\FDQPDNHDSRSXODWLRQ
\RXQJHU&RDOHXVHGGDWDWRFDOFXODWHWKHPRGHOVRIFRXUVHEXWKLVJHQHUDOLVDWLRQV
GHSHQGRQWKHPDQLSXODWLRQRIUHODWLYHO\VLPSOHDEVWUDFWPRGHOVQRWRQWKHV\VWHPDWLF
DQDO\VLVRIHPSLULFDOGDWD
+LVPRQRJUDSKZLWK+RRYHU>&RDOHDQG+RRYHU@DOVRLQYROYHGDEVWUDFW
PRGHOOLQJUDWKHUWKDQEURDGHPSLULFDOUHVHDUFKEXWRQLVVXHVJHQHUDOO\YLHZHGDV
EHKDYLRXUDOUDWKHUWKDQIRUPDODQGLQYROYLQJDFRQVLGHUDEO\PRUHFRPSOH[PRGHO
7KHFRUHRIWKLVZRUNZDVDOLQNLQJRIDVWDQGDUGSRSXODWLRQSURMHFWLRQPRGHOZLWKD
VWDQGDUGHFRQRPLFJURZWKPRGHO7KHPRGHOLVILWWRWKH,QGLDQFDVHDWOHQJWKDQGWR
WKH0H[LFDQFDVHPRUHEULHIO\$QGWKHUHLVVRPHGLVFXVVLRQEXWQRV\VWHPDWLF
HPSLULFDOUHVHDUFKRIWKHZLGHUDSSOLFDELOLW\RIWKHDQDO\VLV,WZDVZKDWWRGD\LVNQRZQ
DVODUJHVFDOHVLPXODWLRQ7KHUHVHDUFKHUVZHUHQRGRXEWKDPSHUHGE\WKHDEVHQFHRI
FRPSXWHUFDSDELOLWLHVZHWDNHIRUJUDQWHGDOWKRXJKWKH\GLGHQJDJHLQZKDWZRXOGQRZ
EHFDOOHGVHQVLWLYLW\DQDO\VHV
&RDOHZDVPRUHGHHSO\LQYROYHGLQWKHGHPRJUDSKLFSDUWVRIWKHZRUN+RRYHU
LQWKHHFRQRPLF%XWWKH\VWUHVVWKDWWKHUHZDVFRRSHUDWLRQRIERWKLQDOOSDUWV


6RPHWLPHVWKH\DUHFOHDUDERXWWKHDEVWUDFWFKDUDFWHURIWKHLUDQDO\VLV2XU
FDOFXODWLRQVHQWDLODPRGHORIWKH,QGLDQHFRQRP\GHVLJQHGWRWDNHLQWRDFFRXQWDV
UHDOLVWLFDOO\DVDQH[WUHPHO\VLPSOLILHGPRGHOFDQWKHPDLQUHOHYDQWIHDWXUHVRIWKDW
HFRQRP\>S@%XWWKHFRQFOXVLRQVDUHVHWIRUWKDVJHQHUDODSSO\LQJWR,QGLD
0H[LFRDQGWRPRVWRWKHUORZLQFRPHQDWLRQVLQWKHGHYHORSLQJZRUOG
7KH\VHHPDWWLPHVWRRYHUORRNDQHOHPHQWRIFLUFXODULW\WKDWLVFKDUDFWHULVWLFRI
DOOVLPXODWLRQQDPHO\WKDWWKHFRQFOXVLRQVIROORZIURPWKHDVVXPSWLRQV7KH\FRQFOXGH
WKURXJKWKLVZKROHJDPXWRISURMHFWLRQVGHVSLWHWKHZLGHYDULDWLRQLQUDWHVRI
SURJUHVVWKDWWKH\LPSO\WKHGLIIHUHQWLDODVVRFLDWHGZLWKUHGXFHGIHUWLOLW\LVUHPDUNDEO\
SHUVLVWHQWDQGVWDEOH>S@%XWHDUOLHUWKH\KDYHWROGXVWKDWWKHPRGHOGRHVQRW
FRQWDLQDOOLPSRUWDQWJURZWKGHWHUPLQDQWVEXWRQO\WKHJURZWKGHWHUPLQDQWVPRVW
FOHDUO\DIIHFWHGE\WKHGLIIHUHQFHEHWZHHQRXUDOWHUQDWLYHUDWHVRISRSXODWLRQJURZWK
>S@6LQFHDOWHUQDWLYHUDWHVRISRSXODWLRQJURZWKLQWKHLUVFHQDULRVGHSHQGPDLQO\RQ
DOWHUQDWLYHIHUWLOLW\DVVXPSWLRQVLQKLQGVLJKWWKHFRQFOXVLRQTXRWHGMXVWDERYHLV
LQHYLWDEOH$QGLWLVFRPSOHWHO\SRVVLEOHWKDWWKHPRGHOLVQRWUHOHYDQWWRFRQFUHWHFDVHV
LQZKLFKWKHRPLWWHGJURZWKGHWHUPLQDQWVDUHFUXFLDO
$QXPEHURISDVVDJHVLQWKHERRNVXJJHVWWKDWWKHDEVWUDFWFKDUDFWHURIWKHLU
ZRUNZDVSDUWLDOO\REVFXUHGLQWKHLUWKLQNLQJE\WKHIDFWWKDWWKHZRUNZDVTXDQWLWDWLYH
WKDWLWGHDOWZLWKFRQFUHWHFDVHVDQGWKDWLWGHDOWZLWKDYHU\VSHFLILFTXHVWLRQZKDW
GLIIHUHQFHZRXOGGLIIHUHQWIHUWLOLW\SDWWHUQVPDNHWRHFRQRPLFGHYHORSPHQW",QKLV
SUHIDFH)UDQN1RWHVWHLQZKRJHQHUDOO\DEKRUUHGDEVWUDFWWKHRU\VHHPVWRKDYHEHHQ
IRROHGE\WKHZRUNQRWLQJWKDWLWLVDKLJKO\RULJLQDOGHPRQVWUDWLRQRIWKHZD\FDUHIXO
IDFWXDODQDO\VLVFDQLOOXPLQDWHWKHYLWDOLQWHUUHODWLRQVKLSVRIHFRQRPLFDQGSRSXODWLRQ
FKDQJH>SSYYL@%XWFOHDUO\LWLVIDFWXDORQO\LIRQHDFFHSWVWKHRUHWLFDOIDFWVDQG
UHDVRQDEOHDVVXPSWLRQVDVZHOODVTXDQWLWDWLYHHPSLULFDOGDWD$QGSHUKDSVLWLVIDFWXDOE\
FRQWUDVWZLWKSXUHWKHRUHWLFDOVSHFXODWLRQQRWJURXQGHGLQWKHGHWDLOVRIDSDUWLFXODU
FRQFUHWHFDVH%XWLWFHUWDLQO\LVQRWHPSLULFDOZRUNLQWKHRUGLQDU\VHQVHRIWKDWWHUP
7KHFHQWUDOSRLQWLVWKDWJHQHUDOSURSRVLWLRQVWKDWHPHUJHGIURPWKLVSURMHFWZHUH
EDVHGRQWKHPRGHOQRWMXVWRQHPSLULFDOGDWD,QGHHGVRPHRIWKHFULWLFVRI&RDOH
+RRYHU>.X]QHWV(DVWHUOLQ@FULWLFLVHGLWSUHFLVHO\RQWKHJURXQGVWKDWFRPSDUDWLYH
HPSLULFDOUHVHDUFKVKRZHGQRVWURQJRUUHJXODUUHODWLRQVKLSEHWZHHQSRSXODWLRQJURZWK
UDWHVDQGHFRQRPLFGHYHORSPHQW
:KHQ&RDOHWXUQHGKLVDWWHQWLRQWRIHUWLOLW\WUDQVLWLRQVWKHRULHQWDWLRQEHFDPH
PXFKPRUHHPSLULFDO,QRQHRIKLVHDUOLHVWSDSHUVRQWKH(XURSHDQIHUWLOLW\SURMHFW
>@KHSUHVHQWVKLVLQGLUHFWO\VWDQGDUGLVHGUDWLRVDQGDIHZHDUO\UHVXOWVDWWKHQDWLRQDO
OHYHO7KHSDSHUGRHVQRWH[SOLFLWO\GHDOZLWKFODVVLFWUDQVLWLRQWKHRU\EXWLPSOLFLWO\FDOOV
LWLQWRTXHVWLRQ0HWKRGRORJLFDOFRPPHQWVPDGHLQSDVVLQJVXJJHVWDUDGLFDOORJLFDO
SRVLWLYLVP6SHDNLQJRIWKHGHFOLQHRIPDULWDOIHUWLOLW\KHFRPPHQWV7KHUHDUHIHZLI
DQ\XQLYHUVDOO\YDOLGJHQHUDOL]DWLRQVDERXWWKHFLUFXPVWDQFHVXQGHUZKLFKQHR0DOWKXVLDQ
IHUWLOLW\UHGXFWLRQRFFXUV>S@$IWHUDOLVWRIIUHTXHQWO\K\SRWKHVLVHGFDXVDOIDFWRUVKH
QRWHVWKDW([DPSOHVFDQEHIRXQGLOOXVWUDWLQJWKHSUHVXPHGLQIOXHQFHRIHDFKRIWKHVH
IDFWRUVEXWFRXQWHUH[DPSOHVRUH[FHSWLRQVDUHQHDUO\DVSUHYDOHQW>S@+HFRQFOXGHV
)HUWLOLW\UHGXFWLRQVHHPVWREHDQHDUO\XQLYHUVDOIHDWXUHRIWKHGHYHORSPHQWRIPRGHUQ
VHFXODUVRFLHWLHVEXWLWVLQWURGXFWLRQDQGVSUHDGFDQQRW\HWEHH[SODLQHGE\DQ\VLPSOH


XQLYHUVDOO\YDOLGPRGHORUJHQHUDOL]HGGHVFULSWLRQ>S@/RRNLQJWRWKHIXWXUHKH
H[SUHVVHVWKHKRSHWKDWIXUWKHUHPSLULFDOUHVHDUFKWUDFLQJWKHGHFOLQHRIIHUWLOLW\PRUH
V\VWHPDWLFDOO\DQGE\JHRJUDSKLFXQLWVVPDOOHUWKDQQDWLRQVZLOOFHUWDLQO\HVWDEOLVKD
IXOOHUUHFRUGRIIHUWLOLW\UHGXFWLRQDQGZLOOSHUKDSVPDNHSRVVLEOHJHQHUDOL]DWLRQVDERXW
WKHFDXVHVRIWKHGHFOLQH>S@
(LJKW\HDUVODWHU>@&RDOHGHDOVZLWKZKDWZRXOGXVXDOO\EHFDOOHGWKHRUHWLFDO
LVVXHVLQKLV,8663SDSHURQ7KHGHPRJUDSKLFWUDQVLWLRQUHFRQVLGHUHG%XWWKH
HPSKDVLVLVVWLOORQWKHVHDUFKIRUXQLYHUVDOHPSLULFDOSURSRVLWLRQV,QWHUHVWLQJO\&RDOH
QHYHUXVHVWKHZRUGWKHRU\HLWKHULQUHIHUHQFHWR1RWHVWHLQVZRUNRUKLVRZQLGHDV>WKH
ZRUGGRHVQRWDSSHDUDQ\ZKHUHLQWKHSDSHU@,WLVGLIILFXOWWRNQRZMXVWZKDWKH
LQWHQGHGE\KLVVWXGLRXVDYRLGDQFHRIWKHZRUGWKHRU\ZKLFKZRXOGKDYHVHHPHGTXLWH
QDWXUDOLQWKHFRQWH[W
,QIDFWWKHSDSHUHYHQWXDOO\SURGXFHVYHU\EURDGJHQHUDOLVDWLRQVWKDWPRVWVRFLDO
VFLHQWLVWVZRXOGYLHZDVWKHRU\&RDOHSRVLWVWKHH[LVWHQFHRIPRUHWKDQRQH
SUHFRQGLWLRQIRUDGHFOLQH7KUHHJHQHUDOSUHUHTXLVLWHVIRUDPDMRUIDOOLQPDULWDOIHUWLOLW\
FDQEHOLVWHG@LWPXVWEHZLWKLQWKHFDOFXOXVRIFRQVFLRXVFKRLFH@UHGXFHGIHUWLOLW\
PXVWEHDGYDQWDJHRXV@HIIHFWLYHIHUWLOLW\FRQWUROWHFKQLTXHVPXVWEHDYDLODEOH>S@
7KHODQJXDJHLVERUURZHGIURPPDWKHPDWLFVWKHWKUHHSUHFRQGLWLRQVRUSUHUHTXLVLWHVDUH
LQIDFWQHFHVVDU\FRQGLWLRQVIRUIHUWLOLW\GHFOLQH>S@$ZHDNQHVVRIWKHLGHD>VLF@RI
WKHWUDQVLWLRQLVWKDWLWWHOOVXVWKDWDKLJKGHJUHHRIPRGHUQL]DWLRQLVVXIILFLHQWWRFDXVHD
IDOORIIHUWLOLW\EXWGRHVQRWWHOOXVZKDWGHJUHH LIDQ\ RIPRGHUQL]DWLRQLVQHFHVVDU\WR
SURGXFHDIDOO>S@&RDOHQRWHVWKDWRQHRUPRUHRIWKHWKUHHSUHFRQGLWLRQVFDQH[LVW
LQWKHDEVHQFHRIPRGHUQLVDWLRQ
&RDOHDFNQRZOHGJHVPDQ\JRRGSRLQWVDERXWWKHLGHDRIWKHWUDQVLWLRQ
>1RWHVWHLQVWUDQVLWLRQWKHRU\@EXWIDXOWVLWILQDOO\RQLWVLQDELOLW\WRPDNHPRUHWKDQ
TXDOLWDWLYHVWDWHPHQWVDERXWWKHFRXUVHRIGHPRJUDSKLFDQGIHUWLOLW\WUDQVLWLRQV+H
QRWHVIRUH[DPSOHWKDWZLWKUHVSHFWWRGHYHORSLQJFRXQWULHVWUDQVLWLRQWKHRU\ZDV
DFFXUDWHLQGLUHFWLRQEXWLQDFFXUDWHLQGHWDLOZLWKUHVSHFWWRPRUWDOLW\>S@
7UDQVLWLRQWKHRU\ZDVTXDOLWDWLYHO\FRUUHFWUHJDUGLQJWKHSDVWRIGHYHORSHGFRXQWULHVDQG
TXDOLWDWLYHO\FRUUHFWLQLWVSUHGLFWLRQVIRUOHVVGHYHORSHGFRXQWULHV%XW,QQHLWKHU
LQVWDQFHGRHVLWVSHFLI\LQWHUPVWKDWFDQEHWUDQVODWHGLQWRTXDQWLWDWLYHPHDVXUHVWKH
FLUFXPVWDQFHVXQGHUZKLFKWKHGHFOLQHRIIHUWLOLW\EHJDQ>S@
%XW&RDOHVWKUHHSUHFRQGLWLRQVFOHDUO\DUHVXEMHFWWRWKHVDPHFULWLFLVP
HVSHFLDOO\VLQFHWKH\DUHQRWSUHVHQWHGDVTXDQWLWDWLYHYDULDEOHV+HVSHDNVRIWKHGHJUHH
RIFKDQJHWKDWPXVWRFFXUEHIRUHWKHSUHFRQGLWLRQVDUHLQWURGXFHGEXWGRHVQRW
DOZD\VGLVFXVVWKHSUHFRQGLWLRQVWKHPVHOYHVDVPDWWHUVRIGHJUHHXVLQJZRUGVWKDW
VXJJHVWDYDULDEOHZKHWKHUWKHSUHFRQGLWLRQVDUHSUHVHQWRUDEVHQW>S@7KHUH
LVOLWWOHDWWHQWLRQWRWKHLVVXHRIKRZWKH\PLJKWEHTXDQWLILHGDQGRSHUDWLRQDOLVHG
&RDOHVODVWPDMRUVWDWHPHQWRQIHUWLOLW\WUDQVLWLRQVLVLQKLVLQWURGXFWRU\FKDSWHU
IRUWKHPXOWLDXWKRUHGVXPPDU\YROXPHRQWKHSURMHFW>&RDOHDQG:DWNLQV@7KH
VSLULWRIWKLVHVVD\LVGLIIHUHQWIURPWKDWRIWKHSDSHUZLWKDUHWXUQWRUHOLDQFHRQ

2QO\LQKDVDVHULRXVHIIRUWEHHQPDGHWRGRWKLV6HH/HVWKDHJKHDQG9DQGHUKRHIW

DEVWUDFWPRGHOVWRJDLQLQVLJKWLQWRSRSXODWLRQG\QDPLFV7KHUHLVIRULQVWDQFH
FRQVLGHUDEOHGLVFXVVLRQRIZKDWPLJKWEHFDOOHGDF\FOLFORJLVWLFPRGHOWRGHVFULEHSUH
PRGHUQRUHYHQSUHKLVWRULFDOSRSXODWLRQG\QDPLFV3RSXODWLRQJURZWKOHDGVWRULVLQJ
PRUWDOLW\SRSXODWLRQVUHDFWE\UHGXFLQJPDUULDJHDQGRUIHUWLOLW\RURWKHUZLVHUHGXFLQJ
SRSXODWLRQJURZWKPRUWDOLW\GHFOLQHVWRIRUPHUOHYHOVDQGWKHF\FOHVWDUWVRYHU
,QWHUHVWLQJO\WKHPRGHOLVSXUHO\TXDOLWDWLYHDQGRIFRXUVHWKHUHLVOLWWOHHPSLULFDO
HYLGHQFHWRVXSSRUWLW
2QWUDQVLWLRQWKHRU\&RDOHVHHPVWRKDYHJLYHQXSWKHKRSHVH[SUHVVHGLQHDUOLHU
SDSHUVWKDWWKHSURMHFWZRXOGDUULYHDWXQLYHUVDOHPSLULFDOJHQHUDOLVDWLRQV7KHWKUHH
SUHFRQGLWLRQVDUHQRWHYHQPHQWLRQHG2QHORQJSDUDJUDSK>S@VXPPDULVHVWKH
FDXVHVRIWUDQVLWLRQDOPRUWDOLW\GHFOLQHLQEURDGWHUPVWKDWZRXOGQRWKDYHSDVVHGPXVWHU
DFFRUGLQJWRWKHVWDQGDUGVRIKLVSDSHU8OWLPDWHO\KHZULWHVRIWKHIHUWLOLW\
WUDQVLWLRQLQODQJXDJHQRWVRGLIIHUHQWIURPWKDWRI1RWHVWHLQIRUW\\HDUVHDUOLHUZLWK
UHIHUHQFHWRW\SLFDOSDWWHUQVRIWUDQVLWLRQDQGVRPHH[FHSWLRQV>SS@7KHUHLVQR
DWWHPSWWRTXDQWLI\WKHLGHDRIWUDQVLWLRQEH\RQGWKHSUHVHQWDWLRQRIHPSLULFDO
PHDVXUHPHQWVRIIHUWLOLW\DQGQXSWLDOLW\DQGWKHLUWLPHWUHQGVDQGLQWHUFRUUHODWLRQVZLWKD
OLPLWHGQXPEHURILQGHSHQGHQWYDULDEOHV,WLVDVWKRXJKWKHVKHHUPDVVRIGDWDKDVOHG
WRDQDEDQGRQPHQWRIDWWHPSWVWRGHYHORSQHZDQGEHWWHUWKHRUHWLFDOLGHDVRUPRGHOV
LQFOXGLQJDUHYLVHGDQGPRUHULJRURXVVWDWHPHQWRIWUDQVLWLRQWKHRU\
7KLVLVDORQJVWRU\EXWLWPDNHVDQLPSRUWDQWSRLQWDPDVVLYHWZHQW\\HDU
SURMHFWZLWKVXEVWDQWLDOUHVRXUFHVDQGFROODERUDWLRQE\DODUJHQXPEHURIILUVWUDWH
GHPRJUDSKHUVGLGQRWUHVXOWLQDVXEVWDQWLDOLPSURYHPHQWLQWKHRU\7KLVLVQRWWRGHQ\
WKHLPPHQVHVFLHQWLILFYDOXHRIWKHZRUNDVDQHPSLULFDOGHVFULSWLYHVWXG\$QGLQ
&RDOHVPLQGGHVFULSWLRQPD\ZHOOKDYHEHHQLWVFHQWUDODLP5HFDOOWKHTXRWHFLWHG
HDUOLHUWUDFLQJWKHGHFOLQHRIIHUWLOLW\PRUHV\VWHPDWLFDOO\ZLOOFHUWDLQO\HVWDEOLVKD
IXOOHUUHFRUGRIIHUWLOLW\UHGXFWLRQDQGZLOOSHUKDSVPDNHSRVVLEOHJHQHUDOL]DWLRQVDERXW
WKHFDXVHVRIWKHGHFOLQH>SHPSKDVLVDGGHG@%XWWKHRU\GLGQRWIORZIURPWKH
GHWDLOHGGDWDWKHPHWKRGRORJLFDOVWDQFHZDVVXFKWKDWWKHRU\FRXOGIORZRQO\IURP
XQLYHUVDOHPSLULFDOJHQHUDOLVDWLRQVDQGWKHVHZHUHQRWIRUWKFRPLQJ
-RKQ+REFUDIWKDVUHFHQWO\FRPPHQWHGLQDVLPLODUYHLQRQWKHVPDOOWKHRUHWLFDO
UHWXUQVWRWKHODUJHQXPEHURIFRPSDUDWLYHIHUWLOLW\VXUYH\VXQGHUWKHDHJLVRIWKH:RUOG
)HUWLOLW\6XUYH\DQGLWVVXFFHVVRUVVXFKDV'HPRJUDSKLFDQG+HDOWK6XUYH\V(QWLWOHG
0RYLQJEH\RQGHODERUDWHGHVFULSWLRQWRZDUGVXQGHUVWDQGLQJFKRLFHDERXWSDUHQWKRRG
>@WKHSDSHUDUJXHVWKDWWKHUHVXOWV>RIWKHVHVXUYH\V@GLGQRWOLYHXSWRP\RZQRU
WRRWKHUVKLJKHVWH[SHFWDWLRQVFRPSDUDWLYHDQDO\VLVSURMHFWVWRGD\DUHPXFKOHVV
FRPPRQWKH'HPRJUDSKLFDQG+HDOWK6XUYH\VWKHGDXJKWHURIWKH:)6KDYHQHYHU
KDGDVHULRXVFRPSDUDWLYHDQDO\VLVFDSDFLW\ EH\RQGWKHPDLQO\GHVFULSWLYH&RPSDUDWLYH
6WXGLHV >S@+HVSHDNVRIPHDJUHUHWXUQVDQGRIPHDJUHSURJUHVVWRGDWHLQPRYLQJ
IRUZDUGRXUUHDOXQGHUVWDQGLQJRIIHUWLOLW\EHKDYLRXUWKURXJKFURVVQDWLRQDOFRPSDUDWLYH
VXUYH\V>S@+HDGGVWKDWDSURIRXQGVKLIWRIHPSKDVLVLVUHTXLUHGLQRUGHUWRPDNH
UHDOSURJUHVV>S@WKDWLVSURJUHVVWRZDUGVXQGHUVWDQGLQJ

+REFUDIWVGLDJQRVLV
WKHPDLQSUREOHPIRUFRPSDUDWLYHDQDO\VLVRYHUDQGDERYHWKHVKHHUVFDOHRI
GDWDPDQLSXODWLRQKDVDOZD\VEHHQWKHUDWKHUOLPLWHGQXPEHURIH[SODQDWRU\
YDULDEOHVZKLFKDUHVXIILFLHQWO\VWDQGDUGLVHGDQGDFFRUGHGHQRXJKFUHGLELOLW\WR
EHFROOHFWHGLQHYHU\FRXQWU\,QSDUWWKLVSUREOHPDULVHVIURPDODFNRID
FRPPRQO\DFFHSWHGWKHRUHWLFDOIUDPHZRUNIRUXQGHUVWDQGLQJIHUWLOLW\EHKDYLRXU
EXWLWLVDOVRDUJXDEOHWKDWZHVKDOOQHYHUUHPHG\WKHSUREOHPZLWKRXWEHWWHU
DJUHHPHQWDQGWHVWLQJRIFRPSDUDEOHLQIRUPDWLRQ>S@
+HVHHPVWRDJUHHZLWK*ULIILWK)HHQH\ZKRHDUOLHU>@QRWHGWKDWWKH
VXUYH\VLQTXHVWLRQFRQWDLQHGDORWRIGDWDEXWQRWQHFHVVDULO\WKHULJKWGDWDIRUWHVWLQJRU
GHYHORSLQJH[SODQDWLRQVDQGWKHRU\+REFUDIWFRPPHQWVZLWKUHVSHFWWRWKH
FRPSDUDWLYHIHUWLOLW\VXUYH\VWKDWWKHUHKDVJHQHUDOO\EHHQDODFNRIFRQFHSWXDODQG
WKHRUHWLFDOFODULW\DERXWZKDWHOHPHQWVVKRXOGUHFHLYHSULRULW\DQGWKDWDQH[SOLFLW
WKHRUHWLFDORULHQWDWLRQKDVEHHQODFNLQJ>S@QRWLQJWKDWWKHVXUYH\VZHUHGRQHIRU
SROLF\RUHYHQSROLWLFDOSXUSRVHVQRWSULPDULO\WRDGYDQFHVFLHQFH
+REFUDIWVUHPHG\ZRXOGEHWRFROOHFWPRUHDQGEHWWHUGDWDZLWKYDULDEOHVWREH
VHOHFWHGRQWKHEDVLVRIWKHEHVWWKHRUHWLFDOWKLQNLQJDERXWWKHGHWHUPLQDQWVRIIHUWLOLW\
7KHHPSKDVLVZRXOGEHRQYDULDEOHVWKDWDUHFRPSDUDEOHFURVVFXOWXUDOO\DQGHVSHFLDOO\
RQYDULDEOHVUHODWLQJWRWKHIHUWLOLW\GHFLVLRQPDNLQJSURFHVV>GHILQHGEURDGO\WR
HPSKDVLVHWKHGHFLVLRQWREHFRPHDSDUHQW@DQGRQFRPPXQLW\OHYHOYDULDEOHV
$QDO\VLVRIVXFKGDWDZRXOGDLPDWJOREDOPRGHOVPRGHOVLQYROYLQJQRWMXVWWKH
VDPHUDQJHRIUHJUHVVRUVEXWDOVRWKHVDPHSDUDPHWHUV>S@
$GHHSHUXQGHUVWDQGLQJZRXOGLQYROYHDFORVHUVSHFLILFDWLRQZKHUHE\WKH
VWUHQJWKRIWKHUHODWLRQVKLSZDVWKHVDPHHYHU\ZKHUHQHWRIWKHFRUUHFWUDQJHRI
RWKHUFRQWUROVRUWKHGHYHORSPHQWRIPRGHOVZKLFKLQFRUSRUDWHWKHIDFWRUV
ZKLFKEULQJDERXWYDULDWLRQVLQWKHVWUHQJWKRIWKHUHODWLRQVKLSDVDVWHSWRZDUGV
WKHIXOOHUPRGHO>S@
+REFUDIWWKLQNVSURJUHVVWRZDUGVXFKPRGHOVLVHVVHQWLDOIRUJRRGWKHRU\
>S@EXWQRWWKDWWKHRU\ZLOOIORZIURPWKHGDWD5DWKHUWKHDSSURSULDWHGDWD
FROOHFWLRQDQGDQDO\VLVZLOOQHFHVVDULO\EHLQIRUPHGDQGJXLGHGE\WKHRU\2I
FRPSDUDWLYHGHVFULSWLRQDQGGHWDLOHGVRFLHW\VSHFLILFDFFRXQWVKHFRQFOXGHVWKDW
1HLWKHUKROGVRXWJUHDWKRSHIRUUHDFKLQJJHQHUDOWKHRUHWLFDOXQGHUVWDQGLQJ>S@
:KHQDOOLVVDLGDQGGRQHKRZHYHU+REFUDIWVIDLWKLQIXWXUHSURJUHVVWLOWV
WRZDUGVEHWWHUGDWDDQGPRUHVRSKLVWLFDWHGGDWDDQDO\VLV$QGWKHJRDORIJOREDOPRGHOV
VXJJHVWVDQDVVXPSWLRQWKDWZLGHVSUHDGLIQRWXQLYHUVDOHPSLULFDOJHQHUDOLVDWLRQVDUH
WKHUHLIRQO\ZHFDQILQGWKHP7KHORJLFDOSRVLWLYLVWDSSURDFKPDLQWDLQVLWVKROG
.H\ILW]RQWKH)UXLWIXOQHVVRI$EVWUDFW0RGHOOLQJ
$QDOWHUQDWLYHDSSURDFKLVWREHIRXQGLQDQLQWHUHVWLQJSDSHUE\.H\ILW]>@
RQHRIWKHIHZH[WDQWSDSHUVVSHFLILFDOO\RQVFLHQWLILFPHWKRGRORJ\>DVRSSRVHGWR


WHFKQLTXH@E\DGHPRJUDSKHU,QDQVZHUWRWKHWLWOHTXHVWLRQ+RZGRZHNQRZWKHIDFWV
RIGHPRJUDSK\".H\ILW]FRPPHQWV0DQ\UHDGHUVZLOOEHVXUSULVHGWROHDUQWKDWLQD
VFLHQFHWKRXJKWRIDVHPSLULFDORIWHQFULWLFL]HGIRULWVODFNRIWKHRU\WKHPRVWLPSRUWDQW
UHODWLRQVFDQQRWEHHVWDEOLVKHGE\GLUHFWREVHUYDWLRQZKLFKWHQGVWRSURYLGHHQLJPDWLF
DQGLQFRQVLVWHQWUHSRUWV>S@&LWLQJ(2:LOVRQKHVSHDNVRIWKHUHVLVWDQFHRIGDWD
WRJHQHUDOLVDWLRQ>S@
7RLOOXVWUDWHKLVSRLQWKHILUVWORRNVDWWKHLVVXHVRIWKHLQWHUUHODWLRQVDPRQJ
JURZWKDQGSURSRUWLRQRIHOGHUO\DQGRIWKHUHODWLYHLPSDFWRIIHUWLOLW\DQGPRUWDOLW\RQ
DJHVWUXFWXUHERWKRIZKLFKDUHEHVWDQVZHUHGXVLQJSRSXODWLRQVPRGHOV,QDQRWKHU
VHFWLRQHQWLWOHG1RPRGHOQRXQGHUVWDQGLQJKHQRWHVWKDWVWDWLVWLFDOREVHUYDWLRQVRI
GLIIHUHQWLDOLQFLGHQFHRIEUHDVWFDQFHUUHPDLQODUJHO\XQH[SODLQHGDQGFRPPHQWV+HUHLV
MXVWRQHPRUHTXHVWLRQWKDWLVXQOLNHO\WREHVROYHGE\DQ\YROXPHRIVWDWLVWLFVE\
WKHPVHOYHV>S@
+HWKHQFRQVLGHUVWKHLVVXHRIWKHHIIHFWRIPDUULDJHGHOD\RQFRPSOHWHGIHUWLOLW\
WKDWRISURPRWLRQLQRUJDQLVDWLRQVDQGWKHHIIHFWVRIGHYHORSPHQWRQSRSXODWLRQ
JURZWKDOOTXHVWLRQVLQYROYLQJEHKDYLRXUDOPRGHOVRQZKLFKWKHUHLVOHVVFRQVHQVXV
WKDQRQWKHVWDEOHPRGHOXVHGWRVROYHWKHSUREOHPVRQDJHVWUXFWXUH
7KHLPSRUWDQWSRLQWLVWKDW.H\ILW]DWWULEXWHVRXUDQVZHUVWRWKHVHLVVXHVWRZRUN
ZLWKWKHRU\RUPRGHOVDOVRKHGRHVQRWPDNHDVKDUSGLVWLQFWLRQEHWZHHQIRUPDOPRGHOV
>HJWKHVWDEOHPRGHO@DQGEHKDYLRXUDOPRGHOV>HJWUDQVLWLRQWKHRU\@7KHORJLFDO
SURFHGXUHVLQYROYHGLQWKHVWDWHPHQWDQGXVHRIWKHWZRVRUWVRIPRGHOVDUHVHHQWREH
PXFKWKHVDPH,QDILQDOVHFWLRQHQWLWOHG7KHSV\FKRORJ\RIUHVHDUFKKHFRPPHQWV
7KHPRGHOLVPXFKPRUHWKDQDPQHPRQLFGHYLFHKRZHYHULWLVDPDFKLQHZLWK
FDXVDOOLQNDJHV,QVRIDUDVLWUHIOHFWVWKHUHDOZRUOGLWVXJJHVWVKRZOHYHUVFDQEH
PRYHGWRDOWHUGLUHFWLRQLQDFFRUGZLWKSROLF\UHTXLUHPHQWV7KHTXHVWLRQLVDOZD\V
KRZFORVHO\WKLVFRQVWUXFWHGPDFKLQHUHVHPEOHVWKHRQHRSHUDWHGE\QDWXUH$VWKH
LQYHVWLJDWRUFRQFHQWUDWHVRQLWVGHJUHHRIUHDOLVPKHPRUHDQGPRUHSHUVXDGHV
KLPVHOIWKDWKLVPRGHOLVDWKHRU\RIKRZWKHZRUOGRSHUDWHV>S@
1RWHWKHHTXDWLRQRIPRGHODQGWKHRU\LQWKHFORVLQJVHQWHQFH
$0RGHO%DVHG9LHZRI6FLHQFH
7KHORJLFDOSRVLWLYLVWYLHZRIVFLHQFHKDVGRPLQDWHGVRFLDOVFLHQFHLQFOXGLQJ
GHPRJUDSK\LQWKHODWWHUKDOIRIWKHWKFHQWXU\$FFRUGLQJWRWKLVYLHZWKHRU\D
VXPPDU\RIZKDWLVNQRZQLQDILHOGPXVWEHEDVHGRQYDOLGHPSLULFDOJHQHUDOLVDWLRQV
RUODZV([SODQDWLRQLQWKLVSHUVSHFWLYHFRQVLVWVRIVXEVXPLQJVRPHIDFWXQGHUD
EURDGHUJHQHUDOSURSRVLWLRQZKLFKLQWXUQLVVXEVXPHGXQGHUDVWLOOEURDGHU
JHQHUDOLVDWLRQHWFWKHVRFDOOHGFRYHULQJODZDSSURDFKWRH[SODQDWLRQ/DZVDUH
VXEMHFWWRHPSLULFDOWHVWWREHSURYHQRULQNHHSLQJZLWKWKHZLGHVSUHDG3RSSHULDQ
YLHZWRVXUYLYHHIIRUWVDWIDOVLILFDWLRQ
1RWDOOVRFLDOVFLHQWLVWVKDYHDGKHUHGWRWKHGRPLQDQWYLHZDV.H\ILW]VHVVD\
DWWHVWV$VDGLVFLSOLQHHFRQRPLFVKDVGHSDUWHGIURPDOLWHUDOORJLFDOSRVLWLYLVPDWOHDVW


WRDGHJUHHVXIILFLHQWWRDOORZDQGHQFRXUDJHDEVWUDFWDQDO\WLFWKHRU\DQGPRGHOVHYHQLI
WKH\VHHPHGWRVRPHXQUHDOLVWLF0LOWRQ)ULHGPDQVHVVD\RQ7KH0HWKRGRORJ\RI
3RVLWLYH(FRQRPLFVLVUHSUHVHQWDWLYH>0)ULHGPDQ@7KHRULHVDQGPRGHOVDUH
YLHZHGDVDQDO\WLFWRROVWKDWPD\RUPD\QRWEHXVHIXOIRUDQDO\VLQJSDUWLFXODUHPSLULFDO
SKHQRPHQDZLWKWKHLUXVHIXOQHVVMXGJHGE\WKHLUDELOLW\WR\LHOGXQGHUVWDQGLQJDQGWR
SUHGLFWSKHQRPHQDQRWSUHYLRXVO\REVHUYHG)ULHGPDQDFNQRZOHGJHVWKHIRUPDORU
ORJLFDOFKDUDFWHURIPRGHOVEXWVWLOOVSHDNVRIIDOVLI\LQJRUYDOLGDWLQJWKHPLQWHUPVRI
WKHLUDELOLW\WRSUHGLFWZLWKUHJDUGWRZKROHFODVVHVRIHPSLULFDOSKHQRPHQD7KHQRWLRQ
RIWKHVHDUFKIRUXQLYHUVDOODZVVRFKDUDFWHULVWLFRIORJLFDOSRVLWLYLVPOXUNVMXVWEHORZ
WKHVXUIDFHRIWKHHVVD\
0DQ\VRFLRORJLFDOWKHRULVWVKDYHDWWDFNHGORJLFDOSRVLWLYLVPEXWWKHDWWDFNRIWHQ
KDVEHHQDLPHGDWSRVLWLYLVPRUHPSLULFLVPDVVXFKHVSHFLDOO\LQLWVTXDQWLWDWLYHIRUPV
QRWMXVWDWWKHSDUWLFXODUDSSURDFKDGYRFDWHGE\1DJHODQG+HPSHO7KHUHVXOWLQJ
VFKLVPEHWZHHQWKHRU\DQGHPSLULFDOUHVHDUFKLQVRFLRORJ\UHPDLQVVWURQJ
$IURQWDODWWDFNRQORJLFDOSRVLWLYLVPWKDWUHMHFWVQHLWKHUHPSLULFLVPQRU
IRUPDOLVDWLRQLVWREHIRXQGLQDQH[WUDRUGLQDU\EXWQHJOHFWHGZRUNE\WKHSROLWLFDO
VFLHQWLVW(XJHQH0HHKDQ([SODQDWLRQLQ6RFLDO6FLHQFH$6\VWHP3DUDGLJP>@0HHKDQ
DUJXHVWKDWWKHVHDUFKIRUXQLYHUVDOHPSLULFDOJHQHUDOLVDWLRQVLVODUJHO\GRRPHGWRIDLOXUH
LQVRFLDOVFLHQFHVLQFHVXFKJHQHUDOLVDWLRQVDUHDQGDUHOLNHO\WRUHPDLQIHZDQGIDU
EHWZHHQ+HSURSRVHVLQVWHDGH[SODQDWLRQE\WKHXVHRIV\VWHPV>FRQWHPSRUDU\
WHUPLQRORJ\ZRXOGFDOOWKHPPRGHOVRUWKHRU\@WRWDOO\IRUPDOVWUXFWXUHVZKLFKHQWDLO
RUORJLFDOO\LPSO\WKHSKHQRPHQDWREHH[SODLQHG7KHV\VWHPVDUHWUXHRQO\LQWKHVHQVH
RIEHLQJORJLFDOO\FRKHUHQW7KHUHOHYDQWHPSLULFDOTXHVWLRQLVQRWZKHWKHUWKH\DUH
YDOLGRULQYDOLGEXWZKHWKHUZKHQORDGHGZLWKVSHFLILFHPSLULFDOLQIRUPDWLRQWKH\
VXIILFLHQWO\UHVHPEOHVRPHSRUWLRQRIWKHUHDOZRUOG>LQKLVZRUGVZKHWKHUWKHV\VWHPLV
VXIILFLHQWO\LVRPRUSKLFZLWKUHDOLW\@WRHQDEOHWKHDQDO\VWWRDFFRPSOLVKKLVRUKHU
SXUSRVH7KHSXUSRVHFDQEHSUHGLFWLRQZKLFKHQDEOHVKXPDQEHLQJVWRDGMXVWWRWKH
ZRUOG2UHYHQEHWWHULWFDQEHH[SODQDWLRQZKLFKSURYLGHVLQVLJKWLQWRSURFHVVDQG
PHFKDQLVPVVXFKWKDWRQHFRXOGDWOHDVWLQSULQFLSOHFRQWUROWKHUHDOZRUOGV\VWHPLQ
TXHVWLRQ
0HHKDQLVZDU\RIWU\LQJWRH[SODLQODUJHFODVVHVRIHYHQWVIRUWKHVDPHUHDVRQ
WKDWKHLVSHVVLPLVWLFDERXWGLVFRYHULQJXQLYHUVDOHPSLULFDOJHQHUDOLVDWLRQVFODVVHVRI
VRFLDOHYHQWVDUHRIWHQGHILQHGLQGHSHQGHQWO\RIDWWHPSWVDWVFLHQWLILFH[SODQDWLRQDQG
W\SLFDOO\DUHQRWSDUWLFXODUO\KRPRJHQHRXV7KHIRFXVLVRQSDUWLFXODUFRQFUHWHHYHQWV
EXWWKHNH\WRROLVDEVWUDFWDQDO\WLFDOUHDVRQLQJ
&RQWHPSRUDU\SKLORVRSK\RIVFLHQFHKDVLQFUHDVLQJO\FKDOOHQJHGWKHFODVVLF
ORJLFDOSRVLWLYLVWYLHZRI1DJHO>@RURI+HPSHO>@DUJXLQJWKDWLWLVQHLWKHUDQ
DFFXUDWHGHVFULSWLRQRIZKDWVFLHQWLVWVDFWXDOO\GRQRUDJRRGJXLGHWRZKDWWKH\VKRXOG
GRIRUWKHLUZRUNWREHIUXLWIXO,QWKLVQHZHUYLHZVFLHQWLILFODZVDUHVHOGRPLIHYHUWUXH
UHSUHVHQWDWLRQVRIUHDOLW\EXWDWEHVWLGHDOLVDWLRQVRIFHUWDLQIHDWXUHVRIDQLQGHILQLWHO\


&KHPLFDOFRPSRXQGVPD\EHKDYHWKHVDPHHYHU\ZKHUHWRWKHH[WHQWWKDWWKH\DUHWKHVDPHHYHU\ZKHUH
%XWGHPRJUDSKLFFDWHJRULHVOLNHPDUULDJHRUIHUWLOLW\WUDQVLWLRQSHUWDLQWRYHU\KHWHURJHQHRXVFODVVHVRI
HYHQWV6HH%XUFKDQG%pODQJHU

FRPSOH[UHDOZRUOG1RUDUHWKH\VRPXFKGLVFRYHUHGLQQDWXUHDVFRQVWUXFWHGE\WKH
KXPDQPLQG&DUWZULJKW>@VSHDNVRIQRPRORJLFDOPDFKLQHVPRGHOVFUHDWHGE\
WKHVFLHQWLVWJHQHUDWHODZVUDWKHUWKDQYLFHYHUVD>UHFDOO.H\ILW]VXVHRIWKHPDFKLQH
DQDORJ\@
*LHUH>@QRWHVWKDWPRVWVFLHQWLILFODZVDUHQRWXQLYHUVDODQGWKDWWKH\DUHLQ
IDFWQRWHYHQWUXHXQGHUVWRRGDVJHQHUDOFODLPVDERXWWKHZRUOGPRVWSXUSRUWHGODZV
RIQDWXUHDUHLQIDFWIDOVH6RZHQHHGDSRUWUDLWRIVFLHQFHWKDWFDSWXUHVRXUHYHU\GD\
XQGHUVWDQGLQJRIVXFFHVVZLWKRXWLQYRNLQJODZVRIQDWXUHXQGHUVWRRGDVWUXHXQLYHUVDO
JHQHUDOL]DWLRQV>S@7KHUHDVRQLVWKDWDQ\ODZRIQDWXUHFRQWDLQVRQO\DIHZ
SK\VLFDOTXDQWLWLHVZKHUHDVQDWXUHFRQWDLQVPDQ\TXDQWLWLHVZKLFKRIWHQLQWHUDFWRQH
ZLWKDQRWKHUDQGWKHUHDUHIHZLIDQ\LVRODWHGV\VWHPV6RWKHUHFDQQRWEHPDQ\V\VWHPV
LQWKHUHDOZRUOGWKDWH[DFWO\VDWLVI\DQ\SXUSRUWHGODZRIQDWXUH>S@
)RU*LHUHWKHSULPDU\UHSUHVHQWDWLRQDOGHYLFHLQVFLHQFHLVQRWWKHODZEXWWKH
PRGHORIZKLFKWKHUHDUHWKUHHPDLQW\SHVSK\VLFDOPRGHOVYLVXDOPRGHOVDQG
WKHRUHWLFDOPRGHOV>*LHUHSUHIHUVWKHWHUPPRGHOEDVHGYLHZRIVFLHQFHWRWKHROGHU
SKLORVRSKLFDOWHUPWKHVHPDQWLFYLHZRIVFLHQFH@0RGHOVDUHLQKHUHQWO\DEVWUDFW
FRQVWUXFWLRQVWKDWDWWHPSWWRUHSUHVHQWRQO\FHUWDLQIHDWXUHVRIWKHUHDOZRUOG7KH\DUH
WUXHRQO\LQWKHVHQVHWKDWGHILQLWLRQVDUHWUXH7KHTXHVWLRQRIZKHWKHUWKH\DUH
HPSLULFDOO\WUXHLVLUUHOHYDQWVLQFHWKH\FDQQRWEH7KHUHOHYDQWTXHVWLRQLVZKHWKHUWKH\
FRUUHVSRQGWRVRPHSDUWRIWKHUHDOZRUOGLQD@VRPHUHVSHFWVE@WRDVXIILFLHQWGHJUHHRI
DFFXUDF\IRUF@FHUWDLQZHOOGHILQHGSXUSRVHV>FRPSDUHSRLQWEWR.H\ILW]VSKUDVH
GHJUHHRIUHDOLVPRU0HHKDQVQRWLRQRIVXIILFLHQWLVRSPRUSKLVP@*LHUHJLYHVWKH
H[DPSOHRIWKHPRGHOIRUWKHHDUWKPRRQV\VWHPZKLFKLVDGHTXDWHWRGHVFULEHDQG
DFFRXQWIRUWKHPRRQVRUELWDQGSHUKDSVIRUSXWWLQJDURFNHWRQWKHPRRQEXWLV
LQDGHTXDWHWRGHVFULEHWKH9HQXVHDUWKV\VWHP7KHSURWRW\SHRIVFLHQWLILFNQRZOHGJHLV
QRWWKHHPSLULFDOODZEXWDPRGHOSOXVDOLVWRIUHDOZRUOGV\VWHPVWRZKLFKLWDSSOLHV
$PRGHOH[SODLQVVRPHUHDOZRUOGSKHQRPHQRQLID@WKHPRGHOLVDSSURSULDWHWR
WKHUHDOZRUOGV\VWHPLQWKHWKUHHUHVSHFWVQRWHGDERYHDQGE@LIWKHPRGHOORJLFDOO\
LPSOLHVWKHSKHQRPHQRQLQRWKHUZRUGVLIWKHSKHQRPHQRQIROORZVORJLFDOO\IURPWKH
PRGHODVVSHFLILHGWRILWDSDUWLFXODUSDUWRIWKHUHDOZRUOG,WZRXOGQHYHURFFXUWRPRVW
SK\VLFDOVFLHQWLVWVWRDGGWKHVHFRQGFRQGLWLRQ%XWLQVRFLDOVFLHQFHLQFOXGLQJ
GHPRJUDSK\ZHDUHVRDFFXVWRPHGWRORRVHLQIHUHQFHWKDWLWVH[SOLFLWVWDWHPHQWLV
QHFHVVDU\
1RWHWKDWLQWKLVDFFRXQWRIVFLHQFHDOOPRGHOVDUHIRUPDOO\WUXH>DVVXPLQJRI
FRXUVHQRORJLFDOHUURUVRULQWHUQDOFRQWUDGLFWLRQV@WKDWLVWUXHE\GHILQLWLRQ7KH
HPSLULFDOTXHVWLRQWKHQEHFRPHVRQHQRWRIHPSLULFDOWUXWKRUYDOLGLW\EXWZKHWKHUD
YDOLGPRGHODSSOLHVWRDSDUWLFXODUHPSLULFDOFDVH


*LHUHZLWKFRQVLGHUDEOHWUDLQLQJLQSK\VLFVGUDZVPDQ\RIKLVH[DPSOHVIURPWKDWILHOG,IKLV
FRQFOXVLRQVDSSO\WRSK\VLFVWKH\ZRXOGVHHPWRDSSO\DOOWKHPRUHIRUFHIXOO\WRRWKHUVFLHQWLILF
GLVFLSOLQHVIRUH[DPSOHELRORJ\RUWKHVRFLDODQGEHKDYLRXUDOVFLHQFHV

$VQRWHGDERYHWKHQRWLRQRIH[SODQDWLRQDVORJLFDOLQIHUHQFHIURPDPRGHOLVFHQWUDOWR0HHKDQV
([SODQDWLRQLQ6RFLDO6FLHQFH>@7KHQHHGIRUULJRURXVORJLFLVHPSKDVLVHGE\3ODWW>@



2IFRXUVHVRPHPRGHOVDUHPRUHZLGHO\DSSOLFDEOHWKDQRWKHUVDQGRWKHUWKLQJV
HTXDOVFLHQFHZLOOSUHIHUWKHPRGHOZLWKWKHZLGHVWDSSOLFDELOLW\,QGHPRJUDSK\IRU
H[DPSOHWKHIXQGDPHQWDOGHPRJUDSKLFHTXDWLRQLVWUXHE\GHILQLWLRQDQGDSSOLFDEOHWR
HYHU\ZHOOGHILQHGUHDOSRSXODWLRQ>QHJOHFWLQJHUURULQGDWD@7KHH[SRQHQWLDOJURZWK
IRUPXODLVWUXHE\GHILQLWLRQDQGZLWKUHVSHFWWRFDOFXODWLRQRIWKHDYHUDJHDQQXDO
JURZWKUDWHRYHUDSHULRGLVDOVRDSSOLFDEOHWRHYHU\UHDOZRUOGSRSXODWLRQ:LWKUHVSHFW
WRGHVFULELQJDSRSXODWLRQVJURZWKWUDMHFWRU\KRZHYHUWKHH[SRQHQWLDOJURZWKIRUPXOD
DSSOLHVPRUHRUOHVVWRVRPHSRSXODWLRQVEXWLVQRWDWDOODSSOLFDEOHWRRWKHUV
$EHKDYLRXUDOPRGHOVXFKDVWKHWKHRU\RIGHPRJUDSKLFWUDQVLWLRQFDQEHVWDWHG
LQVXFKDZD\WKDWLWLVIRUPDOO\WUXH,WVYDOLGLW\KDVEHHQDPDWWHURIGHEDWHIRURYHU
ILIW\\HDUV%XWLWLVZRUWKQRWLQJLQWHUPVRI*LHUHVFULWHULDRIDSSOLFDELOLW\WKDWLW
FRUUHFWO\UHSUHVHQWVDODUJHQXPEHURIDFWXDOFDVHVRIPRUWDOLW\IHUWLOLW\GHFOLQHDWOHDVWLQ
TXDOLWDWLYHWHUPV
,QP\UHDGLQJRI*LHUHVDQG&DUWZULJKWVDFFRXQWVRIVFLHQFHWKH\FRPHFORVHWR
ZKDWKDVORQJEHHQWKHVWDQGDUGDSSURDFKLQWKHOLWHUDWXUHRQPDWKHPDWLFDOPRGHOOLQJ
DQGPRUHUHFHQWO\RIFRPSXWHUPRGHOOLQJ$PRGHOLVDQDEVWUDFWFRQVWUXFWWKDWPD\RU
PD\QRWEHXVHIXOIRUVRPHZHOOGHILQHGSXUSRVH,QVFLHQFHWKDWSXUSRVHRIWHQZLOOEH
H[SODQDWLRQRUSUHGLFWLRQDVRSSRVHGWRSUDFWLFH$QGLQVRPHVFKRROVRIFRPSXWHU
PRGHOOLQJWKHHPSKDVLVLVRQOHVVDEVWUDFWPRGHOVWU\LQJWRFDSWXUHPRUHRIWKH
FRPSOH[LW\RIWKHUHDOZRUOG%XWWKHFHQWUDOLGHDVDUHWKHVDPH
7KHPRGHOEDVHGDSSURDFKWRVFLHQFHGHVFULEHGDERYHSUHIHUVQRWWRPDNHD
VKDUSGLVWLQFWLRQEHWZHHQDPRGHODQGDWKHRU\6RPHDXWKRUVGLVWLQJXLVKWKHWZRRQD
JHQHUDOVSHFLILFD[LVEXWWKHQGLIIHUHQFHVDUHLQGHJUHHRQO\QRWLQNLQG*LHUHVSHDNVRI
WKHRUHWLFDOPRGHOVDQGVRPHWLPHVGHVFULEHVDWKHRU\DVDFROOHFWLRQRIVXFKPRGHOV
1RWHWKDWWKLVSRVLWLRQKDVQRWKLQJWRGRZLWKWKHYLHZWKDWVFLHQFHLVWRWDOO\D
VRFLDOFRQVWUXFWLRQ$JRRGPRGHOLVJRRGSUHFLVHO\EHFDXVHLWFDSWXUHVVRPHLPSRUWDQW
DVSHFWVRIWKHUHDOZRUOG,Q*LHUHVZRUGVWKHUHLVUHDOLVPZLWKRXWWUXWK
(OHPHQWVRI6FLHQFH
,QWKLQNLQJDERXWVRPHRIWKHDERYHLVVXHVLQYROYLQJWKHGHVFULSWLRQDQG
HYDOXDWLRQRIVFLHQWLILFNQRZOHGJHLWLVXVHIXOWRWKLQNLQWHUPVRIIRXUGLVWLQFWEXW
LQWHUUHODWHGVHWVRIHOHPHQWV
@UHDOLW\WKHUHDOZRUOGDVLWH[LVWVLQGHSHQGHQWO\RIKXPDQNQRZOHGJH
@WKHRU\FRKHUHQWVHWVRILGHDVDERXWKRZVRPHSRUWLRQRIUHDOLW\ZRUNV


$QLQWHUHVWLQJSRLQWDERXWWUDQVLWLRQWKHRU\LVWKDWWKHUHKDVEHHQDWHQGHQF\WRGLVPLVVLWDVQRWILWWLQJDOO
FDVHVRUDVQRWSURYLGLQJGHWDLOVRIWLPLQJSDFHHWF7KHUHVHHPVWRKDYHEHHQUHODWLYHO\OLWWOHHIIRUWWR
DFFHSWLWDVDYDOLGPRGHODQGZRUNWRZDUGVDPRUHSUHFLVHVSHFLILFDWLRQE\GHILQLQJIXQFWLRQDOIRUPVIRU
IHUWLOLW\RUPRUWDOLW\GHFOLQHDVIXQFWLRQVRIGHYHORSPHQWDQGSDUDPHWHUVUHSUHVHQWLQJVL]HRIODJVVORSHV
HWF



@GDWDREVHUYDWLRQVDQGPHDVXUHPHQWVRQVRPHUHDOZRUOGV\VWHP
@PRGHOVDEVWUDFWEXWULJRURXVDQGVSHFLILFUHSUHVHQWDWLRQVRIUHDOLW\EDVHGRQ
WKHRU\RUGDWDRUERWK
,QVRPHVFLHQFHVEXWQRWVRPXFKLQVRFLRORJ\RUGHPRJUDSK\DQRWKHUHOHPHQW
ORRPVODUJHQDPHO\WKHFRQWUROOHGODERUDWRU\H[SHULPHQW7KLVLVUHDOLW\LQWKHVHQVH
WKDWLWH[LVWVLQGHSHQGHQWO\RIWKHKXPDQPLQGEXWLWRIWHQLVDUWLILFLDOUHDOLW\LQWKDWLW
GRHVQRWRFFXULQWKHQDWXUDOZRUOGZLWKRXWKXPDQLQWHUYHQWLRQ
6RPHIXUWKHUFRPPHQWVRQWKHVHHOHPHQWV
7KHILUVWHOHPHQWLPSOLHVDEHOLHILQWKHH[LVWHQFHRIREMHFWLYHUHDOLW\DQ
DVVXPSWLRQWKDWZLOOEHWDNHQIRUJUDQWHGDQGQRWIXUWKHUGLVFXVVHGKHUH
7KHVHFRQGHOHPHQWLPSOLHVWKDWLWLVSRVVLEOHWRKDYHWKHRULHVWKDWDUHQRWPHUH
IDQWDV\EXWH[SUHVVLPSRUWDQWLQVLJKWVLQWRWKHUHDOZRUOGLQVLJKWVWKDWFDQSURYLGHD
EDVLVIRUH[SODQDWLRQSUHGLFWLRQDQGVRPHWLPHVFRQWURO,IRQHEHOLHYHVWKDWVXFK
WKHRU\LVQRWSRVVLEOHZLWKUHVSHFWWRKXPDQEHKDYLRXUZKHWKHUEHFDXVHRIFRPSOH[LW\
IUHHZLOOLGHRORJLFDOELDVRUVRPHRWKHUUHDVRQVWKHQWKHUHLVQRGLVFXVVLRQ
%\GDWDLVPHDQWDOLPLWHGVHWRIPHDVXUHPHQWVRQVRPHSRUWLRQRIWKHUHDO
ZRUOG1RWHWKDWYLUWXDOO\DOOQRQWULYLDOGDWDVHWVLQYROYHHUURUDQGYDULRXVNLQGVRI
DEVWUDFWLRQ
7KHZRUGPRGHOLVWURXEOLQJLQLWVDPELJXLW\EXWWKHDPELJXLW\UHIOHFWVDFWXDO
XVDJHRIWKHZRUGLQGLIIHUHQWFRQWH[WV$ULFKHUVHWRIWHUPVZRXOGKHOS,QWKH
PHDQWLPHVHYHUDOGLVWLQFWLRQVDUHQHFHVVDU\7KHHPSKDVLVKHUHLVRQWKHGLVWLQFWLRQ
EHWZHHQPRGHOVWKDWUHSUHVHQWXVXDOO\LQPRUHVSHFLILFIRUPDVHWRIWKHRUHWLFDOLGHDV
DQGPRGHOVWKDWUHSUHVHQWDVHWRIGDWDRUDVWUXFWXUHFRQWDLQHGWKHUHLQWKHRUHWLFDOPRGHOV
DQGHPSLULFDOPRGHOV%XWWKHVHWZRFDWHJRULHVDUHQRWPXWXDOO\H[FOXVLYHWKHUHDUHPDQ\
K\EULGRULQWHUPHGLDWHW\SHV
6WLOOWKHUHPDQ\PRGHOOLQJH[HUFLVHVLQZKLFKDSDUWLFXODUGDWDVHWKDVWKHXSSHU
KDQGDVLWZHUHZLWKOLWWOHLQSXWIURPWKHRU\$QH[WUHPHFDVHLVWKDWRIDSSUR[LPDWLQJ
IXQFWLRQVZKHUHDIXQFWLRQDOIRUPLVIRXQGWKDWEHVWUHSUHVHQWVDGDWDVHW>WZRRUWKUHH
GLPHQVLRQDO@ZLWKRXWDQ\UHJDUGWRWKHVXEVWDQWLYHPHDQLQJRIWKHIXQFWLRQRULWV
SDUDPHWHUV7KLVW\SLFDOO\ZLOOEHGRQHIRUSXUSRVHVRUVPRRWKLQJLQWHUSRODWLRQRU
H[WUDSRODWLRQ7KH7DEOH&XUYHVRIWZDUHSURYLGHVDJRRGH[SODQDWLRQRIWKLVDSSURDFKWR
PRGHOOLQJ>-DQGHO6FLHQWLILF@,WFRQWUDVWVWKHXVHRIDSSUR[LPDWLQJIXQFWLRQVZLWK
ZKDWLWWHUPVSDUDPHWULFIXQFWLRQVLQZKLFKWKHSDUDPHWHUVFDQEHJLYHQPHDQLQJ


7KH(QJOLVKODQJXDJHGRHVQRWKHOSLQWKDWWKHUHLVRQO\RQHYHUEIRUPLQFXUUHQWXVHWKDWLVWRPRGHO
)UHQFKGLVWLQJXLVKHVPRGHOHUDVLQWKHDFWVRIDVFXOSWRUDQGPRGHOLVHUDVLQWKHILWWLQJRIDVWDWLVWLFDOPRGHO
7KH2[IRUG(QJOLVK'LFWLRQDU\OLVWVPRGHOL]HDVDQREVROHWH(QJOLVKZRUGEXWWKHPHDQLQJVRILWDQGPRGHOGR
QRWVHHPWRSDUDOOHOWKH)UHQFKGLVWLQFWLRQ,QVRIDUDVWKHRU\FRQVWUXFWLRQLVDFUHDWLYHDFWRILPDJLQDWLRQ
WKH)UHQFKPRGHOHUVHHPWKHPRUHDSWZRUGIRULW



3DUDPHWULFIXQFWLRQVLQWXUQFDQEHWKHRU\EDVHGZLWKWKHIXQFWLRQDOIRUPDQGLWV
SDUDPHWHUVPLUURULQJVRPHUHOHYDQWWKHRU\$SDUDPHWULFPRGHOZLWKDQXQGHUO\LQJ
SK\VLFDOIRXQGDWLRQUHODWHVGHSHQGHQWYDULDEOH<WRWKHLQGHSHQGHQWYDULDEOH;YLDD
SRVWXODWHGSK\VLFDOUHODWLRQVKLSEHWZHHQWKHP>S@2ULQWKHDEVHQFHRIDQ
XQGHUO\LQJWKHRUHWLFDOPRGHOWKHSDUDPHWHUVPD\VLPSO\FKDUDFWHULVHWKHGDWDVHW+HUH
IHDWXUHVRIWKHGDWDDUHNQRZQWRKDYHDGLUHFWUHODWLRQVKLSZLWKWKHXQGHUO\LQJIDFWRUV
EXWWKHUHLVQRTXDQWLWDWLYHXQGHUO\LQJWKHRUHWLFDOPRGHO>S@WKHV\VWHPSURGXFLQJ
WKHGDWDLVWUHDWHGDVDEODFNER[3DUDPHWHUVPD\GHVFULEHVXFKIHDWXUHVRIWKHGDWDVHW
DVPD[LPDDQGPLQLPDWUDQVLWLRQSRLQWVVORSHVHWF
0XOWLYDULDWHVWDWLVWLFDOPRGHOOLQJW\SLFDOO\UHVHPEOHVDWKHRUHWLFDOSDUDPHWULF
PRGHOOLQJDVGHVFULEHGDERYH7KHSDUDPHWHUVKDYHVXEVWDQWLYHPHDQLQJ>LQIDFWDV
VORSHV@EXWWKHPHFKDQLVPRUXQGHUO\LQJSURFHVVOHDGLQJIURPLQSXWVWRRXWSXWVLVQRW
VSHFLILHG7KHVHOHFWLRQRIYDULDEOHVPD\EHEDVHGRQWKHRUHWLFDOFRQVLGHUDWLRQVEXWMXVW
DVRIWHQLVEDVHGRQFRPPRQVHQVHDYDLODELOLW\RIGDWDRUSUHYLRXVO\REVHUYHGHPSLULFDO
FRUUHODWLRQV7KHVWDWLVWLFDOPRGHOLVDUHSUHVHQWDWLRQRIWKHVWUXFWXUHW\SLFDOO\OLQHDU
VWUXFWXUHRIDGDWDVHW,WLVDQDEVWUDFWUHSUHVHQWDWLRQRIDQDEVWUDFWGDWDVHWXVLQJ
DEVWUDFWFRQFHSWVIRUPHDVXUHPHQW%XWDVWDWLVWLFDOPRGHOLVQRWSXUHO\HPSLULFDOIXOO\
GHWHUPLQHGE\GDWD7KHUHPXVWEHDSULRULDVVXPSWLRQVDERXWZKDWYDULDEOHVWRLQFOXGH
DQGDERXWIXQFWLRQDOIRUP6XFKDPRGHOPD\EHEHVWILWWLQJEXWIURPDYHU\OLPLWHGVHW
RIDOOSRVVLEOHPRGHOV$PXOWLYDULDWHVWDWLVWLFDOPRGHOLVQRWRUDWOHDVWVKRXOGQRWFODLP
WREHDUHSUHVHQWDWLRQRIWKHUHDOZRUOGV\VWHPRQZKLFKWKHGDWDZHUHPHDVXUHG
$JRRGH[DPSOHRIDWKHRU\EDVHGPRGHOLVSURYLGHGE\+HUQHV>@VWXG\RI
ILUVWPDUULDJH+HVWDUWVZLWKWKHRUHWLFDOQRWLRQVDFRKRUWKDVDQXQGHUO\LQJ
PDUULDJDELOLW\RUHOLJLELOLW\IRUPDUULDJHIRUWKHLQGLYLGXDOWKLVPDUULDJDELOLW\WHQGVWR
GHFOLQHZLWKDJHSUHVVXUHVWRPDUU\LQFUHDVHDVWKHSURSRUWLRQDOUHDG\PDUULHGULVHVEXW
RQO\XSWRWKHSRLQWZKHUHWKHVFDUFLW\RISRWHQWLDOSDUWQHUVEHJLQVWRWDNHHIIHFW7KHVH
WKHRUHWLFDOLGHDVDUHWKHQH[SUHVVHGE\PHDQVRIDSDUWLFXODUPDWKHPDWLFDOIXQFWLRQDQ
DV\PPHWULFORJLVWLFZLWKWKHDV\PPHWU\GXHWRDQH[SRQHQWLDOGHFOLQHLQPDUULDJDELOLW\
ZLWKDJH)LQDOO\WKHSDUDPHWHUVDUHHVWLPDWHGIURPDSDUWLFXODUGDWDVHWRQSURSRUWLRQV
HYHUPDUULHGE\DJH7KHSDUDPHWHUVDUHHVWLPDWHGIURPGDWDDQGWKH\WDNHWKHLURULJLQDO
PHDQLQJIURPDWKHRU\,QDVHQVHWKHHTXDWLRQPRGHOVERWKWKHWKHRU\DQGWKHGDWD
7KLVDQDO\VLVFDQEHFRPSDUHGDQGFRQWUDVWHGZLWKDEOLQGPHFKDQLFDOILWRIVRPH
PDWKHPDWLFDOIXQFWLRQWRDJLYHQGDWDVHWRQILUVWPDUULDJHE\DJH>DQDSSUR[LPDWLQJ
IXQFWLRQ@DQGZLWKDVWDWLVWLFDOPRGHORIHYHQWKLVWRU\GDWDRQILUVWPDUULDJHLQUHODWLRQWR
DVHWRIFRYDULDWHVDVLQDKD]DUGVPRGHOEDVHGRQO\ORRVHO\RQWKHRU\
7KHVHGLVWLQFWLRQVDUHIDUIURPGHILQLWLYH%XWWKHFHQWUDOGLVWLQFWLRQEHWZHHQ
PRGHOOLQJWKHRUHWLFDOLGHDVDQGPRGHOOLQJDVSHFLILFGDWDVHWLVSDUDPRXQW0RGHOPDNHU
DV\VWHPVPRGHOOLQJVRIWZDUHSDFNDJHPDNHVDGLVWLQFWLRQEHWZHHQHPSLULFDOPRGHOVDQG
VLPXODWLRQRUPHFKDQLVWLFPRGHOV>:DONHU@(PSLULFDOPRGHOVGHVFULEHYDULDWLRQLQ


6HHWKHLPSRUWDQWGLVWLQFWLRQE\$EERWW>@RIWKHUHSUHVHQWDWLRQDOYHUVXVWKHHQWDLOPHQWLQWHUSUHWDWLRQV
RUXVHVRIWKHJHQHUDOOLQHDUPRGHO7KHHQWDLOPHQWXVHRIWKHJHQHUDOOLQHDUPRGHOUHDVRQVJLYHQD
WKHRU\DERXWWKHVRFLDOZRUOGDFHUWDLQOLQHDUVWUXFWXUHVKRXOGEHREVHUYHGLQUHOHYDQWGDWD7KH
UHSUHVHQWDWLRQDOXVHLQYROYHVWKHIDOODF\LQ$EERWWVYLHZRIPLVWDNLQJWKHOLQHDUPRGHOIRUD
UHSUHVHQWDWLRQRIWKHUHDOZRUOGV\VWHPWKHIDOODF\RIUHLILFDWLRQRUPLVSODFHGFRQFUHWHQHVV



VRPHREVHUYHGGDWDIRUDSKHQRPHQRQZKLFKVKRZVKRZLWYDULHVLQUHODWLRQWRRWKHU
IDFWRUV>S@6LPXODWLRQPRGHOVWU\WRGHVFULEHDQXPEHURIVXESURFHVVHVZKLFKFDQ
EHFRPELQHGWRUHSUHVHQWWKHEHKDYLRURIDODUJHUPRUHFRPSOH[V\VWHPS@7KH
GHVFULSWLRQRIHPSLULFDOPRGHOVPRGHOVRIGDWDE\(GZDUGVDQG+DPVRQ>@LV
ZRUWKTXRWLQJLQIXOO
$QHPSLULFDOPRGHOLVRQHZKLFKLVGHULYHGIURPDQGEDVHGHQWLUHO\RQGDWD,Q
VXFKDPRGHOUHODWLRQVKLSVEHWZHHQYDULDEOHVDUHGHULYHGE\ORRNLQJDWWKH
DYDLODEOHGDWDRQWKHYDULDEOHVDQGVHOHFWLQJDPDWKHPDWLFDOIRUPZKLFKLVD
FRPSURPLVHEHWZHHQDFFXUDF\RIILWDQGVLPSOLFLW\RIPDWKHPDWLFV7KH
LPSRUWDQWGLVWLQFWLRQLVWKDWHPSLULFDOPRGHOVDUHQRWGHULYHGIURPDVVXPSWLRQV
FRQFHUQLQJWKHUHODWLRQVKLSVEHWZHHQYDULDEOHVDQGWKH\DUHQRWEDVHGRQSK\VLFDO
ODZVRUSULQFLSOHV4XLWHRIWHQHPSLULFDOPRGHOVDUHXVHGDVVXEPRGHOVRU
SDUWVRIDPRUHFRPSOLFDWHGPRGHO:KHQZHKDYHQRSULQFLSOHVWRJXLGHXVDQG
QRREYLRXVDVVXPSWLRQVVXJJHVWWKHPVHOYHVZHPD\ ZLWKMXVWLILFDWLRQ WXUQWR
GDWDWRILQGKRZVRPHRIRXUYDULDEOHVDUHUHODWHG>S@
%RWKRIWKHSUHYLRXVFLWDWLRQVUDLVHWKHLVVXHRIFRPSOH[LW\ZKLFKFXWVDFURVVWKH
WKHRU\GDWDGLVWLQFWLRQZHKDYHEHHQGLVFXVVLQJ+HUQHVXVHVDUHODWLYHO\VLPSOHWKHRU\
DQGPRGHOWRDFFRXQWIRUDUHODWLYHO\VLPSOHGDWDVHWGHVFULELQJDUHODWLYHO\VLPSOHUHDO
ZRUOGSKHQRPHQRQFRKRUWSURSRUWLRQVILUVWPDUULHGE\DJH+HUQHVGRHVQRWDWWHPSW
DPRGHORIWKHFRPSOHWHPDUULDJHV\VWHPZKLFKZRXOGKDYHWRGHDOZLWKLVVXHVVXFKDV
HQGRJDP\H[RJDP\VSRXVHVHOHFWLRQ>E\FRXSOHRUE\SDUHQWV@SUHPDULWDOFRQFHSWLRQ
EHWURWKDOSRVWPDULWDOUHVLGHQFHHWFDOOIDFWRUVEHDULQJRQDJHDWILUVWPDUULDJH
$QGVRZHPXVWNHHSLQPLQGWKUHHNLQGVRIPRGHOOLQJPRGHOOLQJDOLPLWHGVHW
RIWKHRUHWLFDOLGHDVPRGHOOLQJDOLPLWHGVHWRIGDWDDQGPRGHOOLQJDUHODWLYHO\FRPSOH[
SRUWLRQRIWKHUHDOZRUOGFRPLQJFORVHWRSURYLGLQJDUHSOLFDJHQHUDOO\NQRZQDVODUJH
VFDOHVLPXODWLRQ7KHODVWZLOORIQHFHVVLW\UHTXLUHPDQ\WKHRUHWLFDOLGHDVDQGPXFKGDWDLI
LWLVWREHDWDOOVXFFHVVIXOEXWVXFFHVVDVDOZD\VPXVWEHGHILQHGLQWHUPVRISXUSRVHV
$VVHVVLQJ6FLHQWLILF.QRZOHGJH
7KHDLPRIHPSLULFDOVFLHQFHLVWRXQGHUVWDQGVRPHSRUWLRQRIWKHUHDOZRUOG
+RZZHOOZHGRLQWKLVUHJDUGFDQEHVHHQLQWHUPVRIWKHFORVHQHVVRIILWDPRQJWKHRU\
GDWDPRGHOVDQGWKHUHDOZRUOG(PSLULFDOVRFLDOVFLHQWLVWVDUHXVHGWRWKLQNLQJLQWHUPV
RIJRRGQHVVRIILWEHWZHHQDVWDWLVWLFDOPRGHODQGGDWD:HDUHOHVVXVHGWRWKLQNLQJLQ
WHUPVRIWKHRWKHUUHODWLRQVKLSVGLDJUDPPHGEHORZ



7KLVNLQGRIPRGHOOLQJLVIDYRXUHGLQ&DVWLV:RXOGEH:RUOGV>@DOWKRXJKKHLVFOHDURQWKHSRLQW
WKDWWKHUHDUHPDQ\NLQGVRIPRGHOOLQJVXLWDEOHWRGLIIHUHQWSXUSRVHV







5HDOLW\

""
7KHRU\
"

'DWD

""

0RGHOV
7KHTXHVWLRQPDUNVEHWZHHQHDFKSDLURIHOHPHQWVDUHLQVHUWHGWRHPSKDVLVHWKDWWKH
FORVHQHVVRIRQHHOHPHQWWRDQRWKHULVDQRSHQTXHVWLRQ7KHGLVWDQFHRIHDFKRIWKH
DERYHOLQNVPD\YDU\DQGQRRQHRIWKHPLVQHFHVVDULO\RUFRQVLVWHQWO\VKRUWHUWKDQ
DQRWKHU,WLVLPSRUWDQWWRLQFOXGH5HDOLW\LQDGLDJUDPVXFKDVWKLVVLQFHLWLVWKHXOWLPDWH
UHIHUHQFHSRLQWRIDOOHPSLULFDOVFLHQWLILFZRUN'LDJUDPVRIWKHVFLHQWLILFSURFHVVRIWHQ
GRQRWH[SOLFLWO\LQFOXGHLWIRUH[DPSOH:DOODFH>@
,QOLQHZLWKSUHYLRXVGLVFXVVLRQVWKHERWWRPHOHPHQW0RGHOVPLJKWEHUH
ZULWWHQWRUHIOHFWWKHGLVWLQFWLRQEHWZHHQWKHRUHWLFDODQGHPSLULFDOPRGHOVEXWDOVRWKH
IDFWWKDWWKH\DUHEHVWUHSUHVHQWHGE\DFRQWLQXXP
7KHRUHWLFDO0RGHOV!(PSLULFDO
,QDQROGHUYHUVLRQRISRVLWLYLVPDVVRFLDWHGZLWK.DUO3HDUVRQWKHRU\DQG
WKHRUHWLFDOPRGHOVGURSRXWRIWKHGLDJUDP7KHPRVWRQHFDQH[SHFWLVWRILQGVWDEOH
FRUUHODWLRQVDPRQJGDWD>7XUQHU@,QWKHQHZHUORJLFDOSRVLWLYLVPRI1DJHODQG
+HPSHOWKHRU\LVSRVVLEOHEXWLWPXVWEHEDVHGRQHPSLULFDOJHQHUDOLVDWLRQVDUULYHGDW
E\VWDWLVWLFDODQDO\VLVRIGDWD,QHLWKHUFDVHLWLVDVVXPHGWKDWGDWDDQGHPSLULFDOPRGHOV
DUHFORVHVWWRUHDOLW\,QWKHODWWHUFDVHGDWDDQGHPSLULFDOPRGHOVDUHWKHH[SOLFLW
IRXQGDWLRQIRUWKHRU\DQGDJDWHNHHSHUZLWKUHVSHFWWRWKHRUHWLFDOLGHDV
%XWWKLVSRVLWLYLVWDVVXPSWLRQLVJUDWXLWRXVLWQHHGVWREHGHPRQVWUDWHGLQDQ\
SDUWLFXODUFDVHDQGLQJHQHUDO,WLVFRPSOHWHO\SRVVLEOHWKDWDJRRGWKHRU\RUD
WKHRUHWLFDOPRGHOFDQFRPHFORVHUWRUHDOLW\WKDQGDWDDQGVWDWLVWLFDOPRGHOV,IQRWKLQJ
HOVHWKHRUHWLFDOPRGHOVFDQLQFOXGHYDULDEOHVZKLFKZHNQRZDUHDOPRVWFHUWDLQO\
LPSRUWDQWEXWZKLFKKDYHQRWRUFDQQRWHDVLO\EHPHDVXUHG7KLVSRLQWLVVHOGRP
UHFRJQLVHGLQWKHGHPRJUDSKLFOLWHUDWXUH$QH[FHSWLRQLVDQHORTXHQWVWDWHPHQWE\
%UDFKHU6DQWRZ0RUJDQDQG7UXVVHOO>@LQWKHLUVWDWHRIWKHDUWDQDO\VLVRI
$XVWUDOLDQGLYRUFHXVLQJXQXVXDOO\ULFKHYHQWKLVWRU\GDWD7KH\FRPPHQWLQWKH
FRQFOXGLQJVHFWLRQ


+RZHYHUGHWDLOHGDQGFRPSUHKHQVLYHWKHH[SODQDWRU\IDFWRUVZHKDYHKDGDW
RXUGLVSRVDOWKH\DUHDIWHUDOORQO\GLPUHIOHFWLRQVRIWKHSRVVLEO\XQPHDVXUDEOH
IDFWRUVWKDWNHHSPDUULDJHVWRJHWKHURUGULYHWKHPDSDUWDQGLWZRXOGEH
XQIRUWXQDWHLIWKHDSSDUHQWVRSKLVWLFDWLRQRIWKHPHDVXUHVZHUHWRREVFXUHWKLV
IDFW>S@
7KHRUHWLFDOPRGHOVDOVRFDQPRUHHDVLO\LQFRUSRUDWHQRQOLQHDUIXQFWLRQDOIRUPV
DQGIHHGEDFNVDQGGHDOZLWKSURFHVVDQGPHFKDQLVPV7KH\FDQSDLQWDSODXVLEOHSLFWXUH
RIKRZDUHDOZRUOGV\VWHPZRUNVLQDZD\WKDWQRGDWDERXQGVWDWLVWLFDOPRGHOHYHUFDQ
:KHWKHUWKDWSLFWXUHILWVWKDWUHDOZRUOGV\VWHPFORVHO\HQRXJKWRVHUYHVRPHSXUSRVH
UHPDLQVDQHPSLULFDOTXHVWLRQ$QGVRHPSLULFDOGDWDDUHQHFHVVDU\WRGHVFULEHVHOHFWHG
IHDWXUHVRIUHDOZRUOGV\VWHPVDQGREVHUYDEOHSKHQRPHQDWREHH[SODLQHG$QGWKH\
PD\EHQHFHVVDU\WRKHOSHVWDEOLVKKRZFORVHO\DWKHRUHWLFDOPRGHOILWVWKHUHDOZRUOG
WKH\FDQQHYHUFRPSOHWHO\GHWHUPLQHWKLV%XWGDWDDQGHPSLULFDOPRGHOVGRQRWFORVH
WKHXQGHUVWDQGLQJJDS)RUWKLVWKHRU\LVUHTXLUHG
$FULWLFDOKLVWRU\RIWKFHQWXU\GHPRJUDSK\ZRXOGVKRZ,EHOLHYHWKDW
GHPRJUDSK\KDVWHQGHGWRKROGWKHRU\DWDUPVOHQJWKRQO\JUXGJLQJO\JLYLQJLWDVPDOO
SODFHLQRXUGLVFLSOLQH7KHVDPHKDVEHHQWUXHZLWKUHJDUGWRWUDGLWLRQDOPDWKHPDWLFDO
PRGHOOLQJ>DSDUWIURPWKHFRUHPDWKHPDWLFDOPRGHOVVXFKDVWKHVWDEOHSRSXODWLRQ@DQG
ZLWKUHJDUGWRODWHUGHYHORSPHQWVLQFRPSXWHUPRGHOOLQJRUVLPXODWLRQ7KH
GHPRJUDSKLFPLQGKDVYLHZHGGDWDDVVROLGDQGUHDOWKHRU\DQGVLPXODWLRQDVDLU\DQG
IDQFLIXO$JURZLQJERG\RIRSLQLRQLQWKHSKLORVRSK\RIVFLHQFHZRXOGVXJJHVWWKDWWKLV
YLHZLVIDXOW\DVGRHVWKHVFDQWWKHRUHWLFDOSURJUHVVLQWKHGLVFLSOLQHV\PEROLVHGE\WKH
IDFWWKDWWUDQVLWLRQWKHRU\LVQRWLQDSSUHFLDEO\EHWWHUVKDSHQRZWKDWLWZDVIRUW\RUILIW\
\HDUVDJR0RUHDQGPRUHLQIRUPHGDWWHQWLRQWRWKHRU\LVQHHGHGLIGHPRJUDSK\LVWR
EHDVFLHQFHDVRSSRVHGWRDERG\RIWHFKQLTXHV
&RGD2QWKH'DQJHUVRI'LFKRWRPLHV
'HPRJUDSK\DORQJZLWKRWKHUVRFLDOVFLHQFHGLVFLSOLQHVKDVEHHQSODJXHGE\WKH
WHQGHQF\WRWKLQNDFWDQGLQVWLWXWLRQDOLVHLQWHUPVRIVWULFWGLFKRWRPLHVWKHRU\YV
HPSLULFDOUHVHDUFKTXDQWLWDWLYHYVTXDOLWDWLYHPRGHOYVWKHRU\VFLHQWLILFODZYV
K\SRWKHVLVIRUPDOYVEHKDYLRXUDOGHPRJUDSK\WRPHQWLRQDIHZRIWKHPRUHREYLRXV
'LIIHUHQWNLQGVRIZRUNDQGGLIIHUHQWDSSURDFKHVWRVFLHQFHWHQGWREHVHHQDVGLVFUHWH
SRODURSSRVLWHV2IWHQWKH\DUHVHHQDVRSSRVHGLQWKHVHQVHRIEHLQJKRVWLOHWRRQH
DQRWKHU
%XWVRPHRIWKHPDUHIDOVHRWKHUVJHWLQWKHZD\RIWKHKDUPRQLRXVZRUNLQJ
WRJHWKHURIWKHPDQ\SDUWVRIWKHVFLHQWLILFHQGHDYRXU7KHGLVWLQFWLRQIRUH[DPSOH
EHWZHHQTXDQWLWDWLYHDQGTXDOLWDWLYHRYHUORRNVWKHKLVWRULFDOIDFWWKDWWKDWPRVW
TXDQWLWDWLYHWRRORIVFLHQFHGLIIHUHQWLDOHTXDWLRQVRIWHQGHDOWRQO\ZLWKTXDOLWDWLYH
VROXWLRQV,QWKHPRUHFRQWHPSRUDU\UHDOPRIFRPSXWHUVLPXODWLRQDOVRLWLVRIWHQWKH
TXDOLWDWLYHUHVXOWVWKDWDUHRIPRVWLPSRUWDQFH7KHSUHFLVHTXDQWLWDWLYHUHVXOWVDIWHUDOO
DUHHVVHQWLDOO\DUELWUDU\,QWKHEXUJHRQLQJILHOGRITXDOLWDWLYHPHWKRGVRQWKHRWKHU


,QDUHFHQWERRNUHYLHZWZRLPPXQRORJLVWVKDYHFRPPHQWHGWKDWLQELRORJ\WKHUHDOFRQWULEXWLRQRI
PDWKHPDWLFVLVQRWWKDWLWLQWURGXFHVTXDQWLILFDWLRQEXWWKDWLWSURYLGHVDSUHFLVHTXDOLWDWLYHIUDPHZRUN





KDQGLWLVLURQLFEXWDKHDOWK\GHYHORSPHQWWRVHHWKHUHOHYDQWVRIWZDUHEHJLQQLQJWR
LQFOXGHXWLOLWLHVIRUWKHIRUPDWLRQRIIUHTXHQF\GLVWULEXWLRQV
*LHUHVDQG&DUWZULJKWVPRGHOEDVHGYLHZVRIVFLHQFHE\GHWKURQLQJWKH
FRQFHSWRIVFLHQWLILFODZLQSK\VLFVRIDOOGLVFLSOLQHVWKHRQHFRQVLGHUHGPRVWODZOLNH
KDYHXQGHUOLQHGWKHDEVWUDFWXQUHDOFKDUDFWHURIDOOVFLHQWLILFWKHRU\DQGWKHRUHWLFDO
PRGHOV,QDVHQVHDOOVFLHQWLILFWKHRU\LVK\SRWKHWLFDO%XWWKHK\SRWKHVLVLVQRWZKHWKHU
LWZLOOHYHQWXDOO\EHSURYHGWUXHRUYDOLGEXWZKHWKHULWILWVDSDUWLFXODUSDUWRIWKHUHDO
ZRUOGZHOOHQRXJKWRDFFRPSOLVKDSDUWLFXODUKXPDQSXUSRVH
7KHDSSOLFDWLRQRIWKLVWKLQNLQJWRGHPRJUDSK\DSSHDUVWRPHWRDEROLVKWKH
VKDUSGLVWLQFWLRQEHWZHHQIRUPDODQGEHKDYLRXUDOGHPRJUDSK\DVWUDGLWLRQDOO\GHILQHG
7KHSURSRVLWLRQVRIDEHKDYLRXUDOWKHRU\RUPRGHOPXVWEHIRUPDOO\WUXHWUXHE\
GHILQLWLRQ2WKHUZLVHWKHPRGHOFDQQRWVHUYHDVZKDW&DUWZULJKWWHUPVDQRPRORJLFDO
PDFKLQHLWFDQQRWJHQHUDWHLPSOLFDWLRQVRUSUHGLFWLRQVWKDWIROORZLQVWULFWORJLFIURPWKH
PRGHODVVXPSWLRQVDQGVWUXFWXUH7KHLGHDRIQHFHVVDU\UHODWLRQVKLSVLQRXU
PDWKHPDWLFDOPRGHOVLQGHPRJUDSK\DQGFRQWLQJHQWUHODWLRQVKLSVLQRXUWKHRUHWLFDO
PRGHOQHHGVUHH[DPLQDWLRQ
$ILQDOGLVWLQFWLRQWKDWLVEUHDNLQJGRZQLVWKDWEHWZHHQWKHRU\DQGPRGHOOLQJ
2OGHUWH[WVRQPDWKHPDWLFDOPRGHOOLQJDQGRQVRFLDOWKHRU\>DVDOZD\VHFRQRPLFVLVDQ
H[FHSWLRQ@KDYHWHQGHGWRRFFXS\GLIIHUHQWZRUOGV0DWKHPDWLFDOPRGHOOLQJERRNV
VHOGRPKDGPXFKWRVD\DERXWWKHRU\DQGYLFHYHUVD7KHPRGHOEDVHGYLHZRI
VFLHQFHRQWKHRWKHUKDQGVHHVWKHPRGHODVWKHSULPDU\UHSUHVHQWDWLRQDOGHYLFHLQ
VFLHQFHHQFDSVXODWLQJLWVWKHRUHWLFDOLGHDV7KHWKHRU\PRGHOGLVWLQFWLRQLVEOXUUHG$QG
JLYHQWKHFRPSOH[LW\RIPDQ\VRFLDODQGGHPRJUDSKLFV\VWHPVWKHWKHRUHWLFDOWRRORI
FKRLFHEHFRPHVFRPSXWHUPRGHOOLQJRUVLPXODWLRQ
2OGZRUGVLQDODQJXDJHRIWHQOHDGWRVWULNLQJLQVLJKWV,Q(QJOLVKWKHUHLVDQROG
ZRUGWKHRULF>DOVRVSHOOHGWKHRULFN@GHVFULEHGDVREVROHWHDQGDUFKDLFE\WKH2[IRUG(QJOLVK
'LFWLRQDU\,WVILUVWPHDQLQJLVWKHRU\,WVWKLUGPHDQLQJLVDPHFKDQLFDOGHYLFH
WKHRUHWLFDOO\UHSUHVHQWLQJRUH[SODLQLQJDQDWXUDOSKHQRPHQRQ6L[WHHQWKFHQWXU\
H[DPSOHVUHODWHWRDVWURQRP\7RPDQ\VRFLDOVFLHQWLVWVWKHGLVMXQFWXUHEHWZHHQWKHRU\
DQGDPHFKDQLFDOGHYLFHLVWRWDO,Q*LHUHVPRGHOEDVHGYLHZRIVFLHQFHWKHUHDUHWKUHH
NLQGVRIPRGHOVWKHRUHWLFDOYLVXDODQGSK\VLFDOWKDWLVPHFKDQLFDOGHYLFHV7KLQJVKDYH
FRPHIXOOFLUFOHEDFNDSSUR[LPDWHO\WRZKHUHWKH\EHORQJ
 

RIUHDVRQLQJ$VELRORJLFDONQRZOHGJHEHFRPHVHYHUPRUHFRPSOH[DQGGHWDLOHGVRQDWXUDOODQJXDJH
EHFRPHVPRUHLQDGHTXDWHIRUFHUWDLQW\SHVRIELRORJLFDOTXHVWLRQV0DWKHPDWLFVSURYLGHVDQHIILFLHQW
SUHFLVHDQGULJRURXVDOWHUQDWLYHPDWKHPDWLFVLVQRPRUHEXWQROHVVWKDQDZD\RIWKLQNLQJ
FOHDUO\>%DQJKDPDQG$VTXLWK@

$QLQWHUHVWLQJH[FHSWLRQLVE\'RXFHWDQG6ORHS>@ZKRLQWKHLUERRNRQPDWKHPDWLFDOPRGHOLQJLQ
WKHOLIHVFLHQFHVLQFOXGHDVXEVWDQWLDOGLVFXVVLRQRIWKHVHPDQWLFVFKRRORISKLORVRS\RIZKLFK*LHUHDQG
&DUWZULJKWDUHFRQWHPSRUDU\UHSUHVHQWDWLYHV





5HIHUHQFHV
$EERWW$QGUHZ7UDQVFHQGLQJJHQHUDOOLQHDUUHDOLW\6RFLRORJLFDO7KHRU\
%DQJKDP&KDUOHV50DQG$VTXLWK%HFFD9LUDOLPPXQRORJ\IURPPDWK
5HYLHZRI9LUXV'\QDPLFV0DWKHPDWLFDO3ULQFLSOHVRI,PPXQRORJ\DQG9LURORJ\E\
0DUWLQ$1RZDNDQG5REHUW00D\2[IRUG2[IRUG8QLYHUVLW\3UHVV
6FLHQFH
%XUFK7KRPDV.,FRQVVWUDZPHQDQGSUHFLVLRQUHIOHFWLRQVRQGHPRJUDSKLF
WKHRULHVRIIHUWLOLW\GHFOLQH7KH6RFLRORJLFDO4XDUWHUO\
%XUFK7KRPDV.>IRUWKFRPLQJ@&RPSXWHUPRGHOOLQJRIWKHRU\H[SODQDWLRQIRU
WKHVWFHQWXU\,Q5REHUW)UDQFN>HG@7KH([SODQDWRU\3RZHURI0RGHOV%ULGJLQJWKH
*DS%HWZHHQ(PSLULFDODQG7KHRUHWLFDO5HVHDUFKLQWKH6RFLDO6FLHQFHV1RUGUHFKW7KH
1HWKHUODQGV.OXZHU$FDGHPLF3UHVV
%XUFK7KRPDV.DQG%pODQJHU'DQLqOH/pWXGHGHVXQLRQVHQGpPRJUDSKLH
GHVFDWpJRULHVDX[SURFHVVXV&DKLHUV4XpEpFRLVGH'pPRJUDSKLH
&DUWZULJKW1DQF\'7KH'DSSOHG:RUOG$6WXG\RIWKH%RXQGDULHVRI6FLHQFH1HZ
<RUN&DPEULGJH8QLYHUVLW\3UHVV
&DVWL-RKQ/:RUOG%H:RUOGV+RZ6LPXODWLRQ,V&KDQJLQJWKH)URQWLHUVRI6FLHQFH
1HZ<RUN-RKQ:LOH\ 6RQV
&RDOH$QVOH\-7KHHIIHFWVRIFKDQJHVLQPRUWDOLW\DQGIHUWLOLW\RQDJH
FRPSRVLWLRQ0LOEDQN0HPRULDO)XQG4XDUWHUO\
&RDOH$QVOH\-)DFWRUVDVVRFLDWHGZLWKWKHGHYHORSPHQWRIORZIHUWLOLW\DQ
KLVWRULFVXPPDU\8QLWHG1DWLRQV:RUOG3RSXODWLRQ&RQIHUHQFH%HOJUDGH
<XJRVODYLD:3&:3SS
&RDOH$QVOH\-7KHGHPRJUDSKLFWUDQVLWLRQ,QWHUQDWLRQDO8QLRQIRUWKH
6FLHQWLILF6WXG\RI3RSXODWLRQ,QWHUQDWLRQDO3RSXODWLRQ&RQIHUHQFH/LHJH
&RDOH$QVOH\-DQG+RRYHU(GJDU03RSXODWLRQ*URZWKDQG(FRQRPLF'HYHORSPHQW
LQ/RZ,QFRPH&RXQWULHV3ULQFHWRQ3ULQFHWRQ8QLYHUVLW\3UHVV
&RDOH$QVOH\-DQG:DWNLQV6XVDQ&RWWV7KH'HFOLQHRI)HUWLOLW\LQ(XURSH
3ULQFHWRQ3ULQFHWRQ8QLYHUVLW\3UHVV
'RXFHW3DXODQG6ORHS3HWHU%0DWKHPDWLFDO0RGHOLQJLQWKH/LIH6FLHQFHV1HZ
<RUN(OOLV+RUZRRG
(GZDUGV'LOOZ\QDQG+DPVRQ0LNH*XLGHWR0DWKHPDWLFDO0RGHOOLQJ%RFD
5DWRQ)OD&5&3UHVV


)HHQH\*ULIILWK)HUWLOLW\GHFOLQHLQ(DVW$VLD6FLHQFH
)ULHGPDQ0LOWRQ7KHPHWKRGRORJ\RISRVLWLYHHFRQRPLFV,Q(VVD\VLQ3RVLWLYH
(FRQRPLFV&KLFDJR8QLYHUVLW\RI&KLFDJR3UHVVSS
*LHUH5RQDOG16FLHQFH:LWKRXW/DZV&KLFDJR8QLYHUVLW\RI&KLFDJR3UHVV
+HGVWU|P3HWHUDQG6ZHGEHUJ5LFKDUG6RFLDO0HFKDQLVPV$Q$QDO\WLF$SSURDFK
WR6RFLDO7KHRU\&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV
+HPSHO&DUO*$VSHFWVRI6FLHQWLILF([SODQDWLRQ1HZ<RUN7KH)UHH3UHVV
+HUQHV*XGPXQG7KHSURFHVVRIHQWU\LQWRILUVWPDUULDJH$PHULFDQ6RFLRORJLFDO
5HYLHZ
+REFUDIW-RKQ0RYLQJEH\RQGHODERUDWHGHVFULSWLRQWRZDUGVXQGHUVWDQGLQJ
FKRLFHVDERXWSDUHQWKRRG3DSHUSUHVHQWHGDW81(FRQRPLF&RPLVVLRQIRU
(XURSH)HUWLOLW\DQG)DPLO\6XUYH\V)ODJVKLS&RQIHUHQFH%UXVVHOV%HOJLXP
-DQGHO6FLHQWLILF7DEOH&XUYH'$XWRPDWHG&XUYH)LWWLQJDQG(TXDWLRQ'LVFRYHU\6DQ
5DIDHO&$-DQGHO6FLHQWLILF
.H\ILW]1DWKDQ+RZGRZHNQRZWKHIDFWVRIGHPRJUDSK\3RSXODWLRQDQG
'HYHORSPHQW5HYLHZ
/HVWKDHJKH5RQDQG9DQGHUKRHIW&5HDG\ZLOOLQJDQGDEOHD
FRQFHSWXDOL]DWLRQRIWUDQVLWLRQVWRQHZEHKDYLRUDOIRUPV,3':RUNLQJ3DSHU
,QWHUIDFH'HPRJUDSK\9ULMH8QLYHUVLWHLW%UXVVHO
0HHKDQ(XJHQH-([SODQDWLRQLQ6RFLDO6FLHQFH$6\VWHP3DUDGLJP+RPHZRRG
,OO7KH'RUVH\3UHVV
1DJHO(UQHVW7KH6WUXFWXUHRI6FLHQFH1HZ<RUN+DUFRXUW%UDFHDQG:RUOG
3ODWW-RKQ56WURQJLQIHUHQFHLQVFLHQWLILFUHVHDUFK6FLHQFH>2FWREHU@

3ROODUG$+<DVXI)DUKDWDQG3ROODUG*1'HPRJUDSKLF7HFKQLTXHV>UGHG@
6\GQH\7RURQWR3HUJDPRQ3UHVV
7XUQHU6WHSKHQ38QGHUGHWHUPLQDWLRQDQGWKHSURPLVHRIVWDWLVWLFDOVRFLRORJ\
6RFLRORJLFDO7KHRU\
:DONHU$QGUHZ0RGHOPDNHU8VHU0DQXDO9HUVLRQ2[IRUG&KHUZHOO6FLHQWLILF
3XEOLVKLQJ
:DOODFH:DOWHU/7KH/RJLFRI6FLHQFHLQ6RFLRORJ\&KLFDJR$OGLQH$WKHUWRQ


You might also like