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<TASK DESCRIPTION>
Only use the provided text to answer the question, no outside sources.
<QUESTION>
[user request]
<TEXT>
[context document] | Please summarize what Montelukast is used for and tell me if there are any serious side effects. This is important to me, so please be detained and provide your response in two paragraphs. | Why is this medication prescribed?
Montelukast is used to prevent wheezing, difficulty breathing, chest tightness, and coughing caused by asthma in adults and children 12 months of age and older. Montelukast is also used to prevent bronchospasm (breathing difficulties) during exercise in adults and children 6 years of age and older. Montelukast is also used to treat the symptoms of seasonal (occurs only at certain times of the year), allergic rhinitis (a condition associated with sneezing and stuffy, runny or itchy nose) in adults and children 2 years of age and older, and perennial (occurs all year round) allergic rhinitis in adults and children 6 months of age and older. Montelukast should be used to treat seasonal or perennial allergic rhinitis only in adults and children who cannot be treated with other medications. Montelukast is in a class of medications called leukotriene receptor antagonists (LTRAs). It works by blocking the action of substances in the body that cause the symptoms of asthma and allergic rhinitis.
How should this medicine be used?
Montelukast comes as a tablet, a chewable tablet, and granules to take by mouth. Montelukast is usually taken once a day with or without food. When montelukast is used to treat asthma, it should be taken in the evening. When montelukast is used to prevent breathing difficulties during exercise, it should be taken at least 2 hours before exercise. If you are taking montelukast once a day on a regular basis, or if you have taken a dose of montelukast within the past 24 hours, you should not take an additional dose before exercising. When montelukast is used to treat allergic rhinitis, it may be taken at any time of day. Take montelukast at around the same time every day. Follow the directions on your prescription label carefully, and ask your doctor or pharmacist to explain any part you do not understand. Take montelukast exactly as directed. Do not take more or less of it or take it more often than prescribed by your doctor.
If you are giving the granules to your child, you should not open the foil pouch until your child is ready to take the medication. You may pour all of the granules directly from the packet into your child's mouth to be swallowed immediately.
Do not use montelukast to treat a sudden attack of asthma symptoms. Your doctor will prescribe a short-acting inhaler to use during attacks. Talk to your doctor about how to treat symptoms of a sudden asthma attack. If your asthma symptoms get worse or if you have asthma attacks more often, be sure to call your doctor.
If you are taking montelukast to treat asthma, continue to take or use all other medications that your doctor has prescribed to treat your asthma. Do not stop taking any of your medications or change the doses of any of your medications unless your doctor tells you that you should. If your asthma is made worse by aspirin, do not take aspirin or other nonsteroidal anti-inflammatory drugs (NSAIDs) during your treatment with montelukast.
Montelukast controls the symptoms of asthma and allergic rhinitis but does not cure these conditions. Continue to take montelukast even if you feel well. Do not stop taking montelukast without talking to your doctor.
Ask your pharmacist or doctor for a copy of the manufacturer's information for the patient.
Other uses for this medicine
This medication may be prescribed for other uses; ask your doctor or pharmacist for more information.
What special precautions should I follow?
Before taking montelukast,
tell your doctor and pharmacist if you are allergic to montelukast or any other medications, or any of the ingredients in montelukast tablet, chewable tablet, or granules.
tell your doctor and pharmacist what prescription and nonprescription medications, vitamins, nutritional supplements, and herbal products you are taking or plan to take. Be sure to mention gemfibrozil (Lopid), phenobarbital and rifampin (Rifadin, Rimactane, in Rifamate, Rifater). Your doctor may need to change the doses of your medications or monitor you more carefully for side effects.
tell your doctor if you have or have ever had liver disease.
tell your doctor if you are pregnant, plan to become pregnant, or are breastfeeding. If you become pregnant while taking montelukast, call your doctor.
if you have phenylketonuria (PKU, an inherited condition in which a special diet must be followed to prevent damage to your brain that can cause severe intellectual disability), you should know that the chewable tablets contain aspartame that forms phenylalanine.
What special dietary instructions should I follow?
Unless your doctor tells you otherwise, continue your normal diet.
What should I do if I forget a dose?
Skip the missed dose and continue your regular dosing schedule. Do not take a double dose to make up for a missed one. Do not take more than one dose of montelukast in a 24 hour period.
What side effects can this medication cause?
Montelukast may cause side effects. Tell your doctor if any of these symptoms are severe or do not go away:
headache
heartburn
stomach pain
tiredness
diarrhea | <TASK DESCRIPTION>
Only use the provided text to answer the question, no outside sources.
<QUESTION>
Please summarize what Montelukast is used for and tell me if there are any serious side effects. This is important to me, so please be detained and provide your response in two paragraphs.
<TEXT>
Why is this medication prescribed?
Montelukast is used to prevent wheezing, difficulty breathing, chest tightness, and coughing caused by asthma in adults and children 12 months of age and older. Montelukast is also used to prevent bronchospasm (breathing difficulties) during exercise in adults and children 6 years of age and older. Montelukast is also used to treat the symptoms of seasonal (occurs only at certain times of the year), allergic rhinitis (a condition associated with sneezing and stuffy, runny or itchy nose) in adults and children 2 years of age and older, and perennial (occurs all year round) allergic rhinitis in adults and children 6 months of age and older. Montelukast should be used to treat seasonal or perennial allergic rhinitis only in adults and children who cannot be treated with other medications. Montelukast is in a class of medications called leukotriene receptor antagonists (LTRAs). It works by blocking the action of substances in the body that cause the symptoms of asthma and allergic rhinitis.
How should this medicine be used?
Montelukast comes as a tablet, a chewable tablet, and granules to take by mouth. Montelukast is usually taken once a day with or without food. When montelukast is used to treat asthma, it should be taken in the evening. When montelukast is used to prevent breathing difficulties during exercise, it should be taken at least 2 hours before exercise. If you are taking montelukast once a day on a regular basis, or if you have taken a dose of montelukast within the past 24 hours, you should not take an additional dose before exercising. When montelukast is used to treat allergic rhinitis, it may be taken at any time of day. Take montelukast at around the same time every day. Follow the directions on your prescription label carefully, and ask your doctor or pharmacist to explain any part you do not understand. Take montelukast exactly as directed. Do not take more or less of it or take it more often than prescribed by your doctor.
If you are giving the granules to your child, you should not open the foil pouch until your child is ready to take the medication. You may pour all of the granules directly from the packet into your child's mouth to be swallowed immediately.
Do not use montelukast to treat a sudden attack of asthma symptoms. Your doctor will prescribe a short-acting inhaler to use during attacks. Talk to your doctor about how to treat symptoms of a sudden asthma attack. If your asthma symptoms get worse or if you have asthma attacks more often, be sure to call your doctor.
If you are taking montelukast to treat asthma, continue to take or use all other medications that your doctor has prescribed to treat your asthma. Do not stop taking any of your medications or change the doses of any of your medications unless your doctor tells you that you should. If your asthma is made worse by aspirin, do not take aspirin or other nonsteroidal anti-inflammatory drugs (NSAIDs) during your treatment with montelukast.
Montelukast controls the symptoms of asthma and allergic rhinitis but does not cure these conditions. Continue to take montelukast even if you feel well. Do not stop taking montelukast without talking to your doctor.
Ask your pharmacist or doctor for a copy of the manufacturer's information for the patient.
Other uses for this medicine
This medication may be prescribed for other uses; ask your doctor or pharmacist for more information.
What special precautions should I follow?
Before taking montelukast,
tell your doctor and pharmacist if you are allergic to montelukast or any other medications, or any of the ingredients in montelukast tablet, chewable tablet, or granules.
tell your doctor and pharmacist what prescription and nonprescription medications, vitamins, nutritional supplements, and herbal products you are taking or plan to take. Be sure to mention gemfibrozil (Lopid), phenobarbital and rifampin (Rifadin, Rimactane, in Rifamate, Rifater). Your doctor may need to change the doses of your medications or monitor you more carefully for side effects.
tell your doctor if you have or have ever had liver disease.
tell your doctor if you are pregnant, plan to become pregnant, or are breastfeeding. If you become pregnant while taking montelukast, call your doctor.
if you have phenylketonuria (PKU, an inherited condition in which a special diet must be followed to prevent damage to your brain that can cause severe intellectual disability), you should know that the chewable tablets contain aspartame that forms phenylalanine.
What special dietary instructions should I follow?
Unless your doctor tells you otherwise, continue your normal diet.
What should I do if I forget a dose?
Skip the missed dose and continue your regular dosing schedule. Do not take a double dose to make up for a missed one. Do not take more than one dose of montelukast in a 24 hour period.
What side effects can this medication cause?
Montelukast may cause side effects. Tell your doctor if any of these symptoms are severe or do not go away:
headache
heartburn
stomach pain
tiredness
diarrhea
https://medlineplus.gov/druginfo/meds/a600014.html |
Only include information available in the following text in your answer. Do not use any information or prior knowledge not included in the text. Limit your answer to 600 words or less. | How do the three new variables in the UTAUT 2 model improve our understanding of continued usage of Spotify Premium? | Due to technological advancement, technology acceptance and adoption became an
important and distinct topic of this study, especially regarding e-commerce (Rahi et al.,
2020). The UTAUT 2 model was developed in research by Venkatesh et al. (2012) to
enhance the explanatory power of the previous UTAUT version (Venkatesh et al., 2003).
The original UTAUT model which consist of four variables which is effort expectancy
(EE), performance expectancy (PE) facilitating condition (FC) and social influence (SI),
was highly used by scholars to predict the intention to use new technology. Despite its’
popularity, the model was not lacking of criticism due to its incapability to include
essential determinant of technology usage behaviour (Beh et al., 2019). To overcome
those criticism, Venkatesh et al. (2012) compensate the limitation of the original UTAUT
with the additional three variables which is habit (HB), hedonic motivation (HM) and
price value (PV). On top of that, the UTAUT 2 also focusing to the post usage behaviour.
Various literature has confirming that the capability of the UTAUT 2 in explaining the
continuance behaviour of technology usage. Since Spotify Premium is considered a new
technology in music industry, thus, it suits well with the concept in UTAUT.
Furthermore, despite having high explanatory power, (Rondan-Cataluña et al., 2015)
confirmed that UTAUT 2 has better predictive power compared to other technological
acceptance model. Thus, provide a valid reason why the study relies on this model to
predict continuance behaviour of subscribing the Spotify Premium among university
students in Malaysia.
Unravelling the continue of subscribing Spotify Premium 5
2.2 BI
BI can be categorised as intention to use of continue of use of particular services. In the
context of this study, BI refers to the intention to continue of subscribing the Spotify
Premium. Continue of use always related to the behavioural of loyalty (Han et al., 2009).
Since many of music streaming available in the market and each providers are offering
unique features (Weinberger and Bouhnik, 2020), thus, critical to understand the reason
behind the continued use of the application so that the service providers can guarantee
their service remain competitive, for business sustainability and the ability to survive in a
tough business environment. It is useless for the company to enhance its services if they
fail to retain current customers or attract new clients. Furthermore, to increase the
continue of use could be considered as a main goal in the service providers (Batouei
et al., 2020).
2.3 EE
EE is the level of convenience consumers experience when utilising a technology
(Venkatesh et al., 2012). In this research, EE refers to the convenience of Spotify
Premium usage among university students in Malaysia. Moreover, convenience refers to
the ease in application usage; thus, the higher intention to use and continued usage. Also,
university students classified as Generation Y (Gen. Y) are closely connected with
technology use and thus experienced ease in utilising the Spotify Premium. Hence, EE is
expected to produce a positive relationship with BI to continue the Spotify Premium
subscription. Strengthened by a previous study, which discovered that EE has a positive
relationship with BI regarding the usage of smartwatch (Beh et al., 2019), mobile
financial services (Rahman et al., 2020), continued music streaming subscription (Lüders,
2020) and e-hailing technology. Therefore, this study proposes the following:
Hypothesis 1 (H1) EE has a positive relationship with BI of Spotify Premium
subscription.
2.4 FC
FC’s refer to a person’s beliefs in the technical support available to advocate new
technology use (Venkatesh et al., 2012). This study examined the availability of Spotify’s
support for premium subscribers concerning the application. Paid music services require
fast and up-to-date technology, namely advanced electronic equipment and an internet
connection to ensure smooth and seamless music streaming. FC’s such as the skills and
ability to handle the devices are crucial factors and predictors of BI due to rapid
technological changes in the music streaming industry, such as computers, smartphones,
tablets, the internet, online customer support (Pinochet et al., 2019). This research
examined previous literature in proving the positive relationship between FC and BI,
such as the study by Beh et al. (2019) and Rahman et al. (2020). University students also
found that FC and BI was positively related in the context of learning management
system (Sharif et al., 2019). Hence, this paper proposed that:
Hypothesis 2 (H2) FC has positive effects on the BI of the Spotify Premium
subscription.
6 M.S.M. Suhod et al.
2.5 Habit
Habit (HB) is the extent to which an individual believes his behaviour is a result of
experience; the individual tends to perform that behaviour automatically based on
learning from past experience (Venkatesh et al., 2012). Habit occurs when one
consistently performs an activity, such as when they experience joy and happiness while
performing the activities or when the activity suits the individual. According to Soares
et al. (2020), habit could be influenced by past behaviour and personal experience in
applying particular system or products. If past experience produced favourable results,
there is high tendency to transform the particular behaviour to become a habit. Past
studies showed that habit produced a positive relationship with BI (Ameri et al., 2020;
Nikolopoulou et al., 2020; Soares et al., 2020). From that, the study proposed:
Hypothesis 3 (H3) Habit has positive effects on BI of Spotify Premium subscription
2.6 HM
HM is the enjoyment or pleasure from technology usage (Venkatesh et al., 2012). This
study defined HM as the enjoyment of Spotify Premium usage to enjoy music streaming.
Based on research by Beh et al. (2019), HM showed a positive relationship with BI in the
usage of smartwatches. Plus, Greece university students showed that their HM had a
positive relationship with BI concerning mobile phone usage (Nikolopoulou et al., 2020).
Hence, this paper suggested:
Hypothesis 4 (H4) HM produced a positive effect on the BI of the Spotify Premium
subscription.
2.7 PE
PE refers to the competence of applications or new technology to assist users in
performing certain activities substantially and conveniently (Venkatesh et al., 2012). A
study by Malik (2017) stated that users are more interested in applications that improve
their performance and productivity through better content knowledge and thus resulting
in content awareness and the ability to provide an application that performs well.
Previous studies on the continued use of technology discovered that PE has a positive
relationship with BI (Ameri et al., 2020; Nikolopoulou et al., 2020; Rahman et al., 2020).
With regards to that, the study proposed:
Hypothesis 5 (H5) PE has a positive effect on the BI of Spotify Premium subscription.
2.8 PV
PV refers to the relationship between consumers’ cognitive trade-off between the benefits
gained versus the amount paid for the services (Venkatesh et al., 2012). Spotify Premium
users will continue their subscription if the subscription is worth paying based on the
services provided. Plus, when there is beneficial experience from using the Spotify
Premium, or the received benefits are greater than the cost. Previously, it was discovered
that the PV has a positive relationship with the continued subscription of music streaming
services (Lüders, 2020).
Unravelling the continue of subscribing Spotify Premium 7
Additionally, the PV created a positive relationship with the BI on the continued
subscription to music streaming (Lüders, 2020) and continued use of mobile financial
services (Rahman et al., 2020). Consequently, the study proposed:
Hypothesis 6 (H6) PV produced positive effects on the BI of Spotify Premium
subscription.
2.9 SI
According to Venkatesh et al. (2012), SI refers to the extent of family and friend’s
influence on consumers in terms of the decision to use technology. In this particular
research, SI is the extent to which a university student perceives the influential person
can cause them to believe that they should subscribe to Spotify Premium. Since in
campus life, majority of the students spent their time with their colleague and they tend to
share the experience with their people around them. Hence, what are their surrounding
behaviour and thinking will have an impact in their daily life. Family and friend’s
perception will influence the students’ decision. Furthermore, most students are
encouraged by trend and peer pressure. SI has a positive relationship with the BI of
pharmacy students’ continued use of the mobile-based educational application (Ameri
et al., 2020) and Greece students’ continued use of mobile phones in their study
(Nikolopoulou et al., 2020). Therefore, the study suggested: | Only include information available in the following text in your answer. Do not use any information or prior knowledge not included in the text. Limit your answer to 600 words or less.
Due to technological advancement, technology acceptance and adoption became an
important and distinct topic of this study, especially regarding e-commerce (Rahi et al.,
2020). The UTAUT 2 model was developed in research by Venkatesh et al. (2012) to
enhance the explanatory power of the previous UTAUT version (Venkatesh et al., 2003).
The original UTAUT model which consist of four variables which is effort expectancy
(EE), performance expectancy (PE) facilitating condition (FC) and social influence (SI),
was highly used by scholars to predict the intention to use new technology. Despite its’
popularity, the model was not lacking of criticism due to its incapability to include
essential determinant of technology usage behaviour (Beh et al., 2019). To overcome
those criticism, Venkatesh et al. (2012) compensate the limitation of the original UTAUT
with the additional three variables which is habit (HB), hedonic motivation (HM) and
price value (PV). On top of that, the UTAUT 2 also focusing to the post usage behaviour.
Various literature has confirming that the capability of the UTAUT 2 in explaining the
continuance behaviour of technology usage. Since Spotify Premium is considered a new
technology in music industry, thus, it suits well with the concept in UTAUT.
Furthermore, despite having high explanatory power, (Rondan-Cataluña et al., 2015)
confirmed that UTAUT 2 has better predictive power compared to other technological
acceptance model. Thus, provide a valid reason why the study relies on this model to
predict continuance behaviour of subscribing the Spotify Premium among university
students in Malaysia.
Unravelling the continue of subscribing Spotify Premium 5
2.2 BI
BI can be categorised as intention to use of continue of use of particular services. In the
context of this study, BI refers to the intention to continue of subscribing the Spotify
Premium. Continue of use always related to the behavioural of loyalty (Han et al., 2009).
Since many of music streaming available in the market and each providers are offering
unique features (Weinberger and Bouhnik, 2020), thus, critical to understand the reason
behind the continued use of the application so that the service providers can guarantee
their service remain competitive, for business sustainability and the ability to survive in a
tough business environment. It is useless for the company to enhance its services if they
fail to retain current customers or attract new clients. Furthermore, to increase the
continue of use could be considered as a main goal in the service providers (Batouei
et al., 2020).
2.3 EE
EE is the level of convenience consumers experience when utilising a technology
(Venkatesh et al., 2012). In this research, EE refers to the convenience of Spotify
Premium usage among university students in Malaysia. Moreover, convenience refers to
the ease in application usage; thus, the higher intention to use and continued usage. Also,
university students classified as Generation Y (Gen. Y) are closely connected with
technology use and thus experienced ease in utilising the Spotify Premium. Hence, EE is
expected to produce a positive relationship with BI to continue the Spotify Premium
subscription. Strengthened by a previous study, which discovered that EE has a positive
relationship with BI regarding the usage of smartwatch (Beh et al., 2019), mobile
financial services (Rahman et al., 2020), continued music streaming subscription (Lüders,
2020) and e-hailing technology. Therefore, this study proposes the following:
Hypothesis 1 (H1) EE has a positive relationship with BI of Spotify Premium
subscription.
2.4 FC
FC’s refer to a person’s beliefs in the technical support available to advocate new
technology use (Venkatesh et al., 2012). This study examined the availability of Spotify’s
support for premium subscribers concerning the application. Paid music services require
fast and up-to-date technology, namely advanced electronic equipment and an internet
connection to ensure smooth and seamless music streaming. FC’s such as the skills and
ability to handle the devices are crucial factors and predictors of BI due to rapid
technological changes in the music streaming industry, such as computers, smartphones,
tablets, the internet, online customer support (Pinochet et al., 2019). This research
examined previous literature in proving the positive relationship between FC and BI,
such as the study by Beh et al. (2019) and Rahman et al. (2020). University students also
found that FC and BI was positively related in the context of learning management
system (Sharif et al., 2019). Hence, this paper proposed that:
Hypothesis 2 (H2) FC has positive effects on the BI of the Spotify Premium
subscription.
6 M.S.M. Suhod et al.
2.5 Habit
Habit (HB) is the extent to which an individual believes his behaviour is a result of
experience; the individual tends to perform that behaviour automatically based on
learning from past experience (Venkatesh et al., 2012). Habit occurs when one
consistently performs an activity, such as when they experience joy and happiness while
performing the activities or when the activity suits the individual. According to Soares
et al. (2020), habit could be influenced by past behaviour and personal experience in
applying particular system or products. If past experience produced favourable results,
there is high tendency to transform the particular behaviour to become a habit. Past
studies showed that habit produced a positive relationship with BI (Ameri et al., 2020;
Nikolopoulou et al., 2020; Soares et al., 2020). From that, the study proposed:
Hypothesis 3 (H3) Habit has positive effects on BI of Spotify Premium subscription
2.6 HM
HM is the enjoyment or pleasure from technology usage (Venkatesh et al., 2012). This
study defined HM as the enjoyment of Spotify Premium usage to enjoy music streaming.
Based on research by Beh et al. (2019), HM showed a positive relationship with BI in the
usage of smartwatches. Plus, Greece university students showed that their HM had a
positive relationship with BI concerning mobile phone usage (Nikolopoulou et al., 2020).
Hence, this paper suggested:
Hypothesis 4 (H4) HM produced a positive effect on the BI of the Spotify Premium
subscription.
2.7 PE
PE refers to the competence of applications or new technology to assist users in
performing certain activities substantially and conveniently (Venkatesh et al., 2012). A
study by Malik (2017) stated that users are more interested in applications that improve
their performance and productivity through better content knowledge and thus resulting
in content awareness and the ability to provide an application that performs well.
Previous studies on the continued use of technology discovered that PE has a positive
relationship with BI (Ameri et al., 2020; Nikolopoulou et al., 2020; Rahman et al., 2020).
With regards to that, the study proposed:
Hypothesis 5 (H5) PE has a positive effect on the BI of Spotify Premium subscription.
2.8 PV
PV refers to the relationship between consumers’ cognitive trade-off between the benefits
gained versus the amount paid for the services (Venkatesh et al., 2012). Spotify Premium
users will continue their subscription if the subscription is worth paying based on the
services provided. Plus, when there is beneficial experience from using the Spotify
Premium, or the received benefits are greater than the cost. Previously, it was discovered
that the PV has a positive relationship with the continued subscription of music streaming
services (Lüders, 2020).
Unravelling the continue of subscribing Spotify Premium 7
Additionally, the PV created a positive relationship with the BI on the continued
subscription to music streaming (Lüders, 2020) and continued use of mobile financial
services (Rahman et al., 2020). Consequently, the study proposed:
Hypothesis 6 (H6) PV produced positive effects on the BI of Spotify Premium
subscription.
2.9 SI
According to Venkatesh et al. (2012), SI refers to the extent of family and friend’s
influence on consumers in terms of the decision to use technology. In this particular
research, SI is the extent to which a university student perceives the influential person
can cause them to believe that they should subscribe to Spotify Premium. Since in
campus life, majority of the students spent their time with their colleague and they tend to
share the experience with their people around them. Hence, what are their surrounding
behaviour and thinking will have an impact in their daily life. Family and friend’s
perception will influence the students’ decision. Furthermore, most students are
encouraged by trend and peer pressure. SI has a positive relationship with the BI of
pharmacy students’ continued use of the mobile-based educational application (Ameri
et al., 2020) and Greece students’ continued use of mobile phones in their study
(Nikolopoulou et al., 2020).
How do the three new variables in the UTAUT 2 model improve on our understanding of continued usage of Spotify Premium? |
[question]
[user request]
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[text]
[context document]
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[instruction]
Answer the question using only the information provided in the context. Do not rely on external knowledge or sources. | What are the implications of the recent NCAA settlements, and what might it mean for the future of athlete compensation in college sports? Write in a minimum of 200 words. | Formal settlement documents were filed with the Northern District Court of California Friday to advance the settlement approval process to resolve class-action lawsuits involving the NCAA and the Atlantic Coast Conference, Big Ten Conference, Big 12 Conference, Pac-12 Conference and Southeastern Conference (Autonomy 5 conferences).
The settlement documents address three cases – House v. NCAA, Hubbard v. NCAA and Carter v. NCAA – involving back damages and future benefits for Division I student-athletes.
"This is another important step in the ongoing effort to provide increased benefits to student-athletes while creating a stable and sustainable model for the future of college sports," said the commissioners of the five conferences and the NCAA president. "While there is still much work to be done in the settlement approval process, this is a significant step toward establishing clarity for the future of all of Division I athletics while maintaining a lasting education-based model for college sports, ensuring the opportunity for student-athletes to earn a degree and the tools necessary to be successful in life after sports."
The Settlement
The settlement addresses three primary issues: payment of back damages for claims relating to name, image and likeness (NIL), academic-related awards and other benefits; increased benefits from institutions to student-athletes going forward, including additional NIL opportunities for student-athletes directly with the institution; and eliminating scholarships limits in favor of roster limits.
The settlement calls for total back damages of approximately $2.78 billion, to be paid over 10 years, equating to approximately $280 million annually with distribution of back damages as determined by plaintiffs.
Going forward, the settlement allows the A5 conference member institutions (and other DI schools that choose to participate in the new structure) to provide increased benefits to student-athletes, including for NIL. If approved by the court, this model will allow schools to provide up to 22% of the average Autonomy 5 athletic media, ticket, and sponsorship revenue to student-athletes, starting in the 2025-26 academic year. The future model could result in student-athletes receiving $1.5 billion to $2 billion in new benefits annually.
The new benefits that may be made available to student-athletes would be in addition to the myriad benefits currently provided to student-athletes, including free tuition, room & board, educational grants, academic support and tutoring, medical and mental health resources & support, nutrition resources & support, life skills development, superior coaching and training and extended medical coverage after they stop competing. Adding these existing benefits together with the benefits to be available under the new model, many A5 schools would be providing nearly 50 percent of athletics revenue to their student-athletes.
Under the new model, institutions may pay student-athletes directly for their NIL rights. Any institutional NIL payments would apply toward the 22% cap. Third parties may continue to enter into NIL agreements with student-athletes. Such agreements will be subject to review to ensure they are legitimate, fair market value agreements and not used for pay-for-play. NIL payments by third parties would not apply toward the 22% cap but must be disclosed to a clearinghouse for review.
The new model allows for the establishment of a robust and effective enforcement and oversight program to ensure the new NIL model achieves its objectives. The establishment of a clearinghouse for NIL payments over $600 would give institutions access to information about external NIL activities, providing a level of transparency that does not currently exist to allow for better management of third-party influence and better assurance of legitimate NIL activity.
Lastly, scholarship limits will be eliminated in all sports, and roster limits will be established. Institutions have the discretion to offer partial or full scholarships provided they do not exceed the roster limits. This change will allow institutions to provide additional scholarships to student-athletes in the future.
Next Steps
The settlement must be approved by the court before it becomes final, a process expected to take several months. If the court preliminarily approves the settlement, the class members will be provided notice of the settlement. Class members with claims for monetary damages based on prior conduct will have an opportunity to opt out of the settlement if they choose. Class members—including incoming student-athletes—will also receive notice and be allowed to present objections to the future relief/model to the court.
Unresolved Issues
While approval of the settlement would be a significant step forward, there would still be pending issues to be addressed that highlight the continuing need for federal legislation. These issues include:
The settlement does not resolve the patchwork of state laws, many of which may conflict with the settlement. These laws will need to be preempted by federal legislation in order for the settlement to be effective.
The settlement does not address ongoing efforts to designate student-athletes as employees under state and federal labor and employment laws. These efforts by the NLRB and plaintiffs' attorneys pose a direct threat to both the sustainability of sports programs (especially for non-revenue generating ones) and to the baseline of support provided to all athletes.
"This settlement is an important step forward for student-athletes and college sports, but it does not address every challenge," said the A5 conference commissioners and NCAA president. "The need for Federal legislation to provide solutions remains. If Congress does not act, the progress reached through the settlement could be significantly mitigated by state laws and continued litigation." | [question]
What are the implications of the recent NCAA settlements, and what might it mean for the future of athlete compensation in college sports? Write in a minimum of 200 words.
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Formal settlement documents were filed with the Northern District Court of California Friday to advance the settlement approval process to resolve class-action lawsuits involving the NCAA and the Atlantic Coast Conference, Big Ten Conference, Big 12 Conference, Pac-12 Conference and Southeastern Conference (Autonomy 5 conferences).
The settlement documents address three cases – House v. NCAA, Hubbard v. NCAA and Carter v. NCAA – involving back damages and future benefits for Division I student-athletes.
"This is another important step in the ongoing effort to provide increased benefits to student-athletes while creating a stable and sustainable model for the future of college sports," said the commissioners of the five conferences and the NCAA president. "While there is still much work to be done in the settlement approval process, this is a significant step toward establishing clarity for the future of all of Division I athletics while maintaining a lasting education-based model for college sports, ensuring the opportunity for student-athletes to earn a degree and the tools necessary to be successful in life after sports."
The Settlement
The settlement addresses three primary issues: payment of back damages for claims relating to name, image and likeness (NIL), academic-related awards and other benefits; increased benefits from institutions to student-athletes going forward, including additional NIL opportunities for student-athletes directly with the institution; and eliminating scholarships limits in favor of roster limits.
The settlement calls for total back damages of approximately $2.78 billion, to be paid over 10 years, equating to approximately $280 million annually with distribution of back damages as determined by plaintiffs.
Going forward, the settlement allows the A5 conference member institutions (and other DI schools that choose to participate in the new structure) to provide increased benefits to student-athletes, including for NIL. If approved by the court, this model will allow schools to provide up to 22% of the average Autonomy 5 athletic media, ticket, and sponsorship revenue to student-athletes, starting in the 2025-26 academic year. The future model could result in student-athletes receiving $1.5 billion to $2 billion in new benefits annually.
The new benefits that may be made available to student-athletes would be in addition to the myriad benefits currently provided to student-athletes, including free tuition, room & board, educational grants, academic support and tutoring, medical and mental health resources & support, nutrition resources & support, life skills development, superior coaching and training and extended medical coverage after they stop competing. Adding these existing benefits together with the benefits to be available under the new model, many A5 schools would be providing nearly 50 percent of athletics revenue to their student-athletes.
Under the new model, institutions may pay student-athletes directly for their NIL rights. Any institutional NIL payments would apply toward the 22% cap. Third parties may continue to enter into NIL agreements with student-athletes. Such agreements will be subject to review to ensure they are legitimate, fair market value agreements and not used for pay-for-play. NIL payments by third parties would not apply toward the 22% cap but must be disclosed to a clearinghouse for review.
The new model allows for the establishment of a robust and effective enforcement and oversight program to ensure the new NIL model achieves its objectives. The establishment of a clearinghouse for NIL payments over $600 would give institutions access to information about external NIL activities, providing a level of transparency that does not currently exist to allow for better management of third-party influence and better assurance of legitimate NIL activity.
Lastly, scholarship limits will be eliminated in all sports, and roster limits will be established. Institutions have the discretion to offer partial or full scholarships provided they do not exceed the roster limits. This change will allow institutions to provide additional scholarships to student-athletes in the future.
Next Steps
The settlement must be approved by the court before it becomes final, a process expected to take several months. If the court preliminarily approves the settlement, the class members will be provided notice of the settlement. Class members with claims for monetary damages based on prior conduct will have an opportunity to opt out of the settlement if they choose. Class members—including incoming student-athletes—will also receive notice and be allowed to present objections to the future relief/model to the court.
Unresolved Issues
While approval of the settlement would be a significant step forward, there would still be pending issues to be addressed that highlight the continuing need for federal legislation. These issues include:
The settlement does not resolve the patchwork of state laws, many of which may conflict with the settlement. These laws will need to be preempted by federal legislation in order for the settlement to be effective.
The settlement does not address ongoing efforts to designate student-athletes as employees under state and federal labor and employment laws. These efforts by the NLRB and plaintiffs' attorneys pose a direct threat to both the sustainability of sports programs (especially for non-revenue generating ones) and to the baseline of support provided to all athletes.
"This settlement is an important step forward for student-athletes and college sports, but it does not address every challenge," said the A5 conference commissioners and NCAA president. "The need for Federal legislation to provide solutions remains. If Congress does not act, the progress reached through the settlement could be significantly mitigated by state laws and continued litigation."
https://www.ncaa.org/news/2024/7/25/media-center-settlement-documents-filed-in-college-athletics-class-action-lawsuits#:~:text=The%20settlement%20calls%20for%20total,damages%20as%20determined%20by%20plaintiffs.
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Answer the question using only the information provided in the context. Do not rely on external knowledge or sources. |
You should answer the following question as concisely as possible, using only the provided text and no outside information. | From where did the study get its criteria for determining if a student was suffering from addiction? | Theoretically, Problematic Online Game Use (POGU) and online game addiction are the same; they refer to an excessive online game use that results in negative impact (Kim & Kim, 2010). This is asserted by theoretical perspective from Young (1998), in his theory, POGU is derived
from the characteristics of people suffering from internet addiction (IA), which is based on the criteria of Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition (DSM-V). Addictive behavior can be defined as a condition where an individual is addicted to a certain thing he loves on various occasions, which emerges from a lack of behavioral control, making them feel guilty when they do not satisfy their desire. This asserts that addiction is compulsive and lack of control aspect of behavior (Griffiths, 2005). They usually do what they love on any occasion.
How to distinguish between addiction and addiction tendencies, researchers refer to the proposed criteria in the DSM-5 (American Psychiatric Association, 2013) which explains that the severity of the disorder is based on the extent to which it interferes with daily activities. The proposed criteria in question are continuous and repeated use of the Internet to play games, often with other players, causing clinically significant disturbance or distress that is characterized as unsuccessful attempts to control online gaming behaviour, an increase in the amount of time playing online games, playing online games has become a dominant activity in an individual's life, health problems and relationships with others arise as a result of playing online games by individuals and this in a 12 month period.
Online game gains its popularity among adolescents, it offers a number of attractiveness, making adolescents prefer to play game than to study, and this has become habit among adolescents. In addition to impulsivity and aggression, enjoyment and competitive feelings can be associated with gambling addiction because dark personality traits are associated with higher levels of enjoyment and satisfaction with one's unhappiness can be facilitated by games (James, Kavanagh, Jonason, Chonody and Scrutton, 2014). There are some motivations that make someone playing online game. According to (Yee, 2006), there are ten subcomponents of motivation, causing ones to play online game, they are categorized into three components, namely achievement, social, and immersion. APJII's survey result in 2017 proves that the largest online game users were in the age of 19-34 years old (49.52%, or 70.94 million users). The survey conducted by the Ministry of Communication and Information Technology revealed that Indonesia has the sixth-largest internet users in the world, and most of them are adolescents aged 15 to 19 years old, the age of high school and university students.
This phenomenon is opposite to what university students should do. Students have a number of duties in university. The students supposed to study, obey the rule, respect the teacher, be discipline, and maintain the university reputation. The present study aimed to see the level of online game addiction and online use motive among the students of Semarang State University. As Wijayanti (2013) argued, one's motive in playing online game affects their level of addiction.
METHOD
This was a prevalence study with cross-sectional survey approach. The study was conducted in Semarang State University. The population of the study was all students of Semarang State University. By using random sampling technique, 568 students were selected as the subjects of study. The data of study were collected using two scales, addiction scale and online game use motives scale. Addiction scale used in the present study was adapted from Game Addiction Scale developed by Lemmens, Valkenburg, & Peter (2009). This scale consists of 21 categories with 3 categories on each aspect related to the seven criteria for online gaming addiction according to Lemmens, Valkenburg and Peter, which are silence, tolerance, mood swings, relapse. , addiction, conflict and problems. This tool has a Cronbach Alpha score of 0.94. There are no adverse factors in this measurement tool.
Besides, online game use motives scale was adapted from instrument developed by Demetrovics et al. (2011), namely, motives for Online Gaming Questionnaire (MOGQ). This scale consists of 27 items that measure seven aspects of gambling motivation: escape (escape from reality), cope (overcome stress and distress), fantasy (gambling identity and experience), skill development (such as attention and coordination), Recreation (entertainment and fun), Competition (challenge and compete with others) and Social (establishment and maintenance of social relationship). MOGQ is the first tool designed to measure the motivation of online gamers of all ages. These include the major gambling motives identified in previous studies and exhibit high internal consistency. Univariate data analysis and bivariate correlation were employed. There were five interval criteria to interpret the percentage, Very Low, Low, Fair, High, and Very High. The result was categorized as Very High if its percentage is in the range of 84%-100%. It was categorized as High if its percentage is in the range of 68%-83%. It was categorized as Fair if its percentage is in the range of 52%-67%. It was categorized as Low if its percentage is in the range of 36%-51%. While it was categorized as Very Low if its percentage is in the range of 20%-35%. Data analysis using correlation analysis and multiple linear regression. Researchers used the application of Statistical Product and Service Solution (SPSS) version 22. | System Instruction: You should answer the following question as concisely as possible, using only the provided text and no outside information.
Question: From where did the study get its criteria for determining if a student was suffering from addiction?
Context:
Theoretically, Problematic Online Game Use (POGU) and online game addiction are the same; they refer to an excessive online game use that results in negative impact (Kim & Kim, 2010). This is asserted by theoretical perspective from Young (1998), in his theory, POGU is derived
from the characteristics of people suffering from internet addiction (IA), which is based on the criteria of Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition (DSM-V). Addictive behavior can be defined as a condition where an individual is addicted to a certain thing he loves on various occasions, which emerges from a lack of behavioral control, making them feel guilty when they do not satisfy their desire. This asserts that addiction is compulsive and lack of control aspect of behavior (Griffiths, 2005). They usually do what they love on any occasion.
How to distinguish between addiction and addiction tendencies, researchers refer to the proposed criteria in the DSM-5 (American Psychiatric Association, 2013) which explains that the severity of the disorder is based on the extent to which it interferes with daily activities. The proposed criteria in question are continuous and repeated use of the Internet to play games, often with other players, causing clinically significant disturbance or distress that is characterized as unsuccessful attempts to control online gaming behaviour, an increase in the amount of time playing online games, playing online games has become a dominant activity in an individual's life, health problems and relationships with others arise as a result of playing online games by individuals and this in a 12 month period.
Online game gains its popularity among adolescents, it offers a number of attractiveness, making adolescents prefer to play game than to study, and this has become habit among adolescents. In addition to impulsivity and aggression, enjoyment and competitive feelings can be associated with gambling addiction because dark personality traits are associated with higher levels of enjoyment and satisfaction with one's unhappiness can be facilitated by games (James, Kavanagh, Jonason, Chonody and Scrutton, 2014). There are some motivations that make someone playing online game. According to (Yee, 2006), there are ten subcomponents of motivation, causing ones to play online game, they are categorized into three components, namely achievement, social, and immersion. APJII's survey result in 2017 proves that the largest online game users were in the age of 19-34 years old (49.52%, or 70.94 million users). The survey conducted by the Ministry of Communication and Information Technology revealed that Indonesia has the sixth-largest internet users in the world, and most of them are adolescents aged 15 to 19 years old, the age of high school and university students.
This phenomenon is opposite to what university students should do. Students have a number of duties in university. The students supposed to study, obey the rule, respect the teacher, be discipline, and maintain the university reputation. The present study aimed to see the level of online game addiction and online use motive among the students of Semarang State University. As Wijayanti (2013) argued, one's motive in playing online game affects their level of addiction.
METHOD
This was a prevalence study with cross-sectional survey approach. The study was conducted in Semarang State University. The population of the study was all students of Semarang State University. By using random sampling technique, 568 students were selected as the subjects of study. The data of study were collected using two scales, addiction scale and online game use motives scale. Addiction scale used in the present study was adapted from Game Addiction Scale developed by Lemmens, Valkenburg, & Peter (2009). This scale consists of 21 categories with 3 categories on each aspect related to the seven criteria for online gaming addiction according to Lemmens, Valkenburg and Peter, which are silence, tolerance, mood swings, relapse. , addiction, conflict and problems. This tool has a Cronbach Alpha score of 0.94. There are no adverse factors in this measurement tool.
Besides, online game use motives scale was adapted from instrument developed by Demetrovics et al. (2011), namely, motives for Online Gaming Questionnaire (MOGQ). This scale consists of 27 items that measure seven aspects of gambling motivation: escape (escape from reality), cope (overcome stress and distress), fantasy (gambling identity and experience), skill development (such as attention and coordination), Recreation (entertainment and fun), Competition (challenge and compete with others) and Social (establishment and maintenance of social relationship). MOGQ is the first tool designed to measure the motivation of online gamers of all ages. These include the major gambling motives identified in previous studies and exhibit high internal consistency. Univariate data analysis and bivariate correlation were employed. There were five interval criteria to interpret the percentage, Very Low, Low, Fair, High, and Very High. The result was categorized as Very High if its percentage is in the range of 84%-100%. It was categorized as High if its percentage is in the range of 68%-83%. It was categorized as Fair if its percentage is in the range of 52%-67%. It was categorized as Low if its percentage is in the range of 36%-51%. While it was categorized as Very Low if its percentage is in the range of 20%-35%. Data analysis using correlation analysis and multiple linear regression. Researchers used the application of Statistical Product and Service Solution (SPSS) version 22. |
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[context document] | According to this article, what are the reasons that Plantir is growing its getting more commercial clients? Please tell me in easy to understand terms, I'm not an expert at this stuff. | Palantir reported its Q2 FY24 earnings, where total revenue grew 27% YoY to $678M beating estimates. Out of the $678M in revenue, Government revenue accounted for roughly 55% of Total Revenue, growing 23% YoY. But the main hero of this growth story is its Commercial segment which is growing at a faster rate of 33% YoY and accounting for a growing share of Total Revenue when we compare it to the prior year.
Particularly, when it comes to the Commercial revenue segment, its US market saw a growth rate of 55% YoY to $159M. While it saw a slowdown in its growth pace on a sequential basis to 6%, its annual growth rate indicates a reacceleration in trend, boosting investor optimism. This was driven by persistent demand for their enterprise platform, AIP (Artificial Intelligence Platform), that makes artificial capabilities useful to large organizations, providing them with a structural advantage over their competitors.
What is even more impressive is that over 4 years ago, Palantir had just 14 commercial customers in the US. With the launch of AIP over a year ago, its US commercial customer count stands at 295, growing 83% YoY, as it captures the enterprise AI opportunity as the management claims that they solve the “prototype to production” problem like no other company.
In Q2, the company closed 96 Commercial deals with at least $1M of TCV (Total Contract Value), which grew 45% YoY and 10% QoQ. However, with a closer look at this data point, we can see that the company saw a sequential acceleration in its $5M and $10M deals, which grew 22% and 80% QoQ to 33 and 27 respectively. This is driven by a combination of a higher volume of existing customers signing expansion deals with deepening product-level relationships as well as new customer acquisition where they leverage their go-to-market motion of bootcamps and pilots to accelerate customer journey towards high-value production use cases, with TCV growing 152% YoY in the US Commercial segment.
At the same time, Palantir and Microsoft (MSFT) also announced a significant advancement in their partnership in August, where Palantir will deploy their suite of products in Microsoft Azure Government and in the Azure Government Secret and Top Secret Clouds, enabling operators to safely and responsibly build AI-driven operational workloads across Defense and Intelligence verticals for the US government. This should further drive deeper adoption of AIP in the federal sector, thus boosting the top line.
Shifting gears to profitability, Palantir generated $254M in Adjusted Operating income, which grew 88% YoY with a margin expansion of 1200 basis points to 37%. Simultaneously, the company also achieved GAAP operating profitability for the sixth consecutive quarter with a GAAP operating margin of 16%, up 1400 basis points YoY. It is incredible that operating expenses just grew just 6% YoY for the magnitude of revenue growth. In other words, it saw its revenue growth accelerate while expanding margins at the same time, unlocking the “holy grail” in the world of SaaS with a Rule of 40 score from 57 in Q1 to 64 in Q2.
I believe that this is made possible by its go-to-market strategy, which focuses on AIP Bootcamps and AIPCon that leverages the strength of its product to unlock potential client AI use cases instead of hoarding large numbers of salespeople. So far, with this strategy, it is seeing a steady increase in the number of clients along with existing clients expanding their usage of the platform, with the 12-month revenue from Top 20 customers growing 9% YoY to $57M/customer, thus enabling it to unlock operating leverage. | {instruction}
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In your answer, refer only to the context document. Do not employ any outside knowledge
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According to this article, what are the reasons that Plantir is growing its getting more commercial clients? Please tell me in easy to understand terms, I'm not an expert at this stuff.
{passage 0}
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Palantir reported its Q2 FY24 earnings, where total revenue grew 27% YoY to $678M beating estimates. Out of the $678M in revenue, Government revenue accounted for roughly 55% of Total Revenue, growing 23% YoY. But the main hero of this growth story is its Commercial segment which is growing at a faster rate of 33% YoY and accounting for a growing share of Total Revenue when we compare it to the prior year.
Particularly, when it comes to the Commercial revenue segment, its US market saw a growth rate of 55% YoY to $159M. While it saw a slowdown in its growth pace on a sequential basis to 6%, its annual growth rate indicates a reacceleration in trend, boosting investor optimism. This was driven by persistent demand for their enterprise platform, AIP (Artificial Intelligence Platform), that makes artificial capabilities useful to large organizations, providing them with a structural advantage over their competitors.
What is even more impressive is that over 4 years ago, Palantir had just 14 commercial customers in the US. With the launch of AIP over a year ago, its US commercial customer count stands at 295, growing 83% YoY, as it captures the enterprise AI opportunity as the management claims that they solve the “prototype to production” problem like no other company.
In Q2, the company closed 96 Commercial deals with at least $1M of TCV (Total Contract Value), which grew 45% YoY and 10% QoQ. However, with a closer look at this data point, we can see that the company saw a sequential acceleration in its $5M and $10M deals, which grew 22% and 80% QoQ to 33 and 27 respectively. This is driven by a combination of a higher volume of existing customers signing expansion deals with deepening product-level relationships as well as new customer acquisition where they leverage their go-to-market motion of bootcamps and pilots to accelerate customer journey towards high-value production use cases, with TCV growing 152% YoY in the US Commercial segment.
At the same time, Palantir and Microsoft (MSFT) also announced a significant advancement in their partnership in August, where Palantir will deploy their suite of products in Microsoft Azure Government and in the Azure Government Secret and Top Secret Clouds, enabling operators to safely and responsibly build AI-driven operational workloads across Defense and Intelligence verticals for the US government. This should further drive deeper adoption of AIP in the federal sector, thus boosting the top line.
Shifting gears to profitability, Palantir generated $254M in Adjusted Operating income, which grew 88% YoY with a margin expansion of 1200 basis points to 37%. Simultaneously, the company also achieved GAAP operating profitability for the sixth consecutive quarter with a GAAP operating margin of 16%, up 1400 basis points YoY. It is incredible that operating expenses just grew just 6% YoY for the magnitude of revenue growth. In other words, it saw its revenue growth accelerate while expanding margins at the same time, unlocking the “holy grail” in the world of SaaS with a Rule of 40 score from 57 in Q1 to 64 in Q2.
I believe that this is made possible by its go-to-market strategy, which focuses on AIP Bootcamps and AIPCon that leverages the strength of its product to unlock potential client AI use cases instead of hoarding large numbers of salespeople. So far, with this strategy, it is seeing a steady increase in the number of clients along with existing clients expanding their usage of the platform, with the 12-month revenue from Top 20 customers growing 9% YoY to $57M/customer, thus enabling it to unlock operating leverage.
https://seekingalpha.com/article/4720671-palantir-80x-pe-pure-nosebleed#source=first_level_url%3Ahome%7Csection%3Atrending_articles%7Crecommendation_type%3Adefault%7Cline%3A11 |
You must respond using only information provided in the prompt. Explain your reasoning with at least 2 supporting points without using direct quotes over 5 words. | summarize the info from the answer to question 1 in a 3-column table | Betsy L. Graseck
Analyst, Morgan Stanley & Co. LLC Q
So, a couple of questions here. Just, one, Jamie, could you talk through the decision to raise the dividend kind of mid-cycle, it felt like, preCCAR? And also, help us understand how you're thinking about where that payout ratio, that dividend payout ratio, range should be. Because
over the past several years, it's been somewhere between 24% and 32%. And so, is this suggesting we could be towards the higher-end of
that range or even expanding above that?
And then I also just wanted to understand the buyback and the keeping of the CET1 at 15% here. The minimum is 11.9%. I know it's – we
have to wait for Basel III Endgame re-proposal to come through and all that, but should we be expecting that, hey, we're going to hold 15%
CET1 until we know all these rules? Thanks.
......................................................................................................................................................................................................................................................
Jamie Dimon
Chairman & Chief Executive Officer, JPMorgan Chase & Co. A
Yeah. So, Betsy, before I answer the question, I want to say something on behalf of all of us at JPMorgan and, me personally, thrilled to have
you on this call. For those that don't know, Betsy has been through a terrible medical episode and it's a reminder to all of us how lucky we are
to be here. But, Betsy, in particular, the amount of respect we have, not just in your work, but in your character over the last 20 plus years has
been exceptional. So, on behalf of all of us, I just want to welcome you back and thrilled to have you here.
And so, you're asking a pertinent question. So, we're earning a lot of money. Our capital cup runneth over, and that's why we've increased the
dividend. And if you're asking me what we'd like to do is to pay out something like a third, a third of normalized earnings. Of course, it's hard to
calculate always what normalized earnings are, but we don't mind being a little bit ahead of that sometimes, a little bit behind that sometimes.
If I could give people kind of consistent dividend guidance, et cetera, I think the far more important question is the 15%. So, look at the 15%,
I'm going to oversimplify it, that basically will prepare us for the total Basel Endgame today, roughly. The specifics don't matter that much.
5
Jamie Dimon
Chairman & Chief Executive Officer, JPMorgan Chase & Co. A
Remember, we can do a lot of things to change that in the short-run or the long-run, but it looks like Basel III Endgame may not be the worst
case. It'll be something less than that. So, obviously, when and if that happens, it would free up a lot of capital, and I'm going to say in the
order of $20 billion or something like that.
And, yes, we've always had the capital hierarchy the same way, which is we're going to use capital to build our business first, I mean, pay the
dividend – steady dividend, build the business, and if we think it's appropriate to buy back stock. We're continuing to buy back stock at $2
billion a quarter (sic). I personally do not want to buy back a lot more than that at these current prices. I think you've all heard me talk about
the world, things like that. So, waiting in preparation for Basel. Hopefully we'll know something later, and then we can be much more specific
with you all.
But in the meantime, there's also – it's very important to put in mind, there are short-term uses for capital that are good for shareholders, that
could reduce our CET1 too. So, you may see us do things in the short-run that will increase earnings, increase capital, that are using up that
capital. Jeremy mentioned on the – on one of the things that we know, the balance sheet and how we use the balance sheet for credit and
trading, we could do things now.
So, it's a great position to be in. We're going to be very, very patient. I urge all the analysts to keep in mind, excess capital is not wasted
capital, it's earnings in store. We will deploy it in a very good way for shareholders in due course.
......................................................................................................................................................................................................................................................
Betsy L. Graseck
Analyst, Morgan Stanley & Co. LLC Q
Excellent. Thank you so much.
......................................................................................................................................................................................................................................................
Jeremy Barnum
Chief Financial Officer, JPMorgan Chase & Co. A
And yeah, Betsy, I just wanted to add my welcome back thoughts as well, and just a very minor edit to Jamie's answer. I think he just
misspoke when he said $2 billion a year in buybacks. The trajectory is $2 billion...
......................................................................................................................................................................................................................................................
Jamie Dimon
Chairman & Chief Executive Officer, JPMorgan Chase & Co. A
Oh. Sorry. $2 billion a quarter. Yeah.
......................................................................................................................................................................................................................................................
Jeremy Barnum
Chief Financial Officer, JPMorgan Chase & Co. A
...a quarter. Otherwise, I have nothing to add to Jamie's very complete answer. But welcome back, Betsy.
......................................................................................................................................................................................................................................................
Betsy L. Graseck
Analyst, Morgan Stanley & Co. LLC Q
Okay. Thank you so much, and appreciate it. Looking forward to seeing you at Investor Day on May 20th.
......................................................................................................................................................................................................................................................
Jeremy Barnum
Chief Financial Officer, JPMorgan Chase & Co. A
Excellent. Us too.
......................................................................................................................................................................................................................................................
Operator: Thank you. Our next question comes from Jim Mitchell with Seaport Global. You may proceed.
......................................................................................................................................................................................................................................................
6
Jim Mitchell
Analyst, Seaport Global Securities LLC Q
Hey. Good morning. Jeremy, can you speak to the trends you're seeing with respect to deposit migration in the quarter, if there's been any
change? Have you seen that migration start to slow or not?
......................................................................................................................................................................................................................................................
Jeremy Barnum
Chief Financial Officer, JPMorgan Chase & Co. A
Yeah. Good question, Jim. I think the simplest and best answer to that is: not really. So, as we've been saying for a while, migration from
checking and savings to CDs is sort of the dominant trend with this driving the increase in weighted average rate paid in the consumer deposit
franchise, that continues. We continue to capture that money-in-motion at a very high rate. We're very happy about what that means about the
consumer franchise and level of engagement that we're seeing.
I'm aware that there's a little bit of a narrative out there about are we seeing the end of what people sometimes refer to as cash sorting. We've
looked at that data. We see some evidence that maybe it's slowing a little bit. We're quite cautious on that. We really sort of don't think it
makes sense to assume that in a world where checking and savings is paying effectively zero and the policy rate is above 5% that you're not
going to see ongoing migration.
And frankly, we expect to see that even in a world where – even if the current yield curve environment were to change and meaningful cuts
were to get reintroduced and we would actually start to see those, we would still expect to see ongoing migration and yield-seeking behavior.
So, it's quite conceivable and this is actually on the yield curve that we had in fourth quarter that had six cuts in it. We were still nonetheless
expecting an increase in weighted average rate paid as that migration continues. So, I would say no meaningful change in the trends and the
expectation for ongoing migration is very much still there.
......................................................................................................................................................................................................................................................
Jim Mitchell
Analyst, Seaport Global Securities LLC Q
Okay. And just a follow-up on that and just sort of bigger picture on NII. Is that sort of the biggest driver of your outlook? Is it migration? Is it
the forward curve? Is it balances? It sounds like it's migration, but just I'd be curious to hear your thoughts on the biggest drivers of upside or
downside.
..................................................................................................................................................................................................................................
Jeremy Barnum
Chief Financial Officer, JPMorgan Chase & Co. A
Yeah. So, I mean I think the drivers of, let's say, what's embedded in the current guidance is actually not meaningfully different from what it
was in the fourth quarter, meaning it's the current yield curve, which is a little bit stale now. But the snap from quarter-end had roughly three
cuts in it. So, it's the current yield curve, it's what I just said, the expectation of ongoing internal migration. There is some meaningful offset
from Card revolve growth, which while it's a little bit less than it was in prior years, is still a tailwind there. | You must respond using only information provided in the prompt. Explain your reasoning with at least 2 supporting points without using direct quotes over 5 words.
Betsy L. Graseck
Analyst, Morgan Stanley & Co. LLC Q
So, a couple of questions here. Just, one, Jamie, could you talk through the decision to raise the dividend kind of mid-cycle, it felt like, preCCAR? And also, help us understand how you're thinking about where that payout ratio, that dividend payout ratio, range should be. Because
over the past several years, it's been somewhere between 24% and 32%. And so, is this suggesting we could be towards the higher-end of
that range or even expanding above that?
And then I also just wanted to understand the buyback and the keeping of the CET1 at 15% here. The minimum is 11.9%. I know it's – we
have to wait for Basel III Endgame re-proposal to come through and all that, but should we be expecting that, hey, we're going to hold 15%
CET1 until we know all these rules? Thanks.
......................................................................................................................................................................................................................................................
Jamie Dimon
Chairman & Chief Executive Officer, JPMorgan Chase & Co. A
Yeah. So, Betsy, before I answer the question, I want to say something on behalf of all of us at JPMorgan and, me personally, thrilled to have
you on this call. For those that don't know, Betsy has been through a terrible medical episode and it's a reminder to all of us how lucky we are
to be here. But, Betsy, in particular, the amount of respect we have, not just in your work, but in your character over the last 20 plus years has
been exceptional. So, on behalf of all of us, I just want to welcome you back and thrilled to have you here.
And so, you're asking a pertinent question. So, we're earning a lot of money. Our capital cup runneth over, and that's why we've increased the
dividend. And if you're asking me what we'd like to do is to pay out something like a third, a third of normalized earnings. Of course, it's hard to
calculate always what normalized earnings are, but we don't mind being a little bit ahead of that sometimes, a little bit behind that sometimes.
If I could give people kind of consistent dividend guidance, et cetera, I think the far more important question is the 15%. So, look at the 15%,
I'm going to oversimplify it, that basically will prepare us for the total Basel Endgame today, roughly. The specifics don't matter that much.
5
Jamie Dimon
Chairman & Chief Executive Officer, JPMorgan Chase & Co. A
Remember, we can do a lot of things to change that in the short-run or the long-run, but it looks like Basel III Endgame may not be the worst
case. It'll be something less than that. So, obviously, when and if that happens, it would free up a lot of capital, and I'm going to say in the
order of $20 billion or something like that.
And, yes, we've always had the capital hierarchy the same way, which is we're going to use capital to build our business first, I mean, pay the
dividend – steady dividend, build the business, and if we think it's appropriate to buy back stock. We're continuing to buy back stock at $2
billion a quarter (sic). I personally do not want to buy back a lot more than that at these current prices. I think you've all heard me talk about
the world, things like that. So, waiting in preparation for Basel. Hopefully we'll know something later, and then we can be much more specific
with you all.
But in the meantime, there's also – it's very important to put in mind, there are short-term uses for capital that are good for shareholders, that
could reduce our CET1 too. So, you may see us do things in the short-run that will increase earnings, increase capital, that are using up that
capital. Jeremy mentioned on the – on one of the things that we know, the balance sheet and how we use the balance sheet for credit and
trading, we could do things now.
So, it's a great position to be in. We're going to be very, very patient. I urge all the analysts to keep in mind, excess capital is not wasted
capital, it's earnings in store. We will deploy it in a very good way for shareholders in due course.
......................................................................................................................................................................................................................................................
Betsy L. Graseck
Analyst, Morgan Stanley & Co. LLC Q
Excellent. Thank you so much.
......................................................................................................................................................................................................................................................
Jeremy Barnum
Chief Financial Officer, JPMorgan Chase & Co. A
And yeah, Betsy, I just wanted to add my welcome back thoughts as well, and just a very minor edit to Jamie's answer. I think he just
misspoke when he said $2 billion a year in buybacks. The trajectory is $2 billion...
......................................................................................................................................................................................................................................................
Jamie Dimon
Chairman & Chief Executive Officer, JPMorgan Chase & Co. A
Oh. Sorry. $2 billion a quarter. Yeah.
......................................................................................................................................................................................................................................................
Jeremy Barnum
Chief Financial Officer, JPMorgan Chase & Co. A
...a quarter. Otherwise, I have nothing to add to Jamie's very complete answer. But welcome back, Betsy.
......................................................................................................................................................................................................................................................
Betsy L. Graseck
Analyst, Morgan Stanley & Co. LLC Q
Okay. Thank you so much, and appreciate it. Looking forward to seeing you at Investor Day on May 20th.
......................................................................................................................................................................................................................................................
Jeremy Barnum
Chief Financial Officer, JPMorgan Chase & Co. A
Excellent. Us too.
......................................................................................................................................................................................................................................................
Operator: Thank you. Our next question comes from Jim Mitchell with Seaport Global. You may proceed.
......................................................................................................................................................................................................................................................
6
Jim Mitchell
Analyst, Seaport Global Securities LLC Q
Hey. Good morning. Jeremy, can you speak to the trends you're seeing with respect to deposit migration in the quarter, if there's been any
change? Have you seen that migration start to slow or not?
......................................................................................................................................................................................................................................................
Jeremy Barnum
Chief Financial Officer, JPMorgan Chase & Co. A
Yeah. Good question, Jim. I think the simplest and best answer to that is: not really. So, as we've been saying for a while, migration from
checking and savings to CDs is sort of the dominant trend with this driving the increase in weighted average rate paid in the consumer deposit
franchise, that continues. We continue to capture that money-in-motion at a very high rate. We're very happy about what that means about the
consumer franchise and level of engagement that we're seeing.
I'm aware that there's a little bit of a narrative out there about are we seeing the end of what people sometimes refer to as cash sorting. We've
looked at that data. We see some evidence that maybe it's slowing a little bit. We're quite cautious on that. We really sort of don't think it
makes sense to assume that in a world where checking and savings is paying effectively zero and the policy rate is above 5% that you're not
going to see ongoing migration.
And frankly, we expect to see that even in a world where – even if the current yield curve environment were to change and meaningful cuts
were to get reintroduced and we would actually start to see those, we would still expect to see ongoing migration and yield-seeking behavior.
So, it's quite conceivable and this is actually on the yield curve that we had in fourth quarter that had six cuts in it. We were still nonetheless
expecting an increase in weighted average rate paid as that migration continues. So, I would say no meaningful change in the trends and the
expectation for ongoing migration is very much still there.
......................................................................................................................................................................................................................................................
Jim Mitchell
Analyst, Seaport Global Securities LLC Q
Okay. And just a follow-up on that and just sort of bigger picture on NII. Is that sort of the biggest driver of your outlook? Is it migration? Is it
the forward curve? Is it balances? It sounds like it's migration, but just I'd be curious to hear your thoughts on the biggest drivers of upside or
downside.
..................................................................................................................................................................................................................................
Jeremy Barnum
Chief Financial Officer, JPMorgan Chase & Co. A
Yeah. So, I mean I think the drivers of, let's say, what's embedded in the current guidance is actually not meaningfully different from what it
was in the fourth quarter, meaning it's the current yield curve, which is a little bit stale now. But the snap from quarter-end had roughly three
cuts in it. So, it's the current yield curve, it's what I just said, the expectation of ongoing internal migration. There is some meaningful offset
from Card revolve growth, which while it's a little bit less than it was in prior years, is still a tailwind there.
summarize the info from the answer to question 1 in a 3-column table
|
Answer using only information in the prompt.
Answer in full sentences, but the word or phrase that provides a direct answer to the prompt should be in bold text. | Which treatments are suitable for children? | Treatment options include:
• No treatment: Up to 65% of viral warts including plantar warts resolve
by themselves without any treatment within two years of appearing.
Plantar warts that are not causing any adverse symptoms such as pain
should be left alone.
• Salicylic acid paints and gels: These are available in different
strengths. Salicylic acid works by removing the outer dead layers of skin
and triggering the immune system into clearing the virus. Before applying
the paint, the feet should be soaked in warm water and thickened skin
filed away with a pumice stone or emery board. Care should be taken
not to scrape the surrounding normal skin to avoid spreading the virus.
Treatment should be daily for at least 12 weeks and is usually most
convenient at bedtime. The paint /gel should be applied carefully to the
wart, not the surrounding normal skin. Cover the lesion with a dressing
to allow the treatment to work effectively. If the wart becomes too sore,
treatment should be stopped for a few days, then resumed.
• Cryotherapy. (See patient information leaflet on cryotherapy). Freezing
the warts with liquid nitrogen (a very cold gas), may be available at your
doctor’s surgery or podiatrist. Thick warts need to be shaved before
freezing to allow the cold to get into the skin. Ideally, cryotherapy should
be repeated every three to four weeks. It is painful and may cause
blisters and burns, and because of this is not usually recommended in
children. Several freezes may be needed to clear warts and it does not
always work. Using a salicylic acid preparation in between freezes may
improve the effectiveness.
• Duct Tape: Although there is conflicting evidence regarding the
effectiveness of duct tape in the treatment of cutaneous warts, it might still be well worth trying, especially in children. The wart should be
covered with duct tape for six days, and if the tape falls off it should be
replaced with a fresh piece. The tape should then be removed, and the
affected area soaked in luke-warm water and the wart pared down to
remove any dead skin cells. The wart should then be left uncovered
overnight, and the duct tape reapplied once again in the morning. This
can be continued for up to two months.
• Other approved topical treatments for plantar warts include
formaldehyde gel, glutaraldehyde and silver nitrate caustic pencils.
• Other preparations include topical dithranol, podophyllotoxin, 5-
fluorouracil trichloroacetic acid and bleomycin injections.
• Contact immunotherapy with a chemical paint such as diphencyprone
causes an allergic skin reaction that may boost the body’s immune
reaction against the wart virus.
• Surgical removal of warts is an option if topical treatments do not work.
Options include tissue destructive laser therapy or curettage and cautery
after a local anaesthetic injection into the skin. These procedures are
painful and can lead to uncomfortable scarring. The wart may come back
in the scar after surgery.
• Photodynamic therapy and other lasers (Pulsed Dye Laser and NdYAG) have also been used but are not widely available for treatment of
warts.
• Complementary and alternative treatments include hypnotherapy,
homeopathy, acupuncture, and herbal treatment. | System instructions:
Answer using only information in the prompt.
Answer in full sentences, but the word or phrase that provides a direct answer to the prompt should be in bold text.
Context: Treatment options include:
• No treatment: Up to 65% of viral warts including plantar warts resolve
by themselves without any treatment within two years of appearing.
Plantar warts that are not causing any adverse symptoms such as pain
should be left alone.
• Salicylic acid paints and gels: These are available in different
strengths. Salicylic acid works by removing the outer dead layers of skin
and triggering the immune system into clearing the virus. Before applying
the paint, the feet should be soaked in warm water and thickened skin
filed away with a pumice stone or emery board. Care should be taken
not to scrape the surrounding normal skin to avoid spreading the virus.
Treatment should be daily for at least 12 weeks and is usually most
convenient at bedtime. The paint /gel should be applied carefully to the
wart, not the surrounding normal skin. Cover the lesion with a dressing
to allow the treatment to work effectively. If the wart becomes too sore,
treatment should be stopped for a few days, then resumed.
• Cryotherapy. (See patient information leaflet on cryotherapy). Freezing
the warts with liquid nitrogen (a very cold gas), may be available at your
doctor’s surgery or podiatrist. Thick warts need to be shaved before
freezing to allow the cold to get into the skin. Ideally, cryotherapy should
be repeated every three to four weeks. It is painful and may cause
blisters and burns, and because of this is not usually recommended in
children. Several freezes may be needed to clear warts and it does not
always work. Using a salicylic acid preparation in between freezes may
improve the effectiveness.
• Duct Tape: Although there is conflicting evidence regarding the
effectiveness of duct tape in the treatment of cutaneous warts, it might still be well worth trying, especially in children. The wart should be
covered with duct tape for six days, and if the tape falls off it should be
replaced with a fresh piece. The tape should then be removed, and the
affected area soaked in luke-warm water and the wart pared down to
remove any dead skin cells. The wart should then be left uncovered
overnight, and the duct tape reapplied once again in the morning. This
can be continued for up to two months.
• Other approved topical treatments for plantar warts include
formaldehyde gel, glutaraldehyde and silver nitrate caustic pencils.
• Other preparations include topical dithranol, podophyllotoxin, 5-
fluorouracil trichloroacetic acid and bleomycin injections.
• Contact immunotherapy with a chemical paint such as diphencyprone
causes an allergic skin reaction that may boost the body’s immune
reaction against the wart virus.
• Surgical removal of warts is an option if topical treatments do not work.
Options include tissue destructive laser therapy or curettage and cautery
after a local anaesthetic injection into the skin. These procedures are
painful and can lead to uncomfortable scarring. The wart may come back
in the scar after surgery.
• Photodynamic therapy and other lasers (Pulsed Dye Laser and NdYAG) have also been used but are not widely available for treatment of
warts.
• Complementary and alternative treatments include hypnotherapy,
homeopathy, acupuncture, and herbal treatment.
Question: Which treatments are suitable for children? |
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<TEXT PASSAGE>
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[context document]
================
<QUESTION>
=======
[user request]
================
<TASK>
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You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." | What happens when faces are quickly flashed in one's peripheral vision? Summarize the role of peripheral vision in the flashed face distortion effect in 200 words or fewer. | In our lifetimes, we encounter hundreds of thousands of faces. Each person's unique exposure to faces largely determines their "face space"—a model of how we encode, perceive, and remember the faces that we see.
Cross-cultural differences, such as the other-race effect, demonstrate that we are generally more accurate at recognizing faces of ethnicities we are more familiar with. But even within cultures, people differ greatly in which faces will elicit a sense of trustworthiness, approachability, or attractiveness.
Another factor has an even greater effect on how we perceive a face—where the face is positioned relative to our central or peripheral vision. Something very strange happens when a sequence of faces is quickly presented in our peripheral vision. This was first demonstrated in 2011 in a powerful illusion discovered by Jason Tangen, Sean Murphy, and Matthew Thompson, called the "flashed face distortion effect"
After a few seconds of staring at the central fixation cross, the faces peripherally presented faces start to appear deformed, cartoonish, and even grotesque. However, upon closer inspection, one can tell the faces are perfectly normal and have not been altered.
Several studies have attempted to explain the mechanisms underlying this phenomenon. Is it the fact that the faces are aligned at the eyes? Is it because they are presented quickly (4-5 faces per second)? Is it dependent on which faces follow each other or how centrally or peripherally they are shown?
The Role of Peripheral Vision
A study by Bowden et al. (2019) explored the role of peripheral vision. We know that everything in peripheral vision looks blurry compared to central vision. This is because peripheral stimuli are processed by retinal rod cells that have poor spatial acuity. So it could be that the intrinsic blur of peripheral vision makes the faces appear distorted.
However, Bowden et al. compared peripherally presented faces to centrally presented faces manipulated by blur. Although they found some evidence of face distortion in central vision using blurred faces, the effect was much larger when using un-blurred peripheral faces.
Another study by Balas and Pearson (2019) tested additional factors that may influence the illusion. They again found that peripheral presentation makes a big difference, as does the presentation speed.
Notably, the orientation of the faces presented did not seem to matter. In other words, upside-down faces produced a similar distortion effect as upright faces. This is surprising because, in most aspects of face perception, upside-down faces produce weak effects due to their general unfamiliarity (a prime example of this is the Thatcher Effect).
Do We All Perceive the Same Distortions When Looking at Peripherally Flashed Faces?
Earlier research by Afraz and Cavanagh (2009) found that peripheral distortion effects are quite idiosyncratic. Their study presented participants with faces and other stimuli in different positions of their peripheral vision. Participants were asked to make various judgments, such as the gender and age of faces or the aspect ratio of shapes.
They found that the very same stimulus can appear differently depending on where it is placed within the observer's peripheral vision. For example, a neutral face might appear male in the upper right corner, but in the lower right corner, the same face might appear female. These differences are stable over time for a particular observer but vary substantially between observers.
Therefore, the particularities of the visual distortions we experience in peripheral vision may be responsible for the particular ways flashed faces appear distorted. Further research is needed to identify the neural mechanisms behind these effects, whether they occur when we observe non-human faces, and whether they serve any adaptive purpose. | "================
<TEXT PASSAGE>
=======
In our lifetimes, we encounter hundreds of thousands of faces. Each person's unique exposure to faces largely determines their "face space"—a model of how we encode, perceive, and remember the faces that we see.
Cross-cultural differences, such as the other-race effect, demonstrate that we are generally more accurate at recognizing faces of ethnicities we are more familiar with. But even within cultures, people differ greatly in which faces will elicit a sense of trustworthiness, approachability, or attractiveness.
Another factor has an even greater effect on how we perceive a face—where the face is positioned relative to our central or peripheral vision. Something very strange happens when a sequence of faces is quickly presented in our peripheral vision. This was first demonstrated in 2011 in a powerful illusion discovered by Jason Tangen, Sean Murphy, and Matthew Thompson, called the "flashed face distortion effect"
After a few seconds of staring at the central fixation cross, the faces peripherally presented faces start to appear deformed, cartoonish, and even grotesque. However, upon closer inspection, one can tell the faces are perfectly normal and have not been altered.
Several studies have attempted to explain the mechanisms underlying this phenomenon. Is it the fact that the faces are aligned at the eyes? Is it because they are presented quickly (4-5 faces per second)? Is it dependent on which faces follow each other or how centrally or peripherally they are shown?
The Role of Peripheral Vision
A study by Bowden et al. (2019) explored the role of peripheral vision. We know that everything in peripheral vision looks blurry compared to central vision. This is because peripheral stimuli are processed by retinal rod cells that have poor spatial acuity. So it could be that the intrinsic blur of peripheral vision makes the faces appear distorted.
However, Bowden et al. compared peripherally presented faces to centrally presented faces manipulated by blur. Although they found some evidence of face distortion in central vision using blurred faces, the effect was much larger when using un-blurred peripheral faces.
Another study by Balas and Pearson (2019) tested additional factors that may influence the illusion. They again found that peripheral presentation makes a big difference, as does the presentation speed.
Notably, the orientation of the faces presented did not seem to matter. In other words, upside-down faces produced a similar distortion effect as upright faces. This is surprising because, in most aspects of face perception, upside-down faces produce weak effects due to their general unfamiliarity (a prime example of this is the Thatcher Effect).
Do We All Perceive the Same Distortions When Looking at Peripherally Flashed Faces?
Earlier research by Afraz and Cavanagh (2009) found that peripheral distortion effects are quite idiosyncratic. Their study presented participants with faces and other stimuli in different positions of their peripheral vision. Participants were asked to make various judgments, such as the gender and age of faces or the aspect ratio of shapes.
They found that the very same stimulus can appear differently depending on where it is placed within the observer's peripheral vision. For example, a neutral face might appear male in the upper right corner, but in the lower right corner, the same face might appear female. These differences are stable over time for a particular observer but vary substantially between observers.
Therefore, the particularities of the visual distortions we experience in peripheral vision may be responsible for the particular ways flashed faces appear distorted. Further research is needed to identify the neural mechanisms behind these effects, whether they occur when we observe non-human faces, and whether they serve any adaptive purpose.
https://www.psychologytoday.com/us/blog/illusions-delusions-and-reality/202303/why-faces-look-distorted-in-our-periphery
================
<QUESTION>
=======
What happens when faces are quickly flashed in one's peripheral vision? Summarize the role of peripheral vision in the flashed face distortion effect in 200 words or fewer.
================
<TASK>
=======
You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." |
Respond using only information provided. Do not use any external knowledge or information. | Assume I just bought this product. How do I use it? | WARNINGS
Read the instructions carefully as they contain important information about safety,
use and maintenance of the product.
IMPORTANT: READ THIS MANUAL THOROUGHLY AND KEEP IT WITH CARE
FOR FUTURE REFERENCE.
• These instructions are an integral part of the product and, throughout the
entire life of the product, must be kept and be available. The documentation
should be given to the subsequent owners of the product.
• Attention: this coff ee maker requires a heat source for its operation and
develops pressure inside. Failure to comply with the instructions may cause
the risk of burn or the coff ee maker burst.
• Before each use, make sure the coff ee maker is not damaged and is complete
with all its parts. In case of doubts, contact the dealer or the manufacturer.
• Remove the packaging materials of the coff ee maker and any warning inside
it before use.
• This appliance is not intended for use by persons (including children) with
reduced physical, sensory or mental capabilities, or lack of experience and
knowledge.
• Keep out of reach of children.
• Use the coff ee maker for the purpose that it was designed for. The product is
intended for household use only.
• Do not leave the appliance unattended during operation.
• Do not touch the hot surface of the coff ee maker. The surfaces get hot,
therefore use the handle (1) to move the coff ee maker.
• Never use the coff ee maker without water in the heater.
• Never use other liquids in the heater or the upper part, the coff ee maker is
intended to be used with water only.
• The coff ee maker is designed to be used only with water and ground coff ee
for Moka for household use: do not use other products (e.g. barley, cocoa,
coff ee extracts, tea, COFFEE FOR PERCOLATING FILTERS OR ESPRESSO MACHINES, etc.).
• Make sure the steam jet is oriented far from the user, by ensuring the safety
valve is not oriented towards the user.
• Do not leave the coff ee maker on the heat source for too long to prevent
any change in colour.
• Make sure the coff ee maker is properly closed before use.
• When using a gas heat source, the fl ame must not go beyond the rim of
the heater.
• In case of induction/electric/ceramic glass plate, never use the highest heat,
but maintain a medium setting. In case of induction plate, never use the
boost function.
• Do not open or close the coff ee maker by forcing the column (1).
• Never use the coff ee maker in the oven or in a microwave.
• During use, close the cup support base (7) of the coff ee maker.
• In case of malfunctioning, do not use the product and contact the dealer or
the manufacturer.
• After use, allow the coff ee maker to cool down before opening it.
• After use, place the coff ee maker on suitable surfaces, as its base reaches
high temperatures. Do not store it in contact with fl ammable surfaces that
might deteriorate with the heat.
• Choose only original Bialetti spare parts suitable for the model used.
• At the end of dispensing there might be some water in the heater. Such
residue helps avoid possible changes in colour of the heater surface in case
the coff ee maker is left on the heat source for a prolonged period of time
after dispensing.
• In case of malfunctioning, do not use the product and contact the dealer or
the manufacturer.
INSTRUCTIONS FOR USE
First use of the product
• When using the coff ee maker for the fi rst time, wash it thoroughly, only
with water, and make at least 3 cups of coff ee, discarding them (do not
drink them).
• For the use on induction, check the compatibility of the diameter of the coff ee
maker heater with the technical features of the hob.
• Check the coff ee maker is complete with all its components and is properly
positioned, as shown in the fi gure. Check the coff ee maker is complete with
safety valve, funnel fi lter, gasket and fi lter plate and that these parts are in
the correct position (5-6-3-2).
• Do not drink the fi rst 3 dispensing operations of coff ee as they are necessary
for enhancing the aroma of coff ee at best.
• Make sure the safety valve is not oriented towards the user.
• Hand wash only without using detergents and abrasive sponges to preserve
its features over the time.
• Use ground coff ee for Moka, that is with a suitable grinding, and never use
fi ne grinding coff ee.
• Never press coff ee into the funnel.
• Store each part of the coff ee maker completely dry and without closing it.
• Replace the gasket, if worn. It is recommended to replace it at least once
a year anyway.
• Do not beat the funnel to remove the coff ee, as it might get damaged or get
ovalized, jeopardizing a proper sealing.
MAKING COFFEE
1. Remove the cup support base (7 - upper part of the coff ee maker) and,
without forcing the column (1), rotate clockwise the heater (4 - lower
part of the coff ee maker) Fig. A.
2. Fill the heater (4) with cold water without exceeding the opening of the
safety valve level (Fig. B).
3. Insert the funnel fi lter (6) into the heater (4). Fig. C.
4. Fill the funnel fi lter (6) with ground coff ee for Moka, without pressing it down,
taking care not to leave coff ee powder on the rim of the coff ee maker, Fig. D.
5. Assemble the cup support base (7) on the heater (4), by rotating the heater
counterclockwise, and tighten well, without pressing too much and avoiding
to force the column (1), Fig. E.
6. Put the coff ee maker on the heat source with the cups underneath the column (1) on the cup support base (7), Fig.F. In case of fl ame, make sure
that it does not go beyond the rim of the coff ee maker. In case of induction/
electric/ceramic glass plate, do not use the highest heat.
BIALETTI INSPECTION SAFETY VALVE (5)
The Bialetti valve has been patented and designed to guarantee the use of the
coff ee maker in complete safety.
Using the coff ee maker with drinking water might entail the risk of formation of
lime scale in the hole of the valve, causing its clogging. To avoid clogging arising
from lime scale, just move the small piston coming out of the valve along its axis
during the normal washing operations, Fig. F. It is advisable to carry out this inspection periodically to ensure its proper operation. The safety valve is a protective
element and should intervene only in conditions of abnormal operation or use of
the coff ee maker.
CLEANING AND MAINTENANCE
• Before carrying out cleaning and maintenance, wait for the appliance to cool
down completely.
• It is advisable to clean the coff ee maker in all its parts on a regular basis,
including the dispensing column, which must be free from coff ee powder
obstructions.
• After each use, wash with warm water without detergents and/or abrasive
materials (the product CANNOT be put in the dishwasher).
• Store the product perfectly dry in all its parts and not closed to prevent any
build-up of stains/oxidations.
• Regularly perform the decalcifi cation procedure:
1. Fill the heater with water as per normal preparation.
2. Add two teaspoons of citric acid or vinegar.
3. Reassemble the product and, without adding any coff ee powder, dispense once.
4. Throw away the solution obtained.
5. Wash the coff ee maker under running water and make coff ee.
• Do not beat the funnel to remove the coff ee, as it might get damaged or get
ovalized, avoiding a proper sealing.
• Regularly check that the holes of the fi lter plate (2) are not obstructed, otherwise open them using a brush with delicate bristles or a needle.
• Periodically check the internal components and, in case of wearing or damage, replace them only with original Bialetti spare parts suitable for the model used.
• Replace the gasket (3), if worn. It is advisable to replace it at least once a
• At the end of the life of the product, dispose it in a waste collection centre.
• The adequate waste sorting and the correct disposal contribute to avoid negative impacts on the environment and public health and permit recycling of
the materials which the product is made of.
• For more detailed information regarding the available collection systems,
contract the local refuse centre or the store where the product was purchased. | Assume I just bought this product. How do I use it?
Respond using only information provided. Do not use any external knowledge or information.
WARNINGS
Read the instructions carefully as they contain important information about safety,
use and maintenance of the product.
IMPORTANT: READ THIS MANUAL THOROUGHLY AND KEEP IT WITH CARE
FOR FUTURE REFERENCE.
• These instructions are an integral part of the product and, throughout the
entire life of the product, must be kept and be available. The documentation
should be given to the subsequent owners of the product.
• Attention: this coff ee maker requires a heat source for its operation and
develops pressure inside. Failure to comply with the instructions may cause
the risk of burn or the coff ee maker burst.
• Before each use, make sure the coff ee maker is not damaged and is complete
with all its parts. In case of doubts, contact the dealer or the manufacturer.
• Remove the packaging materials of the coff ee maker and any warning inside
it before use.
• This appliance is not intended for use by persons (including children) with
reduced physical, sensory or mental capabilities, or lack of experience and
knowledge.
• Keep out of reach of children.
• Use the coff ee maker for the purpose that it was designed for. The product is
intended for household use only.
• Do not leave the appliance unattended during operation.
• Do not touch the hot surface of the coff ee maker. The surfaces get hot,
therefore use the handle (1) to move the coff ee maker.
• Never use the coff ee maker without water in the heater.
• Never use other liquids in the heater or the upper part, the coff ee maker is
intended to be used with water only.
• The coff ee maker is designed to be used only with water and ground coff ee
for Moka for household use: do not use other products (e.g. barley, cocoa,
coff ee extracts, tea, COFFEE FOR PERCOLATING FILTERS OR ESPRESSO MACHINES, etc.).
• Make sure the steam jet is oriented far from the user, by ensuring the safety
valve is not oriented towards the user.
• Do not leave the coff ee maker on the heat source for too long to prevent
any change in colour.
• Make sure the coff ee maker is properly closed before use.
• When using a gas heat source, the fl ame must not go beyond the rim of
the heater.
• In case of induction/electric/ceramic glass plate, never use the highest heat,
but maintain a medium setting. In case of induction plate, never use the
boost function.
• Do not open or close the coff ee maker by forcing the column (1).
• Never use the coff ee maker in the oven or in a microwave.
• During use, close the cup support base (7) of the coff ee maker.
• In case of malfunctioning, do not use the product and contact the dealer or
the manufacturer.
• After use, allow the coff ee maker to cool down before opening it.
• After use, place the coff ee maker on suitable surfaces, as its base reaches
high temperatures. Do not store it in contact with fl ammable surfaces that
might deteriorate with the heat.
• Choose only original Bialetti spare parts suitable for the model used.
• At the end of dispensing there might be some water in the heater. Such
residue helps avoid possible changes in colour of the heater surface in case
the coff ee maker is left on the heat source for a prolonged period of time
after dispensing.
• In case of malfunctioning, do not use the product and contact the dealer or
the manufacturer.
INSTRUCTIONS FOR USE
First use of the product
• When using the coff ee maker for the fi rst time, wash it thoroughly, only
with water, and make at least 3 cups of coff ee, discarding them (do not
drink them).
• For the use on induction, check the compatibility of the diameter of the coff ee
maker heater with the technical features of the hob.
• Check the coff ee maker is complete with all its components and is properly
positioned, as shown in the fi gure. Check the coff ee maker is complete with
safety valve, funnel fi lter, gasket and fi lter plate and that these parts are in
the correct position (5-6-3-2).
• Do not drink the fi rst 3 dispensing operations of coff ee as they are necessary
for enhancing the aroma of coff ee at best.
• Make sure the safety valve is not oriented towards the user.
• Hand wash only without using detergents and abrasive sponges to preserve
its features over the time.
• Use ground coff ee for Moka, that is with a suitable grinding, and never use
fi ne grinding coff ee.
• Never press coff ee into the funnel.
• Store each part of the coff ee maker completely dry and without closing it.
• Replace the gasket, if worn. It is recommended to replace it at least once
a year anyway.
• Do not beat the funnel to remove the coff ee, as it might get damaged or get
ovalized, jeopardizing a proper sealing.
MAKING COFFEE
1. Remove the cup support base (7 - upper part of the coff ee maker) and,
without forcing the column (1), rotate clockwise the heater (4 - lower
part of the coff ee maker) Fig. A.
2. Fill the heater (4) with cold water without exceeding the opening of the
safety valve level (Fig. B).
3. Insert the funnel fi lter (6) into the heater (4). Fig. C.
4. Fill the funnel fi lter (6) with ground coff ee for Moka, without pressing it down,
taking care not to leave coff ee powder on the rim of the coff ee maker, Fig. D.
5. Assemble the cup support base (7) on the heater (4), by rotating the heater
counterclockwise, and tighten well, without pressing too much and avoiding
to force the column (1), Fig. E.
6. Put the coff ee maker on the heat source with the cups underneath the column (1) on the cup support base (7), Fig.F. In case of fl ame, make sure
that it does not go beyond the rim of the coff ee maker. In case of induction/
electric/ceramic glass plate, do not use the highest heat.
BIALETTI INSPECTION SAFETY VALVE (5)
The Bialetti valve has been patented and designed to guarantee the use of the
coff ee maker in complete safety.
Using the coff ee maker with drinking water might entail the risk of formation of
lime scale in the hole of the valve, causing its clogging. To avoid clogging arising
from lime scale, just move the small piston coming out of the valve along its axis
during the normal washing operations, Fig. F. It is advisable to carry out this inspection periodically to ensure its proper operation. The safety valve is a protective
element and should intervene only in conditions of abnormal operation or use of
the coff ee maker.
CLEANING AND MAINTENANCE
• Before carrying out cleaning and maintenance, wait for the appliance to cool
down completely.
• It is advisable to clean the coff ee maker in all its parts on a regular basis,
including the dispensing column, which must be free from coff ee powder
obstructions.
• After each use, wash with warm water without detergents and/or abrasive
materials (the product CANNOT be put in the dishwasher).
• Store the product perfectly dry in all its parts and not closed to prevent any
build-up of stains/oxidations.
• Regularly perform the decalcifi cation procedure:
1. Fill the heater with water as per normal preparation.
2. Add two teaspoons of citric acid or vinegar.
3. Reassemble the product and, without adding any coff ee powder, dispense once.
4. Throw away the solution obtained.
5. Wash the coff ee maker under running water and make coff ee.
• Do not beat the funnel to remove the coff ee, as it might get damaged or get
ovalized, avoiding a proper sealing.
• Regularly check that the holes of the fi lter plate (2) are not obstructed, otherwise open them using a brush with delicate bristles or a needle.
• Periodically check the internal components and, in case of wearing or damage, replace them only with original Bialetti spare parts suitable for the model used.
• Replace the gasket (3), if worn. It is advisable to replace it at least once a
• At the end of the life of the product, dispose it in a waste collection centre.
• The adequate waste sorting and the correct disposal contribute to avoid negative impacts on the environment and public health and permit recycling of
the materials which the product is made of.
• For more detailed information regarding the available collection systems,
contract the local refuse centre or the store where the product was purchased. |
Answer the question based solely on the information provided in the passage. Do not use any external knowledge or resources.
[user request]
[context document] | What are some frequent difficulties that Finance and Accounting (F&A) teams face when dealing with period-end close task? Please provide solutions in bold font. | Why Is Year-End Close Important?
This form of annual reporting stands as a resource for organizations when establishing budget, long-term, and short-term goals. With this financial data, organizational leaders can make informed decisions to greatly benefit their company – but it all starts with accurate reporting.
There are multiple aspects of year-end close that must be considered when finalizing your company’s financial assets at the end of the fiscal year.
The year-end close process includes:
Adhering to legal/government regulations
Modifying journal entries
Preparing financial statements
Balancing accounts
When accountants have these benchmarks in mind, they can enjoy several benefits associated with a successful year-end close.
Benefits of a Successful Year-End Close
The year-end close process can help organizations improve and optimize their operations in several ways – not only can it identify areas for improvement throughout the financial process, but it also helps decision-makers determine areas to allocate resources. This ultimately enhances the overall financial performance of the entire business.
Accuracy & Compliance
The year-end close process ultimately confirms the accuracy of an organization’s financial reporting for the entire fiscal year – giving leaders and decision makers a crystal-clear view of the business’s financial performance and health. Financial data is verified, and accounts are reconciled during this process, ensuring that the company is complying with accounting standards and regulations.
Decision-Making & Planning
As we’ve discussed, the year-end close process is essential for future financial planning and budgeting. This level of reporting allows leadership to make informed decisions based on reliable data – highlighting potential problems, trends, and areas primed for growth - a huge help when planning for the next year.
Now that you know why year-end close is critical for your company, do you know how to do it properly? Let’s talk about it.
Best Practices for Year-End Close
Businesses must keep accurate financial reporting data for proper planning and decision making, but the year-end close process is known to be both time-consuming and complicated.
Lucky for you, BlackLine is on your side - and we’ve listed out the most important steps to take during your year-end close process:
Prepare In Advance
They say preparation is the key to success, and when we’re talking about closing your financial records at the end of the fiscal year, they couldn’t be more correct. If you operate throughout the year with your year-end close process in mind, you can save a lot of time and stress come the end of Q4.
As you manage your financial data throughout the year, keep these tasks in mind:
Understanding applicable tax deadlines and implications
Analyzing your organization’s tax duties
Auditing and verifying financial data (which you should have been doing every step of the way)
Taking advantage of the applicable tax credits and tax deductions
Analyze Your Company’s Finances
Now that you’ve been keeping accurate records and a close eye on your company’s financial data for the entirety of the fiscal year, it’s time to conduct an in-depth financial review.
This review should consist of the following tasks:
Analyzing revenue and expenses
Evaluating asset and liability statements (receivables, payables, loans, and inventory)
Discovering and correcting anomalies
Through this detailed financial analysis, you will be empowered to identify opportunities for growth and savings in the next year, as well as fix inconsistencies that arise in your organization’s liability and asset accounts before you prepare your financial statements. | Answer the question based solely on the information provided in the passage. Do not use any external knowledge or resources.
What are some frequent difficulties that Finance and Accounting (F&A) teams face when dealing with period-end close task? Please provide solutions in bold font.
Why Is Year-End Close Important?
This form of annual reporting stands as a resource for organizations when establishing budget, long-term, and short-term goals. With this financial data, organizational leaders can make informed decisions to greatly benefit their company – but it all starts with accurate reporting.
There are multiple aspects of year-end close that must be considered when finalizing your company’s financial assets at the end of the fiscal year.
The year-end close process includes:
Adhering to legal/government regulations
Modifying journal entries
Preparing financial statements
Balancing accounts
When accountants have these benchmarks in mind, they can enjoy several benefits associated with a successful year-end close.
Benefits of a Successful Year-End Close
The year-end close process can help organizations improve and optimize their operations in several ways – not only can it identify areas for improvement throughout the financial process, but it also helps decision-makers determine areas to allocate resources. This ultimately enhances the overall financial performance of the entire business.
Accuracy & Compliance
The year-end close process ultimately confirms the accuracy of an organization’s financial reporting for the entire fiscal year – giving leaders and decision makers a crystal-clear view of the business’s financial performance and health. Financial data is verified, and accounts are reconciled during this process, ensuring that the company is complying with accounting standards and regulations.
Decision-Making & Planning
As we’ve discussed, the year-end close process is essential for future financial planning and budgeting. This level of reporting allows leadership to make informed decisions based on reliable data – highlighting potential problems, trends, and areas primed for growth - a huge help when planning for the next year.
Now that you know why year-end close is critical for your company, do you know how to do it properly? Let’s talk about it.
Best Practices for Year-End Close
Businesses must keep accurate financial reporting data for proper planning and decision making, but the year-end close process is known to be both time-consuming and complicated.
Lucky for you, BlackLine is on your side - and we’ve listed out the most important steps to take during your year-end close process:
Prepare In Advance
They say preparation is the key to success, and when we’re talking about closing your financial records at the end of the fiscal year, they couldn’t be more correct. If you operate throughout the year with your year-end close process in mind, you can save a lot of time and stress come the end of Q4.
As you manage your financial data throughout the year, keep these tasks in mind:
Understanding applicable tax deadlines and implications
Analyzing your organization’s tax duties
Auditing and verifying financial data (which you should have been doing every step of the way)
Taking advantage of the applicable tax credits and tax deductions
Analyze Your Company’s Finances
Now that you’ve been keeping accurate records and a close eye on your company’s financial data for the entirety of the fiscal year, it’s time to conduct an in-depth financial review.
This review should consist of the following tasks:
Analyzing revenue and expenses
Evaluating asset and liability statements (receivables, payables, loans, and inventory)
Discovering and correcting anomalies
Through this detailed financial analysis, you will be empowered to identify opportunities for growth and savings in the next year, as well as fix inconsistencies that arise in your organization’s liability and asset accounts before you prepare your financial statements.
https://www.blackline.com/blog/closing-the-books-best-practices-for-year-end-close/ |
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[user request]
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You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." | My son came home from school and told me about one of his classmates who had scary skin. I am not sure what he is referring to, but I suspect it is eczema. My son says that he is afraid of playing with the classmate because he doesn't want to get scaly skin like a lizard. I am not really sure what eczema is, aside from being a skin condition. Please tell me more about it. | Eczema, or atopic dermatitis, is a common chronic skin condition that can lead to recurrent infections and poor quality of life if left untreated. Recognized as the "itch that rashes" due to the rash that results from scratching or rubbing, the hallmark of eczema is dry, itchy skin prone to infections. This activity explores the pathogenesis of eczema, acknowledging the intertwined roles of genetic and environmental factors. Learners will gain valuable insights into recognizing eczema across different age brackets, effective evaluation techniques, proactive management of flare-ups, and preventative measures against recurring infections associated with untreated eczema. The course discussion also highlights the role of interprofessional collaboration in improving outcomes for patients with this condition.
Objectives:
Identify the pathophysiology of eczema.
Evaluate the adverse effects of poorly controlled eczema.
Implement appropriate treatment options for eczema.
Communicate the importance of improving care coordination among the interprofessional team to improve outcomes for patients with eczema.
Eczema, or atopic dermatitis, is the most common form of dermatitis.[1] Many factors, including genetic and environmental factors, are thought to play a part in the pathogenesis of eczema. It is most commonly seen in children but can be seen in adults as well. People with eczema tend to have dry, itchy skin prone to infection. The condition is commonly known as the "itch that rashes" because dry, itchy skin leads to a rash due to scratching or rubbing the skin.
The exact etiology of eczema is not entirely understood, but it is believed to be a combination of genetic and environmental factors.[2]
Genetic Factors
There is a strong genetic component to eczema, with a family history of eczema, asthma, or allergies commonly found in affected individuals. Several genes associated with eczema have been identified, including those involved in the skin barrier function and the immune system.
Filaggrin Gene
One of the most well-known genes associated with eczema is the filaggrin gene (FLG). This gene provides instructions for making a protein called filaggrin, which is important in maintaining the skin barrier function. Mutations in this gene have been linked to eczema and other skin conditions and are thought to increase susceptibility to environmental irritants and allergens.[3][4]
Other Skin Barrier Genes
In addition to the filaggrin gene, other genes involved in the skin barrier function have been implicated in the development of eczema. These include genes involved in lipid synthesis and transport, such as the ceramide synthase gene and the ABCA12 gene.[5]
Immune-related Genes
Several genes involved in the immune response have also been associated with eczema, including genes that regulate T-cells, cytokines, and immunoglobulins. These genes include interleukin (IL)-4, IL-13, IL-31, signal transducer and activator of transduction (STAT)3, and Fc fragment of immunoglobulin (Ig)E receptor Ig (FCER1G).
Overall, the genetic factors involved in eczema are complex and likely involve multiple genes and genetic pathways. Although genetic testing is not routinely used to diagnose eczema, understanding the disease's genetic basis can help identify individuals at increased risk and guide treatment approaches.
Environmental Factors
Environmental factors also play a role in the development of eczema. Patients with eczema have a defect in their skin barrier function, leading to increased water loss and susceptibility to environmental irritants and allergens. Common triggers for eczema flares include exposure to irritants such as detergents, soaps, solvents, and allergens such as dust mites, pet dander, and certain foods. Other factors that can exacerbate eczema symptoms include stress, changes in temperature and humidity, and infections.
Immune System Activation
In addition to genetic and environmental factors, the immune system is also thought to play a role in the development of eczema. Patients with eczema have an overactive immune response to environmental triggers, leading to inflammation and skin damage.
Research shows there is a genetic component to eczema. One common mutation has been observed in FLG, a vital gene for skin cell maturity. This gene is responsible for creating the tough, flat corneocytes that form the outermost protective layer of skin. In a patient with normal skin cells, the corneocytes are tightly packed in an organized manner. A patient with an FLG mutation will have a dysfunctional skin barrier due to the haphazard organization of the skin cells.[7] This dysfunction causes a "leaky" skin barrier, allowing water loss and decreased protection from harmful substances.
People with eczema also have reduced numbers of β-defensins in the skin. β-defensins are host defense peptides vital for fighting off certain bacteria, viruses, and fungi. A decrease in these peptides leads to increased colonization and infection, especially with Staphylococcus aureus (S. aureus). | "================
<TEXT PASSAGE>
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Eczema, or atopic dermatitis, is a common chronic skin condition that can lead to recurrent infections and poor quality of life if left untreated. Recognized as the "itch that rashes" due to the rash that results from scratching or rubbing, the hallmark of eczema is dry, itchy skin prone to infections. This activity explores the pathogenesis of eczema, acknowledging the intertwined roles of genetic and environmental factors. Learners will gain valuable insights into recognizing eczema across different age brackets, effective evaluation techniques, proactive management of flare-ups, and preventative measures against recurring infections associated with untreated eczema. The course discussion also highlights the role of interprofessional collaboration in improving outcomes for patients with this condition.
Objectives:
Identify the pathophysiology of eczema.
Evaluate the adverse effects of poorly controlled eczema.
Implement appropriate treatment options for eczema.
Communicate the importance of improving care coordination among the interprofessional team to improve outcomes for patients with eczema.
Eczema, or atopic dermatitis, is the most common form of dermatitis.[1] Many factors, including genetic and environmental factors, are thought to play a part in the pathogenesis of eczema. It is most commonly seen in children but can be seen in adults as well. People with eczema tend to have dry, itchy skin prone to infection. The condition is commonly known as the "itch that rashes" because dry, itchy skin leads to a rash due to scratching or rubbing the skin.
The exact etiology of eczema is not entirely understood, but it is believed to be a combination of genetic and environmental factors.[2]
Genetic Factors
There is a strong genetic component to eczema, with a family history of eczema, asthma, or allergies commonly found in affected individuals. Several genes associated with eczema have been identified, including those involved in the skin barrier function and the immune system.
Filaggrin Gene
One of the most well-known genes associated with eczema is the filaggrin gene (FLG). This gene provides instructions for making a protein called filaggrin, which is important in maintaining the skin barrier function. Mutations in this gene have been linked to eczema and other skin conditions and are thought to increase susceptibility to environmental irritants and allergens.[3][4]
Other Skin Barrier Genes
In addition to the filaggrin gene, other genes involved in the skin barrier function have been implicated in the development of eczema. These include genes involved in lipid synthesis and transport, such as the ceramide synthase gene and the ABCA12 gene.[5]
Immune-related Genes
Several genes involved in the immune response have also been associated with eczema, including genes that regulate T-cells, cytokines, and immunoglobulins. These genes include interleukin (IL)-4, IL-13, IL-31, signal transducer and activator of transduction (STAT)3, and Fc fragment of immunoglobulin (Ig)E receptor Ig (FCER1G).
Overall, the genetic factors involved in eczema are complex and likely involve multiple genes and genetic pathways. Although genetic testing is not routinely used to diagnose eczema, understanding the disease's genetic basis can help identify individuals at increased risk and guide treatment approaches.
Environmental Factors
Environmental factors also play a role in the development of eczema. Patients with eczema have a defect in their skin barrier function, leading to increased water loss and susceptibility to environmental irritants and allergens. Common triggers for eczema flares include exposure to irritants such as detergents, soaps, solvents, and allergens such as dust mites, pet dander, and certain foods. Other factors that can exacerbate eczema symptoms include stress, changes in temperature and humidity, and infections.
Immune System Activation
In addition to genetic and environmental factors, the immune system is also thought to play a role in the development of eczema. Patients with eczema have an overactive immune response to environmental triggers, leading to inflammation and skin damage.
Research shows there is a genetic component to eczema. One common mutation has been observed in FLG, a vital gene for skin cell maturity. This gene is responsible for creating the tough, flat corneocytes that form the outermost protective layer of skin. In a patient with normal skin cells, the corneocytes are tightly packed in an organized manner. A patient with an FLG mutation will have a dysfunctional skin barrier due to the haphazard organization of the skin cells.[7] This dysfunction causes a "leaky" skin barrier, allowing water loss and decreased protection from harmful substances.
People with eczema also have reduced numbers of β-defensins in the skin. β-defensins are host defense peptides vital for fighting off certain bacteria, viruses, and fungi. A decrease in these peptides leads to increased colonization and infection, especially with Staphylococcus aureus (S. aureus).
https://www.ncbi.nlm.nih.gov/books/NBK538209/
================
<QUESTION>
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My son came home from school and told me about one of his classmates who had scary skin. I am not sure what he is referring to, but I suspect it is eczema. My son says that he is afraid of playing with the classmate because he doesn't want to get scaly skin like a lizard. I am not really sure what eczema is, aside from being a skin condition. Please tell me more about it.
================
<TASK>
=======
You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." |
You can only respond using information in the context block. | What is the difference between supply-side economics and trickle-down economics? |
In this paper I discuss what can be learned about “trickle-down” ideas from recent
empirical evidence on tax incidence. Tax incidence, defined as the effect of tax policies
on the distribution of welfare, provides an ideal framework because of the explicit focus
on tracing the impacts of a policy beyond the directly affected group (ex. the rich).
I arrive at three main lessons. First, recent evidence finds that business income taxes
do affect the earnings of workers, but these effects are mostly a result of rent-sharing
and taxation of rents, not from traditional supply-side channels. Second, there are
systematic differences in the types of workers that are affected by the tax policies,
so to understand how taxing businesses or business owners affects the distribution of
welfare, it is not sufficient to treat workers/labor as a class. Third, across different
income tax policies that statutorily affect the rich, the burden is generally ultimately
born by the rich. I conclude with a discussion of fruitful avenues of further research,
particularly on how tax incidence depends on various institutional features of labor
markets, product markets and tax systems.
There are two ideas of government. There are those who believe that if you just legislate
to make the well-to-do prosperous, that their prosperity will leak through on those below.
The Democratic idea has been that if you legislate to make the masses prosperous their
prosperity will find its way up and through every class that rests upon it.
- William Jennings Bryan (1896)
1
to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put
it uphill and let it go and it will reach the driest little spot. But he didn’t know that
money trickled up. Give it to the people at the bottom and the people at the top will
have it before night, anyhow. But it will at least have passed through the poor fellow’s
hands. They saved the big banks, but the little ones went up the flue.
- Will Rogers (1932), first use of “trickle down”
The idea of “trickle-down” originated from political debates to describe the economic policies
of a party or politician. There was never a formal concept of “trickle-down economics” in
the sense of economic theory. The term-of-art was used to describe policies that directly
benefited to rich but were justified by arguments they would ultimately also benefit the
middle class and poor. In fact, the term was not originally used by those advocating for
such policies, but as a critique of the political discourse promoting such policies. While the
term “trickle-down” was not used by William Jennings Bryan in his 1896 speech as he was
running for president, the rhetoric was present in the introductory quote above. The term
was first introduced by humorist and vaudville performer Will Rogers in a column critiquing
then-President Herbert Hoover’s economic policies, also quoted above.
The term, and the critique it embodied, stuck with politicians and parties that promoted
economic policies where the direct benefits were for the rich, particularly those with respect
to tax policies.1 The relationship between trickle-down ideas, tax policy and economics
was secured during the Ronald Reagan administration, when the proposed tax cuts where
linked to the recently articulated “supply-side” economic theory. Supply-side economics,
broadly developed around the ideas of economists Robert Mundell and Arthur Laffer, focused on growth through reducing marginal income tax rates and promoting investment
1William J. Bennett, a conservative politician who served in the administrations of Ronald Reagan and
George H. W. Bush, lamented in his 2007 book, “Humorist Will Rogers referred to the theory that cutting
taxes for higher earners and businesses was a ”trickle-down” policy, a term that has stuck over the years.”
2
through lower capital income tax rates and deregulation. These ideas had a natural relationship with trickle-down ideas in that the direct beneficiaries of lower marginal and capital
tax rates were disproportionately the rich - those that faced the highest marginal tax rates
and disproportionately owned the capital - but the theory stated that this would ultimately
benefit lower income consumers/workers through growth (led by capital investment), employment and lower prices. The Reagan administration turned to “supply-side” rhetoric to
promote large marginal rate and business income tax cuts, and the concepts of supply-side
and trickle-down tax policies have been linked since.2 Figure 1 shows the Google Trends of
the term “trickle down” since 2005, and reveals that spikes in its use are concentrated around
changes in tax policy or U.S. presidential elections where tax policy was on the agenda.
1.2. Economic Analysis of Trickle-Down
In this article I will discuss the idea of trickle-down as it relates to taxes. I will focus on
tax policies that have direct effects on the rich and capital owners - tax rates faced by high
income households and capital tax policies specifically related to growth (supply-side) - with
a focus on how the effects of these policies “trickle down” to lower income households or
workers. Given that trickle-down originated as a political debate, I will discuss both positive
analyses of these policies and normative frameworks that apply to the policies.
Given this, the best economic framework to study these questions is the theory of tax
incidence. Tax incidence is the study of the impact of taxes on the distribution of welfare,
3
and it derives from the insight that the person or entity with the the legal or statutory
obligation to make the tax payment may not be the only one whose welfare is affected by
the tax. In this way, the study of tax incidence maps directly onto trickle-down ideas by
taking the direct or statutory beneficiary of the tax policy and following how it affects the
distribution of welfare across the economy (whom does it trickle to?).
Therefore, this paper will frame trickle-down ideas through positive and normative applications of tax incidence. I focus primarily on new empirical research about how taxing
capital or the rich affect “the distribution of welfare.” Various economic models offer competing predictions about whether to expect that taxing capital owners at the top of the income distribution affects lower earning workers, if so, in what direction and by what channel.
In the wake of this, some supply-side advocates have lamented how it has been used to promote trickledown ideas. In a 2007 article titled, How Supply-Side Economics Trickled Down, Bruce Bartlett, a former
Reagan advisor wrote, “most accept the basic ideas of supply-side economics – that incentives matter, that
high tax rates are bad for growth, and that inflation is fundamentally a monetary phenomenon. . . .
Today, supply-side economics has become associated with an obsession for cutting taxes under any and all
circumstances. No longer do its advocates in Congress and elsewhere confine themselves to cutting marginal
tax rates – the tax on each additional dollar earned – as the original supply-siders did. Rather, they support
even the most gimmicky, economically dubious tax cuts with the same intensity. ... today it is common to
hear tax cutters claim, implausibly, that all tax cuts raise revenue.” Yet, another former Reagan advisor
David Stockman has issued a competing complaint arguing that supply-side economics was always a cover
for trickle-down ideas stating, “It’s kind of hard to sell ’trickle down,’ so the supply-side formula was the
only way to get a tax policy that was really ’trickle down.’ Supply-side is ’trickle-down’ theory.”
Therefore, it is ultimately an empirical question as to whether, and how, changes in these tax
rates affect workers. Advances in data quality, particularly administrative linked firm-worker
data, econometric methods for identifying causal effects of tax policies, and micro-economic
theory on product and labor markets have led to new insights about whether and how taxes
that directly affect the rich / capital owners ultimately affect lower earning workers.
I review this new literature according to themes related to trickle-down and supply-side
tax ideas and arrive at three main lessons. First, recent evidence finds that business income
taxes do affect the earnings of workers, but these effects are mostly a result of rent-sharing
and taxation of rents, not from traditional supply-side channels. Second, there are systematic
differences in the types of workers that are affected by the tax policies, so to understand how
taxing businesses or business owners affects the distribution of welfare, it is not sufficient to
treat workers/labor as a class. Third, across different income tax policies that statutorily
affect the rich, the burden is generally ultimately born by the rich. I conclude by arguing
that from a policy standpoint, considering who bears the burden of a tax in isolation is
insufficient for addressing trickle-down ideas or critiques and advocate for a more unified
discussion of the efficiency and equity consequences of both tax and spending policies. | You can only respond using information in the context block.]
What is the difference between supply-side economics and trickle-down economics?
In this paper I discuss what can be learned about “trickle-down” ideas from recent
empirical evidence on tax incidence. Tax incidence, defined as the effect of tax policies
on the distribution of welfare, provides an ideal framework because of the explicit focus
on tracing the impacts of a policy beyond the directly affected group (ex. the rich).
I arrive at three main lessons. First, recent evidence finds that business income taxes
do affect the earnings of workers, but these effects are mostly a result of rent-sharing
and taxation of rents, not from traditional supply-side channels. Second, there are
systematic differences in the types of workers that are affected by the tax policies,
so to understand how taxing businesses or business owners affects the distribution of
welfare, it is not sufficient to treat workers/labor as a class. Third, across different
income tax policies that statutorily affect the rich, the burden is generally ultimately
born by the rich. I conclude with a discussion of fruitful avenues of further research,
particularly on how tax incidence depends on various institutional features of labor
markets, product markets and tax systems.
There are two ideas of government. There are those who believe that if you just legislate
to make the well-to-do prosperous, that their prosperity will leak through on those below.
The Democratic idea has been that if you legislate to make the masses prosperous their
prosperity will find its way up and through every class that rests upon it.
- William Jennings Bryan (1896)
1
to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put
it uphill and let it go and it will reach the driest little spot. But he didn’t know that
money trickled up. Give it to the people at the bottom and the people at the top will
have it before night, anyhow. But it will at least have passed through the poor fellow’s
hands. They saved the big banks, but the little ones went up the flue.
- Will Rogers (1932), first use of “trickle down”
The idea of “trickle-down” originated from political debates to describe the economic policies
of a party or politician. There was never a formal concept of “trickle-down economics” in
the sense of economic theory. The term-of-art was used to describe policies that directly
benefited to rich but were justified by arguments they would ultimately also benefit the
middle class and poor. In fact, the term was not originally used by those advocating for
such policies, but as a critique of the political discourse promoting such policies. While the
term “trickle-down” was not used by William Jennings Bryan in his 1896 speech as he was
running for president, the rhetoric was present in the introductory quote above. The term
was first introduced by humorist and vaudville performer Will Rogers in a column critiquing
then-President Herbert Hoover’s economic policies, also quoted above.
The term, and the critique it embodied, stuck with politicians and parties that promoted
economic policies where the direct benefits were for the rich, particularly those with respect
to tax policies.1 The relationship between trickle-down ideas, tax policy and economics
was secured during the Ronald Reagan administration, when the proposed tax cuts where
linked to the recently articulated “supply-side” economic theory. Supply-side economics,
broadly developed around the ideas of economists Robert Mundell and Arthur Laffer, focused on growth through reducing marginal income tax rates and promoting investment
1William J. Bennett, a conservative politician who served in the administrations of Ronald Reagan and
George H. W. Bush, lamented in his 2007 book, “Humorist Will Rogers referred to the theory that cutting
taxes for higher earners and businesses was a ”trickle-down” policy, a term that has stuck over the years.”
2
through lower capital income tax rates and deregulation. These ideas had a natural relationship with trickle-down ideas in that the direct beneficiaries of lower marginal and capital
tax rates were disproportionately the rich - those that faced the highest marginal tax rates
and disproportionately owned the capital - but the theory stated that this would ultimately
benefit lower income consumers/workers through growth (led by capital investment), employment and lower prices. The Reagan administration turned to “supply-side” rhetoric to
promote large marginal rate and business income tax cuts, and the concepts of supply-side
and trickle-down tax policies have been linked since.2 Figure 1 shows the Google Trends of
the term “trickle down” since 2005, and reveals that spikes in its use are concentrated around
changes in tax policy or U.S. presidential elections where tax policy was on the agenda.
1.2. Economic Analysis of Trickle-Down
In this article I will discuss the idea of trickle-down as it relates to taxes. I will focus on
tax policies that have direct effects on the rich and capital owners - tax rates faced by high
income households and capital tax policies specifically related to growth (supply-side) - with
a focus on how the effects of these policies “trickle down” to lower income households or
workers. Given that trickle-down originated as a political debate, I will discuss both positive
analyses of these policies and normative frameworks that apply to the policies.
Given this, the best economic framework to study these questions is the theory of tax
incidence. Tax incidence is the study of the impact of taxes on the distribution of welfare,
3
and it derives from the insight that the person or entity with the the legal or statutory
obligation to make the tax payment may not be the only one whose welfare is affected by
the tax. In this way, the study of tax incidence maps directly onto trickle-down ideas by
taking the direct or statutory beneficiary of the tax policy and following how it affects the
distribution of welfare across the economy (whom does it trickle to?).
Therefore, this paper will frame trickle-down ideas through positive and normative applications of tax incidence. I focus primarily on new empirical research about how taxing
capital or the rich affect “the distribution of welfare.” Various economic models offer competing predictions about whether to expect that taxing capital owners at the top of the income distribution affects lower earning workers, if so, in what direction and by what channel.
In the wake of this, some supply-side advocates have lamented how it has been used to promote trickledown ideas. In a 2007 article titled, How Supply-Side Economics Trickled Down, Bruce Bartlett, a former
Reagan advisor wrote, “most accept the basic ideas of supply-side economics – that incentives matter, that
high tax rates are bad for growth, and that inflation is fundamentally a monetary phenomenon. . . .
Today, supply-side economics has become associated with an obsession for cutting taxes under any and all
circumstances. No longer do its advocates in Congress and elsewhere confine themselves to cutting marginal
tax rates – the tax on each additional dollar earned – as the original supply-siders did. Rather, they support
even the most gimmicky, economically dubious tax cuts with the same intensity. ... today it is common to
hear tax cutters claim, implausibly, that all tax cuts raise revenue.” Yet, another former Reagan advisor
David Stockman has issued a competing complaint arguing that supply-side economics was always a cover
for trickle-down ideas stating, “It’s kind of hard to sell ’trickle down,’ so the supply-side formula was the
only way to get a tax policy that was really ’trickle down.’ Supply-side is ’trickle-down’ theory.”
Therefore, it is ultimately an empirical question as to whether, and how, changes in these tax
rates affect workers. Advances in data quality, particularly administrative linked firm-worker
data, econometric methods for identifying causal effects of tax policies, and micro-economic
theory on product and labor markets have led to new insights about whether and how taxes
that directly affect the rich / capital owners ultimately affect lower earning workers.
I review this new literature according to themes related to trickle-down and supply-side
tax ideas and arrive at three main lessons. First, recent evidence finds that business income
taxes do affect the earnings of workers, but these effects are mostly a result of rent-sharing
and taxation of rents, not from traditional supply-side channels. Second, there are systematic
differences in the types of workers that are affected by the tax policies, so to understand how
taxing businesses or business owners affects the distribution of welfare, it is not sufficient to
treat workers/labor as a class. Third, across different income tax policies that statutorily
affect the rich, the burden is generally ultimately born by the rich. I conclude by arguing
that from a policy standpoint, considering who bears the burden of a tax in isolation is
insufficient for addressing trickle-down ideas or critiques and advocate for a more unified
discussion of the efficiency and equity consequences of both tax and spending policies. |
Present your answer without any extraneous information. | How can schools transition from in-person classes to an online teaching model? | Contemporary Issues In Education Research – December 2010 Volume 3, Number 12
17
Virtual Teaching And Strategies:
Transitioning From Teaching Traditional
Classes To Online Classes
Bob Barrett, Franklin University, USA
ABSTRACT
As more technology has become available in many parts of the globe, a new type of student
population has emerged. The traditional student image of higher learning has been somewhat
limited in many countries, but given the impact of the Internet, this traditional “student body” has
changed. Rather than being limited to regional demographics, the student body for educational
institutions offering online courses has changed drastically. In fact, these online courses have
started yet another chapter in the history of education, known as virtual learning communities.
While online instructors may start out teaching students from local areas, this particular
opportunity has been changing over the past decade. In fact, many online instructors have noted
an increase in a more diversified student population in their classes. Further, they have realized
the need to update their teaching skills, practices and strategies in order to accommodate the
changing needs of the learners in the classroom, as well as updating their own teaching portfolio.
This paper will provide a brief overview of current recruitment and hiring methods used in the
traditional hiring versus online hiring of educators. Also, this paper will address the growing
concerns of current traditional teachers as they approach the decision to transition over to online
learning and how to obtain proper online instruction. Finally, this paper will overview how one
online university has approached online teacher training for both experienced instructors, as well
as new teaching recruits as they prepare to transition from traditional classrooms over to virtual
classes.
Keywords: Virtual learning; teachings strategies; traditional learning; online learning; online teaching strategies;
online teacher training; teacher training
INTRODUCTION
s more technology has become available in many parts of the globe, a new type of student
population has emerged. The traditional student image of higher learning has been somewhat
limited in many countries, but given the impact of the Internet, this traditional “student body” has
changed. Rather than being limited to regional demographics, the student body for educational institutions offering
online courses has changed drastically. In fact, these online courses have started yet another chapter in the history of
education, known as virtual learning communities.
In 2008, Sloan Consortium reports that there are approximately 4 million college students are currently
enrolled in fully online courses.
In 2006, Sloan Consortium reported there were 3.2 million postsecondary students in the United States that
took at least one online course; this represents a 25% increase over the previous year.
(http://www.nacol.org).
Further, there is also a growing need for online instruction in the K-12 market.
A
Contemporary Issues In Education Research – December 2010 Volume 3, Number 12
18
K-12 online learning is a new field consisting of an estimated $300 million market, which is growing at an
estimated annual pace of 30% annually.
„45 of the 50 states, plus Washington D.C., have a state virtual school or online initiative, full-time online
schools, or both.
„24 states, as well as Washington, DC, have statewide full-time online schools.
Many virtual schools show annual growth rates between 20 and 45%.
35 states have state virtual schools or state-led online programs. (http://www.nacol.org).
While online instructors may start out teaching students from local areas, this particular opportunity has
been changing over the past decade. In fact, many online instructors have noted an increase in a more diversified
student population in their classes. Further, they have realized the need to update their teaching skills, practices and
strategies in order to accommodate the changing needs of the learners in the classroom, as well as updating their
own teaching portfolio.
Teaching business and management has changed over the past decades in terms of the types of delivery,
especially with the use of technology. The use of online learning has helped to increase student enrollments,
diversify the variety of student input and perspectives, as well as increase the exposure of instructors to bigger
learning demands of the learners. As a result, virtual instructors today need to develop and enhance their teaching
strategies and methodologies in order to meet the growing needs of today’s online learning population. No longer
are instructors focusing on teaching just local learners, but they must also concentrate on teaching students from a
variety of international locations.
This paper will focus on transitioning new and current instructors teaching in a live classroom setting to
prepare them to teach online. The online learning environment differs from the physical, live classroom setting in
terms of student population, use of technology, and vast ranges of time zones shared by a variety of students in an
online course. As a result, it is important for adequate and appropriate online training/instruction be afforded to this
specific population of educators.
PURPOSE
Due to the technological advancements in the online environment, online instructors must have a different
type of skills sets in order to compete in today’s online learning environment. As a result, interviewers and HR
personnel must create and implement different practices and procedures in order to determine the best possible
candidate for an online teaching position. Thus, this paper will help to provide an open forum for the audience to
determine if there is a need for change.
Currently, recruiting and hiring methods used in the traditional hiring versus online hiring of educators do
differ. When organizations are seeking qualified personnel to teach for their educational institutions, they may also
need to gather and assess more information in order to best determine which candidate best “fits” the needs of the
organization and position. As a result, there is a growing need for interviewers to capture more substantial data in
order to help assist others in the hiring process. Further, they may need to employ different methods for recruiting
and hiring. A new type of employee is needed to fill online instructional positions, so candidates must have certain
skills sets.
While many traditional instructors enjoy teaching in a live, physical classroom, many are starting to
consider the possibility of transitioning over to online learning and how to obtain proper online instruction. Due to
the lack of classroom space and declining enrollments, many colleges and universities have started to consider and
implement online learning courses and programs. As a result, they have been changing their traditional approach to
teacher training to that of an online learning environment. This change has been quite effective since many
traditional instructors have been considering or have been assigned to teach online courses. While there is still a
large population of graduates who have learned in the traditional learning environment (on-ground classes), there is
a growing number of adult learners obtaining their degrees from online universities (with the same type of
accreditation as their on-ground counterparts). As a result, both online and on-ground graduates are now seeking
additional education in order to compete for online (adjunct) teaching opportunities.
Contemporary Issues In Education Research – December 2010 Volume 3, Number 12
19
While distance education has been happening over the past 3-4 decades, the evolution of online learning
has been growing rapidly in the higher education field. As this field has been seeing more and more online
programs appear, many of the administrative and training departments of various colleges and universities have
realized the need to help current and potential online instructors in preparing for online teaching in terms of current
teaching strategies used – both from the live (on-ground) environment, as well as those strategies used in the online
learning environment. Many colleges and universities now recruit, hire, and train potential online instructors via
the Internet in terms of their electronic postings of jobs.
There are four major areas that many universities must consider in the area of instructor recruitment and
hiring. First, they need to reconsider their approach to recruitment, hiring, and training of current and future
instructors for employment in the area of the online teaching. Second, they need to look at the best practices of
other leading educational institutions to see how they are conducting their recruitment and training of online
instructors. Third, they need to update their technological and skill requirements for online instructors to make sure
that they are hiring the best for their educational institution. . Barbara Smith (2000), chief learning officer for
Burson-Marsteller stated that "If we don't have the best people creating the best product, we can't compete. What I'm
after is creating the best people in the industry. E-learning is an option that provides us with a real competitive edge-
-it helps us maximize our intellectual capital" (para. 2). During this process, these educational institutions should
examine the potential networking efforts, which could be possible for current and potential online instructors to meet
others interested in online teaching during these instructional workshops, seminars, or courses. The following
section will discuss the issues of recruitment and hiring. In particular, a discussion will be held on the
characteristics of online instructor. Finally, there will be a brief overview of the online teacher training.
RECRUITMENT AND HIRING OF POTENTIAL ONLINE INSTRUCTORS
When organizations are seeking qualified personnel to teach for their educational institutions, they may
also need to gather and assess more information in order to best determine which candidate best “fits” the needs of
the organization and position. As a result, there is a growing need for interviewers to capture more substantial data
in order to help assist others in the hiring process. Further, they may need to employee different methods for
recruiting and hiring. Due to the technological advancements in the online environment, online instructors must
have a different type of skills sets in order to compete in today’s online learning environment. As a result,
interviewers and HR personnel must create and implement different practices and procedures in order to determine
the best possible candidate for an online teaching position.
CHARACTERISTICS OF AN ONLINE INSTRUCTOR
What are the characteristics of a good and bad online instructor? Roueche, Roueche, and Milliron (1995)
stated, “Adjunct faculty are increasingly important players in the teaching and learning process. It is in the college’s
best interest of appreciating the investment value of them, and ultimately in the interest of establishing and
maintaining the college’s reputation for teaching excellence” (p. 120). As noted early, many online teaching
positions are being filled by part-time instructors. Many colleges and universities have found that this helps to
reduce some administration of benefits and pay – so part-time faculty have been a “quick fix” for their current need.
However, it should be noted for the purposes of this paper that there may be a change in this situation within the
next decade or two as more part-time faculty seek more pay and benefits (i.e., union organization).
TRAINING INSTRUCTORS ONLINE
While some teaching tools may be effective in one learning environment, they may not be as successful in
another. Therefore, as each environment is unique, as well as the learners in it, the teacher needs to assess their
virtual environment and determine if change is necessary. However, not all educators may be as flexible in their
teaching method, and they may not be willing to change. This leads us to the following question. Do educators
incorporate different teaching strategies and techniques to meet the ever-changing needs of these virtual learners in
terms of learning from their cultural differences in order to enhance the learning experiences of all?
Contemporary Issues In Education Research – December 2010 Volume 3, Number 12
20
While we may hope that all educators are continuously improving their teaching methods and classrooms,
we must recognize the fact that some may not. In the traditional classroom, there was an “expected” structure of
teaching and layout of the classroom. However, in the virtual learning environment, educators have had to
“unlearn” their old way of thinking in terms of teaching methodologies. In turn, online educators have had to learn
new ways of implementing and nurturing learning for their virtual student populations. The key to success is our
ability to think, visualize, and implement. White (2002) noted “Nowhere is thinking more evident than in the textual
environment of the online classroom. If writing is thinking, then online students display their thinking throughout
the course, illustrating their individual styles and changing attitudes.” (p. 6) Along this same line of thinking,
educators can incorporate various strategies to help draw upon the experiences of all class members – rather than
just a select few.
CONCLUSION
Traditionally, teachers have been expected serve as role models as they lead classroom discussions,
collected and graded assignments, and provide leadership and guidance to their students. However, over the past
two decades, the role and function of the instructor has changed drastically due to economic, technological, and
educational factors. In any event, the area of online instruction has started to attract more and more students, as well
as more instructors. In order to meet this growing demand for better qualified, online instructors, many schools have
had to rethink their recruiting, hiring, and training efforts. Thus, there is a growing need to offer better quality
online teacher training to current and potential online instructors to better enable these instructors to meet the ever-
changing need of their online learning populations.
AUTHOR INFORMATION
Dr. Bob Barrett received his Ed.D. at The George Washington University; his M.B.E. at The University of the
District of Columbia; and his B.A. at Shepherd University. He has completed additional Studies at University of
Maryland - College Park, USDA Graduate School, and Gallaudet University. Dr. Barrett's current research interests
are: Human Resource Development (HRD); Human Resource Management (HRM); Virtual Management Teams;
Stakeholder Theory/Ethics; Logic/Dominant Logic; Disability/BDEP.
REFERENCES
1. NACOL. http://www.nacol.org. Retrieved June 15, 2009.
2. National Center for Education Statistics, 2003.
3. Preece, J. (2000). Online communities: Designing usability, supporting sociability. Chichester: Wiley.
4. Roueche, J.E., Roueche, S.D., and Milliron, M.D. (1995). Strangers in their own land: Parts-time faculty in
American’s community colleges. Washington D.C.: Community College Press.
5. Smith, B. (2000). Online Learning: The Competitive Edge: Companies blend E-learning into their
business strategies to maximize intellectual capital. InformationWeek.com Retrieved September 22, 2010,
http://www.informationweek.com/801/learn.htm.
6. White, K.W., Weight, B.H. (2000). The online teaching guide: A handbook of attitudes, strategies, and
techniques for the virtual classroom. Needham Heights, MA: Allyn & Bacon. | Present your answer without any extraneous information.
How can schools transition from in-person classes to an online teaching model?
Contemporary Issues In Education Research – December 2010 Volume 3, Number 12
17
Virtual Teaching And Strategies:
Transitioning From Teaching Traditional
Classes To Online Classes
Bob Barrett, Franklin University, USA
ABSTRACT
As more technology has become available in many parts of the globe, a new type of student
population has emerged. The traditional student image of higher learning has been somewhat
limited in many countries, but given the impact of the Internet, this traditional “student body” has
changed. Rather than being limited to regional demographics, the student body for educational
institutions offering online courses has changed drastically. In fact, these online courses have
started yet another chapter in the history of education, known as virtual learning communities.
While online instructors may start out teaching students from local areas, this particular
opportunity has been changing over the past decade. In fact, many online instructors have noted
an increase in a more diversified student population in their classes. Further, they have realized
the need to update their teaching skills, practices and strategies in order to accommodate the
changing needs of the learners in the classroom, as well as updating their own teaching portfolio.
This paper will provide a brief overview of current recruitment and hiring methods used in the
traditional hiring versus online hiring of educators. Also, this paper will address the growing
concerns of current traditional teachers as they approach the decision to transition over to online
learning and how to obtain proper online instruction. Finally, this paper will overview how one
online university has approached online teacher training for both experienced instructors, as well
as new teaching recruits as they prepare to transition from traditional classrooms over to virtual
classes.
Keywords: Virtual learning; teachings strategies; traditional learning; online learning; online teaching strategies;
online teacher training; teacher training
INTRODUCTION
s more technology has become available in many parts of the globe, a new type of student
population has emerged. The traditional student image of higher learning has been somewhat
limited in many countries, but given the impact of the Internet, this traditional “student body” has
changed. Rather than being limited to regional demographics, the student body for educational institutions offering
online courses has changed drastically. In fact, these online courses have started yet another chapter in the history of
education, known as virtual learning communities.
In 2008, Sloan Consortium reports that there are approximately 4 million college students are currently
enrolled in fully online courses.
In 2006, Sloan Consortium reported there were 3.2 million postsecondary students in the United States that
took at least one online course; this represents a 25% increase over the previous year.
(http://www.nacol.org).
Further, there is also a growing need for online instruction in the K-12 market.
A
Contemporary Issues In Education Research – December 2010 Volume 3, Number 12
18
K-12 online learning is a new field consisting of an estimated $300 million market, which is growing at an
estimated annual pace of 30% annually.
„45 of the 50 states, plus Washington D.C., have a state virtual school or online initiative, full-time online
schools, or both.
„24 states, as well as Washington, DC, have statewide full-time online schools.
Many virtual schools show annual growth rates between 20 and 45%.
35 states have state virtual schools or state-led online programs. (http://www.nacol.org).
While online instructors may start out teaching students from local areas, this particular opportunity has
been changing over the past decade. In fact, many online instructors have noted an increase in a more diversified
student population in their classes. Further, they have realized the need to update their teaching skills, practices and
strategies in order to accommodate the changing needs of the learners in the classroom, as well as updating their
own teaching portfolio.
Teaching business and management has changed over the past decades in terms of the types of delivery,
especially with the use of technology. The use of online learning has helped to increase student enrollments,
diversify the variety of student input and perspectives, as well as increase the exposure of instructors to bigger
learning demands of the learners. As a result, virtual instructors today need to develop and enhance their teaching
strategies and methodologies in order to meet the growing needs of today’s online learning population. No longer
are instructors focusing on teaching just local learners, but they must also concentrate on teaching students from a
variety of international locations.
This paper will focus on transitioning new and current instructors teaching in a live classroom setting to
prepare them to teach online. The online learning environment differs from the physical, live classroom setting in
terms of student population, use of technology, and vast ranges of time zones shared by a variety of students in an
online course. As a result, it is important for adequate and appropriate online training/instruction be afforded to this
specific population of educators.
PURPOSE
Due to the technological advancements in the online environment, online instructors must have a different
type of skills sets in order to compete in today’s online learning environment. As a result, interviewers and HR
personnel must create and implement different practices and procedures in order to determine the best possible
candidate for an online teaching position. Thus, this paper will help to provide an open forum for the audience to
determine if there is a need for change.
Currently, recruiting and hiring methods used in the traditional hiring versus online hiring of educators do
differ. When organizations are seeking qualified personnel to teach for their educational institutions, they may also
need to gather and assess more information in order to best determine which candidate best “fits” the needs of the
organization and position. As a result, there is a growing need for interviewers to capture more substantial data in
order to help assist others in the hiring process. Further, they may need to employ different methods for recruiting
and hiring. A new type of employee is needed to fill online instructional positions, so candidates must have certain
skills sets.
While many traditional instructors enjoy teaching in a live, physical classroom, many are starting to
consider the possibility of transitioning over to online learning and how to obtain proper online instruction. Due to
the lack of classroom space and declining enrollments, many colleges and universities have started to consider and
implement online learning courses and programs. As a result, they have been changing their traditional approach to
teacher training to that of an online learning environment. This change has been quite effective since many
traditional instructors have been considering or have been assigned to teach online courses. While there is still a
large population of graduates who have learned in the traditional learning environment (on-ground classes), there is
a growing number of adult learners obtaining their degrees from online universities (with the same type of
accreditation as their on-ground counterparts). As a result, both online and on-ground graduates are now seeking
additional education in order to compete for online (adjunct) teaching opportunities.
Contemporary Issues In Education Research – December 2010 Volume 3, Number 12
19
While distance education has been happening over the past 3-4 decades, the evolution of online learning
has been growing rapidly in the higher education field. As this field has been seeing more and more online
programs appear, many of the administrative and training departments of various colleges and universities have
realized the need to help current and potential online instructors in preparing for online teaching in terms of current
teaching strategies used – both from the live (on-ground) environment, as well as those strategies used in the online
learning environment. Many colleges and universities now recruit, hire, and train potential online instructors via
the Internet in terms of their electronic postings of jobs.
There are four major areas that many universities must consider in the area of instructor recruitment and
hiring. First, they need to reconsider their approach to recruitment, hiring, and training of current and future
instructors for employment in the area of the online teaching. Second, they need to look at the best practices of
other leading educational institutions to see how they are conducting their recruitment and training of online
instructors. Third, they need to update their technological and skill requirements for online instructors to make sure
that they are hiring the best for their educational institution. . Barbara Smith (2000), chief learning officer for
Burson-Marsteller stated that "If we don't have the best people creating the best product, we can't compete. What I'm
after is creating the best people in the industry. E-learning is an option that provides us with a real competitive edge-
-it helps us maximize our intellectual capital" (para. 2). During this process, these educational institutions should
examine the potential networking efforts, which could be possible for current and potential online instructors to meet
others interested in online teaching during these instructional workshops, seminars, or courses. The following
section will discuss the issues of recruitment and hiring. In particular, a discussion will be held on the
characteristics of online instructor. Finally, there will be a brief overview of the online teacher training.
RECRUITMENT AND HIRING OF POTENTIAL ONLINE INSTRUCTORS
When organizations are seeking qualified personnel to teach for their educational institutions, they may
also need to gather and assess more information in order to best determine which candidate best “fits” the needs of
the organization and position. As a result, there is a growing need for interviewers to capture more substantial data
in order to help assist others in the hiring process. Further, they may need to employee different methods for
recruiting and hiring. Due to the technological advancements in the online environment, online instructors must
have a different type of skills sets in order to compete in today’s online learning environment. As a result,
interviewers and HR personnel must create and implement different practices and procedures in order to determine
the best possible candidate for an online teaching position.
CHARACTERISTICS OF AN ONLINE INSTRUCTOR
What are the characteristics of a good and bad online instructor? Roueche, Roueche, and Milliron (1995)
stated, “Adjunct faculty are increasingly important players in the teaching and learning process. It is in the college’s
best interest of appreciating the investment value of them, and ultimately in the interest of establishing and
maintaining the college’s reputation for teaching excellence” (p. 120). As noted early, many online teaching
positions are being filled by part-time instructors. Many colleges and universities have found that this helps to
reduce some administration of benefits and pay – so part-time faculty have been a “quick fix” for their current need.
However, it should be noted for the purposes of this paper that there may be a change in this situation within the
next decade or two as more part-time faculty seek more pay and benefits (i.e., union organization).
TRAINING INSTRUCTORS ONLINE
While some teaching tools may be effective in one learning environment, they may not be as successful in
another. Therefore, as each environment is unique, as well as the learners in it, the teacher needs to assess their
virtual environment and determine if change is necessary. However, not all educators may be as flexible in their
teaching method, and they may not be willing to change. This leads us to the following question. Do educators
incorporate different teaching strategies and techniques to meet the ever-changing needs of these virtual learners in
terms of learning from their cultural differences in order to enhance the learning experiences of all?
Contemporary Issues In Education Research – December 2010 Volume 3, Number 12
20
While we may hope that all educators are continuously improving their teaching methods and classrooms,
we must recognize the fact that some may not. In the traditional classroom, there was an “expected” structure of
teaching and layout of the classroom. However, in the virtual learning environment, educators have had to
“unlearn” their old way of thinking in terms of teaching methodologies. In turn, online educators have had to learn
new ways of implementing and nurturing learning for their virtual student populations. The key to success is our
ability to think, visualize, and implement. White (2002) noted “Nowhere is thinking more evident than in the textual
environment of the online classroom. If writing is thinking, then online students display their thinking throughout
the course, illustrating their individual styles and changing attitudes.” (p. 6) Along this same line of thinking,
educators can incorporate various strategies to help draw upon the experiences of all class members – rather than
just a select few.
CONCLUSION
Traditionally, teachers have been expected serve as role models as they lead classroom discussions,
collected and graded assignments, and provide leadership and guidance to their students. However, over the past
two decades, the role and function of the instructor has changed drastically due to economic, technological, and
educational factors. In any event, the area of online instruction has started to attract more and more students, as well
as more instructors. In order to meet this growing demand for better qualified, online instructors, many schools have
had to rethink their recruiting, hiring, and training efforts. Thus, there is a growing need to offer better quality
online teacher training to current and potential online instructors to better enable these instructors to meet the ever-
changing need of their online learning populations.
AUTHOR INFORMATION
Dr. Bob Barrett received his Ed.D. at The George Washington University; his M.B.E. at The University of the
District of Columbia; and his B.A. at Shepherd University. He has completed additional Studies at University of
Maryland - College Park, USDA Graduate School, and Gallaudet University. Dr. Barrett's current research interests
are: Human Resource Development (HRD); Human Resource Management (HRM); Virtual Management Teams;
Stakeholder Theory/Ethics; Logic/Dominant Logic; Disability/BDEP.
REFERENCES
1. NACOL. http://www.nacol.org. Retrieved June 15, 2009.
2. National Center for Education Statistics, 2003.
3. Preece, J. (2000). Online communities: Designing usability, supporting sociability. Chichester: Wiley.
4. Roueche, J.E., Roueche, S.D., and Milliron, M.D. (1995). Strangers in their own land: Parts-time faculty in
American’s community colleges. Washington D.C.: Community College Press.
5. Smith, B. (2000). Online Learning: The Competitive Edge: Companies blend E-learning into their
business strategies to maximize intellectual capital. InformationWeek.com Retrieved September 22, 2010,
http://www.informationweek.com/801/learn.htm.
6. White, K.W., Weight, B.H. (2000). The online teaching guide: A handbook of attitudes, strategies, and
techniques for the virtual classroom. Needham Heights, MA: Allyn & Bacon. |
Give me your answer as a full sentence. Answer the question only using the context provided in the document. | Can anyone file an Amicus Brief? | **LEGAL BRIEF**
A legal brief is a document that makes an argument as to why the person filing the brief should win the case or otherwise see his motion granted. This document contains the issues in dispute, the facts of the matter, and arguments in support of the party’s position. A legal brief that is submitted with a motion can also be referred to as a “memorandum of law.” This usually happens at the trial court level. To explore this concept, consider the following legal brief definition.
Definition of Legal Brief
Noun
A short and concise statement
A document that presents a legal argument to a court explaining why that party should prevail over the other.
Origin
1250-1300 Middle English bref
What is a Legal Brief
A legal brief is a document that is submitted to a court by a party to a lawsuit. In the document, that party lists the reasons why he should prevail over the other party or parties to the lawsuit. Legal briefs are often submitted together with a motion at the trial court level. These legal briefs are referred to as “legal memorandums,” or “memorandums of law.” A legal brief is different from a law school brief. In law school, students are typically asked to prepare a “brief” that gives an overview of a case, such as the issue at hand and an analysis of the facts.
An example of a legal brief that can be considered a memorandum of law is one that accompanies a motion for summary judgment. A motion for summary judgment explains to the court why it is impossible for the opposing party to win the case, and requests that it be dismissed. Upon the court’s granting of summary judgment, the case is then effectively over.
Legal briefs are also filed with the appellate court when an appeal has been entered. While trial courts hold trials to establish the facts of a case, appellate courts are more interested in whether or not the trial court made a mistake in issuing the decision that it did. Therefore, almost all appeals are heard via the briefs that are filed by the parties. Arguments are then heard from the parties’ attorneys, which are made based on the points presented in the legal briefs.
Cases that are of a higher caliber and that are granted a writ of certiorari by the Supreme Court, can be argued on one of two examples of legal briefs: a merit brief, or an amicus brief. Merits briefs are filed by the parties to the case and, like at the lower court level, argue each side’s reasons they should win.
Amicus briefs, however, are filed by people who are not parties to the case, but who have information to support one point of view or the other. These briefs focus on policy-related issues, and/or finer points of law. They can also explain why the case should be decided in favor of one party over the other when the law does not clearly apply to the issues at hand.
Amicus briefs are typically filed by experts who specialize in the topics that are being discussed. For example, legal briefs are often filed by the American Civil Liberties Union (ACLU) on civil rights cases because they are experts on the subject, even if they are not directly involved with the parties to the case. Anyone can file an amicus brief to a case, so long as the court allows it.
How to Write a Legal
Before writing a legal brief, the person writing the brief should first consult the rules of the court to which the brief will be submitted. Different courts have different rules insofar as how to write a legal brief, such as the format of the brief, the number of pages that are permitted, and the presentation of citations. Court rules are normally published and, if the court has a website, the rules are usually posted there as well for easy reference.
The State Bar of Wisconsin compiled a list of helpful tips on how to write a legal brief from judges who have extensive experience reading them. What follows are a few of their suggestions on how to write a legal brief that is better than average:
Parties Should Persuade, Not Argue – A brief is effective when the judge reading it wonders why the parties to the action are arguing over such an obvious issue.
Briefs Should Be Concise – Most cases can be boiled down to a single issue, so less is more when crafting a strong argument.
Points Should Be Accurate – The parties should not argue points they are unable to prove.
Relief Should Be Requested – The parties should not hesitate to be specific in the relief they’re requesting.
Those drafting legal briefs often get caught up in raising all the facts of a case within that brief. This often results in the key points of a case getting buried in the other details being presented, and an otherwise good argument is lost. The last thing a brief should do is anger or bore the judge reading it. Therefore, only the best arguments should be presented, not every argument.
It is also good to use the names of the parties, rather than “plaintiff” or “appellant.” This keeps the reader engaged in the narrative that is being told, and makes the argument that is being presented more persuasive to the person reading it. The more a judge can be drawn into reading a brief, the better chance that party has of prevailing at trial.
Another common mistake is a failure to back up good arguments with good citations. Often, the person drafting a brief will cite case law and assume the judge is familiar with the facts of that case. It is therefore assumed that the judge will understand why that case is being cited with little or no explanation as to why. This is not necessarily true.
Case citations should be accompanied by a brief explanation that clarifies the relevance of the holding whenever possible. If the case is not read thoroughly by the party citing it, it can actually work against him by acting as ammunition for the other side. In other words, he may be using an argument against his case, rather than for it.
Formatting and Language of Legal Briefs
There are specific rules regarding the formatting and language of a legal brief, depending on the court. As far as the U.S. Supreme Court is concerned, legal briefs must be written in 12-point type, in Century Schoolbook font. This is referred to as the “Supreme Court font.”
Each legal brief submitted to the Supreme Court must be accompanied by a signed certificate that confirms that the brief’s formatting and language is in compliance with the imposed word limitations. The author’s signature must be notarized if he is not a member of the Bar of the Supreme Court or counsel of record.
The word count, which is given by the word processing system that is used to draft the brief, must be listed on the certificate. The word count refers only to the text of the document and its footnotes. It does not include the additional sections of the brief, which can include the table of contents, the table of cited authorities, and/or any appendix that may be affixed to it. Nor are block quotations detailing constitutional provisions, treaties, statutes, ordinances, and regulations involved in the case included in the word count.
Briefs submitted to the U.S. Supreme Court must be bound in booklet format, on paper cut to exactly 6 1/2″ x 9 1/4″, and the color, weight, and brightness of the paper is specified, as are the margins, size of footnotes, and the gutter. In addition to rules regarding formatting and language, the Supreme Court also has binding requirements for its briefs. Briefs should be saddle-stitched, which is the neat, center-spine stapling that is usually used for pamphlets, or perfect-bound, which is like the binding that joins together the pages of a book. Bindings made from plastic, metal, or string are not allowed, nor are spiral bindings.
Even the color of the cover of the brief bears significance with the Supreme Court. For instance, an orange cover tells the Court that the brief is in opposition to a writ of certiorari. A light blue cover identifies a merits brief of Petitioner or Appellant, and a light green cover is attached to briefs of amicus curiae in support of Petitioner or Appellant. These are only a few of the colors that are used for Supreme Court brief covers. All of these requirements can be found on the Supreme Court’s website.
Legalese
It used to be that simple legal writing was frowned upon by the courts. To compensate, attorneys began writing in “legalese,” which is legal writing that is convoluted and confusing to most people. Terms like “heretofore,” “aforementioned,” and “thereafter” are considered legalese. Simpler legal writing uses fewer words, is clearer to the reader, and is significantly shorter in the number of total pages. When attorneys remove the legalese from their briefs, they are able to convey the same message that might otherwise have been lost in their use of more complicated legal terms.
Legal Brief Sample
The rules of the court to which a brief will be submitted take precedence over any legal brief sample that may be referenced in drafting the brief. While Appellate briefs are rarely published, those looking for sample legal briefs can reference the Supreme Court’s . This series contains full texts of some of the briefs that have been submitted for argument before the Supreme Court.
Related Legal Terms and Issues
Notary – A person authorized to perform certain legal tasks, such as the certification of contracts, deeds, or other documents that are referenced in court.
Writ of Certiorari – An order issued by a higher court demanding a lower court forward all records of a specific case for review | [Task]
==================
Give me your answer as a full sentence. Answer the question only using the context provided in the document.
================
[Question]
==================
Can anyone file an Amicus Brief?
================
[Text]
==================
**LEGAL BRIEF**
A legal brief is a document that makes an argument as to why the person filing the brief should win the case or otherwise see his motion granted. This document contains the issues in dispute, the facts of the matter, and arguments in support of the party’s position. A legal brief that is submitted with a motion can also be referred to as a “memorandum of law.” This usually happens at the trial court level. To explore this concept, consider the following legal brief definition.
Definition of Legal Brief
Noun
A short and concise statement
A document that presents a legal argument to a court explaining why that party should prevail over the other.
Origin
1250-1300 Middle English bref
What is a Legal Brief
A legal brief is a document that is submitted to a court by a party to a lawsuit. In the document, that party lists the reasons why he should prevail over the other party or parties to the lawsuit. Legal briefs are often submitted together with a motion at the trial court level. These legal briefs are referred to as “legal memorandums,” or “memorandums of law.” A legal brief is different from a law school brief. In law school, students are typically asked to prepare a “brief” that gives an overview of a case, such as the issue at hand and an analysis of the facts.
An example of a legal brief that can be considered a memorandum of law is one that accompanies a motion for summary judgment. A motion for summary judgment explains to the court why it is impossible for the opposing party to win the case, and requests that it be dismissed. Upon the court’s granting of summary judgment, the case is then effectively over.
Legal briefs are also filed with the appellate court when an appeal has been entered. While trial courts hold trials to establish the facts of a case, appellate courts are more interested in whether or not the trial court made a mistake in issuing the decision that it did. Therefore, almost all appeals are heard via the briefs that are filed by the parties. Arguments are then heard from the parties’ attorneys, which are made based on the points presented in the legal briefs.
Cases that are of a higher caliber and that are granted a writ of certiorari by the Supreme Court, can be argued on one of two examples of legal briefs: a merit brief, or an amicus brief. Merits briefs are filed by the parties to the case and, like at the lower court level, argue each side’s reasons they should win.
Amicus briefs, however, are filed by people who are not parties to the case, but who have information to support one point of view or the other. These briefs focus on policy-related issues, and/or finer points of law. They can also explain why the case should be decided in favor of one party over the other when the law does not clearly apply to the issues at hand.
Amicus briefs are typically filed by experts who specialize in the topics that are being discussed. For example, legal briefs are often filed by the American Civil Liberties Union (ACLU) on civil rights cases because they are experts on the subject, even if they are not directly involved with the parties to the case. Anyone can file an amicus brief to a case, so long as the court allows it.
How to Write a Legal
Before writing a legal brief, the person writing the brief should first consult the rules of the court to which the brief will be submitted. Different courts have different rules insofar as how to write a legal brief, such as the format of the brief, the number of pages that are permitted, and the presentation of citations. Court rules are normally published and, if the court has a website, the rules are usually posted there as well for easy reference.
The State Bar of Wisconsin compiled a list of helpful tips on how to write a legal brief from judges who have extensive experience reading them. What follows are a few of their suggestions on how to write a legal brief that is better than average:
Parties Should Persuade, Not Argue – A brief is effective when the judge reading it wonders why the parties to the action are arguing over such an obvious issue.
Briefs Should Be Concise – Most cases can be boiled down to a single issue, so less is more when crafting a strong argument.
Points Should Be Accurate – The parties should not argue points they are unable to prove.
Relief Should Be Requested – The parties should not hesitate to be specific in the relief they’re requesting.
Those drafting legal briefs often get caught up in raising all the facts of a case within that brief. This often results in the key points of a case getting buried in the other details being presented, and an otherwise good argument is lost. The last thing a brief should do is anger or bore the judge reading it. Therefore, only the best arguments should be presented, not every argument.
It is also good to use the names of the parties, rather than “plaintiff” or “appellant.” This keeps the reader engaged in the narrative that is being told, and makes the argument that is being presented more persuasive to the person reading it. The more a judge can be drawn into reading a brief, the better chance that party has of prevailing at trial.
Another common mistake is a failure to back up good arguments with good citations. Often, the person drafting a brief will cite case law and assume the judge is familiar with the facts of that case. It is therefore assumed that the judge will understand why that case is being cited with little or no explanation as to why. This is not necessarily true.
Case citations should be accompanied by a brief explanation that clarifies the relevance of the holding whenever possible. If the case is not read thoroughly by the party citing it, it can actually work against him by acting as ammunition for the other side. In other words, he may be using an argument against his case, rather than for it.
Formatting and Language of Legal Briefs
There are specific rules regarding the formatting and language of a legal brief, depending on the court. As far as the U.S. Supreme Court is concerned, legal briefs must be written in 12-point type, in Century Schoolbook font. This is referred to as the “Supreme Court font.”
Each legal brief submitted to the Supreme Court must be accompanied by a signed certificate that confirms that the brief’s formatting and language is in compliance with the imposed word limitations. The author’s signature must be notarized if he is not a member of the Bar of the Supreme Court or counsel of record.
The word count, which is given by the word processing system that is used to draft the brief, must be listed on the certificate. The word count refers only to the text of the document and its footnotes. It does not include the additional sections of the brief, which can include the table of contents, the table of cited authorities, and/or any appendix that may be affixed to it. Nor are block quotations detailing constitutional provisions, treaties, statutes, ordinances, and regulations involved in the case included in the word count.
Briefs submitted to the U.S. Supreme Court must be bound in booklet format, on paper cut to exactly 6 1/2″ x 9 1/4″, and the color, weight, and brightness of the paper is specified, as are the margins, size of footnotes, and the gutter. In addition to rules regarding formatting and language, the Supreme Court also has binding requirements for its briefs. Briefs should be saddle-stitched, which is the neat, center-spine stapling that is usually used for pamphlets, or perfect-bound, which is like the binding that joins together the pages of a book. Bindings made from plastic, metal, or string are not allowed, nor are spiral bindings.
Even the color of the cover of the brief bears significance with the Supreme Court. For instance, an orange cover tells the Court that the brief is in opposition to a writ of certiorari. A light blue cover identifies a merits brief of Petitioner or Appellant, and a light green cover is attached to briefs of amicus curiae in support of Petitioner or Appellant. These are only a few of the colors that are used for Supreme Court brief covers. All of these requirements can be found on the Supreme Court’s website.
Legalese
It used to be that simple legal writing was frowned upon by the courts. To compensate, attorneys began writing in “legalese,” which is legal writing that is convoluted and confusing to most people. Terms like “heretofore,” “aforementioned,” and “thereafter” are considered legalese. Simpler legal writing uses fewer words, is clearer to the reader, and is significantly shorter in the number of total pages. When attorneys remove the legalese from their briefs, they are able to convey the same message that might otherwise have been lost in their use of more complicated legal terms.
Legal Brief Sample
The rules of the court to which a brief will be submitted take precedence over any legal brief sample that may be referenced in drafting the brief. While Appellate briefs are rarely published, those looking for sample legal briefs can reference the Supreme Court’s . This series contains full texts of some of the briefs that have been submitted for argument before the Supreme Court.
Related Legal Terms and Issues
Notary – A person authorized to perform certain legal tasks, such as the certification of contracts, deeds, or other documents that are referenced in court.
Writ of Certiorari – An order issued by a higher court demanding a lower court forward all records of a specific case for review |
Only use the information found within the provided context. Answer using bullet points with explanations for each. | What are the most impactful 2023 developments for Hasbro? | Fiscal year 2023 was a year of transformation for our business. Following the October 2022
announcement of our revised strategic plan, we embarked upon an ambitious, multi-year
transformation guided by our revamped strategy. Since that announcement, we have been able to
create efficiencies in our supply chain, improve our inventory position, lower our costs, and reinvest
back into the business. During fiscal 2023, we strengthened our leadership team with industry
veterans and turnaround experts and have focused our strategic investments on our most valuable
and profitable franchises across games, toys, licensing and entertainment. This focused strategy
also led to the decision to sell certain non-core parts of our business, including the Entertainment
One film and television business not relating to Hasbro and family-oriented brands, which we refer
to as Hasbro Brands and Family Brands. In 2023, we experienced stronger than expected market
headwinds within our Consumer Products business, resulting in our difficult decision to take additional headcount reductions and accelerate the process of certain organizational structure
changes that is expected to result in the reallocation of people and resources, both in effort to
strengthen our foundation and position Hasbro for growth. | Only use the information found within the provided context. Answer using bullet points with explanations for each. What are the most impactful 2023 developments for Hasbro?
Fiscal year 2023 was a year of transformation for our business. Following the October 2022
announcement of our revised strategic plan, we embarked upon an ambitious, multi-year
transformation guided by our revamped strategy. Since that announcement, we have been able to
create efficiencies in our supply chain, improve our inventory position, lower our costs, and reinvest
back into the business. During fiscal 2023, we strengthened our leadership team with industry
veterans and turnaround experts and have focused our strategic investments on our most valuable
and profitable franchises across games, toys, licensing and entertainment. This focused strategy
also led to the decision to sell certain non-core parts of our business, including the Entertainment
One film and television business not relating to Hasbro and family-oriented brands, which we refer
to as Hasbro Brands and Family Brands. In 2023, we experienced stronger than expected market
headwinds within our Consumer Products business, resulting in our difficult decision to take additional headcount reductions and accelerate the process of certain organizational structure
changes that is expected to result in the reallocation of people and resources, both in effort to
strengthen our foundation and position Hasbro for growth. |
In a 3-5 sentence paragraph based solely on the provided context block, answer the user's question. Outside knowledge is strictly prohibited. | What are the benefits and/or drawbacks of this acquisition? | Contact: Corporate Communications, USJ Co.
81-6-6465-3333
US MEDIA GIANT, COMCAST NBCUNIVERSAL
TO PURCHASE 51% OWNERSHIP OF USJ CO., LTD.
OSAKA (Sept. 28, 2015) – USJ Co., Ltd., the operating company of Universal Studios Japan, announced today that
Comcast NBCUniversal agreed to purchase 51% of ownership of USJ from the current shareholders. This acquisition
will show the strong commitment of Comcast NBCUniversal to grow and evolve Universal Studios Japan and as we
work with NBCUniversal and its Universal Parks & Resorts division, the entire group’s global strategy in theme park
business will accelerate.
Also today, Glenn Gumpel, who served as Chief Executive Officer of USJ since 2004, announced to step down from
the current position effective when the transaction closes. Universal Parks & Resorts has named Jean-Louis Bonnier
as the new Chief Executive Officer.
Glenn Gumpel said, “Universal Studios Japan will continue to progress along with its basic policies such as the
successful marketing strategy which has boosted the attendance these recent years and look forward to even further
growth utilizing a financial strength and a great platform Comcast NBCUniversal will give.”
About Universal Studios Japan
Bring You the Best of the Worldas a theme park where its guests can have the world’s best experiences and create
the world’s best memories, Universal Studios Japan offers the world-class entertainment such as authentic attractions
and shows, based on not only Hollywood blockbusters but also very popular world class entertainment brands, and a
variety of seasonal events entertain its guests to the fullest fun.
In recent years, Universal Studios Japan has constantly offered new entertainment one after another such as
Universal Wonederland area where family guests enjoy meeting with popular characters, Universal Cool Japan event
offering attractions themed on world-renowned Japanese entertainment brands, and The Wizarding World of Harry
Potter which has been gathering attention of both domestic and international guests. These efforts resulted in not only
a record-high attendance made in FY 2014 but also positioning of the Park as a prominent entertainment and leisure
landmark drawing much greater number of guests from distant areas in Japan as well as overseas.
About Comcast:
Comcast Corporation (Nasdaq: CMCSA, CMCSK) is a global media and technology company with two primary
businesses, Comcast Cable and NBCUniversal. Comcast Cable is one of the nation's largest video, high-speed Internet
and phone providers to residential customers under the XFINITY brand and also provides these services to businesses.
About NBCUniversal:
NBCUniversal owns and operates a valuable portfolio of news and entertainment television networks, a premier motion
picture company, significant television production operations, a leading television stations group, world-renowned
theme parks, and a suite of leading Internet-based businesses. NBCUniversal is a subsidiary of Comcast Corporation.
About Universal Parks & Resorts:
Universal Parks & Resorts, a unit of Comcast NBCUniversal, offers guests around the globe today’s most relevant and
popular entertainment experiences. With three-time Academy Award winner Steven Spielberg as creative consultant, its
theme parks are known for immersive experiences that feature some of the world’s most thrilling and technologically
advanced film- and television-based attractions.
Comcast NBCUniversal wholly owns Universal Studios Hollywood, which includes Universal CityWalk Hollywood. It
also owns Universal Orlando Resort, a world-class destination resort featuring two theme parks (Universal Studios
Florida and Universal’s Islands of Adventure), four resort hotels, and Universal CityWalk Orlando. Comcast
NBCUniversal also has license agreements with Universal Studios Japan in Osaka, Japan and Universal Studios
Singapore at Resorts World Sentosa, Singapore. In addition, Comcast NBCUniversal has recently announced plans for a
theme park in Beijing and an indoor theme park to be developed as part of the Galactica Park project in Moscow.
＊ ＊ ＊
Universal Studios Japan aims for the world’s best entertainment, a place where memories that lasts a lifetime are
made.
Please call the information center （Tel : 0570-20-0606） for any general information in regards to Universal
Studios Japan. The Official Universal Studios Japan website can be accessed via computer, cell phone and smart
phone.
＊ ＊ ＊ | Context Block: Contact: Corporate Communications, USJ Co.
81-6-6465-3333
US MEDIA GIANT, COMCAST NBCUNIVERSAL
TO PURCHASE 51% OWNERSHIP OF USJ CO., LTD.
OSAKA (Sept. 28, 2015) – USJ Co., Ltd., the operating company of Universal Studios Japan, announced today that
Comcast NBCUniversal agreed to purchase 51% of ownership of USJ from the current shareholders. This acquisition
will show the strong commitment of Comcast NBCUniversal to grow and evolve Universal Studios Japan and as we
work with NBCUniversal and its Universal Parks & Resorts division, the entire group’s global strategy in theme park
business will accelerate.
Also today, Glenn Gumpel, who served as Chief Executive Officer of USJ since 2004, announced to step down from
the current position effective when the transaction closes. Universal Parks & Resorts has named Jean-Louis Bonnier
as the new Chief Executive Officer.
Glenn Gumpel said, “Universal Studios Japan will continue to progress along with its basic policies such as the
successful marketing strategy which has boosted the attendance these recent years and look forward to even further
growth utilizing a financial strength and a great platform Comcast NBCUniversal will give.”
About Universal Studios Japan
Bring You the Best of the Worldas a theme park where its guests can have the world’s best experiences and create
the world’s best memories, Universal Studios Japan offers the world-class entertainment such as authentic attractions
and shows, based on not only Hollywood blockbusters but also very popular world class entertainment brands, and a
variety of seasonal events entertain its guests to the fullest fun.
In recent years, Universal Studios Japan has constantly offered new entertainment one after another such as
Universal Wonederland area where family guests enjoy meeting with popular characters, Universal Cool Japan event
offering attractions themed on world-renowned Japanese entertainment brands, and The Wizarding World of Harry
Potter which has been gathering attention of both domestic and international guests. These efforts resulted in not only
a record-high attendance made in FY 2014 but also positioning of the Park as a prominent entertainment and leisure
landmark drawing much greater number of guests from distant areas in Japan as well as overseas.
About Comcast:
Comcast Corporation (Nasdaq: CMCSA, CMCSK) is a global media and technology company with two primary
businesses, Comcast Cable and NBCUniversal. Comcast Cable is one of the nation's largest video, high-speed Internet
and phone providers to residential customers under the XFINITY brand and also provides these services to businesses.
About NBCUniversal:
NBCUniversal owns and operates a valuable portfolio of news and entertainment television networks, a premier motion
picture company, significant television production operations, a leading television stations group, world-renowned
theme parks, and a suite of leading Internet-based businesses. NBCUniversal is a subsidiary of Comcast Corporation.
About Universal Parks & Resorts:
Universal Parks & Resorts, a unit of Comcast NBCUniversal, offers guests around the globe today’s most relevant and
popular entertainment experiences. With three-time Academy Award winner Steven Spielberg as creative consultant, its
theme parks are known for immersive experiences that feature some of the world’s most thrilling and technologically
advanced film- and television-based attractions.
Comcast NBCUniversal wholly owns Universal Studios Hollywood, which includes Universal CityWalk Hollywood. It
also owns Universal Orlando Resort, a world-class destination resort featuring two theme parks (Universal Studios
Florida and Universal’s Islands of Adventure), four resort hotels, and Universal CityWalk Orlando. Comcast
NBCUniversal also has license agreements with Universal Studios Japan in Osaka, Japan and Universal Studios
Singapore at Resorts World Sentosa, Singapore. In addition, Comcast NBCUniversal has recently announced plans for a
theme park in Beijing and an indoor theme park to be developed as part of the Galactica Park project in Moscow.
＊ ＊ ＊
Universal Studios Japan aims for the world’s best entertainment, a place where memories that lasts a lifetime are
made.
Please call the information center （Tel : 0570-20-0606） for any general information in regards to Universal
Studios Japan. The Official Universal Studios Japan website can be accessed via computer, cell phone and smart
phone.
＊ ＊ ＊
System Instructions: In a 3-5 sentence paragraph based solely on the provided context block, answer the user's question. Outside knowledge is strictly prohibited.
Question: Can you explain the relationship between all the companies mentioned here in simple terms, including subsidiaries, etc.? |
Only utilize the information provided to you, and refer to it to respond to any query. Omit any clarifications, that would reach outside the scope of the provided materials. Declare: "I need more provided context", when a User query implies interest in a new field or topic. | Please provide an analysis of the US-Mexico border and how a more efficient border would impact the economy. | Atlantic Council
ADRIENNE ARSHT
LATIN AMERICA CENTER
The Economic Impact of aMore Efficient US-MexicoBorder How Reducing Wait Times at Land Ports of Entry Would Promote Commerce, Resilience, and Job Creation
Report Contributors:
Alejandro Brugués Rodríguez, John Byrd, Noé Arón Fuentes Flores, David Gaytan, John Gibson, Camila Hernández, Mayra Maldonado, Jason Marczak, Jorge Eduardo Mendoza Cota, Roberto Ransom, and Ignacia Ulloa
Atlantic Council
ADRIENNE ARSHT
LATIN AMERICA CENTER
The Atlantic Council’s nonpartisan Adrienne Arsht Latin America Center (AALAC) broadens understanding of regional transformations while demonstrating why Latin America and the Caribbean matter for the world. The center focuses on pressing political, economic, and social issues that will define the region’s trajectory, proposing constructive, results-oriented solutions to inform public sector, business, and multilateral action based on a shared vision for a more prosperous, inclusive, and sustainable future.
AALAC – home to the premier Caribbean Initiative – builds consensus for action in advancing innovative policy perspectives within select lines of programing: U.S. policy in the Western Hemisphere; Colombia’s future; Venezuela’s multidimensional crisis; Central American prosperity; US-Mexico ties; China in the Americas; Brazil’s trajectory; Caribbean development; regional economic development and commerce; and energy transitions. Jason Marczak serves as the center’s senior director.
This report is written and published in accordance with the Atlantic Council Policy on Intellectual Independence. The authors are solely responsible for its analysis and recommendations. The Atlantic Council and its donors do not determine, nor do they necessarily endorse or advocate for, any of this report’s conclusions.
Atlantic Council
1030 15th Street NW, 12th Floor
Washington, DC 20005
For more information, please visit
www.AtlanticCouncil.org.
ISBN-13: 978-1-61977-250-2
September 2022
A joint report by the Atlantic Council’s Adrienne Arsht Latin America Center, the University of Texas
at El Paso’s Hunt Institute for Global Competitiveness, and El Colegio de la Frontera Norte.
Atlantic Council
ADRIENNE ARSHT
LATIN AMERICA CENTER
The Economic Impact of aMore Efficient US-MexicoBorder How Reducing Wait Times at Land Ports of Entry Would Promote Commerce, Resilience, and Job Creation
(The first of a two-part series on the US-Mexico Border)
Report Contributors:
Alejandro Brugués Rodríguez, John Byrd,
Noé Arón Fuentes Flores, David Gaytan,
John Gibson, Camila Hernández,
Mayra Maldonado, Jason Marczak,
Jorge Eduardo Mendoza Cota,
Roberto Ransom, and Ignacia Ulloa
Table of Contents
EXECUTIVE SUMMARY 6 INTRODUCTION 7 WHY INVEST IN THE US-MEXICO BORDER? 8 BORDER WAIT TIMES: A CONTINUED CHALLENGE 9 THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER 11
The United States: Increased border efficiency would strengthen the economy 12 Mexico: The potential economic gains of a more efficient border 15 CONCLUSION 17 METHODOLOGY 18 APPENDICES 19 ACKNOWLEDGMENTS 38
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
“We know that long wait times at the border can hurt our businesses and economy, especially in my district. Ensuring our ports of entry have sufficient funding to reduce wait times is necessary to keep our economy on track and ensure businesses on both sides of the border succeed.” The Hon. Juan Vargas
Representative (D-CA-51)
US HOUSE OF REPRESENTATIVES
“Strengthened US-Mexico collaboration at our border will unlock significant economic growth, promote supply chain resilience, and boost competitiveness, benefiting Mexican
workers and families. These benefits will reverberate far beyond the border, reaching states throughout Mexico. Now is the time to invest in initiatives to create an even more efficient and secure shared border.”
H.E. Luz Maria de la Mora
Subsecretary of International Commerce,
Secretariat of the Economy
UNITED MEXICAN STATES
“Our border communities rely on efficient and effective infrastructure for work, trade, tourism and other economic exchanges across the US-Mexico border. As the North American region seeks to retain its competitive global advantage, it is more important than ever for these communities to have access to top-notch ports of entry, staffing and technology. With the proper tools for border management, our border cities will be enabled to prosper now and well into the future.”
The Hon. Tony Gonzales
Representative (R-TX-23)
US HOUSE OF REPRESENTATIVES
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Executive Summary
Improvements in border management and the adoption of
new technologies at the US-Mexico border have the potential to enhance security and generate economic benefits for the United States and Mexico through expedited flows of goods
and people. Reduced border wait times would lead to more traffic entering the United States from Mexico, both in terms of commercial trucks loaded with goods for US consumers and shoppers ready to buy US goods. This report quantifies the economic impact of this additional commerce and cross-border spending, which would lead to further economic prosperity in the two countries.
Research shows that a 10-minute reduction in wait times could lead to an additional $26 million worth of cargo entering the United States each month via commercial vehicles. This translates to more than $312 million in further commerce from Mexico into the United States annually. The extra inventory of finished and intermediate goods would drive down US domestic prices, creating increased economic well-being for US citizens.
This report also finds that reducing border wait times by 10 minutes has a positive annual impact of $5.4 million on the US economy due to purchases by additional families and individuals entering the United States from Mexico. While the immediate effect of these purchases is most evident in border communities, economic benefits would spread to the continental United States due to the
economic linkages between local economies, with approximately 25 percent of the total impact reaching non-border states.
Beyond the $312 million in added commerce from Mexico into the United States, a 10-minute reduction in border wait times would promote the creation of nearly 18,700 direct and indirect jobs in Mexico, increase labor income per sector by an average of $17,474, and simulate growth for various Mexican economic sectors, particularly manufacturing, wholesale trade, and mining.
More specifically, a one-minute reduction in border wait times would increase the average production (or output) per sector—for Mexico’s top ten sectors exporting to the United States—by 2 percent. This reduction in border wait times would also boost intermediate sales and aggregate demand in Mexico by 2.4 percent and 1.7 percent, respectively.
These findings illustrate the economic benefits of prioritizing investments at the US-Mexico border to reduce commercial and noncommercial wait times. They are understood as the lower range of the potential national-level economic benefits of deepened US-Mexico collaboration to create a more efficient and secure border. A forthcoming second study will build on these findings, disaggregating the economic impact of reduced wait times for US and Mexican states and counties at the border and beyond.
Trucks pass through the U.S. border and into the United States from Juarez, Mexico in El Paso, Texas, U.S. June 18, 2018. REUTERS/Mike Blake
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Introduction
The US-Mexico border is a hub of cultural and commercial
exchange, fostering continued growth and collaboration between the United States and Mexico. Stretching over 2,000 miles, it has more than forty-four active ports of
entry, with fifteen million US and Mexican citizens residing in border counties. In July 2022 alone, the United States and Mexico traded over $65 billion in goods,1 with more than $53 billion crossing the southern border via trucks and trains.2
Approximately five million US jobs depend on trade with Mexico,3 meaning that one in every twenty-nine workers in the United States has a job created or supported by US-Mexico trade. These jobs are spread throughout the US economy in terms of geography and industries. In Mexico’s automotive sector, US-Mexico trade supports more than one million jobs directly and 4.5 million indirectly.4
In addition to importing and exporting final products, the United States and Mexico jointly produce goods. Cross-border production sharing has contributed to greater economic integration, resilience, and competitiveness while helping to insulate the US and Mexican economies from global competitors. Similarly, US-Mexico trade in services contributes to the commercial relationship, with over $62 billion traded in 2019.5
On July 12, 2022, US President Joseph R. Biden and Mexican President Andrés Manuel López Obrador met in Washington, DC, to discuss how safer and more efficient borders would enhance shared commerce.6 During their meeting, the United States committed to investing $3.4 billion and Mexico $1.5 billion to undertake major projects to modernize land ports of entry on the northern and southern borders. These efforts will create jobs, bolster shared security, and enhance supply chain resilience by promoting legitimate trade and travel.
New investments should continue to enhance shared commerce while addressing long-standing efficiency and security challenges, including excessive wait times, inconsistent federal policies, outdated screening technologies, and the illicit flow of weapons, drugs, contraband, and people. Future US-Mexico cooperation should also build on prior efforts to modernize border infrastructure, expedite processing times, and implement joint production programs through accords such as the United States Mexico-Canada Agreement (USMCA). It could also prioritize new information-sharing infrastructure, shared defense strategies, bilateral-processing mechanisms, and expanded trusted traveler programs. The long-term institutionalization of standing working groups like the US-Mexico High-Level Economic Dialogue (HLED) will help the United States and Mexico align priorities and advance shared development goals moving forward—as evidenced through the joint commitments made at the September 12, 2022, HLED meeting.7
This report—the first in a two-part series—shows that US-Mexico cooperation aimed at creating a more efficient, resilient, and secure border will enhance shared commerce and economic well-being through the expedited flow of goods and people. Reduced border wait times would allow more commercial and noncommercial vehicles to enter the United States from Mexico, bolstering cross
border trade and spending and stimulating competitiveness, economic integration, and job creation. This report includes national-level findings, while a second report disaggregates results by county and state, showing that investing in the US-Mexico border will pay dividends far beyond the border.
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Why Invest in the US-Mexico Border?
The United States and Mexico rely on each other to meet
their populations’ demand for goods and services. Mexico stands as one of the United States’ largest trading partners in terms of goods, ranking first in 2019 with more than $614
billion in total (two-way) goods traded that year.8 Recent disruptions to cross-border commerce illustrate this interdependence, with important economic implications for populations on both sides of the border.
As COVID-19 first raged worldwide, shutting down economies in the spring of 2020, the US-Mexico border was not immune to the global lockdown. Disruptions in cross-border flows of goods and people resulted in unemployment, curtailed retail sales, and decreased revenue for the tourism industry. In Texas alone, the tourism industry lost $1.02 billion over the course of eight months of border closures. In Mexico, agricultural exports decreased 5.9 percent between March and May of 2020, with a 17.9 percent decrease in sugar exports compared to 2019.9
Avocados are another example of US-Mexico economic interdependence. Approximately nine of ten avocados in US supermarkets come from Mexico.10 In 2021 alone, the United States imported more than 1.1 million metric tons of avocados from Mexico, totaling over $2.8 billion. However, a temporary suspension of avocado imports—due to a verbal threat received by a US inspector in Michoacán—led to concerns over shortages and price increases across the United States.11 Fortunately, the eight-day suspension did not have a lasting impact on local economies or spoil the fruit waiting for export. Soon after the suspension was lifted, avocados quickly returned to US supermarkets to satisfy consumer demand.
The story of COVID-related commerce disruptions and the avocado example not only illustrate the two countries’ economic
interdependence but also the importance of safe and efficient borders. According to US Customs and Border Protection (CBP), the average border-crossing wait time per truck regularly surpasses 125 minutes during regular-to-peak crossing hours.12 Multiplied by the average of 19,617 trucks crossing the border daily, the lost revenue amounts to millions of dollars annually for the United States and Mexico.
Cross-border spending by noncommercial entities (families and individuals) also directly impacts the US and Mexican economies. Cities along the southern border of the United States have become attractive commercial poles that draw customers from Mexico up to 75 miles (120 kilometers) away for daily consumption of goods and services. This is partly due to trade mechanisms becoming antiquated under new international trade agreements (originally designed to retain customers in local markets and supply border counties with national products) and the limitations of the Mexican domestic market, which often translates to higher prices and lower quality in goods such as food, clothing, footwear, and household equipment.
The United States and Mexico have created a series of tools to expedite border crossings for pedestrians, trains, and commercial and noncommercial vehicles, including Unified Cargo Processing,13 Global Entry, Secure Electronic Network for Travelers Rapid Inspection (SENTRI),14 Customs Trade Partnership Against Terrorism,15 and other trusted traveler programs. However, these mechanisms only serve a small portion of daily border crossers, given high annual fees and other prohibitive eligibility requirements. For example, only 175,000 citizens in the United States and Mexico have become SENTRI card holders.16 Building on these and other programs is essential as US and Mexican leaders work together to tap the full economic potential of our shared border.
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Border Wait Times: A Continued Challenge
Bottlenecks at land ports of entry along the US-Mexico
border present a long-term challenge for economic integration, supply chain resilience, and competitiveness. While international production sharing programs
such as the USMCA and the Maquiladora Export Industry17 have promoted mutually beneficial trade, they have contributed to border congestion by increasing the volume of vehicles requiring border inspections. Congestion and associated wait times are compounded by outdated technologies and limited information sharing within and between agencies in Mexico and the United States. Curtailing the illegal flow of weapons, drugs, contraband, and people also requires stringent and time-consuming border inspections that may lead to border delays.
As shown in Figure 1, non-expedited cargo (commercial vehicles) entering the United States from Mexico undergoes a multistep inspection process. The first processing step involves examination by Mexican border agents who verify paperwork for outgoing goods, ensuring that tariffs are accurately assigned.18 Once cargo
reaches US inspection booths, CBP officers first examine relevant documentation for incoming merchandise and drivers, who are then subject to automated regulation and tariff compliance reviews. At the officers’ discretion, cargo can undergo an additional canine or gamma ray inspection before being cleared for crossing.
Noncommercial vehicles entering the United States from Mexico also undergo a multistep inspection process. Depending on the type of border crossing (i.e., land or bridge), vehicles could be required to pay tolls in cash or via electronic toll collection systems. Once completed, vehicles continue to US inspection points, where they can undergo up to two separate inspections. At the primary inspection booth, CBP officials verify travelers’ documentation and inquire about the purpose of their visit to the United States. If the Interagency Border Inspection System finds records of norm violation,20 CBP officers direct the vehicle toward secondary inspection. At the secondary inspection, officers conduct a thorough identity investigation, after which access to the United States is either granted or denied.
Figure 1: Inspection Process for Commercial Vehicles at the US-Mexico Border19 1. Mexican Export Lot 2. US Federal Compound 3. State Safety Facility
Warehouse / Yard
Mexican export documentation verifications and cargo inspection selection
Mexican
export
cargo
inspection
CBP primary inspection
(document
inspection)
Secondary
inspection
VACIS, X-Ray, FMCSA
`Others
Visual vehicle safety
inspection
Detailed state truck safety
inspection
Warehouse / Yard
Mexico United
SOURCE: US Department of Transportation, Federal Highway Administration, “Border-wide Assessment of Intelligent Transportation System (ITS) Technology—Current and Future Concepts,” https://ops.fhwa.dot.gov/publications/fhwahop12015/ch2.htm, 2022.
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Trucks wait in a long queue for border customs control to cross into the U.S., in one of the main roads of Tijuana, Mexico, April 18, 2019. REUTERS/Andres Martinez Casares - RC1CE4339C90
Despite the implementation of numerous interventions to enhance the border-user experience, border users consulted while preparing this report expressed concerns about inconsistent federal policies that are not well attuned to their needs.21 For example, outdated technologies at port facilities lead to inaccurate time projections on official agency platforms, making border users turn to social media to better estimate wait and crossing times. Similarly, double inspection processes and unstandardized documentation
requirements in different ports of entry generate delays in border crossings, which ultimately increase transport expenses.
Finding ways to efficiently process the large volume of commercial and noncommercial vehicles crossing the border while safeguarding national security should remain a priority for the bilateral relationship. This will improve the border-user experience and result in substantial economic gains for both countries.
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The Economic Impact of a More
Efficient US-Mexico Border
Reduced wait times at the US-Mexico directly impact the
US and Mexican economies through increased cross border commerce (commercial vehicles) and spending (noncommercial vehicles). This section quantifies the
nationwide dollar value that would result from additional traffic entering the United States from Mexico following a 10-minute reduction in border wait times. The economic impact is estimated for the US and Mexican economies.
OUR APPROACH
The Atlantic Council’s Adrienne Arsht Latin America Center partnered with the Hunt Institute for Global Competitiveness at the
University of Texas at El Paso and El Colegio de la Frontera Norte to produce this two-part study. Findings in this first report result from roundtables, focus groups, and individual consultations carried out virtually across both countries and in-person in Washington, DC; El Paso, Texas; and Tijuana, Mexico; and the analysis of economic data from the United States and Mexico. This study utilizes two economic models; one uses US data, emphasizing the US economy, and another employs Mexican data, focusing on the Mexican economy. As a starting point, both sides of the border were viewed independently to account for discrepancies in data availability and the specific methodologies of local partners and stakeholders. By later harmonizing findings and data, the scope and range of results were extended, ultimately determining the costs and benefits of reducing border wait times for both economies.
USEFUL TERMS
• Commercial traffic: loaded or unloaded vehicles (usually trucks or trains) that cross the US-Mexico border with the intent to distribute goods produced in the country of origin.
• Expenditure: the amount of money spent by noncommercial entities (families and individuals).
• Aggregate demand: the total amount of demand for all finished goods and services produced in an economy.
• Final good: a product that the final consumer uses or consumes. It does not require any additional processing.
• Gross output: the measure of total economic activity in the production of new goods and services during an accounting period.
• Labor income: the sum of employee compensation (wages and benefits) and proprietor income.
• Intermediate good: a product used to produce a final good.
• Intermediate sale: the sale of intermediate goods used in the production of final goods.
• Noncommercial traffic: vehicles carrying passengers (tourists, workers, others) that do not transport goods to sell in the destination country.
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The United States: Border Efficiency to Strengthen the Economy
By John Byrd, John Gibson, Mayra Maldonado, and Roberto Ransom.
University of Texas at El Paso’s Hunt Institute for Global Competitiveness
Improved border management and the implementation of new
technologies at the US-Mexico border have the potential to enhance border security and expedite legitimate trade and travel, stimulating the US and Mexican economies. A more
efficient border would allow more commercial and noncommercial traffic to enter the United States from Mexico, resulting in additional goods for US consumers and businesses and more shoppers buying US goods and services.
KEY TAKEAWAYS:
A 10-minute reduction in wait times at the US-Mexico border would:
• Five-hundred thirty-two additional commercial vehicles loaded with goods entering the United States from Mexico every month would generate an additional commercial intake of nearly $26 million monthly or $312 million annually. The extra inventory resulting from increased imports would reduce US domestic prices, thus promoting economic well-being for US citizens.
• Sixty-thousand two-hundred forty additional noncommercial vehicles entering the United States from Mexico every month would generate an additional economic intake of $450,000 monthly, or $5.4 million annually. Border states would absorb approximately 75 percent of this economic impact, and the other 25 percent would reach non-border states in the United States.
The Economic Impact of Additional
Commercial Crossings
In 2021, more than 4.7 million container trucks loaded with over $345.9 million worth of cargo entered the United States from Mexico via the US-Mexico border.22 Research shows that a one minute reduction in commercial wait times would result in 53 additional commercial crossings (see regression analysis in Appendix B). This means that a 10-minute reduction in wait times would result in approximately another 532 container trucks entering the United States every month.
These containers may be loaded or unloaded. Therefore, estimating the economic impact of additional commercial crossings would require determining the proportion of loaded containers entering the United States via land ports of entry and the average cargo value of loaded containers. Data from the US Bureau of Transportation shows that approximately 73.1 percent of containers crossing the US-Mexico border are loaded with an average value of $66,798. Table 1 shows a breakdown of the average container value and the number of loaded and unloaded containers crossing the border through individual border counties.
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Table 1: Proportion of Loaded Containers and Average Container Value (2019)
State
County
Loaded
Containers 2019
Unloaded Containers 2019
Loaded + Unloaded Containers
Exports
2019
Imports
2019
Total Trade
2019
Average
Value
per Truck
Texas
El Paso
610,869
184,426
795,295
$31,717,503,019
$46,613,712,212
$78,331,215,231
$76,307
Texas
Hudspeth
0
0
0
$-
$-
$-
$-
Texas
Presidio
8,418
1,791
10,209
$144,896,195
$200,275,710
$345,171,905
$23,791
Texas
Val Verde
59,951
15,651
75,602
$2,068,951,047
$3,082,037,002
$5,150,988,049
$51,409
Texas
Maverick
149,732
30,298
180,030
$7,453,868,613
$22,197,870,144
$29,651,738,757
$148,251
Texas
Webb
1,711,670
658,639
2,370,309
$95,124,653,587
$135,741,587,991
$230,866,241,578
$79,304
Texas
Starr
38,611
17,958
56,569
$92,580,893
$387,724,994
$480,305,887
$10,042
Texas
Hidalgo
502,312
213,297
715,609
$13,222,562,811
$23,522,857,942
$36,745,420,753
$46,829
Texas
Cameron
153,280
134,796
288,076
$8,910,096,389
$8,930,388,221
$17,840,484,610
$58,262
New
Mexico
Luna
15,960
794
16,754
$23,980,387
$116,358,933
$140,339,320
$7,291
New
Mexico
Dona Ana
114,701
19,916
134,617
$14,098,068,953
$16,344,483,518
$30,442,552,471
$142,496
Arizona
Yuma
28,342
8,823
37,165
$506,644,995
$875,099,032
$1,381,744,027
$30,876
Arizona
Pima
303
12
315
$3,518,870
$1,794,662
$5,313,532
$5,923
Arizona
Santa Cruz
293,771
66,136
359,907
$10,369,174,240
$15,633,063,045
$26,002,237,285
$53,215
Arizona
Cochise
21,775
8,253
30,028
$802,531,798
$1,153,252,535
$1,955,784,333
$52,962
California
San Diego
798,230
258,912
1,057,142
$17,279,207,288
$32,480,486,882
$49,759,694,170
$40,691
California
Imperial
258,227
134,805
393,032
$7,023,568,716
$11,087,270,453
$18,110,839,169
$42,936
Total
US Border
4,766,152
1,754,507
6,520,659
$208,841,807,801
$318,368,263,276
$527,210,071,077
Average
$66,798
SOURCE: The Hunt Institute for Global Competitiveness and the COLEF using data from the Department of Transportation and the US Census Bureau.
Based on these findings, a 10-minute reduction in commercial wait times would allow $26 million23 in additional cargo value to enter the United States monthly or $312 million annually. This added commerce from Mexico into the United States consists of various finished and intermediate goods demanded by US consumers and businesses. While it may be argued that additional consumer goods entering the United States via the southern border would result in fewer jobs in the United States, the extra inventory generated by these other imports would also drive down domestic prices. Furthermore, the inflow of intermediate goods serves as vital inputs that support US businesses. As such, more data and analysis are required to determine which of these offsetting effects dominate.
The Economic Impact of Additional
Noncommercial Crossings24
Improvements in border management tools and practices could also expedite the flow of noncommercial crossings, with positive repercussions for the US economy due to additional cross border spending. In 2021, nearly 126 million people entered the United States from Mexico to purchase goods and services from US businesses. As shown in Table 2, these purchases generated an economic impact of $12.3 billion for the US economy.25 While the four US border states—Arizona, California, New Mexico, and Texas—absorb 75 percent of this impact, approximately 25 percent
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Table 2: Economic Impact of Cross-Border Spending in the United States (2022) Impact Employment Labor Income Value Added Output
1 - Direct 2 - Indirect 3 - Induced
60,619.16
$1,812,022,814.56
$2,765,047,740.91
$5,036,142,293.41
21,166.07
$1,234,825,927.30
$1,980,607,178.46
$4,118,866,436.04
18,648.05
$977,441,701.68
$1,771,486,445.19
$3,177,688,817.94
100,433.29
$4,024,290,443.54
$6,517,141,364.56
$12,332,697,547.38
SOURCE: The Hunt Institute for Global Competitiveness and the COLEF, using IMPLAN.
bleeds directly into non-border states. This means that spending by shoppers from Mexico in US border states has an economic impact of $3.1 billion in the other forty-six US states.
Research finds that a 10-minute reduction in wait times at the US-Mexico border would result in an average of approximately 5,020 additional noncommercial crossings every month, or 60,240 every year (see regression results in Appendix B). Determining the economic impact of these additional crossings requires data on the spending patterns of noncommercial crossers and a model to assess the economic impact of this spending. Appendix C provides
technical details on how the data and model were used to calculate impact.
Research shows that a 10-minute reduction in noncommercial wait times at the US-Mexico border would lead to a $450,000 positive economic impact on the US economy every month. Over the course of one year, this would add up to a monetary intake of $5.4 million. The top three industries that would most benefit from additional cross-border spending is concentrated in areas where tourists or temporary visitors are likely to spend money, particularly retail, full
service restaurants, and general merchandise industries. For further information on sector-specific impacts, see Appendix C.
Trucks wait in a queue for border customs control, to cross into the United States, at the Zaragoza-Ysleta border crossing bridge in Ciudad Juarez, Mexico April 30, 2020. REUTERS/Jose Luis Gonzalez
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Mexico: The Potential Economic Gains of Border Efficiency
By David Gaytan, Noé Arón Fuentes Flores, Alejandro Brugués Rodríguez, and Jorge Eduardo Mendoza Cota. El Colegio de la Frontera Norte
KEY TAKEAWAYS:
A one-minute reduction in wait times at the US-Mexico border would:
• Boost Mexican exports to the United States, increasing sectoral output by an average of 2 percent, intermediate sales by an average of 2.4 percent, and aggregate demand by an average of 1.7 percent. Sectors benefiting the most from reduced commercial wait times are those for which production is largely driven by US demand for export goods such as mining, manufacturing, wholesale trade, and agriculture.
A 10-minute reduction in wait times at the US-Mexico border would:
• Create nearly 18,700 additional direct and indirect Mexican jobs. These posts would be largely concentrated in financial services; wholesale trade; sports, cultural, and other recreational services; and professional, scientific, and technical services.
• Lead to an overall increase of $174,474 in labor income.
Expediting the flow of commercial traffic from Mexico into
the United States would boost cross-border commerce, which impacts aggregate demand in Mexico, causing a change in total gross output and intermediate sales.26
These effects can be disaggregated by sector in the Mexican economy.
Macroeconomic Impact of Additional
Commercial Crossings
Determining the sectoral economic impact of a more efficient US-Mexico border requires understanding the relationship between Mexico’s exports per sector and US demand for export goods. The United States stands as Mexico’s largest export market, with approximately 80 percent of Mexican exports destined for the United States.27 Nearly 100 percent of these exports are concentrated in ten sectors,28 accounting for $349 billion in 2018 and $358 billion in 2019 (for more information, see Appendix F).29 Therefore, this study only considers Mexico’s top-ten sectors in terms of exports to the United States. Within this group, the manufacturing and maquiladora export industries are particularly important, producing more than 60 percent of Mexico’s total exports to the United States. Today, Mexico stands as the top US supplier of motor vehicles and motor vehicle parts.30
Findings show that, on average, Mexican exports to the United States drive 38 percent of Mexican production (or output) per sector (for a detailed breakdown, see Appendix F). For mining, manufacturing, wholesale trade, and agriculture, exports to the United States drive more than 50 percent of total gross output. These four sectors alone are responsible for 84.4 percent of the total dollar value generated from exports to the United States, accounting for $664.26 billion out of the total $787.16 billion in total production.
A significant portion of Mexican exports enters the United States via land ports across the US-Mexico border. An average of twenty-eight commercial vehicles with export goods arrive at the border every hour, with the average truck taking approximately 20 minutes to cross the border (for more information, see Appendix D3). Reducing wait times would boost Mexican exports by allowing additional commercial crossings into the United States. This would strengthen Mexican supply chains by stimulating the exchange of intermediate and final goods between sectors in response to the increased demand for export goods.
Given that approximately 73.1 percent of containers crossing the US-Mexico border are loaded with an average value of $66,798,31 a one-minute reduction in commercial wait times would increase
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sectoral output (total gross output) by an average of 2 percent. This output growth would be driven by a 1.7 percent increase in average demand per sector, occurring as a result of additional Mexican exports entering the United States. Intermediate sales (the sectoral exchange of intermediate goods for the production of additional export goods) would grow by an average of 2.4 percent per sector. Appendix D includes a detailed description of the two models used in the analysis, a queuing and input-output model.
As Figure 2 shows, the benefits of increased commercial crossings into the United States are unequally distributed across sectors of the Mexican economy. The mining, manufacturing, and wholesale trade sectors experience the highest growth rates in production, at 3.62 percent, 3.62 percent, and 3.33 percent, respectively. These three sectors also have the largest increase in aggregate demand, growing at 3.88 percent, 5.20 percent, and 3.63 percent, respectively. Regarding intermediate sales, the agricultural and mining sectors have growth rates higher than 3 percent. Appendix F has a detailed breakdown of nominal and percentage growth in production (total gross output), intermediate sales, and aggregate demand following a one-minute reduction in border wait times.
Economic Impact on Employment and Labor Income of Additional Commercial Crossings
Moreover, this study finds that a 10-minute reduction in border wait times would promote the creation of nearly 18,700 indirect and direct jobs in Mexico over the course of one year, with 5,505 new positions opening in financial and insurance services, 3,684 in mass media information, 3,216 in wholesale trade, and 2,448 in professional, scientific, and technical posts. The loss in labor is far smaller, with an estimated 793 jobs lost in manufacturing and 210 in the transportation, postage, and warehousing sectors. (For detailed analysis, see Appendix G).
A ten-minute reduction in commercial wait times would also result in a $174,474 increase in labor income. When disaggregated by sector, labor income growth is higher in the wholesale trade, financial and insurance services, information services, and mining sectors. Interestingly, this change would lead to more equitable distribution of labor income across Mexican economic sectors. However, the variation is driven mainly by increased production by sector rather than overall productivity. (For more information, see Appendix G).
Figure 2: Growth of Total Gross Output, Aggregate Demand, and Intermediate Sales Total Production Growth Aggregate Demand Growth Intermediate Sales GrowthSOURCE: In-house prepared graph based on estimates for 2018 data, obtained from the National Institute of Statistics and Geography, 2022.
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Conclusion
Trucks wait in a long queue for border customs control to cross into the United States at the World Trade Bridge in Nuevo Laredo, Mexico April 2, 2019. REUTERS/Daniel Becerril
A more efficient US-Mexico border would expedite
legitimate trade and travel, enhancing cross-border commerce and benefiting the US and Mexican economies. Streamlined border crossings could be
achieved through improvements in border management practices and the adoption of new technologies. These efforts would also bolster shared security between the United States and Mexico.
This report focused on the economic impact of expediting commercial and noncommercial crossings from Mexico into the United States. Reduced border wait times would increase the supply of goods and services for US consumers and stimulate spending in the United States while boosting Mexican exports into the United States. This would lead to an increasingly competitive, economically integrated, and resilient bilateral relationship.
In the United States, a 10-minute reduction in border wait times would facilitate the crossing of 532 additional loaded trucks every month, generating an added commercial intake of nearly $26 million per month. In one year, the economic impact on the US economy would be $312 million. Similarly, it would allow 60,240 additional noncommercial vehicles to enter the United States every month, generating an extra economic intake of $450,000 monthly, or $5.4 million annually. The benefits of increased cross-border commerce and spending would extend throughout the United States due to the economic linkages between local economies.
For Mexico’s top ten export sectors to the United States, a one minute reduction in commercial wait times would, on average, increase production (total gross output) by 2 percent, intermediate sales by 2.4 percent, and aggregate demand by 1.7 percent. Results show the mining, manufacturing, wholesale trade, and agricultural sectors would benefit the most from additional commerce from Mexico into the United States. Historically, more than 50 percent of production in these sectors has been driven by US demand for export goods.
Expediting the flow of commercial vehicles from Mexico into the United States by ten minutes would increase labor income by $174,474 and promote the creation of nearly 18,700 additional direct and indirect jobs in Mexico, particularly in financial services; mass media information; wholesale trade; and professional, scientific, and technical services.
These numbers illustrate the lower-bound economic gains that would result from reduced wait times at the US-Mexico border, stemming from potential improvements in border management practices and tools. They emphasize the economic interdependence of the United States and Mexico, outlining how a further coordinated, binational approach to the border would benefit both countries. A subsequent study will disaggregate national-level findings and thus determine the impact of a more efficient and secure US-Mexico border at the state and county level in the United States and Mexico.
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THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Methodology
US-focused analysis
The Hunt Institute for Global Competitiveness used a
two-step process to calculate the economic impact of reducing border wait times for commercial and noncommercial crossings. First, regression analysis
was employed to determine the relationship between average wait times (in minutes) and the average number of crossings (commercial and noncommercial) at major US-Mexico land ports of entry. Additional factors impacting this relationship, such as employment and crime on both sides of the border, the number of lanes in operation, and total expenditures made by the US Department of Homeland Security (DHS), were considered. The analysis used data from various sources, including CBP, the US Department of Transportation’s Bureau of Transportation Statistics, the US Department of Labor’s Bureau of Labor Statistics, Instituto Nacional de Estadística y Geografía (INEGI, or National Institute of Statistics and Geography), and the Instituto Mexicano de Seguro Social (Mexican Institute of Social Security). To account for disruptions in border traffic patterns stemming from COVID-19 and its accompanying policy changes, the study captures data between April 2016 and December 2019, before the pandemic’s onset.
The second step in the analysis was quantifying the economic impact of additional crossings resulting from reduced wait times. Because of the different types of data available for commercial and noncommercial crossings; this study used various methods to quantify their effects. For commercial crossings, the proportion of loaded container crossings and the average value per container—
obtained from the US Department of Transportation—were used to determine the dollar value associated with increased container crossings. For noncommercial crossings, survey data from the City of El Paso’s International Bridges Department on travel and spending patterns were used to model the economic impact of spending by additional noncommercial crossers. Appendices A through C include more technical information and a detailed, step
by-step explanation of the analysis.
Mexico-focused analysis
El Colegio de la Frontera Norte used a three-step process and two economic models to determine the economic impact of reduced border wait times for commercial vehicles. The analysis used data from the US Bureau of Transportation Statistics, CBP, the North American Industry Classification System (NAICS), Mexico’s INEGI, Automated Census Information System (ACIS), and Servicio de Administración Tributaria (SAT, or Tax Administration Service).
The first step was to estimate the average inspection rate of commercial vehicles at US-Mexico border land ports of entry (see Appendix D3 for detailed analysis). Then, a queuing model was used to determine how reduced wait times affect Mexican exports to the United States. Finally, an input-output model was implemented to establish how changes in exports affect production (total gross output), intermediate sales, and aggregate demand for Mexico’s top ten sectors in terms of exports to the United States. Appendix D provides a detailed, technical description of the queueing and input output models, while Appendix F includes analysis results.
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THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Appendices
The following Appendices provide additional details on the economic analysis summarized in the main report. Given its technical nature, this section can be skipped by more casual readers. Appendices A, B, and C explain the US-focused analysis by the Hunt Institute for Global Competitiveness and Appendices D, E, F, and G expand on the Mexico-focused analysis by El Colegio de la Frontera Norte.
US-FOCUSED ANALYSIS
APPENDIX A 20 Provides a detailed description of the data used
in the regression analysis.
APPENDIX B 24 Outlines the regression model used to estimate
the relationship between border wait times
and commercial and noncommercial crossings.
APPENDIX C 25 Gives an overview of IMPLAN and how it was used to
measure the economic impact of noncommercial crossings. MEXICO-FOCUSED ANALYSIS
APPENDIX D 28 Provides more details on the input-output
and queuing models.
APPENDIX E 31 Describes the data used in the analysis.
APPENDIX F 32 Explains the economic impact analysis with
and without reduced border wait times.
APPENDIX G 36 Describes the analysis of economic impact
on employment and labor income.
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APPENDIX A
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX A: DATA USED FOR THE FIXED EFFECTS MODEL
While report results are presented at the national level, the analysis by the Hunt Institute for Global Competitiveness is built from county level data focusing on major US-Mexico land ports of entry. Map 1 shows the counties on the US-Mexico border for which data was
collected and analyzed. These counties have one or more land ports of entry. Map 2 presents CBP sectors and selected counties’ ports of entry within each sector.
Map 1. US Border Counties on the US-Mexico Border
SOURCE: The Hunt Institute for Global Competitiveness and El Colegio de la Frontera Norte (COLEF).
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APPENDIX A
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER Map 2. CBP Sectors Along the US-Mexico Border
SOURCE: The Hunt Institute for Global Competitiveness and COLEF using data from CBP.
Table A1 lists every US county that touches the US-Mexico border.
The list includes the name of every port of entry within that county,
the names of the corresponding Mexican counties, and the CBP
sector that contains that county.
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APPENDIX A THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Table A1: US-Mexico Border States, Counties, Cities, Ports of Entry, Mexican Sister Cities, and CBP Sectors State County City PoE Sister City CBP Sector
California
Arizona
New
Mexico
Texas
San Diego
San Ysidro
San Ysidro
Tijuana,
Baja California
San Diego Sector, California
Otay Mesa
Otay Mesa - Commercial
Otay Mesa - Passenger
Otay Mesa - Pedestrian Cross Border Express
Tecate
Tecate
Imperial
Calexico
Calexico - East
Mexicali,
Baja California
El Centro Sector,
California
Calexico - West
Andrade
Andrade
Yuma
San Luis
San Luis - San Luis I
San Luis Rio Colorado, Sonora
Yuma Sector, Arizona
San Luis - San Luis II
Pima
Lukeville
Lukeville
Puerto Peñasco, Sonora
Tucson Sector,
Arizona
Sasabe
Sasabe
Sáric, Sonora
Santa Cruz
Nobales
Nogales - Deconcini
Nogales, Sonora
Nogales - Mariposa
Nogales - Morley Gate
Cochise
Naco
Naco
Naco, Sonora
Douglas
Douglas (Raul Hector Castro)
Agua Prieta, Sonora
Luna
Columbus
Columbus
Asencion, Chihuahua
El Paso Sector, New Mexico
Doña Ana
Santa Teresa
Santa Teresa - Santa Teresa Port of Entry
Ciudad Juarez,
Chihuahua
El Paso
El Paso
El Paso - Bridge of the Americas (BOTA)
Ciudad Juarez,
Chihuahua
El Paso Sector, Texas
El Paso - Paso del Norte (PDN)
El Paso - Stanton DCL
El Paso - Ysleta
Hudspeth
Fort
Hancock
Fort Hancock - Fort Hancock
El Paso
Fabens
Fabens - Tornillo
Guadalupe, Chihuahua
Presidio
Presidio
Presidio
Ojinaga, Chihuahua
Big Bend Sector,
Texas
Val Verde
Del Rio
Del Rio
Acuña, Coahuila
Del Rio Sector, Texas
Maverick
Eagle Pass
Eagle Pass - Bridge I
Piedras Negras,
Coahuila
Eagle Pass - Bridge II
Webb
Laredo
Laredo - Bridge I
Nuevo Laredo,
Tamaulipas
Laredo Sector, Texas
Laredo - Bridge II
Laredo - Colombia Solidarity
Laredo - World Trade Bridge
Starr
Roma
Roma
Ciudad Miguel Aleman, Tamaulipas
Rio Grande
Rio Grande City
Camargo, Tamaulipas
Rio Grande Valley Sector
Hidalgo
County
Hidalgo/
Pharr
Hidalgo/Pharr - Anzalduas International Bridge
Reynosa, Tamaulipas
Hidalgo/Pharr - Hidalgo
Hidalgo/Pharr - PharrProgreso - Donna International Bridge
Hidalgo
Progreso
Progreso - Donna International Bridge
Rio Bravo, Tamaulipas
Progreso - Progreso International Bridge
Cameron
Brownsville
Brownsville - B&M
Matamoros, Coahuila
Brownsville - Gateway
Brownsville - Los Indios
Brownsville - Veterans International
SOURCE: The Hunt Institute for Global Competitiveness and El Colegio de la Frontera Norte (COLEF) using data from CBP.
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APPENDIX A
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Running the necessary regressions to determine the impact of border wait times on border crossings requires data on several variables in various geographies. The data gathered for the regression analysis includes:
1. Average wait times: Border wait times at ports of entry were obtained from CBP. The research team used this data to estimate the monthly average border wait time (in minutes) for every land port of entry. This data was available for commercial vehicles, personal vehicles, and pedestrian modes of crossing, but not for rail crossings.32 Commercial vehicle data for the Hudspeth port of entry were unavailable for this variable.33
2. Total number of crossings per month: Data was captured from the US Department of Transportation’s Bureau of Transportation Statistics for each port of entry on the US-Mexico border and mode of crossing (commercial vehicles, noncommercial vehicles, and pedestrian crossings). The analysis uses these data to estimate the total number of crossings per city and county. The data for the Fort Hancock port of entry was unavailable for this variable.
3. Number of operational lanes per month: The total number of operating lanes per hour per port of entry was taken from the CBP for every port of entry. This analysis used the point of entry level data to estimate the number of operational lanes by city and county. The research team estimated an hourly average for every port of entry, using it to estimate a monthly average of the number of lanes in operation per port of entry. The commercial vehicles data for the Eagle Pass port of entry were not available for this variable.
4. Total number of existing lanes: The total number of existing lanes for every port of entry was captured from CBP. Commercial vehicle data for the Fort Hancock port of entry were unavailable for this variable.
5. Total employment (United States): The monthly data of total non-farm employment information for each US county on the US-Mexico border with ports of entry was obtained from the US Department of Labor’s Bureau of Labor Statistics.
6. Total employment (Mexico): The monthly data on total non-farm employment for each of the Mexican counties on the US-Mexico border with a port of entry was acquired from the Instituto Mexicano del Seguro Social (IMSS or Mexico’s Institute of Social Security).
7. Illegal Apprehensions: CBP provided its complete monthly number of illegal apprehensions for every sector within the southern border. See Map 2 for the boundaries of each CBP sector. This variable serves as a measure of crime in the United States.
8. Homicide rate: The total number of homicides per county was obtained for every northern Mexican municipality from the Secretariado Ejecutivo del Sistema Nacional de Seguridad Publica (Mexico’s Executive Secretary of the National Public Security System), the Mexican agency that compiles the total number of homicides per county. Mexican population data is available from two Mexican agencies, the Instituto Nacional de Estadística y Geografía (INEGI or the National Institute of Statistics and Geography) and the Consejo Nacional de Población (CONAPO or the National Council on Population). This variable serves as a measure of crime in Mexico.
9. Federal Expenditures (United States): Federal costs data were obtained for the following federal agencies: CBP, US Coast Guard, Transportation Security Administration, Federal Law Enforcement Training Center, and US Immigration and Customs Enforcement. These expenses were gathered for the following counties: San Diego and Imperial in California; Yuma, Pima, Santa Cruz, and Cochise in Arizona; Luna and Doña Ana in New Mexico; and El Paso, Presidio, Val Verde, Maverick, Webb, Starr, Hidalgo, and Cameron in Texas.
10. Trade: The data obtained from the US Trade Census consists of the value of the total imports and exports that cross the US-Mexico border ports of entry every month.
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APPENDIX B
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX B: FIXED EFFECTS MODEL
Calculating the economic impact of a more efficient and secure border, requires understanding the relationship between wait times and the number of border crossings.
The data across counties shows a low yet positive correlation between noncommercial crossings and wait times, suggesting that increased wait times are associated with more border crossings.34 This counterintuitive finding is explained by the fact that increased border usage (or border congestion) results in both longer wait times and more crossings. Therefore, to determine the underlying relationship between border wait time and crossings, the research team used an econometric model to control for other factors that may influence border crossings. The following equation is estimated by fixed effects using monthly county-level data from April 2016 through December 2019.35
crossit = β1waitit + β2Xit+ i+uit ,t = 1,2, ..., T
In the estimation equation, crossit and waitit denote the number of crossings (either commercial or noncommercial) and average wait times in county i at time t, respectively. All additional time-varying explanatory variables are included in Xit, while i denotes the time
constant fixed effect for county i and uit denotes the error term.36
The additional controls in Xit account for other factors influencing crossings and include a measure of employment in the United States and Mexico, a measure of crime in both countries, the number (or proportion) of lanes in operation, total expenditures by DHS, and a measure of trade (included in the commercial regression only).
The left panel of Table B1 provides regression results for commercial crossings, while the right panel shows results for noncommercial crossings. The coefficient estimate on wait times is of primary interest, which is negative and statistically significant in both regressions. Specifically, the analysis found that a one-minute reduction in wait times results in 53 additional commercial crossings and 502 noncommercial crossings on average per month.
The coefficient on wait times in the commercial crossing regression is statistically significant at 10 percent. Each additional commercial crossing represents another cargo container (loaded or unloaded) crossing into the United States via a land port of entry. The coefficient on wait times in the noncommercial crossings regression is statistically significant at 5 percent. Each additional noncommercial crossing represents a personal vehicle crossing into the United States via a land port of entry.
Regression results suggest an inverse relationship between wait times and commercial and noncommercial border crossings. Including additional time-varying controls and time-constant fixed effects helped to reverse the counterintuitive finding of a positive correlation reported above. As such, Table B1 describes the underlying relationship between border wait times and border crossings. These findings can be used to determine how improved border management techniques or the adoption of new technologies affect commercial and noncommercial border crossings.
Table B1: Fixed Effects Regression Results
Regression Results
Commercial Crossings
Noncommercial Crossings
Wait times
-53.23*
-502.05**
(30.34)
(227.18)
Employment in US
0.03
0.23
(0.05)
(0.41)
Employment in
Mexico
-0.01
0.05
(0.02)
(0.17)
Crime in US
-0.03
-1.16***
(0.04)
(0.43)
Crime in Mexico
-17.60***
-30.00
(5.56)
(98.12)
Lanes operational
487.29
314031.50***
(1998.54)
(68954.24)
DHS Expenditures
-0.002**
0.01
(0.001)
(0.01)
Trade
8.92E-06***
-
(5.09E-07)
-
Constant
8307.01
268168.40***
(6615.80)
(48439.59)
Sample Size
554
585
R^2
0.95
0.76
SOURCE: The Hunt Institute for Global Competitiveness and the COLEF, using data from the US Department of Transportation.
NOTE: The standard error is in parentheses. ***Statistically significant at 1 percent. **Statistically significant at 5 percent. *Statistically significant at 10 percent.
24 ATLANTIC COUNCIL
APPENDIX C
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX C: ECONOMIC IMPACT ANALYSIS OF BORDER CROSSINGS
The regression results presented in Appendix B established a link between border wait times and commercial and noncommercial crossings. This serves as the first step in understanding the economic impact of reduced border wait times. Additional data is needed to determine the economic impact of reductions in border wait times. The following subsections explain the steps taken to produce the economic impact results described in the main text.
Appendix C1: Economic Impact of Commercial Crossings
The regression results described in Appendix B indicate that a one-minute reduction in average commercial wait times results in approximately fifty-three additional container crossings per month. Data from the US Department of Transportation’s Bureau of Transportation Statistics were used to estimate that approximately 73.1 percent of these containers would be loaded with an average value of $66,798 (for a detailed breakdown of the proportion of loaded containers crossing the US-Mexico border and their average cargo value, see table 1 on page 13). This means that a 10-minute reduction in wait times would result in 532 additional container crossings, of which 388 would be loaded with $25,879,549 in cargo value.
Appendix C2: Economic Impact of Noncommercial Crossings
Individuals crossing from Mexico into the United States make purchases on the US borders and in states, contributing to local economies. Due to underlying economic linkages, this spending has an amplified national impact. To estimate this impact, the research team used IMPLAN—a regional economic impact software—, data on expenditure patterns, and the average number of border crossings aggregated to the county level. Below is an overview of the data and model used to estimate the economic impact of the expenditures that result from these noncommercial border crossings.
A 2019 study by the City of El Paso International Bridges Department quantifies the social and economic cross-border activities from vehicle and pedestrian crossings through the El Paso–Ciudad Juárez port of entry. The study consisted of two surveys. First, a short questionnaire administered to US-Mexico border crossers between October 1 and December 31, 2019. Residents who indicated Mexico as their primary place of residence received an entry survey, while those indicating the United States as their primary place of residence received an exit survey. The entry survey captured the planned activities and expenditures of those traveling to El Paso from Ciudad Juárez, while the exit survey captured the activities and spending already made by those traveling to Ciudad Juárez from El Paso.
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APPENDIX C
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Survey respondents were asked questions related to four categories:
• Demographics
• Reasons for crossing
• Anticipated spending (including the area of spending) • Trip characteristics
This report focused on survey responses related to the intended destination (El Paso or other) and expected spending across various categories. The survey results indicate that approximately 80 percent of individuals crossing the border (by vehicle and as pedestrians) remained in El Paso, while 20 percent continued to another location. Of the 80 percent who stayed in El Paso, approximately 64 percent of those who crossed by vehicle and 47 percent who crossed as pedestrians reported positive expected expenditures. The survey data breaks down the dollar amount individuals expected to spend within twenty categories.37
This information was used to calculate the average expenditure per crosser, for both vehicle and pedestrian crossings. These expenditures were then scaled by the total number of vehicle and pedestrian crossings in 2019 (after scaling by the proportion of crossers who remained in El Paso and reported spending money) to determine the average expenditure of crossings in 2019 for El Paso County.
To establish the economic impact of these expenditures at the national level, the average expenditures by crossers in 2019 were computed for the following border counties:
• Texas: Presidio, Val Verde, Maverick, Webb, Starr, Hidalgo, and Cameron
• New Mexico: Luna and Doña Ana
• Arizona: Yuma, Pima, Santa Cruz, and Cochise
• California: San Diego and Imperial
Unfortunately, detailed expenditure data were unavailable for the other border counties. However, the El Paso survey was used with the assumption that spending patterns across the twenty categories do not change across counties. First, the average expenditures per crosser for each category was recovered from the El Paso survey. These expenditures were then scaled up or down based on the average household income in the neighboring Mexican state relative to the average household income in Chihuahua (the Mexican state neighboring El Paso). Once this income adjustment was made, the average 2019 expenditures were scaled by the number of vehicle and pedestrian crossings in 2019 for each border county listed above. This exercise reveals the total spending in the twenty categories for each of the sixteen border counties considered in the analysis.38
These findings were used as inputs into IMPLAN to estimate the economic impact of expenditures by individuals crossing the US-Mexico border. First, the twenty expenditure categories from the survey were mapped into comparable IMPLAN industries. Then, industry output (spending) was reduced in these industries for each of the sixteen counties. Twenty adverse output (spending) events were modeled separately in the sixteen counties for a total of 320 events. The rest of the United States was then built up, county-by county for Texas, New Mexico, Arizona, and California; and state-by
state for the non-border states. Finally, the national-level analysis was run using IMPLAN’s multiregion input-output feature, allowing for additional indirect linkages between regions within the analysis. Tables C2.1 and C2.2 present the main findings.
26 ATLANTIC COUNCIL
APPENDIX C
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Table C2.1: Economic Impact of Removing Cross-Border Spending in the United States (2022)
Impact Employment Labor Income Value Added Output
1 - Direct 2 - Indirect 3 - Induced
-60,619.16
-$1,812,022,814.56
-$2,765,047,740.91
-$5,036,142,293.41
-21,166.07
-$1,234,825,927.30
-$1,980,607,178.46
-$4,118,866,436.04
-18,648.05
-$977,441,701.68
-$1,771,486,445.19
-$3,177,688,817.94
-100,433.29
-$4,024,290,443.54
-$6,517,141,364.56
-$12,332,697,547.38
Source: The Hunt Institute for Global Competitiveness and the COLEF, using IMPLAN.
As shown on Table C2.1, removing cross-border spending by noncommercial crossers results in approximately 100,433 fewer jobs in the United States. Approximately 60 percent of this job loss is directly caused by reduced expenditure. The remaining 40 percent is due to indirect and induced effects. Removing cross
border spending would also result in a loss of $12,332,697,547 in economic output. Approximately 41 percent of this output loss is explained by the direct effects of reducing expenditures and 59 percent by indirect or induced effects.
Table C2.2 includes the top five most impacted industries in terms of output lost due to the reduction in cross-border spending by noncommercial crossers. As expected, these industries are concentrated in areas where tourists or temporary visitors would
likely spend money. The three sectors with the largest output loss include retail, full-service restaurants, and general merchandise. As such, the entire output loss within these industries was due to sectoral linkages with other areas experiencing direct impacts.
IMPLAN results in Table C2 can be combined with the regression results in Appendix B to determine the economic impact of reducing noncommercial border wait times. The research team divided the total output loss resulting from eliminating noncommercial crossings by the total number of crossers in 2019, 87,812,443.39 This yields a value of $140.44 which can be interpreted as the output loss associated with losing one noncommercial crosser or the output gain associated with one additional noncommercial crosser.
Table C2.2: Top Five Industries with Reductions in Economic Output from Removing Cross-Border Spending in the United States (2022) Impact 1 - Direct 2 - Indirect 3 - InducedImpact output
Industry display
Impact output
Impact output
Impact output
Retail: Clothing
and ccessories
-$2,161,062,814.49
-$707,698.49
-$23,321,554.17
-$2,185,092,067.16
Other real estate services
$0.00
-$740,224,149.66
-$130,392,264.37
-$870,616,414.03
Full service restaurants
-$713,075,639.37
-$28,572,142.09
-$65,051,510.06
-$806,699,291.52
General merchandise
-$575,957,329.13
-$2,040,513.78
-$36,955,115.99
-$614,952,958.90
Management
$0.00
-$397,735,328.22
-$56,187,767.71
-$453,923,095.93
1
2
3
4
5
Source: The Hunt Institute for Global Competitiveness and the COLEF, using IMPLAN.
27 ATLANTIC COUNCIL
APPENDIX D
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX D: DESCRIPTION OF THE INPUT-OUTPUT AND QUEUING MODELS
Appendix D1: The queueing model
This study uses a queuing model to evaluate how wait times for commercial vehicles at the US-Mexico border affect Mexican exports to the United States. A queueing model mathematically describes a queuing system, making specific assumptions about the probabilistic nature of the number and type of servers (commercial vehicles), the arrival and service processes (border processing rates), and the queue discipline and organization. For this study, this can be described as:
E'j,t = E'j,0- ∆ %(λ-μ)*αj ∑ E'j,0 (1)
Where;
E'j,t = commercial vehicles processed per hour at t ≥1. E'j,0 = commercial vehicles processed per hour at t=0. λ = the average number of commercial vehicles arriving per hour.40
μ = the average number of commercial vehicles dispatched per hour.41
α = the share of sectoral exports in total exports per hour (E'j,0 / ∑ E'j,0).
∑ E'j,0 = the total number of commercial vehicles per hour in the economy.
The E'j,0 vector also serve as a measure of Mexican exports, given that commercial vehicles entering the United States are loaded with Mexican goods.
In equation (1), the assigned volume is the number of commercial vehicles arriving at a border checkpoint every hour (λ), while the volume processed is the processing capacity of the checkpoint per
hour (μ). To conduct the queuing analysis, these two variables must be known beforehand. Appendix D3 shows how they were defined.
Besides the variables λ and μ, the queuing model considers other key variables, including the value of exports transported by commercial vehicles and the number of lanes in operation. The former was determined using data from the US Department of Transportation’s Bureau of Transportation Statistics (see Appendix C1), and the latter with data from CBP. Additionally, this study considers the system in its steadystate of operation, i.e., during time intervals when λ and μ behave normally. This means that anomalous states of operation are removed from the analysis (such as the first 30 minutes in the workday when personnel perform preparatory activities).
As equation (1) shows, when the volume of commercial vehicles in the system is processed immediately [(λ-μ) = 0], there would be no queues. As a result, wait times would be insignificant, and the value of Mexican exports entering the United States in commercial vehicles would be E'j,0. However, when the assigned volume of commercial vehicles is greater than the volume of vehicles processed [(λ-μ) > 0], a queue forms, leading to increased wait times and reducing the number of commercial vehicles crossing the border with Mexican export goods (reducing E'j,t). This calculation produces approximate wait times, which are sufficiently accurate to understand the overall distribution of traffic between land ports of entry across the US-Mexico border.
Once approximate wait times are established, it is important to verify the model’s validity. Using a chi-square goodness of fit test, the observed distribution of the variables λ and μ is compared with their theoretical distribution, demonstrating the degree of adjustment between the sample (the average service rate for one checkpoint) and the population (the average service rate for all checkpoints across the US-Mexico border). This hypothesis test concludes, with a certain degree of statistical significance, that the sample in this study is representative of the full population.
28 ATLANTIC COUNCIL
APPENDIX D
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Appendix D2: Intersectoral input-output model
Input-output models are a form of macroeconomic analysis based on the interdependencies (the flow of goods and services) between different economic sectors. They are commonly used to estimate the impacts of positive or negative economic shocks and their ripple effects throughout an economy.
This study uses an input-output model to determine how increased Mexican exports stemming from reduced border wait times (previously established using a queuing model; see Appendix D1) affect aggregate demand in Mexico (calculated as aggregate demand = C + I + G + Nx, where: C = consumer spending; I = private investment and corporate spending; G = government spending; and Nx = net exports (exports minus imports).
Economic sectors respond to increases in aggregate demand directly by supplying final goods (increasing output) or indirectly by producing intermediate goods for sectors that respond directly (increasing intermediate sales). Therefore, findings are then used to calculate the impact on total gross output and intermediate sales across sectors of the Mexican economy.
Equation (2) estimates the impact of increased demand for Mexican exports on output per sector:
Xj,0= (I-A)-1Yj,0 (2)
Where:
Xj,0 = the total gross output vector per sector at t=0.
(I-A)-1 = the Leontief inverse (or the matrix of indirect and direct multipliers). In which I = identity matrix and A = technical coefficient matrix.
Yj,0 = the aggregate demand vector per sector at t=0.
Therefore, equation (2) could be re-written as:
Xj,0= (I-A)-1E'j,0 (3)
Where:
E'j,0 = the exports vector per sector at t=0.
As discussed in Appendix D1, E'j,0 can be interpreted as “commercial vehicles processed by the customs system every hour” and equation (3) expressed as:
Xj,t = (I-A)-1E'j,t (4) Where E'j,0 = commercial vehicles processed per hour at t ≥ 1.
This interpretation makes two assumptions: (a) that the system operates at full capacity and (b) that the volume of commercial vehicles in the system is processed immediately [(λ-μ) = 0], resulting in no wait times (see Appendix D1). In other words, the input-output model is static.
However, this is not always the case, given that commercial vehicle arrivals and departures to and from border checkpoints do not happen at fixed intervals (they are uncertain). Therefore, by incorporating specific trajectories describing the behavior of E'j,t (changes to the number of commercial vehicles processed by customs checkpoints due to reduced wait times), the static input
output model can be used to estimate the impact of increased Mexican exports on total gross output per sector. This is calculated with the equation:
Lj,t = ∑ [Xj,t+Xj,0] (5) Where:
Lj,t = the impact on total gross output.
Xj,0 = the total gross output vector per sector at t=0 (before reduced wait times and no changes to E'j,0).
Xj,t = the total gross output vector per sector at t ≥1 (after reduced wait times and changes to E'j,t).
j = 1- n sectors.
29 ATLANTIC COUNCIL
APPENDIX D
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Appendix D3: Establishing the assigned volume and processing rate of commercial vehicles
Estimating the average processing capacity of a port of entry requires data on the volume of commercial vehicles serviced and the number of lanes, hours, and days in operation for that port of entry. For land ports of entry across the US-Mexico border, these data were obtained from the Bureau of Transportation Statistics’ Border Crossing Data.42 Table D3 shows data for the Otay Mesa port of entry in Baja, California, the third-busiest on the US-Mexico border.43 The Otay Mesa example helps to illustrate how processing capacity was calculated for other ports of entry as part of this study.
On average, one lane in the Otay Mesa port of entry operates 65 hours per week. Together, its ten lanes would operate 650 hours per week, meaning that, together, the lanes of the Otay Mesa port of entry operate for approximately 33,800 hours in one year (52 weeks). Given that 962,577 commercial vehicles are serviced per
year, a total of 18,511 trucks would cross the border weekly. For one lane, this translates to 1,851 trucks per week, 370 per day, and 28.5 per hour.
Having established the number of commercial vehicles serviced per hour (28.5 vehicles), an M/M/1 queue was simulated (see Appendix D1) to estimate the average processing capacity (μ), showing that border wait times for commercial vehicles are approximately 21.5 minutes.44
Enhanced border management practices and the implementation of new technologies would improve the processing capacity of ports of entry, reduce commercial wait times, and allow more Mexican exports to enter the United States. This would boost total gross output, aggregate demand, and intermediated sales across various sectors in the Mexican economy, as well as employment and labor income (see Appendices F and G for input-output analysis results).
Table D3: Data for the Otay Mesa Port of Entry
Item Value
Total number of commercial vehicles serviced per year Hours in operation per day
Days in operation per week
Maximum number of lanes in operation
962,577
13
5
10
FUENTE: Cálculos propios con base en Información procedente de <https://bwt.cbp.gov/> y <Border Crossing/Entry Data - Bureau of Transportation Statistics
30 ATLANTIC COUNCIL
APPENDIX E
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX E: DATA USED FOR THE ANALYSIS
This study relied on the North American Industry Classification System (NAICS) and the Sistema Automatizado de Información Censal (ACIS or Automated Census Information System) to further understand Mexico’s productive sector and commercial relationship with the United States. It also used data from the Instituto Nacional de Estadística y Geografía (INEGI or the National Institute of Statistics and Geography).
The NAICS, jointly developed by the US Economic Classification Policy Committee, INEGI, and Statistics Canada, classifies North American business statistics, allowing for a high level of comparability between economic activities in the United States, Mexico, and Canada. The sectors shown in Table E1, classified by NAICS in 2018, were used for this study.
The INEGI used data from economic censuses in Mexico, systematized in the ACIS,45 to produce an input-output matrix46 for the Mexican economy in 2013. It then used a RAS method to estimate a matrix for 2018.47 The 2018 matrix was used as part of this study to determine the top ten Mexican sectors exporting to the United States, which were later used in the intersectoral input output analysis described in Appendix D2. Results on the economic impact of reduced border wait times on sectoral output, aggregate demand, and intermediate sales appear in Appendix F2.
Additionally, the 2018 input-output matrix and vectors for employment and labor income in Mexico were used to estimate how reduced commercial wait times affect employment and labor income, as shown in Appendix G. The vectors were calculated using data from the ACIS.
Table E: Sectoral Classification of the North American Industry Classification System (NAICS) (2018)
NAICS Code Sector
11
Agriculture, animal breeding and exploitation, forestry, fishing and hunting
21
Mining
22
Electric power generation, transmission and diffusion, water and gas supply through pipelines to final consumers
23
Construction
31-33
Manufacturing industries
43
Wholesale trade
46
Retail trade
48-49
Transportation, postage, and warehousing
51
Mass media information
52
Financial and insurance services
53
Real estate and rental services of personal and intangible property
54
Professional, scientific, and technical services
55
Corporate
56
Business support services and waste and residue management and remediation services
61
Educational services
62
Health and social welfare services
71
Cultural, sports, and other recreational services
72
Temporary accommodation services and food and beverage preparation services
81
Other services, except government activities.
93
Legislative, governmental, law enforcement, and international and extraterritorial organization activities
SOURCE: The Colegio de la Frontera Norte using the 2018 sectoral classification of the NAICS
31 ATLANTIC COUNCIL
APPENDIX F
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX F: ECONOMIC IMPACT ANALYSIS OF BORDER CROSSINGS
This study first established a baseline of Mexican exports to the
United States without reduced wait times, which allowed for the
determination of the top ten sectors exporting to the United States
and the effect that exports have on sectoral output in Mexico. Then,
an analysis with reduced border wait times was conducted, and
baseline results were compared with new findings to determine
the relative and absolute variation in sectoral output, aggregate
demand, and intermediate sales stemming from reduced wait
times. The values in all Appendix F tables appear in 2018 US dollars,
using a conversion rate of 1 US dollar to 20.03 Mexican pesos.
Results have yet to be adjusted to 2022 values, using inflation and
consumer price index (CPI) historical data from the United States.
Appendix F1: Analysis without reduced border wait
times
Assessing the economic impact of a one-minute reduction in border
wait times requires understanding the US-Mexico commercial
relationship and how it drives sectoral output in Mexico. As shown
in Figure F1, ten sectors produced 99.86 percent of total Mexican
exports to the United States in 2018. Therefore, this study considers
these ten sectors.
Figure F1: Top Ten Mexican Sectors in Terms of Exports to the United States (2018)
• 31-33 - Manufacturing
0.82%
• 43 - Wholesale trade
• 21 - Mining
• 48-49 - Transportation, postage, and warehousing • 46 - Retail trade
• 11 - Agriculture, animal breeding and exploitation, forestry, fishing, and hunting
• 52 - Financial and insurance services
• 22 - Electric power generation, transmission and diffusion, and water and gas supply through pipelines to final consumers
• 51 - Mass media information
• 54 - Professional, scientific, and technical services
SOURCE: In-house, prepared using 2018
using data obtained from INEGI (2022).
1.92%
3.97%
6.30%
6.81%
16.80%
0.05%
0.05%
0.02%
63.24%
32 ATLANTIC COUNCIL
APPENDIX F
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
The input-output analysis was employed to estimate the baseline output per sector driven by Mexican exports to the United States, using equation (3) in Appendix D2 [Xj,0 = (I-A)-1E'j,0]. Table F1
includes results in relative and absolute terms, showing that, on average, Mexican exports to the United States drive 38 percent of total gross output per sector in Mexico.
Table F1: Total Gross Output (TGO) Driven by Mexican Exports to the United States (2018)48 NAICS
classification code
Sector Total Percentage
21
Mining
976,753.75
68.91%
31-33
Manufacturing
9,992,494.79
68.79%
43
Wholesale trade
1,724,997.69
63.26%
11
Agriculture, animal breeding and
exploitation, forestry, fishing, and hunting
630,344.07
50.86%
22
Electric power generation, transmission and diffusion, and water and gas supply through pipelines to final consumers
234,304.63
31.91%
48-49
Transportation, postage, and warehousing
682,499.14
27.21%
54
Professional, scientific,
and technical services
155,642.26
26.37%
46
Retail trade
477,034.24
17.72%
52
Financial and insurance services
185,136.92
13.40%
51
Mass media information
79,296.98
12.22%
Total
15,138,504.47
380.65%
Average
1,513,850.45
38.07%
SOURCE: In-house, prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
33 ATLANTIC COUNCIL
APPENDIX F
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Appendix F2: Analysis with reduced wait times
A second input-output analysis was performed to determine how the positive economic shock (increased Mexican exports caused by reduced border wait times) affected total gross production per sector (Xj,t). This is estimated using equation (4) in Appendix D2 [Xj,t= (I-A)-1E'j,t], where E'j,t is the exports vector and j the number of sectors.
Given the interdependencies between sectors, the economic impact of reduced border wait times spreads throughout productive sectors in the Mexican economy. Therefore, results show the average percentage increase in output, aggregate demand, and final sales per sector driven by additional Mexican exports to the United States (caused by a one-minute reduction in border wait times). Table F2.1 shows findings in terms of total gross output, while Tables F2.2 and F2.3 include results for aggregate demand and intermediate sales, respectively.
NAICS
Table F2.1: Growth in Total Gross Output (TGO)49
Total Gross Output
Classification Sectors
code
Absolute (TGO)
Change driven by Mexican exports
Percentage
increase
11
Agriculture, animal breeding and exploitation, forestry, fishing, and hunting
61,870,394,408.39
63,525,716,328.93
2.68%
21
Mining
70,768,853,919.12
73,333,868,768.35
3.62%
22
Electric power generation, transmission and diffusion, and water and gas supply through pipelines to final consumers
36,661,826,110.83
37,277,124,334.51
1.68%
31-33
Manufacturing industries
725,175,223,165.25
751,416,123,114.45
3.62%
43
Wholesale trade
136,148,265,851.22
140,678,214,854.59
3.33%
46
Retail trade
134,388,874,388.42
135,641,595,360.59
0.93%
48-49
Transportation, postage, and warehousing
125,222,060,808.79
127,014,345,127.69
1.43%
51
Mass media information
32,404,278,182.73
32,612,516,876.33
0.64%
52
Financial and insurance services
68,962,248,726.91
69,448,429,551.32
0.70%
54
Professional, scientific, and technical services
29,468,317,923.12
29,877,043,990.12
1.39%
Average
142,107,034,348.48
146,082,497,830.69
2.00%
SOURCE: In-house, prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
34 ATLANTIC COUNCIL
APPENDIX F
NAICS
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Table F2.2: Growth in intermediate sales50
Intermediate Sales
Classification Sectors
code
Absolute
intermediate sales
Change driven by Mexican exports
Percentage
increase
11
Agriculture, animal breeding and exploitation, forestry, fishing, and hunting
37,715,987,831.23
39,017,404,257.82
3.45%
21
Mining
38,319,742,304.75
39,627,221,214.17
3.41%
22
Electric power generation, transmission and diffusion, and water and gas supply through pipelines to final consumers
26,093,440,432.45
26,698,820,186.23
2.32%
31-33
Manufacturing industries
500,578,423,695.96
515,136,851,491.74
2.91%
43
Wholesale trade
50,588,439,711.28
52,014,146,106.25
2.82%
46
Retail trade
20,372,948,351.47
20,891,889,251.96
2.55%
48-49
Transportation, postage, and warehousing
27,507,131,659.31
28,135,165,832.62
2.28%
51
Mass media information
14,218,572,797.10
14,418,468,679.28
1.41%
52
Financial and insurance services
23,171,318,014.63
23,506,746,665.51
1.45%
54
Professional, scientific, and technical services
27,550,006,467.55
27,955,133,873.68
1.47%
Average
76,611,601,126.57
78,740,184,755.93
2.41%
SOURCE: In-house, prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
Table F2.3: Growth in final demand51
NAICS
Classification Sectors
Final demand
code
Absolute aggregate demand
Change driven by Mexican exports
Percentage
increase
11
Agriculture, animal breeding and exploitation, forestry, fishing, and hunting
24,154,406,577.15
24,508,312,071.11
1.47%
21
Mining
32,449,111,614.37
33,706,647,554.19
3.88%
22
Electric power generation, transmission and diffusion, and water and gas supply through pipelines to final consumers
10,568,385,678.38
10,578,304,148.28
0.09%
31-33
Manufacturing industries
224,596,799,469.30
236,279,271,622.71
5.20%
43
Wholesale trade
85,559,826,139.94
88,664,068,748.35
3.63%
46
Retail trade
114,015,926,036.95
114,749,706,108.63
0.64%
48-49
Transportation, postage, and warehousing
97,714,929,149.48
98,879,179,295.07
1.19%
51
Mass media information
18,185,705,385.62
18,194,048,197.05
0.05%
52
Financial and insurance services
45,790,930,712.28
45,941,682,885.81
0.33%
54
Professional, scientific, and technical services
1,918,311,455.57
1,921,910,116.43
0.19%
Average
65,495,433,221.90
67,342,313,074.76
1.67%
SOURCE: In-house, prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
35 ATLANTIC COUNCIL
APPENDIX G
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX G: ECONOMIC IMPACT ON EMPLOYMENT AND LABOR INCOME
Appendix G1: Employment
The effect of a 10-minute reduction in commercial wait times on direct employment in Mexico was estimated using the multiplier:
l= LT [diag(X)-1] (6) Where:
l = the direct employment coefficient
LT = the employment generated per sector52
[diag(X)-1] = the diagonal matrix of total gross output (obtained via the input-output model)
To assess the impact on direct and indirect employment, the direct employment coefficient (l) is multiplied by the Leontief inverse:
MED-1 = l[(I-A)-1] (7)
Table G1 shows the original jobs per sector and the new jobs created as a result of increased exports following a 10-minute reduction in commercial wait times. It also includes the difference between these two values and the relative increase and net variation in employment. Results show that 18,697 jobs would be created in one year.
NAICS
Classification code
Table G1: Impact on Direct and Indirect Employment of a More Efficient US-Mexico Border
Sectores Original New Difference Relative Increase
Net
Variation
11
Agriculture, animal breeding and ex ploitation, forestry, fishing, and hunting
5.9
6.6
0.7
0.3%
748.2
21
Mining
5.9
8.1
2.2
1.2%
2,220.1
22
Electric power generation, transmis sion and diffusion, and water and gas supply through pipelines to final consumers
7.4
7.5
0.1
0.1%
129.3
31-33
Manufacturing industries
13.6
12.8
-0.8
0.0%
-793.1
43
Wholesale trade
8.4
11.6
3.2
0.2%
3,216.0
46
Retail trade
24.7
26.4
1.7
0.0%
1,748.8
48-49
Transportation, postage, and ware housing
10.3
10.1
-0.2
0.0%
-210.3
51
Mass media information
12.0
15.7
3.7
1.0%
3,684.5
52
Financial and insurance services
10.1
15.6
5.5
0.8%
5,505.5
54
Professional, scientific, and technical services
18.6
21
2.4
0.3%
2,448.6
Total
116.9
135.4
18.5
3.9%
1,8697.6
Average
11.7
13.5
1.9
0.4%
1,869.8
SOURCE: In-house prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
36 ATLANTIC COUNCIL
APPENDIX G
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Appendix G2: Labor income
The effect of a 10-minute reduction in commercial wait times on labor income in Mexico was estimated using a two-step process. First, the labor income coefficient was determined with the equation:
r= RemT [diag(X)-1] (8) Where:
r = the labor income coefficient
RemT = the labor income per sector 53
[diag(X)-1] = the diagonal matrix of total gross output
Second, the labor income coefficient (r) was multiplied by the Leontief inverse:
MRemD-1 =r[(I-A)-1] (9)
Table G2 shows the direct and indirect effects on labor income of increased Mexican exports to the United States stemming reductions in commercial wait times. It includes labor income per sector before reduced wait times (original), labor income after reduced wait times (new), the difference between these two values, and the relative increase and net variation in labor income. Results show that, overall, labor income would increase by $17,474 with a one-minute reduction in border wait times or $174,474 with a ten minute reduction.
NAICS
Table G2: Impact on Labor Income of a More Efficient US-Mexico Border One-minute
10-minute
Relative
Classification code
Sector Original New Difference
reduction in wait times
reduction in wait times
weight
Agriculture, animal
breeding and exploita tion, forestry, fishing, and hunting
0.04
0.05
0.01
$ 324.72
$3,247.21
Mining
0.10
0.15
0.05
$ 2,643.81
$26,438.14
Electric power genera tion, transmission and diffusion, and water and gas supply through pipe lines to final consumers
0.08
0.09
0.01
$ 711.73
$7,117.31
Manufacturing industries
0.14
0.15
0.01
$ 467.19
$4,671.91
Wholesale trade
0.08
0.16
0.08
$ 3,852.29
$38,522.90
Retail trade
0.09
0.13
0.04
$ 1,766.03
$17,660.32
Transportation, postage, and warehousing
0.10
0.10
0.00
$ (89.37)
$(893.65)
Mass media information
0.17
0.23
0.06
$ 2,895.81
$28,958.10
Financial and insurance services
0.16
0.23
0.07
$ 3,574.24
$35,742.39
Professional, scientific, and technical services
0.14
0.17
0.03
$ 1,327.86
$13,278.59
Total
$ 17,474.32
$174,743.23
111.9% 21 15.1%
224.1%
31-33 2.7% 43 22.0% 46 10.1%
48-49 -0.5% 51 16.6% 52 20.5%
54 7.6%
Average $ 1,747.43 $17,474.32
SOURCE: In-house prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
37 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Acknowledgments
This report was informed by roundtables, focus groups, and consultations carried out in the United States and Mexico and the analysis of economic data. We thank the many individuals and institutions who participated in project activities and research efforts. It was a true pleasure to work with our partners at the University of Texas at El Paso’s (UTEP’s) Hunt Institute for Global Competitiveness and Colegio de la Frontera Norte (COLEF).
We are deeply grateful to the Adrienne Arsht Latin America Center (AALAC) team, who worked tirelessly to produce this report, particularly to Camila Hernández and Ignacia Ulloa, who provided invaluable writing and editorial support. Thank you to Jason Marczak, senior director for AALAC, and Maria Fernanda Bozmoski, deputy director for programs, for their guidance and editorial support.
We thank AALAC Non-Resident Fellow Bosco Martí and the Global Nexus team, specifically Ruben Olmos, Ana Margarita Martínez, and Alejandro Vales, for providing crucial expertise and contributions. Our gratitude extends to Rhonda Shore for her diligent editorial work and to Donald Partyka and Anais Gonzalez for their exceptional design skills.
Most importantly, we thank the US Department of State’s Bureau for International Narcotics and Law Enforcement Affairs for giving the Atlantic Council, UTEP, and COLEF the opportunity to produce this report in service of daily border users and strengthening the US and Mexican economies.
38 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Endnotes
1 Government of the United States, “Trade in Goods with Mexico,” US Census Bureau, accessed August 16, 2022,
https://www.census.gov/foreign-trade/balance/c2010.html; and Government of the United States, “Monthly U.S. International Trade in Goods and Services, June 2022,” US Census Bureau and US Department of Commerce, August 4, 2022, https://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf. 2 Government of the United States, “Overview of US- North American Freight by Port, Commodity Group, and Mode - Value (in Millions),” US Department of Transportation, accessed August 16, 2022, https://explore.dot.gov/views/Dashboard_PortbyCommodity/Overview?%3Aembed=y&%3Aiid=1&%3AisGuestRedirectFromVizportal=y. 3 Government of Mexico, “US-Mexico Trade Relation,” Embassy of Mexico to the United States of America, Section of Economic Affairs, February 2022, https://embamex.sre.gob.mx/eua/images/stories/economicos/2022/documents/US-MX_Trade_Website_02-2022.pdf.
4 Government of Mexico, Secretariat of Foreign Affairs, Embassy of Mexico to the United States of America, Office of Political Affairs. Information acquired September 8, 2022. 5 Government of the United States, “Mexico: US-Mexico Trade Facts,” Office of the US Trade Representative,
accessed August 14, 2022, https://ustr.gov/countries-regions/americas/mexico.
6 Joint Statement by President Biden and President Lopez Obrador, The White House, July 12, 2022,
https://www.whitehouse.gov/briefing-room/statements-releases/2022/07/12/president-biden-and-president-lopez-obrador-joint-statement/. 7 The US-Mexico High-Level Economic Dialogue is an opportunity for Mexico and the United States to advance strategic economic and commercial priorities to foster economic development and growth, job creation, and global competitiveness and reduce poverty and inequality.
8 Government of the United States, “Mexico: US-Mexico Trade Facts,” US Trade Representative, accessed August 16, 2022, https://ustr.gov/countries-regions/americas/mexico. 9 Zahniser, Stephen. “COVID-19 Working Paper: U.S.-Mexico Agricultural Trade in 2020,” United States Department of Agriculture, Economic Research Service. January, 2022. 10 Michoacán, Mexico, exports approximately 80 percent of its avocado supply directly to the United States. Government of the United States,
“Fresh Avocado Imports from Mexico Resume,” Animal and Plant Inspection Service, United States Department of Agriculture, accessed August 20, 2022. https://www.aphis.usda.gov/aphis/newsroom/stakeholder-info/sa_by_date/sa-2022/avocado-imports-mexico.
11 Ibid
12 Government of the United States, “Hourly Wait Times Trends vs Current,” Customs and Border Protection,
accessed August 17, 2022, https://bwt.cbp.gov/details/09250401/POV.
13 Unified Cargo Processing is a program for joint inspection of northbound cargo via free and secure trade lanes. John Davis, “U.S. and Mexico United in Cargo Processing,” US Customs and Border Protection, last modified January 4, 2022, https://www.cbp.gov/frontline/cargo-processing.. 14 Global Entry and the Secure Electronic Network for Travelers Rapid Inspection are risk-based programs that allow expedited clearance for pre-approved, low-risk travelers upon arrival in the United States. Government of the United States, “Global Entry: Trusted Traveler Program Enrollment,” US Customs and Border Protection, last modified September 6, 2022, https://www.cbp.gov/travel/trusted-traveler-programs/global-entry; and Government of the United States, “Secure Electronic Network for Travelers Rapid Inspection,” US Customs and Border Protection, last modified January 4, 2022, https://www.cbp.gov/travel/trusted-traveler-programs/sentri. 15 The Customs Trade Partnership Against Terrorism is a voluntary supply chain security partnership used by the public and private
sectors. Government of the United States, “CTPAT: Customs Trade Partnership Against Terrorism,” US Customs and Border
Protection, last modified August 29, 2022, https://www.cbp.gov/border-security/ports-entry/cargo-security/CTPAT.
16 “SENTRI Program Requirements,” Immigration Passport Visa Service, accessed August 17, 2022, http://immigrationpassportvisa.com/travel/sentri-pass program-requirements/#:~:text=Over%20175%2C000%20US%20citizens%20and%20Mexican%20citizens%20have%20become%20card%20holders. 17 The Maquiladora Export Industry is a conglomerate of intermediate-good manufacturing companies.
18 According to the North American Industry Classification System (NAICS), a classification scheme for Mexican productive activities that dates to 1993 and collects information on businesses, households, and individuals. In the development of this study, the consortium also referred to the Automated Census Information System (ACIS), which allowed for adjustments and specifications of data. For additional information on NAICS and ACIS, see Appendix G. 19 Vehicle and Cargo Inspection System (VACIS) and Federal Motor Carrier Safety Administration (FMCSA).
20 The Interagency Border Inspection System is a computer-based system that provides law enforcement access to
drivers’ criminal records and other information used to screen vehicles crossing the border.
21 Border users were consulted during roundtables hosted by the Atlantic Council. The first took place on May 10, 2022, in
El Paso, Texas, in collaboration with the Hunt Institute for Global Competitiveness at the University of Texas at El Paso. The
second occurred on July 12, 2022, in Tijuana, Mexico, in collaboration with El Colegio de la Frontera Norte.
22 According to research by the Hunt Institute for Global Competitiveness, 4,720,967 container trucks crossed the border in 2021.
23 A 10-minute reduction in commercial wait times would allow $25,879,549 million, specifically in additional cargo
value, to enter the United States monthly. See Appendix C1 for more information.
24 This section focuses on crossings by individuals and families in noncommercial vehicles alone. Migrant caravans at the US-Mexico border disrupted standard pedestrian crossing patterns during the sample period, preventing the analysis of pedestrian traffic using the regression model described in Appendix B. Further research is needed to estimate the economic impact of additional pedestrian crossings following a reduction in border wait times.
25 Per Table 2, these purchases generated an economic impact of $12,332,697,547 for the US economy. The economic impact of cross-border spending was determined by mapping out expenditure categories and running INPLAN’s multi-region input-output feature.
26 Given the nature of available data for the input-output analysis (macroeconomic data from Mexico’s National Institute of Statistics and Geography (INEGI), which captures the commercial relationship between the United States and Mexico), this section exclusively focuses on commercial crossings from Mexico into the United States. The economic impact for Mexican families and workers was estimated by considering how changes in the US-Mexico commercial relationship affect employment and labor income.
27 Government of the United States, “U.S.-Mexico Trade Relations,” Congressional Research Service, updated April 25, 2021, https://sgp.fas.org/crs/row/IF11175.pdf. 28 The ten sectors are mining; manufacturing; wholesale trade; agriculture, animal breeding and exploitation, forestry, fishing, and
hunting; electric power generation, transmission and diffusion, and water and gas supply; transportation, postage, and warehousing;
professional, scientific, and technical services; retail trade; financial and insurance services; and mass media information.
29 “U.S.-Mexico Trade Relations,” Congressional Research Service. https://sgp.fas.org/crs/row/IF11175.pdf
30 “México supera a Japón y lidera por primera vez envíos de autos a Estados Unidos” (“Mexico surpasses Japan and leads car shipments to the United States for the first time”), El Economista, September 5, 2022, https://dfsud.com/america/mexico-supera-a-japon-y-lidera-por-primera-vez-envios-de-autos-a-estados. 31 See Appendix C1.
32 As described in the report, the regression analysis did not include pedestrian crossings due to the impact of migrant caravans during the period under study.
39 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
33 Missing data was excluded from averages.
34 The correlation between wait times and crossings is 0.2977. This is likely because congestion at the border
may result in both increased wait times and a higher number of crossings.
35 The sample ends prior to 2020 to avoid disruptions in border crossings due to COVID-19. See Appendix A for a detailed description of the data. 36 The fixed effect, i, accounts for time-constant heterogeneity between counties in the analysis. Estimating the regression equation by fixed effects removes this time-constant heterogeneity, effectively controlling for the immutable differences between counties.
37 Spending categories include clothing, general merchandise, auto parts, groceries, electronics, restaurants, gas, sports and music, building, furniture, personal care services, fast food, health, business and other professional services, amusement and recreation, accommodation, bar, theater, transportation and parking, and other products. 38 The sixteen counties used in the analysis were El Paso, Presidio, Val Verde, Maverick, Webb, Starr, Hidalgo,
Cameron, Luna, Dona Ana, Yuma, Pima, Santa Cruz, Cochise, San Diego, and Imperial.
39 The total number of crossers was determined using data from the Bureau of Transportation Statistics.
40 This could also be the average arrival rate.
41 This could also be the average service rate.
42 Government of the United States, “Bureau of Transportation Statistics: Border Crossing/Entry Data,” US Department of Transportation, accessed August 18, 2022, https://www.bts.gov/browse-statistical-products-and-data/border-crossing-data/border-crossingentry-data#:~:text=Border%20
crossing%20data%20are%20collected,comparable%20data%20on%20outbound%20crossings..
43 Scott Mall, “FreightWaves Classics: Otay Mesa Land Port is third-busiest on U.S.-Mexico border,” Freightwaves, May 12, 2021,
https://www.freightwaves.com/news/freightwaves-classics-otay-mesa-land-port-is-third-busiest-on-us-mexico-border.
44 Ports of entry with extremely atypical wait times (anomalies) were disregarded in this paper’s analysis.
45 The ACIS systematizes information from Mexico’s four most recent economic censuses, which occurred in 2019, 2014, 2009, and 2004. 46 An input-output matrix represents national or regional economic accounting that records how industries trade with one another and produce for consumption and investments. 47 The RAS method is an interactive method for data reconciliation. It scales an input-output table bi-proportionally to achieve consistency between
given row and column sums. For a detailed description of the methodology used by INEGI, see “Matrices de Contabilidad Social de México: Fuentes y metodología,” INEGI, accessed August 18, 2022, https://inegi.org.mx/contenidos/investigacion/mcsm/doc/fuente_y_metodologia.pdf. 48 Originally in 2018 Mexican pesos and converted to US dollars using a conversion rate of 1 US dollar to 20.03 Mexican pesos. Results are in 2018 values. 49 Originally in 2018 Mexican pesos and converted to US dollars using a conversion rate of 1 US dollar to 20.03 Mexican pesos. Results are in 2018 values. 50 Originally in 2018 Mexican pesos and converted to US dollars using a conversion rate of 1 US dollar to 20.03 Mexican pesos. Results are in 2018 values. 51 Originally in 2018 Mexican pesos and converted to US dollars using a conversion rate of 1 US dollar to 20.03 Mexican pesos. Results are in 2018 values. 52 Total employment per sector was obtained from INEGI, using 2018 data.
53 Total labor income per sector was obtained from INEGI, using 2018 data in Mexican pesos (millions).
40 ATLANTIC COUNCIL
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Please provide an analysis of the US-Mexico border and how a more efficient border would impact the economy.
Atlantic Council
ADRIENNE ARSHT
LATIN AMERICA CENTER
The Economic Impact of aMore Efficient US-MexicoBorder How Reducing Wait Times at Land Ports of Entry Would Promote Commerce, Resilience, and Job Creation
Report Contributors:
Alejandro Brugués Rodríguez, John Byrd, Noé Arón Fuentes Flores, David Gaytan, John Gibson, Camila Hernández, Mayra Maldonado, Jason Marczak, Jorge Eduardo Mendoza Cota, Roberto Ransom, and Ignacia Ulloa
Atlantic Council
ADRIENNE ARSHT
LATIN AMERICA CENTER
The Atlantic Council’s nonpartisan Adrienne Arsht Latin America Center (AALAC) broadens understanding of regional transformations while demonstrating why Latin America and the Caribbean matter for the world. The center focuses on pressing political, economic, and social issues that will define the region’s trajectory, proposing constructive, results-oriented solutions to inform public sector, business, and multilateral action based on a shared vision for a more prosperous, inclusive, and sustainable future.
AALAC – home to the premier Caribbean Initiative – builds consensus for action in advancing innovative policy perspectives within select lines of programing: U.S. policy in the Western Hemisphere; Colombia’s future; Venezuela’s multidimensional crisis; Central American prosperity; US-Mexico ties; China in the Americas; Brazil’s trajectory; Caribbean development; regional economic development and commerce; and energy transitions. Jason Marczak serves as the center’s senior director.
This report is written and published in accordance with the Atlantic Council Policy on Intellectual Independence. The authors are solely responsible for its analysis and recommendations. The Atlantic Council and its donors do not determine, nor do they necessarily endorse or advocate for, any of this report’s conclusions.
Atlantic Council
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For more information, please visit
www.AtlanticCouncil.org.
ISBN-13: 978-1-61977-250-2
September 2022
A joint report by the Atlantic Council’s Adrienne Arsht Latin America Center, the University of Texas
at El Paso’s Hunt Institute for Global Competitiveness, and El Colegio de la Frontera Norte.
Atlantic Council
ADRIENNE ARSHT
LATIN AMERICA CENTER
The Economic Impact of aMore Efficient US-MexicoBorder How Reducing Wait Times at Land Ports of Entry Would Promote Commerce, Resilience, and Job Creation
(The first of a two-part series on the US-Mexico Border)
Report Contributors:
Alejandro Brugués Rodríguez, John Byrd,
Noé Arón Fuentes Flores, David Gaytan,
John Gibson, Camila Hernández,
Mayra Maldonado, Jason Marczak,
Jorge Eduardo Mendoza Cota,
Roberto Ransom, and Ignacia Ulloa
Table of Contents
EXECUTIVE SUMMARY 6 INTRODUCTION 7 WHY INVEST IN THE US-MEXICO BORDER? 8 BORDER WAIT TIMES: A CONTINUED CHALLENGE 9 THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER 11
The United States: Increased border efficiency would strengthen the economy 12 Mexico: The potential economic gains of a more efficient border 15 CONCLUSION 17 METHODOLOGY 18 APPENDICES 19 ACKNOWLEDGMENTS 38
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
“We know that long wait times at the border can hurt our businesses and economy, especially in my district. Ensuring our ports of entry have sufficient funding to reduce wait times is necessary to keep our economy on track and ensure businesses on both sides of the border succeed.” The Hon. Juan Vargas
Representative (D-CA-51)
US HOUSE OF REPRESENTATIVES
“Strengthened US-Mexico collaboration at our border will unlock significant economic growth, promote supply chain resilience, and boost competitiveness, benefiting Mexican
workers and families. These benefits will reverberate far beyond the border, reaching states throughout Mexico. Now is the time to invest in initiatives to create an even more efficient and secure shared border.”
H.E. Luz Maria de la Mora
Subsecretary of International Commerce,
Secretariat of the Economy
UNITED MEXICAN STATES
“Our border communities rely on efficient and effective infrastructure for work, trade, tourism and other economic exchanges across the US-Mexico border. As the North American region seeks to retain its competitive global advantage, it is more important than ever for these communities to have access to top-notch ports of entry, staffing and technology. With the proper tools for border management, our border cities will be enabled to prosper now and well into the future.”
The Hon. Tony Gonzales
Representative (R-TX-23)
US HOUSE OF REPRESENTATIVES
5 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Executive Summary
Improvements in border management and the adoption of
new technologies at the US-Mexico border have the potential to enhance security and generate economic benefits for the United States and Mexico through expedited flows of goods
and people. Reduced border wait times would lead to more traffic entering the United States from Mexico, both in terms of commercial trucks loaded with goods for US consumers and shoppers ready to buy US goods. This report quantifies the economic impact of this additional commerce and cross-border spending, which would lead to further economic prosperity in the two countries.
Research shows that a 10-minute reduction in wait times could lead to an additional $26 million worth of cargo entering the United States each month via commercial vehicles. This translates to more than $312 million in further commerce from Mexico into the United States annually. The extra inventory of finished and intermediate goods would drive down US domestic prices, creating increased economic well-being for US citizens.
This report also finds that reducing border wait times by 10 minutes has a positive annual impact of $5.4 million on the US economy due to purchases by additional families and individuals entering the United States from Mexico. While the immediate effect of these purchases is most evident in border communities, economic benefits would spread to the continental United States due to the
economic linkages between local economies, with approximately 25 percent of the total impact reaching non-border states.
Beyond the $312 million in added commerce from Mexico into the United States, a 10-minute reduction in border wait times would promote the creation of nearly 18,700 direct and indirect jobs in Mexico, increase labor income per sector by an average of $17,474, and simulate growth for various Mexican economic sectors, particularly manufacturing, wholesale trade, and mining.
More specifically, a one-minute reduction in border wait times would increase the average production (or output) per sector—for Mexico’s top ten sectors exporting to the United States—by 2 percent. This reduction in border wait times would also boost intermediate sales and aggregate demand in Mexico by 2.4 percent and 1.7 percent, respectively.
These findings illustrate the economic benefits of prioritizing investments at the US-Mexico border to reduce commercial and noncommercial wait times. They are understood as the lower range of the potential national-level economic benefits of deepened US-Mexico collaboration to create a more efficient and secure border. A forthcoming second study will build on these findings, disaggregating the economic impact of reduced wait times for US and Mexican states and counties at the border and beyond.
Trucks pass through the U.S. border and into the United States from Juarez, Mexico in El Paso, Texas, U.S. June 18, 2018. REUTERS/Mike Blake
6 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Introduction
The US-Mexico border is a hub of cultural and commercial
exchange, fostering continued growth and collaboration between the United States and Mexico. Stretching over 2,000 miles, it has more than forty-four active ports of
entry, with fifteen million US and Mexican citizens residing in border counties. In July 2022 alone, the United States and Mexico traded over $65 billion in goods,1 with more than $53 billion crossing the southern border via trucks and trains.2
Approximately five million US jobs depend on trade with Mexico,3 meaning that one in every twenty-nine workers in the United States has a job created or supported by US-Mexico trade. These jobs are spread throughout the US economy in terms of geography and industries. In Mexico’s automotive sector, US-Mexico trade supports more than one million jobs directly and 4.5 million indirectly.4
In addition to importing and exporting final products, the United States and Mexico jointly produce goods. Cross-border production sharing has contributed to greater economic integration, resilience, and competitiveness while helping to insulate the US and Mexican economies from global competitors. Similarly, US-Mexico trade in services contributes to the commercial relationship, with over $62 billion traded in 2019.5
On July 12, 2022, US President Joseph R. Biden and Mexican President Andrés Manuel López Obrador met in Washington, DC, to discuss how safer and more efficient borders would enhance shared commerce.6 During their meeting, the United States committed to investing $3.4 billion and Mexico $1.5 billion to undertake major projects to modernize land ports of entry on the northern and southern borders. These efforts will create jobs, bolster shared security, and enhance supply chain resilience by promoting legitimate trade and travel.
New investments should continue to enhance shared commerce while addressing long-standing efficiency and security challenges, including excessive wait times, inconsistent federal policies, outdated screening technologies, and the illicit flow of weapons, drugs, contraband, and people. Future US-Mexico cooperation should also build on prior efforts to modernize border infrastructure, expedite processing times, and implement joint production programs through accords such as the United States Mexico-Canada Agreement (USMCA). It could also prioritize new information-sharing infrastructure, shared defense strategies, bilateral-processing mechanisms, and expanded trusted traveler programs. The long-term institutionalization of standing working groups like the US-Mexico High-Level Economic Dialogue (HLED) will help the United States and Mexico align priorities and advance shared development goals moving forward—as evidenced through the joint commitments made at the September 12, 2022, HLED meeting.7
This report—the first in a two-part series—shows that US-Mexico cooperation aimed at creating a more efficient, resilient, and secure border will enhance shared commerce and economic well-being through the expedited flow of goods and people. Reduced border wait times would allow more commercial and noncommercial vehicles to enter the United States from Mexico, bolstering cross
border trade and spending and stimulating competitiveness, economic integration, and job creation. This report includes national-level findings, while a second report disaggregates results by county and state, showing that investing in the US-Mexico border will pay dividends far beyond the border.
7 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Why Invest in the US-Mexico Border?
The United States and Mexico rely on each other to meet
their populations’ demand for goods and services. Mexico stands as one of the United States’ largest trading partners in terms of goods, ranking first in 2019 with more than $614
billion in total (two-way) goods traded that year.8 Recent disruptions to cross-border commerce illustrate this interdependence, with important economic implications for populations on both sides of the border.
As COVID-19 first raged worldwide, shutting down economies in the spring of 2020, the US-Mexico border was not immune to the global lockdown. Disruptions in cross-border flows of goods and people resulted in unemployment, curtailed retail sales, and decreased revenue for the tourism industry. In Texas alone, the tourism industry lost $1.02 billion over the course of eight months of border closures. In Mexico, agricultural exports decreased 5.9 percent between March and May of 2020, with a 17.9 percent decrease in sugar exports compared to 2019.9
Avocados are another example of US-Mexico economic interdependence. Approximately nine of ten avocados in US supermarkets come from Mexico.10 In 2021 alone, the United States imported more than 1.1 million metric tons of avocados from Mexico, totaling over $2.8 billion. However, a temporary suspension of avocado imports—due to a verbal threat received by a US inspector in Michoacán—led to concerns over shortages and price increases across the United States.11 Fortunately, the eight-day suspension did not have a lasting impact on local economies or spoil the fruit waiting for export. Soon after the suspension was lifted, avocados quickly returned to US supermarkets to satisfy consumer demand.
The story of COVID-related commerce disruptions and the avocado example not only illustrate the two countries’ economic
interdependence but also the importance of safe and efficient borders. According to US Customs and Border Protection (CBP), the average border-crossing wait time per truck regularly surpasses 125 minutes during regular-to-peak crossing hours.12 Multiplied by the average of 19,617 trucks crossing the border daily, the lost revenue amounts to millions of dollars annually for the United States and Mexico.
Cross-border spending by noncommercial entities (families and individuals) also directly impacts the US and Mexican economies. Cities along the southern border of the United States have become attractive commercial poles that draw customers from Mexico up to 75 miles (120 kilometers) away for daily consumption of goods and services. This is partly due to trade mechanisms becoming antiquated under new international trade agreements (originally designed to retain customers in local markets and supply border counties with national products) and the limitations of the Mexican domestic market, which often translates to higher prices and lower quality in goods such as food, clothing, footwear, and household equipment.
The United States and Mexico have created a series of tools to expedite border crossings for pedestrians, trains, and commercial and noncommercial vehicles, including Unified Cargo Processing,13 Global Entry, Secure Electronic Network for Travelers Rapid Inspection (SENTRI),14 Customs Trade Partnership Against Terrorism,15 and other trusted traveler programs. However, these mechanisms only serve a small portion of daily border crossers, given high annual fees and other prohibitive eligibility requirements. For example, only 175,000 citizens in the United States and Mexico have become SENTRI card holders.16 Building on these and other programs is essential as US and Mexican leaders work together to tap the full economic potential of our shared border.
8 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Border Wait Times: A Continued Challenge
Bottlenecks at land ports of entry along the US-Mexico
border present a long-term challenge for economic integration, supply chain resilience, and competitiveness. While international production sharing programs
such as the USMCA and the Maquiladora Export Industry17 have promoted mutually beneficial trade, they have contributed to border congestion by increasing the volume of vehicles requiring border inspections. Congestion and associated wait times are compounded by outdated technologies and limited information sharing within and between agencies in Mexico and the United States. Curtailing the illegal flow of weapons, drugs, contraband, and people also requires stringent and time-consuming border inspections that may lead to border delays.
As shown in Figure 1, non-expedited cargo (commercial vehicles) entering the United States from Mexico undergoes a multistep inspection process. The first processing step involves examination by Mexican border agents who verify paperwork for outgoing goods, ensuring that tariffs are accurately assigned.18 Once cargo
reaches US inspection booths, CBP officers first examine relevant documentation for incoming merchandise and drivers, who are then subject to automated regulation and tariff compliance reviews. At the officers’ discretion, cargo can undergo an additional canine or gamma ray inspection before being cleared for crossing.
Noncommercial vehicles entering the United States from Mexico also undergo a multistep inspection process. Depending on the type of border crossing (i.e., land or bridge), vehicles could be required to pay tolls in cash or via electronic toll collection systems. Once completed, vehicles continue to US inspection points, where they can undergo up to two separate inspections. At the primary inspection booth, CBP officials verify travelers’ documentation and inquire about the purpose of their visit to the United States. If the Interagency Border Inspection System finds records of norm violation,20 CBP officers direct the vehicle toward secondary inspection. At the secondary inspection, officers conduct a thorough identity investigation, after which access to the United States is either granted or denied.
Figure 1: Inspection Process for Commercial Vehicles at the US-Mexico Border19 1. Mexican Export Lot 2. US Federal Compound 3. State Safety Facility
Warehouse / Yard
Mexican export documentation verifications and cargo inspection selection
Mexican
export
cargo
inspection
CBP primary inspection
(document
inspection)
Secondary
inspection
VACIS, X-Ray, FMCSA
`Others
Visual vehicle safety
inspection
Detailed state truck safety
inspection
Warehouse / Yard
Mexico United
SOURCE: US Department of Transportation, Federal Highway Administration, “Border-wide Assessment of Intelligent Transportation System (ITS) Technology—Current and Future Concepts,” https://ops.fhwa.dot.gov/publications/fhwahop12015/ch2.htm, 2022.
9 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Trucks wait in a long queue for border customs control to cross into the U.S., in one of the main roads of Tijuana, Mexico, April 18, 2019. REUTERS/Andres Martinez Casares - RC1CE4339C90
Despite the implementation of numerous interventions to enhance the border-user experience, border users consulted while preparing this report expressed concerns about inconsistent federal policies that are not well attuned to their needs.21 For example, outdated technologies at port facilities lead to inaccurate time projections on official agency platforms, making border users turn to social media to better estimate wait and crossing times. Similarly, double inspection processes and unstandardized documentation
requirements in different ports of entry generate delays in border crossings, which ultimately increase transport expenses.
Finding ways to efficiently process the large volume of commercial and noncommercial vehicles crossing the border while safeguarding national security should remain a priority for the bilateral relationship. This will improve the border-user experience and result in substantial economic gains for both countries.
10 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
The Economic Impact of a More
Efficient US-Mexico Border
Reduced wait times at the US-Mexico directly impact the
US and Mexican economies through increased cross border commerce (commercial vehicles) and spending (noncommercial vehicles). This section quantifies the
nationwide dollar value that would result from additional traffic entering the United States from Mexico following a 10-minute reduction in border wait times. The economic impact is estimated for the US and Mexican economies.
OUR APPROACH
The Atlantic Council’s Adrienne Arsht Latin America Center partnered with the Hunt Institute for Global Competitiveness at the
University of Texas at El Paso and El Colegio de la Frontera Norte to produce this two-part study. Findings in this first report result from roundtables, focus groups, and individual consultations carried out virtually across both countries and in-person in Washington, DC; El Paso, Texas; and Tijuana, Mexico; and the analysis of economic data from the United States and Mexico. This study utilizes two economic models; one uses US data, emphasizing the US economy, and another employs Mexican data, focusing on the Mexican economy. As a starting point, both sides of the border were viewed independently to account for discrepancies in data availability and the specific methodologies of local partners and stakeholders. By later harmonizing findings and data, the scope and range of results were extended, ultimately determining the costs and benefits of reducing border wait times for both economies.
USEFUL TERMS
• Commercial traffic: loaded or unloaded vehicles (usually trucks or trains) that cross the US-Mexico border with the intent to distribute goods produced in the country of origin.
• Expenditure: the amount of money spent by noncommercial entities (families and individuals).
• Aggregate demand: the total amount of demand for all finished goods and services produced in an economy.
• Final good: a product that the final consumer uses or consumes. It does not require any additional processing.
• Gross output: the measure of total economic activity in the production of new goods and services during an accounting period.
• Labor income: the sum of employee compensation (wages and benefits) and proprietor income.
• Intermediate good: a product used to produce a final good.
• Intermediate sale: the sale of intermediate goods used in the production of final goods.
• Noncommercial traffic: vehicles carrying passengers (tourists, workers, others) that do not transport goods to sell in the destination country.
11 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
The United States: Border Efficiency to Strengthen the Economy
By John Byrd, John Gibson, Mayra Maldonado, and Roberto Ransom.
University of Texas at El Paso’s Hunt Institute for Global Competitiveness
Improved border management and the implementation of new
technologies at the US-Mexico border have the potential to enhance border security and expedite legitimate trade and travel, stimulating the US and Mexican economies. A more
efficient border would allow more commercial and noncommercial traffic to enter the United States from Mexico, resulting in additional goods for US consumers and businesses and more shoppers buying US goods and services.
KEY TAKEAWAYS:
A 10-minute reduction in wait times at the US-Mexico border would:
• Five-hundred thirty-two additional commercial vehicles loaded with goods entering the United States from Mexico every month would generate an additional commercial intake of nearly $26 million monthly or $312 million annually. The extra inventory resulting from increased imports would reduce US domestic prices, thus promoting economic well-being for US citizens.
• Sixty-thousand two-hundred forty additional noncommercial vehicles entering the United States from Mexico every month would generate an additional economic intake of $450,000 monthly, or $5.4 million annually. Border states would absorb approximately 75 percent of this economic impact, and the other 25 percent would reach non-border states in the United States.
The Economic Impact of Additional
Commercial Crossings
In 2021, more than 4.7 million container trucks loaded with over $345.9 million worth of cargo entered the United States from Mexico via the US-Mexico border.22 Research shows that a one minute reduction in commercial wait times would result in 53 additional commercial crossings (see regression analysis in Appendix B). This means that a 10-minute reduction in wait times would result in approximately another 532 container trucks entering the United States every month.
These containers may be loaded or unloaded. Therefore, estimating the economic impact of additional commercial crossings would require determining the proportion of loaded containers entering the United States via land ports of entry and the average cargo value of loaded containers. Data from the US Bureau of Transportation shows that approximately 73.1 percent of containers crossing the US-Mexico border are loaded with an average value of $66,798. Table 1 shows a breakdown of the average container value and the number of loaded and unloaded containers crossing the border through individual border counties.
12 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Table 1: Proportion of Loaded Containers and Average Container Value (2019)
State
County
Loaded
Containers 2019
Unloaded Containers 2019
Loaded + Unloaded Containers
Exports
2019
Imports
2019
Total Trade
2019
Average
Value
per Truck
Texas
El Paso
610,869
184,426
795,295
$31,717,503,019
$46,613,712,212
$78,331,215,231
$76,307
Texas
Hudspeth
0
0
0
$-
$-
$-
$-
Texas
Presidio
8,418
1,791
10,209
$144,896,195
$200,275,710
$345,171,905
$23,791
Texas
Val Verde
59,951
15,651
75,602
$2,068,951,047
$3,082,037,002
$5,150,988,049
$51,409
Texas
Maverick
149,732
30,298
180,030
$7,453,868,613
$22,197,870,144
$29,651,738,757
$148,251
Texas
Webb
1,711,670
658,639
2,370,309
$95,124,653,587
$135,741,587,991
$230,866,241,578
$79,304
Texas
Starr
38,611
17,958
56,569
$92,580,893
$387,724,994
$480,305,887
$10,042
Texas
Hidalgo
502,312
213,297
715,609
$13,222,562,811
$23,522,857,942
$36,745,420,753
$46,829
Texas
Cameron
153,280
134,796
288,076
$8,910,096,389
$8,930,388,221
$17,840,484,610
$58,262
New
Mexico
Luna
15,960
794
16,754
$23,980,387
$116,358,933
$140,339,320
$7,291
New
Mexico
Dona Ana
114,701
19,916
134,617
$14,098,068,953
$16,344,483,518
$30,442,552,471
$142,496
Arizona
Yuma
28,342
8,823
37,165
$506,644,995
$875,099,032
$1,381,744,027
$30,876
Arizona
Pima
303
12
315
$3,518,870
$1,794,662
$5,313,532
$5,923
Arizona
Santa Cruz
293,771
66,136
359,907
$10,369,174,240
$15,633,063,045
$26,002,237,285
$53,215
Arizona
Cochise
21,775
8,253
30,028
$802,531,798
$1,153,252,535
$1,955,784,333
$52,962
California
San Diego
798,230
258,912
1,057,142
$17,279,207,288
$32,480,486,882
$49,759,694,170
$40,691
California
Imperial
258,227
134,805
393,032
$7,023,568,716
$11,087,270,453
$18,110,839,169
$42,936
Total
US Border
4,766,152
1,754,507
6,520,659
$208,841,807,801
$318,368,263,276
$527,210,071,077
Average
$66,798
SOURCE: The Hunt Institute for Global Competitiveness and the COLEF using data from the Department of Transportation and the US Census Bureau.
Based on these findings, a 10-minute reduction in commercial wait times would allow $26 million23 in additional cargo value to enter the United States monthly or $312 million annually. This added commerce from Mexico into the United States consists of various finished and intermediate goods demanded by US consumers and businesses. While it may be argued that additional consumer goods entering the United States via the southern border would result in fewer jobs in the United States, the extra inventory generated by these other imports would also drive down domestic prices. Furthermore, the inflow of intermediate goods serves as vital inputs that support US businesses. As such, more data and analysis are required to determine which of these offsetting effects dominate.
The Economic Impact of Additional
Noncommercial Crossings24
Improvements in border management tools and practices could also expedite the flow of noncommercial crossings, with positive repercussions for the US economy due to additional cross border spending. In 2021, nearly 126 million people entered the United States from Mexico to purchase goods and services from US businesses. As shown in Table 2, these purchases generated an economic impact of $12.3 billion for the US economy.25 While the four US border states—Arizona, California, New Mexico, and Texas—absorb 75 percent of this impact, approximately 25 percent
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THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Table 2: Economic Impact of Cross-Border Spending in the United States (2022) Impact Employment Labor Income Value Added Output
1 - Direct 2 - Indirect 3 - Induced
60,619.16
$1,812,022,814.56
$2,765,047,740.91
$5,036,142,293.41
21,166.07
$1,234,825,927.30
$1,980,607,178.46
$4,118,866,436.04
18,648.05
$977,441,701.68
$1,771,486,445.19
$3,177,688,817.94
100,433.29
$4,024,290,443.54
$6,517,141,364.56
$12,332,697,547.38
SOURCE: The Hunt Institute for Global Competitiveness and the COLEF, using IMPLAN.
bleeds directly into non-border states. This means that spending by shoppers from Mexico in US border states has an economic impact of $3.1 billion in the other forty-six US states.
Research finds that a 10-minute reduction in wait times at the US-Mexico border would result in an average of approximately 5,020 additional noncommercial crossings every month, or 60,240 every year (see regression results in Appendix B). Determining the economic impact of these additional crossings requires data on the spending patterns of noncommercial crossers and a model to assess the economic impact of this spending. Appendix C provides
technical details on how the data and model were used to calculate impact.
Research shows that a 10-minute reduction in noncommercial wait times at the US-Mexico border would lead to a $450,000 positive economic impact on the US economy every month. Over the course of one year, this would add up to a monetary intake of $5.4 million. The top three industries that would most benefit from additional cross-border spending is concentrated in areas where tourists or temporary visitors are likely to spend money, particularly retail, full
service restaurants, and general merchandise industries. For further information on sector-specific impacts, see Appendix C.
Trucks wait in a queue for border customs control, to cross into the United States, at the Zaragoza-Ysleta border crossing bridge in Ciudad Juarez, Mexico April 30, 2020. REUTERS/Jose Luis Gonzalez
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THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Mexico: The Potential Economic Gains of Border Efficiency
By David Gaytan, Noé Arón Fuentes Flores, Alejandro Brugués Rodríguez, and Jorge Eduardo Mendoza Cota. El Colegio de la Frontera Norte
KEY TAKEAWAYS:
A one-minute reduction in wait times at the US-Mexico border would:
• Boost Mexican exports to the United States, increasing sectoral output by an average of 2 percent, intermediate sales by an average of 2.4 percent, and aggregate demand by an average of 1.7 percent. Sectors benefiting the most from reduced commercial wait times are those for which production is largely driven by US demand for export goods such as mining, manufacturing, wholesale trade, and agriculture.
A 10-minute reduction in wait times at the US-Mexico border would:
• Create nearly 18,700 additional direct and indirect Mexican jobs. These posts would be largely concentrated in financial services; wholesale trade; sports, cultural, and other recreational services; and professional, scientific, and technical services.
• Lead to an overall increase of $174,474 in labor income.
Expediting the flow of commercial traffic from Mexico into
the United States would boost cross-border commerce, which impacts aggregate demand in Mexico, causing a change in total gross output and intermediate sales.26
These effects can be disaggregated by sector in the Mexican economy.
Macroeconomic Impact of Additional
Commercial Crossings
Determining the sectoral economic impact of a more efficient US-Mexico border requires understanding the relationship between Mexico’s exports per sector and US demand for export goods. The United States stands as Mexico’s largest export market, with approximately 80 percent of Mexican exports destined for the United States.27 Nearly 100 percent of these exports are concentrated in ten sectors,28 accounting for $349 billion in 2018 and $358 billion in 2019 (for more information, see Appendix F).29 Therefore, this study only considers Mexico’s top-ten sectors in terms of exports to the United States. Within this group, the manufacturing and maquiladora export industries are particularly important, producing more than 60 percent of Mexico’s total exports to the United States. Today, Mexico stands as the top US supplier of motor vehicles and motor vehicle parts.30
Findings show that, on average, Mexican exports to the United States drive 38 percent of Mexican production (or output) per sector (for a detailed breakdown, see Appendix F). For mining, manufacturing, wholesale trade, and agriculture, exports to the United States drive more than 50 percent of total gross output. These four sectors alone are responsible for 84.4 percent of the total dollar value generated from exports to the United States, accounting for $664.26 billion out of the total $787.16 billion in total production.
A significant portion of Mexican exports enters the United States via land ports across the US-Mexico border. An average of twenty-eight commercial vehicles with export goods arrive at the border every hour, with the average truck taking approximately 20 minutes to cross the border (for more information, see Appendix D3). Reducing wait times would boost Mexican exports by allowing additional commercial crossings into the United States. This would strengthen Mexican supply chains by stimulating the exchange of intermediate and final goods between sectors in response to the increased demand for export goods.
Given that approximately 73.1 percent of containers crossing the US-Mexico border are loaded with an average value of $66,798,31 a one-minute reduction in commercial wait times would increase
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THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
sectoral output (total gross output) by an average of 2 percent. This output growth would be driven by a 1.7 percent increase in average demand per sector, occurring as a result of additional Mexican exports entering the United States. Intermediate sales (the sectoral exchange of intermediate goods for the production of additional export goods) would grow by an average of 2.4 percent per sector. Appendix D includes a detailed description of the two models used in the analysis, a queuing and input-output model.
As Figure 2 shows, the benefits of increased commercial crossings into the United States are unequally distributed across sectors of the Mexican economy. The mining, manufacturing, and wholesale trade sectors experience the highest growth rates in production, at 3.62 percent, 3.62 percent, and 3.33 percent, respectively. These three sectors also have the largest increase in aggregate demand, growing at 3.88 percent, 5.20 percent, and 3.63 percent, respectively. Regarding intermediate sales, the agricultural and mining sectors have growth rates higher than 3 percent. Appendix F has a detailed breakdown of nominal and percentage growth in production (total gross output), intermediate sales, and aggregate demand following a one-minute reduction in border wait times.
Economic Impact on Employment and Labor Income of Additional Commercial Crossings
Moreover, this study finds that a 10-minute reduction in border wait times would promote the creation of nearly 18,700 indirect and direct jobs in Mexico over the course of one year, with 5,505 new positions opening in financial and insurance services, 3,684 in mass media information, 3,216 in wholesale trade, and 2,448 in professional, scientific, and technical posts. The loss in labor is far smaller, with an estimated 793 jobs lost in manufacturing and 210 in the transportation, postage, and warehousing sectors. (For detailed analysis, see Appendix G).
A ten-minute reduction in commercial wait times would also result in a $174,474 increase in labor income. When disaggregated by sector, labor income growth is higher in the wholesale trade, financial and insurance services, information services, and mining sectors. Interestingly, this change would lead to more equitable distribution of labor income across Mexican economic sectors. However, the variation is driven mainly by increased production by sector rather than overall productivity. (For more information, see Appendix G).
Figure 2: Growth of Total Gross Output, Aggregate Demand, and Intermediate Sales Total Production Growth Aggregate Demand Growth Intermediate Sales GrowthSOURCE: In-house prepared graph based on estimates for 2018 data, obtained from the National Institute of Statistics and Geography, 2022.
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THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Conclusion
Trucks wait in a long queue for border customs control to cross into the United States at the World Trade Bridge in Nuevo Laredo, Mexico April 2, 2019. REUTERS/Daniel Becerril
A more efficient US-Mexico border would expedite
legitimate trade and travel, enhancing cross-border commerce and benefiting the US and Mexican economies. Streamlined border crossings could be
achieved through improvements in border management practices and the adoption of new technologies. These efforts would also bolster shared security between the United States and Mexico.
This report focused on the economic impact of expediting commercial and noncommercial crossings from Mexico into the United States. Reduced border wait times would increase the supply of goods and services for US consumers and stimulate spending in the United States while boosting Mexican exports into the United States. This would lead to an increasingly competitive, economically integrated, and resilient bilateral relationship.
In the United States, a 10-minute reduction in border wait times would facilitate the crossing of 532 additional loaded trucks every month, generating an added commercial intake of nearly $26 million per month. In one year, the economic impact on the US economy would be $312 million. Similarly, it would allow 60,240 additional noncommercial vehicles to enter the United States every month, generating an extra economic intake of $450,000 monthly, or $5.4 million annually. The benefits of increased cross-border commerce and spending would extend throughout the United States due to the economic linkages between local economies.
For Mexico’s top ten export sectors to the United States, a one minute reduction in commercial wait times would, on average, increase production (total gross output) by 2 percent, intermediate sales by 2.4 percent, and aggregate demand by 1.7 percent. Results show the mining, manufacturing, wholesale trade, and agricultural sectors would benefit the most from additional commerce from Mexico into the United States. Historically, more than 50 percent of production in these sectors has been driven by US demand for export goods.
Expediting the flow of commercial vehicles from Mexico into the United States by ten minutes would increase labor income by $174,474 and promote the creation of nearly 18,700 additional direct and indirect jobs in Mexico, particularly in financial services; mass media information; wholesale trade; and professional, scientific, and technical services.
These numbers illustrate the lower-bound economic gains that would result from reduced wait times at the US-Mexico border, stemming from potential improvements in border management practices and tools. They emphasize the economic interdependence of the United States and Mexico, outlining how a further coordinated, binational approach to the border would benefit both countries. A subsequent study will disaggregate national-level findings and thus determine the impact of a more efficient and secure US-Mexico border at the state and county level in the United States and Mexico.
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THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Methodology
US-focused analysis
The Hunt Institute for Global Competitiveness used a
two-step process to calculate the economic impact of reducing border wait times for commercial and noncommercial crossings. First, regression analysis
was employed to determine the relationship between average wait times (in minutes) and the average number of crossings (commercial and noncommercial) at major US-Mexico land ports of entry. Additional factors impacting this relationship, such as employment and crime on both sides of the border, the number of lanes in operation, and total expenditures made by the US Department of Homeland Security (DHS), were considered. The analysis used data from various sources, including CBP, the US Department of Transportation’s Bureau of Transportation Statistics, the US Department of Labor’s Bureau of Labor Statistics, Instituto Nacional de Estadística y Geografía (INEGI, or National Institute of Statistics and Geography), and the Instituto Mexicano de Seguro Social (Mexican Institute of Social Security). To account for disruptions in border traffic patterns stemming from COVID-19 and its accompanying policy changes, the study captures data between April 2016 and December 2019, before the pandemic’s onset.
The second step in the analysis was quantifying the economic impact of additional crossings resulting from reduced wait times. Because of the different types of data available for commercial and noncommercial crossings; this study used various methods to quantify their effects. For commercial crossings, the proportion of loaded container crossings and the average value per container—
obtained from the US Department of Transportation—were used to determine the dollar value associated with increased container crossings. For noncommercial crossings, survey data from the City of El Paso’s International Bridges Department on travel and spending patterns were used to model the economic impact of spending by additional noncommercial crossers. Appendices A through C include more technical information and a detailed, step
by-step explanation of the analysis.
Mexico-focused analysis
El Colegio de la Frontera Norte used a three-step process and two economic models to determine the economic impact of reduced border wait times for commercial vehicles. The analysis used data from the US Bureau of Transportation Statistics, CBP, the North American Industry Classification System (NAICS), Mexico’s INEGI, Automated Census Information System (ACIS), and Servicio de Administración Tributaria (SAT, or Tax Administration Service).
The first step was to estimate the average inspection rate of commercial vehicles at US-Mexico border land ports of entry (see Appendix D3 for detailed analysis). Then, a queuing model was used to determine how reduced wait times affect Mexican exports to the United States. Finally, an input-output model was implemented to establish how changes in exports affect production (total gross output), intermediate sales, and aggregate demand for Mexico’s top ten sectors in terms of exports to the United States. Appendix D provides a detailed, technical description of the queueing and input output models, while Appendix F includes analysis results.
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THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Appendices
The following Appendices provide additional details on the economic analysis summarized in the main report. Given its technical nature, this section can be skipped by more casual readers. Appendices A, B, and C explain the US-focused analysis by the Hunt Institute for Global Competitiveness and Appendices D, E, F, and G expand on the Mexico-focused analysis by El Colegio de la Frontera Norte.
US-FOCUSED ANALYSIS
APPENDIX A 20 Provides a detailed description of the data used
in the regression analysis.
APPENDIX B 24 Outlines the regression model used to estimate
the relationship between border wait times
and commercial and noncommercial crossings.
APPENDIX C 25 Gives an overview of IMPLAN and how it was used to
measure the economic impact of noncommercial crossings. MEXICO-FOCUSED ANALYSIS
APPENDIX D 28 Provides more details on the input-output
and queuing models.
APPENDIX E 31 Describes the data used in the analysis.
APPENDIX F 32 Explains the economic impact analysis with
and without reduced border wait times.
APPENDIX G 36 Describes the analysis of economic impact
on employment and labor income.
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APPENDIX A
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX A: DATA USED FOR THE FIXED EFFECTS MODEL
While report results are presented at the national level, the analysis by the Hunt Institute for Global Competitiveness is built from county level data focusing on major US-Mexico land ports of entry. Map 1 shows the counties on the US-Mexico border for which data was
collected and analyzed. These counties have one or more land ports of entry. Map 2 presents CBP sectors and selected counties’ ports of entry within each sector.
Map 1. US Border Counties on the US-Mexico Border
SOURCE: The Hunt Institute for Global Competitiveness and El Colegio de la Frontera Norte (COLEF).
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APPENDIX A
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER Map 2. CBP Sectors Along the US-Mexico Border
SOURCE: The Hunt Institute for Global Competitiveness and COLEF using data from CBP.
Table A1 lists every US county that touches the US-Mexico border.
The list includes the name of every port of entry within that county,
the names of the corresponding Mexican counties, and the CBP
sector that contains that county.
21 ATLANTIC COUNCIL
APPENDIX A THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Table A1: US-Mexico Border States, Counties, Cities, Ports of Entry, Mexican Sister Cities, and CBP Sectors State County City PoE Sister City CBP Sector
California
Arizona
New
Mexico
Texas
San Diego
San Ysidro
San Ysidro
Tijuana,
Baja California
San Diego Sector, California
Otay Mesa
Otay Mesa - Commercial
Otay Mesa - Passenger
Otay Mesa - Pedestrian Cross Border Express
Tecate
Tecate
Imperial
Calexico
Calexico - East
Mexicali,
Baja California
El Centro Sector,
California
Calexico - West
Andrade
Andrade
Yuma
San Luis
San Luis - San Luis I
San Luis Rio Colorado, Sonora
Yuma Sector, Arizona
San Luis - San Luis II
Pima
Lukeville
Lukeville
Puerto Peñasco, Sonora
Tucson Sector,
Arizona
Sasabe
Sasabe
Sáric, Sonora
Santa Cruz
Nobales
Nogales - Deconcini
Nogales, Sonora
Nogales - Mariposa
Nogales - Morley Gate
Cochise
Naco
Naco
Naco, Sonora
Douglas
Douglas (Raul Hector Castro)
Agua Prieta, Sonora
Luna
Columbus
Columbus
Asencion, Chihuahua
El Paso Sector, New Mexico
Doña Ana
Santa Teresa
Santa Teresa - Santa Teresa Port of Entry
Ciudad Juarez,
Chihuahua
El Paso
El Paso
El Paso - Bridge of the Americas (BOTA)
Ciudad Juarez,
Chihuahua
El Paso Sector, Texas
El Paso - Paso del Norte (PDN)
El Paso - Stanton DCL
El Paso - Ysleta
Hudspeth
Fort
Hancock
Fort Hancock - Fort Hancock
El Paso
Fabens
Fabens - Tornillo
Guadalupe, Chihuahua
Presidio
Presidio
Presidio
Ojinaga, Chihuahua
Big Bend Sector,
Texas
Val Verde
Del Rio
Del Rio
Acuña, Coahuila
Del Rio Sector, Texas
Maverick
Eagle Pass
Eagle Pass - Bridge I
Piedras Negras,
Coahuila
Eagle Pass - Bridge II
Webb
Laredo
Laredo - Bridge I
Nuevo Laredo,
Tamaulipas
Laredo Sector, Texas
Laredo - Bridge II
Laredo - Colombia Solidarity
Laredo - World Trade Bridge
Starr
Roma
Roma
Ciudad Miguel Aleman, Tamaulipas
Rio Grande
Rio Grande City
Camargo, Tamaulipas
Rio Grande Valley Sector
Hidalgo
County
Hidalgo/
Pharr
Hidalgo/Pharr - Anzalduas International Bridge
Reynosa, Tamaulipas
Hidalgo/Pharr - Hidalgo
Hidalgo/Pharr - PharrProgreso - Donna International Bridge
Hidalgo
Progreso
Progreso - Donna International Bridge
Rio Bravo, Tamaulipas
Progreso - Progreso International Bridge
Cameron
Brownsville
Brownsville - B&M
Matamoros, Coahuila
Brownsville - Gateway
Brownsville - Los Indios
Brownsville - Veterans International
SOURCE: The Hunt Institute for Global Competitiveness and El Colegio de la Frontera Norte (COLEF) using data from CBP.
22 ATLANTIC COUNCIL
APPENDIX A
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Running the necessary regressions to determine the impact of border wait times on border crossings requires data on several variables in various geographies. The data gathered for the regression analysis includes:
1. Average wait times: Border wait times at ports of entry were obtained from CBP. The research team used this data to estimate the monthly average border wait time (in minutes) for every land port of entry. This data was available for commercial vehicles, personal vehicles, and pedestrian modes of crossing, but not for rail crossings.32 Commercial vehicle data for the Hudspeth port of entry were unavailable for this variable.33
2. Total number of crossings per month: Data was captured from the US Department of Transportation’s Bureau of Transportation Statistics for each port of entry on the US-Mexico border and mode of crossing (commercial vehicles, noncommercial vehicles, and pedestrian crossings). The analysis uses these data to estimate the total number of crossings per city and county. The data for the Fort Hancock port of entry was unavailable for this variable.
3. Number of operational lanes per month: The total number of operating lanes per hour per port of entry was taken from the CBP for every port of entry. This analysis used the point of entry level data to estimate the number of operational lanes by city and county. The research team estimated an hourly average for every port of entry, using it to estimate a monthly average of the number of lanes in operation per port of entry. The commercial vehicles data for the Eagle Pass port of entry were not available for this variable.
4. Total number of existing lanes: The total number of existing lanes for every port of entry was captured from CBP. Commercial vehicle data for the Fort Hancock port of entry were unavailable for this variable.
5. Total employment (United States): The monthly data of total non-farm employment information for each US county on the US-Mexico border with ports of entry was obtained from the US Department of Labor’s Bureau of Labor Statistics.
6. Total employment (Mexico): The monthly data on total non-farm employment for each of the Mexican counties on the US-Mexico border with a port of entry was acquired from the Instituto Mexicano del Seguro Social (IMSS or Mexico’s Institute of Social Security).
7. Illegal Apprehensions: CBP provided its complete monthly number of illegal apprehensions for every sector within the southern border. See Map 2 for the boundaries of each CBP sector. This variable serves as a measure of crime in the United States.
8. Homicide rate: The total number of homicides per county was obtained for every northern Mexican municipality from the Secretariado Ejecutivo del Sistema Nacional de Seguridad Publica (Mexico’s Executive Secretary of the National Public Security System), the Mexican agency that compiles the total number of homicides per county. Mexican population data is available from two Mexican agencies, the Instituto Nacional de Estadística y Geografía (INEGI or the National Institute of Statistics and Geography) and the Consejo Nacional de Población (CONAPO or the National Council on Population). This variable serves as a measure of crime in Mexico.
9. Federal Expenditures (United States): Federal costs data were obtained for the following federal agencies: CBP, US Coast Guard, Transportation Security Administration, Federal Law Enforcement Training Center, and US Immigration and Customs Enforcement. These expenses were gathered for the following counties: San Diego and Imperial in California; Yuma, Pima, Santa Cruz, and Cochise in Arizona; Luna and Doña Ana in New Mexico; and El Paso, Presidio, Val Verde, Maverick, Webb, Starr, Hidalgo, and Cameron in Texas.
10. Trade: The data obtained from the US Trade Census consists of the value of the total imports and exports that cross the US-Mexico border ports of entry every month.
23 ATLANTIC COUNCIL
APPENDIX B
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX B: FIXED EFFECTS MODEL
Calculating the economic impact of a more efficient and secure border, requires understanding the relationship between wait times and the number of border crossings.
The data across counties shows a low yet positive correlation between noncommercial crossings and wait times, suggesting that increased wait times are associated with more border crossings.34 This counterintuitive finding is explained by the fact that increased border usage (or border congestion) results in both longer wait times and more crossings. Therefore, to determine the underlying relationship between border wait time and crossings, the research team used an econometric model to control for other factors that may influence border crossings. The following equation is estimated by fixed effects using monthly county-level data from April 2016 through December 2019.35
crossit = β1waitit + β2Xit+ i+uit ,t = 1,2, ..., T
In the estimation equation, crossit and waitit denote the number of crossings (either commercial or noncommercial) and average wait times in county i at time t, respectively. All additional time-varying explanatory variables are included in Xit, while i denotes the time
constant fixed effect for county i and uit denotes the error term.36
The additional controls in Xit account for other factors influencing crossings and include a measure of employment in the United States and Mexico, a measure of crime in both countries, the number (or proportion) of lanes in operation, total expenditures by DHS, and a measure of trade (included in the commercial regression only).
The left panel of Table B1 provides regression results for commercial crossings, while the right panel shows results for noncommercial crossings. The coefficient estimate on wait times is of primary interest, which is negative and statistically significant in both regressions. Specifically, the analysis found that a one-minute reduction in wait times results in 53 additional commercial crossings and 502 noncommercial crossings on average per month.
The coefficient on wait times in the commercial crossing regression is statistically significant at 10 percent. Each additional commercial crossing represents another cargo container (loaded or unloaded) crossing into the United States via a land port of entry. The coefficient on wait times in the noncommercial crossings regression is statistically significant at 5 percent. Each additional noncommercial crossing represents a personal vehicle crossing into the United States via a land port of entry.
Regression results suggest an inverse relationship between wait times and commercial and noncommercial border crossings. Including additional time-varying controls and time-constant fixed effects helped to reverse the counterintuitive finding of a positive correlation reported above. As such, Table B1 describes the underlying relationship between border wait times and border crossings. These findings can be used to determine how improved border management techniques or the adoption of new technologies affect commercial and noncommercial border crossings.
Table B1: Fixed Effects Regression Results
Regression Results
Commercial Crossings
Noncommercial Crossings
Wait times
-53.23*
-502.05**
(30.34)
(227.18)
Employment in US
0.03
0.23
(0.05)
(0.41)
Employment in
Mexico
-0.01
0.05
(0.02)
(0.17)
Crime in US
-0.03
-1.16***
(0.04)
(0.43)
Crime in Mexico
-17.60***
-30.00
(5.56)
(98.12)
Lanes operational
487.29
314031.50***
(1998.54)
(68954.24)
DHS Expenditures
-0.002**
0.01
(0.001)
(0.01)
Trade
8.92E-06***
-
(5.09E-07)
-
Constant
8307.01
268168.40***
(6615.80)
(48439.59)
Sample Size
554
585
R^2
0.95
0.76
SOURCE: The Hunt Institute for Global Competitiveness and the COLEF, using data from the US Department of Transportation.
NOTE: The standard error is in parentheses. ***Statistically significant at 1 percent. **Statistically significant at 5 percent. *Statistically significant at 10 percent.
24 ATLANTIC COUNCIL
APPENDIX C
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX C: ECONOMIC IMPACT ANALYSIS OF BORDER CROSSINGS
The regression results presented in Appendix B established a link between border wait times and commercial and noncommercial crossings. This serves as the first step in understanding the economic impact of reduced border wait times. Additional data is needed to determine the economic impact of reductions in border wait times. The following subsections explain the steps taken to produce the economic impact results described in the main text.
Appendix C1: Economic Impact of Commercial Crossings
The regression results described in Appendix B indicate that a one-minute reduction in average commercial wait times results in approximately fifty-three additional container crossings per month. Data from the US Department of Transportation’s Bureau of Transportation Statistics were used to estimate that approximately 73.1 percent of these containers would be loaded with an average value of $66,798 (for a detailed breakdown of the proportion of loaded containers crossing the US-Mexico border and their average cargo value, see table 1 on page 13). This means that a 10-minute reduction in wait times would result in 532 additional container crossings, of which 388 would be loaded with $25,879,549 in cargo value.
Appendix C2: Economic Impact of Noncommercial Crossings
Individuals crossing from Mexico into the United States make purchases on the US borders and in states, contributing to local economies. Due to underlying economic linkages, this spending has an amplified national impact. To estimate this impact, the research team used IMPLAN—a regional economic impact software—, data on expenditure patterns, and the average number of border crossings aggregated to the county level. Below is an overview of the data and model used to estimate the economic impact of the expenditures that result from these noncommercial border crossings.
A 2019 study by the City of El Paso International Bridges Department quantifies the social and economic cross-border activities from vehicle and pedestrian crossings through the El Paso–Ciudad Juárez port of entry. The study consisted of two surveys. First, a short questionnaire administered to US-Mexico border crossers between October 1 and December 31, 2019. Residents who indicated Mexico as their primary place of residence received an entry survey, while those indicating the United States as their primary place of residence received an exit survey. The entry survey captured the planned activities and expenditures of those traveling to El Paso from Ciudad Juárez, while the exit survey captured the activities and spending already made by those traveling to Ciudad Juárez from El Paso.
25 ATLANTIC COUNCIL
APPENDIX C
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Survey respondents were asked questions related to four categories:
• Demographics
• Reasons for crossing
• Anticipated spending (including the area of spending) • Trip characteristics
This report focused on survey responses related to the intended destination (El Paso or other) and expected spending across various categories. The survey results indicate that approximately 80 percent of individuals crossing the border (by vehicle and as pedestrians) remained in El Paso, while 20 percent continued to another location. Of the 80 percent who stayed in El Paso, approximately 64 percent of those who crossed by vehicle and 47 percent who crossed as pedestrians reported positive expected expenditures. The survey data breaks down the dollar amount individuals expected to spend within twenty categories.37
This information was used to calculate the average expenditure per crosser, for both vehicle and pedestrian crossings. These expenditures were then scaled by the total number of vehicle and pedestrian crossings in 2019 (after scaling by the proportion of crossers who remained in El Paso and reported spending money) to determine the average expenditure of crossings in 2019 for El Paso County.
To establish the economic impact of these expenditures at the national level, the average expenditures by crossers in 2019 were computed for the following border counties:
• Texas: Presidio, Val Verde, Maverick, Webb, Starr, Hidalgo, and Cameron
• New Mexico: Luna and Doña Ana
• Arizona: Yuma, Pima, Santa Cruz, and Cochise
• California: San Diego and Imperial
Unfortunately, detailed expenditure data were unavailable for the other border counties. However, the El Paso survey was used with the assumption that spending patterns across the twenty categories do not change across counties. First, the average expenditures per crosser for each category was recovered from the El Paso survey. These expenditures were then scaled up or down based on the average household income in the neighboring Mexican state relative to the average household income in Chihuahua (the Mexican state neighboring El Paso). Once this income adjustment was made, the average 2019 expenditures were scaled by the number of vehicle and pedestrian crossings in 2019 for each border county listed above. This exercise reveals the total spending in the twenty categories for each of the sixteen border counties considered in the analysis.38
These findings were used as inputs into IMPLAN to estimate the economic impact of expenditures by individuals crossing the US-Mexico border. First, the twenty expenditure categories from the survey were mapped into comparable IMPLAN industries. Then, industry output (spending) was reduced in these industries for each of the sixteen counties. Twenty adverse output (spending) events were modeled separately in the sixteen counties for a total of 320 events. The rest of the United States was then built up, county-by county for Texas, New Mexico, Arizona, and California; and state-by
state for the non-border states. Finally, the national-level analysis was run using IMPLAN’s multiregion input-output feature, allowing for additional indirect linkages between regions within the analysis. Tables C2.1 and C2.2 present the main findings.
26 ATLANTIC COUNCIL
APPENDIX C
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Table C2.1: Economic Impact of Removing Cross-Border Spending in the United States (2022)
Impact Employment Labor Income Value Added Output
1 - Direct 2 - Indirect 3 - Induced
-60,619.16
-$1,812,022,814.56
-$2,765,047,740.91
-$5,036,142,293.41
-21,166.07
-$1,234,825,927.30
-$1,980,607,178.46
-$4,118,866,436.04
-18,648.05
-$977,441,701.68
-$1,771,486,445.19
-$3,177,688,817.94
-100,433.29
-$4,024,290,443.54
-$6,517,141,364.56
-$12,332,697,547.38
Source: The Hunt Institute for Global Competitiveness and the COLEF, using IMPLAN.
As shown on Table C2.1, removing cross-border spending by noncommercial crossers results in approximately 100,433 fewer jobs in the United States. Approximately 60 percent of this job loss is directly caused by reduced expenditure. The remaining 40 percent is due to indirect and induced effects. Removing cross
border spending would also result in a loss of $12,332,697,547 in economic output. Approximately 41 percent of this output loss is explained by the direct effects of reducing expenditures and 59 percent by indirect or induced effects.
Table C2.2 includes the top five most impacted industries in terms of output lost due to the reduction in cross-border spending by noncommercial crossers. As expected, these industries are concentrated in areas where tourists or temporary visitors would
likely spend money. The three sectors with the largest output loss include retail, full-service restaurants, and general merchandise. As such, the entire output loss within these industries was due to sectoral linkages with other areas experiencing direct impacts.
IMPLAN results in Table C2 can be combined with the regression results in Appendix B to determine the economic impact of reducing noncommercial border wait times. The research team divided the total output loss resulting from eliminating noncommercial crossings by the total number of crossers in 2019, 87,812,443.39 This yields a value of $140.44 which can be interpreted as the output loss associated with losing one noncommercial crosser or the output gain associated with one additional noncommercial crosser.
Table C2.2: Top Five Industries with Reductions in Economic Output from Removing Cross-Border Spending in the United States (2022) Impact 1 - Direct 2 - Indirect 3 - InducedImpact output
Industry display
Impact output
Impact output
Impact output
Retail: Clothing
and ccessories
-$2,161,062,814.49
-$707,698.49
-$23,321,554.17
-$2,185,092,067.16
Other real estate services
$0.00
-$740,224,149.66
-$130,392,264.37
-$870,616,414.03
Full service restaurants
-$713,075,639.37
-$28,572,142.09
-$65,051,510.06
-$806,699,291.52
General merchandise
-$575,957,329.13
-$2,040,513.78
-$36,955,115.99
-$614,952,958.90
Management
$0.00
-$397,735,328.22
-$56,187,767.71
-$453,923,095.93
1
2
3
4
5
Source: The Hunt Institute for Global Competitiveness and the COLEF, using IMPLAN.
27 ATLANTIC COUNCIL
APPENDIX D
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX D: DESCRIPTION OF THE INPUT-OUTPUT AND QUEUING MODELS
Appendix D1: The queueing model
This study uses a queuing model to evaluate how wait times for commercial vehicles at the US-Mexico border affect Mexican exports to the United States. A queueing model mathematically describes a queuing system, making specific assumptions about the probabilistic nature of the number and type of servers (commercial vehicles), the arrival and service processes (border processing rates), and the queue discipline and organization. For this study, this can be described as:
E'j,t = E'j,0- ∆ %(λ-μ)*αj ∑ E'j,0 (1)
Where;
E'j,t = commercial vehicles processed per hour at t ≥1. E'j,0 = commercial vehicles processed per hour at t=0. λ = the average number of commercial vehicles arriving per hour.40
μ = the average number of commercial vehicles dispatched per hour.41
α = the share of sectoral exports in total exports per hour (E'j,0 / ∑ E'j,0).
∑ E'j,0 = the total number of commercial vehicles per hour in the economy.
The E'j,0 vector also serve as a measure of Mexican exports, given that commercial vehicles entering the United States are loaded with Mexican goods.
In equation (1), the assigned volume is the number of commercial vehicles arriving at a border checkpoint every hour (λ), while the volume processed is the processing capacity of the checkpoint per
hour (μ). To conduct the queuing analysis, these two variables must be known beforehand. Appendix D3 shows how they were defined.
Besides the variables λ and μ, the queuing model considers other key variables, including the value of exports transported by commercial vehicles and the number of lanes in operation. The former was determined using data from the US Department of Transportation’s Bureau of Transportation Statistics (see Appendix C1), and the latter with data from CBP. Additionally, this study considers the system in its steadystate of operation, i.e., during time intervals when λ and μ behave normally. This means that anomalous states of operation are removed from the analysis (such as the first 30 minutes in the workday when personnel perform preparatory activities).
As equation (1) shows, when the volume of commercial vehicles in the system is processed immediately [(λ-μ) = 0], there would be no queues. As a result, wait times would be insignificant, and the value of Mexican exports entering the United States in commercial vehicles would be E'j,0. However, when the assigned volume of commercial vehicles is greater than the volume of vehicles processed [(λ-μ) > 0], a queue forms, leading to increased wait times and reducing the number of commercial vehicles crossing the border with Mexican export goods (reducing E'j,t). This calculation produces approximate wait times, which are sufficiently accurate to understand the overall distribution of traffic between land ports of entry across the US-Mexico border.
Once approximate wait times are established, it is important to verify the model’s validity. Using a chi-square goodness of fit test, the observed distribution of the variables λ and μ is compared with their theoretical distribution, demonstrating the degree of adjustment between the sample (the average service rate for one checkpoint) and the population (the average service rate for all checkpoints across the US-Mexico border). This hypothesis test concludes, with a certain degree of statistical significance, that the sample in this study is representative of the full population.
28 ATLANTIC COUNCIL
APPENDIX D
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Appendix D2: Intersectoral input-output model
Input-output models are a form of macroeconomic analysis based on the interdependencies (the flow of goods and services) between different economic sectors. They are commonly used to estimate the impacts of positive or negative economic shocks and their ripple effects throughout an economy.
This study uses an input-output model to determine how increased Mexican exports stemming from reduced border wait times (previously established using a queuing model; see Appendix D1) affect aggregate demand in Mexico (calculated as aggregate demand = C + I + G + Nx, where: C = consumer spending; I = private investment and corporate spending; G = government spending; and Nx = net exports (exports minus imports).
Economic sectors respond to increases in aggregate demand directly by supplying final goods (increasing output) or indirectly by producing intermediate goods for sectors that respond directly (increasing intermediate sales). Therefore, findings are then used to calculate the impact on total gross output and intermediate sales across sectors of the Mexican economy.
Equation (2) estimates the impact of increased demand for Mexican exports on output per sector:
Xj,0= (I-A)-1Yj,0 (2)
Where:
Xj,0 = the total gross output vector per sector at t=0.
(I-A)-1 = the Leontief inverse (or the matrix of indirect and direct multipliers). In which I = identity matrix and A = technical coefficient matrix.
Yj,0 = the aggregate demand vector per sector at t=0.
Therefore, equation (2) could be re-written as:
Xj,0= (I-A)-1E'j,0 (3)
Where:
E'j,0 = the exports vector per sector at t=0.
As discussed in Appendix D1, E'j,0 can be interpreted as “commercial vehicles processed by the customs system every hour” and equation (3) expressed as:
Xj,t = (I-A)-1E'j,t (4) Where E'j,0 = commercial vehicles processed per hour at t ≥ 1.
This interpretation makes two assumptions: (a) that the system operates at full capacity and (b) that the volume of commercial vehicles in the system is processed immediately [(λ-μ) = 0], resulting in no wait times (see Appendix D1). In other words, the input-output model is static.
However, this is not always the case, given that commercial vehicle arrivals and departures to and from border checkpoints do not happen at fixed intervals (they are uncertain). Therefore, by incorporating specific trajectories describing the behavior of E'j,t (changes to the number of commercial vehicles processed by customs checkpoints due to reduced wait times), the static input
output model can be used to estimate the impact of increased Mexican exports on total gross output per sector. This is calculated with the equation:
Lj,t = ∑ [Xj,t+Xj,0] (5) Where:
Lj,t = the impact on total gross output.
Xj,0 = the total gross output vector per sector at t=0 (before reduced wait times and no changes to E'j,0).
Xj,t = the total gross output vector per sector at t ≥1 (after reduced wait times and changes to E'j,t).
j = 1- n sectors.
29 ATLANTIC COUNCIL
APPENDIX D
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Appendix D3: Establishing the assigned volume and processing rate of commercial vehicles
Estimating the average processing capacity of a port of entry requires data on the volume of commercial vehicles serviced and the number of lanes, hours, and days in operation for that port of entry. For land ports of entry across the US-Mexico border, these data were obtained from the Bureau of Transportation Statistics’ Border Crossing Data.42 Table D3 shows data for the Otay Mesa port of entry in Baja, California, the third-busiest on the US-Mexico border.43 The Otay Mesa example helps to illustrate how processing capacity was calculated for other ports of entry as part of this study.
On average, one lane in the Otay Mesa port of entry operates 65 hours per week. Together, its ten lanes would operate 650 hours per week, meaning that, together, the lanes of the Otay Mesa port of entry operate for approximately 33,800 hours in one year (52 weeks). Given that 962,577 commercial vehicles are serviced per
year, a total of 18,511 trucks would cross the border weekly. For one lane, this translates to 1,851 trucks per week, 370 per day, and 28.5 per hour.
Having established the number of commercial vehicles serviced per hour (28.5 vehicles), an M/M/1 queue was simulated (see Appendix D1) to estimate the average processing capacity (μ), showing that border wait times for commercial vehicles are approximately 21.5 minutes.44
Enhanced border management practices and the implementation of new technologies would improve the processing capacity of ports of entry, reduce commercial wait times, and allow more Mexican exports to enter the United States. This would boost total gross output, aggregate demand, and intermediated sales across various sectors in the Mexican economy, as well as employment and labor income (see Appendices F and G for input-output analysis results).
Table D3: Data for the Otay Mesa Port of Entry
Item Value
Total number of commercial vehicles serviced per year Hours in operation per day
Days in operation per week
Maximum number of lanes in operation
962,577
13
5
10
FUENTE: Cálculos propios con base en Información procedente de <https://bwt.cbp.gov/> y <Border Crossing/Entry Data - Bureau of Transportation Statistics
30 ATLANTIC COUNCIL
APPENDIX E
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX E: DATA USED FOR THE ANALYSIS
This study relied on the North American Industry Classification System (NAICS) and the Sistema Automatizado de Información Censal (ACIS or Automated Census Information System) to further understand Mexico’s productive sector and commercial relationship with the United States. It also used data from the Instituto Nacional de Estadística y Geografía (INEGI or the National Institute of Statistics and Geography).
The NAICS, jointly developed by the US Economic Classification Policy Committee, INEGI, and Statistics Canada, classifies North American business statistics, allowing for a high level of comparability between economic activities in the United States, Mexico, and Canada. The sectors shown in Table E1, classified by NAICS in 2018, were used for this study.
The INEGI used data from economic censuses in Mexico, systematized in the ACIS,45 to produce an input-output matrix46 for the Mexican economy in 2013. It then used a RAS method to estimate a matrix for 2018.47 The 2018 matrix was used as part of this study to determine the top ten Mexican sectors exporting to the United States, which were later used in the intersectoral input output analysis described in Appendix D2. Results on the economic impact of reduced border wait times on sectoral output, aggregate demand, and intermediate sales appear in Appendix F2.
Additionally, the 2018 input-output matrix and vectors for employment and labor income in Mexico were used to estimate how reduced commercial wait times affect employment and labor income, as shown in Appendix G. The vectors were calculated using data from the ACIS.
Table E: Sectoral Classification of the North American Industry Classification System (NAICS) (2018)
NAICS Code Sector
11
Agriculture, animal breeding and exploitation, forestry, fishing and hunting
21
Mining
22
Electric power generation, transmission and diffusion, water and gas supply through pipelines to final consumers
23
Construction
31-33
Manufacturing industries
43
Wholesale trade
46
Retail trade
48-49
Transportation, postage, and warehousing
51
Mass media information
52
Financial and insurance services
53
Real estate and rental services of personal and intangible property
54
Professional, scientific, and technical services
55
Corporate
56
Business support services and waste and residue management and remediation services
61
Educational services
62
Health and social welfare services
71
Cultural, sports, and other recreational services
72
Temporary accommodation services and food and beverage preparation services
81
Other services, except government activities.
93
Legislative, governmental, law enforcement, and international and extraterritorial organization activities
SOURCE: The Colegio de la Frontera Norte using the 2018 sectoral classification of the NAICS
31 ATLANTIC COUNCIL
APPENDIX F
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX F: ECONOMIC IMPACT ANALYSIS OF BORDER CROSSINGS
This study first established a baseline of Mexican exports to the
United States without reduced wait times, which allowed for the
determination of the top ten sectors exporting to the United States
and the effect that exports have on sectoral output in Mexico. Then,
an analysis with reduced border wait times was conducted, and
baseline results were compared with new findings to determine
the relative and absolute variation in sectoral output, aggregate
demand, and intermediate sales stemming from reduced wait
times. The values in all Appendix F tables appear in 2018 US dollars,
using a conversion rate of 1 US dollar to 20.03 Mexican pesos.
Results have yet to be adjusted to 2022 values, using inflation and
consumer price index (CPI) historical data from the United States.
Appendix F1: Analysis without reduced border wait
times
Assessing the economic impact of a one-minute reduction in border
wait times requires understanding the US-Mexico commercial
relationship and how it drives sectoral output in Mexico. As shown
in Figure F1, ten sectors produced 99.86 percent of total Mexican
exports to the United States in 2018. Therefore, this study considers
these ten sectors.
Figure F1: Top Ten Mexican Sectors in Terms of Exports to the United States (2018)
• 31-33 - Manufacturing
0.82%
• 43 - Wholesale trade
• 21 - Mining
• 48-49 - Transportation, postage, and warehousing • 46 - Retail trade
• 11 - Agriculture, animal breeding and exploitation, forestry, fishing, and hunting
• 52 - Financial and insurance services
• 22 - Electric power generation, transmission and diffusion, and water and gas supply through pipelines to final consumers
• 51 - Mass media information
• 54 - Professional, scientific, and technical services
SOURCE: In-house, prepared using 2018
using data obtained from INEGI (2022).
1.92%
3.97%
6.30%
6.81%
16.80%
0.05%
0.05%
0.02%
63.24%
32 ATLANTIC COUNCIL
APPENDIX F
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
The input-output analysis was employed to estimate the baseline output per sector driven by Mexican exports to the United States, using equation (3) in Appendix D2 [Xj,0 = (I-A)-1E'j,0]. Table F1
includes results in relative and absolute terms, showing that, on average, Mexican exports to the United States drive 38 percent of total gross output per sector in Mexico.
Table F1: Total Gross Output (TGO) Driven by Mexican Exports to the United States (2018)48 NAICS
classification code
Sector Total Percentage
21
Mining
976,753.75
68.91%
31-33
Manufacturing
9,992,494.79
68.79%
43
Wholesale trade
1,724,997.69
63.26%
11
Agriculture, animal breeding and
exploitation, forestry, fishing, and hunting
630,344.07
50.86%
22
Electric power generation, transmission and diffusion, and water and gas supply through pipelines to final consumers
234,304.63
31.91%
48-49
Transportation, postage, and warehousing
682,499.14
27.21%
54
Professional, scientific,
and technical services
155,642.26
26.37%
46
Retail trade
477,034.24
17.72%
52
Financial and insurance services
185,136.92
13.40%
51
Mass media information
79,296.98
12.22%
Total
15,138,504.47
380.65%
Average
1,513,850.45
38.07%
SOURCE: In-house, prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
33 ATLANTIC COUNCIL
APPENDIX F
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Appendix F2: Analysis with reduced wait times
A second input-output analysis was performed to determine how the positive economic shock (increased Mexican exports caused by reduced border wait times) affected total gross production per sector (Xj,t). This is estimated using equation (4) in Appendix D2 [Xj,t= (I-A)-1E'j,t], where E'j,t is the exports vector and j the number of sectors.
Given the interdependencies between sectors, the economic impact of reduced border wait times spreads throughout productive sectors in the Mexican economy. Therefore, results show the average percentage increase in output, aggregate demand, and final sales per sector driven by additional Mexican exports to the United States (caused by a one-minute reduction in border wait times). Table F2.1 shows findings in terms of total gross output, while Tables F2.2 and F2.3 include results for aggregate demand and intermediate sales, respectively.
NAICS
Table F2.1: Growth in Total Gross Output (TGO)49
Total Gross Output
Classification Sectors
code
Absolute (TGO)
Change driven by Mexican exports
Percentage
increase
11
Agriculture, animal breeding and exploitation, forestry, fishing, and hunting
61,870,394,408.39
63,525,716,328.93
2.68%
21
Mining
70,768,853,919.12
73,333,868,768.35
3.62%
22
Electric power generation, transmission and diffusion, and water and gas supply through pipelines to final consumers
36,661,826,110.83
37,277,124,334.51
1.68%
31-33
Manufacturing industries
725,175,223,165.25
751,416,123,114.45
3.62%
43
Wholesale trade
136,148,265,851.22
140,678,214,854.59
3.33%
46
Retail trade
134,388,874,388.42
135,641,595,360.59
0.93%
48-49
Transportation, postage, and warehousing
125,222,060,808.79
127,014,345,127.69
1.43%
51
Mass media information
32,404,278,182.73
32,612,516,876.33
0.64%
52
Financial and insurance services
68,962,248,726.91
69,448,429,551.32
0.70%
54
Professional, scientific, and technical services
29,468,317,923.12
29,877,043,990.12
1.39%
Average
142,107,034,348.48
146,082,497,830.69
2.00%
SOURCE: In-house, prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
34 ATLANTIC COUNCIL
APPENDIX F
NAICS
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Table F2.2: Growth in intermediate sales50
Intermediate Sales
Classification Sectors
code
Absolute
intermediate sales
Change driven by Mexican exports
Percentage
increase
11
Agriculture, animal breeding and exploitation, forestry, fishing, and hunting
37,715,987,831.23
39,017,404,257.82
3.45%
21
Mining
38,319,742,304.75
39,627,221,214.17
3.41%
22
Electric power generation, transmission and diffusion, and water and gas supply through pipelines to final consumers
26,093,440,432.45
26,698,820,186.23
2.32%
31-33
Manufacturing industries
500,578,423,695.96
515,136,851,491.74
2.91%
43
Wholesale trade
50,588,439,711.28
52,014,146,106.25
2.82%
46
Retail trade
20,372,948,351.47
20,891,889,251.96
2.55%
48-49
Transportation, postage, and warehousing
27,507,131,659.31
28,135,165,832.62
2.28%
51
Mass media information
14,218,572,797.10
14,418,468,679.28
1.41%
52
Financial and insurance services
23,171,318,014.63
23,506,746,665.51
1.45%
54
Professional, scientific, and technical services
27,550,006,467.55
27,955,133,873.68
1.47%
Average
76,611,601,126.57
78,740,184,755.93
2.41%
SOURCE: In-house, prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
Table F2.3: Growth in final demand51
NAICS
Classification Sectors
Final demand
code
Absolute aggregate demand
Change driven by Mexican exports
Percentage
increase
11
Agriculture, animal breeding and exploitation, forestry, fishing, and hunting
24,154,406,577.15
24,508,312,071.11
1.47%
21
Mining
32,449,111,614.37
33,706,647,554.19
3.88%
22
Electric power generation, transmission and diffusion, and water and gas supply through pipelines to final consumers
10,568,385,678.38
10,578,304,148.28
0.09%
31-33
Manufacturing industries
224,596,799,469.30
236,279,271,622.71
5.20%
43
Wholesale trade
85,559,826,139.94
88,664,068,748.35
3.63%
46
Retail trade
114,015,926,036.95
114,749,706,108.63
0.64%
48-49
Transportation, postage, and warehousing
97,714,929,149.48
98,879,179,295.07
1.19%
51
Mass media information
18,185,705,385.62
18,194,048,197.05
0.05%
52
Financial and insurance services
45,790,930,712.28
45,941,682,885.81
0.33%
54
Professional, scientific, and technical services
1,918,311,455.57
1,921,910,116.43
0.19%
Average
65,495,433,221.90
67,342,313,074.76
1.67%
SOURCE: In-house, prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
35 ATLANTIC COUNCIL
APPENDIX G
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
APPENDIX G: ECONOMIC IMPACT ON EMPLOYMENT AND LABOR INCOME
Appendix G1: Employment
The effect of a 10-minute reduction in commercial wait times on direct employment in Mexico was estimated using the multiplier:
l= LT [diag(X)-1] (6) Where:
l = the direct employment coefficient
LT = the employment generated per sector52
[diag(X)-1] = the diagonal matrix of total gross output (obtained via the input-output model)
To assess the impact on direct and indirect employment, the direct employment coefficient (l) is multiplied by the Leontief inverse:
MED-1 = l[(I-A)-1] (7)
Table G1 shows the original jobs per sector and the new jobs created as a result of increased exports following a 10-minute reduction in commercial wait times. It also includes the difference between these two values and the relative increase and net variation in employment. Results show that 18,697 jobs would be created in one year.
NAICS
Classification code
Table G1: Impact on Direct and Indirect Employment of a More Efficient US-Mexico Border
Sectores Original New Difference Relative Increase
Net
Variation
11
Agriculture, animal breeding and ex ploitation, forestry, fishing, and hunting
5.9
6.6
0.7
0.3%
748.2
21
Mining
5.9
8.1
2.2
1.2%
2,220.1
22
Electric power generation, transmis sion and diffusion, and water and gas supply through pipelines to final consumers
7.4
7.5
0.1
0.1%
129.3
31-33
Manufacturing industries
13.6
12.8
-0.8
0.0%
-793.1
43
Wholesale trade
8.4
11.6
3.2
0.2%
3,216.0
46
Retail trade
24.7
26.4
1.7
0.0%
1,748.8
48-49
Transportation, postage, and ware housing
10.3
10.1
-0.2
0.0%
-210.3
51
Mass media information
12.0
15.7
3.7
1.0%
3,684.5
52
Financial and insurance services
10.1
15.6
5.5
0.8%
5,505.5
54
Professional, scientific, and technical services
18.6
21
2.4
0.3%
2,448.6
Total
116.9
135.4
18.5
3.9%
1,8697.6
Average
11.7
13.5
1.9
0.4%
1,869.8
SOURCE: In-house prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
36 ATLANTIC COUNCIL
APPENDIX G
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Appendix G2: Labor income
The effect of a 10-minute reduction in commercial wait times on labor income in Mexico was estimated using a two-step process. First, the labor income coefficient was determined with the equation:
r= RemT [diag(X)-1] (8) Where:
r = the labor income coefficient
RemT = the labor income per sector 53
[diag(X)-1] = the diagonal matrix of total gross output
Second, the labor income coefficient (r) was multiplied by the Leontief inverse:
MRemD-1 =r[(I-A)-1] (9)
Table G2 shows the direct and indirect effects on labor income of increased Mexican exports to the United States stemming reductions in commercial wait times. It includes labor income per sector before reduced wait times (original), labor income after reduced wait times (new), the difference between these two values, and the relative increase and net variation in labor income. Results show that, overall, labor income would increase by $17,474 with a one-minute reduction in border wait times or $174,474 with a ten minute reduction.
NAICS
Table G2: Impact on Labor Income of a More Efficient US-Mexico Border One-minute
10-minute
Relative
Classification code
Sector Original New Difference
reduction in wait times
reduction in wait times
weight
Agriculture, animal
breeding and exploita tion, forestry, fishing, and hunting
0.04
0.05
0.01
$ 324.72
$3,247.21
Mining
0.10
0.15
0.05
$ 2,643.81
$26,438.14
Electric power genera tion, transmission and diffusion, and water and gas supply through pipe lines to final consumers
0.08
0.09
0.01
$ 711.73
$7,117.31
Manufacturing industries
0.14
0.15
0.01
$ 467.19
$4,671.91
Wholesale trade
0.08
0.16
0.08
$ 3,852.29
$38,522.90
Retail trade
0.09
0.13
0.04
$ 1,766.03
$17,660.32
Transportation, postage, and warehousing
0.10
0.10
0.00
$ (89.37)
$(893.65)
Mass media information
0.17
0.23
0.06
$ 2,895.81
$28,958.10
Financial and insurance services
0.16
0.23
0.07
$ 3,574.24
$35,742.39
Professional, scientific, and technical services
0.14
0.17
0.03
$ 1,327.86
$13,278.59
Total
$ 17,474.32
$174,743.23
111.9% 21 15.1%
224.1%
31-33 2.7% 43 22.0% 46 10.1%
48-49 -0.5% 51 16.6% 52 20.5%
54 7.6%
Average $ 1,747.43 $17,474.32
SOURCE: In-house prepared estimates based on estimates for 2018 using data obtained from INEGI (2022).
37 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Acknowledgments
This report was informed by roundtables, focus groups, and consultations carried out in the United States and Mexico and the analysis of economic data. We thank the many individuals and institutions who participated in project activities and research efforts. It was a true pleasure to work with our partners at the University of Texas at El Paso’s (UTEP’s) Hunt Institute for Global Competitiveness and Colegio de la Frontera Norte (COLEF).
We are deeply grateful to the Adrienne Arsht Latin America Center (AALAC) team, who worked tirelessly to produce this report, particularly to Camila Hernández and Ignacia Ulloa, who provided invaluable writing and editorial support. Thank you to Jason Marczak, senior director for AALAC, and Maria Fernanda Bozmoski, deputy director for programs, for their guidance and editorial support.
We thank AALAC Non-Resident Fellow Bosco Martí and the Global Nexus team, specifically Ruben Olmos, Ana Margarita Martínez, and Alejandro Vales, for providing crucial expertise and contributions. Our gratitude extends to Rhonda Shore for her diligent editorial work and to Donald Partyka and Anais Gonzalez for their exceptional design skills.
Most importantly, we thank the US Department of State’s Bureau for International Narcotics and Law Enforcement Affairs for giving the Atlantic Council, UTEP, and COLEF the opportunity to produce this report in service of daily border users and strengthening the US and Mexican economies.
38 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
Endnotes
1 Government of the United States, “Trade in Goods with Mexico,” US Census Bureau, accessed August 16, 2022,
https://www.census.gov/foreign-trade/balance/c2010.html; and Government of the United States, “Monthly U.S. International Trade in Goods and Services, June 2022,” US Census Bureau and US Department of Commerce, August 4, 2022, https://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf. 2 Government of the United States, “Overview of US- North American Freight by Port, Commodity Group, and Mode - Value (in Millions),” US Department of Transportation, accessed August 16, 2022, https://explore.dot.gov/views/Dashboard_PortbyCommodity/Overview?%3Aembed=y&%3Aiid=1&%3AisGuestRedirectFromVizportal=y. 3 Government of Mexico, “US-Mexico Trade Relation,” Embassy of Mexico to the United States of America, Section of Economic Affairs, February 2022, https://embamex.sre.gob.mx/eua/images/stories/economicos/2022/documents/US-MX_Trade_Website_02-2022.pdf.
4 Government of Mexico, Secretariat of Foreign Affairs, Embassy of Mexico to the United States of America, Office of Political Affairs. Information acquired September 8, 2022. 5 Government of the United States, “Mexico: US-Mexico Trade Facts,” Office of the US Trade Representative,
accessed August 14, 2022, https://ustr.gov/countries-regions/americas/mexico.
6 Joint Statement by President Biden and President Lopez Obrador, The White House, July 12, 2022,
https://www.whitehouse.gov/briefing-room/statements-releases/2022/07/12/president-biden-and-president-lopez-obrador-joint-statement/. 7 The US-Mexico High-Level Economic Dialogue is an opportunity for Mexico and the United States to advance strategic economic and commercial priorities to foster economic development and growth, job creation, and global competitiveness and reduce poverty and inequality.
8 Government of the United States, “Mexico: US-Mexico Trade Facts,” US Trade Representative, accessed August 16, 2022, https://ustr.gov/countries-regions/americas/mexico. 9 Zahniser, Stephen. “COVID-19 Working Paper: U.S.-Mexico Agricultural Trade in 2020,” United States Department of Agriculture, Economic Research Service. January, 2022. 10 Michoacán, Mexico, exports approximately 80 percent of its avocado supply directly to the United States. Government of the United States,
“Fresh Avocado Imports from Mexico Resume,” Animal and Plant Inspection Service, United States Department of Agriculture, accessed August 20, 2022. https://www.aphis.usda.gov/aphis/newsroom/stakeholder-info/sa_by_date/sa-2022/avocado-imports-mexico.
11 Ibid
12 Government of the United States, “Hourly Wait Times Trends vs Current,” Customs and Border Protection,
accessed August 17, 2022, https://bwt.cbp.gov/details/09250401/POV.
13 Unified Cargo Processing is a program for joint inspection of northbound cargo via free and secure trade lanes. John Davis, “U.S. and Mexico United in Cargo Processing,” US Customs and Border Protection, last modified January 4, 2022, https://www.cbp.gov/frontline/cargo-processing.. 14 Global Entry and the Secure Electronic Network for Travelers Rapid Inspection are risk-based programs that allow expedited clearance for pre-approved, low-risk travelers upon arrival in the United States. Government of the United States, “Global Entry: Trusted Traveler Program Enrollment,” US Customs and Border Protection, last modified September 6, 2022, https://www.cbp.gov/travel/trusted-traveler-programs/global-entry; and Government of the United States, “Secure Electronic Network for Travelers Rapid Inspection,” US Customs and Border Protection, last modified January 4, 2022, https://www.cbp.gov/travel/trusted-traveler-programs/sentri. 15 The Customs Trade Partnership Against Terrorism is a voluntary supply chain security partnership used by the public and private
sectors. Government of the United States, “CTPAT: Customs Trade Partnership Against Terrorism,” US Customs and Border
Protection, last modified August 29, 2022, https://www.cbp.gov/border-security/ports-entry/cargo-security/CTPAT.
16 “SENTRI Program Requirements,” Immigration Passport Visa Service, accessed August 17, 2022, http://immigrationpassportvisa.com/travel/sentri-pass program-requirements/#:~:text=Over%20175%2C000%20US%20citizens%20and%20Mexican%20citizens%20have%20become%20card%20holders. 17 The Maquiladora Export Industry is a conglomerate of intermediate-good manufacturing companies.
18 According to the North American Industry Classification System (NAICS), a classification scheme for Mexican productive activities that dates to 1993 and collects information on businesses, households, and individuals. In the development of this study, the consortium also referred to the Automated Census Information System (ACIS), which allowed for adjustments and specifications of data. For additional information on NAICS and ACIS, see Appendix G. 19 Vehicle and Cargo Inspection System (VACIS) and Federal Motor Carrier Safety Administration (FMCSA).
20 The Interagency Border Inspection System is a computer-based system that provides law enforcement access to
drivers’ criminal records and other information used to screen vehicles crossing the border.
21 Border users were consulted during roundtables hosted by the Atlantic Council. The first took place on May 10, 2022, in
El Paso, Texas, in collaboration with the Hunt Institute for Global Competitiveness at the University of Texas at El Paso. The
second occurred on July 12, 2022, in Tijuana, Mexico, in collaboration with El Colegio de la Frontera Norte.
22 According to research by the Hunt Institute for Global Competitiveness, 4,720,967 container trucks crossed the border in 2021.
23 A 10-minute reduction in commercial wait times would allow $25,879,549 million, specifically in additional cargo
value, to enter the United States monthly. See Appendix C1 for more information.
24 This section focuses on crossings by individuals and families in noncommercial vehicles alone. Migrant caravans at the US-Mexico border disrupted standard pedestrian crossing patterns during the sample period, preventing the analysis of pedestrian traffic using the regression model described in Appendix B. Further research is needed to estimate the economic impact of additional pedestrian crossings following a reduction in border wait times.
25 Per Table 2, these purchases generated an economic impact of $12,332,697,547 for the US economy. The economic impact of cross-border spending was determined by mapping out expenditure categories and running INPLAN’s multi-region input-output feature.
26 Given the nature of available data for the input-output analysis (macroeconomic data from Mexico’s National Institute of Statistics and Geography (INEGI), which captures the commercial relationship between the United States and Mexico), this section exclusively focuses on commercial crossings from Mexico into the United States. The economic impact for Mexican families and workers was estimated by considering how changes in the US-Mexico commercial relationship affect employment and labor income.
27 Government of the United States, “U.S.-Mexico Trade Relations,” Congressional Research Service, updated April 25, 2021, https://sgp.fas.org/crs/row/IF11175.pdf. 28 The ten sectors are mining; manufacturing; wholesale trade; agriculture, animal breeding and exploitation, forestry, fishing, and
hunting; electric power generation, transmission and diffusion, and water and gas supply; transportation, postage, and warehousing;
professional, scientific, and technical services; retail trade; financial and insurance services; and mass media information.
29 “U.S.-Mexico Trade Relations,” Congressional Research Service. https://sgp.fas.org/crs/row/IF11175.pdf
30 “México supera a Japón y lidera por primera vez envíos de autos a Estados Unidos” (“Mexico surpasses Japan and leads car shipments to the United States for the first time”), El Economista, September 5, 2022, https://dfsud.com/america/mexico-supera-a-japon-y-lidera-por-primera-vez-envios-de-autos-a-estados. 31 See Appendix C1.
32 As described in the report, the regression analysis did not include pedestrian crossings due to the impact of migrant caravans during the period under study.
39 ATLANTIC COUNCIL
THE ECONOMIC IMPACT OF A MORE EFFICIENT US-MEXICO BORDER
33 Missing data was excluded from averages.
34 The correlation between wait times and crossings is 0.2977. This is likely because congestion at the border
may result in both increased wait times and a higher number of crossings.
35 The sample ends prior to 2020 to avoid disruptions in border crossings due to COVID-19. See Appendix A for a detailed description of the data. 36 The fixed effect, i, accounts for time-constant heterogeneity between counties in the analysis. Estimating the regression equation by fixed effects removes this time-constant heterogeneity, effectively controlling for the immutable differences between counties.
37 Spending categories include clothing, general merchandise, auto parts, groceries, electronics, restaurants, gas, sports and music, building, furniture, personal care services, fast food, health, business and other professional services, amusement and recreation, accommodation, bar, theater, transportation and parking, and other products. 38 The sixteen counties used in the analysis were El Paso, Presidio, Val Verde, Maverick, Webb, Starr, Hidalgo,
Cameron, Luna, Dona Ana, Yuma, Pima, Santa Cruz, Cochise, San Diego, and Imperial.
39 The total number of crossers was determined using data from the Bureau of Transportation Statistics.
40 This could also be the average arrival rate.
41 This could also be the average service rate.
42 Government of the United States, “Bureau of Transportation Statistics: Border Crossing/Entry Data,” US Department of Transportation, accessed August 18, 2022, https://www.bts.gov/browse-statistical-products-and-data/border-crossing-data/border-crossingentry-data#:~:text=Border%20
crossing%20data%20are%20collected,comparable%20data%20on%20outbound%20crossings..
43 Scott Mall, “FreightWaves Classics: Otay Mesa Land Port is third-busiest on U.S.-Mexico border,” Freightwaves, May 12, 2021,
https://www.freightwaves.com/news/freightwaves-classics-otay-mesa-land-port-is-third-busiest-on-us-mexico-border.
44 Ports of entry with extremely atypical wait times (anomalies) were disregarded in this paper’s analysis.
45 The ACIS systematizes information from Mexico’s four most recent economic censuses, which occurred in 2019, 2014, 2009, and 2004. 46 An input-output matrix represents national or regional economic accounting that records how industries trade with one another and produce for consumption and investments. 47 The RAS method is an interactive method for data reconciliation. It scales an input-output table bi-proportionally to achieve consistency between
given row and column sums. For a detailed description of the methodology used by INEGI, see “Matrices de Contabilidad Social de México: Fuentes y metodología,” INEGI, accessed August 18, 2022, https://inegi.org.mx/contenidos/investigacion/mcsm/doc/fuente_y_metodologia.pdf. 48 Originally in 2018 Mexican pesos and converted to US dollars using a conversion rate of 1 US dollar to 20.03 Mexican pesos. Results are in 2018 values. 49 Originally in 2018 Mexican pesos and converted to US dollars using a conversion rate of 1 US dollar to 20.03 Mexican pesos. Results are in 2018 values. 50 Originally in 2018 Mexican pesos and converted to US dollars using a conversion rate of 1 US dollar to 20.03 Mexican pesos. Results are in 2018 values. 51 Originally in 2018 Mexican pesos and converted to US dollars using a conversion rate of 1 US dollar to 20.03 Mexican pesos. Results are in 2018 values. 52 Total employment per sector was obtained from INEGI, using 2018 data.
53 Total labor income per sector was obtained from INEGI, using 2018 data in Mexican pesos (millions).
40 ATLANTIC COUNCIL
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*John F.W. Rogers
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EMERITUS
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Made possible by: |
{instruction}
==========
In your answer, refer only to the context document. Do not employ any outside knowledge
{question}
==========
[user request]
{passage 0}
==========
[context document] | I got a speeding ticket the other day and really can't afford to pay it, or the premium increase it would cause on my insurance. What can I do to get it dismissed? | Noticing the flashing police lights in your rearview mirror is bad enough. Facing the results of a speeding ticket is much, much worse.
A first offense could increase your car insurance base premium by about 15-27 percent; a second minor conviction can inflate it an additional 40 percent. The rate increase doesn't last just a few weeks — increases last an average of three years.
Depending on your driving record and your state's point system, your ticket may cost you your driving privileges. So just how much do you want to lose your license? Read on to find out just how you can beat a speeding ticket, in or out of court.
Getting a dismissal
While it may sound impossible, your state may allow you to simply pretend like your speeding ticket never happened.
Find out from your state's DMV or traffic court if there are ways to dismiss your ticket. If you have a clean record and your state allows it, this may be an option.
Some southern states defer judgment if you don't get any tickets for the next six months.
Rhode Island will even consider dismissal if the amount that exceeded the speed limit is less than 20 miles per hour over the posted limit and you have no vehicular violations in three years.
Attend driving school
Your other option to beat a ticket and stay out of court may be attending a driving school. While each state's policies are different, generally, once you submit your certificate of completion to the court, minor convictions are erased from your record.
While this option is more expensive than a simple dismissal, the cost is mostly in time. In some states, classes are offered only once a year or every 18 months, and class time varies between 6 to 8 hours.
You may still be subject to paying a fine for your ticket and school tuition, which averages around $50 to $80. Some states offer traffic school courses online.
Talk to the judge
If dismissal or traffic school won't work for you, or if you truly feel you've been unfairly ticketed, it's time to put the court system to work for you.
Going to court can intimidate anybody, particularly the inexperienced, yet just showing up gives you an advantage.
Only 3-5 percent of all tickets are contested. Half of those who contest their tickets have their cases dismissed altogether, while the other half receives reduced fines or plea bargains. A reasonable defense will steel your resolve, and increase your chances for success in beating your ticket.
Know thy case
Keep a copy of your ticket and, as soon as possible, document the circumstances under which you were driving and ticketed. Describe the who, what, when, where, and why you were cited.
Know who the officer is and what was said, and solicit the help of witnesses, such as passengers. Know the charges and study the law that is allegedly violated.
Describe when and where the alleged violation and ticketing occurred. Cite anything that can be material, such as the flow of traffic, road conditions, or how the officer's view of you was obstructed.
Classifications of common defenses
Necessity defenses. These types of defenses are recognized in all 50 states. It means there was an emergency, not of your own making. Examples of necessity defenses are based on the premise that one had to speed up briefly to avoid an accident. Avoiding accidents such as being rear-ended by an aggressive tailgater, crashing into a car entering the highway, or getting rolled on by an out of control truck are examples of necessity defenses. However, speeding in order to rush to personal events or for personal reasons will garner no sympathy from the court.
Obstruction of speed limit. This defense means you are going to argue the speed sign was hidden. However, there are still default speed limits for un-posted roads. If, for example, you were driving in a zone, where the 35 mph sign was creatively painted into 85 mph, you are guilty if you exceeded the 35 mph. You need to check if the sign posting in the area in which you were cited is in compliance with state or local regulations.
Technical defenses. These defenses challenge the method the officer used in clocking your speed. This requires pre-trial investigation of determining the method used by the officer, such as radar, laser, or pacing, then challenging that method. You need to determine if the equipment was maintained properly and if it was functional in the range the officer used it. However, because of required maintenance and verification by most jurisdictions, the success rate of this defense is usually minimal.
There are 35 million tickets issued each year. Consider what would happen if all these were contested in court and how much money drivers are paying unnecessarily.
By going to court, the only thing you stand to lose is your time and the amount of the original fine. Statistics show you are likely to either win or have the fine reduced.
Silently submitting by paying the fine without taking steps to contest it, will result in higher insurance and a sullied driver's record. | {instruction}
==========
In your answer, refer only to the context document. Do not employ any outside knowledge
{question}
==========
I got a speeding ticket the other day and really can't afford to pay it, or the premium increase it would cause on my insurance. What can I do to get it dismissed?
{passage 0}
==========
Noticing the flashing police lights in your rearview mirror is bad enough. Facing the results of a speeding ticket is much, much worse.
A first offense could increase your car insurance base premium by about 15-27 percent; a second minor conviction can inflate it an additional 40 percent. The rate increase doesn't last just a few weeks — increases last an average of three years.
Depending on your driving record and your state's point system, your ticket may cost you your driving privileges. So just how much do you want to lose your license? Read on to find out just how you can beat a speeding ticket, in or out of court.
Getting a dismissal
While it may sound impossible, your state may allow you to simply pretend like your speeding ticket never happened.
Find out from your state's DMV or traffic court if there are ways to dismiss your ticket. If you have a clean record and your state allows it, this may be an option.
Some southern states defer judgment if you don't get any tickets for the next six months.
Rhode Island will even consider dismissal if the amount that exceeded the speed limit is less than 20 miles per hour over the posted limit and you have no vehicular violations in three years.
Attend driving school
Your other option to beat a ticket and stay out of court may be attending a driving school. While each state's policies are different, generally, once you submit your certificate of completion to the court, minor convictions are erased from your record.
While this option is more expensive than a simple dismissal, the cost is mostly in time. In some states, classes are offered only once a year or every 18 months, and class time varies between 6 to 8 hours.
You may still be subject to paying a fine for your ticket and school tuition, which averages around $50 to $80. Some states offer traffic school courses online.
Talk to the judge
If dismissal or traffic school won't work for you, or if you truly feel you've been unfairly ticketed, it's time to put the court system to work for you.
Going to court can intimidate anybody, particularly the inexperienced, yet just showing up gives you an advantage.
Only 3-5 percent of all tickets are contested. Half of those who contest their tickets have their cases dismissed altogether, while the other half receives reduced fines or plea bargains. A reasonable defense will steel your resolve, and increase your chances for success in beating your ticket.
Know thy case
Keep a copy of your ticket and, as soon as possible, document the circumstances under which you were driving and ticketed. Describe the who, what, when, where, and why you were cited.
Know who the officer is and what was said, and solicit the help of witnesses, such as passengers. Know the charges and study the law that is allegedly violated.
Describe when and where the alleged violation and ticketing occurred. Cite anything that can be material, such as the flow of traffic, road conditions, or how the officer's view of you was obstructed.
Classifications of common defenses
Necessity defenses. These types of defenses are recognized in all 50 states. It means there was an emergency, not of your own making. Examples of necessity defenses are based on the premise that one had to speed up briefly to avoid an accident. Avoiding accidents such as being rear-ended by an aggressive tailgater, crashing into a car entering the highway, or getting rolled on by an out of control truck are examples of necessity defenses. However, speeding in order to rush to personal events or for personal reasons will garner no sympathy from the court.
Obstruction of speed limit. This defense means you are going to argue the speed sign was hidden. However, there are still default speed limits for un-posted roads. If, for example, you were driving in a zone, where the 35 mph sign was creatively painted into 85 mph, you are guilty if you exceeded the 35 mph. You need to check if the sign posting in the area in which you were cited is in compliance with state or local regulations.
Technical defenses. These defenses challenge the method the officer used in clocking your speed. This requires pre-trial investigation of determining the method used by the officer, such as radar, laser, or pacing, then challenging that method. You need to determine if the equipment was maintained properly and if it was functional in the range the officer used it. However, because of required maintenance and verification by most jurisdictions, the success rate of this defense is usually minimal.
There are 35 million tickets issued each year. Consider what would happen if all these were contested in court and how much money drivers are paying unnecessarily.
By going to court, the only thing you stand to lose is your time and the amount of the original fine. Statistics show you are likely to either win or have the fine reduced.
Silently submitting by paying the fine without taking steps to contest it, will result in higher insurance and a sullied driver's record.
https://www.legalzoom.com/articles/beat-a-speeding-ticket-what-you-need-to-know |
You must use information only from the provided text in your response. | Find and summarize each sentence using the phrase "Organized Retail Crime." | Criminal Justice Data: Organized Retail Crime
Retailers and retail industry advocacy groups have expressed concern about what they see as a
general increase in retail crime, and more specifically an increase in organized retail crime
(ORC). Reports of incidents where individuals, occasionally acting in flash mobs, storm stores to
steal large amounts of items, and at times assault employees, have underscored these concerns.
Some law enforcement agencies have increased resources and information sharing to counter
these crimes. Additionally, some retail organizations have urged policymakers and law
enforcement to take steps to educate the public and crack down on this apparent increase in retail
crime, and more specifically ORC.
A primary barrier to measuring ORC accurately is a lack of a consistent, widely accepted definition that can be used in a
systematic and comprehensive effort to collect and report these data. Nonetheless, there is general consensus that ORC
involves coordinated theft with the intent to resell for financial gain. ORC typically refers to large-scale retail theft and fraud
by organized groups of professional shoplifters (or boosters). Organized crime rings resell illegally acquired merchandise via
a variety of fencing operations such as flea markets, swap meets, pawn shops, and online marketplaces. ORC differs from
shoplifting in that traditional shoplifters tend to steal merchandise for personal use.
A number of factors contribute to the lack of comprehensive criminal justice data on ORC. At the federal level, there is
currently no law prohibiting organized retail crime that could be used to help document the number of ORC incidents known
to federal law enforcement, specifically. Combating retail theft has primarily been handled by state and local law
enforcement under state criminal laws. While state laws prohibiting theft are the statutes that state and local law enforcement
and prosecutors have often relied on to investigate and prosecute ORC, over 30 states have enacted ORC-specific laws.
However, these laws differ by state and there is no centralized reporting system for ORC-related crimes. The Federal Bureau
of Investigation’s Uniform Crime Reporting program, National Incident-Based Reporting System, collects data on thefts
reported to state and local law enforcement, including shoplifting; however, it does not capture ORC specifically. In the
absence of comprehensive data on ORC, snapshots of data from various sources may offer insight into its extent and nature.
For instance, 78.1% of respondents to the National Retail Federation’s 2023 National Retail Security Survey indicated that
the threat of ORC was more of a priority than it had been in the prior year.
While some observers believe that ORC is a national problem, others disagree, citing anecdotal and high-profile flash mob
thefts and smash-and-grabs as driving this concern. Nonetheless, there is debate over the federal government’s role in
deterring ORC and sanctioning various actors that may be involved in committing or aiding these crimes. A principal
underlying issue is the lack of data on the scope of ORC to inform this debate. Without these data, Congress may not be able
to accurately assess the proper role of the federal government. As such, policymakers may debate various options regarding
data on ORC, including how new or existing mechanisms for collecting national crime data could be used to capture these
data and help inform policymakers on the prevalence and nature of this type of crime. | You must use information only from the provided text in your response.
Criminal Justice Data: Organized Retail Crime
Retailers and retail industry advocacy groups have expressed concern about what they see as a
general increase in retail crime, and more specifically an increase in organized retail crime
(ORC). Reports of incidents where individuals, occasionally acting in flash mobs, storm stores to
steal large amounts of items, and at times assault employees, have underscored these concerns.
Some law enforcement agencies have increased resources and information sharing to counter
these crimes. Additionally, some retail organizations have urged policymakers and law
enforcement to take steps to educate the public and crack down on this apparent increase in retail
crime, and more specifically ORC.
A primary barrier to measuring ORC accurately is a lack of a consistent, widely accepted definition that can be used in a
systematic and comprehensive effort to collect and report these data. Nonetheless, there is general consensus that ORC
involves coordinated theft with the intent to resell for financial gain. ORC typically refers to large-scale retail theft and fraud
by organized groups of professional shoplifters (or boosters). Organized crime rings resell illegally acquired merchandise via
a variety of fencing operations such as flea markets, swap meets, pawn shops, and online marketplaces. ORC differs from
shoplifting in that traditional shoplifters tend to steal merchandise for personal use.
A number of factors contribute to the lack of comprehensive criminal justice data on ORC. At the federal level, there is
currently no law prohibiting organized retail crime that could be used to help document the number of ORC incidents known
to federal law enforcement, specifically. Combating retail theft has primarily been handled by state and local law
enforcement under state criminal laws. While state laws prohibiting theft are the statutes that state and local law enforcement
and prosecutors have often relied on to investigate and prosecute ORC, over 30 states have enacted ORC-specific laws.
However, these laws differ by state and there is no centralized reporting system for ORC-related crimes. The Federal Bureau
of Investigation’s Uniform Crime Reporting program, National Incident-Based Reporting System, collects data on thefts
reported to state and local law enforcement, including shoplifting; however, it does not capture ORC specifically. In the
absence of comprehensive data on ORC, snapshots of data from various sources may offer insight into its extent and nature.
For instance, 78.1% of respondents to the National Retail Federation’s 2023 National Retail Security Survey indicated that
the threat of ORC was more of a priority than it had been in the prior year.
While some observers believe that ORC is a national problem, others disagree, citing anecdotal and high-profile flash mob
thefts and smash-and-grabs as driving this concern. Nonetheless, there is debate over the federal government’s role in
deterring ORC and sanctioning various actors that may be involved in committing or aiding these crimes. A principal
underlying issue is the lack of data on the scope of ORC to inform this debate. Without these data, Congress may not be able
to accurately assess the proper role of the federal government. As such, policymakers may debate various options regarding
data on ORC, including how new or existing mechanisms for collecting national crime data could be used to capture these
data and help inform policymakers on the prevalence and nature of this type of crime.
Find and summarize each sentence using the phrase "Organized Retail Crime." |
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You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." | I'm pursuing a Masters in Public Health. For class tomorrow, I am leading a discussion on the state of medical knowledge about Long COVID. Based on this article, please write a summary of the challenges associated with describing and studying Long COVID. | Introduction
More than 4 years after the COVID-19 pandemic began,
millions of people continue to suffer long-term sequelae of SARS-CoV-2 infection. Yet, despite thousands of academic papers (including 170 systematic reviews) mentioning “long COVID”, “post-acute (sequelae of) COVID-19”, “chronic COVID-19”, or “post-COVID-19 condition” in their titles or abstracts, many clinicians remain unsure of how to evaluate and manage individuals with post-COVID-19 condition (also known as long COVID).
Reasons for this uncertainty include conflicting definitions; the existence of multiple putative pathophysiological mechanisms; the lack of a single, agreed upon and accessible biomarker that could be used for diagnosis, monitoring, and research; and changes in the natural history of this condition over time caused by (for example) viral evolution, vaccination, and novel therapeutics. All of these reasons are reflected in the sheer volume of research already published and the pace at which new papers are appearing. There are signs that virological, immunological, and other basic science research appears to be close to producing clinically relevant breakthroughs in diagnosis and treatment to augment current clinical practice, which is based largely on a rehabilitation therapy model of alleviating symptoms and optimising functional performance.
Particularly in the early months of the pandemic, many
people living with long COVID were undiagnosed, disbelieved, inadequately assessed, or inappropriately treated, an experience some individuals described as “medical gaslighting”. The dearth of clinical knowledge and scarcity of services at that crucial time helps explain the rapid emergence of online communities, which
fulfilled important roles in mutual support, information provision, activism, and research.
In this interdisciplinary Review, we had three goals. First, to make sense of the extensive research literature on long COVID, including literature on epidemiology, basic science, lived experience, and clinical trials of therapy. Second, to bring this state-of-the-science
summary into dialogue with current approaches and dilemmas in clinical practice. And third, to acknowledge and respond to the call “for patients’ ongoing contributions to be recognised and used to combat the suffering of multitudes”.
Definitions
The persisting sequelae and longer-term complications of COVID-19 were named long COVID by patients on May 20, 2020; the term was widely taken up and used by people living with these sequelae. The term long COVID, defined somewhat vaguely, was later formally
adopted by public health bodies in the USA, although WHO uses the term post-COVID condition and the UK National Institute for Health and Clinical Excellence prefers ongoing symptomatic COVID-19 and post-COVID-19 syndrome. These terms are defined in table 1. None of them requires a positive laboratory or lateral flow test.
The absence of consensus on a name or definition partly reflects prevailing confusion about underlying disease processes and natural history. Research would benefit from greater consensus on definitions, and ideally, such definitions should reflect pathological mechanisms. However, different definitions might be appropriate for different non-research purposes (eg, clinical care and monitoring, service planning, peer support, and activism).
Symptoms of long COVID and their impact
Manifestations of long COVID are heterogeneous, multisystemic (the condition can affect any and all organ systems), and can change over time. But patterns that are both diagnostically and prognostically important can usually be discerned through a careful history-taking process (panel 1).
Many but not all people with long COVID have pre-existing conditions (including asthma, allergies,
attention deficit hyperactivity disorder, musculoskeletal pain, diabetes, poor mental health, insomnia, headaches, chronic fatigue, and frailty), which can exacerbate—and be exacerbated by—long COVID. When comorbidities are present, management requires a personalised approach that takes both long COVID guidance and other relevant factors (eg, patient priorities, practicalities, and the need to avoid investigation fatigue and polypharmacy) into account.
There are many parallels between long COVID and other known or suspected infection-associated chronic syndromes (also known as post-acute infection syndromes), including the sequelae of other
coronaviruses (SARS-CoV and MERS-CoV), West Nile virus, Epstein–Barr virus, and myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS). Given these examples, the increased morbidity and mortality from organ damage in COVID-19 will possibly continue for
years (in West Nile Virus, for example, all-cause mortality was significantly elevated for at least 8 years after
infection).
Long COVID—one disease or many?
Initial advancements in our understanding of long COVID involved detailed analyses of patient-reported symptoms from surveys and electronic health records. These studies, most of which were undertaken by clinicians and did not include metabolic profiling,
generated various long COVID phenotypes on the basis of symptom clusters (see examples in table 2, which are listed by sample size). Clinical phenotyping studies applied different methods to different samples and—unsurprisingly—therefore produced different cluster patterns (or no clusters at all).
In all studies, there was considerable overlap between clusters, which is consistent with (but does not prove) the hypothesis that long COVID is, broadly speaking, “a single, multisystemic multifaceted post-viral disease rather than different pathologically-independent subsyndromes”. However, an alternative hypothesis is
that multiple discrete pathological processes do exist but produce overlapping phenotypes (eg, fatigue might have more than one pathological pathway), as we discuss in panel 2. | "================
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Introduction
More than 4 years after the COVID-19 pandemic began,
millions of people continue to suffer long-term sequelae of SARS-CoV-2 infection. Yet, despite thousands of academic papers (including 170 systematic reviews) mentioning “long COVID”, “post-acute (sequelae of) COVID-19”, “chronic COVID-19”, or “post-COVID-19 condition” in their titles or abstracts, many clinicians remain unsure of how to evaluate and manage individuals with post-COVID-19 condition (also known as long COVID).
Reasons for this uncertainty include conflicting definitions; the existence of multiple putative pathophysiological mechanisms; the lack of a single, agreed upon and accessible biomarker that could be used for diagnosis, monitoring, and research; and changes in the natural history of this condition over time caused by (for example) viral evolution, vaccination, and novel therapeutics. All of these reasons are reflected in the sheer volume of research already published and the pace at which new papers are appearing. There are signs that virological, immunological, and other basic science research appears to be close to producing clinically relevant breakthroughs in diagnosis and treatment to augment current clinical practice, which is based largely on a rehabilitation therapy model of alleviating symptoms and optimising functional performance.
Particularly in the early months of the pandemic, many
people living with long COVID were undiagnosed, disbelieved, inadequately assessed, or inappropriately treated, an experience some individuals described as “medical gaslighting”. The dearth of clinical knowledge and scarcity of services at that crucial time helps explain the rapid emergence of online communities, which
fulfilled important roles in mutual support, information provision, activism, and research.
In this interdisciplinary Review, we had three goals. First, to make sense of the extensive research literature on long COVID, including literature on epidemiology, basic science, lived experience, and clinical trials of therapy. Second, to bring this state-of-the-science
summary into dialogue with current approaches and dilemmas in clinical practice. And third, to acknowledge and respond to the call “for patients’ ongoing contributions to be recognised and used to combat the suffering of multitudes”.
Definitions
The persisting sequelae and longer-term complications of COVID-19 were named long COVID by patients on May 20, 2020; the term was widely taken up and used by people living with these sequelae. The term long COVID, defined somewhat vaguely, was later formally
adopted by public health bodies in the USA, although WHO uses the term post-COVID condition and the UK National Institute for Health and Clinical Excellence prefers ongoing symptomatic COVID-19 and post-COVID-19 syndrome. These terms are defined in table 1. None of them requires a positive laboratory or lateral flow test.
The absence of consensus on a name or definition partly reflects prevailing confusion about underlying disease processes and natural history. Research would benefit from greater consensus on definitions, and ideally, such definitions should reflect pathological mechanisms. However, different definitions might be appropriate for different non-research purposes (eg, clinical care and monitoring, service planning, peer support, and activism).
Symptoms of long COVID and their impact
Manifestations of long COVID are heterogeneous, multisystemic (the condition can affect any and all organ systems), and can change over time. But patterns that are both diagnostically and prognostically important can usually be discerned through a careful history-taking process (panel 1).
Many but not all people with long COVID have pre-existing conditions (including asthma, allergies,
attention deficit hyperactivity disorder, musculoskeletal pain, diabetes, poor mental health, insomnia, headaches, chronic fatigue, and frailty), which can exacerbate—and be exacerbated by—long COVID. When comorbidities are present, management requires a personalised approach that takes both long COVID guidance and other relevant factors (eg, patient priorities, practicalities, and the need to avoid investigation fatigue and polypharmacy) into account.
There are many parallels between long COVID and other known or suspected infection-associated chronic syndromes (also known as post-acute infection syndromes), including the sequelae of other
coronaviruses (SARS-CoV and MERS-CoV), West Nile virus, Epstein–Barr virus, and myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS). Given these examples, the increased morbidity and mortality from organ damage in COVID-19 will possibly continue for
years (in West Nile Virus, for example, all-cause mortality was significantly elevated for at least 8 years after
infection).
Long COVID—one disease or many?
Initial advancements in our understanding of long COVID involved detailed analyses of patient-reported symptoms from surveys and electronic health records. These studies, most of which were undertaken by clinicians and did not include metabolic profiling,
generated various long COVID phenotypes on the basis of symptom clusters (see examples in table 2, which are listed by sample size). Clinical phenotyping studies applied different methods to different samples and—unsurprisingly—therefore produced different cluster patterns (or no clusters at all).
In all studies, there was considerable overlap between clusters, which is consistent with (but does not prove) the hypothesis that long COVID is, broadly speaking, “a single, multisystemic multifaceted post-viral disease rather than different pathologically-independent subsyndromes”. However, an alternative hypothesis is
that multiple discrete pathological processes do exist but produce overlapping phenotypes (eg, fatigue might have more than one pathological pathway), as we discuss in panel 2.
http://ciar.org/h/PIIS014067362401136X.pdf
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I'm pursuing a Masters in Public Health. For class tomorrow, I am leading a discussion on the state of medical knowledge about Long COVID. Based on this article, please write a summary of the challenges associated with describing and studying Long COVID.
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You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." |
You are a bot designed to assist federal employees with checking compliance with NIST (National Institute of Standards and Technology) standards.
You will be provided a context by the user in the form of an excerpt from the relevant NIST Standards Guide. Only use the provided context to inform responses. All claims made in the response should be verifiably true using only the provided context. At the end of each response, include a list of all links to other sources that appear in the context.
| What is the difference between a "mobile device" and a "portable device"? | Mobile and Portable Devices
Portable and mobile devices that operate in the Cellular Radiotelephone Service (47 CFR 22
Subpart H), the Personal Communications Service (PCS) (47 CFR 24), the Satellite
Communications Service (47 CFR 25), the Wireless Communications Service (47 CFR 27), the
Maritime Service (ship earth stations only) (47 CFR 80), and Specialized Mobile Radio Service
(47 CFR 24, 25, 27, 80 (ship earth stations devices only) and 90) at frequencies of 1.5 GHz or
below and their effective radiated power (ERP) is 1.5 watts or more, or if they operate at
frequencies above 1.5 GHz and their ERP is 3 watts or more, are subject to RF emissions
requirements as specified in the rule part that they operate under. All of these portable and
mobile devices are also subject to the routine environmental evaluation for RF exposure
requirement of 47 CFR 2.1091 (bottom of page 706) (mobile devices) and/or 47 CFR 2.1093
(page 708) (portable devices) prior to equipment authorization or use.
Portable devices operating in the Wireless Medical Telemetry Service (WMTS) (47 CFR Part 95
Subpart H) and the Medical Device Radio communications Service (MEDRADIO) (47 CFR 95
Subpart I) are subject to RF emissions limits as specified in the rule part they operate under
and also to routine environmental evaluation for RF exposure prior to equipment
authorization or use. Unlicensed PCS (47 CFR Part 15 Subpart D), Unlicensed National
Information Infrastructure (U-NII) (47 CFR Part 15 Subpart E), and millimeter wave devices (47
CFR Part 15 Subpart C) are subject to RF emission requirements specified in the rule section
they operate in and are also subject to routine environmental evaluation for RF exposure
prior to equipment authorization or use if their ERP is 3 watts or more or if they meet the
definition of a portable device. All other mobile and portable devices are categorically excluded
from routine environmental evaluation for RF exposure.
The FCC differentiates mobile and portable devices by the proximity to the user during use.
Mobile devices, covered under 47 CFR 2.1091 (page 706), are defined as a transmitting device
designed to be used in other than fixed locations and generally used in a manner that the
radiating structure is at least 20 cm from the body of the user or nearby persons. Examples of
mobile and portable devices include cellular and PCS mobile telephones with vehicle mounted
antennas and other radio devices that use vehicle mounted antennas. These devices must be
evaluated for exposure potential with respect to Maximum Permissible Exposure (MPE) limits
for field strength or power density or with respect to specific absorption rate (SAR) limits,
whichever is most appropriate for the specific use and operating configuration of the device.
Portable devices, covered under 47 CFR 2.1093 (page 708), are defined as a transmitting device
designed to be used so the radiating structure is within 20 cm of the body of the user. These
devices include handheld cellular phones and PCS mobile phones that incorporate the radiating
antenna into the hand-piece and wireless transmitters carried close to the body. RF evaluation
must be based on specific absorption rate (SAR) limits. | You are a bot designed to assist federal employees with checking compliance with NIST (National Institute of Standards and Technology) standards.
You will be provided a context by the user in the form of an excerpt from the relevant NIST Standards Guide. Only use the provided context to inform responses. All claims made in the response should be verifiably true using only the provided context. At the end of each response, include a list of all links to other sources that appear in the context.
User: What is the difference between a "mobile device" and a "portable device"?
Context: Mobile and Portable Devices
Portable and mobile devices that operate in the Cellular Radiotelephone Service (47 CFR 22
Subpart H), the Personal Communications Service (PCS) (47 CFR 24), the Satellite
Communications Service (47 CFR 25), the Wireless Communications Service (47 CFR 27), the
Maritime Service (ship earth stations only) (47 CFR 80), and Specialized Mobile Radio Service
(47 CFR 24, 25, 27, 80 (ship earth stations devices only) and 90) at frequencies of 1.5 GHz or
below and their effective radiated power (ERP) is 1.5 watts or more, or if they operate at
frequencies above 1.5 GHz and their ERP is 3 watts or more, are subject to RF emissions
requirements as specified in the rule part that they operate under. All of these portable and
mobile devices are also subject to the routine environmental evaluation for RF exposure
requirement of 47 CFR 2.1091 (bottom of page 706) (mobile devices) and/or 47 CFR 2.1093
(page 708) (portable devices) prior to equipment authorization or use.
Portable devices operating in the Wireless Medical Telemetry Service (WMTS) (47 CFR Part 95
Subpart H) and the Medical Device Radio communications Service (MEDRADIO) (47 CFR 95
Subpart I) are subject to RF emissions limits as specified in the rule part they operate under
and also to routine environmental evaluation for RF exposure prior to equipment
authorization or use. Unlicensed PCS (47 CFR Part 15 Subpart D), Unlicensed National
Information Infrastructure (U-NII) (47 CFR Part 15 Subpart E), and millimeter wave devices (47
CFR Part 15 Subpart C) are subject to RF emission requirements specified in the rule section
they operate in and are also subject to routine environmental evaluation for RF exposure
prior to equipment authorization or use if their ERP is 3 watts or more or if they meet the
definition of a portable device. All other mobile and portable devices are categorically excluded
from routine environmental evaluation for RF exposure.
The FCC differentiates mobile and portable devices by the proximity to the user during use.
Mobile devices, covered under 47 CFR 2.1091 (page 706), are defined as a transmitting device
designed to be used in other than fixed locations and generally used in a manner that the
radiating structure is at least 20 cm from the body of the user or nearby persons. Examples of
mobile and portable devices include cellular and PCS mobile telephones with vehicle mounted
antennas and other radio devices that use vehicle mounted antennas. These devices must be
evaluated for exposure potential with respect to Maximum Permissible Exposure (MPE) limits
for field strength or power density or with respect to specific absorption rate (SAR) limits,
whichever is most appropriate for the specific use and operating configuration of the device.
Portable devices, covered under 47 CFR 2.1093 (page 708), are defined as a transmitting device
designed to be used so the radiating structure is within 20 cm of the body of the user. These
devices include handheld cellular phones and PCS mobile phones that incorporate the radiating
antenna into the hand-piece and wireless transmitters carried close to the body. RF evaluation
must be based on specific absorption rate (SAR) limits. |
Formulate responses using only information from the provided text. Do not use any outside knowledge and do not use prior knowledge to inform your response. | Briefly identify and explain the parts of section 2015 related to water.
| Several provisions of AWIA Title II, “Drinking Water System Improvement,” amend SDWA to
revise existing drinking water programs, reauthorize appropriations, and establish new drinking
water infrastructure grant programs.
SDWA authorizes the regulation of contaminants in public water systems. Enacted in 1974, the
act was last broadly amended in 1996.17 The act is implemented through programs that (1)
establish national primary drinking water regulations and monitoring and reporting requirements
for contaminants present in water delivered by public water systems, (2) promote water system
compliance through technical and financial assistance and capacity development programs, and
(3) address public water systems’ preparedness for emergencies.18 The act established a federalstate partnership in which states, tribes, and territories may be delegated primary implementation
and enforcement authority (i.e., primacy) for the drinking water program.19
17 SDWA Amendments of 1996 (P.L. 104-182).
18 In addition, SDWA Part C includes programs to protect underground sources of drinking water. CRS Report
RL31243, Safe Drinking Water Act (SDWA): A Summary of the Act and Its Major Requirements, by Mary Tiemann,
provides an overview of SDWA and includes statistics and tables on the numbers and types of regulated public water
systems.
19 Currently, 49 states, the territories, and the Navajo Nation have applied for and received primacy for the drinking
water program. EPA retains implementation and enforcement authority for Wyoming, the District of Columbia, and
America’s Water Infrastructure Act of 2018 (P.L. 115-270): Drinking Water Provisions
Congressional Research Service 6
One key component of SDWA is the requirement that EPA establish national primary drinking
water regulations for contaminants that may adversely affect human health and are likely to be
present in public water supplies.20 EPA has issued regulations for more than 90 contaminants.
These include numerical standards or treatment techniques for drinking water disinfectants and
their byproducts, microorganisms, radionuclides, organic chemicals, and inorganic chemicals.21
The SDWA Amendments of 1996 (P.L. 104-182) reauthorized appropriations for most SDWA
programs through FY2003. Although the authority has expired for most appropriations, Congress
has continued to appropriate funds for the ongoing SDWA programs.22 Even though the
authorization of appropriations may expire, program authority (i.e., an agency’s “enabling”
authority) does not expire unless there is a “sunset” date for that authority or if Congress repeals
it through subsequent laws.
Drinking Water State Revolving Fund Program
Authorized in 1996, the DWSRF program provides federal financial assistance to communities to
finance drinking water infrastructure improvements.23 SDWA Section 1452 authorizes EPA to
make annual grants to states to capitalize their state revolving loan fund.24 The statute requires
states to provide a 20% match. States may use DWSRF financing for public water system projects
needed to comply with federal drinking water standards and address risks to human health. The
primary type of DWSRF financial assistance are low interest rate loans. SDWA Section 1452
authorizes states to provide additional subsidization (including forgiveness of principal) to
disadvantaged communities.25 The federal capitalization grants together with state funds (e.g.,
state match, loan repayments, leveraged bonds, and other state sources) are intended to build a
sustainable source of drinking water infrastructure funding for the state. The authorization of
appropriation for DWSRF expired in FY2003. Congress has continued to provide funds for the
DWSRF program through annual appropriations.
From FY1997 through FY2018, Congress appropriated over $23.33 billion for the DWSRF
program. The appropriation for DWSRF program generally ranged between $820.0 million in
FY2000 and $1.39 billion in FY2010.26
DWSRF Program Revisions (AWIA Sections 2002, 2015, and 2022)
AWIA makes the most substantial revisions to the DWSRF provisions of SDWA since the
program was authorized in 1996. These revisions expand the eligible uses of DWSRF financial
assistance, provide states with additional flexibility to administer the DWSRF program, and
include provisions intended to make DWSRF assistance more accessible to public water
systems.
27
AWIA Section 2015(a) amends SDWA to expressly state that DWSRF funds can be used for
projects to replace or rehabilitate aging treatment, storage, or distribution systems.28 Under EPA
guidance, these replacement and rehabilitation projects have been eligible for financial assistance
from the DWSRF if needed to protect public health. According to EPA’s needs survey, this
category of projects accounts for 66.1% of the estimated drinking water infrastructure need.29
Prior to AWIA, these activities were not previously explicitly identified in statute.30
Section 2015 also revises existing DWSRF provisions that address financial assistance for
disadvantaged communities. These amendments increase the portion of a state’s capitalization
grant that states may dedicate to additional subsidization and extend the amortization period for
loans made to disadvantaged communities. Before AWIA, states could use 30% of their annual
capitalization grants to subsidize loans for disadvantaged communities.31 Section 2015(c) of
AWIA increases that proportion to 35% while conditionally requiring states to use at least 6% of
their capitalization grant for these subsidies.32 The section also amends the SDWA DWSRF
provisions to extend the amortization period for loans made to disadvantaged communities from
30 to 40 years.
Section 2015(d) of AWIA also extends the repayment and amortization period for all projects
financed by the DWSRF. Previously, SDWA required DWSRF financing recipients to pay the
initial principal and interest payments within one year of project completion. This amendment
extends the date of that initial payment to 18 months after project completion. This section also
authorizes the extension of the amortization period for projects that receive DWSRF assistance
from 20 to 30 years.
Section 2015(e) requires EPA to evaluate and include the cost to replace lead service lines in the
drinking water infrastructure needs survey, which EPA completes every four years.33 EPA uses the
needs survey to allot the DWSRF appropriation among the states.
34 In conducting the needs
survey, EPA has not previously requested that public water systems report the cost to replace
these lines.35 AWIA specifies that the cost to replace lead lines must be included in the needs
survey (to the extent practicable), which may potentially affect some states’ allotments of
DWSRF capitalization grants.
Section 2015(g) of AWIA requires EPA to gather specified information on DWSRF
administration from state drinking water administrators and report to Congress on best practices
for implementing the DWSRF to facilitate the application process and to improve DWSRF
financial management and sustainability.
Source Water Assessment and Protection
In 1996, Congress added source water assessment provisions to SDWA to encourage protection of
drinking water sources.
36 Section 1453 required states to develop source water assessment
programs that delineate areas from which public water systems receive water and identify the
origins of regulated contaminants to determine threats to water systems. States were authorized to
fund these activities from 10% of their DWSRF capitalization grant for FY1996 and FY1997.37
Section 2015(f) of AWIA removes this fiscal year limitation and accordingly authorizes states to
use a portion of their capitalization grant to fund these source water assessments or update an
existing source water assessment.38
The 1996 SDWA amendments required states to conduct source water assessments as a condition
of adopting modified monitoring requirements.
39 However, the 1996 amendments did not
authorize states to fund implementation of source water protection plans from their DWSRF
capitalization grants. AWIA Section 2002 authorizes states to fund implementation of surface
drinking water sources protection efforts and activities from the 10% set-aside of a state’s annual
DWSRF capitalization grant.
Source water protection is also addressed in the “Protecting Source Water” section of this report. | Formulate responses using only information from the provided text. Do not use any outside knowledge and do not use prior knowledge to inform your response.
Briefly identify and explain the parts of section 2015 related to water.
Several provisions of AWIA Title II, “Drinking Water System Improvement,” amend SDWA to
revise existing drinking water programs, reauthorize appropriations, and establish new drinking
water infrastructure grant programs.
SDWA authorizes the regulation of contaminants in public water systems. Enacted in 1974, the
act was last broadly amended in 1996.17 The act is implemented through programs that (1)
establish national primary drinking water regulations and monitoring and reporting requirements
for contaminants present in water delivered by public water systems, (2) promote water system
compliance through technical and financial assistance and capacity development programs, and
(3) address public water systems’ preparedness for emergencies.18 The act established a federalstate partnership in which states, tribes, and territories may be delegated primary implementation
and enforcement authority (i.e., primacy) for the drinking water program.19
17 SDWA Amendments of 1996 (P.L. 104-182).
18 In addition, SDWA Part C includes programs to protect underground sources of drinking water. CRS Report
RL31243, Safe Drinking Water Act (SDWA): A Summary of the Act and Its Major Requirements, by Mary Tiemann,
provides an overview of SDWA and includes statistics and tables on the numbers and types of regulated public water
systems.
19 Currently, 49 states, the territories, and the Navajo Nation have applied for and received primacy for the drinking
water program. EPA retains implementation and enforcement authority for Wyoming, the District of Columbia, and
America’s Water Infrastructure Act of 2018 (P.L. 115-270): Drinking Water Provisions
Congressional Research Service 6
One key component of SDWA is the requirement that EPA establish national primary drinking
water regulations for contaminants that may adversely affect human health and are likely to be
present in public water supplies.20 EPA has issued regulations for more than 90 contaminants.
These include numerical standards or treatment techniques for drinking water disinfectants and
their byproducts, microorganisms, radionuclides, organic chemicals, and inorganic chemicals.21
The SDWA Amendments of 1996 (P.L. 104-182) reauthorized appropriations for most SDWA
programs through FY2003. Although the authority has expired for most appropriations, Congress
has continued to appropriate funds for the ongoing SDWA programs.22 Even though the
authorization of appropriations may expire, program authority (i.e., an agency’s “enabling”
authority) does not expire unless there is a “sunset” date for that authority or if Congress repeals
it through subsequent laws.
Drinking Water State Revolving Fund Program
Authorized in 1996, the DWSRF program provides federal financial assistance to communities to
finance drinking water infrastructure improvements.23 SDWA Section 1452 authorizes EPA to
make annual grants to states to capitalize their state revolving loan fund.24 The statute requires
states to provide a 20% match. States may use DWSRF financing for public water system projects
needed to comply with federal drinking water standards and address risks to human health. The
primary type of DWSRF financial assistance are low interest rate loans. SDWA Section 1452
authorizes states to provide additional subsidization (including forgiveness of principal) to
disadvantaged communities.25 The federal capitalization grants together with state funds (e.g.,
state match, loan repayments, leveraged bonds, and other state sources) are intended to build a
sustainable source of drinking water infrastructure funding for the state. The authorization of
appropriation for DWSRF expired in FY2003. Congress has continued to provide funds for the
DWSRF program through annual appropriations.
From FY1997 through FY2018, Congress appropriated over $23.33 billion for the DWSRF
program. The appropriation for DWSRF program generally ranged between $820.0 million in
FY2000 and $1.39 billion in FY2010.26
DWSRF Program Revisions (AWIA Sections 2002, 2015, and 2022)
AWIA makes the most substantial revisions to the DWSRF provisions of SDWA since the
program was authorized in 1996. These revisions expand the eligible uses of DWSRF financial
assistance, provide states with additional flexibility to administer the DWSRF program, and
include provisions intended to make DWSRF assistance more accessible to public water
systems.
27
AWIA Section 2015(a) amends SDWA to expressly state that DWSRF funds can be used for
projects to replace or rehabilitate aging treatment, storage, or distribution systems.28 Under EPA
guidance, these replacement and rehabilitation projects have been eligible for financial assistance
from the DWSRF if needed to protect public health. According to EPA’s needs survey, this
category of projects accounts for 66.1% of the estimated drinking water infrastructure need.29
Prior to AWIA, these activities were not previously explicitly identified in statute.30
Section 2015 also revises existing DWSRF provisions that address financial assistance for
disadvantaged communities. These amendments increase the portion of a state’s capitalization
grant that states may dedicate to additional subsidization and extend the amortization period for
loans made to disadvantaged communities. Before AWIA, states could use 30% of their annual
capitalization grants to subsidize loans for disadvantaged communities.31 Section 2015(c) of
AWIA increases that proportion to 35% while conditionally requiring states to use at least 6% of
their capitalization grant for these subsidies.32 The section also amends the SDWA DWSRF
provisions to extend the amortization period for loans made to disadvantaged communities from
30 to 40 years.
Section 2015(d) of AWIA also extends the repayment and amortization period for all projects
financed by the DWSRF. Previously, SDWA required DWSRF financing recipients to pay the
initial principal and interest payments within one year of project completion. This amendment
extends the date of that initial payment to 18 months after project completion. This section also
authorizes the extension of the amortization period for projects that receive DWSRF assistance
from 20 to 30 years.
Section 2015(e) requires EPA to evaluate and include the cost to replace lead service lines in the
drinking water infrastructure needs survey, which EPA completes every four years.33 EPA uses the
needs survey to allot the DWSRF appropriation among the states.
34 In conducting the needs
survey, EPA has not previously requested that public water systems report the cost to replace
these lines.35 AWIA specifies that the cost to replace lead lines must be included in the needs
survey (to the extent practicable), which may potentially affect some states’ allotments of
DWSRF capitalization grants.
Section 2015(g) of AWIA requires EPA to gather specified information on DWSRF
administration from state drinking water administrators and report to Congress on best practices
for implementing the DWSRF to facilitate the application process and to improve DWSRF
financial management and sustainability.
Source Water Assessment and Protection
In 1996, Congress added source water assessment provisions to SDWA to encourage protection of
drinking water sources.
36 Section 1453 required states to develop source water assessment
programs that delineate areas from which public water systems receive water and identify the
origins of regulated contaminants to determine threats to water systems. States were authorized to
fund these activities from 10% of their DWSRF capitalization grant for FY1996 and FY1997.37
Section 2015(f) of AWIA removes this fiscal year limitation and accordingly authorizes states to
use a portion of their capitalization grant to fund these source water assessments or update an
existing source water assessment.38
The 1996 SDWA amendments required states to conduct source water assessments as a condition
of adopting modified monitoring requirements.
39 However, the 1996 amendments did not
authorize states to fund implementation of source water protection plans from their DWSRF
capitalization grants. AWIA Section 2002 authorizes states to fund implementation of surface
drinking water sources protection efforts and activities from the 10% set-aside of a state’s annual
DWSRF capitalization grant.
Source water protection is also addressed in the “Protecting Source Water” section of this report. |
Provide a concise answer (less than 100 words), using only the information provided below. | In the context of the Gender Recognition Act 2004, what makes something a gender-specific offence? | 3 Evidence
(1) An application under section 1(1)(a) must include either—
(a) a report made by a registered medical practitioner practising in the
field of gender dysphoria and a report made by another registered
medical practitioner (who may, but need not, practise in that field), or
(b) a report made by a chartered psychologist practising in that field and a
report made by a registered medical practitioner (who may, but need
not, practise in that field).
(2) But subsection (1) is not complied with unless a report required by that
subsection and made by—
(a) a registered medical practitioner, or
(b) a chartered psychologist,
practising in the field of gender dysphoria includes details of the diagnosis of
the applicant’s gender dysphoria.
(3) And subsection (1) is not complied with in a case where—
(a) the applicant has undergone or is undergoing treatment for the
purpose of modifying sexual characteristics, or
(b) treatment for that purpose has been prescribed or planned for the
applicant,
unless at least one of the reports required by that subsection includes details of
it.
(4) An application under section 1(1)(a) must also include a statutory declaration
by the applicant that the applicant meets the conditions in section 2(1)(b) and
(c).
(5) An application under section 1(1)(b) must include evidence that the applicant
has changed gender under the law of an approved country or territory.
Gender Recognition Act 2004 (c. 7) 3
(6) Any application under section 1(1) must include—
(a) a statutory declaration as to whether or not the applicant is married,
(b) any other information or evidence required by an order made by the
Secretary of State, and
(c) any other information or evidence which the Panel which is to
determine the application may require,
and may include any other information or evidence which the applicant wishes
to include.
(7) The Secretary of State may not make an order under subsection (6)(b) without
consulting the Scottish Ministers and the Department of Finance and Personnel
in Northern Ireland.
(8) If the Panel which is to determine the application requires inform | What evidence is required to obtain a Gender Recognition Certificate in the UK?
Provide a concise answer (less than 100 words), using only the information provided below.
"3 Evidence
(1) An application under section 1(1)(a) must include either—
(a) a report made by a registered medical practitioner practising in the
field of gender dysphoria and a report made by another registered
medical practitioner (who may, but need not, practise in that field), or
(b) a report made by a chartered psychologist practising in that field and a
report made by a registered medical practitioner (who may, but need
not, practise in that field).
(2) But subsection (1) is not complied with unless a report required by that
subsection and made by—
(a) a registered medical practitioner, or
(b) a chartered psychologist,
practising in the field of gender dysphoria includes details of the diagnosis of
the applicant’s gender dysphoria.
(3) And subsection (1) is not complied with in a case where—
(a) the applicant has undergone or is undergoing treatment for the
purpose of modifying sexual characteristics, or
(b) treatment for that purpose has been prescribed or planned for the
applicant,
unless at least one of the reports required by that subsection includes details of
it.
(4) An application under section 1(1)(a) must also include a statutory declaration
by the applicant that the applicant meets the conditions in section 2(1)(b) and
(c).
(5) An application under section 1(1)(b) must include evidence that the applicant
has changed gender under the law of an approved country or territory.
Gender Recognition Act 2004 (c. 7) 3
(6) Any application under section 1(1) must include—
(a) a statutory declaration as to whether or not the applicant is married,
(b) any other information or evidence required by an order made by the
Secretary of State, and
(c) any other information or evidence which the Panel which is to
determine the application may require,
and may include any other information or evidence which the applicant wishes
to include.
(7) The Secretary of State may not make an order under subsection (6)(b) without
consulting the Scottish Ministers and the Department of Finance and Personnel
in Northern Ireland.
(8) If the Panel which is to determine the application requires inform" |
Only use the document provided to answer the question. Cite the section of text you are basing your response on. | Using the provided document, what terrain may cause connection issues for WISPs? | **Rural access**
One of the great challenges for Internet access in general and for broadband access in particular is to provide service to potential customers in areas of low population density, such as to farmers, ranchers, and small towns. In cities where the population density is high, it is easier for a service provider to recover equipment costs, but each rural customer may require expensive equipment to get connected. While 66% of Americans had an Internet connection in 2010, that figure was only 50% in rural areas, according to the Pew Internet & American Life Project.[141] Virgin Media advertised over 100 towns across the United Kingdom "from Cwmbran to Clydebank" that have access to their 100 Mbit/s service.[30]
Wireless Internet service providers (WISPs) are rapidly becoming a popular broadband option for rural areas.[142] The technology's line-of-sight requirements may hamper connectivity in some areas with hilly and heavily foliated terrain. However, the Tegola project, a successful pilot in remote Scotland, demonstrates that wireless can be a viable option.[143]
The Broadband for Rural Nova Scotia initiative is the first program in North America to guarantee access to "100% of civic addresses" in a region. It is based on Motorola Canopy technology. As of November 2011, under 1000 households have reported access problems. Deployment of a new cell network by one Canopy provider (Eastlink) was expected to provide the alternative of 3G/4G service, possibly at a special unmetered rate, for areas harder to serve by Canopy.[144]
In New Zealand, a fund has been formed by the government to improve rural broadband,[145] and mobile phone coverage. Current proposals include: (a) extending fiber coverage and upgrading copper to support VDSL, (b) focusing on improving the coverage of cellphone technology, or (c) regional wireless.[146]
Several countries have started Hybrid Access Networks to provide faster Internet services in rural areas by enabling network operators to efficiently combine their XDSL and LTE networks. | {Document}
==========
**Rural access**
One of the great challenges for Internet access in general and for broadband access in particular is to provide service to potential customers in areas of low population density, such as to farmers, ranchers, and small towns. In cities where the population density is high, it is easier for a service provider to recover equipment costs, but each rural customer may require expensive equipment to get connected. While 66% of Americans had an Internet connection in 2010, that figure was only 50% in rural areas, according to the Pew Internet & American Life Project.[141] Virgin Media advertised over 100 towns across the United Kingdom "from Cwmbran to Clydebank" that have access to their 100 Mbit/s service.[30]
Wireless Internet service providers (WISPs) are rapidly becoming a popular broadband option for rural areas.[142] The technology's line-of-sight requirements may hamper connectivity in some areas with hilly and heavily foliated terrain. However, the Tegola project, a successful pilot in remote Scotland, demonstrates that wireless can be a viable option.[143]
The Broadband for Rural Nova Scotia initiative is the first program in North America to guarantee access to "100% of civic addresses" in a region. It is based on Motorola Canopy technology. As of November 2011, under 1000 households have reported access problems. Deployment of a new cell network by one Canopy provider (Eastlink) was expected to provide the alternative of 3G/4G service, possibly at a special unmetered rate, for areas harder to serve by Canopy.[144]
In New Zealand, a fund has been formed by the government to improve rural broadband,[145] and mobile phone coverage. Current proposals include: (a) extending fiber coverage and upgrading copper to support VDSL, (b) focusing on improving the coverage of cellphone technology, or (c) regional wireless.[146]
Several countries have started Hybrid Access Networks to provide faster Internet services in rural areas by enabling network operators to efficiently combine their XDSL and LTE networks.
----------------
{System Instruction}
==========
Only use the document provided to answer the question. Cite the section of text you are basing your response on.
----------------
{Question}
==========
Using the provided document, what terrain may cause connection issues for WISPs? |
You must only respond using information from the provided PDF. You must not use any external information. You must present and provide citations only if they are relevant. | What doctrine or doctrines does Kagan use to argue against the Court's decision to overrule Chevron? | JUSTICE KAGAN, with whom JUSTICE SOTOMAYOR and
JUSTICE JACKSON join,* dissenting.
For 40 years, Chevron U. S. A. Inc. v. Natural Resources
Defense Council, Inc., 467 U. S. 837 (1984), has served as a
cornerstone of administrative law, allocating responsibility
for statutory construction between courts and agencies.
Under Chevron, a court uses all its normal interpretive
tools to determine whether Congress has spoken to an issue. If the court finds Congress has done so, that is the end
of the matter; the agency’s views make no difference. But
if the court finds, at the end of its interpretive work, that
Congress has left an ambiguity or gap, then a choice must
be made. Who should give content to a statute when Congress’s instructions have run out? Should it be a court? Or
should it be the agency Congress has charged with administering the statute? The answer Chevron gives is that it
should usually be the agency, within the bounds of reasonableness. That rule has formed the backdrop against which
Congress, courts, and agencies—as well as regulated parties and the public—all have operated for decades. It has
been applied in thousands of judicial decisions. It has become part of the warp and woof of modern government, supporting regulatory efforts of all kinds—to name a few, keeping air and water clean, food and drugs safe, and financial
markets honest.
And the rule is right. This Court has long understood
Chevron deference to reflect what Congress would want,
and so to be rooted in a presumption of legislative intent.
Congress knows that it does not—in fact cannot—write perfectly complete regulatory statutes. It knows that those
statutes will inevitably contain ambiguities that some other
actor will have to resolve, and gaps that some other actor
will have to fill. And it would usually prefer that actor to
be the responsible agency, not a court. Some interpretive
issues arising in the regulatory context involve scientific or
technical subject matter. Agencies have expertise in those
areas; courts do not. Some demand a detailed understanding of complex and interdependent regulatory programs.
Agencies know those programs inside-out; again, courts do
not. And some present policy choices, including trade-offs
between competing goods. Agencies report to a President,
who in turn answers to the public for his policy calls; courts
have no such accountability and no proper basis for making
policy. And of course Congress has conferred on that expert, experienced, and politically accountable agency the
authority to administer—to make rules about and otherwise implement—the statute giving rise to the ambiguity or
Put all that together and deference to the agency is
the almost obvious choice, based on an implicit congressional delegation of interpretive authority. We defer, the
Court has explained, “because of a presumption that Congress” would have “desired the agency (rather than the
courts)” to exercise “whatever degree of discretion” the statute allows. Smiley v. Citibank (South Dakota), N. A., 517
U. S. 735, 740–741 (1996).
Today, the Court flips the script: It is now “the courts (rather than the agency)” that will wield power when Congress
has left an area of interpretive discretion. A rule of judicial
humility gives way to a rule of judicial hubris. In recent
years, this Court has too often taken for itself decision-making authority Congress assigned to agencies. The Court has
substituted its own judgment on workplace health for that
of the Occupational Safety and Health Administration; its
own judgment on climate change for that of the Environmental Protection Agency; and its own judgment on student
loans for that of the Department of Education. See, e.g.,
National Federation of Independent Business v. OSHA, 595
U. S. 109 (2022); West Virginia v. EPA, 597 U. S. 697 (2022);
Biden v. Nebraska, 600 U. S. 477 (2023). But evidently that
was, for this Court, all too piecemeal. In one fell swoop, the
majority today gives itself exclusive power over every open
issue—no matter how expertise-driven or policy-laden—involving the meaning of regulatory law. As if it did not have
enough on its plate, the majority turns itself into the country’s administrative czar. It defends that move as one (suddenly) required by the (nearly 80-year-old) Administrative
Procedure Act. But the Act makes no such demand. Today’s decision is not one Congress directed. It is entirely
the majority’s choice.
And the majority cannot destroy one doctrine of judicial
humility without making a laughing-stock of a second. (If
opinions had titles, a good candidate for today’s would be
Hubris Squared.) Stare decisis is, among other things, a
way to remind judges that wisdom often lies in what prior
judges have done. It is a brake on the urge to convert “every
new judge’s opinion” into a new legal rule or regime. Dobbs
v. Jackson Women’s Health Organization, 597 U. S. 215,
388 (2022) (joint opinion of Breyer, SOTOMAYOR, and
KAGAN, JJ., dissenting) (quoting 1 W. Blackstone, Commentaries on the Laws of England 69 (7th ed. 1775)). Chevron is entrenched precedent, entitled to the protection of
stare decisis, as even the majority acknowledges. In fact,
Chevron is entitled to the supercharged version of that doctrine because Congress could always overrule the decision,
and because so many governmental and private actors have
relied on it for so long. Because that is so, the majority
needs a “particularly special justification” for its action. Kisor v. Wilkie, 588 U. S. 558, 588 (2019) (opinion of the
Court). But the majority has nothing that would qualify. It
barely tries to advance the usual factors this Court invokes
for overruling precedent. Its justification comes down, in
the end, to this: Courts must have more say over regulation—over the provision of health care, the protection of the
environment, the safety of consumer products, the efficacy
of transportation systems, and so on. A longstanding precedent at the crux of administrative governance thus falls
victim to a bald assertion of judicial authority. The majority disdains restraint, and grasps for power. | You must only respond using information from the provided PDF. You must not use any external information. You must present and provide citations only if they are relevant.
What doctrine or doctrines does Kagan use to argue against the Court's decision to overrule Chevron?
JUSTICE KAGAN, with whom JUSTICE SOTOMAYOR and
JUSTICE JACKSON join,* dissenting.
For 40 years, Chevron U. S. A. Inc. v. Natural Resources
Defense Council, Inc., 467 U. S. 837 (1984), has served as a
cornerstone of administrative law, allocating responsibility
for statutory construction between courts and agencies.
Under Chevron, a court uses all its normal interpretive
tools to determine whether Congress has spoken to an issue. If the court finds Congress has done so, that is the end
of the matter; the agency’s views make no difference. But
if the court finds, at the end of its interpretive work, that
Congress has left an ambiguity or gap, then a choice must
be made. Who should give content to a statute when Congress’s instructions have run out? Should it be a court? Or
should it be the agency Congress has charged with administering the statute? The answer Chevron gives is that it
should usually be the agency, within the bounds of reasonableness. That rule has formed the backdrop against which
Congress, courts, and agencies—as well as regulated parties and the public—all have operated for decades. It has
been applied in thousands of judicial decisions. It has become part of the warp and woof of modern government, supporting regulatory efforts of all kinds—to name a few, keeping air and water clean, food and drugs safe, and financial
markets honest.
And the rule is right. This Court has long understood
Chevron deference to reflect what Congress would want,
and so to be rooted in a presumption of legislative intent.
Congress knows that it does not—in fact cannot—write perfectly complete regulatory statutes. It knows that those
statutes will inevitably contain ambiguities that some other
actor will have to resolve, and gaps that some other actor
will have to fill. And it would usually prefer that actor to
be the responsible agency, not a court. Some interpretive
issues arising in the regulatory context involve scientific or
technical subject matter. Agencies have expertise in those
areas; courts do not. Some demand a detailed understanding of complex and interdependent regulatory programs.
Agencies know those programs inside-out; again, courts do
not. And some present policy choices, including trade-offs
between competing goods. Agencies report to a President,
who in turn answers to the public for his policy calls; courts
have no such accountability and no proper basis for making
policy. And of course Congress has conferred on that expert, experienced, and politically accountable agency the
authority to administer—to make rules about and otherwise implement—the statute giving rise to the ambiguity or
Put all that together and deference to the agency is
the almost obvious choice, based on an implicit congressional delegation of interpretive authority. We defer, the
Court has explained, “because of a presumption that Congress” would have “desired the agency (rather than the
courts)” to exercise “whatever degree of discretion” the statute allows. Smiley v. Citibank (South Dakota), N. A., 517
U. S. 735, 740–741 (1996).
Today, the Court flips the script: It is now “the courts (rather than the agency)” that will wield power when Congress
has left an area of interpretive discretion. A rule of judicial
humility gives way to a rule of judicial hubris. In recent
years, this Court has too often taken for itself decision-making authority Congress assigned to agencies. The Court has
substituted its own judgment on workplace health for that
of the Occupational Safety and Health Administration; its
own judgment on climate change for that of the Environmental Protection Agency; and its own judgment on student
loans for that of the Department of Education. See, e.g.,
National Federation of Independent Business v. OSHA, 595
U. S. 109 (2022); West Virginia v. EPA, 597 U. S. 697 (2022);
Biden v. Nebraska, 600 U. S. 477 (2023). But evidently that
was, for this Court, all too piecemeal. In one fell swoop, the
majority today gives itself exclusive power over every open
issue—no matter how expertise-driven or policy-laden—involving the meaning of regulatory law. As if it did not have
enough on its plate, the majority turns itself into the country’s administrative czar. It defends that move as one (suddenly) required by the (nearly 80-year-old) Administrative
Procedure Act. But the Act makes no such demand. Today’s decision is not one Congress directed. It is entirely
the majority’s choice.
And the majority cannot destroy one doctrine of judicial
humility without making a laughing-stock of a second. (If
opinions had titles, a good candidate for today’s would be
Hubris Squared.) Stare decisis is, among other things, a
way to remind judges that wisdom often lies in what prior
judges have done. It is a brake on the urge to convert “every
new judge’s opinion” into a new legal rule or regime. Dobbs
v. Jackson Women’s Health Organization, 597 U. S. 215,
388 (2022) (joint opinion of Breyer, SOTOMAYOR, and
KAGAN, JJ., dissenting) (quoting 1 W. Blackstone, Commentaries on the Laws of England 69 (7th ed. 1775)). Chevron is entrenched precedent, entitled to the protection of
stare decisis, as even the majority acknowledges. In fact,
Chevron is entitled to the supercharged version of that doctrine because Congress could always overrule the decision,
and because so many governmental and private actors have
relied on it for so long. Because that is so, the majority
needs a “particularly special justification” for its action. Kisor v. Wilkie, 588 U. S. 558, 588 (2019) (opinion of the
Court). But the majority has nothing that would qualify. It
barely tries to advance the usual factors this Court invokes
for overruling precedent. Its justification comes down, in
the end, to this: Courts must have more say over regulation—over the provision of health care, the protection of the
environment, the safety of consumer products, the efficacy
of transportation systems, and so on. A longstanding precedent at the crux of administrative governance thus falls
victim to a bald assertion of judicial authority. The majority disdains restraint, and grasps for power. |
"================
<TEXT PASSAGE>
=======
[context document]
================
<QUESTION>
=======
[user request]
================
<TASK>
=======
You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." | I'm doing a retail forecasting analysis of consumer behavior and the economy. Please summarize the changes in the fashion industry first and then tell me in two paragraphs how companies cope with them from both consumer and retailer perspectives. | Uncertainty in the face of headwinds
With conflicts in Europe and the Middle East and strained international relations elsewhere, geopolitics is the number-one concern for fashion industry executives going into 2024, followed by economic volatility and inflation. Some 62 percent of executives in this year’s survey, conducted in September, cite geopolitical instability as the top risk to growth. Economic volatility is cited by 55 percent and inflation is mentioned by 51 percent (compared with 78 percent last year). The global average headline rate of inflation is predicted to moderate to 5.8 percent—still high on a historical basis—from 6.9 percent in 2023.1
Against a challenging economic backdrop, executive views of the industry’s prospects are more divided than in any year since the launch of the BoF–McKinsey Executive Survey in 2017. While 26 percent of survey respondents say they expect conditions to improve year on year, 37 percent see them remaining the same and 38 percent think they will worsen.
Uncertainty within the industry reflects the broader economic situation, albeit with regional divergence. Going into 2024, pressure on household incomes is expected to dampen demand for apparel and prompt trading down across categories. Still, there are geographic outliers that may offer comfort. One is India, where consumer confidence hit a four-year high in September 2023.2 India-based executives are more optimistic than those in Western countries, with 85 percent of respondents to McKinsey’s Global Economics Intelligence survey saying that conditions have improved in the past six months.3 China’s economy is facing challenges, but the country’s consumers show a higher intent to shop for fashion in 2024 than consumers in both the United States and Europe.
Ten themes for 2024
To prepare for challenges and be alert to opportunities, leading fashion companies will likely prioritize contingency planning for the coming year. A key theme will be companies keeping a firm grip on costs and inventories while driving growth by precisely managing prices. Brands and suppliers can expect an increasingly competitive environment. But they will also have opportunities, with consumers discovering new styles, tastes, and priorities—all presenting routes to value creation. As previously done, this year’s report highlights ten emerging themes that will be high on leadership agendas.
Global economy:
Fragmented future. In 2024, the global economic outlook will continue to be unsettled, as financial, geopolitical, and other challenges weigh on consumer confidence. Fashion markets in China, Europe, and the United States will likely face headwinds, some of which reflect individual regional dynamics. Suppliers, brands, and retailers may need to bolster contingency planning and manage for uncertainty.
Climate urgency. The frequency and intensity of extreme weather-related events in 2023 mean the climate crisis is an even more urgent priority than in previous years. With physical and transition risks rising across continents, the industry must not delay in tackling emissions and building resilience into supply chains.
Consumer shifts:
Vacation mode. Consumers are gearing up for the biggest year of travel since before the pandemic. But a shift in values means expectations are evolving, even as shopping remains a priority. Brands and retailers should refresh distribution and category strategies to reflect the new reality.
The new face of influence. It’s time for brand marketers to update their influencer playbooks, as a new guard of creative personalities wins fans. Working with opinion leaders in 2024 will require a different type of partnership, an emphasis on video, and a willingness to loosen the reins on creative control.
Outdoors reinvented. Technical outdoor clothing and “gorpcore” are in demand as consumers embrace healthier lifestyles. In 2024, more outdoor brands are expected to launch lifestyle collections. At the same time, lifestyle brands will likely embed technical elements into collections, blurring the lines between functionality and style.
Fashion system:
Generative AI’s creative crossroads. After generative AI’s (gen AI) breakout year in 2023, more use cases are emerging across the industry. Capturing value will require fashion players to look beyond automation and explore gen AI’s potential to enhance the work of human creatives.
Fast fashion’s power play. Fast-fashion competition is set to be fiercer than ever. Challengers, led by Shein and Temu, are bringing new tactics on price, customer experience, and speed. Success for disruptors and incumbents could hinge on adapting to new consumer preferences while navigating the regulatory agenda.
All eyes on brand. Brand marketing is expected to be back in the spotlight as the fashion industry manages a switch away from performance marketing. Brands may benefit from forging emotional connections with consumers as marketers rewrite playbooks to emphasise long-term brand building.
Sustainability rules. The era of fashion industry self-regulation is drawing to a close. Across jurisdictions, new rules will have significant effects on both consumers and fashion players. Brands and manufacturers may consider revamping business models to align with the changes ahead.
Bullwhip snaps back. Shifts in consumer demand have created a “bullwhip effect,” by which order volatility reverberates unpredictably through supply chains. Suppliers will likely face pressure as brands and retailers focus on transparency and strategic partnerships.
Looking ahead
As the industry continues to be challenged by geopolitical and economic headwinds, fashion leaders in 2024 will look to strike a careful balance between managing uncertainty and seizing opportunities. With cost-saving tactics mostly exhausted, companies may focus on growing sales, underpinned by new pricing and promotion strategies. Across the industry, net intent to raise prices is more than 50 percent, according to the BoF–McKinsey Executive Survey. At the same time, reduced cost pressures could provide a potential boost to performance.
As climate change brings increasingly extreme weather events and global temperatures rise, the coming year is likely to mark a heightened industry focus on environmental, social, and governance issues. Our survey shows that the topic is seen as both the number-one priority and number-one challenge for industry executives. The most successful companies will find a balance between sustainability initiatives, risk management, and commercial imperatives.
In an uncertain world, consumer discretionary spend will be weighted toward trusted categories and brands. Hard luxury goods—jewelry, watches, and leather—will likely be in demand, reflecting their potential investment value in tough economic times. Consumers are expected to travel more and continue spending more time outdoors. And they prefer emotional connections and authenticity over celebrity endorsements.
All told, executives are bracing for a strategically complex year ahead. To counter uncertainty, leading companies will prepare for a range of outcomes. The most successful will become more resilient, better equipped to manage the challenges, and ready to accelerate when the storm clouds begin to clear. | "================
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Uncertainty in the face of headwinds
With conflicts in Europe and the Middle East and strained international relations elsewhere, geopolitics is the number-one concern for fashion industry executives going into 2024, followed by economic volatility and inflation. Some 62 percent of executives in this year’s survey, conducted in September, cite geopolitical instability as the top risk to growth. Economic volatility is cited by 55 percent and inflation is mentioned by 51 percent (compared with 78 percent last year). The global average headline rate of inflation is predicted to moderate to 5.8 percent—still high on a historical basis—from 6.9 percent in 2023.1
Against a challenging economic backdrop, executive views of the industry’s prospects are more divided than in any year since the launch of the BoF–McKinsey Executive Survey in 2017. While 26 percent of survey respondents say they expect conditions to improve year on year, 37 percent see them remaining the same and 38 percent think they will worsen.
Uncertainty within the industry reflects the broader economic situation, albeit with regional divergence. Going into 2024, pressure on household incomes is expected to dampen demand for apparel and prompt trading down across categories. Still, there are geographic outliers that may offer comfort. One is India, where consumer confidence hit a four-year high in September 2023.2 India-based executives are more optimistic than those in Western countries, with 85 percent of respondents to McKinsey’s Global Economics Intelligence survey saying that conditions have improved in the past six months.3 China’s economy is facing challenges, but the country’s consumers show a higher intent to shop for fashion in 2024 than consumers in both the United States and Europe.
Ten themes for 2024
To prepare for challenges and be alert to opportunities, leading fashion companies will likely prioritize contingency planning for the coming year. A key theme will be companies keeping a firm grip on costs and inventories while driving growth by precisely managing prices. Brands and suppliers can expect an increasingly competitive environment. But they will also have opportunities, with consumers discovering new styles, tastes, and priorities—all presenting routes to value creation. As previously done, this year’s report highlights ten emerging themes that will be high on leadership agendas.
Global economy:
Fragmented future. In 2024, the global economic outlook will continue to be unsettled, as financial, geopolitical, and other challenges weigh on consumer confidence. Fashion markets in China, Europe, and the United States will likely face headwinds, some of which reflect individual regional dynamics. Suppliers, brands, and retailers may need to bolster contingency planning and manage for uncertainty.
Climate urgency. The frequency and intensity of extreme weather-related events in 2023 mean the climate crisis is an even more urgent priority than in previous years. With physical and transition risks rising across continents, the industry must not delay in tackling emissions and building resilience into supply chains.
Consumer shifts:
Vacation mode. Consumers are gearing up for the biggest year of travel since before the pandemic. But a shift in values means expectations are evolving, even as shopping remains a priority. Brands and retailers should refresh distribution and category strategies to reflect the new reality.
The new face of influence. It’s time for brand marketers to update their influencer playbooks, as a new guard of creative personalities wins fans. Working with opinion leaders in 2024 will require a different type of partnership, an emphasis on video, and a willingness to loosen the reins on creative control.
Outdoors reinvented. Technical outdoor clothing and “gorpcore” are in demand as consumers embrace healthier lifestyles. In 2024, more outdoor brands are expected to launch lifestyle collections. At the same time, lifestyle brands will likely embed technical elements into collections, blurring the lines between functionality and style.
Fashion system:
Generative AI’s creative crossroads. After generative AI’s (gen AI) breakout year in 2023, more use cases are emerging across the industry. Capturing value will require fashion players to look beyond automation and explore gen AI’s potential to enhance the work of human creatives.
Fast fashion’s power play. Fast-fashion competition is set to be fiercer than ever. Challengers, led by Shein and Temu, are bringing new tactics on price, customer experience, and speed. Success for disruptors and incumbents could hinge on adapting to new consumer preferences while navigating the regulatory agenda.
All eyes on brand. Brand marketing is expected to be back in the spotlight as the fashion industry manages a switch away from performance marketing. Brands may benefit from forging emotional connections with consumers as marketers rewrite playbooks to emphasise long-term brand building.
Sustainability rules. The era of fashion industry self-regulation is drawing to a close. Across jurisdictions, new rules will have significant effects on both consumers and fashion players. Brands and manufacturers may consider revamping business models to align with the changes ahead.
Bullwhip snaps back. Shifts in consumer demand have created a “bullwhip effect,” by which order volatility reverberates unpredictably through supply chains. Suppliers will likely face pressure as brands and retailers focus on transparency and strategic partnerships.
Looking ahead
As the industry continues to be challenged by geopolitical and economic headwinds, fashion leaders in 2024 will look to strike a careful balance between managing uncertainty and seizing opportunities. With cost-saving tactics mostly exhausted, companies may focus on growing sales, underpinned by new pricing and promotion strategies. Across the industry, net intent to raise prices is more than 50 percent, according to the BoF–McKinsey Executive Survey. At the same time, reduced cost pressures could provide a potential boost to performance.
As climate change brings increasingly extreme weather events and global temperatures rise, the coming year is likely to mark a heightened industry focus on environmental, social, and governance issues. Our survey shows that the topic is seen as both the number-one priority and number-one challenge for industry executives. The most successful companies will find a balance between sustainability initiatives, risk management, and commercial imperatives.
In an uncertain world, consumer discretionary spend will be weighted toward trusted categories and brands. Hard luxury goods—jewelry, watches, and leather—will likely be in demand, reflecting their potential investment value in tough economic times. Consumers are expected to travel more and continue spending more time outdoors. And they prefer emotional connections and authenticity over celebrity endorsements.
All told, executives are bracing for a strategically complex year ahead. To counter uncertainty, leading companies will prepare for a range of outcomes. The most successful will become more resilient, better equipped to manage the challenges, and ready to accelerate when the storm clouds begin to clear.
https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion
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I'm doing a retail forecasting analysis of consumer behavior and the economy. Please summarize the changes in the fashion industry first and then tell me in two paragraphs how companies cope with them from both consumer and retailer perspectives.
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You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." |
This task requires you to answer a question based solely on the information provided in the prompt. You may not use any outside information/knowledge. | Please explain firewalls available and how they work. | Internet Connection Firewall
Today, there are three basic ways that home users connect to the Internet. The first is
through a device called a modem. A modem allows you to connect to the Internet using
your regular telephone line. You are only connected to the Internet when you actually dial
your Internet Service Provider (ISP). This is a relatively slow way of connecting to the
Internet, but much less costly than the other two options.
The other two options are connecting to the Internet through your cable television service (cable), or connecting through specialized telephone wire run between the nearest
telephone switching site and your house [digital subscriber line (DSL)]. Both ways are
expensive compared to using a standard modem, but the speeds can be 20 or more times
faster using cable or DSL.
In reality, cable and DSL connections also require modems. However, when
we talk about connecting to the Internet through a modem we are normally
talking about using a standard telephone line for the connection.
In the case of a cable or DSL connection, your computer is constantly connected to the
Internet. This exposes your computer to the possibility of being hacked. Hacking is when an unauthorized person attempts to gain control of your computer for purposes of stealing
data or causing malicious damage. One step that can be taken to deter hackers is placing a hardware or software firewall between your computer and the Internet. All messages entering or leaving the computer pass through the firewall, which examines each message and blocks those that do not meet the specified security criteria. Although a hardware firewall is always considered to be more effective than a software firewall, it is considerably more expensive. To save Windows XP users from having to invest additional money for basic security, Microsoft has included a software Internet Connection Firewall ICF) that can be used without additional charge. | System Instruction: [This task requires you to answer a question based solely on the information provided in the prompt. You may not use any outside information/knowledge. ]
Question: [Please explain firewalls available and how they work.]
Context Block: [Internet Connection Firewall
Today, there are three basic ways that home users connect to the Internet. The first is
through a device called a modem. A modem allows you to connect to the Internet using
your regular telephone line. You are only connected to the Internet when you actually dial
your Internet Service Provider (ISP). This is a relatively slow way of connecting to the
Internet, but much less costly than the other two options.
The other two options are connecting to the Internet through your cable television service (cable), or connecting through specialized telephone wire run between the nearest
telephone switching site and your house [digital subscriber line (DSL)]. Both ways are
expensive compared to using a standard modem, but the speeds can be 20 or more times
faster using cable or DSL.
In reality, cable and DSL connections also require modems. However, when
we talk about connecting to the Internet through a modem we are normally
talking about using a standard telephone line for the connection.
In the case of a cable or DSL connection, your computer is constantly connected to the
Internet. This exposes your computer to the possibility of being hacked. Hacking is when an unauthorized person attempts to gain control of your computer for purposes of stealing
data or causing malicious damage. One step that can be taken to deter hackers is placing a hardware or software firewall between your computer and the Internet. All messages entering or leaving the computer pass through the firewall, which examines each message and blocks those that do not meet the specified security criteria. Although a hardware firewall is always considered to be more effective than a software firewall, it is considerably more expensive. To save Windows XP users from having to invest additional money for basic security, Microsoft has included a software Internet Connection Firewall ICF) that can be used without additional charge.] |
Only use information in the context block to answer the question. Your answer should be understandable to individuals with a general, but not advanced, knowledge of computer science. Keep your answer to 250 words or less. | What are the differences between serverless computing and the microservice software style? | Cloud computing provides the ability of computation services via the Internet. According to the NIST definition [156], traditional cloud computing has three service categories: “Infrastructure as a Service” (IaaS), “Platform as a Service” (PaaS), and “Software as a Service” (SaaS). Specifically, IaaS allows software developers to configure and use computation, storage, and network resources. For example, AWS provides the computation service like Elastic Compute Cloud (AWS EC2) [6] and the storage service like Simple Storage Service (AWS S3) [7]. However, IaaS does not hide the operation complexity of the application; thus, developers are still responsible for resource provisioning, runtime configuration, application code management, etc. SaaS allows software developers to directly use the cloud provider’s applications, such as Gmail [30] and Docs [29] provided by Google. SaaS completely hides the underlying operation complexity, but use cases are limited. Moreover, developers completely lose control of the application. PaaS allows software developers to develop, run, and manage applications using the execution environment supported by the cloud provider. For example, Google provides the App Engine [27], while Azure offers App Service [16]. PaaS compromises the operation complexity between IaaS and SaaS, but software developers still are responsible for and manage some underlying tasks. To ease the cloud management burden on software developers, cloud providers presented a new paradigm, i.e., serverless computing. Serverless computing is similar to PaaS; differently, it almost hides all complex underlying management tasks for developers, i.e., “server-less”, and it also allows developers to control their applications. Serverless computing-related applications (a.k.a., serverless applications) follow the microservice software style, which decomposes the application into a subset of independent tasks. However, the differences between serverless applications and microservice-based applications are as follows. First, the serverless application’s unit (a.k.a., serverless function) is a smaller granularity than the unit of the microservice-based application. Second, microservice-based applications still make developers face the additional effort of underlying tasks like scalability, fault tolerance, and load balancing. Third, serverless functions adopt the event-driven pattern while microservices are usually responsive to their interfaces. In addition, serverless computing is more suitable for short-lived and bursty applications because its platforms provide high and automatic scalability, while microservices are suited for long-running and stable applications.
Serverless computing is an emerging and potential cloud computing paradigm, and its significant advantage is to free software developers from the burden of complex and error-prone server management tasks. Serverless computing provides “Backend as a Service” (BaaS) and “Function as a Service” (FaaS) [120], as shown in Fig. 2. Specifically, BaaS represents tailor-made cloud services provided by cloud providers, e.g., cloud storage and notification services. These services can service FaaS optionally to simplify the backend functionality development for software developers. FaaS represents that software developers can write stateless, event-driven serverless functions, making them focus on the logic of serverless applications. Generally, FaaS is the core of serverless computing, allowing developers to develop and control their applications.
To better understand serverless computing, we introduce its key characteristics as follows. • Functionality and no operations (NoOps): In serverless platforms, software developers can select their most appropriate and familiar languages (e.g., Python, JavaScript, and Java) to write the function-level code snippet to create serverless applications. Moreover, serverless platforms provide user-friendly integrated development environments (IDEs). For the deployment of serverless applications, software developers only need to upload their application code to the serverless platform without complex environment configuration. In addition, BaaS is the equivalent of off-the-shelf backend functionality. Its related services can be directly applied in the application by developers to replace similar backend functionalities. Therefore, developers do not have to redevelop these functionalities and deal with server configurations.
Auto-scaling: Serverless platforms can automatically scale function instances horizontally and vertically according to the application workload dynamics. Horizontal scaling is to launch (i.e., scale-in) new function instances or recycle (i.e., scale-out) running ones, while vertical scaling is to add (i.e., scale-up) or remove (i.e., scale-down) the amount of computation and other resources from running function instances. After completing requests, the corresponding function instances and allocated resources will retain in memory for a short time to prepare to be reused by subsequent requests of the same function. If there are no subsequent requests, these instances and resources will be automatically recycled by the serverless platform, i.e., scaling to zero. However, scaling to zero makes incoming new requests face the cold start problem, which takes a long time to prepare required runtime environments from scratch.
• Utilization-based billing: In serverless computing, software developers charge for the actually allocated or consumed resources of the serverless application in the fine-granular execution unit. For example, AWS Lambda’s pricing is related to the allocated memory, and Azure Functions considers the consumed memory. On the other hand, serverless functions are event-driven; thus, they will not run without being triggered, and developers do not pay any cost. This feature eliminates the concern of paying for idle resources. In summary, the billing pattern of serverless computing is relatively reasonable and inexpensive compared with traditional cloud computing, which requires always renting and paying resources in memory on standby.
Separation of computation and storage: Serverless computing adopts the separation way of computation and storage, i.e., separately scaling and independently provisioning and pricing. Generally, computation refers to stateless serverless functions, while storage represents cloud storage services provided by cloud providers to store data from the serverless function. This separation way can ensure the auto-scaling ability of the serverless platform for bursty workloads. •
Additional limitations: Cloud providers set some additional limitations for serverless functions to keep the vital auto-scaling feature of serverless platforms. Generally, these limitations contain function execution timeout, deployment package size, local disk size, memory allocation maximum, etc. Moreover, different serverless platforms have different demands regarding these additional limitations. The above key characteristics show the unique advantages of serverless computing. In addition, some features and limitations will also essentially influence the development of cloud-based applications.
| Question: What are the differences between serverless computing and the microservice software style?
System Prompt: Only use information in the context block to answer the question. Your answer should be understandable to individuals with a general, but not advanced, knowledge of computer science. Keep your answer to 250 words or less.
Context Block:
Cloud computing provides the ability of computation services via the Internet. According to the NIST definition [156], traditional cloud computing has three service categories: “Infrastructure as a Service” (IaaS), “Platform as a Service” (PaaS), and “Software as a Service” (SaaS). Specifically, IaaS allows software developers to configure and use computation, storage, and network resources. For example, AWS provides the computation service like Elastic Compute Cloud (AWS EC2) [6] and the storage service like Simple Storage Service (AWS S3) [7]. However, IaaS does not hide the operation complexity of the application; thus, developers are still responsible for resource provisioning, runtime configuration, application code management, etc. SaaS allows software developers to directly use the cloud provider’s applications, such as Gmail [30] and Docs [29] provided by Google. SaaS completely hides the underlying operation complexity, but use cases are limited. Moreover, developers completely lose control of the application. PaaS allows software developers to develop, run, and manage applications using the execution environment supported by the cloud provider. For example, Google provides the App Engine [27], while Azure offers App Service [16]. PaaS compromises the operation complexity between IaaS and SaaS, but software developers still are responsible for and manage some underlying tasks. To ease the cloud management burden on software developers, cloud providers presented a new paradigm, i.e., serverless computing. Serverless computing is similar to PaaS; differently, it almost hides all complex underlying management tasks for developers, i.e., “server-less”, and it also allows developers to control their applications. Serverless computing-related applications (a.k.a., serverless applications) follow the microservice software style, which decomposes the application into a subset of independent tasks. However, the differences between serverless applications and microservice-based applications are as follows. First, the serverless application’s unit (a.k.a., serverless function) is a smaller granularity than the unit of the microservice-based application. Second, microservice-based applications still make developers face the additional effort of underlying tasks like scalability, fault tolerance, and load balancing. Third, serverless functions adopt the event-driven pattern while microservices are usually responsive to their interfaces. In addition, serverless computing is more suitable for short-lived and bursty applications because its platforms provide high and automatic scalability, while microservices are suited for long-running and stable applications.
Serverless computing is an emerging and potential cloud computing paradigm, and its significant advantage is to free software developers from the burden of complex and error-prone server management tasks. Serverless computing provides “Backend as a Service” (BaaS) and “Function as a Service” (FaaS) [120], as shown in Fig. 2. Specifically, BaaS represents tailor-made cloud services provided by cloud providers, e.g., cloud storage and notification services. These services can service FaaS optionally to simplify the backend functionality development for software developers. FaaS represents that software developers can write stateless, event-driven serverless functions, making them focus on the logic of serverless applications. Generally, FaaS is the core of serverless computing, allowing developers to develop and control their applications.
To better understand serverless computing, we introduce its key characteristics as follows. • Functionality and no operations (NoOps): In serverless platforms, software developers can select their most appropriate and familiar languages (e.g., Python, JavaScript, and Java) to write the function-level code snippet to create serverless applications. Moreover, serverless platforms provide user-friendly integrated development environments (IDEs). For the deployment of serverless applications, software developers only need to upload their application code to the serverless platform without complex environment configuration. In addition, BaaS is the equivalent of off-the-shelf backend functionality. Its related services can be directly applied in the application by developers to replace similar backend functionalities. Therefore, developers do not have to redevelop these functionalities and deal with server configurations.
Auto-scaling: Serverless platforms can automatically scale function instances horizontally and vertically according to the application workload dynamics. Horizontal scaling is to launch (i.e., scale-in) new function instances or recycle (i.e., scale-out) running ones, while vertical scaling is to add (i.e., scale-up) or remove (i.e., scale-down) the amount of computation and other resources from running function instances. After completing requests, the corresponding function instances and allocated resources will retain in memory for a short time to prepare to be reused by subsequent requests of the same function. If there are no subsequent requests, these instances and resources will be automatically recycled by the serverless platform, i.e., scaling to zero. However, scaling to zero makes incoming new requests face the cold start problem, which takes a long time to prepare required runtime environments from scratch.
• Utilization-based billing: In serverless computing, software developers charge for the actually allocated or consumed resources of the serverless application in the fine-granular execution unit. For example, AWS Lambda’s pricing is related to the allocated memory, and Azure Functions considers the consumed memory. On the other hand, serverless functions are event-driven; thus, they will not run without being triggered, and developers do not pay any cost. This feature eliminates the concern of paying for idle resources. In summary, the billing pattern of serverless computing is relatively reasonable and inexpensive compared with traditional cloud computing, which requires always renting and paying resources in memory on standby.
Separation of computation and storage: Serverless computing adopts the separation way of computation and storage, i.e., separately scaling and independently provisioning and pricing. Generally, computation refers to stateless serverless functions, while storage represents cloud storage services provided by cloud providers to store data from the serverless function. This separation way can ensure the auto-scaling ability of the serverless platform for bursty workloads. •
Additional limitations: Cloud providers set some additional limitations for serverless functions to keep the vital auto-scaling feature of serverless platforms. Generally, these limitations contain function execution timeout, deployment package size, local disk size, memory allocation maximum, etc. Moreover, different serverless platforms have different demands regarding these additional limitations. The above key characteristics show the unique advantages of serverless computing. In addition, some features and limitations will also essentially influence the development of cloud-based applications.
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You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." | explain the pros and cons of the three different medications for opioid use disorder, in plain language, for someone who is not a medical person | Methadone
Methadone is a slow-acting opioid agonist indicated in the treatment of OUD and opioid withdrawal management. Although methadone is only available through approved opioid treatment programs, federal and state laws allow take-home doses for select patients who have demonstrated treatment progress [14, 15].
Methadone treatment aims to suppress opioid withdrawal, block the effects of illicit opioids, reduce opioid craving, and facilitate patient engagement in psychosocial and nonpharmacological interventions. Methadone treatment has shown superiority over abstinence-based approaches [16]. While methadone is a frequently utilized medication in MAT, both patients and providers should be aware of the potential risks associated with treatment. Methadone treatment increases the risk of arrhythmias including QT interval prolongation and torsades des pointes [17, 18]. Obtaining a history of structural heart disease, arrhythmia, syncope, and other risk factors for QT interval prolongation is critical before starting treatment. Methadone also presents with numerous drug-drug interactions due to cytochrome P450 isoenzymes involved in its metabolism. MAT providers should closely monitor for interactions that could potentiate or synergize methadone’s effects on a patient. Methadone is safe for use in pregnant patients [14, 15].
Practice guidelines published by the American Society of Addiction Medicine (ASAM) Methadone Action Group [14, 15] recommend an initial dose range from 10 mg to 30 mg, reassessing every 2–4 h when peak levels are reached. Following an initiation period, methadone dosing is based on the goals of treatment and patient dependence. Less than 30 mg per day can lessen acute withdrawal but is not as effective in suppressing cravings. Most patients fare better if their initial 30 mg to 40 mg per-day dose is gradually increased to a 60 mg to 120 mg per day maintenance dose. Randomized trials have shown that patients demonstrate better retention in treatment with higher doses of 80–100 mg per day [19, 20]. A dose-response effect is observed for methadone treatment retention rates [21, 22]. Doses above 120 mg per day are utilized with select patients due to the increased purity of heroin and the strength of prescription opioids resulting in increased difficulty to block opioid effects. The optimal length of treatment is not well established; however, relapse rates are highest for patients who drop out [14, 15].
Naltrexone
Naltrexone is a long-acting, full opioid antagonist. Like buprenorphine, naltrexone can be prescribed in the outpatient setting for OUD. Unlike buprenorphine, naltrexone can also be prescribed outpatient for alcohol use disorder treatment [14, 15]. Both formulations, oral and extended-release (ER) injectable, have demonstrated treatment efficacy; however, oral naltrexone is not recommended except under limited circumstances because retention in depot naltrexone is better than usually observed in studies utilizing oral naltrexone [23]. Trials are often limited due to high dropout rates and poor adherence [14, 15]. Adding an agent that improves dopaminergic function to complement naltrexone is a novel approach being studied to encourage adherence [24].
Treatment goals include prevention of relapse, inhibition of illicit opioid effects, opioid craving reduction, and the facilitation of patient engagement in psychosocial and nonpharmacological interventions [14, 15]. Oral naltrexone is best for those who can be closely supervised and are highly motivated because it has high rates of nonadherence and a high risk for overdose upon relapse [23]. ER injectable naltrexone is most effective for patients who have failed other MAT options or are unable to obtain agonist treatment. Both formulations are generally well tolerated; however, patients should be cautioned regarding the high-risk opioid overdose with subsequent relapse due to diminished tolerance and heightened sensitivity [14, 15].
Before naltrexone administration, the patient must be adequately detoxified from opioids with no physical dependence. A naloxone challenge can be utilized when uncertain of detoxification, monitoring for signs and symptoms of withdrawal. Oral naltrexone can be dosed at 50 mg daily or three times weekly with two 100 mg doses followed by one 150 mg dose. ER injectable naltrexone can be given every 3–4 weeks by deep intramuscular injection in the gluteal muscle at a set dosage of 380 mg per injection [14, 15].
Naltrexone ER is associated with side effects such as insomnia, clinically insignificant elevation of transaminases, hypertension, naso-pharyngitis, and influenza [25]. Although naltrexone does not reduce respiratory drive, relapse with high-dose opioids may result in accidental overdose death due to diminished opioid tolerance. Unlike methadone and buprenorphine, naltrexone ER is not recommended for use in pregnant or breastfeeding women [14, 15].
Buprenorphine
Buprenorphine is a partial opioid agonist utilized to treat OUD [26]. Buprenorphine has the ability to relieve a patient’s drug cravings while maintaining a higher safety profile than other MAT medications. Due to buprenorphine’s “ceiling effect,” increasing dosages will not cause equally increasing respiratory depression in patients [27]. As such, buprenorphine is less likely to cause fatal respiratory depression during overdose [28, 29]. Caution should be applied when combining buprenorphine with other sedative medications, potentially causing higher levels of sedation. Buprenorphine, like methadone, is safe for use in pregnant patients [14, 15]. It demonstrates less peak-dosing suppression of fetal heart rate and less severe neonatal abstinence syndrome than methadone [25].
A critical distinction of buprenorphine therapy is its ability for outpatient prescription following the Drug Addiction Treatment Act (DATA) of 2000 [30]. Any physician can prescribe buprenorphine following completion of an online training course. This distinction can increase access to MAT in otherwise inaccessible patient populations. Following a closely monitored initiation phase, dosing is usually 2 mg to 4 mg to reduce the risk of precipitating withdrawal [14, 15]. If well tolerated, the dose can be increased fairly rapidly to a dose that provides stable effects for 24 h and is effective, with evidence suggesting that doses of 16 mg and greater may be more effective at suppressing illicit opioid use [23]. The FDA recommendation limits dosing to 24 mg per day because higher doses may increase diversion risk [14, 15]. Retention on buprenorphine across low (2 mg–6 mg per day), medium (7 mg–15 mg per day), and high (≥16 mg per day) doses is significantly superior to placebo [31]. However, only high-dose buprenorphine reduces opioid use significantly compared to placebo [32].
Buprenorphine can also be administered with naloxone as a single-dose tablet or buccal film [14, 15]. The goal of combining naloxone, an opioid antagonist, with buprenorphine is to discourage buprenorphine abuse. If the buprenorphine/naloxone product is crushed for the purpose of injection, naloxone will antagonize the agonistic effects of buprenorphine [33]. The FDA recently approved several new buprenorphine formulations for the treatment of OUD, including an ER injection, but data regarding their effectiveness are limited [14, 15]. Some emergency departments are now initiating buprenorphine therapy to patients experiencing withdrawal symptoms [34]. This new strategy has demonstrated promising results toward improving rates of MAT initiation, and its expansion is likely to continue over time [34, 35].
The Substance Abuse and Mental Health Services Administration (SAMHSA) recommends appropriate counseling and social support programs for patients receiving buprenorphine therapy [36] “Group-based” buprenorphine treatments have gained interest since their inception, providing both buprenorphine prescription and group counseling together in a destigmatized environment. This model also increases the number of patients that a single physician could treat, addressing areas with limited access to MAT providers [37]. Some studies have suggested possible benefits of this treatment model [38, 39], particularly in prolonging treatment retention. Despite these advantages, the available supporting research has been limited and varied [38]. A 2017 literature review [39] examined 10 studies, 4 of which utilized small-group models and 6 of which utilized group psychotherapy. The authors concluded that there was limited evidence to support group-based buprenorphine therapy but that much of the literature available was either weak or potentially biased. Based on the limited research available and isolated reports of success, this practice has some feasibility and expands buprenorphine access for patients. | "================
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Methadone
Methadone is a slow-acting opioid agonist indicated in the treatment of OUD and opioid withdrawal management. Although methadone is only available through approved opioid treatment programs, federal and state laws allow take-home doses for select patients who have demonstrated treatment progress [14, 15].
Methadone treatment aims to suppress opioid withdrawal, block the effects of illicit opioids, reduce opioid craving, and facilitate patient engagement in psychosocial and nonpharmacological interventions. Methadone treatment has shown superiority over abstinence-based approaches [16]. While methadone is a frequently utilized medication in MAT, both patients and providers should be aware of the potential risks associated with treatment. Methadone treatment increases the risk of arrhythmias including QT interval prolongation and torsades des pointes [17, 18]. Obtaining a history of structural heart disease, arrhythmia, syncope, and other risk factors for QT interval prolongation is critical before starting treatment. Methadone also presents with numerous drug-drug interactions due to cytochrome P450 isoenzymes involved in its metabolism. MAT providers should closely monitor for interactions that could potentiate or synergize methadone’s effects on a patient. Methadone is safe for use in pregnant patients [14, 15].
Practice guidelines published by the American Society of Addiction Medicine (ASAM) Methadone Action Group [14, 15] recommend an initial dose range from 10 mg to 30 mg, reassessing every 2–4 h when peak levels are reached. Following an initiation period, methadone dosing is based on the goals of treatment and patient dependence. Less than 30 mg per day can lessen acute withdrawal but is not as effective in suppressing cravings. Most patients fare better if their initial 30 mg to 40 mg per-day dose is gradually increased to a 60 mg to 120 mg per day maintenance dose. Randomized trials have shown that patients demonstrate better retention in treatment with higher doses of 80–100 mg per day [19, 20]. A dose-response effect is observed for methadone treatment retention rates [21, 22]. Doses above 120 mg per day are utilized with select patients due to the increased purity of heroin and the strength of prescription opioids resulting in increased difficulty to block opioid effects. The optimal length of treatment is not well established; however, relapse rates are highest for patients who drop out [14, 15].
Naltrexone
Naltrexone is a long-acting, full opioid antagonist. Like buprenorphine, naltrexone can be prescribed in the outpatient setting for OUD. Unlike buprenorphine, naltrexone can also be prescribed outpatient for alcohol use disorder treatment [14, 15]. Both formulations, oral and extended-release (ER) injectable, have demonstrated treatment efficacy; however, oral naltrexone is not recommended except under limited circumstances because retention in depot naltrexone is better than usually observed in studies utilizing oral naltrexone [23]. Trials are often limited due to high dropout rates and poor adherence [14, 15]. Adding an agent that improves dopaminergic function to complement naltrexone is a novel approach being studied to encourage adherence [24].
Treatment goals include prevention of relapse, inhibition of illicit opioid effects, opioid craving reduction, and the facilitation of patient engagement in psychosocial and nonpharmacological interventions [14, 15]. Oral naltrexone is best for those who can be closely supervised and are highly motivated because it has high rates of nonadherence and a high risk for overdose upon relapse [23]. ER injectable naltrexone is most effective for patients who have failed other MAT options or are unable to obtain agonist treatment. Both formulations are generally well tolerated; however, patients should be cautioned regarding the high-risk opioid overdose with subsequent relapse due to diminished tolerance and heightened sensitivity [14, 15].
Before naltrexone administration, the patient must be adequately detoxified from opioids with no physical dependence. A naloxone challenge can be utilized when uncertain of detoxification, monitoring for signs and symptoms of withdrawal. Oral naltrexone can be dosed at 50 mg daily or three times weekly with two 100 mg doses followed by one 150 mg dose. ER injectable naltrexone can be given every 3–4 weeks by deep intramuscular injection in the gluteal muscle at a set dosage of 380 mg per injection [14, 15].
Naltrexone ER is associated with side effects such as insomnia, clinically insignificant elevation of transaminases, hypertension, naso-pharyngitis, and influenza [25]. Although naltrexone does not reduce respiratory drive, relapse with high-dose opioids may result in accidental overdose death due to diminished opioid tolerance. Unlike methadone and buprenorphine, naltrexone ER is not recommended for use in pregnant or breastfeeding women [14, 15].
Buprenorphine
Buprenorphine is a partial opioid agonist utilized to treat OUD [26]. Buprenorphine has the ability to relieve a patient’s drug cravings while maintaining a higher safety profile than other MAT medications. Due to buprenorphine’s “ceiling effect,” increasing dosages will not cause equally increasing respiratory depression in patients [27]. As such, buprenorphine is less likely to cause fatal respiratory depression during overdose [28, 29]. Caution should be applied when combining buprenorphine with other sedative medications, potentially causing higher levels of sedation. Buprenorphine, like methadone, is safe for use in pregnant patients [14, 15]. It demonstrates less peak-dosing suppression of fetal heart rate and less severe neonatal abstinence syndrome than methadone [25].
A critical distinction of buprenorphine therapy is its ability for outpatient prescription following the Drug Addiction Treatment Act (DATA) of 2000 [30]. Any physician can prescribe buprenorphine following completion of an online training course. This distinction can increase access to MAT in otherwise inaccessible patient populations. Following a closely monitored initiation phase, dosing is usually 2 mg to 4 mg to reduce the risk of precipitating withdrawal [14, 15]. If well tolerated, the dose can be increased fairly rapidly to a dose that provides stable effects for 24 h and is effective, with evidence suggesting that doses of 16 mg and greater may be more effective at suppressing illicit opioid use [23]. The FDA recommendation limits dosing to 24 mg per day because higher doses may increase diversion risk [14, 15]. Retention on buprenorphine across low (2 mg–6 mg per day), medium (7 mg–15 mg per day), and high (≥16 mg per day) doses is significantly superior to placebo [31]. However, only high-dose buprenorphine reduces opioid use significantly compared to placebo [32].
Buprenorphine can also be administered with naloxone as a single-dose tablet or buccal film [14, 15]. The goal of combining naloxone, an opioid antagonist, with buprenorphine is to discourage buprenorphine abuse. If the buprenorphine/naloxone product is crushed for the purpose of injection, naloxone will antagonize the agonistic effects of buprenorphine [33]. The FDA recently approved several new buprenorphine formulations for the treatment of OUD, including an ER injection, but data regarding their effectiveness are limited [14, 15]. Some emergency departments are now initiating buprenorphine therapy to patients experiencing withdrawal symptoms [34]. This new strategy has demonstrated promising results toward improving rates of MAT initiation, and its expansion is likely to continue over time [34, 35].
The Substance Abuse and Mental Health Services Administration (SAMHSA) recommends appropriate counseling and social support programs for patients receiving buprenorphine therapy [36] “Group-based” buprenorphine treatments have gained interest since their inception, providing both buprenorphine prescription and group counseling together in a destigmatized environment. This model also increases the number of patients that a single physician could treat, addressing areas with limited access to MAT providers [37]. Some studies have suggested possible benefits of this treatment model [38, 39], particularly in prolonging treatment retention. Despite these advantages, the available supporting research has been limited and varied [38]. A 2017 literature review [39] examined 10 studies, 4 of which utilized small-group models and 6 of which utilized group psychotherapy. The authors concluded that there was limited evidence to support group-based buprenorphine therapy but that much of the literature available was either weak or potentially biased. Based on the limited research available and isolated reports of success, this practice has some feasibility and expands buprenorphine access for patients.
https://pubmed.ncbi.nlm.nih.gov/35285220/
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explain the pros and cons of the three different medications for opioid use disorder, in plain language, for someone who is not a medical person
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You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." |
Respond to questions or requests using only the information contained in the text that is provided to you. | Summarize and list the cases used to support the policy in this document in chronological order. | Attorney Fees The Freedom of Information Act is one of more than a hundred different federal statutes that contain a "fee-shifting" provision permitting the trial court to award reasonable attorney fees and litigation costs to a plaintiff who has "substantially prevailed."1 The FOIA's attorney fees provision requires courts to engage in a two-step substantive inquiry. The court must determine first if the plaintiff is eligible for an award of fees and/or costs and it must then determine if the plaintiff is entitled to the award.2 Even if a plaintiff meets both of these tests, the award of fees and costs is entirely within the discretion of the court.3 Threshold Issues The FOIA's attorney fees provision limits an award to fees and costs incurred in litigating a case brought pursuant to the FOIA;4 accordingly, fees and other costs are generally 1 5 U.S.C. § 552(a)(4)(E)(i) (2006), amended by OPEN Government Act of 2007, Pub. L. No. 110-175, 121 Stat. 2524. 2 See, e.g., Tax Analysts v. DOJ, 965 F.2d 1092, 1093 (D.C. Cir. 1992); Church of Scientology v. USPS, 700 F.2d 486, 489 (9th Cir. 1983); see also Wheeler v. IRS, 37 F. Supp. 2d 407, 411 n.1 (W.D. Pa. 1998) ("The test for whether the court should award a FOIA plaintiff litigation costs is the same as the test for whether attorney fees should be awarded."). 3 See, e.g., Lissner v. U.S. Customs Serv., 56 F. App'x 330, 331 (9th Cir. 2002) (stating that review of attorney fee award is for abuse of discretion); Anderson v. HHS, 80 F.3d 1500, 1504 (10th Cir. 1996) ("Assessment of attorney's fees in an FOIA case is discretionary with the district court."); Detroit Free Press, Inc. v. DOJ, 73 F.3d 93, 98 (6th Cir. 1996) ("We review the court's determination [to grant fees] for an abuse of discretion."); Young v. Dir., No. 92-2561, 1993 WL 305970, at *2 (4th Cir. 1993) (noting that court has discretion to deny fees even if eligibility threshold is met); Maynard v. CIA, 986 F.2d 547, 567 (1st Cir. 1993) (holding that a decision on whether to award attorney fees "will be reversed only for an abuse of . . . discretion"); Tax Analysts, 965 F.2d at 1094 ("sifting of those [fee] criteria over the facts of a case is a matter of district court discretion"); Hersh & Hersh v. HHS, No. 06-4234, 2008 WL 2725497, at *1 (N.D. Cal. July 10, 2008) ("If a plaintiff demonstrates eligibility for fees, the district court may then, in the exercise of its discretion, determine that the plaintiff is entitled to an award of fees and costs."); Bangor Hydro-Elec. Co. v. U.S. Dep't of the Interior, 903 F. Supp. 160, 170 (D. Me. 1995) ("Awards of litigation costs and attorney fees under FOIA are left to the sound discretion of the trial court."). 4 See Nichols v. Pierce, 740 F.2d 1249, 1252-54 (D.C. Cir. 1984) (refusing to award fees for (continued...) not awarded for services rendered at the administrative level.5 Furthermore, the Court of Appeals for the District of Columbia Circuit has held that FOIA litigation costs related to disputes with third parties, "who are not within the government's authority or control, with respect to litigation issues that were neither raised nor pursued by the government, cannot form the basis of a fee award under 5 U.S.C. § 552(a)(4)(E)."6 A threshold eligibility matter concerns precisely who can qualify for an award of attorney fees. The D.C. Circuit has found that the Supreme Court's decision in Kay v. Ehrler7 establishes that subsection (a)(4)(E)(i) of the FOIA does not authorize the award of fees to a pro se non-attorney plaintiff, because "the word 'attorney,' when used in the context of a feeshifting statute, does not encompass a layperson proceeding on his own behalf."8 In order to 4 (...continued) plaintiff's success under Administrative Procedure Act, 5 U.S.C. §§ 701-706 (2006), resulting in order to agency to issue regulations, despite plaintiff's claim of victory under FOIA subsection (a)(1)), because Complaint failed to assert claim under or rely specifically on FOIA). 5 See AutoAlliance Int'l, Inc. v. U.S. Customs Serv., No. 02-72369, slip op. at 3 (E.D. Mich. Mar. 23, 2004) (denying attorney fees for time spent on "administrative appeals that should have been completed prior to filing suit"); Inst. for Wildlife Prot. v. U.S. Fish & Wildlife Serv., No. 02-6178, slip op. at 6 (D. Or. Dec. 3, 2003) (deducting hours spent on FOIA administrative process for fee-calculation purposes); Nw. Coal. for Alternatives to Pesticides v. Browner, 965 F. Supp. 59, 65 (D.D.C. 1997) ("FOIA does not authorize fees for work performed at the administrative stage."); Associated Gen. Contractors v. EPA, 488 F. Supp. 861, 864 (D. Nev. 1980) (concluding that attorney fees are unavailable for work performed at administrative level); cf. Kennedy v. Andrus, 459 F. Supp. 240, 244 (D.D.C. 1978) (rejecting attorney fees claim for services rendered at administrative level under Privacy Act, 5 U.S.C. § 552a (2006)), aff'd, 612 F.2d 586 (D.C. Cir. 1980) (unpublished table decision). But see Or. Natural Desert Ass'n v. Gutierrez, 442 F. Supp. 2d 1096, 1101 (D. Or. 2006) (awarding fees for work performed at the administrative level, on the rationale that "exhaustion of remedies is required and provides a sufficient record for the civil action") (appeal pending); McCoy v. BOP, No. 03-383, 2005 WL 1972600, at *4 (E.D. Ky. Aug. 16, 2005) (permitting fees for work on plaintiff's administrative appeal, on the rationale that it "was necessary to exhaust administrative remedies"), reconsideration denied, No. 03-383 (E.D. Ky. Oct. 6, 2005); cf. Tule River Conservancy v. U.S. Forest Serv., No. 97-5720, slip op. at 16-17 (E.D. Cal. Sept. 12, 2000) (allowing attorney fees for pre-litigation research on "how to exhaust [plaintiff's] administration remedies prior to filing suit" and on "how to file FOIA complaint"). 6 Judicial Watch, Inc. v. U.S. Dep't of Commerce, 470 F.3d 363, 373 (D.C. Cir. 2006). 7 499 U.S. 432 (1991). 8 Benavides v. BOP, 993 F.2d 257, 259 (D.C. Cir. 1993) (explaining Kay decision); see Bensman v. U.S. Fish & Wildlife Serv., 49 F. App'x 646, 647 (7th Cir. 2002) ("Even when a pro se litigant performs the same tasks as an attorney, he is not entitled to reimbursement for his time."); Sukup v. EOUSA, No. 02-0355, 2007 WL 2405716, at *1 (D.D.C. Aug. 23, 2007) ("Pro se plaintiffs may not recover attorney's fees under the FOIA."); Deichman v. United States, No. 2:05cv680, 2006 WL 3000448, at *7 (E.D. Va. Oct. 20, 2006) (holding that pro see litigant cannot (continued...) be eligible for attorney fees, therefore, a FOIA plaintiff must have a representational relationship with an attorney.9 Furthermore, Kay indicated that no award of attorney fees should be made to a pro se plaintiff who also is an attorney. 10 Because the fee-shifting provision of the FOIA was intended "'to encourage potential claimants to seek legal advice before commencing litigation,'"11 and because a pro se attorney, by definition, does not seek out the "'detached and objective perspective necessary'" to litigate his FOIA case,12 the overwhelming majority of courts have agreed with Kay and have held that a pro se attorney is not eligible for a fee award that otherwise would have had to be paid to counsel.13 This is particularly so because 8 (...continued) recover attorney fees under FOIA); Lair v. Dep't of the Treasury, No. 03-827, 2005 WL 645228, at *6 (D.D.C. Mar. 21, 2005) (explaining that "pro-se non-attorney . . . may not collect attorney fees" (citing Benavides)), reconsideration denied, 2005 WL 1330722 (D.D.C. June 3, 2005). 9 See Kooritzky v. Herman, 178 F.3d 1315, 1323 (D.C. Cir. 1999) (holding that for all similarly worded fee-shifting statutes, "the term 'attorney' contemplates an agency relationship between a litigant and an independent lawyer"); see also Blazy v. Tenet, 194 F.3d 90, 94 (D.C. Cir. 1999) (concluding that attorney need not file formal appearance in order for litigant to claim fees for consultations, so long as attorney-client relationship existed) (Privacy Act case); cf. Anderson v. U.S. Dep't of the Treasury, 648 F.2d 1, 3 (D.C. Cir. 1979) (indicating that when an organization litigates through in-house counsel, any payable attorney fees should not "exceed[] the expenses incurred by [that party] in terms of [in-house counsel] salaries and other out-of-pocket expenses"). | Respond to questions or requests using only the information contained in the text that is provided to you.
Summarize and list the cases used to support the policy in this document in chronological order.
Attorney Fees The Freedom of Information Act is one of more than a hundred different federal statutes that contain a "fee-shifting" provision permitting the trial court to award reasonable attorney fees and litigation costs to a plaintiff who has "substantially prevailed."1 The FOIA's attorney fees provision requires courts to engage in a two-step substantive inquiry. The court must determine first if the plaintiff is eligible for an award of fees and/or costs and it must then determine if the plaintiff is entitled to the award.2 Even if a plaintiff meets both of these tests, the award of fees and costs is entirely within the discretion of the court.3 Threshold Issues The FOIA's attorney fees provision limits an award to fees and costs incurred in litigating a case brought pursuant to the FOIA;4 accordingly, fees and other costs are generally 1 5 U.S.C. § 552(a)(4)(E)(i) (2006), amended by OPEN Government Act of 2007, Pub. L. No. 110-175, 121 Stat. 2524. 2 See, e.g., Tax Analysts v. DOJ, 965 F.2d 1092, 1093 (D.C. Cir. 1992); Church of Scientology v. USPS, 700 F.2d 486, 489 (9th Cir. 1983); see also Wheeler v. IRS, 37 F. Supp. 2d 407, 411 n.1 (W.D. Pa. 1998) ("The test for whether the court should award a FOIA plaintiff litigation costs is the same as the test for whether attorney fees should be awarded."). 3 See, e.g., Lissner v. U.S. Customs Serv., 56 F. App'x 330, 331 (9th Cir. 2002) (stating that review of attorney fee award is for abuse of discretion); Anderson v. HHS, 80 F.3d 1500, 1504 (10th Cir. 1996) ("Assessment of attorney's fees in an FOIA case is discretionary with the district court."); Detroit Free Press, Inc. v. DOJ, 73 F.3d 93, 98 (6th Cir. 1996) ("We review the court's determination [to grant fees] for an abuse of discretion."); Young v. Dir., No. 92-2561, 1993 WL 305970, at *2 (4th Cir. 1993) (noting that court has discretion to deny fees even if eligibility threshold is met); Maynard v. CIA, 986 F.2d 547, 567 (1st Cir. 1993) (holding that a decision on whether to award attorney fees "will be reversed only for an abuse of . . . discretion"); Tax Analysts, 965 F.2d at 1094 ("sifting of those [fee] criteria over the facts of a case is a matter of district court discretion"); Hersh & Hersh v. HHS, No. 06-4234, 2008 WL 2725497, at *1 (N.D. Cal. July 10, 2008) ("If a plaintiff demonstrates eligibility for fees, the district court may then, in the exercise of its discretion, determine that the plaintiff is entitled to an award of fees and costs."); Bangor Hydro-Elec. Co. v. U.S. Dep't of the Interior, 903 F. Supp. 160, 170 (D. Me. 1995) ("Awards of litigation costs and attorney fees under FOIA are left to the sound discretion of the trial court."). 4 See Nichols v. Pierce, 740 F.2d 1249, 1252-54 (D.C. Cir. 1984) (refusing to award fees for (continued...) not awarded for services rendered at the administrative level.5 Furthermore, the Court of Appeals for the District of Columbia Circuit has held that FOIA litigation costs related to disputes with third parties, "who are not within the government's authority or control, with respect to litigation issues that were neither raised nor pursued by the government, cannot form the basis of a fee award under 5 U.S.C. § 552(a)(4)(E)."6 A threshold eligibility matter concerns precisely who can qualify for an award of attorney fees. The D.C. Circuit has found that the Supreme Court's decision in Kay v. Ehrler7 establishes that subsection (a)(4)(E)(i) of the FOIA does not authorize the award of fees to a pro se non-attorney plaintiff, because "the word 'attorney,' when used in the context of a feeshifting statute, does not encompass a layperson proceeding on his own behalf."8 In order to 4 (...continued) plaintiff's success under Administrative Procedure Act, 5 U.S.C. §§ 701-706 (2006), resulting in order to agency to issue regulations, despite plaintiff's claim of victory under FOIA subsection (a)(1)), because Complaint failed to assert claim under or rely specifically on FOIA). 5 See AutoAlliance Int'l, Inc. v. U.S. Customs Serv., No. 02-72369, slip op. at 3 (E.D. Mich. Mar. 23, 2004) (denying attorney fees for time spent on "administrative appeals that should have been completed prior to filing suit"); Inst. for Wildlife Prot. v. U.S. Fish & Wildlife Serv., No. 02-6178, slip op. at 6 (D. Or. Dec. 3, 2003) (deducting hours spent on FOIA administrative process for fee-calculation purposes); Nw. Coal. for Alternatives to Pesticides v. Browner, 965 F. Supp. 59, 65 (D.D.C. 1997) ("FOIA does not authorize fees for work performed at the administrative stage."); Associated Gen. Contractors v. EPA, 488 F. Supp. 861, 864 (D. Nev. 1980) (concluding that attorney fees are unavailable for work performed at administrative level); cf. Kennedy v. Andrus, 459 F. Supp. 240, 244 (D.D.C. 1978) (rejecting attorney fees claim for services rendered at administrative level under Privacy Act, 5 U.S.C. § 552a (2006)), aff'd, 612 F.2d 586 (D.C. Cir. 1980) (unpublished table decision). But see Or. Natural Desert Ass'n v. Gutierrez, 442 F. Supp. 2d 1096, 1101 (D. Or. 2006) (awarding fees for work performed at the administrative level, on the rationale that "exhaustion of remedies is required and provides a sufficient record for the civil action") (appeal pending); McCoy v. BOP, No. 03-383, 2005 WL 1972600, at *4 (E.D. Ky. Aug. 16, 2005) (permitting fees for work on plaintiff's administrative appeal, on the rationale that it "was necessary to exhaust administrative remedies"), reconsideration denied, No. 03-383 (E.D. Ky. Oct. 6, 2005); cf. Tule River Conservancy v. U.S. Forest Serv., No. 97-5720, slip op. at 16-17 (E.D. Cal. Sept. 12, 2000) (allowing attorney fees for pre-litigation research on "how to exhaust [plaintiff's] administration remedies prior to filing suit" and on "how to file FOIA complaint"). 6 Judicial Watch, Inc. v. U.S. Dep't of Commerce, 470 F.3d 363, 373 (D.C. Cir. 2006). 7 499 U.S. 432 (1991). 8 Benavides v. BOP, 993 F.2d 257, 259 (D.C. Cir. 1993) (explaining Kay decision); see Bensman v. U.S. Fish & Wildlife Serv., 49 F. App'x 646, 647 (7th Cir. 2002) ("Even when a pro se litigant performs the same tasks as an attorney, he is not entitled to reimbursement for his time."); Sukup v. EOUSA, No. 02-0355, 2007 WL 2405716, at *1 (D.D.C. Aug. 23, 2007) ("Pro se plaintiffs may not recover attorney's fees under the FOIA."); Deichman v. United States, No. 2:05cv680, 2006 WL 3000448, at *7 (E.D. Va. Oct. 20, 2006) (holding that pro see litigant cannot (continued...) be eligible for attorney fees, therefore, a FOIA plaintiff must have a representational relationship with an attorney.9 Furthermore, Kay indicated that no award of attorney fees should be made to a pro se plaintiff who also is an attorney. 10 Because the fee-shifting provision of the FOIA was intended "'to encourage potential claimants to seek legal advice before commencing litigation,'"11 and because a pro se attorney, by definition, does not seek out the "'detached and objective perspective necessary'" to litigate his FOIA case,12 the overwhelming majority of courts have agreed with Kay and have held that a pro se attorney is not eligible for a fee award that otherwise would have had to be paid to counsel.13 This is particularly so because 8 (...continued) recover attorney fees under FOIA); Lair v. Dep't of the Treasury, No. 03-827, 2005 WL 645228, at *6 (D.D.C. Mar. 21, 2005) (explaining that "pro-se non-attorney . . . may not collect attorney fees" (citing Benavides)), reconsideration denied, 2005 WL 1330722 (D.D.C. June 3, 2005). 9 See Kooritzky v. Herman, 178 F.3d 1315, 1323 (D.C. Cir. 1999) (holding that for all similarly worded fee-shifting statutes, "the term 'attorney' contemplates an agency relationship between a litigant and an independent lawyer"); see also Blazy v. Tenet, 194 F.3d 90, 94 (D.C. Cir. 1999) (concluding that attorney need not file formal appearance in order for litigant to claim fees for consultations, so long as attorney-client relationship existed) (Privacy Act case); cf. Anderson v. U.S. Dep't of the Treasury, 648 F.2d 1, 3 (D.C. Cir. 1979) (indicating that when an organization litigates through in-house counsel, any payable attorney fees should not "exceed[] the expenses incurred by [that party] in terms of [in-house counsel] salaries and other out-of-pocket expenses"). |
You are required to answer questions based solely on the information provided in the prompt. You will not use any outside resources or internal knowledge. | What are the risks associated with high interest rates on mortgages? | Mortgage Classifications
Mortgages can be classified into several categories based on their characteristics. The broadest
distinction is between government-insured mortgages and conventional mortgages. Government-
insured mortgages have mortgage insurance from a government agency, such as FHA, VA, or
USDA, whereas conventional mortgages do not have government insurance. As previously noted,
this insurance pays the lender if the borrower defaults. Borrowers can also be classified into two
broad groups based on their credit history: prime and non-prime. Although there is no single
agreed-upon definition, prime borrowers generally have very good credit and are offered more
attractive mortgage terms, such as better interest rates, than non-prime borrowers. Non-prime
borrowers exhibit one or more factors that make them appear riskier to lenders, such as past credit
problems or a lack of complete income and asset documentation.
Conventional mortgages can be broken down into two additional groups, conforming and
nonconforming mortgages. Conforming loans are loans eligible to be purchased in the secondary
market by Fannie Mae and Freddie Mac, two GSEs that are discussed later in this report. To be a
conforming loan, the mortgage must meet certain creditworthiness thresholds (such as a
minimum credit score) and be less than the “conforming loan limit,” a legal cap on the principal
balance of the mortgage that can vary based on the geographic area where the house is located.18
Borrowers with conforming loans are usually prime borrowers.
Nonconforming loans can be broken down into three additional categories depending on the
reason they are not conforming. First, nonconforming loans above the conforming loan limit are
called jumbo loans.19 Second, Alt-A loans are for near-prime borrowers who may have credit
problems or who do not have complete documentation for income or assets. Third, subprime
loans are generally for the riskiest borrowers; they either have low credit scores, documentation
issues, or some other factor that makes them appear to be riskier to lenders. Subprime borrowers
are likely to be charged a higher interest rate to compensate the lender for the additional risk.20
Risks Associated with Holding Mortgages
When a lender originates a mortgage, it accepts certain risks. The three major risks are credit,
prepayment, and funding risk.
Credit risk refers to the risk that the lender bears if a borrower does not repay the mortgage on
time. 21 Prepayment risk is the risk that a mortgage will be paid off sooner than expected,
typically by a borrower refinancing the mortgage or selling the home. This is more likely to
happen when interest rates fall, because borrowers are more likely to refinance their mortgages to
take advantage of lower interest rates. 22 When a borrower refinances, the lender is paid in full the
amount owed, but it now has to reinvest those funds at a time when its expected return on new
investments is lower because interest rates have fallen.
Although prepayment risk is a risk associated with falling interest rates, there are also risks for
lenders that come from rising interest rates. One of these risks, called funding risk, arises because
some lenders borrow money in the short term to fund long-term investments, such as 30-year
mortgages. Short-term interest rates are typically lower than long-term interest rates because of
the additional risk associated with lending money for a longer period of time. Lenders, therefore,
can profit from the difference, or spread, between the short-term and long-term rates. If interest
rates rise, then the lender will have to borrow funds at a higher interest rate, while still earning the
same interest rate on the mortgage. As long as the short-term rate stays below the long-term
return, the lender would profit on the difference, although its profits would be lower than if the
short-term interest rates had not increased. If short-term rates increase above the fixed return on
the mortgage, then the investment would no longer be profitable.
Another lender’s risk associated with rising interest rates is opportunity costs. If interest rates rise,
but lender’s money is tied up in long-term mortgages made at lower interest rates, then the lender
is missing out on higher returns that it could be earning if it were able to originate mortgages or
make other investments at the higher current interest rate.
The lender that originates a mortgage does not necessarily have to bear all of the associated risks.
In some cases, the borrower could bear some of these risks. Adjustable-rate mortgages, for
example, transfer the risk that interest rates might rise from the lender to the borrower. Lenders
can also sell mortgages to investors, who then bear the risks associated with the mortgage. The
market for buying and selling mortgages is called the secondary market, which is described
below.
The Secondary Market
After a lender originates a mortgage loan, the lender has several options. The lender could choose
to hold the mortgage in its portfolio or sell it to another entity. Mortgages are bought and sold in
the secondary market to domestic and international investors. When a mortgage is sold, the
mortgage servicer may change. In any case, the borrower continues to send monthly mortgage
payments to the mortgage servicer.23 The servicer remits the payments to the entity that purchased
the mortgage.
The secondary market plays an important role in providing funding for loans made in the primary
market. When a mortgage is sold in the secondary market, the lender can use the proceeds to fund
additional new mortgages in the primary market. If the lender holds the mortgage in its portfolio,
the lender has fewer available funds to make new mortgages. Furthermore, selling the loan to
another entity allows the lender to transfer mortgage lending risks to the buyer.
Securitization
When a lender sells a mortgage in the secondary market, the new mortgage holder can hold the
mortgage as a whole loan. When held as a whole loan, the mortgage is in the portfolio of the new
mortgage holder, and the new mortgage holder bears the risks associated with the mortgage.
Alternatively, the new mortgage holder may choose to securitize the mortgage instead of holding
it as a whole loan.24 Mortgage securitization comes in many different forms, but generally
speaking, the process involves a financial institution acquiring and combining (pooling together)
many different mortgages and then issuing a mortgage-backed security (MBS). An MBS can be
divided into different pieces, or tranches, that are sold to investors.25 The investors do not own
the underlying mortgages but are buying the right to receive the future stream of payments that
come from those mortgages. A servicer collects the payments of all the borrowers whose
mortgages are part of the security and remits the payments to the investors.
For investors, purchasing MBS offers several benefits compared with holding whole mortgages.
Most notably, an MBS is generally more liquid than whole mortgages, meaning it is easier to
quickly sell an MBS at the current price. Because the market for MBS is more liquid than the
market for whole mortgages, MBS might be attractive to investors who would not otherwise
choose to invest in mortgages. More investors in the mortgage market, in turn, can mean more
funding is available for lenders to offer mortgages. More funding available in the primary market,
and the existence of a secondary market where lenders know they can easily sell the mortgages
they make, can result in lower interest rates that lenders charge to borrowers.
Although securitization may have several advantages, it may also present several disadvantages.
Securitization—and the secondary market in general—requires additional participants to facilitate
the flow of credit than when a loan is held by the originator. Additional participants, with some
acting on behalf of others, can increase costs and introduce competing incentives for the various
participants and potential conflicts of interest. For example, more participants in the transaction
may result in a principal-agent problem, a situation in which one entity (the agent) is supposed to
work on behalf of another entity (the principal), but the agent may have an incentive to act in its
own best interest rather than in the best interest of the principal. For example, mortgage servicers
act on behalf of investors to evaluate a borrower for mortgage workout options or to begin the
foreclosure process when a borrower falls behind on mortgage payments, as specified by a
contract between the investor and the servicer. However, in some cases, a servicer may have an
incentive to choose the option that is in its own best interest rather than in the best interest of the
investor, and the investor might not be well positioned to police the servicer’s actions.26 | What are the risks associated with high interest rates on mortgages?
Mortgage Classifications
Mortgages can be classified into several categories based on their characteristics. The broadest
distinction is between government-insured mortgages and conventional mortgages. Government-
insured mortgages have mortgage insurance from a government agency, such as FHA, VA, or
USDA, whereas conventional mortgages do not have government insurance. As previously noted,
this insurance pays the lender if the borrower defaults. Borrowers can also be classified into two
broad groups based on their credit history: prime and non-prime. Although there is no single
agreed-upon definition, prime borrowers generally have very good credit and are offered more
attractive mortgage terms, such as better interest rates, than non-prime borrowers. Non-prime
borrowers exhibit one or more factors that make them appear riskier to lenders, such as past credit
problems or a lack of complete income and asset documentation.
Conventional mortgages can be broken down into two additional groups, conforming and
nonconforming mortgages. Conforming loans are loans eligible to be purchased in the secondary
market by Fannie Mae and Freddie Mac, two GSEs that are discussed later in this report. To be a
conforming loan, the mortgage must meet certain creditworthiness thresholds (such as a
minimum credit score) and be less than the “conforming loan limit,” a legal cap on the principal
balance of the mortgage that can vary based on the geographic area where the house is located.18
Borrowers with conforming loans are usually prime borrowers.
Nonconforming loans can be broken down into three additional categories depending on the
reason they are not conforming. First, nonconforming loans above the conforming loan limit are
called jumbo loans.19 Second, Alt-A loans are for near-prime borrowers who may have credit
problems or who do not have complete documentation for income or assets. Third, subprime
loans are generally for the riskiest borrowers; they either have low credit scores, documentation
issues, or some other factor that makes them appear to be riskier to lenders. Subprime borrowers
are likely to be charged a higher interest rate to compensate the lender for the additional risk.20
Risks Associated with Holding Mortgages
When a lender originates a mortgage, it accepts certain risks. The three major risks are credit,
prepayment, and funding risk.
Credit risk refers to the risk that the lender bears if a borrower does not repay the mortgage on
time. 21 Prepayment risk is the risk that a mortgage will be paid off sooner than expected,
typically by a borrower refinancing the mortgage or selling the home. This is more likely to
happen when interest rates fall, because borrowers are more likely to refinance their mortgages to
take advantage of lower interest rates. 22 When a borrower refinances, the lender is paid in full the
amount owed, but it now has to reinvest those funds at a time when its expected return on new
investments is lower because interest rates have fallen.
Although prepayment risk is a risk associated with falling interest rates, there are also risks for
lenders that come from rising interest rates. One of these risks, called funding risk, arises because
some lenders borrow money in the short term to fund long-term investments, such as 30-year
mortgages. Short-term interest rates are typically lower than long-term interest rates because of
the additional risk associated with lending money for a longer period of time. Lenders, therefore,
can profit from the difference, or spread, between the short-term and long-term rates. If interest
rates rise, then the lender will have to borrow funds at a higher interest rate, while still earning the
same interest rate on the mortgage. As long as the short-term rate stays below the long-term
return, the lender would profit on the difference, although its profits would be lower than if the
short-term interest rates had not increased. If short-term rates increase above the fixed return on
the mortgage, then the investment would no longer be profitable.
Another lender’s risk associated with rising interest rates is opportunity costs. If interest rates rise,
but lender’s money is tied up in long-term mortgages made at lower interest rates, then the lender
is missing out on higher returns that it could be earning if it were able to originate mortgages or
make other investments at the higher current interest rate.
The lender that originates a mortgage does not necessarily have to bear all of the associated risks.
In some cases, the borrower could bear some of these risks. Adjustable-rate mortgages, for
example, transfer the risk that interest rates might rise from the lender to the borrower. Lenders
can also sell mortgages to investors, who then bear the risks associated with the mortgage. The
market for buying and selling mortgages is called the secondary market, which is described
below.
The Secondary Market
After a lender originates a mortgage loan, the lender has several options. The lender could choose
to hold the mortgage in its portfolio or sell it to another entity. Mortgages are bought and sold in
the secondary market to domestic and international investors. When a mortgage is sold, the
mortgage servicer may change. In any case, the borrower continues to send monthly mortgage
payments to the mortgage servicer.23 The servicer remits the payments to the entity that purchased
the mortgage.
The secondary market plays an important role in providing funding for loans made in the primary
market. When a mortgage is sold in the secondary market, the lender can use the proceeds to fund
additional new mortgages in the primary market. If the lender holds the mortgage in its portfolio,
the lender has fewer available funds to make new mortgages. Furthermore, selling the loan to
another entity allows the lender to transfer mortgage lending risks to the buyer.
Securitization
When a lender sells a mortgage in the secondary market, the new mortgage holder can hold the
mortgage as a whole loan. When held as a whole loan, the mortgage is in the portfolio of the new
mortgage holder, and the new mortgage holder bears the risks associated with the mortgage.
Alternatively, the new mortgage holder may choose to securitize the mortgage instead of holding
it as a whole loan.24 Mortgage securitization comes in many different forms, but generally
speaking, the process involves a financial institution acquiring and combining (pooling together)
many different mortgages and then issuing a mortgage-backed security (MBS). An MBS can be
divided into different pieces, or tranches, that are sold to investors.25 The investors do not own
the underlying mortgages but are buying the right to receive the future stream of payments that
come from those mortgages. A servicer collects the payments of all the borrowers whose
mortgages are part of the security and remits the payments to the investors.
For investors, purchasing MBS offers several benefits compared with holding whole mortgages.
Most notably, an MBS is generally more liquid than whole mortgages, meaning it is easier to
quickly sell an MBS at the current price. Because the market for MBS is more liquid than the
market for whole mortgages, MBS might be attractive to investors who would not otherwise
choose to invest in mortgages. More investors in the mortgage market, in turn, can mean more
funding is available for lenders to offer mortgages. More funding available in the primary market,
and the existence of a secondary market where lenders know they can easily sell the mortgages
they make, can result in lower interest rates that lenders charge to borrowers.
Although securitization may have several advantages, it may also present several disadvantages.
Securitization—and the secondary market in general—requires additional participants to facilitate
the flow of credit than when a loan is held by the originator. Additional participants, with some
acting on behalf of others, can increase costs and introduce competing incentives for the various
participants and potential conflicts of interest. For example, more participants in the transaction
may result in a principal-agent problem, a situation in which one entity (the agent) is supposed to
work on behalf of another entity (the principal), but the agent may have an incentive to act in its
own best interest rather than in the best interest of the principal. For example, mortgage servicers
act on behalf of investors to evaluate a borrower for mortgage workout options or to begin the
foreclosure process when a borrower falls behind on mortgage payments, as specified by a
contract between the investor and the servicer. However, in some cases, a servicer may have an
incentive to choose the option that is in its own best interest rather than in the best interest of the
investor, and the investor might not be well positioned to police the servicer’s actions.26
You are required to answer questions based solely on the information provided in the prompt. You will not use any outside resources or internal knowledge. |
Answer the question using only information gathered from the prompt. Every time you name an animal, capitalize it. | For each animal mentioned in the document, summarize the text pertaining to it. | Hatchery Salmon Naturally spawned fish are genetically diverse and therefore considered to be more vigorous than the genetically more similar hatchery fish. Consequently, agency scientists have distinguished between hatchery-raised and wild salmon to maximize production of the latter. Over the years, these distinctions have been controversial in several respects. In 1993 NMFS issued its Interim Hatchery Listing Policy on how to consider hatchery fish in listing determinations for Pacific salmon and steelhead species. The interim policy concluded that hatchery fish could be in the same evolutionarily significant unit (ESU) as wild fish.20 Eventually, a federal court found that the interim policy violated the ESA by listing below the species level. The court found that if hatchery and wild salmon were in the same ESU, they should not have different listing status.21 NMFS revised the policy to reflect the court’s decision. The final hatchery listing policy (HLP) was released four years later, in 2005.22 The HLP requires NMFS to consider the status of the ESU as a whole, rather than the status of only the wild fish within the ESU, when determining whether to list the species. It also provides that the entire ESU would be listed, rather than just the wild fish. Two suits were filed in two different district courts. One suit challenged how the HLP affected steelhead trout. Two types of groups sued in the steelhead case: groups that wanted wild fish considered as distinct from hatchery fish, and groups that wanted to require NMFS to make no distinction between the origins of fish. The court found the HLP was invalid because it was not based on the best available scientific data.23 The court found the HLP undermined a fundamental purpose of the ESA—to preserve natural, self-sustaining populations. The court further found it scientifically questionable whether risk assessment criteria developed by NMFS for making status determinations could be applied to fish populations that included both hatchery and wild fish, since the criteria were designed to be applied only to wild fish. NMFS’s downlisting of steelhead from endangered to threatened by applying the HLP was ruled invalid. But the court upheld the NMFS decision to include hatchery and wild fish in the same ESU. The Ninth Circuit Court of Appeals upheld only a portion of the steelhead decision.24 The appellate court distinguished between the two steps of the listing process: defining the species, and then determining whether the species should be listed. The Ninth Circuit agreed with NMFS that the effects of hatchery fish on wild fish could be considered at the listing phase, not the definitional stage. The court gave discretion to NMFS’s science, although it noted that there may not be scientific consensus regarding the threat hatchery fish pose to wild fish. The appellate court reversed the lower court’s holding that downlisting the fish was invalid, finding that hatchery fish did not necessarily put wild fish at risk. A second suit was based on how the HLP affected salmon. In this case, the court held that NMFS properly considered hatchery and wild fish as having different extinction risks in its listing decision.25 The court rejected the plaintiffs’ argument that special regulations regarding taking salmon had to apply uniformly to hatchery and wild fish. The Ninth Circuit Court affirmed the lower court’s decision.26 Steller Sea Lions The western population of Steller sea lions was listed in 1990 as endangered under the ESA, and their abundance has been declining for several decades. 27 Starting in late 1998, NMFS prepared three biological opinions28 that were based on the hypothesis that intense fishing for pollock, Pacific cod, and Atka mackerel off Alaska was causing localized depletion of these fish and therefore starving Steller sea lions. Critics among commercial fishermen argued that NMFS based its biological opinion on a scientifically untested hypothesis to make a jeopardy finding on fishing levels and practices under the ESA, while NMFS insisted on a higher standard of certainty for the science under the Magnuson-Stevens Fishery Conservation and Management Act, supporting fishery management measures to address localized fish depletion problems. In a fourth biological opinion on authorization of these fisheries, NMFS took a different approach, after Steller sea lion feeding studies and population trends at some rookery sites raised questions about the localized depletion hypothesis. Litigation on this issue was settled early in 2003.29 In response, NMFS (1) published an addendum to its 2001 biological opinion to clarify the effects of the fisheries on Steller sea lions and their critical habitat and (2) completed a Final Programmatic Supplemental Environmental Impact Statement and Record of Decision concerning the Alaska groundfish fishery. In early December 2010, NMFS restrictions on commercial Atka mackerel and Pacific cod fishing in the western Aleutians to protect western Steller sea lions reignited this controversy.30 As a result of litigation challenging the NMFS determination that commercial fishing jeopardized those Steller sea lions, a court ordered NMFS to prepare an environmental impact statement for Steller sea lion protection measures. 31 Gray Wolves in Eastern States Wolves are an adaptable species, as shown by their behavior and by their presence in a tremendous variety of ecosystems.32 Variations in color, size, and bone structure have led some mammalogists to designate wolves in different areas as different subspecies or populations, whereas other experts would recognize only a single species with variability. Biologists commonly describe their colleagues as lumpers or splitters, based on their inclinations in classifying organisms. As the names suggest, lumpers are those who tend to minimize differences, and see one or a few species, perhaps with some variations, while splitters tend to emphasize those differences, dividing a species into many subspecies, or populations. As one well-known mammalogist once stated: “Splitters make very small units—their opponents say that if they can tell two animals apart, they place them in different genera, and if they cannot tell them apart, they place them in different species. Lumpers make large units—their opponents say that if a carnivore is neither a dog nor a bear they call it a cat.” 33 For wolves, which are (or were) found in temperate and polar areas throughout the Northern Hemisphere, some observers (splitters) have argued that there are as many as 24 subspecies in North America and 8 in Europe and Asia.34 More recently, lumpers have had the upper hand in the scientific community. However, that tide may be changing. In May 2011, the U.S. Fish and Wildlife Service (FWS) proposed recognizing a third species of wolf (Canis lycaon), in addition to the gray and red wolf.35 The wolves being considered for this new species designation live (or lived) primarily in the eastern United States. In the ESA context, the academic debate has considerable significance. Under the ESA, if a taxon is listed (for example the genus Hylobates), then all of the species of gibbons which belong to that genus are all protected. Similarly, if Canis lupus is listed, then all wolves (subspecies, and DPS) belonging to that species are all protected. However, if FWS concludes that there are animals commonly referred to as wolves, but which do not belong to Canis lupus at all, then those wolves would lose their ESA protections unless or until they won ESA protection on their own merits. From a scientific viewpoint, designating wolves found in the eastern United States as a separate species is not assured. For example, the encyclopedic Mammal Species of the World discusses the validity of Canis lycaon as a distinct species and concludes that evidence for separation is equivocal.36 However, it does not currently consider this wolf in the East to be a distinct species. Moreover, the North American consortium of national professionals who manage the Integrated Taxonomic Information System (ITIS, the source considered authoritative on taxonomy and taxonomic validity in the United States and its territories, Mexico, and Canada) currently considers this wolf as a subspecies (Canis lupus lycaon). 37 The validity debate considers evidence related to mitochondrial DNA, morphology, evidence of hybridization with coyotes, the natural variability of widely distributed species, and the extremely low population densities that make conclusive evidence difficult to obtain. A change in the taxonomic status would, in effect, de-list any remaining eastern wolves on the basis of that new status, rather than on an assessment of its conservation status. Only a new decision to list would return such wolves to a protected status. | Context: Hatchery Salmon Naturally spawned fish are genetically diverse and therefore considered to be more vigorous than the genetically more similar hatchery fish. Consequently, agency scientists have distinguished between hatchery-raised and wild salmon to maximize production of the latter. Over the years, these distinctions have been controversial in several respects. In 1993 NMFS issued its Interim Hatchery Listing Policy on how to consider hatchery fish in listing determinations for Pacific salmon and steelhead species. The interim policy concluded that hatchery fish could be in the same evolutionarily significant unit (ESU) as wild fish.20 Eventually, a federal court found that the interim policy violated the ESA by listing below the species level. The court found that if hatchery and wild salmon were in the same ESU, they should not have different listing status.21 NMFS revised the policy to reflect the court’s decision. The final hatchery listing policy (HLP) was released four years later, in 2005.22 The HLP requires NMFS to consider the status of the ESU as a whole, rather than the status of only the wild fish within the ESU, when determining whether to list the species. It also provides that the entire ESU would be listed, rather than just the wild fish. Two suits were filed in two different district courts. One suit challenged how the HLP affected steelhead trout. Two types of groups sued in the steelhead case: groups that wanted wild fish considered as distinct from hatchery fish, and groups that wanted to require NMFS to make no distinction between the origins of fish. The court found the HLP was invalid because it was not based on the best available scientific data.23 The court found the HLP undermined a fundamental purpose of the ESA—to preserve natural, self-sustaining populations. The court further found it scientifically questionable whether risk assessment criteria developed by NMFS for making status determinations could be applied to fish populations that included both hatchery and wild fish, since the criteria were designed to be applied only to wild fish. NMFS’s downlisting of steelhead from endangered to threatened by applying the HLP was ruled invalid. But the court upheld the NMFS decision to include hatchery and wild fish in the same ESU. The Ninth Circuit Court of Appeals upheld only a portion of the steelhead decision.24 The appellate court distinguished between the two steps of the listing process: defining the species, and then determining whether the species should be listed. The Ninth Circuit agreed with NMFS that the effects of hatchery fish on wild fish could be considered at the listing phase, not the definitional stage. The court gave discretion to NMFS’s science, although it noted that there may not be scientific consensus regarding the threat hatchery fish pose to wild fish. The appellate court reversed the lower court’s holding that downlisting the fish was invalid, finding that hatchery fish did not necessarily put wild fish at risk. A second suit was based on how the HLP affected salmon. In this case, the court held that NMFS properly considered hatchery and wild fish as having different extinction risks in its listing decision.25 The court rejected the plaintiffs’ argument that special regulations regarding taking salmon had to apply uniformly to hatchery and wild fish. The Ninth Circuit Court affirmed the lower court’s decision.26 Steller Sea Lions The western population of Steller sea lions was listed in 1990 as endangered under the ESA, and their abundance has been declining for several decades. 27 Starting in late 1998, NMFS prepared three biological opinions28 that were based on the hypothesis that intense fishing for pollock, Pacific cod, and Atka mackerel off Alaska was causing localized depletion of these fish and therefore starving Steller sea lions. Critics among commercial fishermen argued that NMFS based its biological opinion on a scientifically untested hypothesis to make a jeopardy finding on fishing levels and practices under the ESA, while NMFS insisted on a higher standard of certainty for the science under the Magnuson-Stevens Fishery Conservation and Management Act, supporting fishery management measures to address localized fish depletion problems. In a fourth biological opinion on authorization of these fisheries, NMFS took a different approach, after Steller sea lion feeding studies and population trends at some rookery sites raised questions about the localized depletion hypothesis. Litigation on this issue was settled early in 2003.29 In response, NMFS (1) published an addendum to its 2001 biological opinion to clarify the effects of the fisheries on Steller sea lions and their critical habitat and (2) completed a Final Programmatic Supplemental Environmental Impact Statement and Record of Decision concerning the Alaska groundfish fishery. In early December 2010, NMFS restrictions on commercial Atka mackerel and Pacific cod fishing in the western Aleutians to protect western Steller sea lions reignited this controversy.30 As a result of litigation challenging the NMFS determination that commercial fishing jeopardized those Steller sea lions, a court ordered NMFS to prepare an environmental impact statement for Steller sea lion protection measures. 31 Gray Wolves in Eastern States Wolves are an adaptable species, as shown by their behavior and by their presence in a tremendous variety of ecosystems.32 Variations in color, size, and bone structure have led some mammalogists to designate wolves in different areas as different subspecies or populations, whereas other experts would recognize only a single species with variability. Biologists commonly describe their colleagues as lumpers or splitters, based on their inclinations in classifying organisms. As the names suggest, lumpers are those who tend to minimize differences, and see one or a few species, perhaps with some variations, while splitters tend to emphasize those differences, dividing a species into many subspecies, or populations. As one well-known mammalogist once stated: “Splitters make very small units—their opponents say that if they can tell two animals apart, they place them in different genera, and if they cannot tell them apart, they place them in different species. Lumpers make large units—their opponents say that if a carnivore is neither a dog nor a bear they call it a cat.” 33 For wolves, which are (or were) found in temperate and polar areas throughout the Northern Hemisphere, some observers (splitters) have argued that there are as many as 24 subspecies in North America and 8 in Europe and Asia.34 More recently, lumpers have had the upper hand in the scientific community. However, that tide may be changing. In May 2011, the U.S. Fish and Wildlife Service (FWS) proposed recognizing a third species of wolf (Canis lycaon), in addition to the gray and red wolf.35 The wolves being considered for this new species designation live (or lived) primarily in the eastern United States. In the ESA context, the academic debate has considerable significance. Under the ESA, if a taxon is listed (for example the genus Hylobates), then all of the species of gibbons which belong to that genus are all protected. Similarly, if Canis lupus is listed, then all wolves (subspecies, and DPS) belonging to that species are all protected. However, if FWS concludes that there are animals commonly referred to as wolves, but which do not belong to Canis lupus at all, then those wolves would lose their ESA protections unless or until they won ESA protection on their own merits. From a scientific viewpoint, designating wolves found in the eastern United States as a separate species is not assured. For example, the encyclopedic Mammal Species of the World discusses the validity of Canis lycaon as a distinct species and concludes that evidence for separation is equivocal.36 However, it does not currently consider this wolf in the East to be a distinct species. Moreover, the North American consortium of national professionals who manage the Integrated Taxonomic Information System (ITIS, the source considered authoritative on taxonomy and taxonomic validity in the United States and its territories, Mexico, and Canada) currently considers this wolf as a subspecies (Canis lupus lycaon). 37 The validity debate considers evidence related to mitochondrial DNA, morphology, evidence of hybridization with coyotes, the natural variability of widely distributed species, and the extremely low population densities that make conclusive evidence difficult to obtain. A change in the taxonomic status would, in effect, de-list any remaining eastern wolves on the basis of that new status, rather than on an assessment of its conservation status. Only a new decision to list would return such wolves to a protected status.
Question: For each animal mentioned in the document, summarize the text pertaining to it.
System Instructions: Answer the question using only information gathered from the prompt. Every time you name an animal, capitalize it. |
Only use the text that is provided to answer the question. Answer using complete sentences. The answer must be a minimum of 3 sentences. | Based only on the information in the article above, which fitness equipment brands specialize in weight/strength training equipment? | **The Top 9 Gym Equipment Brands for Business Success in 2024**
Are you a startup gym owner ready to make a significant impact on the fitness industry this year?
In a market flooded with endless options, pinpointing the right gym equipment manufacturer to partner with is pivotal for your business’s success.
After rigorous research and analysis, Yanre Fitness stands out as the best brand of gym equipment for startup gym owners aiming for business success in 2024.
With over a decade of experience in the fitness industry, I’ve consulted gyms across the country, helping them scale their operations and maximize profits. The insights on this list are grounded in real-world experience and in-depth market research, making them invaluable for business owners in this space.
Keep reading to discover the top gym equipment brands that can propel a business to greater heights this year.
1. Technogym – Best in Luxury Fitness Solutions
Country and City: Cesena FC, Italy
Established Date: 1983
Technogym, the Wellness Company, is a global leader in creating top-of-the-line fitness equipment tailored to various markets, including private homes, fitness clubs, hotels, spas, and rehabilitation centers. The brand is synonymous with wellness, a philosophy that encourages a balanced lifestyle through regular exercise, nutritious eating, and a positive mental attitude.
Key Products: Treadmills and Strength Equipments
Takeaway Note:
Technogym excels in offering luxurious, design-forward fitness solutions backed by decades of innovation and quality craftsmanship. However, their products often come with a premium price tag, which may be a consideration for budget-conscious business owners.
2. Power Systems – Best in Comprehensive Fitness Solutions
Country and City: Tennessee, United States
Established Date: 1986
Power Systems stands out as a complete solution provider in the sports and fitness industries, offering a wide range of quality fitness and performance products. The brand is deeply committed to innovation, customer service, and education. Their slogan, “Power. Performance. Results,” aptly summarizes their philosophy that their products and elite customer service empower their diverse clientele to achieve optimal outcomes.
Key Products: Strength and Functional Equipments
Takeaway Note:
Power Systems offers a comprehensive range of quality fitness products, backed by an unwavering commitment to customer satisfaction. However, the brand’s vast product line can sometimes make the selection process overwhelming for new business owners.
3. Yanre Fitness – Best in Durable Equipment Solutions
Country and City: Wuhu, China
Established: 1997
Yanre Fitness is a brand that has been steadily rising in popularity, thanks to its modern, functional, and convenient commercial gym equipment. Particularly excelling in the strength training segment, the brand uses durable materials that promise longevity and consistent performance over time. The brand is unwavering in its commitment to quality, making it a popular choice among gym owners.
Key Products: Cardio and Strength Equipments
Takeaway Note: Yanre Fitness delivers on both quality and affordability, making it an excellent choice for gym owners who are budget-conscious yet unwilling to compromise on equipment longevity. Whether looking to upgrade an existing gym or set up a new facility, they offer a seamless, cost-effective pathway to achieving your business goals.
4. Matrix Fitness – Best in Technologically Advanced Solutions
Country and City: Wisconsin, United States
Established Date: 2001
Matrix Fitness, a brand under Johnson Health Tech (JHT), excels in producing some of the most technologically advanced fitness equipment available today. Being part of a larger, globally recognized organization, the brand benefits from a vast international research and development network, allowing them to innovate and offer cutting-edge solutions.
Key Products: Commercial Fitness and Cardio Equipments
Takeaway Note:
Matrix Fitness leads the pack in delivering technologically advanced and meticulously designed gym equipment. However, the sophistication of their equipment may come with a steeper learning curve for gym-goers unfamiliar with advanced fitness tech.
5. Gym 80 – Best in Precision Craftsmanship
Country and City: Sarstedt, Germany
Established: 1980
Gym 80 has become a byword for training quality, revolutionizing the way we work out. For instance, tenowned for its excellent biomechanics, precision craftsmanship, and clear design, the brand continually pushes the boundaries of what strength equipment can achieve. Their reputation in the industry stands as a testament to their commitment to quality and innovation.
Key Products: Weight Stacks and Plate Loaded Equipments
Takeaway Note: Gym 80 offers exceptional quality by blending traditional craftsmanship with advanced technology. However, this level of attention to detail comes with a higher price point. Therefore, if budget constraints are a significant concern, this brand might not be the most cost-effective option.
6. Tunturi New Fitness – Best in Holistic Wellness
Country and City: Almere, Netherlands
Established Date: 1922
Tunturi New Fitness doesn’t just sell gym equipment; they offer a philosophy of holistic well-being for both body and mind. They understand that health is more than just physical fitness, and that’s why their product range is designed to promote a balanced mind as well as a healthy body. With a strong focus on quality, longevity, and overall wellness, Tunturi New Fitness aims to be a lifelong partner in your health journey.
Key Products: Strength and Cardio Equipments
Takeaway Note:
Choosing Tunturi New Fitness means investing in equipment that’s designed for the long haul, encompassing both physical and mental well-being. However, their philosophy-driven approach and the additional features focused on holistic wellness may feel overwhelming or unnecessary for any gym’s needs.
7. Rogue Fitness – Best in Strength Training
Country and City: Ohio, United States
Established Date: 2006
Rogue Fitness stands as a giant in the area of strength and conditioning equipment, with a product line that includes everything from barbells to power racks and sleds. Their dedication to quality is evident, serving as the official equipment supplier to prestigious competitions like the CrossFit Games, USA Weightlifting, the Arnold Strongman Classic, and the World’s Strongest Man competition.
Key Products: Plates and Crossfit Equipments
Takeaway Note:
For business owners seeking to attract a clientele who appreciates high-quality, durable strength training equipment, Rogue Fitness provides a substantial competitive advantage. However, the premium pricing of their equipment requires a significant initial investment, potentially affecting the business’s budget.
8. NordicTrack – Best in Versatile Strength Equipment
Country and City: Utah, USA
Established Date: 1975
NordicTrack stands out for its comprehensive and versatile range of strength training equipment suitable for both home and commercial gyms. With a focus on high-quality and user-friendly design, the brand caters to various strength workout needs, ensuring that gym-goers and fitness enthusiasts can achieve their goals effectively.
Key Products: Ellipticals and Strength Equipments
Takeaway Note:
NordicTrack’s versatile range of strength equipment makes it a one-stop-shop for all the fitness facility’s needs. However, while the brand promises durability and variety, their advanced machines may require regular software updates, which could be a long-term consideration in terms of maintenance and user experience.
9. True Fitness – Best in Customer-Centric Equipment
Country and City: Missouri, United States
Established Date: 1981
True Fitness specializes in creating premium, customer-first fitness equipment, encompassing cardio, strength, and functional training. For instance, the company prioritizes responsiveness in service, superior quality in product, and expertise in design. What sets them apart is their comprehensive customer care, not just at the point of sale, but also during and after the purchase.
Key Products: Elliptical Trainers and Cardio Equipments
Takeaway Note:
True Fitness offers a range of equipment that aligns with a customer-first philosophy, enhancing user experience and potentially increasing customer loyalty. However, their focus on premium products may mean a higher upfront investment for businesses.
10. 3 Tips to Consider When Choosing the Best Brand of Gym Equipment
Navigating the diverse market of gym equipment requires consideration beyond merely pricing or popular opinion. This section outlines 5 critical factors to facilitate the selection of a gym equipment brand that aligns with business goals and demonstrates lasting reliability.
1. Track Record of Quality: Opt for brands with a strong historical credibility and track record of quality and service, with positive peer reviews and endorsements from reputable professionals.
2. Readily Available Customer Support: According to Styku, buying a gym equipment is a considerable investment. Look for brands with favorable warranty terms covering significant components and offering reasonable periods, plus a commitment to excellent after-sales service, with readily available customer support and repair services.
3. Favorable Financing Terms: Consider the value offered against the cost, with brands that might seem expensive but provide durability, advanced features, and better service. According to Glofox, financing options can be a lifeline. Brands that offer favorable financing or leasing terms understand the industry’s economic challenges and are committed to fostering long-term partnerships. | <Passage>
**The Top 9 Gym Equipment Brands for Business Success in 2024**
Are you a startup gym owner ready to make a significant impact on the fitness industry this year?
In a market flooded with endless options, pinpointing the right gym equipment manufacturer to partner with is pivotal for your business’s success.
After rigorous research and analysis, Yanre Fitness stands out as the best brand of gym equipment for startup gym owners aiming for business success in 2024.
With over a decade of experience in the fitness industry, I’ve consulted gyms across the country, helping them scale their operations and maximize profits. The insights on this list are grounded in real-world experience and in-depth market research, making them invaluable for business owners in this space.
Keep reading to discover the top gym equipment brands that can propel a business to greater heights this year.
1. Technogym – Best in Luxury Fitness Solutions
Country and City: Cesena FC, Italy
Established Date: 1983
Technogym, the Wellness Company, is a global leader in creating top-of-the-line fitness equipment tailored to various markets, including private homes, fitness clubs, hotels, spas, and rehabilitation centers. The brand is synonymous with wellness, a philosophy that encourages a balanced lifestyle through regular exercise, nutritious eating, and a positive mental attitude.
Key Products: Treadmills and Strength Equipments
Takeaway Note:
Technogym excels in offering luxurious, design-forward fitness solutions backed by decades of innovation and quality craftsmanship. However, their products often come with a premium price tag, which may be a consideration for budget-conscious business owners.
2. Power Systems – Best in Comprehensive Fitness Solutions
Country and City: Tennessee, United States
Established Date: 1986
Power Systems stands out as a complete solution provider in the sports and fitness industries, offering a wide range of quality fitness and performance products. The brand is deeply committed to innovation, customer service, and education. Their slogan, “Power. Performance. Results,” aptly summarizes their philosophy that their products and elite customer service empower their diverse clientele to achieve optimal outcomes.
Key Products: Strength and Functional Equipments
Takeaway Note:
Power Systems offers a comprehensive range of quality fitness products, backed by an unwavering commitment to customer satisfaction. However, the brand’s vast product line can sometimes make the selection process overwhelming for new business owners.
3. Yanre Fitness – Best in Durable Equipment Solutions
Country and City: Wuhu, China
Established: 1997
Yanre Fitness is a brand that has been steadily rising in popularity, thanks to its modern, functional, and convenient commercial gym equipment. Particularly excelling in the strength training segment, the brand uses durable materials that promise longevity and consistent performance over time. The brand is unwavering in its commitment to quality, making it a popular choice among gym owners.
Key Products: Cardio and Strength Equipments
Takeaway Note: Yanre Fitness delivers on both quality and affordability, making it an excellent choice for gym owners who are budget-conscious yet unwilling to compromise on equipment longevity. Whether looking to upgrade an existing gym or set up a new facility, they offer a seamless, cost-effective pathway to achieving your business goals.
4. Matrix Fitness – Best in Technologically Advanced Solutions
Country and City: Wisconsin, United States
Established Date: 2001
Matrix Fitness, a brand under Johnson Health Tech (JHT), excels in producing some of the most technologically advanced fitness equipment available today. Being part of a larger, globally recognized organization, the brand benefits from a vast international research and development network, allowing them to innovate and offer cutting-edge solutions.
Key Products: Commercial Fitness and Cardio Equipments
Takeaway Note:
Matrix Fitness leads the pack in delivering technologically advanced and meticulously designed gym equipment. However, the sophistication of their equipment may come with a steeper learning curve for gym-goers unfamiliar with advanced fitness tech.
5. Gym 80 – Best in Precision Craftsmanship
Country and City: Sarstedt, Germany
Established: 1980
Gym 80 has become a byword for training quality, revolutionizing the way we work out. For instance, tenowned for its excellent biomechanics, precision craftsmanship, and clear design, the brand continually pushes the boundaries of what strength equipment can achieve. Their reputation in the industry stands as a testament to their commitment to quality and innovation.
Key Products: Weight Stacks and Plate Loaded Equipments
Takeaway Note: Gym 80 offers exceptional quality by blending traditional craftsmanship with advanced technology. However, this level of attention to detail comes with a higher price point. Therefore, if budget constraints are a significant concern, this brand might not be the most cost-effective option.
6. Tunturi New Fitness – Best in Holistic Wellness
Country and City: Almere, Netherlands
Established Date: 1922
Tunturi New Fitness doesn’t just sell gym equipment; they offer a philosophy of holistic well-being for both body and mind. They understand that health is more than just physical fitness, and that’s why their product range is designed to promote a balanced mind as well as a healthy body. With a strong focus on quality, longevity, and overall wellness, Tunturi New Fitness aims to be a lifelong partner in your health journey.
Key Products: Strength and Cardio Equipments
Takeaway Note:
Choosing Tunturi New Fitness means investing in equipment that’s designed for the long haul, encompassing both physical and mental well-being. However, their philosophy-driven approach and the additional features focused on holistic wellness may feel overwhelming or unnecessary for any gym’s needs.
7. Rogue Fitness – Best in Strength Training
Country and City: Ohio, United States
Established Date: 2006
Rogue Fitness stands as a giant in the area of strength and conditioning equipment, with a product line that includes everything from barbells to power racks and sleds. Their dedication to quality is evident, serving as the official equipment supplier to prestigious competitions like the CrossFit Games, USA Weightlifting, the Arnold Strongman Classic, and the World’s Strongest Man competition.
Key Products: Plates and Crossfit Equipments
Takeaway Note:
For business owners seeking to attract a clientele who appreciates high-quality, durable strength training equipment, Rogue Fitness provides a substantial competitive advantage. However, the premium pricing of their equipment requires a significant initial investment, potentially affecting the business’s budget.
8. NordicTrack – Best in Versatile Strength Equipment
Country and City: Utah, USA
Established Date: 1975
NordicTrack stands out for its comprehensive and versatile range of strength training equipment suitable for both home and commercial gyms. With a focus on high-quality and user-friendly design, the brand caters to various strength workout needs, ensuring that gym-goers and fitness enthusiasts can achieve their goals effectively.
Key Products: Ellipticals and Strength Equipments
Takeaway Note:
NordicTrack’s versatile range of strength equipment makes it a one-stop-shop for all the fitness facility’s needs. However, while the brand promises durability and variety, their advanced machines may require regular software updates, which could be a long-term consideration in terms of maintenance and user experience.
9. True Fitness – Best in Customer-Centric Equipment
Country and City: Missouri, United States
Established Date: 1981
True Fitness specializes in creating premium, customer-first fitness equipment, encompassing cardio, strength, and functional training. For instance, the company prioritizes responsiveness in service, superior quality in product, and expertise in design. What sets them apart is their comprehensive customer care, not just at the point of sale, but also during and after the purchase.
Key Products: Elliptical Trainers and Cardio Equipments
Takeaway Note:
True Fitness offers a range of equipment that aligns with a customer-first philosophy, enhancing user experience and potentially increasing customer loyalty. However, their focus on premium products may mean a higher upfront investment for businesses.
10. 3 Tips to Consider When Choosing the Best Brand of Gym Equipment
Navigating the diverse market of gym equipment requires consideration beyond merely pricing or popular opinion. This section outlines 5 critical factors to facilitate the selection of a gym equipment brand that aligns with business goals and demonstrates lasting reliability.
1. Track Record of Quality: Opt for brands with a strong historical credibility and track record of quality and service, with positive peer reviews and endorsements from reputable professionals.
2. Readily Available Customer Support: According to Styku, buying a gym equipment is a considerable investment. Look for brands with favorable warranty terms covering significant components and offering reasonable periods, plus a commitment to excellent after-sales service, with readily available customer support and repair services.
3. Favorable Financing Terms: Consider the value offered against the cost, with brands that might seem expensive but provide durability, advanced features, and better service. According to Glofox, financing options can be a lifeline. Brands that offer favorable financing or leasing terms understand the industry’s economic challenges and are committed to fostering long-term partnerships.
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<Question>
Based only on the information in the article above, which fitness equipment brands specialize in weight/strength training equipment?
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<Instruction>
Only use the text that is provided to answer the question. Answer using complete sentences. The answer must be a minimum of 3 sentences. |
This task requires you to answer questions based solely on the information provided in the prompt and context block. You are not allowed to use any external resources or prior knowledge. | What was the first circuits ruling on the United States v Evans? | Funding Limitations on Medical Marijuana Prosecutions In each fiscal year since FY2015, Congress has included provisions in appropriations acts that prohibit DOJ from using appropriated funds to prevent certain states and territories and the District of Columbia from “implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” The FY2024 provision lists 52 jurisdictions, including every U.S. jurisdiction that had legalized medical cannabis use at the time it was enacted. On its face, the appropriations rider bars DOJ from taking legal action against the states directly in order to prevent them from promulgating or enforcing medical marijuana laws. In addition, federal courts have interpreted the rider to prohibit certain federal prosecutions of private individuals or organizations that Congressional Research Service 3 produce, distribute, or possess marijuana in accordance with state medical marijuana laws. In those cases, criminal defendants have invoked the rider before trial, seeking either the dismissal of their indictments or injunctions barring prosecution. By contrast, courts have generally declined to apply the rider outside the context of initial criminal prosecutions. For instance, the Ninth Circuit has held that the provision does not “impact[ ] the ability of a federal district court to restrict the use of medical marijuana as a condition of probation.” In the 2016 case United States v. McIntosh, the U.S. Court of Appeals for the Ninth Circuit considered the circumstances in which the appropriations rider bars CSA prosecution of marijuana-related activities. The court held that the rider prohibits the federal government only from preventing the implementation of those specific rules of state law that authorize the use, distribution, possession, or cultivation of medical marijuana. DOJ does not prevent the implementation of [such rules] when it prosecutes individuals who engage in conduct unauthorized under state medical marijuana laws. Individuals who do not strictly comply with all state-law conditions regarding the use, distribution, possession, and cultivation of medical marijuana have engaged in conduct that is unauthorized, and prosecuting such individuals does not violate [the rider]. Relying on McIntosh, the Ninth Circuit has issued several decisions allowing federal prosecution of individuals who did not “strictly comply” with state medical marijuana laws, notwithstanding the appropriations rider, and several district courts have followed that reasoning. As one example, in United States v. Evans, the Ninth Circuit upheld the prosecution of two individuals involved in the production of medical marijuana who smoked marijuana as they processed plants for sale. Although state law permitted medical marijuana use by “qualifying patients,” the court concluded that the defendants failed to show they were qualifying patients, and thus they could be prosecuted because their personal marijuana use did not strictly comply with state medical marijuana law. In the 2022 case United States v. Bilodeau, the U.S. Court of Appeals for the First Circuit also considered the scope of the appropriations rider. The defendants in Bilodeau were registered with the State of Maine to produce medical marijuana, but DOJ alleged that they distributed large quantities of marijuana to individuals who were not qualifying patients under Maine law, including recipients in other states. Following indictment for criminal CSA violations, the defendants sought to invoke the appropriations rider to bar their prosecutions. They argued that the rider “must be read to preclude the DOJ, under most circumstances, from prosecuting persons who possess state licenses to partake in medical marijuana activity.” DOJ instead urged the court to apply the Ninth Circuit’s standard, allowing prosecution unless the defendants could show that they acted in strict compliance with state medical marijuana laws. The First Circuit declined to adopt either of the proposed tests. As an initial matter, the court agreed with the Ninth Circuit that the rider means “DOJ may not spend funds to bring prosecutions if doing so prevents a state from giving practical effect to its medical marijuana laws.” However, the panel declined to adopt the Ninth Circuit’s holding that the rider bars prosecution only in cases where defendants strictly complied with state law. The court noted that the text of the rider does not explicitly require strict compliance with state law and that, given the complexity of state marijuana regulations, “the potential for technical noncompliance [with state law] is real enough that no person through any reasonable effort could always assure strict compliance.” Thus, the First Circuit concluded that requiring strict compliance with state law would likely chill state-legal medical marijuana activities and prevent the states from giving effect to their medical marijuana laws. On the other hand, the court also rejected the defendants’ more expansive reading of the rider, reasoning that “Congress surely did not intend for the rider to provide a safe harbor to all caregivers with facially valid documents without regard for blatantly illegitimate activity.” Ultimately, while the First Circuit held that the rider bars CSA prosecution in at least some cases where the defendant has committed minor technical violations of state medical marijuana laws, it declined to Congressional Research Service 4 “fully define [the] precise boundaries” of its alternative standard. On the record before it, the court concluded that “the defendants’ cultivation, possession, and distribution of marijuana aimed at supplying persons whom no defendant ever thought were qualifying patients under Maine law” and that a CSA conviction in those circumstances would not “prevent Maine’s medical marijuana laws from having their intended practical effect.” Considerations for Congress It remains to be seen whether and how the difference in reasoning between the Ninth Circuit and the First Circuit will make a practical difference in federal marijuana prosecutions. In theory, the First Circuit’s analysis could make it easier for defendants to invoke the appropriations rider to bar federal prosecutions, because they could do so even if they had not been in strict compliance with state law. In practice, however, resource limitations and enforcement priorities have historically meant that federal marijuana prosecutions target only individuals and organizations that have clearly not complied with state law. Thus, one of the First Circuit judges who considered Bilodeau agreed with the panel’s interpretation of the rider but wrote a concurrence noting that, in practice, the First Circuit’s standard might not be “materially different from the one that the Ninth Circuit applied.” While the medical marijuana appropriations rider restricts DOJ’s ability to bring some marijuana prosecutions, its effect is limited in several ways. First, marijuana-related activities that fall outside the scope of the appropriations rider remain subject to prosecution under the CSA. By its terms, the rider applies only to state laws related to medical marijuana; it does not bar prosecution of any activities related to recreational marijuana, even if those activities are permitted under state law. Second, as the Ninth Circuit has explained, even where the rider does apply, it “does not provide immunity from prosecution for federal marijuana offenses”—it simply restricts DOJ’s ability to expend funds to enforce federal law for as long as it remains in effect. If Congress instead opted to repeal the rider or allow it to lapse, DOJ would be able to prosecute future CSA violations as well as past violations that occurred while the rider was in effect, subject to the applicable statute of limitations. Third, participants in the cannabis industry may face numerous collateral consequences arising from the federal prohibition of marijuana in areas including bankruptcy, taxation, and immigration. Many of those legal consequences attach regardless of whether a person is charged with or convicted of a CSA offense, meaning the rider would not affect them. Because the medical marijuana appropriations rider applies to marijuana specifically, regardless of how the substance is classified under the CSA, rescheduling marijuana would not affect the rider. Congress has the authority to enact legislation to clarify or alter the scope of the appropriations rider, repeal the rider, or decline to include it in future appropriations laws. For instance, Congress could amend the rider to specify whether strict compliance with state medical marijuana law is required in order to bar prosecution under the CSA or provide a different standard that DOJ and the courts should apply. Beyond the appropriations context, Congress could also consider other changes to federal marijuana law that would affect its interaction with state law. Such changes could take the form of more stringent marijuana regulation—for instance, through increased DOJ funding to prosecute CSA violations or limiting federal funds for states that legalize marijuana. In contrast, most recent proposals before Congress seek to relax federal restrictions on marijuana or mitigate the disparity between federal and state marijuana regulation. | System Instructions: [This task requires you to answer questions based solely on the information provided in the prompt and context block. You are not allowed to use any external resources or prior knowledge.]
Question: [What was the first circuits ruling on the United States v Evans?]
Context Block: [Funding Limitations on Medical Marijuana Prosecutions In each fiscal year since FY2015, Congress has included provisions in appropriations acts that prohibit DOJ from using appropriated funds to prevent certain states and territories and the District of Columbia from “implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” The FY2024 provision lists 52 jurisdictions, including every U.S. jurisdiction that had legalized medical cannabis use at the time it was enacted. On its face, the appropriations rider bars DOJ from taking legal action against the states directly in order to prevent them from promulgating or enforcing medical marijuana laws. In addition, federal courts have interpreted the rider to prohibit certain federal prosecutions of private individuals or organizations that Congressional Research Service 3 produce, distribute, or possess marijuana in accordance with state medical marijuana laws. In those cases, criminal defendants have invoked the rider before trial, seeking either the dismissal of their indictments or injunctions barring prosecution. By contrast, courts have generally declined to apply the rider outside the context of initial criminal prosecutions. For instance, the Ninth Circuit has held that the provision does not “impact[ ] the ability of a federal district court to restrict the use of medical marijuana as a condition of probation.” In the 2016 case United States v. McIntosh, the U.S. Court of Appeals for the Ninth Circuit considered the circumstances in which the appropriations rider bars CSA prosecution of marijuana-related activities. The court held that the rider prohibits the federal government only from preventing the implementation of those specific rules of state law that authorize the use, distribution, possession, or cultivation of medical marijuana. DOJ does not prevent the implementation of [such rules] when it prosecutes individuals who engage in conduct unauthorized under state medical marijuana laws. Individuals who do not strictly comply with all state-law conditions regarding the use, distribution, possession, and cultivation of medical marijuana have engaged in conduct that is unauthorized, and prosecuting such individuals does not violate [the rider]. Relying on McIntosh, the Ninth Circuit has issued several decisions allowing federal prosecution of individuals who did not “strictly comply” with state medical marijuana laws, notwithstanding the appropriations rider, and several district courts have followed that reasoning. As one example, in United States v. Evans, the Ninth Circuit upheld the prosecution of two individuals involved in the production of medical marijuana who smoked marijuana as they processed plants for sale. Although state law permitted medical marijuana use by “qualifying patients,” the court concluded that the defendants failed to show they were qualifying patients, and thus they could be prosecuted because their personal marijuana use did not strictly comply with state medical marijuana law. In the 2022 case United States v. Bilodeau, the U.S. Court of Appeals for the First Circuit also considered the scope of the appropriations rider. The defendants in Bilodeau were registered with the State of Maine to produce medical marijuana, but DOJ alleged that they distributed large quantities of marijuana to individuals who were not qualifying patients under Maine law, including recipients in other states. Following indictment for criminal CSA violations, the defendants sought to invoke the appropriations rider to bar their prosecutions. They argued that the rider “must be read to preclude the DOJ, under most circumstances, from prosecuting persons who possess state licenses to partake in medical marijuana activity.” DOJ instead urged the court to apply the Ninth Circuit’s standard, allowing prosecution unless the defendants could show that they acted in strict compliance with state medical marijuana laws. The First Circuit declined to adopt either of the proposed tests. As an initial matter, the court agreed with the Ninth Circuit that the rider means “DOJ may not spend funds to bring prosecutions if doing so prevents a state from giving practical effect to its medical marijuana laws.” However, the panel declined to adopt the Ninth Circuit’s holding that the rider bars prosecution only in cases where defendants strictly complied with state law. The court noted that the text of the rider does not explicitly require strict compliance with state law and that, given the complexity of state marijuana regulations, “the potential for technical noncompliance [with state law] is real enough that no person through any reasonable effort could always assure strict compliance.” Thus, the First Circuit concluded that requiring strict compliance with state law would likely chill state-legal medical marijuana activities and prevent the states from giving effect to their medical marijuana laws. On the other hand, the court also rejected the defendants’ more expansive reading of the rider, reasoning that “Congress surely did not intend for the rider to provide a safe harbor to all caregivers with facially valid documents without regard for blatantly illegitimate activity.” Ultimately, while the First Circuit held that the rider bars CSA prosecution in at least some cases where the defendant has committed minor technical violations of state medical marijuana laws, it declined to Congressional Research Service 4 “fully define [the] precise boundaries” of its alternative standard. On the record before it, the court concluded that “the defendants’ cultivation, possession, and distribution of marijuana aimed at supplying persons whom no defendant ever thought were qualifying patients under Maine law” and that a CSA conviction in those circumstances would not “prevent Maine’s medical marijuana laws from having their intended practical effect.” Considerations for Congress It remains to be seen whether and how the difference in reasoning between the Ninth Circuit and the First Circuit will make a practical difference in federal marijuana prosecutions. In theory, the First Circuit’s analysis could make it easier for defendants to invoke the appropriations rider to bar federal prosecutions, because they could do so even if they had not been in strict compliance with state law. In practice, however, resource limitations and enforcement priorities have historically meant that federal marijuana prosecutions target only individuals and organizations that have clearly not complied with state law. Thus, one of the First Circuit judges who considered Bilodeau agreed with the panel’s interpretation of the rider but wrote a concurrence noting that, in practice, the First Circuit’s standard might not be “materially different from the one that the Ninth Circuit applied.” While the medical marijuana appropriations rider restricts DOJ’s ability to bring some marijuana prosecutions, its effect is limited in several ways. First, marijuana-related activities that fall outside the scope of the appropriations rider remain subject to prosecution under the CSA. By its terms, the rider applies only to state laws related to medical marijuana; it does not bar prosecution of any activities related to recreational marijuana, even if those activities are permitted under state law. Second, as the Ninth Circuit has explained, even where the rider does apply, it “does not provide immunity from prosecution for federal marijuana offenses”—it simply restricts DOJ’s ability to expend funds to enforce federal law for as long as it remains in effect. If Congress instead opted to repeal the rider or allow it to lapse, DOJ would be able to prosecute future CSA violations as well as past violations that occurred while the rider was in effect, subject to the applicable statute of limitations. Third, participants in the cannabis industry may face numerous collateral consequences arising from the federal prohibition of marijuana in areas including bankruptcy, taxation, and immigration. Many of those legal consequences attach regardless of whether a person is charged with or convicted of a CSA offense, meaning the rider would not affect them. Because the medical marijuana appropriations rider applies to marijuana specifically, regardless of how the substance is classified under the CSA, rescheduling marijuana would not affect the rider. Congress has the authority to enact legislation to clarify or alter the scope of the appropriations rider, repeal the rider, or decline to include it in future appropriations laws. For instance, Congress could amend the rider to specify whether strict compliance with state medical marijuana law is required in order to bar prosecution under the CSA or provide a different standard that DOJ and the courts should apply. Beyond the appropriations context, Congress could also consider other changes to federal marijuana law that would affect its interaction with state law. Such changes could take the form of more stringent marijuana regulation—for instance, through increased DOJ funding to prosecute CSA violations or limiting federal funds for states that legalize marijuana. In contrast, most recent proposals before Congress seek to relax federal restrictions on marijuana or mitigate the disparity between federal and state marijuana regulation. ] |
You are required to provide a response using only the information included in the context block. you are forbidden from using any external knowledge. | What are the risks and benefits for using AI in healthcare, education, and national security? | Artificial Intelligence Technologies in Selected Sectors
AI technologies have potential applications across a wide range of sectors. A selection of broad, crosscutting issues with application-specific examples of ongoing congressional interest are discussed in the CRS report Artificial Intelligence: Background, Selected Issues, and Policy Considerations. Those issues and examples include implications for the U.S. workforce, international competition and federal investment in AI R&D, standards development, and ethical AI—including questions about bias, fairness, and algorithm transparency (for example, in criminal justice applications).
In addition to those issues and applications, three areas of potential use that may be of growing interest to Congress—particularly in light of the advances in, and widespread availability of, GenAI tools—are health care, education, and national security. In other parts of the federal government, experts have asserted a need to understand the impacts and future directions of AI applications in these areas. For example, the chief AI officer at the Department of Health and Human Services, Greg Singleton, at a June 2023 Health Innovation Summit discussed “the role that AI will play in health care, as well as the importance of regulations.” A May 2023 Department of Education report, Artificial Intelligence and the Future of Teaching and Learning, describes the rising interest in AI in education and highlights reasons to address AI in education now. And the 2023 Annual Threat Assessment of the U.S. Intelligence Community states, “New technologies—particularly in the fields of AI and biotechnology—are being developed and are proliferating faster than companies and governments can shape norms, protect privacy, and prevent dangerous outcomes.” This section will discuss some of the potential benefits and concerns with the use of AI technologies in these sectors.
Health Care
Numerous companies and researchers have been developing and testing AI technologies for use in health care—for example, to improve the drug development process by increasing efficiency and decreasing time and cost, to detect diseases earlier, and to more consistently analyze medical data. A 2022 report by the Government Accountability Office identified a variety of ML-based technologies to assist with the diagnostic processes for five selected diseases—certain cancers, diabetic retinopathy (an eye condition that can cause blindness in diabetic patients), Alzheimer’s disease, heart disease, and COVID-19—though these ML technologies have generally not been widely adopted. Some hospitals have also experimented with using voice recognition, and associated ML and natural language processing technology, to assist doctors and patients.
While there are many encouraging developments for using AI technologies in health care, stakeholders have remarked on the slow progress in using AI broadly within health care settings, and various challenges remain. Researchers and clinicians have raised questions about the accuracy, security, and privacy of these technologies; the availability of sufficient health data on which to train systems; medical liability in the event of adverse outcomes; the adequacy of current user consent processes; and patient access and receptivity. These questions reflect the potential risks from using AI systems. For example, a poorly designed system might lead to misdiagnosis; systems trained on biased data can reflect or amplify those biases in their outputs; and if a flawed AI system is adopted widely, it might result in widespread injury to patients.
Education
According to the U.S. Department of Education, AI, ML, and related technologies “will have powerful impacts on learning, not only through direct supports for students, but also by empowering educators to be more adaptive to learner needs and less consumed by routine, repetitive tasks.” The report also notes that AI in education presents risks, including apprehension from parents and educators and the potential for AI algorithms to be biased, possibly leading to unfair decisions about what or how a student should learn.
The rapid development of AI chatbots and the public release of ChatGPT in November 2022 have spurred debate among teachers and education administrators. Some teachers have begun using these AI tools in their classrooms, highlighting benefits such as making lessons more interactive, aiding the development of critical thinking skills, teaching students media literacy, generating personalized lesson plans, saving teachers time on administration, and aiding students whose first language is not English. Others have raised concerns about students using the systems to cheat on assignments by writing essays and taking tests for them, with some school systems banning the use of chatbots on their networks. Numerous researchers and companies have been developing and deploying detection tools to identify text generated by AI, though there remain issues with the accuracy of these tools. Stakeholders have also raised concerns about data privacy risks, including, for example, whether information shared or stored in AI-enabled systems is used for further product training without gaining explicit user consent and, more broadly, whether such systems are subject to federal or state privacy laws, such as the Family Educational Rights and Privacy Act.
National Security
AI technologies have a wide range of national security applications, including intelligence, surveillance, and reconnaissance; logistics; cyber operations; command and control; semiautonomous and autonomous vehicles; and weapons systems. Since at least 2017, the U.S. military has begun integrating AI systems into combat systems and discussing AI as a key technology to ensure future warfighting capabilities. At the same time, other countries, including China and Russia, have released national plans and statements of intent to lead in the development of AI technologies.
The Department of Defense’s (DOD’s) unclassified investments in AI have grown from just over $600 million in FY2016 to approximately $1.1 billion in FY2023, with DOD maintaining over 685 active AI projects. DOD has an AI strategy, which outlines the following aims: delivering AI-enabled capabilities for key missions; partnering with leading private sector technology companies, academia, and global allies; cultivating a leading AI workforce; and leading in military ethics and AI safety. The intelligence community (IC) has also released a strategy for using AI—the AIM Initiative—as well as AI ethics principles and an AI ethics framework for the IC. While AI holds to potential to assist the IC in its work, AI systems also “pose grave security challenges for which [the United States is] currently unprepared, including the development of novel cyber weapons, large-scale disinformation attacks, and the design of advanced biological weapons.” | System Instructions: You are required to provide a response using only the information included in the context block. you are forbidden from using any external knowledge.
Question: What are the risks and benefits for using AI in healthcare, education, and national security?
Context Block: Artificial Intelligence Technologies in Selected Sectors
AI technologies have potential applications across a wide range of sectors. A selection of broad, crosscutting issues with application-specific examples of ongoing congressional interest are discussed in the CRS report Artificial Intelligence: Background, Selected Issues, and Policy Considerations. Those issues and examples include implications for the U.S. workforce, international competition and federal investment in AI R&D, standards development, and ethical AI—including questions about bias, fairness, and algorithm transparency (for example, in criminal justice applications).
In addition to those issues and applications, three areas of potential use that may be of growing interest to Congress—particularly in light of the advances in, and widespread availability of, GenAI tools—are health care, education, and national security. In other parts of the federal government, experts have asserted a need to understand the impacts and future directions of AI applications in these areas. For example, the chief AI officer at the Department of Health and Human Services, Greg Singleton, at a June 2023 Health Innovation Summit discussed “the role that AI will play in health care, as well as the importance of regulations.” A May 2023 Department of Education report, Artificial Intelligence and the Future of Teaching and Learning, describes the rising interest in AI in education and highlights reasons to address AI in education now. And the 2023 Annual Threat Assessment of the U.S. Intelligence Community states, “New technologies—particularly in the fields of AI and biotechnology—are being developed and are proliferating faster than companies and governments can shape norms, protect privacy, and prevent dangerous outcomes.” This section will discuss some of the potential benefits and concerns with the use of AI technologies in these sectors.
Health Care
Numerous companies and researchers have been developing and testing AI technologies for use in health care—for example, to improve the drug development process by increasing efficiency and decreasing time and cost, to detect diseases earlier, and to more consistently analyze medical data. A 2022 report by the Government Accountability Office identified a variety of ML-based technologies to assist with the diagnostic processes for five selected diseases—certain cancers, diabetic retinopathy (an eye condition that can cause blindness in diabetic patients), Alzheimer’s disease, heart disease, and COVID-19—though these ML technologies have generally not been widely adopted. Some hospitals have also experimented with using voice recognition, and associated ML and natural language processing technology, to assist doctors and patients.
While there are many encouraging developments for using AI technologies in health care, stakeholders have remarked on the slow progress in using AI broadly within health care settings, and various challenges remain. Researchers and clinicians have raised questions about the accuracy, security, and privacy of these technologies; the availability of sufficient health data on which to train systems; medical liability in the event of adverse outcomes; the adequacy of current user consent processes; and patient access and receptivity. These questions reflect the potential risks from using AI systems. For example, a poorly designed system might lead to misdiagnosis; systems trained on biased data can reflect or amplify those biases in their outputs; and if a flawed AI system is adopted widely, it might result in widespread injury to patients.
Education
According to the U.S. Department of Education, AI, ML, and related technologies “will have powerful impacts on learning, not only through direct supports for students, but also by empowering educators to be more adaptive to learner needs and less consumed by routine, repetitive tasks.” The report also notes that AI in education presents risks, including apprehension from parents and educators and the potential for AI algorithms to be biased, possibly leading to unfair decisions about what or how a student should learn.
The rapid development of AI chatbots and the public release of ChatGPT in November 2022 have spurred debate among teachers and education administrators. Some teachers have begun using these AI tools in their classrooms, highlighting benefits such as making lessons more interactive, aiding the development of critical thinking skills, teaching students media literacy, generating personalized lesson plans, saving teachers time on administration, and aiding students whose first language is not English. Others have raised concerns about students using the systems to cheat on assignments by writing essays and taking tests for them, with some school systems banning the use of chatbots on their networks. Numerous researchers and companies have been developing and deploying detection tools to identify text generated by AI, though there remain issues with the accuracy of these tools. Stakeholders have also raised concerns about data privacy risks, including, for example, whether information shared or stored in AI-enabled systems is used for further product training without gaining explicit user consent and, more broadly, whether such systems are subject to federal or state privacy laws, such as the Family Educational Rights and Privacy Act.
National Security
AI technologies have a wide range of national security applications, including intelligence, surveillance, and reconnaissance; logistics; cyber operations; command and control; semiautonomous and autonomous vehicles; and weapons systems. Since at least 2017, the U.S. military has begun integrating AI systems into combat systems and discussing AI as a key technology to ensure future warfighting capabilities. At the same time, other countries, including China and Russia, have released national plans and statements of intent to lead in the development of AI technologies.
The Department of Defense’s (DOD’s) unclassified investments in AI have grown from just over $600 million in FY2016 to approximately $1.1 billion in FY2023, with DOD maintaining over 685 active AI projects. DOD has an AI strategy, which outlines the following aims: delivering AI-enabled capabilities for key missions; partnering with leading private sector technology companies, academia, and global allies; cultivating a leading AI workforce; and leading in military ethics and AI safety. The intelligence community (IC) has also released a strategy for using AI—the AIM Initiative—as well as AI ethics principles and an AI ethics framework for the IC. While AI holds to potential to assist the IC in its work, AI systems also “pose grave security challenges for which [the United States is] currently unprepared, including the development of novel cyber weapons, large-scale disinformation attacks, and the design of advanced biological weapons.” |
Respond using only information contained in the context block. | According to the shareholder letter, what are the differences between all US and Japanese companies? | This year, I would like to describe two other investments that we expect to maintain
indefinitely. Like Coke and AMEX, these commitments are not huge relative to our resources.
They are worthwhile, however, and we were able to increase both positions during 2023.
At yearend, Berkshire owned 27.8% of Occidental Petroleum’s common shares and also
owned warrants that, for more than five years, give us the option to materially increase our
ownership at a fixed price. Though we very much like our ownership, as well as the option,
Berkshire has no interest in purchasing or managing Occidental. We particularly like its vast oil
and gas holdings in the United States, as well as its leadership in carbon-capture initiatives, though
the economic feasibility of this technique has yet to be proven. Both of these activities are very
much in our country’s interest.
Not so long ago, the U.S. was woefully dependent on foreign oil, and carbon capture had
no meaningful constituency. Indeed, in 1975, U.S. production was eight million barrels of
oil-equivalent per day (“BOEPD”), a level far short of the country’s needs. From the favorable
energy position that facilitated the U.S. mobilization in World War II, the country had retreated to
become heavily dependent on foreign – potentially unstable – suppliers. Further declines in oil
production were predicted along with future increases in usage.
9
For a long time, the pessimism appeared to be correct, with production falling to five
million BOEPD by 2007. Meanwhile, the U.S. government created a Strategic Petroleum Reserve
(“SPR”) in 1975 to alleviate – though not come close to eliminating – this erosion of American
self-sufficiency.
And then – Hallelujah! – shale economics became feasible in 2011, and our energy
dependency ended. Now, U.S. production is more than 13 million BOEPD, and OPEC no longer
has the upper hand. Occidental itself has annual U.S. oil production that each year comes close to
matching the entire inventory of the SPR. Our country would be very – very – nervous today if
domestic production had remained at five million BOEPD, and it found itself hugely dependent
on non-U.S. sources. At that level, the SPR would have been emptied within months if foreign oil
became unavailable.
Under Vicki Hollub’s leadership, Occidental is doing the right things for both its country
and its owners. No one knows what oil prices will do over the next month, year, or decade. But
Vicki does know how to separate oil from rock, and that’s an uncommon talent, valuable to her
shareholders and to her country.
* * * * * * * * * * * *
Additionally, Berkshire continues to hold its passive and long-term interest in five very
large Japanese companies, each of which operates in a highly-diversified manner somewhat similar
to the way Berkshire itself is run. We increased our holdings in all five last year after Greg Abel
and I made a trip to Tokyo to talk with their managements.
Berkshire now owns about 9% of each of the five. (A minor point: Japanese companies
calculate outstanding shares in a manner different from the practice in the U.S.) Berkshire has also
pledged to each company that it will not purchase shares that will take our holdings beyond 9.9%.
Our cost for the five totals ¥1.6 trillion, and the yearend market value of the five was ¥2.9 trillion.
However, the yen has weakened in recent years and our yearend unrealized gain in dollars was
61% or $8 billion.
Neither Greg nor I believe we can forecast market prices of major currencies. We also don’t
believe we can hire anyone with this ability. Therefore, Berkshire has financed most of its Japanese
position with the proceeds from ¥1.3 trillion of bonds. This debt has been very well-received in
Japan, and I believe Berkshire has more yen-denominated debt outstanding than any other
American company. The weakened yen has produced a yearend gain for Berkshire of $1.9 billion,
a sum that, pursuant to GAAP rules, has periodically been recognized in income over the
2020-23 period.
In certain important ways, all five companies – Itochu, Marubeni, Mitsubishi, Mitsui and
Sumitomo – follow shareholder-friendly policies that are much superior to those customarily
practiced in the U.S. Since we began our Japanese purchases, each of the five has reduced the
number of its outstanding shares at attractive prices.
10
Meanwhile, the managements of all five companies have been far less aggressive about
their own compensation than is typical in the United States. Note as well that each of the five is
applying only about 1⁄3 of its earnings to dividends. The large sums the five retain are used both to
build their many businesses and, to a lesser degree, to repurchase shares. Like Berkshire, the five
companies are reluctant to issue shares.
An additional benefit for Berkshire is the possibility that our investment may lead to
opportunities for us to partner around the world with five large, well-managed and well-respected
companies. Their interests are far more broad than ours. And, on their side, the Japanese CEOs
have the comfort of knowing that Berkshire will always possess huge liquid resources that can be
instantly available for such partnerships, whatever their size may be.
Our Japanese purchases began on July 4, 2019. Given Berkshire’s present size, building
positions through open-market purchases takes a lot of patience and an extended period of
“friendly” prices. The process is like turning a battleship. That is an important disadvantage which
we did not face in our early days at Berkshire. | system instruction: Respond using only information contained in the context block.
question: According to the shareholder letter, what are the differences between all US and Japanese companies?
context block: This year, I would like to describe two other investments that we expect to maintain
indefinitely. Like Coke and AMEX, these commitments are not huge relative to our resources.
They are worthwhile, however, and we were able to increase both positions during 2023.
At yearend, Berkshire owned 27.8% of Occidental Petroleum’s common shares and also
owned warrants that, for more than five years, give us the option to materially increase our
ownership at a fixed price. Though we very much like our ownership, as well as the option,
Berkshire has no interest in purchasing or managing Occidental. We particularly like its vast oil
and gas holdings in the United States, as well as its leadership in carbon-capture initiatives, though
the economic feasibility of this technique has yet to be proven. Both of these activities are very
much in our country’s interest.
Not so long ago, the U.S. was woefully dependent on foreign oil, and carbon capture had
no meaningful constituency. Indeed, in 1975, U.S. production was eight million barrels of
oil-equivalent per day (“BOEPD”), a level far short of the country’s needs. From the favorable
energy position that facilitated the U.S. mobilization in World War II, the country had retreated to
become heavily dependent on foreign – potentially unstable – suppliers. Further declines in oil
production were predicted along with future increases in usage.
9
For a long time, the pessimism appeared to be correct, with production falling to five
million BOEPD by 2007. Meanwhile, the U.S. government created a Strategic Petroleum Reserve
(“SPR”) in 1975 to alleviate – though not come close to eliminating – this erosion of American
self-sufficiency.
And then – Hallelujah! – shale economics became feasible in 2011, and our energy
dependency ended. Now, U.S. production is more than 13 million BOEPD, and OPEC no longer
has the upper hand. Occidental itself has annual U.S. oil production that each year comes close to
matching the entire inventory of the SPR. Our country would be very – very – nervous today if
domestic production had remained at five million BOEPD, and it found itself hugely dependent
on non-U.S. sources. At that level, the SPR would have been emptied within months if foreign oil
became unavailable.
Under Vicki Hollub’s leadership, Occidental is doing the right things for both its country
and its owners. No one knows what oil prices will do over the next month, year, or decade. But
Vicki does know how to separate oil from rock, and that’s an uncommon talent, valuable to her
shareholders and to her country.
* * * * * * * * * * * *
Additionally, Berkshire continues to hold its passive and long-term interest in five very
large Japanese companies, each of which operates in a highly-diversified manner somewhat similar
to the way Berkshire itself is run. We increased our holdings in all five last year after Greg Abel
and I made a trip to Tokyo to talk with their managements.
Berkshire now owns about 9% of each of the five. (A minor point: Japanese companies
calculate outstanding shares in a manner different from the practice in the U.S.) Berkshire has also
pledged to each company that it will not purchase shares that will take our holdings beyond 9.9%.
Our cost for the five totals ¥1.6 trillion, and the yearend market value of the five was ¥2.9 trillion.
However, the yen has weakened in recent years and our yearend unrealized gain in dollars was
61% or $8 billion.
Neither Greg nor I believe we can forecast market prices of major currencies. We also don’t
believe we can hire anyone with this ability. Therefore, Berkshire has financed most of its Japanese
position with the proceeds from ¥1.3 trillion of bonds. This debt has been very well-received in
Japan, and I believe Berkshire has more yen-denominated debt outstanding than any other
American company. The weakened yen has produced a yearend gain for Berkshire of $1.9 billion,
a sum that, pursuant to GAAP rules, has periodically been recognized in income over the
2020-23 period.
In certain important ways, all five companies – Itochu, Marubeni, Mitsubishi, Mitsui and
Sumitomo – follow shareholder-friendly policies that are much superior to those customarily
practiced in the U.S. Since we began our Japanese purchases, each of the five has reduced the
number of its outstanding shares at attractive prices.
10
Meanwhile, the managements of all five companies have been far less aggressive about
their own compensation than is typical in the United States. Note as well that each of the five is
applying only about 1⁄3 of its earnings to dividends. The large sums the five retain are used both to
build their many businesses and, to a lesser degree, to repurchase shares. Like Berkshire, the five
companies are reluctant to issue shares.
An additional benefit for Berkshire is the possibility that our investment may lead to
opportunities for us to partner around the world with five large, well-managed and well-respected
companies. Their interests are far more broad than ours. And, on their side, the Japanese CEOs
have the comfort of knowing that Berkshire will always possess huge liquid resources that can be
instantly available for such partnerships, whatever their size may be.
Our Japanese purchases began on July 4, 2019. Given Berkshire’s present size, building
positions through open-market purchases takes a lot of patience and an extended period of
“friendly” prices. The process is like turning a battleship. That is an important disadvantage which
we did not face in our early days at Berkshire. |
Respond using only the provided text without any external information. | Explain how retinol helps skin in a month. |
1. Retinol alleviates aging related conditions of human skin
The skin phenotypes of each individual enrolled were collected at five time points. Principal
coordinates analysis (PCoA) revealed that participants experienced an overall change in skin
phenotype after application of retinol. The Adonis test demonstrated significant separation from
Day 0 for Day 21 (adj.p=0.010) and Day 28 (adj.p=0.017), indicating an altered phenotype
compared to the baseline (Fig.S1A). Moreover, more than half (eight out of fourteen) of the
phenotypic measurements, including water content in the stratum corneum (WCSC), transepidermal water loss (TEWL), pH value, percentage of the red area, and various wrinkle
parameters (number, length, area, and volume), exhibited significant changes compared to the
baseline (Fig.1).
The topical use of the retinol resulted in enhanced water retention capability of the skin, with a
31.4% increase in WCSC (adj.p=0.050, Wilcoxon paired test) and an 18.4% decrease in TEWL
at day 28 (adj.p=0.004, adj.p=0.050, Wilcoxon paired test), respectively. Notably, WCSC on
day 28 showed a significant increase not only compared to the baseline but also compared to
days 7 and 14 (adj.p=0.004, adj.p=0.050, Wilcoxon paired test), suggesting that the stratum
corneum's water retention ability improves with prolonged retinol use. The decrease in TWEL
indicated that retinol markedly improved and repaired the skin barrier, helping to retain skin
moisture and prevent water loss. Retinol also demonstrated its effectiveness in sedative and
anti-inflammatory skincare properties, as evidenced by a significant reduction in the size of red
areas: a decrease of 11.6% on day 21 and 13.2% on day 28 compared to the baseline level (Table
S2).
The pH values of the skin cheek surface exhibited a decline from 7.21 (average value on Day
0) to 6.72 (average value on Day 28) while using retinol, indicating the gradual formation of a
weakly acidic environment on the facial skin, suggesting that retinol can modulate and maintain
acid-base balance of skin.
Meanwhile, multiple wrinkle-related indicators, including the wrinkle number, length, area, and
volume at the corners of the eyes, displayed significant reductions starting from Day 7
compared to the pre-retinol use conditions (Table S2). Specifically, the wrinkle number
decreased significantly on Day 7, 21 and 28, with the most substantial reduction observed on
Day 21 and 28, resulting in a 27.8% decrease relative to baseline. The wrinkle length
significantly decreased at all four sampling time points compared to baseline. By Day 28, the
average wrinkle length decreased from 68.7μm to 42μm, representing a reduction of 38.8%
compared to baseline. Wrinkle area exhibited significant reductions on Day 7 and 21, with a
notable decrease of 34.8% observed on Day 21. Finally, the wrinkle volume exhibited a
significant decrease of 26.9% at Day 7. These findings highlight the potent anti-aging properties
of retinol and its efficacy in improving facial wrinkle conditions.
(which was not certified by peer review) is the author/funder. All rights reserved. No reuse allowed without permission.
bioRxiv preprint doi: https://doi.org/10.1101/2024.06.26.600860; this version posted June 27, 2024. The copyright holder for this preprint
Figure 1 The temporal variation of skin phenotypic traits
Statistical significance levels of data relative to baseline changes were assessed using the Wilcoxon paired test and
adjusted using the Benjamini & Hochberg (BH) method. Displayed results are adjusted p values. Unmarked indicates nonsignificance, * indicates adj.p ≤ 0.1, ** indicates adj.p ≤ 0.05. Data are shown in Table S2.
2. Retinol reshapes human skin microbiome microecology.
The application of the retinol had a dramatic impact on the restructuring of skin microbiome
microecology (Fig.S1C). Species-level alpha diversity (Shannon diversity index and species
evenness index) was significantly lower on day 7 compared to day 0 (Fig.2B, p=0.031, paired
Wilcoxon test). This decrease in diversity could be attributed to an imbalance in the relative
distribution of certain species within the microbial community. Specifically, there was a
significant decrease in the relative abundance of Corynebacterium accolens, a skin bacterium
ranked among the top 20 abundant species, on day 7 compared to the baseline (Fig. S1B). This
reduction may have allowed other species to occupy a relatively larger ecological niche,
resulting in a decline in microbial diversity. Notably, opportunistic pathogens such as
Stenotrophomonas maltophilia, Acinetobacter johnsonii, Pseudomonas sp., and Sphingomonas
hankookensis showed significant decreases in their relative abundances at three consecutive
time points compared to the baseline (Fig.2C). This suggests that the retinol-containing skincare
product possesses antimicrobial properties and can reduce the colonization of pathogenic
bacteria on the skin surface. We also noticed an increase in the relative abundance of
Neisseriales species incertae sedis (Fig.S1B) and Corynebacterium jeddahense (Fig.2C).
However, their specific functions remain unclear.
(which was not certified by peer review) is the author/funder. All rights reserved. No reuse allowed without permission.
bioRxiv preprint doi: https://doi.org/10.1101/2024.06.26.600860; this version posted June 27, 2024. The copyright holder for this preprint
Figure 2 Effects of retinol on the structure of skin microbiome.
(A) Gene pathway enrichment analysis based on ReporterScore. A ReporterScore with an absolute value greater
than 1.64 indicates significant enrichment of the gene pathway, with positive or negative signs denoting upregulation or
downregulation compared to the control group (Day 0, baseline). (B) Skin microbiome Alpha diversity indexes. (C) Intergroup differential species abundance changes. Statistical significance levels of data relative to baseline changes were
assessed using the Wilcoxon paired test. Displayed results are p values. Unmarked indicates non-significance, * indicates
p ≤ 0.05, ** indicates p≤ 0.01.
Retinol also exerts an impact on the functionality of the skin microbiome. Starting from Day
14, several microbial gene pathways displayed altered regulation levels (Fig. 2A). Notably, the
thiamine (Vitamin B1) metabolism gene pathway was enriched on both Day 14 and Day 21,
marked by a peak in the abundance of a thiamine metabolite, biotin thiamine, on Day 14, which
significantly increased compared to Day 0 (Fig. S2A). Metabolomic data also showed that the
microbial and host thiamine metabolic pathway was significantly (p=0.026) enriched on Day
14, marked by increased intensities of pyruvic acid and L-Tyrosine (Fig. S2A). All the three
(which was not certified by peer review) is the author/funder. All rights reserved. No reuse allowed without permission.
bioRxiv preprint doi: https://doi.org/10.1101/2024.06.26.600860; this version posted June 27, 2024. The copyright holder for this preprint
substances are biosynthetic precursors of thiamin. Thiamin has a variety of benefits for the skin,
including increasing the expression of collagen, promoting skin cell growth and repair, and
maintaining skin elasticity. Our findings suggest that retinol helps to promote the synthesis and
utilization of thiamine by the skin microbiome, thereby enhancing the function and health of
the skin barrier. Furthermore, the riboflavin metabolism pathway showed enrichment on Day
14 (Fig. 2A), accompanied by a notable decrease in the abundance of riboflavin on Day 14,
while the intensity of riboflavin 5’-phosphate sodium, a bio-active form of riboflavin, exhibited
an increase relative to baseline on Day 21 and Day 28(Fig. S2A). Riboflavin phosphate sodium
salt form is an essential micronutrient, and plays an important role in the health of the skin,
mucous membranes, and eyes. Retinol makes microorganisms more inclined to utilize or
convert riboflavin into the active form, riboflavin 5’-phosphate sodium. Additionally, certain
gene pathways demonstrated decreased expression levels, including biofilm formation of Vibrio
cholerae and flagellar assembly were down-regulated on Day 21. And the bacterial secretion
system and O-antigen nucleotide sugar biosynthesis, both were consistently down-regulated
during the last three time points(Fig. 2A). The down-regulation implies that retinol may possess
antimicrobial and anti-inflammatory capabilities by inhibiting bacterial metabolic activity,
secretion of bacterial products, and influencing the integrity of bacterial structure.
3. Retinol stimulates skin microbiota’s secretion of diverse beneficial metabolites for
synergistic anti-aging effects.
We further utilized MetOrigin to perform tracing analysis of metabolites (based on the
databases of MetOrigin tracking to determine whether they originated from the host,
microorganisms, or co-metabolism) and metabolic pathway enrichment analysis. Of note,
nicotinate and nicotinamide metabolism pathway (hsa00760) enriched in the host on Day 21
, and supported by increment of N1-methyl-4-pyridone-3-carboxamide which is
associated with this pathway
In the microbe, degradation of flavonoids (ko00946), phenylalanine, tyrosine and tryptophan
biosynthesis (ko00400), and biosynthesis of various plant secondary metabolites (ko00999)
were up-regulated (Fig. 3A). Based on the databases of MetOrigin, we found a variety of
microbial-origin metabolites significantly related to the enrichment of the above pathways,
some of which have been reported or experimentally verified to be beneficial to the skin.
Maesopsin and apigenin were related to ko00946, where apigenin was known as an anti-tumor
substance that is particularly helpful in preventing and reversing the formation of abnormal
skin49–52. Quinic acid, 3-dehydroquinic acid and protocatechuic acid were related to ko00400,
where quinic acid was reported to have an antiphotoaging effect by protecting human dermal
fibroblasts53,54 and protocatechuic acid was demonstrated to have anti-oxidate and anti-aging
effects by inducing dermal fibroblasts to synthesis type-1 collagen55–57. In ko00999, (+)-
pinoresinol and secoisolariciresinol were significantly related, the former was reported to
stimulate keratinocyte proliferation58,59 and the latter was reported to suppress atopic dermatitis
in the mouse when administered orally60 | Explain how retinol helps skin in a month.
Respond using only the provided text without any external information.
1. Retinol alleviates aging related conditions of human skin
The skin phenotypes of each individual enrolled were collected at five time points. Principal
coordinates analysis (PCoA) revealed that participants experienced an overall change in skin
phenotype after application of retinol. The Adonis test demonstrated significant separation from
Day 0 for Day 21 (adj.p=0.010) and Day 28 (adj.p=0.017), indicating an altered phenotype
compared to the baseline (Fig.S1A). Moreover, more than half (eight out of fourteen) of the
phenotypic measurements, including water content in the stratum corneum (WCSC), transepidermal water loss (TEWL), pH value, percentage of the red area, and various wrinkle
parameters (number, length, area, and volume), exhibited significant changes compared to the
baseline (Fig.1).
The topical use of the retinol resulted in enhanced water retention capability of the skin, with a
31.4% increase in WCSC (adj.p=0.050, Wilcoxon paired test) and an 18.4% decrease in TEWL
at day 28 (adj.p=0.004, adj.p=0.050, Wilcoxon paired test), respectively. Notably, WCSC on
day 28 showed a significant increase not only compared to the baseline but also compared to
days 7 and 14 (adj.p=0.004, adj.p=0.050, Wilcoxon paired test), suggesting that the stratum
corneum's water retention ability improves with prolonged retinol use. The decrease in TWEL
indicated that retinol markedly improved and repaired the skin barrier, helping to retain skin
moisture and prevent water loss. Retinol also demonstrated its effectiveness in sedative and
anti-inflammatory skincare properties, as evidenced by a significant reduction in the size of red
areas: a decrease of 11.6% on day 21 and 13.2% on day 28 compared to the baseline level (Table
S2).
The pH values of the skin cheek surface exhibited a decline from 7.21 (average value on Day
0) to 6.72 (average value on Day 28) while using retinol, indicating the gradual formation of a
weakly acidic environment on the facial skin, suggesting that retinol can modulate and maintain
acid-base balance of skin.
Meanwhile, multiple wrinkle-related indicators, including the wrinkle number, length, area, and
volume at the corners of the eyes, displayed significant reductions starting from Day 7
compared to the pre-retinol use conditions (Table S2). Specifically, the wrinkle number
decreased significantly on Day 7, 21 and 28, with the most substantial reduction observed on
Day 21 and 28, resulting in a 27.8% decrease relative to baseline. The wrinkle length
significantly decreased at all four sampling time points compared to baseline. By Day 28, the
average wrinkle length decreased from 68.7μm to 42μm, representing a reduction of 38.8%
compared to baseline. Wrinkle area exhibited significant reductions on Day 7 and 21, with a
notable decrease of 34.8% observed on Day 21. Finally, the wrinkle volume exhibited a
significant decrease of 26.9% at Day 7. These findings highlight the potent anti-aging properties
of retinol and its efficacy in improving facial wrinkle conditions.
(which was not certified by peer review) is the author/funder. All rights reserved. No reuse allowed without permission.
bioRxiv preprint doi: https://doi.org/10.1101/2024.06.26.600860; this version posted June 27, 2024. The copyright holder for this preprint
Figure 1 The temporal variation of skin phenotypic traits
Statistical significance levels of data relative to baseline changes were assessed using the Wilcoxon paired test and
adjusted using the Benjamini & Hochberg (BH) method. Displayed results are adjusted p values. Unmarked indicates nonsignificance, * indicates adj.p ≤ 0.1, ** indicates adj.p ≤ 0.05. Data are shown in Table S2.
2. Retinol reshapes human skin microbiome microecology.
The application of the retinol had a dramatic impact on the restructuring of skin microbiome
microecology (Fig.S1C). Species-level alpha diversity (Shannon diversity index and species
evenness index) was significantly lower on day 7 compared to day 0 (Fig.2B, p=0.031, paired
Wilcoxon test). This decrease in diversity could be attributed to an imbalance in the relative
distribution of certain species within the microbial community. Specifically, there was a
significant decrease in the relative abundance of Corynebacterium accolens, a skin bacterium
ranked among the top 20 abundant species, on day 7 compared to the baseline (Fig. S1B). This
reduction may have allowed other species to occupy a relatively larger ecological niche,
resulting in a decline in microbial diversity. Notably, opportunistic pathogens such as
Stenotrophomonas maltophilia, Acinetobacter johnsonii, Pseudomonas sp., and Sphingomonas
hankookensis showed significant decreases in their relative abundances at three consecutive
time points compared to the baseline (Fig.2C). This suggests that the retinol-containing skincare
product possesses antimicrobial properties and can reduce the colonization of pathogenic
bacteria on the skin surface. We also noticed an increase in the relative abundance of
Neisseriales species incertae sedis (Fig.S1B) and Corynebacterium jeddahense (Fig.2C).
However, their specific functions remain unclear.
(which was not certified by peer review) is the author/funder. All rights reserved. No reuse allowed without permission.
bioRxiv preprint doi: https://doi.org/10.1101/2024.06.26.600860; this version posted June 27, 2024. The copyright holder for this preprint
Figure 2 Effects of retinol on the structure of skin microbiome.
(A) Gene pathway enrichment analysis based on ReporterScore. A ReporterScore with an absolute value greater
than 1.64 indicates significant enrichment of the gene pathway, with positive or negative signs denoting upregulation or
downregulation compared to the control group (Day 0, baseline). (B) Skin microbiome Alpha diversity indexes. (C) Intergroup differential species abundance changes. Statistical significance levels of data relative to baseline changes were
assessed using the Wilcoxon paired test. Displayed results are p values. Unmarked indicates non-significance, * indicates
p ≤ 0.05, ** indicates p≤ 0.01.
Retinol also exerts an impact on the functionality of the skin microbiome. Starting from Day
14, several microbial gene pathways displayed altered regulation levels (Fig. 2A). Notably, the
thiamine (Vitamin B1) metabolism gene pathway was enriched on both Day 14 and Day 21,
marked by a peak in the abundance of a thiamine metabolite, biotin thiamine, on Day 14, which
significantly increased compared to Day 0 (Fig. S2A). Metabolomic data also showed that the
microbial and host thiamine metabolic pathway was significantly (p=0.026) enriched on Day
14, marked by increased intensities of pyruvic acid and L-Tyrosine (Fig. S2A). All the three
(which was not certified by peer review) is the author/funder. All rights reserved. No reuse allowed without permission.
bioRxiv preprint doi: https://doi.org/10.1101/2024.06.26.600860; this version posted June 27, 2024. The copyright holder for this preprint
substances are biosynthetic precursors of thiamin. Thiamin has a variety of benefits for the skin,
including increasing the expression of collagen, promoting skin cell growth and repair, and
maintaining skin elasticity. Our findings suggest that retinol helps to promote the synthesis and
utilization of thiamine by the skin microbiome, thereby enhancing the function and health of
the skin barrier. Furthermore, the riboflavin metabolism pathway showed enrichment on Day
14 (Fig. 2A), accompanied by a notable decrease in the abundance of riboflavin on Day 14,
while the intensity of riboflavin 5’-phosphate sodium, a bio-active form of riboflavin, exhibited
an increase relative to baseline on Day 21 and Day 28(Fig. S2A). Riboflavin phosphate sodium
salt form is an essential micronutrient, and plays an important role in the health of the skin,
mucous membranes, and eyes. Retinol makes microorganisms more inclined to utilize or
convert riboflavin into the active form, riboflavin 5’-phosphate sodium. Additionally, certain
gene pathways demonstrated decreased expression levels, including biofilm formation of Vibrio
cholerae and flagellar assembly were down-regulated on Day 21. And the bacterial secretion
system and O-antigen nucleotide sugar biosynthesis, both were consistently down-regulated
during the last three time points(Fig. 2A). The down-regulation implies that retinol may possess
antimicrobial and anti-inflammatory capabilities by inhibiting bacterial metabolic activity,
secretion of bacterial products, and influencing the integrity of bacterial structure.
3. Retinol stimulates skin microbiota’s secretion of diverse beneficial metabolites for
synergistic anti-aging effects.
We further utilized MetOrigin to perform tracing analysis of metabolites (based on the
databases of MetOrigin tracking to determine whether they originated from the host,
microorganisms, or co-metabolism) and metabolic pathway enrichment analysis. Of note,
nicotinate and nicotinamide metabolism pathway (hsa00760) enriched in the host on Day 21
, and supported by increment of N1-methyl-4-pyridone-3-carboxamide which is
associated with this pathway
In the microbe, degradation of flavonoids (ko00946), phenylalanine, tyrosine and tryptophan
biosynthesis (ko00400), and biosynthesis of various plant secondary metabolites (ko00999)
were up-regulated (Fig. 3A). Based on the databases of MetOrigin, we found a variety of
microbial-origin metabolites significantly related to the enrichment of the above pathways,
some of which have been reported or experimentally verified to be beneficial to the skin.
Maesopsin and apigenin were related to ko00946, where apigenin was known as an anti-tumor
substance that is particularly helpful in preventing and reversing the formation of abnormal
skin49–52. Quinic acid, 3-dehydroquinic acid and protocatechuic acid were related to ko00400,
where quinic acid was reported to have an antiphotoaging effect by protecting human dermal
fibroblasts53,54 and protocatechuic acid was demonstrated to have anti-oxidate and anti-aging
effects by inducing dermal fibroblasts to synthesis type-1 collagen55–57. In ko00999, (+)-
pinoresinol and secoisolariciresinol were significantly related, the former was reported to
stimulate keratinocyte proliferation58,59 and the latter was reported to suppress atopic dermatitis
in the mouse when administered orally60 |
Your answer should be drawn only from the provided context block. Respond concisely. | Of the circuit courts mentioned, which single court did not address Alabama but did address a state on the east coast?
| Appellate Courts Split on Legal Challenges to
State Laws Banning Certain Medical
Treatments for Transgender Minors
Updated April 4, 2024
Public debate and attention has focused on whether certain medical treatments should be available for
transgender minors to address a discordance between a person’s sex characteristics and gender identity. A
number of states have passed laws prohibiting specific treatments for minors, including puberty blocking
medication (“puberty blockers”), hormones, and surgical procedures. Several states assert, among other
things, that the treatments are too experimental and can have potentially irreversible effects. Parents of
transgender minors, among others, argue that these laws deny critical medical care to transgender minors
and discriminate based on sex or transgender status in violation of the Equal Protection Clause of the
Fourteenth Amendment. Some litigation has also alleged that these laws violate state constitutions.
In cases challenging the laws of Arkansas, Alabama, Tennessee, Kentucky, Indiana, and Idaho, plaintiffs
sought federal court orders to preliminarily enjoin these states from enforcing the laws until final
resolution of the cases. Several lower courts granted these preliminary injunctions, in part based on the
conclusion that the plaintiffs were likely to succeed on the merits of their equal protection claims. Three
federal courts of appeals analyzed whether the lower courts had erred in their rulings and issued opinions
reaching different conclusions. The Eighth Circuit upheld a preliminary injunction of Arkansas’s law,
while the Eleventh Circuit held that a district court erred in enjoining the Alabama law, and the Sixth
Circuit reversed preliminary injunctions that were issued against the Kentucky and Tennessee laws. Two
other appellate courts reviewed preliminary injunctions and issued orders without accompanying opinions
as of yet. The Seventh Circuit, after hearing oral argument, issued a stay of the lower court’s preliminary
injunction against application of Indiana’s law, meaning that the law can go into effect while the case
proceeds. By contrast, the Ninth Circuit denied a motion to stay a preliminary injunction against Idaho’s
law, meaning that that law may not be enforced for now.
This Sidebar focuses on aspects of the appellate court opinions addressing whether plaintiffs are likely to
prevail on their claims that the laws violate the Equal Protection Clause. The three courts that have issued
opinions reached different conclusions on at least two important legal questions relevant to the issue: (1)
whether the challenged laws amount to sex classifications within the meaning of the Equal Protection
Clause, and (2) what standard of review a court should apply when analyzing these challenges. The
Congressional Research Service
https://crsreports.congress.gov
LSB11057
Congressional Research Service 2
courts’ analyses of these questions are consequential, as the likelihood of a state action being upheld or
invalidated under the Equal Protection Clause may turn significantly on how a court resolves them. These
recent decisions not only dictate how lower courts within these circuits analyze such equal protection
challenges, but also may inform other courts’ approaches to similar equal protection challenges.
Equal Protection Background
The Fourteenth Amendment’s Equal Protection Clause prohibits states from denying individuals “the
equal protection of the laws.” In the most general terms, states must not classify or differentiate among
similarly situated individuals in a manner that violates this constitutional guarantee. When analyzing an
equal protection challenge, a court must first determine which legal standard to apply. The most
deferential standard of equal protection review is rational basis, under which a court will generally uphold
a challenged classification as long as it is reasonably related to a legitimate government purpose. Courts
subject classifications based on sex, however, to a more stringent standard—intermediate scrutiny. If
intermediate scrutiny applies, the parties seeking to defend a sex-based classification must show an
“exceedingly persuasive justification” or “important government interest” for classifying individuals
based on sex and must demonstrate that the classification is “substantially related” to achieving that
interest.
In equal protection challenges raised in another context—school restroom access—several federal
appellate courts have concluded that laws prohibiting transgender individuals from access consistent with
their gender identity amount to sex-based classifications subject to intermediate scrutiny. In addition, the
Fourth and Ninth Circuits have held that transgender individuals constitute a quasi-suspect class for equal
protection purposes—that is, a class of individuals who warrant heightened protection under the law—and
that transgender-based classifications are subject to intermediate scrutiny on that basis.
Challenges to State Laws in Federal Appellate Courts
When analyzing the legal bases for the preliminary injunctions at issue, the appellate courts considering
the challenges to the Arkansas, Tennessee, Kentucky, and Alabama laws differed on the applicable
standard of review. The Eighth Circuit construed the Arkansas law as classifying individuals based on
sex, held that intermediate scrutiny applied, and concluded it was likely that the plaintiffs would prevail
on their claim. By contrast, both the Sixth and Eleventh Circuits held that rational basis review applied
and that the challenged laws neither contained a sex classification nor targeted a quasi-suspect class. (The
Sixth and Eleventh Circuits also rejected arguments related to the Due Process Clause of the Fourteenth
Amendment, further discussion of which is beyond the scope of this Sidebar.)
Eighth Circuit: Brandt v. Rutledge
The Eighth Circuit affirmed a district court’s preliminary injunction of Arkansas’s law banning “gender
transition procedures” for minors, reasoning that the law was a sex classification that did not satisfy
intermediate scrutiny. Arkansas’s law bans procedures and drugs intended to remove or alter “physical or
anatomical characteristics or features that are typical for the individual’s biological sex” or “create
physiological or anatomical characteristics that resemble a sex different from the individual’s biological
sex.” Specific medical services identified in the law include puberty blockers, “cross-sex hormones,” and
“gender reassignment surgery.” Prohibited procedures do not include those for individuals “born with a
medically verifiable disorder of sex development.”
Reviewing the injunction, the Eighth Circuit reasoned that the law discriminates on the basis of sex
because medical procedures permitted for minors of one sex are denied to minors of another sex. For
instance, a minor born as a male can be prescribed testosterone, but a minor born as a female is not
permitted to receive that treatment. The court thus viewed the law as subject to intermediate scrutiny. The
Congressional Research Service 3
state’s asserted justification for the law was its interest in protecting minors from “experimental medical
treatment” and regulating medical ethics. The Eighth Circuit concluded that there was substantial
evidence to support the district court’s findings that the medical treatments were a recognized standard of
care and “supported by medical evidence … subject to rigorous study.” The Eighth Circuit accordingly
determined that the lower court was not wrong to conclude the law’s prohibition was likely to fail
intermediate scrutiny, as it was not substantially related to the state’s interest in protecting minors from
experimental treatment and regulation of medical ethics.
The full Eighth Circuit later denied a petition for rehearing en banc, with five judges dissenting from the
denial and several others indicating that an appeal from a final judgment would offer the court a more
comprehensive record to review. Following a trial in the case, the district court entered a permanent
injunction against enforcement of the law, and that decision is now pending before the Eighth Circuit,
which has granted a petition for an initial hearing en banc.
Eleventh Circuit: Eknes-Tucker v. Governor of Alabama
In contrast to the Eighth Circuit’s analysis in Brandt, the Eleventh Circuit held that specific provisions of
a similar Alabama law did not amount to a sex-based or quasi-suspect classification for equal protection
purposes. The court concluded that the challenged provisions were “best understood as a law that targets
specific medical interventions for minors,” or as classifying based on age, and that it was “exceedingly
likely” that the provisions satisfied rational basis review.
The challenged provisions of Alabama’s law prohibit any person from prescribing or administering
“puberty blocking medication,” “supraphysiologic doses of testosterone or other androgens to females,”
and “supraphysiologic doses of estrogen to males,” when given “to attempt[] to alter the appearance of or
affirm the minor’s perception of his or her gender or sex, if that appearance or perception is inconsistent
with the minor’s sex as defined in this act.” The law’s other provisions, which were not challenged in the
Eknes-Tucker lawsuit, include a prohibition of specific surgical procedures. The Alabama law defines a
minor as a person under the age of 19, and defines sex to mean “‘[t]he biological state of being male or
female, based on the individual’s sex organs, chromosomes, and endogenous hormone profiles.’”
The Eleventh Circuit rejected the plaintiffs’ assertion that the provisions classify based on sex because the
law uses sex-based terms to criminalize certain treatments. The law refers to sex, the court decided, only
because the medical interventions at issue concern physiological sex characteristics. “[I]t is difficult to
imagine how a state might regulate the use of puberty blockers and cross-sex hormones . . . in specific
terms without referencing sex in some way,” the court observed. More significantly, the court reasoned
that the challenged provisions do not distinguish between men and women by denying an opportunity to
one sex but not the other—a key feature of sex-based classifications for equal protection purposes. Rather,
in the court’s view, the restrictions on puberty blockers and hormone treatment apply to all minors,
regardless of sex. The appellate court also rejected the argument, adopted by the lower court, that a
classification based on gender nonconformity “indirectly classifies on the basis of sex.” The appellate
court held that the lower court had relied on inapposite precedent to reach that conclusion, including a
Supreme Court decision interpreting Title VII of the Civil Rights Act of 1964. That decision, the court
reasoned, addressed a federal statute, not the different text and meaning of the Equal Protection Clause,
and did not concern the regulation of medical treatments. The Eleventh Circuit also rejected the view that
transgender persons constitute a quasi-suspect class distinct from sex.
The court did observe that the challenged provisions prohibit medical treatment for minors that only
gender nonconforming or transgender individuals would want to undergo. Addressing that distinction, the
court stated that the law would trigger heightened scrutiny if regulating medical treatment were “a pretext
for invidious discrimination against such individuals.” In the case before the court, however, “the district
court did not find that Alabama’s law was based on invidious discrimination.” Nor did the challenged
Congressional Research Service 4
provisions “further any particular gender stereotype.” Rather, the provisions, in the court’s view, refer to
and “reflect[] biological differences between males and females.” In a concurring opinion, Judge Brasher
agreed that rational basis review was the applicable standard but added that even if intermediate scrutiny
applied to the challenged provisions of Alabama’s law, it was likely the state would satisfy that standard.
The plaintiffs have filed a petition seeking en banc review of the panel decision. | Your answer should be drawn only from the provided context block. Respond concisely.
Of the circuit courts mentioned, which single court did not address Alabama but did address a state on the east coast?
Appellate Courts Split on Legal Challenges to
State Laws Banning Certain Medical
Treatments for Transgender Minors
Updated April 4, 2024
Public debate and attention has focused on whether certain medical treatments should be available for
transgender minors to address a discordance between a person’s sex characteristics and gender identity. A
number of states have passed laws prohibiting specific treatments for minors, including puberty blocking
medication (“puberty blockers”), hormones, and surgical procedures. Several states assert, among other
things, that the treatments are too experimental and can have potentially irreversible effects. Parents of
transgender minors, among others, argue that these laws deny critical medical care to transgender minors
and discriminate based on sex or transgender status in violation of the Equal Protection Clause of the
Fourteenth Amendment. Some litigation has also alleged that these laws violate state constitutions.
In cases challenging the laws of Arkansas, Alabama, Tennessee, Kentucky, Indiana, and Idaho, plaintiffs
sought federal court orders to preliminarily enjoin these states from enforcing the laws until final
resolution of the cases. Several lower courts granted these preliminary injunctions, in part based on the
conclusion that the plaintiffs were likely to succeed on the merits of their equal protection claims. Three
federal courts of appeals analyzed whether the lower courts had erred in their rulings and issued opinions
reaching different conclusions. The Eighth Circuit upheld a preliminary injunction of Arkansas’s law,
while the Eleventh Circuit held that a district court erred in enjoining the Alabama law, and the Sixth
Circuit reversed preliminary injunctions that were issued against the Kentucky and Tennessee laws. Two
other appellate courts reviewed preliminary injunctions and issued orders without accompanying opinions
as of yet. The Seventh Circuit, after hearing oral argument, issued a stay of the lower court’s preliminary
injunction against application of Indiana’s law, meaning that the law can go into effect while the case
proceeds. By contrast, the Ninth Circuit denied a motion to stay a preliminary injunction against Idaho’s
law, meaning that that law may not be enforced for now.
This Sidebar focuses on aspects of the appellate court opinions addressing whether plaintiffs are likely to
prevail on their claims that the laws violate the Equal Protection Clause. The three courts that have issued
opinions reached different conclusions on at least two important legal questions relevant to the issue: (1)
whether the challenged laws amount to sex classifications within the meaning of the Equal Protection
Clause, and (2) what standard of review a court should apply when analyzing these challenges. The
Congressional Research Service
https://crsreports.congress.gov
LSB11057
Congressional Research Service 2
courts’ analyses of these questions are consequential, as the likelihood of a state action being upheld or
invalidated under the Equal Protection Clause may turn significantly on how a court resolves them. These
recent decisions not only dictate how lower courts within these circuits analyze such equal protection
challenges, but also may inform other courts’ approaches to similar equal protection challenges.
Equal Protection Background
The Fourteenth Amendment’s Equal Protection Clause prohibits states from denying individuals “the
equal protection of the laws.” In the most general terms, states must not classify or differentiate among
similarly situated individuals in a manner that violates this constitutional guarantee. When analyzing an
equal protection challenge, a court must first determine which legal standard to apply. The most
deferential standard of equal protection review is rational basis, under which a court will generally uphold
a challenged classification as long as it is reasonably related to a legitimate government purpose. Courts
subject classifications based on sex, however, to a more stringent standard—intermediate scrutiny. If
intermediate scrutiny applies, the parties seeking to defend a sex-based classification must show an
“exceedingly persuasive justification” or “important government interest” for classifying individuals
based on sex and must demonstrate that the classification is “substantially related” to achieving that
interest.
In equal protection challenges raised in another context—school restroom access—several federal
appellate courts have concluded that laws prohibiting transgender individuals from access consistent with
their gender identity amount to sex-based classifications subject to intermediate scrutiny. In addition, the
Fourth and Ninth Circuits have held that transgender individuals constitute a quasi-suspect class for equal
protection purposes—that is, a class of individuals who warrant heightened protection under the law—and
that transgender-based classifications are subject to intermediate scrutiny on that basis.
Challenges to State Laws in Federal Appellate Courts
When analyzing the legal bases for the preliminary injunctions at issue, the appellate courts considering
the challenges to the Arkansas, Tennessee, Kentucky, and Alabama laws differed on the applicable
standard of review. The Eighth Circuit construed the Arkansas law as classifying individuals based on
sex, held that intermediate scrutiny applied, and concluded it was likely that the plaintiffs would prevail
on their claim. By contrast, both the Sixth and Eleventh Circuits held that rational basis review applied
and that the challenged laws neither contained a sex classification nor targeted a quasi-suspect class. (The
Sixth and Eleventh Circuits also rejected arguments related to the Due Process Clause of the Fourteenth
Amendment, further discussion of which is beyond the scope of this Sidebar.)
Eighth Circuit: Brandt v. Rutledge
The Eighth Circuit affirmed a district court’s preliminary injunction of Arkansas’s law banning “gender
transition procedures” for minors, reasoning that the law was a sex classification that did not satisfy
intermediate scrutiny. Arkansas’s law bans procedures and drugs intended to remove or alter “physical or
anatomical characteristics or features that are typical for the individual’s biological sex” or “create
physiological or anatomical characteristics that resemble a sex different from the individual’s biological
sex.” Specific medical services identified in the law include puberty blockers, “cross-sex hormones,” and
“gender reassignment surgery.” Prohibited procedures do not include those for individuals “born with a
medically verifiable disorder of sex development.”
Reviewing the injunction, the Eighth Circuit reasoned that the law discriminates on the basis of sex
because medical procedures permitted for minors of one sex are denied to minors of another sex. For
instance, a minor born as a male can be prescribed testosterone, but a minor born as a female is not
permitted to receive that treatment. The court thus viewed the law as subject to intermediate scrutiny. The
Congressional Research Service 3
state’s asserted justification for the law was its interest in protecting minors from “experimental medical
treatment” and regulating medical ethics. The Eighth Circuit concluded that there was substantial
evidence to support the district court’s findings that the medical treatments were a recognized standard of
care and “supported by medical evidence … subject to rigorous study.” The Eighth Circuit accordingly
determined that the lower court was not wrong to conclude the law’s prohibition was likely to fail
intermediate scrutiny, as it was not substantially related to the state’s interest in protecting minors from
experimental treatment and regulation of medical ethics.
The full Eighth Circuit later denied a petition for rehearing en banc, with five judges dissenting from the
denial and several others indicating that an appeal from a final judgment would offer the court a more
comprehensive record to review. Following a trial in the case, the district court entered a permanent
injunction against enforcement of the law, and that decision is now pending before the Eighth Circuit,
which has granted a petition for an initial hearing en banc.
Eleventh Circuit: Eknes-Tucker v. Governor of Alabama
In contrast to the Eighth Circuit’s analysis in Brandt, the Eleventh Circuit held that specific provisions of
a similar Alabama law did not amount to a sex-based or quasi-suspect classification for equal protection
purposes. The court concluded that the challenged provisions were “best understood as a law that targets
specific medical interventions for minors,” or as classifying based on age, and that it was “exceedingly
likely” that the provisions satisfied rational basis review.
The challenged provisions of Alabama’s law prohibit any person from prescribing or administering
“puberty blocking medication,” “supraphysiologic doses of testosterone or other androgens to females,”
and “supraphysiologic doses of estrogen to males,” when given “to attempt[] to alter the appearance of or
affirm the minor’s perception of his or her gender or sex, if that appearance or perception is inconsistent
with the minor’s sex as defined in this act.” The law’s other provisions, which were not challenged in the
Eknes-Tucker lawsuit, include a prohibition of specific surgical procedures. The Alabama law defines a
minor as a person under the age of 19, and defines sex to mean “‘[t]he biological state of being male or
female, based on the individual’s sex organs, chromosomes, and endogenous hormone profiles.’”
The Eleventh Circuit rejected the plaintiffs’ assertion that the provisions classify based on sex because the
law uses sex-based terms to criminalize certain treatments. The law refers to sex, the court decided, only
because the medical interventions at issue concern physiological sex characteristics. “[I]t is difficult to
imagine how a state might regulate the use of puberty blockers and cross-sex hormones . . . in specific
terms without referencing sex in some way,” the court observed. More significantly, the court reasoned
that the challenged provisions do not distinguish between men and women by denying an opportunity to
one sex but not the other—a key feature of sex-based classifications for equal protection purposes. Rather,
in the court’s view, the restrictions on puberty blockers and hormone treatment apply to all minors,
regardless of sex. The appellate court also rejected the argument, adopted by the lower court, that a
classification based on gender nonconformity “indirectly classifies on the basis of sex.” The appellate
court held that the lower court had relied on inapposite precedent to reach that conclusion, including a
Supreme Court decision interpreting Title VII of the Civil Rights Act of 1964. That decision, the court
reasoned, addressed a federal statute, not the different text and meaning of the Equal Protection Clause,
and did not concern the regulation of medical treatments. The Eleventh Circuit also rejected the view that
transgender persons constitute a quasi-suspect class distinct from sex.
The court did observe that the challenged provisions prohibit medical treatment for minors that only
gender nonconforming or transgender individuals would want to undergo. Addressing that distinction, the
court stated that the law would trigger heightened scrutiny if regulating medical treatment were “a pretext
for invidious discrimination against such individuals.” In the case before the court, however, “the district
court did not find that Alabama’s law was based on invidious discrimination.” Nor did the challenged
Congressional Research Service 4
provisions “further any particular gender stereotype.” Rather, the provisions, in the court’s view, refer to
and “reflect[] biological differences between males and females.” In a concurring opinion, Judge Brasher
agreed that rational basis review was the applicable standard but added that even if intermediate scrutiny
applied to the challenged provisions of Alabama’s law, it was likely the state would satisfy that standard.
The plaintiffs have filed a petition seeking en banc review of the panel decision. |
"================
<TEXT PASSAGE>
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[context document]
================
<QUESTION>
=======
[user request]
================
<TASK>
=======
You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." | My neighbor has been adding to his property all around his home over many years, annexing land from his neighbors. What technique is he using to acquire this real estate? What's required to make this happen? How can I protect my land from his actions? | ADVERSE POSSESSION
By: George Coppolo, Chief Attorney
SUMMARY
Connecticut law recognizes adverse possession as a way to acquire title to property. Adverse possession is a method of acquiring title to real estate, accomplished by an open, visible, and exclusive possession uninterruptedly for a 15-year period (CGS § 52-575; Whitney v. Turmel 180 Conn. 147 (1980)). Connecticut also recognizes the right to acquire a right-of-way or other easement by continuous, uninterrupted use of someone else's land for 15 years (CGS § 47-37).
The legislature has amended this law three times during the past 10 years- in 1996, 1999, and 2002.
Legislation passed in 1996 authorizes a landowner who wishes to interrupt an adverse possession claim, in addition to things already required, to serve a notice on the adverse possessor and record it on the land records (PA 96-249). Such service and notice is an interruption of the use and possession and prevents the acquisition of a right by continuing the use and possession thereafter.
Legislation adopted in 1999 protects land belonging to a nonprofit land-holding organization from adverse possession. The act applies to non-stock corporations whose principal purposes include the conservation and preservation of land (PA 99-64).
PA 02-66 prohibits adverse possession claims on certain types of land owned by investor-owned water companies.
The law in other states is similar to Connecticut's. The main difference is that some jurisdictions have established a shorter or longer period, and some have established different time periods for different types of property.
CONNECTICUT
Adverse possession can create an absolute title to real estate, which is as good as title by deed from the record owner. But adverse possession as record title requires evidence showing the existence of all elements necessary for adverse possession, and apparently this can be done only in a judicial proceeding to which those to be bound by the decision have been made parties.
The essential elements of an adverse possession sufficient to create title to land in a claimant are that the owner is ousted of possession and kept out uninterruptedly for 15 years by an open, visible, and exclusive possession by the claimant, under a claim of right, with the intention of using the property as his own, and without the owner's consent. The possession must be hostile and under a claim of right, actual, open, notorious, exclusive, continuous, and uninterrupted (Goodman v. Quadrato, 142 Conn. 398 (1954)).
The 15-year period comes from CGS § 52-575 which establishes this time frame for an owner to assert his ownership claim over an adverse possessor.
A landowner who wishes to interrupt an adverse possession claim may serve a notice on the adverse possessor and record it on the land records. Such service and notice is an interruption of the use and possession and prevents the acquisition of a right by continuing the use and possession thereafter.
The notice must be served on the adverse possessor, his agent, or guardian if they are in Connecticut, in the same way lawsuit papers are served. Otherwise, a copy of the notice must be affixed to the house on the land in question or to some other conspicuous part of the premises.
The notice and papers indicating the notice was served must be recorded in the land records of the town where the land is located within three months after service. When the adverse possessor is unknown, the notice must be given by conspicuously posting a copy on the property, serving it on the person to whom the taxes were last assessed, and recording it on the land records.
The law prohibits adverse possession of:
1. certain types of land owned by investor-owned water companies (CGS § 47-27(b));
2. land belonging to a non-profit corporation organized under Connecticut law with land conservation or preservation as one of its principal purposes (CGS § 47-27(b)); and
3. certain railroad and canal land (CGS § 47-26). | "================
<TEXT PASSAGE>
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ADVERSE POSSESSION
By: George Coppolo, Chief Attorney
SUMMARY
Connecticut law recognizes adverse possession as a way to acquire title to property. Adverse possession is a method of acquiring title to real estate, accomplished by an open, visible, and exclusive possession uninterruptedly for a 15-year period (CGS § 52-575; Whitney v. Turmel 180 Conn. 147 (1980)). Connecticut also recognizes the right to acquire a right-of-way or other easement by continuous, uninterrupted use of someone else's land for 15 years (CGS § 47-37).
The legislature has amended this law three times during the past 10 years- in 1996, 1999, and 2002.
Legislation passed in 1996 authorizes a landowner who wishes to interrupt an adverse possession claim, in addition to things already required, to serve a notice on the adverse possessor and record it on the land records (PA 96-249). Such service and notice is an interruption of the use and possession and prevents the acquisition of a right by continuing the use and possession thereafter.
Legislation adopted in 1999 protects land belonging to a nonprofit land-holding organization from adverse possession. The act applies to non-stock corporations whose principal purposes include the conservation and preservation of land (PA 99-64).
PA 02-66 prohibits adverse possession claims on certain types of land owned by investor-owned water companies.
The law in other states is similar to Connecticut's. The main difference is that some jurisdictions have established a shorter or longer period, and some have established different time periods for different types of property.
CONNECTICUT
Adverse possession can create an absolute title to real estate, which is as good as title by deed from the record owner. But adverse possession as record title requires evidence showing the existence of all elements necessary for adverse possession, and apparently this can be done only in a judicial proceeding to which those to be bound by the decision have been made parties.
The essential elements of an adverse possession sufficient to create title to land in a claimant are that the owner is ousted of possession and kept out uninterruptedly for 15 years by an open, visible, and exclusive possession by the claimant, under a claim of right, with the intention of using the property as his own, and without the owner's consent. The possession must be hostile and under a claim of right, actual, open, notorious, exclusive, continuous, and uninterrupted (Goodman v. Quadrato, 142 Conn. 398 (1954)).
The 15-year period comes from CGS § 52-575 which establishes this time frame for an owner to assert his ownership claim over an adverse possessor.
A landowner who wishes to interrupt an adverse possession claim may serve a notice on the adverse possessor and record it on the land records. Such service and notice is an interruption of the use and possession and prevents the acquisition of a right by continuing the use and possession thereafter.
The notice must be served on the adverse possessor, his agent, or guardian if they are in Connecticut, in the same way lawsuit papers are served. Otherwise, a copy of the notice must be affixed to the house on the land in question or to some other conspicuous part of the premises.
The notice and papers indicating the notice was served must be recorded in the land records of the town where the land is located within three months after service. When the adverse possessor is unknown, the notice must be given by conspicuously posting a copy on the property, serving it on the person to whom the taxes were last assessed, and recording it on the land records.
The law prohibits adverse possession of:
1. certain types of land owned by investor-owned water companies (CGS § 47-27(b));
2. land belonging to a non-profit corporation organized under Connecticut law with land conservation or preservation as one of its principal purposes (CGS § 47-27(b)); and
3. certain railroad and canal land (CGS § 47-26).
https://www.cga.ct.gov/2006/rpt/2006-R-0032.htm
================
<QUESTION>
=======
My neighbor has been adding to his property all around his home over many years, annexing land from his neighbors. What technique is he using to acquire this real estate? What's required to make this happen? How can I protect my land from his actions?
================
<TASK>
=======
You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." |
{instruction}
==========
In your answer, refer only to the context document. Do not employ any outside knowledge
{question}
==========
[user request]
{passage 0}
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[context document] | what are the health benefits of laughter and what are the symptoms of having dry eyes and what are some of the ingreients in the eye drops | t
Objective: To assess efficacy and safety of laughter exercise in patients with symptomatic dry eye disease.
Design: Non-inferiority randomised controlled trial.
Setting: Recruitment was from clinics and community and the trial took place at Zhongshan Ophthalmic Center, Sun Yat-sen University, the largest ophthalmic centre in China, between 18 June 2020 to 8 January 2021.
Participants: People with symptomatic dry eye disease aged 18-45 years with ocular surface disease index scores ranging from 18 to 80 and tear film break-up time of eight seconds or less.
Interventions: Participants were randomised 1:1 to receive laughter exercise or artificial tears (0.1% sodium hyaluronic acid eyedrop, control group) four times daily for eight weeks. The laughter exercise group viewed an instructional video and participants were requested to vocalise the phrases "Hee hee hee, hah hah hah, cheese cheese cheese, cheek cheek cheek, hah hah hah hah hah hah" 30 times per five minute session. Investigators assessing study outcomes were masked to group assignment but participants were unmasked for practical reasons.
Main outcome measures: The primary outcome was the mean change in the ocular surface disease index (0-100, higher scores indicating worse ocular surface discomfort) from baseline to eight weeks in the per protocol population. The non-inferiority margin was 6 points of this index score. Main secondary outcomes included the proportion of patients with a decrease from baseline in ocular surface disease index score of at least 10 points and changes in dry eye disease signs, for example, non-invasive tear break up time at eight weeks.
Results: 299 participants (mean age 28.9 years; 74% female) were randomly assigned to receive laughter exercise (n=149) or 0.1% sodium hyaluronic acid (n=150). 283 (95%) completed the trial. The mean change in ocular surface disease index score at eight weeks was -10.5 points (95% confidence interval (CI) -13.1 to -7.82) in the laughter exercise group and -8.83 (-11.7 to -6.02) in the control group. The upper boundary of the CI for difference in change between groups was lower than the non-inferiority margin (mean difference -1.45 points (95% CI -5.08 to 2.19); P=0.43), supporting non-inferiority. Among secondary outcomes, the laughter exercise was better in improving non-invasive tear break up time (mean difference 2.30 seconds (95% CI 1.30 to 3.30), P<0.001); other secondary outcomes showed no significant difference. No adverse events were noted in either study group.
Conclusions: The laughter exercise was non-inferior to 0.1% sodium hyaluronic acid in relieving subjective symptoms in patients with dry eye disease with limited corneal staining over eight weeks intervention.
Trial registration: ClinicalTrials.gov NCT04421300.
© Author(s) (or their employer(s)) 2019. Re-use permitted under CC BY-NC. No commercial re-use. See rights and permissions. Published by BMJ.
PubMed Disclaimer
Conflict of interest statement
Competing interests: All authors have completed the ICMJE uniform disclosure form at www.icmje.org/disclosure-of-interest/ and declare: support from the National Natural Science Foundation of China (82070922, 82201142) and the High-level Hospital Construction Project (303020101) for the submitted work; no financial relationships with any organisations that might have an interest in the submitted work in the previous three years; no other relationships or activities that could appear to have influenced the submitted work. | {instruction}
==========
In your answer, refer only to the context document. Do not employ any outside knowledge
{question}
==========
what are the health benefits of laughter and what are the symptoms of having dry eyes and what are some of the ingreients in the eye drops
{passage 0}
==========
t
Objective: To assess efficacy and safety of laughter exercise in patients with symptomatic dry eye disease.
Design: Non-inferiority randomised controlled trial.
Setting: Recruitment was from clinics and community and the trial took place at Zhongshan Ophthalmic Center, Sun Yat-sen University, the largest ophthalmic centre in China, between 18 June 2020 to 8 January 2021.
Participants: People with symptomatic dry eye disease aged 18-45 years with ocular surface disease index scores ranging from 18 to 80 and tear film break-up time of eight seconds or less.
Interventions: Participants were randomised 1:1 to receive laughter exercise or artificial tears (0.1% sodium hyaluronic acid eyedrop, control group) four times daily for eight weeks. The laughter exercise group viewed an instructional video and participants were requested to vocalise the phrases "Hee hee hee, hah hah hah, cheese cheese cheese, cheek cheek cheek, hah hah hah hah hah hah" 30 times per five minute session. Investigators assessing study outcomes were masked to group assignment but participants were unmasked for practical reasons.
Main outcome measures: The primary outcome was the mean change in the ocular surface disease index (0-100, higher scores indicating worse ocular surface discomfort) from baseline to eight weeks in the per protocol population. The non-inferiority margin was 6 points of this index score. Main secondary outcomes included the proportion of patients with a decrease from baseline in ocular surface disease index score of at least 10 points and changes in dry eye disease signs, for example, non-invasive tear break up time at eight weeks.
Results: 299 participants (mean age 28.9 years; 74% female) were randomly assigned to receive laughter exercise (n=149) or 0.1% sodium hyaluronic acid (n=150). 283 (95%) completed the trial. The mean change in ocular surface disease index score at eight weeks was -10.5 points (95% confidence interval (CI) -13.1 to -7.82) in the laughter exercise group and -8.83 (-11.7 to -6.02) in the control group. The upper boundary of the CI for difference in change between groups was lower than the non-inferiority margin (mean difference -1.45 points (95% CI -5.08 to 2.19); P=0.43), supporting non-inferiority. Among secondary outcomes, the laughter exercise was better in improving non-invasive tear break up time (mean difference 2.30 seconds (95% CI 1.30 to 3.30), P<0.001); other secondary outcomes showed no significant difference. No adverse events were noted in either study group.
Conclusions: The laughter exercise was non-inferior to 0.1% sodium hyaluronic acid in relieving subjective symptoms in patients with dry eye disease with limited corneal staining over eight weeks intervention.
Trial registration: ClinicalTrials.gov NCT04421300.
© Author(s) (or their employer(s)) 2019. Re-use permitted under CC BY-NC. No commercial re-use. See rights and permissions. Published by BMJ.
PubMed Disclaimer
Conflict of interest statement
Competing interests: All authors have completed the ICMJE uniform disclosure form at www.icmje.org/disclosure-of-interest/ and declare: support from the National Natural Science Foundation of China (82070922, 82201142) and the High-level Hospital Construction Project (303020101) for the submitted work; no financial relationships with any organisations that might have an interest in the submitted work in the previous three years; no other relationships or activities that could appear to have influenced the submitted work.
https://pubmed.ncbi.nlm.nih.gov/39260878/ |
<TASK DESCRIPTION>
Only use the provided text to answer the question, no outside sources.
<QUESTION>
[user request]
<TEXT>
[context document] | Explain the benefits for a tech company of upgrading their frontend codebase from the AngularJS framework to the modern Angular framework in less than 200 words. | The Risks of Sticking with Outdated Frameworks
Security Vulnerabilities
Every software framework, including Angular, has vulnerabilities that are discovered and patched over time. Running an outdated version means your application is exposed to known security issues that could have been mitigated with an upgrade. For example, Angular has had several security updates over the years addressing issues such as Cross-Site Scripting (XSS) and dependency vulnerabilities. By not upgrading, you leave your application susceptible to attacks that can compromise user data and damage your company's reputation.
Example: In AngularJs 1.6.3, a critical security vulnerability was discovered that allowed attackers to execute arbitrary JavaScript code via the ngSanitize service. This issue was patched in a subsequent release. Companies still running Angular 1.6.3 or earlier are at risk of exploitation. Despite Angular 1.6.3 being an old version, it serves as an example because many legacy systems still run on AngularJS (Angular 1.x), and these systems are particularly vulnerable if not properly maintained.
Performance Improvements
Each new version of Angular introduces performance optimizations that make your application faster and more efficient. These improvements are often the result of extensive research and development by the Angular team, and they can have a significant impact on your application's load times and responsiveness.
Example: Angular 9 introduced the Ivy compiler, which drastically reduced the size of compiled JavaScript bundles, leading to faster load times and improved performance. Applications that have not upgraded to Angular 9 or later are missing out on these substantial gains.
Compatibility and Support
Frameworks evolve to support new web standards, browser features, and third-party integrations. Running an outdated version of Angular can lead to compatibility issues with modern tools and libraries, making it harder to integrate new features or technologies into your application.
Example: Angular 12 introduced strict mode, which improves maintainability and reduces the likelihood of runtime errors. It also provides better support for TypeScript 4.2, which includes new language features and performance enhancements. Sticking with an older version may result in compatibility issues and technical debt.
Developer Satisfaction
Developer satisfaction is crucial for retaining top talent and ensuring high productivity levels. Developers prefer working with the latest technologies to stay current with industry trends and advance their careers. Using an outdated tech stack can lead to frustration and decreased motivation, as developers may feel they are missing out on learning and growth opportunities. Nobody wants to work with old technologies that do not provide the modern conveniences, performance improvements, and security features available in newer versions.
Example: A team of developers working with an outdated version of Angular might feel demotivated compared to their peers who are using the latest version with advanced features and improved tooling. This can lead to higher turnover rates as developers seek opportunities that allow them to work with cutting-edge technologies.
Compliance and Regulatory Requirements
Many industries, especially those dealing with sensitive information like finance and healthcare, are subject to strict regulatory requirements. Using outdated software can lead to non-compliance, resulting in fines and legal consequences. Regulatory bodies often require that software be up-to-date and free of known vulnerabilities.
Example: In the banking sector, projects are often marked as security risks if they use outdated npm packages with known vulnerabilities. This non-compliance can lead to audits and penalties. Tools like Black Duck and SonarQube (Sonar) scans are frequently used to ensure compliance by identifying and reporting outdated or vulnerable dependencies. Black Duck, for instance, provides detailed reports on open-source component risks, helping teams understand the implications of using outdated libraries.
Current Angular Versions
As of June 2024, the current supported versions of Angular are 18, 17, 16. Angular follows a regular release cycle with Long-Term Support (LTS) versions that receive updates for an extended period (12 months), providing stability and security for production applications.
Unsupported Angular Versions
It's important to be aware of the Angular versions that are no longer supported, as they do not receive security updates or bug fixes. Angular versions v2 to v15 are no longer supported.
Using these unsupported versions can expose your application to security risks and compatibility issues.
Overcoming the Resistance to Upgrade
Managers often resist upgrading frameworks due to concerns about the perceived disruption to business delivery. However, the risks associated with running outdated software can far outweigh the temporary inconvenience of an upgrade. Here are some strategies to help convince your manager:
Highlight Security Risks:
Emphasize the importance of security in protecting user data and maintaining trust. Provide examples of high-profile security breaches that were the result of outdated software. Explain that the cost of a security incident, in terms of both financial impact and reputation damage, can be far greater than the cost of an upgrade.
Example: The Equifax data breach in 2017, which exposed the personal information of 147 million people, was partly due to an unpatched vulnerability in a web application framework. This breach resulted in a $700 million settlement.
Demonstrate Cost Savings:
While the initial investment in upgrading may seem high, it can lead to long-term cost savings by reducing technical debt, minimizing downtime, and improving developer efficiency. Provide a cost-benefit analysis that compares the costs of an upgrade to the potential costs of security breaches, performance issues, and maintenance of outdated code.
Example: A study by IBM found that the average cost of a data breach is $3.86 million. Investing in regular upgrades can mitigate these risks and save significant costs in the long run.
Showcase Success Stories:
Provide case studies of companies that have successfully upgraded their frameworks and reaped the benefits. Highlight improvements in security, performance, and developer productivity. This can help alleviate fears and demonstrate the tangible benefits of staying up-to-date.
Example: A major e-commerce company upgraded from AngularJS to Angular 10 and saw a 30% improvement in page load times, resulting in a 15% increase in user engagement and a 10% boost in sales.
Plan for Minimal Disruption:
Develop a detailed upgrade plan that minimizes disruption to business delivery. This can include phased rollouts, thorough testing, and parallel development to ensure a smooth transition. Demonstrating a well-thought-out plan can help reassure managers that the upgrade will not negatively impact ongoing projects.
Example: Conduct a pilot upgrade with a smaller, less critical part of the application to identify potential issues and develop solutions before rolling out the upgrade to the entire system.
Creating a Framework or Developer Experience (DX) Team
One effective strategy to ensure regular upgrades and maintenance of frameworks is to establish a dedicated Framework or Developer Experience (DX) team. This team can take responsibility for monitoring updates, assessing their impact, and planning upgrades without disrupting the core business activities.
Example: A large tech company established a DX team tasked with maintaining the development environment and ensuring all frameworks and libraries are up-to-date. This team conducted regular audits using tools like Black Duck and SonarQube to identify outdated dependencies and potential security risks. They then worked with development teams to plan and implement upgrades in a phased and controlled manner, ensuring minimal disruption to ongoing projects.
Example: A financial institution formed a Framework Team to handle all aspects of framework maintenance, including Angular upgrades. This team used automated tools to scan for vulnerabilities and compliance issues, producing regular reports and actionable insights. By centralizing this responsibility, the institution was able to stay compliant with regulatory requirements and avoid potential security risks associated with outdated software. | <TASK DESCRIPTION>
Only use the provided text to answer the question, no outside sources.
<QUESTION>
Explain the benefits for a tech company of upgrading their frontend codebase from the AngularJS framework to the modern Angular framework in less than 200 words.
<TEXT>
The Risks of Sticking with Outdated Frameworks
Security Vulnerabilities
Every software framework, including Angular, has vulnerabilities that are discovered and patched over time. Running an outdated version means your application is exposed to known security issues that could have been mitigated with an upgrade. For example, Angular has had several security updates over the years addressing issues such as Cross-Site Scripting (XSS) and dependency vulnerabilities. By not upgrading, you leave your application susceptible to attacks that can compromise user data and damage your company's reputation.
Example: In AngularJs 1.6.3, a critical security vulnerability was discovered that allowed attackers to execute arbitrary JavaScript code via the ngSanitize service. This issue was patched in a subsequent release. Companies still running Angular 1.6.3 or earlier are at risk of exploitation. Despite Angular 1.6.3 being an old version, it serves as an example because many legacy systems still run on AngularJS (Angular 1.x), and these systems are particularly vulnerable if not properly maintained.
Performance Improvements
Each new version of Angular introduces performance optimizations that make your application faster and more efficient. These improvements are often the result of extensive research and development by the Angular team, and they can have a significant impact on your application's load times and responsiveness.
Example: Angular 9 introduced the Ivy compiler, which drastically reduced the size of compiled JavaScript bundles, leading to faster load times and improved performance. Applications that have not upgraded to Angular 9 or later are missing out on these substantial gains.
Compatibility and Support
Frameworks evolve to support new web standards, browser features, and third-party integrations. Running an outdated version of Angular can lead to compatibility issues with modern tools and libraries, making it harder to integrate new features or technologies into your application.
Example: Angular 12 introduced strict mode, which improves maintainability and reduces the likelihood of runtime errors. It also provides better support for TypeScript 4.2, which includes new language features and performance enhancements. Sticking with an older version may result in compatibility issues and technical debt.
Developer Satisfaction
Developer satisfaction is crucial for retaining top talent and ensuring high productivity levels. Developers prefer working with the latest technologies to stay current with industry trends and advance their careers. Using an outdated tech stack can lead to frustration and decreased motivation, as developers may feel they are missing out on learning and growth opportunities. Nobody wants to work with old technologies that do not provide the modern conveniences, performance improvements, and security features available in newer versions.
Example: A team of developers working with an outdated version of Angular might feel demotivated compared to their peers who are using the latest version with advanced features and improved tooling. This can lead to higher turnover rates as developers seek opportunities that allow them to work with cutting-edge technologies.
Compliance and Regulatory Requirements
Many industries, especially those dealing with sensitive information like finance and healthcare, are subject to strict regulatory requirements. Using outdated software can lead to non-compliance, resulting in fines and legal consequences. Regulatory bodies often require that software be up-to-date and free of known vulnerabilities.
Example: In the banking sector, projects are often marked as security risks if they use outdated npm packages with known vulnerabilities. This non-compliance can lead to audits and penalties. Tools like Black Duck and SonarQube (Sonar) scans are frequently used to ensure compliance by identifying and reporting outdated or vulnerable dependencies. Black Duck, for instance, provides detailed reports on open-source component risks, helping teams understand the implications of using outdated libraries.
Current Angular Versions
As of June 2024, the current supported versions of Angular are 18, 17, 16. Angular follows a regular release cycle with Long-Term Support (LTS) versions that receive updates for an extended period (12 months), providing stability and security for production applications.
Unsupported Angular Versions
It's important to be aware of the Angular versions that are no longer supported, as they do not receive security updates or bug fixes. Angular versions v2 to v15 are no longer supported.
Using these unsupported versions can expose your application to security risks and compatibility issues.
Overcoming the Resistance to Upgrade
Managers often resist upgrading frameworks due to concerns about the perceived disruption to business delivery. However, the risks associated with running outdated software can far outweigh the temporary inconvenience of an upgrade. Here are some strategies to help convince your manager:
Highlight Security Risks:
Emphasize the importance of security in protecting user data and maintaining trust. Provide examples of high-profile security breaches that were the result of outdated software. Explain that the cost of a security incident, in terms of both financial impact and reputation damage, can be far greater than the cost of an upgrade.
Example: The Equifax data breach in 2017, which exposed the personal information of 147 million people, was partly due to an unpatched vulnerability in a web application framework. This breach resulted in a $700 million settlement.
Demonstrate Cost Savings:
While the initial investment in upgrading may seem high, it can lead to long-term cost savings by reducing technical debt, minimizing downtime, and improving developer efficiency. Provide a cost-benefit analysis that compares the costs of an upgrade to the potential costs of security breaches, performance issues, and maintenance of outdated code.
Example: A study by IBM found that the average cost of a data breach is $3.86 million. Investing in regular upgrades can mitigate these risks and save significant costs in the long run.
Showcase Success Stories:
Provide case studies of companies that have successfully upgraded their frameworks and reaped the benefits. Highlight improvements in security, performance, and developer productivity. This can help alleviate fears and demonstrate the tangible benefits of staying up-to-date.
Example: A major e-commerce company upgraded from AngularJS to Angular 10 and saw a 30% improvement in page load times, resulting in a 15% increase in user engagement and a 10% boost in sales.
Plan for Minimal Disruption:
Develop a detailed upgrade plan that minimizes disruption to business delivery. This can include phased rollouts, thorough testing, and parallel development to ensure a smooth transition. Demonstrating a well-thought-out plan can help reassure managers that the upgrade will not negatively impact ongoing projects.
Example: Conduct a pilot upgrade with a smaller, less critical part of the application to identify potential issues and develop solutions before rolling out the upgrade to the entire system.
Creating a Framework or Developer Experience (DX) Team
One effective strategy to ensure regular upgrades and maintenance of frameworks is to establish a dedicated Framework or Developer Experience (DX) team. This team can take responsibility for monitoring updates, assessing their impact, and planning upgrades without disrupting the core business activities.
Example: A large tech company established a DX team tasked with maintaining the development environment and ensuring all frameworks and libraries are up-to-date. This team conducted regular audits using tools like Black Duck and SonarQube to identify outdated dependencies and potential security risks. They then worked with development teams to plan and implement upgrades in a phased and controlled manner, ensuring minimal disruption to ongoing projects.
Example: A financial institution formed a Framework Team to handle all aspects of framework maintenance, including Angular upgrades. This team used automated tools to scan for vulnerabilities and compliance issues, producing regular reports and actionable insights. By centralizing this responsibility, the institution was able to stay compliant with regulatory requirements and avoid potential security risks associated with outdated software.
https://dev.to/this-is-angular/the-importance-of-upgrading-frameworks-a-case-for-angular-5c91 |
If you cannot answer the question using the given text, respond with "The text does not contain what you are looking for." | Using only the provided text, Is Sickle Cell Disease hereditary? | **What is Sickle Cell Disease?**
Sickle cell disease (SCD) is a group of inherited red blood cell disorders. Red blood cells contain hemoglobin, a protein that carries oxygen. Healthy red blood cells are round, and they move through small blood vessels to carry oxygen to all parts of the body. In someone who has SCD, the hemoglobin is abnormal, which causes the red blood cells to become hard and sticky and look like a C-shaped farm tool called a “sickle.” The sickle cells die early, which causes a constant shortage of red blood cells. Also, when they travel through small blood vessels, they get stuck and clog the blood flow. This can cause pain and other serious complications (health problems) such as infection, acute chest syndrome and stroke.
Types of SCD
There are several types of SCD. The specific type of SCD a person has depends on the genes they inherited from their parents. People with SCD inherit genes that contain instructions, or code, for abnormal hemoglobin.
Below are the most common types of SCD:
HbSS
People who have this form of SCD inherit two genes, one from each parent, that code for hemoglobin “S.” Hemoglobin S is an abnormal form of hemoglobin that causes the red cells to become rigid, and sickle shaped. This is commonly called sickle cell anemia and is usually the most severe form of the disease.
HbSC
People who have this form of SCD inherit a hemoglobin “S” gene from one parent and a gene for a different type of abnormal hemoglobin called “C” from the other parent. This is usually a milder form of SCD.
Infographic: 5 Facts You Should Know About Sickle Cell Disease
Infographic: 5 Facts You Should Know About Sickle Cell Disease
Did you know SCD affects people from many parts of the world?
HbS beta thalassemia
People who have this form of SCD inherit a hemoglobin “S” gene from one parent and a gene for beta thalassemia, another type of hemoglobin abnormality, from the other parent. There are two types of beta thalassemia: “zero” (HbS beta0) and “plus” (HbS beta+). Those with HbS beta0-thalassemia usually have a severe form of SCD. People with HbS beta+-thalassemia tend to have a milder form of SCD.
There also are a few rare types of SCD, such as the following:
HbSD, HbSE, and HbSO
People who have these forms of SCD inherit one hemoglobin “S” gene and one gene that codes for another abnormal type of hemoglobin (“D”, “E”, or “O”). The severity of these rarer types of SCD varies.
Sickle Cell Trait (SCT)
HbAS
People who have sickle cell trait (SCT) inherit a hemoglobin “S” gene from one parent and a normal gene (one that codes for hemoglobin “A”) from the other parent. People with SCT usually do not have any of the signs of the disease. However, in rare cases, a person with SCT may develop health problems; this occurs most often when there are other stresses on the body, such as when a person becomes dehydrated or exercises strenuously. Additionally, people who have SCT can pass the abnormal hemoglobin “S” gene on to their children.
Cause of SCD
SCD is a genetic condition that is present at birth. It is inherited when a child receives two genes—one from each parent—that code for abnormal hemoglobin.
Diagnosis
SCD is diagnosed with a simple blood test. In children born in the United States, it most often is found at birth during routine newborn screening tests at the hospital. In addition, SCD can be diagnosed while the baby is in the womb. Diagnostic tests before the baby is born, such as chorionic villus sampling and amniocentesis, can check for chromosomal or genetic abnormalities in the baby. Chorionic villus sampling tests a tiny piece of the placenta, called chorionic villus. Amniocentesis tests a small sample of amniotic fluid surrounding the baby.
Because children with SCD are at an increased risk of infection and other health problems, early diagnosis and treatment are important.
Complications
People with SCD may start to have signs of the disease during the first year of life, usually around 5 months of age. Symptoms and complications of SCD are different for each person and can range from mild to severe. Learn about the complications.
Prevention and Treatment of SCD Complications
General Prevention Strategies
Management of SCD is focused on preventing and treating pain episodes and other complications. Prevention strategies include lifestyle behaviors as well as medical screening and interventions to prevent SCD complications.
Lifestyle Behaviors
There are simple steps that people with SCD can take to help prevent and reduce the occurrence of pain crises, including the following:
Drink plenty of water.
Try not to get too hot or too cold.
Try to avoid places or situations that cause exposure to high altitudes (for example, flying, mountain climbing, or cities with a high altitude).
Try to avoid places or situations with exposure to low oxygen levels (for example, mountain climbing or exercising extremely hard, such as in military boot camp or when training for an athletic competition).
Simple steps to prevent harmful infections include the following:
Wash your hands often. Washing hands with soap and clean water many times each day is one of the best ways people with SCD, their family members, and other caregivers can help prevent an infection.
Prepare food safely. Bacteria can be especially harmful to children with SCD.
Medical Screenings & Interventions to Prevent SCD Complications
Prevention of Infections
Vaccines can protect against harmful infections. It is important that children with SCD get all regular childhood vaccines. Similarly, it is important for children and adults to get the flu vaccine every year, as well as the pneumococcal vaccine and any others recommended by a doctor.
Penicillin greatly reduces the risk of infections in people with HbSS and has been shown to be even more effective when it is started earlier. To decrease the risk of infection, it’s important that young children with HbSS take penicillin (or other antibiotic prescribed by a doctor) every day until at least 5 years of age. Penicillin on a daily basis is usually not prescribed for children with other types of SCD unless the severity of the disease is similar to that of HbSS, such as HbS beta0-thalassemia.
Prevention of Vision Loss
Yearly visits to an eye doctor to look for damage to the retina (the part of your eye that senses light and sends images to your brain) are important for people with SCD to avoid vision loss. If possible, it’s best to see an eye doctor who specializes in diseases of the retina.
If the retina is damaged by excessive blood vessel growth, laser treatment often can prevent further vision loss.
Prevention of Stroke
Children who are at risk for stroke can be identified using a special type of exam called transcranial Doppler ultrasound (TCD). If the child is found to have an abnormal TCD, a doctor might recommend frequent blood transfusions (a procedure in which new blood is put into a person’s body through a small plastic tube inserted into a person’s blood vessels) to help prevent a stroke.
People who have frequent blood transfusions are usually watched closely because there can be serious side effects. For example, because blood contains iron, transfusions can lead to a condition called iron overload, in which too much iron builds up in the body. Iron overload can cause life-threatening damage to the liver, heart, and other organs. Therefore, it is important for people with SCD receiving regular blood transfusions to also receive treatment to reduce excess iron in the body. This type of treatment is known as iron chelation therapy.
Prevention of Severe Anemia
Blood transfusions may be used to treat severe anemia. A sudden worsening of anemia resulting from infection or enlargement of the spleen (an organ in the upper left side of the abdomen) is a common reason for a transfusion.
As with preventing stroke, frequent blood transfusions can cause iron overload, and iron chelation therapy may be needed to reduce excess iron in the body.
Management of Pain Crises
When pain crises do occur, clinical management may include the following:
Intravenous fluids (giving fluids directly into a person’s vein)
Pain-reducing medicine
Hospitalization for severe pain crises
Specific Treatments to Prevent SCD Complications
SCD is a disease that worsens over time. Treatments are available that can prevent complications and lengthen the lives of those who have this condition. These treatment options and their effects can be different for each person, depending on the symptoms and severity of their disease. It is important to understand the benefits and risks of each treatment option. Currently, the FDA has approved four treatments for SCD[1]. | {Task}
If you cannot answer the question using the given text, respond with "The text does not contain what you are looking for."
================
{Text Passage}
**What is Sickle Cell Disease?**
Sickle cell disease (SCD) is a group of inherited red blood cell disorders. Red blood cells contain hemoglobin, a protein that carries oxygen. Healthy red blood cells are round, and they move through small blood vessels to carry oxygen to all parts of the body. In someone who has SCD, the hemoglobin is abnormal, which causes the red blood cells to become hard and sticky and look like a C-shaped farm tool called a “sickle.” The sickle cells die early, which causes a constant shortage of red blood cells. Also, when they travel through small blood vessels, they get stuck and clog the blood flow. This can cause pain and other serious complications (health problems) such as infection, acute chest syndrome and stroke.
Types of SCD
There are several types of SCD. The specific type of SCD a person has depends on the genes they inherited from their parents. People with SCD inherit genes that contain instructions, or code, for abnormal hemoglobin.
Below are the most common types of SCD:
HbSS
People who have this form of SCD inherit two genes, one from each parent, that code for hemoglobin “S.” Hemoglobin S is an abnormal form of hemoglobin that causes the red cells to become rigid, and sickle shaped. This is commonly called sickle cell anemia and is usually the most severe form of the disease.
HbSC
People who have this form of SCD inherit a hemoglobin “S” gene from one parent and a gene for a different type of abnormal hemoglobin called “C” from the other parent. This is usually a milder form of SCD.
Infographic: 5 Facts You Should Know About Sickle Cell Disease
Infographic: 5 Facts You Should Know About Sickle Cell Disease
Did you know SCD affects people from many parts of the world?
HbS beta thalassemia
People who have this form of SCD inherit a hemoglobin “S” gene from one parent and a gene for beta thalassemia, another type of hemoglobin abnormality, from the other parent. There are two types of beta thalassemia: “zero” (HbS beta0) and “plus” (HbS beta+). Those with HbS beta0-thalassemia usually have a severe form of SCD. People with HbS beta+-thalassemia tend to have a milder form of SCD.
There also are a few rare types of SCD, such as the following:
HbSD, HbSE, and HbSO
People who have these forms of SCD inherit one hemoglobin “S” gene and one gene that codes for another abnormal type of hemoglobin (“D”, “E”, or “O”). The severity of these rarer types of SCD varies.
Sickle Cell Trait (SCT)
HbAS
People who have sickle cell trait (SCT) inherit a hemoglobin “S” gene from one parent and a normal gene (one that codes for hemoglobin “A”) from the other parent. People with SCT usually do not have any of the signs of the disease. However, in rare cases, a person with SCT may develop health problems; this occurs most often when there are other stresses on the body, such as when a person becomes dehydrated or exercises strenuously. Additionally, people who have SCT can pass the abnormal hemoglobin “S” gene on to their children.
Cause of SCD
SCD is a genetic condition that is present at birth. It is inherited when a child receives two genes—one from each parent—that code for abnormal hemoglobin.
Diagnosis
SCD is diagnosed with a simple blood test. In children born in the United States, it most often is found at birth during routine newborn screening tests at the hospital. In addition, SCD can be diagnosed while the baby is in the womb. Diagnostic tests before the baby is born, such as chorionic villus sampling and amniocentesis, can check for chromosomal or genetic abnormalities in the baby. Chorionic villus sampling tests a tiny piece of the placenta, called chorionic villus. Amniocentesis tests a small sample of amniotic fluid surrounding the baby.
Because children with SCD are at an increased risk of infection and other health problems, early diagnosis and treatment are important.
Complications
People with SCD may start to have signs of the disease during the first year of life, usually around 5 months of age. Symptoms and complications of SCD are different for each person and can range from mild to severe. Learn about the complications.
Prevention and Treatment of SCD Complications
General Prevention Strategies
Management of SCD is focused on preventing and treating pain episodes and other complications. Prevention strategies include lifestyle behaviors as well as medical screening and interventions to prevent SCD complications.
Lifestyle Behaviors
There are simple steps that people with SCD can take to help prevent and reduce the occurrence of pain crises, including the following:
Drink plenty of water.
Try not to get too hot or too cold.
Try to avoid places or situations that cause exposure to high altitudes (for example, flying, mountain climbing, or cities with a high altitude).
Try to avoid places or situations with exposure to low oxygen levels (for example, mountain climbing or exercising extremely hard, such as in military boot camp or when training for an athletic competition).
Simple steps to prevent harmful infections include the following:
Wash your hands often. Washing hands with soap and clean water many times each day is one of the best ways people with SCD, their family members, and other caregivers can help prevent an infection.
Prepare food safely. Bacteria can be especially harmful to children with SCD.
Medical Screenings & Interventions to Prevent SCD Complications
Prevention of Infections
Vaccines can protect against harmful infections. It is important that children with SCD get all regular childhood vaccines. Similarly, it is important for children and adults to get the flu vaccine every year, as well as the pneumococcal vaccine and any others recommended by a doctor.
Penicillin greatly reduces the risk of infections in people with HbSS and has been shown to be even more effective when it is started earlier. To decrease the risk of infection, it’s important that young children with HbSS take penicillin (or other antibiotic prescribed by a doctor) every day until at least 5 years of age. Penicillin on a daily basis is usually not prescribed for children with other types of SCD unless the severity of the disease is similar to that of HbSS, such as HbS beta0-thalassemia.
Prevention of Vision Loss
Yearly visits to an eye doctor to look for damage to the retina (the part of your eye that senses light and sends images to your brain) are important for people with SCD to avoid vision loss. If possible, it’s best to see an eye doctor who specializes in diseases of the retina.
If the retina is damaged by excessive blood vessel growth, laser treatment often can prevent further vision loss.
Prevention of Stroke
Children who are at risk for stroke can be identified using a special type of exam called transcranial Doppler ultrasound (TCD). If the child is found to have an abnormal TCD, a doctor might recommend frequent blood transfusions (a procedure in which new blood is put into a person’s body through a small plastic tube inserted into a person’s blood vessels) to help prevent a stroke.
People who have frequent blood transfusions are usually watched closely because there can be serious side effects. For example, because blood contains iron, transfusions can lead to a condition called iron overload, in which too much iron builds up in the body. Iron overload can cause life-threatening damage to the liver, heart, and other organs. Therefore, it is important for people with SCD receiving regular blood transfusions to also receive treatment to reduce excess iron in the body. This type of treatment is known as iron chelation therapy.
Prevention of Severe Anemia
Blood transfusions may be used to treat severe anemia. A sudden worsening of anemia resulting from infection or enlargement of the spleen (an organ in the upper left side of the abdomen) is a common reason for a transfusion.
As with preventing stroke, frequent blood transfusions can cause iron overload, and iron chelation therapy may be needed to reduce excess iron in the body.
Management of Pain Crises
When pain crises do occur, clinical management may include the following:
Intravenous fluids (giving fluids directly into a person’s vein)
Pain-reducing medicine
Hospitalization for severe pain crises
Specific Treatments to Prevent SCD Complications
SCD is a disease that worsens over time. Treatments are available that can prevent complications and lengthen the lives of those who have this condition. These treatment options and their effects can be different for each person, depending on the symptoms and severity of their disease. It is important to understand the benefits and risks of each treatment option. Currently, the FDA has approved four treatments for SCD[1].
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Using only the provided text, Is Sickle Cell Disease hereditary? |
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You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." | How is a screen test for Colorectal cancer performed and what makes one more likely to get it? How much smoking should I have done in order to need a screening for lung cancer? | ## Colorectal cancer
Colorectal cancer is cancer that starts in the colon or rectum. Some factors that increase colorectal cancer risk include physical inactivity, a diet high in red and processed meats, excess body weight, smoking, alcohol use, and a personal or family history of colorectal cancer or polyps.
### What you can do
#### Get screened.
Regular colorectal cancer screening is one of the best ways to prevent colorectal cancer. Most colorectal cancers start with a polyp – a small growth in the colon or rectum. Screening can help to find colorectal cancer early, when it’s smaller, hasn’t spread, and might be easier to treat. Certain screening tests can also help prevent colorectal cancer by finding and removing polyps before they turn into cancer.
The American Cancer Society recommends the following for people at average risk for colorectal cancer:
- **Everyone** **should start regular screening at** **age 45.**
- People who are in good health and with a life expectancy of more than 10 years should continue regular colorectal cancer screening **through** **age** **75.**
- **For people ages 76 to** **85,** the decision to be screened should be based on a person’s preferences, life expectancy, health, and screening history.
- **People over age** **85** should no longer get colorectal cancer screening.
Screening can be done either with a sensitive test that looks for signs of cancer in a person’s stool (a stool-based test), or with an exam that looks at the colon and rectum (a visual exam). These options are listed below.
### Screening tests for colorectal cancer
#### Stool-based tests
- Fecal immunochemical test (FIT)* every year, **or**
- Guaiac-based fecal occult blood test (gFOBT)* every year, **or**
- Stool DNA test (MT-sDNA) every 3 years*
#### Visual (structural) exams of the colon and rectum
- Colonoscopy every 10 years, **or**
- CT colonography (virtual colonoscopy)* every 5 years, **or**
- Flexible sigmoidoscopy* every 5 years
*If a person gets screened with a test other than colonoscopy, any abnormal test result should be followed up with colonoscopy.
If you're at high risk of colorectal cancer based on family history or other factors, you may need to start screening before age 45, be screened more often, or get specific tests.
There are some differences between these tests to consider, **but the most important thing is to get screened, no matter which test you choose.** Talk to a health care provider about which tests might be good options for you, and to your insurance provider about your coverage. If you don't have insurance or can't afford cancer screening, [find free and low-cost screening options.](https://www.cancer.org/cancer/screening/get-screened.html)
## Lung cancer
[Lung cancer](https://www.cancer.org/cancer/types/lung-cancer.html) is the second most common type of cancer in men in the US and the leading cause of cancer death.
### What you can do
#### Get screened.
The American Cancer Society recommends yearly lung cancer screening with a low-dose CT (LDCT) scan for people who:
- **Are ages 50 to 80 years** and smoke or used to smoke
**AND**
- **Have at least a 20 pack-year history of smoking** (A pack-year is equal to smoking 1 pack of cigarettes per day for a year. For example, a person could have a 20 pack-year history by smoking 1 pack a day for 20 years or by smoking 2 packs a day for 10 years.)
Before deciding to get screened, people should talk to their health care provider about the purpose of screening, how it's done, the benefits, limitations, and possible harms of screening. People who still smoke should be counseled about quitting and offered resources to help them quit.
#### Avoid tobacco and exposures.
Not all lung cancers are preventable. But there are things you can do to lower your risk.
- If you don’t smoke, don’t start. Avoid breathing in other people’s smoke.
- If you smoke, call the American Cancer Society at 1-800-227-2345 or visit [Empowered to Quit](https://www.cancer.org/cancer/risk-prevention/tobacco/empowered-to-quit.html) for help quitting.
While smoking tobacco is the leading cause of cancer, not all people who get lung cancer smoke. Other ways you can help lower your risk:
- Avoid all products with tobacco.
- Stay away from secondhand smoke.
- Avoid or limit exposure to cancer-causing chemicals that might be in the home or workplace. | "================
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## Colorectal cancer
Colorectal cancer is cancer that starts in the colon or rectum. Some factors that increase colorectal cancer risk include physical inactivity, a diet high in red and processed meats, excess body weight, smoking, alcohol use, and a personal or family history of colorectal cancer or polyps.
### What you can do
#### Get screened.
Regular colorectal cancer screening is one of the best ways to prevent colorectal cancer. Most colorectal cancers start with a polyp – a small growth in the colon or rectum. Screening can help to find colorectal cancer early, when it’s smaller, hasn’t spread, and might be easier to treat. Certain screening tests can also help prevent colorectal cancer by finding and removing polyps before they turn into cancer.
The American Cancer Society recommends the following for people at average risk for colorectal cancer:
- **Everyone** **should start regular screening at** **age 45.**
- People who are in good health and with a life expectancy of more than 10 years should continue regular colorectal cancer screening **through** **age** **75.**
- **For people ages 76 to** **85,** the decision to be screened should be based on a person’s preferences, life expectancy, health, and screening history.
- **People over age** **85** should no longer get colorectal cancer screening.
Screening can be done either with a sensitive test that looks for signs of cancer in a person’s stool (a stool-based test), or with an exam that looks at the colon and rectum (a visual exam). These options are listed below.
### Screening tests for colorectal cancer
#### Stool-based tests
- Fecal immunochemical test (FIT)* every year, **or**
- Guaiac-based fecal occult blood test (gFOBT)* every year, **or**
- Stool DNA test (MT-sDNA) every 3 years*
#### Visual (structural) exams of the colon and rectum
- Colonoscopy every 10 years, **or**
- CT colonography (virtual colonoscopy)* every 5 years, **or**
- Flexible sigmoidoscopy* every 5 years
*If a person gets screened with a test other than colonoscopy, any abnormal test result should be followed up with colonoscopy.
If you're at high risk of colorectal cancer based on family history or other factors, you may need to start screening before age 45, be screened more often, or get specific tests.
There are some differences between these tests to consider, **but the most important thing is to get screened, no matter which test you choose.** Talk to a health care provider about which tests might be good options for you, and to your insurance provider about your coverage. If you don't have insurance or can't afford cancer screening, [find free and low-cost screening options.](https://www.cancer.org/cancer/screening/get-screened.html)
## Lung cancer
[Lung cancer](https://www.cancer.org/cancer/types/lung-cancer.html) is the second most common type of cancer in men in the US and the leading cause of cancer death.
### What you can do
#### Get screened.
The American Cancer Society recommends yearly lung cancer screening with a low-dose CT (LDCT) scan for people who:
- **Are ages 50 to 80 years** and smoke or used to smoke
**AND**
- **Have at least a 20 pack-year history of smoking** (A pack-year is equal to smoking 1 pack of cigarettes per day for a year. For example, a person could have a 20 pack-year history by smoking 1 pack a day for 20 years or by smoking 2 packs a day for 10 years.)
Before deciding to get screened, people should talk to their health care provider about the purpose of screening, how it's done, the benefits, limitations, and possible harms of screening. People who still smoke should be counseled about quitting and offered resources to help them quit.
#### Avoid tobacco and exposures.
Not all lung cancers are preventable. But there are things you can do to lower your risk.
- If you don’t smoke, don’t start. Avoid breathing in other people’s smoke.
- If you smoke, call the American Cancer Society at 1-800-227-2345 or visit [Empowered to Quit](https://www.cancer.org/cancer/risk-prevention/tobacco/empowered-to-quit.html) for help quitting.
While smoking tobacco is the leading cause of cancer, not all people who get lung cancer smoke. Other ways you can help lower your risk:
- Avoid all products with tobacco.
- Stay away from secondhand smoke.
- Avoid or limit exposure to cancer-causing chemicals that might be in the home or workplace.
https://www.cancer.org/cancer/risk-prevention/understanding-cancer-risk/cancer-facts/cancer-facts-for-men.html
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How is a screen test for Colorectal cancer performed and what makes one more likely to get it? How much smoking should I have done in order to need a screening for lung cancer?
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You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." |
Solely utilize information found in the text within the prompt to answer, do not rely on any other information when drawing conclusions. Try to avoid using complex legal terms, simplify for easier reading where possible. | Give the names of all of the courts in which Smith's case has been considered according to the context document. | Before trial, Smith moved to dismiss the indictment for lack of venue, citing the Constitution’s Venue Clause, Art. III, §2, cl. 3, and its Vicinage Clause, Amdt. 6. Smith argued that trial in the Northern District of Florida was improper because he had accessed StrikeLines’ website from his home in Mobile (in the Southern District of Alabama) and the servers storing StrikeLines’ data were located in Orlando (in the Middle District of Florida). The District Court concluded that factual disputes related to venue should be resolved by the jury and denied Smith’s motion to dismiss without prejudice. The jury found Smith guilty, and Smith moved for a judgment of acquittal based on improper venue. See Fed. Rule Crim. Proc. 29. The District Court denied the motion, reasoning that the effects of Smith’s crime were felt at StrikeLines’ headquarters, located in the Northern District of Florida. On appeal, the Eleventh Circuit determined that venue was improper, but disagreed with Smith that a trial in an improper venue barred reprosecution. The Eleventh Circuit therefore vacated Smith’s conviction for theft of trade secrets. Held: The Constitution permits the retrial of a defendant following a trial in an improper venue conducted before a jury drawn from the wrong district. Pp. 3–16. (a) Except as prohibited by the Double Jeopardy Clause, it “has long been the rule that when a defendant obtains a reversal of a prior, unsatisfied conviction, he may be retried in the normal course of events.” United States v. Ewell, 383 U. S. 116, 121. In all circumstances outside of the Speedy Trial Clause, the strongest appropriate remedy for trial error is a new trial, not a judgment barring reprosecution. Pp. 3–4. 2 SMITH v. UNITED STATES Syllabus (1) Text and precedent provide no basis for concluding that violations of the Venue and Vicinage Clauses are exceptions to the retrial rule. The Venue Clause mandates that the “Trial of all Crimes . . . shall be held in the State where the . . . Crimes shall have been committed.” Art. III, §2, cl. 3. Nothing about this language suggests that a new trial in the proper venue is not an adequate remedy for its violation. Smith primarily argues that the Venue Clause aims to prevent the infliction of additional harm on a defendant who has already undergone the hardship of an initial trial in a distant and improper place. But the mere burden of a second trial has never justified an exemption from the retrial rule. See Ewell, 383 U. S., at 121. Indeed, while the most convenient trial venue for a defendant would presumably be where he lives, the Venue Clause is keyed to the location of the alleged crimes. The Clause does not allow “variation . . . for convenience of the . . . accused,” Johnston v. United States, 351 U. S. 215, 221, and this Court has repeatedly rejected objections based on the hardships created when a defendant is prosecuted far from home. | Solely utilize information found in the text within the prompt to answer, do not rely on any other information when drawing conclusions. Try to avoid using complex legal terms, simplify for easier reading where possible.
Before trial, Smith moved to dismiss the indictment for lack of venue, citing the Constitution’s Venue Clause, Art. III, §2, cl. 3, and its Vicinage Clause, Amdt. 6. Smith argued that trial in the Northern District of Florida was improper because he had accessed StrikeLines’ website from his home in Mobile (in the Southern District of Alabama) and the servers storing StrikeLines’ data were located in Orlando (in the Middle District of Florida). The District Court concluded that factual disputes related to venue should be resolved by the jury and denied Smith’s motion to dismiss without prejudice. The jury found Smith guilty, and Smith moved for a judgment of acquittal based on improper venue. See Fed. Rule Crim. Proc. 29. The District Court denied the motion, reasoning that the effects of Smith’s crime were felt at StrikeLines’ headquarters, located in the Northern District of Florida. On appeal, the Eleventh Circuit determined that venue was improper, but disagreed with Smith that a trial in an improper venue barred reprosecution. The Eleventh Circuit therefore vacated Smith’s conviction for theft of trade secrets. Held: The Constitution permits the retrial of a defendant following a trial in an improper venue conducted before a jury drawn from the wrong district. Pp. 3–16. (a) Except as prohibited by the Double Jeopardy Clause, it “has long been the rule that when a defendant obtains a reversal of a prior, unsatisfied conviction, he may be retried in the normal course of events.” United States v. Ewell, 383 U. S. 116, 121. In all circumstances outside of the Speedy Trial Clause, the strongest appropriate remedy for trial error is a new trial, not a judgment barring reprosecution. Pp. 3–4. 2 SMITH v. UNITED STATES Syllabus (1) Text and precedent provide no basis for concluding that violations of the Venue and Vicinage Clauses are exceptions to the retrial rule. The Venue Clause mandates that the “Trial of all Crimes . . . shall be held in the State where the . . . Crimes shall have been committed.” Art. III, §2, cl. 3. Nothing about this language suggests that a new trial in the proper venue is not an adequate remedy for its violation. Smith primarily argues that the Venue Clause aims to prevent the infliction of additional harm on a defendant who has already undergone the hardship of an initial trial in a distant and improper place. But the mere burden of a second trial has never justified an exemption from the retrial rule. See Ewell, 383 U. S., at 121. Indeed, while the most convenient trial venue for a defendant would presumably be where he lives, the Venue Clause is keyed to the location of the alleged crimes. The Clause does not allow “variation . . . for convenience of the . . . accused,” Johnston v. United States, 351 U. S. 215, 221, and this Court has repeatedly rejected objections based on the hardships created when a defendant is prosecuted far from home.
Give the names of all of the courts in which Smith's case has been considered according to the context document. |
Answer this question using only the text provided. Do not include additional online sourcing. | What is a catalyst fee? | **TALKING TURKEY: IMPACT FUND FILES AMICUS BRIEF TO PROTECT CATALYST FEES FOR PLAINTIFFS**
Nov 14
Meredith Dixon, Impact Fund Law Fellow
Last week, the Impact Fund and fifteen fellow public interest legal organizations filed an amicus brief in the California Court of Appeals defending plaintiffs’ right to catalyst fees in public interest lawsuits.
“Catalyst fees” are one type of attorneys’ fees designed to compensate attorney time spent on public interest lawsuits that catalyze a change in the defendant’s behavior. Not only do catalyst fees incentivize private enforcement, but they also address a specific and serious concern. Plaintiffs face the risk that defendants will vigorously litigate for months or years and then—on the eve of or during trial—fix the very problem challenged in the litigation, moot the case, and escape compensating plaintiffs for the time and effort required to call attention to the problem.
In Direct Action Everywhere v. Diestel Turkey Ranch, the plaintiff encountered just this situation after it filed a false advertising lawsuit alleging that Diestel was deceiving customers about the condition in which it kept animals on its properties. Several days into the trial, Diestel voluntarily removed the allegedly false statements from its website as part of a “website refresh.”
Our brief describes California’s decades-long recognition of the role of attorneys’ fees in encouraging private enforcement of the state’s civil rights laws.
The trial court denied Direct Action’s motion for catalyst fees for multiple reasons, two of which stood out to the Impact Fund and its allies. First, the court scorned the plaintiff’s reason for bringing the lawsuit and, second, it criticized the plaintiff’s activities outside the courtroom. Ultimately, the court held that plaintiffs do not deserve fees when they file litigation consistent with their organizational goals or fail to behave in a manner “above reproach” before and during the litigation.
Our brief describes California’s decades-long recognition of the role of attorneys’ fees in encouraging private enforcement of the state’s civil rights laws. The State Legislature and Supreme Court have defined the factors that determine whether a plaintiff is entitled to attorneys’ fees, and the trial court’s order bore little resemblance to the established analysis. If the trial court’s reasoning is allowed to stand, courts could withhold fees simply because an organizational plaintiff files mission-aligned litigation or acts in a manner that displeases them, from issuing press releases to engaging in protests or policy advocacy, regardless of whether those acts violate any law or have any effect on the litigation. This is not what the legislature or supreme court intended.
California courts have long recognized that catalyst fees are key to encouraging public interest litigation, and the Impact Fund and amici continue to defend the proper catalyst fee analysis. | {Article}
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**TALKING TURKEY: IMPACT FUND FILES AMICUS BRIEF TO PROTECT CATALYST FEES FOR PLAINTIFFS**
Nov 14
Meredith Dixon, Impact Fund Law Fellow
Last week, the Impact Fund and fifteen fellow public interest legal organizations filed an amicus brief in the California Court of Appeals defending plaintiffs’ right to catalyst fees in public interest lawsuits.
“Catalyst fees” are one type of attorneys’ fees designed to compensate attorney time spent on public interest lawsuits that catalyze a change in the defendant’s behavior. Not only do catalyst fees incentivize private enforcement, but they also address a specific and serious concern. Plaintiffs face the risk that defendants will vigorously litigate for months or years and then—on the eve of or during trial—fix the very problem challenged in the litigation, moot the case, and escape compensating plaintiffs for the time and effort required to call attention to the problem.
In Direct Action Everywhere v. Diestel Turkey Ranch, the plaintiff encountered just this situation after it filed a false advertising lawsuit alleging that Diestel was deceiving customers about the condition in which it kept animals on its properties. Several days into the trial, Diestel voluntarily removed the allegedly false statements from its website as part of a “website refresh.”
Our brief describes California’s decades-long recognition of the role of attorneys’ fees in encouraging private enforcement of the state’s civil rights laws.
The trial court denied Direct Action’s motion for catalyst fees for multiple reasons, two of which stood out to the Impact Fund and its allies. First, the court scorned the plaintiff’s reason for bringing the lawsuit and, second, it criticized the plaintiff’s activities outside the courtroom. Ultimately, the court held that plaintiffs do not deserve fees when they file litigation consistent with their organizational goals or fail to behave in a manner “above reproach” before and during the litigation.
Our brief describes California’s decades-long recognition of the role of attorneys’ fees in encouraging private enforcement of the state’s civil rights laws. The State Legislature and Supreme Court have defined the factors that determine whether a plaintiff is entitled to attorneys’ fees, and the trial court’s order bore little resemblance to the established analysis. If the trial court’s reasoning is allowed to stand, courts could withhold fees simply because an organizational plaintiff files mission-aligned litigation or acts in a manner that displeases them, from issuing press releases to engaging in protests or policy advocacy, regardless of whether those acts violate any law or have any effect on the litigation. This is not what the legislature or supreme court intended.
California courts have long recognized that catalyst fees are key to encouraging public interest litigation, and the Impact Fund and amici continue to defend the proper catalyst fee analysis.
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Answer this question using only the text provided. Do not include additional online sourcing.
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What is a catalyst fee? |
Answer based only on the information provided in the prompt. | Why are opioids used so much in the United States? | Policymakers interested in addressing the opioid epidemic may want to understand why the United States consumes a disproportionate amount of opioids. The scientific evidence suggests that many factors may influence this disparity between the United States and other economically advanced countries. This report synthesizes the scientific research to explain relevant factors regarding the difference between opioid consumption in the United States and other comparable industrialized countries, such as the G-7 countries.
A review of scientific literature on international and domestic opioid use pointed to several factors affecting the difference in consumption per capita.3
Prescribing practices of health care providers appear to be a primary factor affecting consumption. U.S. health care providers prescribe opioids more frequently, at higher doses, and throughout more stages of pain treatment—including as a first-line treatment—than their European counterparts. Use of higher-potency opioids—with greater morphine milligram equivalents (MMEs) per dose—appears especially high in the United States compared with other countries. Although there is generally no agreed upon threshold value of what constitutes a “high potency” opioid,4 clinical guidelines and research studies often use MMEs per day or per dose to establish a threshold.5 The MME metric allows for standardization of dose across different opioid analgesics. Table 1 lists the MME conversion factors of several commonly used opioid
analgesics, as defined by the U.S. Centers for Disease Control and Prevention (CDC).6 Clinical guidelines published by the World Health Organization (WHO) and others discourage using high-potency opioids and opioids as a first-line treatment for long-term chronic noncancer pain management.7
Several additional factors besides higher prescribing practices may explain the higher relative use of opioids in the United States. It is possible the United States has a greater prevalence of pain, and that Americans experience, or at least self-report, more intense pain. Americans may receive more opioids at more frequent points in care rather than more comprehensive approaches to pain
management, such as those that use combinations of pharmaceutical, psychological, and physical therapies. Higher opioid-prescribing practices may be driven by insurance reimbursement systems that incentivize opioids over alternative pain treatments, cost structures that promote more efficient care, or evaluations that prioritize patient satisfaction and conflate it with pain management. Compared with most of its European counterparts, the U.S. medical system allows for more autonomy for health care providers, imposes fewer national government regulations on health care practices, and permits more direct-to-provider marketing practices. In addition, prescription drug monitoring programs (PDMPs) in the United States are decentralized. PDMPs in the United States are generally structured to monitor bad actors and generally not designed to
promote best practices aligned with clinical guidance. More broadly, cultural differences, such as expectations about pain relief and entitlements to opioid treatment, may also explain the greater
reliance on pharmacological treatments in the United States.
Health care systems that provide more expansive access to care may allow for greater preventive care and more multimodal approaches to pain, in part because there may be fewer barriers to
using these types of treatments. Moreover, providers operating in highly regulated systems may be less susceptible to the direct and indirect influences experienced by American providers, such as profit-driven fee-for-service incentives or direct-to-provider pharmaceutical marketing. The U.S. federal government leaves the majority of medical practice regulation to individual states. This decentralized system may impose rules governing prescribing practices (e.g., those instituted in European countries to prevent adverse outcomes of opioid use) at a slower pace than those
imposed by centrally governed health care systems. | System Instructions: Answer based only on the information provided in the prompt.
Question: Why are opioids used so much in the United States?
Context: Policymakers interested in addressing the opioid epidemic may want to understand why the United States consumes a disproportionate amount of opioids. The scientific evidence suggests that many factors may influence this disparity between the United States and other economically advanced countries. This report synthesizes the scientific research to explain relevant factors regarding the difference between opioid consumption in the United States and other comparable industrialized countries, such as the G-7 countries.
A review of scientific literature on international and domestic opioid use pointed to several factors affecting the difference in consumption per capita.3
Prescribing practices of health care providers appear to be a primary factor affecting consumption. U.S. health care providers prescribe opioids more frequently, at higher doses, and throughout more stages of pain treatment—including as a first-line treatment—than their European counterparts. Use of higher-potency opioids—with greater morphine milligram equivalents (MMEs) per dose—appears especially high in the United States compared with other countries. Although there is generally no agreed upon threshold value of what constitutes a “high potency” opioid,4 clinical guidelines and research studies often use MMEs per day or per dose to establish a threshold.5 The MME metric allows for standardization of dose across different opioid analgesics. Table 1 lists the MME conversion factors of several commonly used opioid
analgesics, as defined by the U.S. Centers for Disease Control and Prevention (CDC).6 Clinical guidelines published by the World Health Organization (WHO) and others discourage using high-potency opioids and opioids as a first-line treatment for long-term chronic noncancer pain management.7
Several additional factors besides higher prescribing practices may explain the higher relative use of opioids in the United States. It is possible the United States has a greater prevalence of pain, and that Americans experience, or at least self-report, more intense pain. Americans may receive more opioids at more frequent points in care rather than more comprehensive approaches to pain
management, such as those that use combinations of pharmaceutical, psychological, and physical therapies. Higher opioid-prescribing practices may be driven by insurance reimbursement systems that incentivize opioids over alternative pain treatments, cost structures that promote more efficient care, or evaluations that prioritize patient satisfaction and conflate it with pain management. Compared with most of its European counterparts, the U.S. medical system allows for more autonomy for health care providers, imposes fewer national government regulations on health care practices, and permits more direct-to-provider marketing practices. In addition, prescription drug monitoring programs (PDMPs) in the United States are decentralized. PDMPs in the United States are generally structured to monitor bad actors and generally not designed to
promote best practices aligned with clinical guidance. More broadly, cultural differences, such as expectations about pain relief and entitlements to opioid treatment, may also explain the greater
reliance on pharmacological treatments in the United States.
Health care systems that provide more expansive access to care may allow for greater preventive care and more multimodal approaches to pain, in part because there may be fewer barriers to
using these types of treatments. Moreover, providers operating in highly regulated systems may be less susceptible to the direct and indirect influences experienced by American providers, such as profit-driven fee-for-service incentives or direct-to-provider pharmaceutical marketing. The U.S. federal government leaves the majority of medical practice regulation to individual states. This decentralized system may impose rules governing prescribing practices (e.g., those instituted in European countries to prevent adverse outcomes of opioid use) at a slower pace than those
imposed by centrally governed health care systems. |
Answer the question based solely on the information provided in the passage. Do not use any external knowledge or resources.
[user request]
[context document] | I am trying to find one statistic but I don't know which one I'm looking for. Can you make a list of all the statistics included in this text? | With a large portion of face-to-face visits off the table during the pandemic, healthcare providers have had to look for new ways to interact with non-emergency patients. Doctors have been able to consult patients remotely, diagnose conditions, and even review X-rays and CT scans in high definition – often collaboratively with other experts in remote locations.
In turn, people have become more accepting of remote healthcare services and telemedicine, with Ernest Young reporting that 54% of patients with chronic diseases now accept remote healthcare.
That’s a welcome trend: research shows that 30% of hospital visits from patients with common chronic conditions are in fact unnecessary, tie-up resources, and cost the industry upwards of $8.3 billion per year. For patients, the online approach means better and safer access, less wasted time, and lower costs.
The ability to see a doctor regardless of location has helped democratize healthcare access for many people in underserved areas.
Solutions for emergency response
Much like connectivity sits at the core of remote healthcare, it can drive up the efficacy of emergency response during the “golden hour”, the time when effective medical intervention can mean the difference between life and death.
Historically, it’s been impossible to share data between ambulances, A&E departments, and experts in a way that enables a real-time response.
A 5G-powered remote emergency channel that links to a command centre gives doctors equipped with VR glasses the same view as if they were actually inside the ambulance. Doctors receive data on a patient’s vital signs in real-time on a large screen in the command centre, including the patient's ECG, ultrasound image, blood pressure, heart rate, oxygen saturation, and temperature.
The patient's medical history can be quickly established, doctors can guide paramedics in the ambulance, and patients can be admitted to hospital immediately after arrival with their details and condition known. This isn’t something for the future – many hospitals in China are already using this solution.
Discover
How is the World Economic Forum bringing data-driven healthcare to life?
Speed and precision with AI
Alongside remote technologies and 5G, AI is emerging as a key technology in the tech-powered healthcare armory. It’s been instrumental, for example, along with the rapid rollout of COVID-19 vaccines, the large-scale virtual screening for potential drugs and shortening the simulation time from one month to less than one day.
Equally, AI can offset a shortage of specialists, such as ultrasound experts who can interpret echocardiograms to diagnose heart disease. A single expert can diagnose just 40 cases per day, which for patients translates into a waiting time of nearly one week. By training algorithms in small-sample data for 10 heart conditions, we’ve developed the B Ultrasound solution that can speed up the diagnosis process by between five to 10 times.
Proactive healthcare with wearables
In addition to B Ultrasound, since 2018 we’ve been working with more than 80 hospitals in China on the world's largest heart-health research project. With the consent of the research subjects, we’ve collected anonymized data from nearly 3.1 million people. Our smart wearable devices can collect signals from users in real-time, identify abnormal heart rhythms with AI, and upload the results to Huawei Research. Cloud AI then pushes information about high-risk people to the remote medical management platform of the hospitals we’re working with, so that healthcare workers can take appropriate measures. | Answer the question based solely on the information provided in the passage. Do not use any external knowledge or resources.
I am trying to find one statistic but I don't know which one I'm looking for. Can you make a list of all the statistics included in this text?
With a large portion of face-to-face visits off the table during the pandemic, healthcare providers have had to look for new ways to interact with non-emergency patients. Doctors have been able to consult patients remotely, diagnose conditions, and even review X-rays and CT scans in high definition – often collaboratively with other experts in remote locations.
In turn, people have become more accepting of remote healthcare services and telemedicine, with Ernest Young reporting that 54% of patients with chronic diseases now accept remote healthcare.
That’s a welcome trend: research shows that 30% of hospital visits from patients with common chronic conditions are in fact unnecessary, tie-up resources, and cost the industry upwards of $8.3 billion per year. For patients, the online approach means better and safer access, less wasted time, and lower costs.
The ability to see a doctor regardless of location has helped democratize healthcare access for many people in underserved areas.
Solutions for emergency response
Much like connectivity sits at the core of remote healthcare, it can drive up the efficacy of emergency response during the “golden hour”, the time when effective medical intervention can mean the difference between life and death.
Historically, it’s been impossible to share data between ambulances, A&E departments, and experts in a way that enables a real-time response.
A 5G-powered remote emergency channel that links to a command centre gives doctors equipped with VR glasses the same view as if they were actually inside the ambulance. Doctors receive data on a patient’s vital signs in real-time on a large screen in the command centre, including the patient's ECG, ultrasound image, blood pressure, heart rate, oxygen saturation, and temperature.
The patient's medical history can be quickly established, doctors can guide paramedics in the ambulance, and patients can be admitted to hospital immediately after arrival with their details and condition known. This isn’t something for the future – many hospitals in China are already using this solution.
Discover
How is the World Economic Forum bringing data-driven healthcare to life?
Speed and precision with AI
Alongside remote technologies and 5G, AI is emerging as a key technology in the tech-powered healthcare armory. It’s been instrumental, for example, along with the rapid rollout of COVID-19 vaccines, the large-scale virtual screening for potential drugs and shortening the simulation time from one month to less than one day.
Equally, AI can offset a shortage of specialists, such as ultrasound experts who can interpret echocardiograms to diagnose heart disease. A single expert can diagnose just 40 cases per day, which for patients translates into a waiting time of nearly one week. By training algorithms in small-sample data for 10 heart conditions, we’ve developed the B Ultrasound solution that can speed up the diagnosis process by between five to 10 times.
Proactive healthcare with wearables
In addition to B Ultrasound, since 2018 we’ve been working with more than 80 hospitals in China on the world's largest heart-health research project. With the consent of the research subjects, we’ve collected anonymized data from nearly 3.1 million people. Our smart wearable devices can collect signals from users in real-time, identify abnormal heart rhythms with AI, and upload the results to Huawei Research. Cloud AI then pushes information about high-risk people to the remote medical management platform of the hospitals we’re working with, so that healthcare workers can take appropriate measures.
https://www.weforum.org/agenda/2021/10/smart-technologies-transforming-healthcare/ |
Answer in a full sentence, no less than 50 words, and cite the part of the text that supports your statement. | Under the EEOC does an employer always have to modify the dress code to accommodate for an employee's religious practices? | ## U.S. Equal Employment Opportunity Commision
### Prohibited Employment Policies/Practices
Under the laws enforced by EEOC, it is illegal to discriminate against someone (applicant or employee) because of that person's race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. It is also illegal to retaliate against a person because he or she complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.
### The law forbids discrimination in every aspect of employment.
The laws enforced by EEOC prohibit an employer or other covered entity from using neutral employment policies and practices that have a disproportionately negative effect on applicants or employees of a particular race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), or national origin, or on an individual with a disability or class of individuals with disabilities, if the polices or practices at issue are not job-related and necessary to the operation of the business. The laws enforced by EEOC also prohibit an employer from using neutral employment policies and practices that have a disproportionately negative impact on applicants or employees age 40 or older, if the policies or practices at issue are not based on a reasonable factor other than age.
### Job Advertisements
It is illegal for an employer to publish a job advertisement that shows a preference for or discourages someone from applying for a job because of his or her race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information.
### Recruitment
It is also illegal for an employer to recruit new employees in a way that discriminates against them because of their race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information.
### Application & Hiring
It is illegal for an employer to discriminate against a job applicant because of his or her race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. For example, an employer may not refuse to give employment applications to people of a certain race.
If an employer requires job applicants to take a test, the test must be necessary and related to the job and the employer may not exclude people of a particular race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, or individuals with disabilities. In addition, the employer may not use a test that excludes applicants age 40 or older if the test is not based on a reasonable factor other than age.
If a job applicant with a disability needs an accommodation (such as a sign language interpreter) to apply for a job, the employer is required to provide the accommodation, so long as the accommodation does not cause the employer significant difficulty or expense.
### Background Checks
See "Pre-Employment Inquiries" below.
### Job Referrals
It is illegal for an employer, employment agency or union to take into account a person's race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information when making decisions about job referrals.
### Job Assignments & Promotions
It is illegal for an employer to make decisions about job assignments and promotions based on an employee's race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. For example, an employer may not give preference to employees of a certain race when making shift assignments and may not segregate employees of a particular national origin from other employees or from customers.
If an employer requires employees to take a test before making decisions about assignments or promotions, the test may not exclude people of a particular race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), or national origin, or individuals with disabilities, unless the employer can show that the test is necessary and related to the job. In addition, the employer may not use a test that excludes employees age 40 or older if the test is not based on a reasonable factor other than age.
### Pay And Benefits
It is illegal for an employer to discriminate against an employee in the payment of wages or employee benefits on the bases of race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. Employee benefits include sick and vacation leave, insurance, access to overtime as well as overtime pay, and retirement programs. For example, an employer many not pay Hispanic workers less than African-American workers because of their national origin, and men and women in the same workplace must be given equal pay for equal work.
### Discipline & Discharge
An employer may not take into account a person's race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information when making decisions about discipline or discharge. For example, if two employees commit a similar offense, an employer many not discipline them differently because of their race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information.
### Reasonable Accommodation & Disability
The law requires that an employer provide reasonable accommodation to an employee or job applicant with a disability, unless doing so would cause significant difficulty or expense for the employer.
Reasonable Accommodation & Pregnancy, Childbirth, or Related Medical Conditions
The law requires that an employer provide reasonable accommodation to a qualified employee or job applicant with a known limitation related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions, unless doing so would cause significant difficulty or expense for the employer.
### Reasonable Accommodation & Religion
The law requires an employer to reasonably accommodate an employee's religious beliefs or practices, unless doing so would cause difficulty or expense for the employer. This means an employer may have to make reasonable adjustments at work that will allow the employee to practice his or her religion, such as allowing an employee to voluntarily swap shifts with a co- worker so that he or she can attend religious services.
### Training & Apprenticeship Programs
It is illegal for a training or apprenticeship program to discriminate on the bases of race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. For example, an employer may not deny training opportunities to African-American employees because of their race.
In some situations, an employer may be allowed to set age limits for participation in an apprenticeship program.
### Harassment
It is illegal to harass an employee because of race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information.
It is also illegal to harass someone because they have complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.
Harassment can take the form of slurs, graffiti, offensive or derogatory comments, or other verbal or physical conduct. Sexual harassment (including unwelcome sexual advances, requests for sexual favors, and other conduct of a sexual nature) is also unlawful. Although the law does not prohibit simple teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal if it is so frequent or severe that it creates a hostile or offensive work environment or if it results in an adverse employment decision (such as the victim being fired or demoted).
### Terms & Conditions Of Employment
The law makes it illegal for an employer to make any employment decision because of a person's race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. That means an employer may not discriminate when it comes to such things as hiring, firing, promotions, and pay. It also means an employer may not discriminate, for example, when granting breaks, approving leave, assigning work stations, or setting any other term or condition of employment.
### Pre-Employment Inquiries (General)
As a general rule, the information obtained and requested through the pre-employment process should be limited to those essential for determining if a person is qualified for the job; whereas, information regarding race, sex, national origin, age, and religion are irrelevant in such determinations.
Although state and federal equal opportunity laws do not clearly forbid employers from making pre-employment inquiries that relate to, or disproportionately screen out members based on race, color, sex, national origin, religion, or age, such inquiries may be used as evidence of an employer's intent to discriminate unless the questions asked can be justified by some business purpose.
Therefore, inquiries about organizations, clubs, societies, and lodges of which an applicant may be a member or any other questions, which may indicate the applicant's race, sex, national origin, disability status, age, religion, color or ancestry if answered, should generally be avoided.
Similarly, employers should not ask for a photograph of an applicant. If needed for identification purposes, a photograph may be obtained after an offer of employment is made and accepted.
### Pre-Employment Inquiries and:
* Race
* Height & Weight
* Financial Information
* Unemployed Status
* Background Checks
* Religious Affiliation Or Beliefs
* Citizenship
* Marital Status, Number Of Children
* Gender
* Disability
* Medical Questions & Examinations
### Dress Code
In general, an employer may establish a dress code which applies to all employees or employees within certain job categories. However, there are a few possible exceptions.
While an employer may require all workers to follow a uniform dress code even if the dress code conflicts with some workers' ethnic beliefs or practices, a dress code must not treat some employees less favorably because of their national origin. For example, a dress code that prohibits certain kinds of ethnic dress, such as traditional African or East Indian attire, but otherwise permits casual dress would treat some employees less favorably because of their national origin.
Moreover, if the dress code conflicts with an employee's religious practices and the employee requests an accommodation, the employer must modify the dress code or permit an exception to the dress code unless doing so would result in undue hardship.
Similarly, if an employee requests an accommodation to the dress code because of his disability, the employer must modify the dress code or permit an exception to the dress code, unless doing so would result in undue hardship.
### Constructive Discharge/Forced To Resign
Discriminatory practices under the laws EEOC enforces also include constructive discharge or forcing an employee to resign by making the work environment so intolerable a reasonable person would not be able to stay. | <Context>
==========
## U.S. Equal Employment Opportunity Commision
### Prohibited Employment Policies/Practices
Under the laws enforced by EEOC, it is illegal to discriminate against someone (applicant or employee) because of that person's race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. It is also illegal to retaliate against a person because he or she complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.
### The law forbids discrimination in every aspect of employment.
The laws enforced by EEOC prohibit an employer or other covered entity from using neutral employment policies and practices that have a disproportionately negative effect on applicants or employees of a particular race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), or national origin, or on an individual with a disability or class of individuals with disabilities, if the polices or practices at issue are not job-related and necessary to the operation of the business. The laws enforced by EEOC also prohibit an employer from using neutral employment policies and practices that have a disproportionately negative impact on applicants or employees age 40 or older, if the policies or practices at issue are not based on a reasonable factor other than age.
### Job Advertisements
It is illegal for an employer to publish a job advertisement that shows a preference for or discourages someone from applying for a job because of his or her race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information.
### Recruitment
It is also illegal for an employer to recruit new employees in a way that discriminates against them because of their race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information.
### Application & Hiring
It is illegal for an employer to discriminate against a job applicant because of his or her race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. For example, an employer may not refuse to give employment applications to people of a certain race.
If an employer requires job applicants to take a test, the test must be necessary and related to the job and the employer may not exclude people of a particular race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, or individuals with disabilities. In addition, the employer may not use a test that excludes applicants age 40 or older if the test is not based on a reasonable factor other than age.
If a job applicant with a disability needs an accommodation (such as a sign language interpreter) to apply for a job, the employer is required to provide the accommodation, so long as the accommodation does not cause the employer significant difficulty or expense.
### Background Checks
See "Pre-Employment Inquiries" below.
### Job Referrals
It is illegal for an employer, employment agency or union to take into account a person's race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information when making decisions about job referrals.
### Job Assignments & Promotions
It is illegal for an employer to make decisions about job assignments and promotions based on an employee's race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. For example, an employer may not give preference to employees of a certain race when making shift assignments and may not segregate employees of a particular national origin from other employees or from customers.
If an employer requires employees to take a test before making decisions about assignments or promotions, the test may not exclude people of a particular race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), or national origin, or individuals with disabilities, unless the employer can show that the test is necessary and related to the job. In addition, the employer may not use a test that excludes employees age 40 or older if the test is not based on a reasonable factor other than age.
### Pay And Benefits
It is illegal for an employer to discriminate against an employee in the payment of wages or employee benefits on the bases of race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. Employee benefits include sick and vacation leave, insurance, access to overtime as well as overtime pay, and retirement programs. For example, an employer many not pay Hispanic workers less than African-American workers because of their national origin, and men and women in the same workplace must be given equal pay for equal work.
### Discipline & Discharge
An employer may not take into account a person's race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information when making decisions about discipline or discharge. For example, if two employees commit a similar offense, an employer many not discipline them differently because of their race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information.
### Reasonable Accommodation & Disability
The law requires that an employer provide reasonable accommodation to an employee or job applicant with a disability, unless doing so would cause significant difficulty or expense for the employer.
Reasonable Accommodation & Pregnancy, Childbirth, or Related Medical Conditions
The law requires that an employer provide reasonable accommodation to a qualified employee or job applicant with a known limitation related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions, unless doing so would cause significant difficulty or expense for the employer.
### Reasonable Accommodation & Religion
The law requires an employer to reasonably accommodate an employee's religious beliefs or practices, unless doing so would cause difficulty or expense for the employer. This means an employer may have to make reasonable adjustments at work that will allow the employee to practice his or her religion, such as allowing an employee to voluntarily swap shifts with a co- worker so that he or she can attend religious services.
### Training & Apprenticeship Programs
It is illegal for a training or apprenticeship program to discriminate on the bases of race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. For example, an employer may not deny training opportunities to African-American employees because of their race.
In some situations, an employer may be allowed to set age limits for participation in an apprenticeship program.
### Harassment
It is illegal to harass an employee because of race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information.
It is also illegal to harass someone because they have complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.
Harassment can take the form of slurs, graffiti, offensive or derogatory comments, or other verbal or physical conduct. Sexual harassment (including unwelcome sexual advances, requests for sexual favors, and other conduct of a sexual nature) is also unlawful. Although the law does not prohibit simple teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal if it is so frequent or severe that it creates a hostile or offensive work environment or if it results in an adverse employment decision (such as the victim being fired or demoted).
### Terms & Conditions Of Employment
The law makes it illegal for an employer to make any employment decision because of a person's race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. That means an employer may not discriminate when it comes to such things as hiring, firing, promotions, and pay. It also means an employer may not discriminate, for example, when granting breaks, approving leave, assigning work stations, or setting any other term or condition of employment.
### Pre-Employment Inquiries (General)
As a general rule, the information obtained and requested through the pre-employment process should be limited to those essential for determining if a person is qualified for the job; whereas, information regarding race, sex, national origin, age, and religion are irrelevant in such determinations.
Although state and federal equal opportunity laws do not clearly forbid employers from making pre-employment inquiries that relate to, or disproportionately screen out members based on race, color, sex, national origin, religion, or age, such inquiries may be used as evidence of an employer's intent to discriminate unless the questions asked can be justified by some business purpose.
Therefore, inquiries about organizations, clubs, societies, and lodges of which an applicant may be a member or any other questions, which may indicate the applicant's race, sex, national origin, disability status, age, religion, color or ancestry if answered, should generally be avoided.
Similarly, employers should not ask for a photograph of an applicant. If needed for identification purposes, a photograph may be obtained after an offer of employment is made and accepted.
### Pre-Employment Inquiries and:
* Race
* Height & Weight
* Financial Information
* Unemployed Status
* Background Checks
* Religious Affiliation Or Beliefs
* Citizenship
* Marital Status, Number Of Children
* Gender
* Disability
* Medical Questions & Examinations
### Dress Code
In general, an employer may establish a dress code which applies to all employees or employees within certain job categories. However, there are a few possible exceptions.
While an employer may require all workers to follow a uniform dress code even if the dress code conflicts with some workers' ethnic beliefs or practices, a dress code must not treat some employees less favorably because of their national origin. For example, a dress code that prohibits certain kinds of ethnic dress, such as traditional African or East Indian attire, but otherwise permits casual dress would treat some employees less favorably because of their national origin.
Moreover, if the dress code conflicts with an employee's religious practices and the employee requests an accommodation, the employer must modify the dress code or permit an exception to the dress code unless doing so would result in undue hardship.
Similarly, if an employee requests an accommodation to the dress code because of his disability, the employer must modify the dress code or permit an exception to the dress code, unless doing so would result in undue hardship.
### Constructive Discharge/Forced To Resign
Discriminatory practices under the laws EEOC enforces also include constructive discharge or forcing an employee to resign by making the work environment so intolerable a reasonable person would not be able to stay.
<Question>
==========
Under the EEOC does an employer always have to modify the dress code to accommodate for an employee's religious practices?
<System Instruction>
==========
Answer in a full sentence, no less than 50 words, and cite the part of the text that supports your statement. |
{instruction}
==========
In your answer, refer only to the context document. Do not employ any outside knowledge
{question}
==========
[user request]
{passage 0}
==========
[context document] | Please compare the results of the five major cities and explain why the housing prices are different in the cities. Please use dot points to explain the results in simple terms. | According to the OECD Report (2004) and Cox (2021) in Demographia International Housing Affordability 2021, Australian housing prices are overvalued and unaffordable. These reports indicated a 51.8 percent and 40 percent overvaluation in 2004 and 2021, respectively. The ratios of house prices to incomes and rents are also at the highest quantile of the OECD countries since 2003. In terms of affordability, Cox (2021) indicated that the median multiple of national house prices to household income was 6.4 times in Australia compared to the US’s 3.7 and UK’s 4.6 times in 2016. In the third quarter of 2021, the national house price to household income ratio deteriorated to 12.1 times to become severely unaffordable comparing to 5.1 times in UK and 5.0 times in the US (Cox 2022). In Sydney, it was 15.3 times, Melbourne 9.7 times, Adelaide 8 times, Perth 7.1 times and Brisbane 7.4 times, respectively. Generally, all five Australian major cities are in the severely unaffordable category. Sydney has become the second least affordable metropolitan in the world after Hong Kong. This overvaluation and severe unaffordability concur with increases in debt-to-income ratio, place Australia’s housing at the top quantile of the OECD countries. A recent study on the Australian housing market by Cho et al. (2021) asserts that the steadily increasing housing prices have attributed to a steady decline of home ownership. Additionally, they also found that the fundamental housing prices of all Australian cities are significantly overvalued. Melbourne and Sydney had their housing prices overvalued for the last two decades. The authors content that the near zero interest rate was one of the variables that affects the fundamental prices of the housing in Australia.
Figure 1 presents the development of Australia housing prices from 1996 to 2021. As can be seen from this figure, housing prices have surpassed the performance of GDP per capital in the past few years. Since the Global Financial Crisis (GFC) in 2008, researchers and industry analysts have been predicting an imminent housing market meltdown. Nonetheless, in the absence of a prominent trigger, the housing market crash predictions remains a common subject of talk until recently. In the past decade, despite being overvalued and coupled with high debt-to-income ratio, mortgage stress remains insignificant due to record low interest rates. An easing of monetary policy offers liquidity to the market whilst a contracting monetary policy works in the opposite direction. The historical low interest rate was one of the key factors that drove housing prices to greater heights (Cho et al. 2021). However, the recent surge in inflation rate has prompted the Reserve Bank of Australia to increase its cash rate each month since May 2022. These moves drive mortgage rates higher. The current high inflation and growing mortgage rates environment has put homeowners and investors into a new and uncertain situation.
Based on the Spearman’s rho results shown in Table 1, among the five cities under study, housing values of Sydney and Melbourne are positively associated and this relationship is significant. However, housing prices in these two cities are negatively associated with those of Adelaide, Brisbane and Gold Coast and Perth. Results also indicated that Adelaide, Brisbane and Gold Coast and Perth are positively associated with each other.
On the other hand, analysis of the relationship between mortgage rate with variables included in this study indicate that there is an inverse relationship between mortgage rate with housing price of all cities, but this relationship is only significant for Sydney and Melbourne. A plausible reason is a higher mortgage rate in a stagnant wage growth and a high inflation environment has deteriorated borrowing power. With that, a house price correction is inevitable for the top two severely unaffordable cities. In addition, the mortgage rate was found to have a significant positive relationship with inflation rate and WTI crude, but it reported a significant negative relationship with ASX 200 performance.
The increasing CPI over the past twelve months shows a negative relationship with housing prices in all five cities, but only Sydney and Melbourne are significantly affected. CPI is also showing a significant positive relationship with WTI crude and mortgage rate. In addition, result of the analysis also indicates a significant inverse relationship between CPI and ASX200 performance.
A rise in WTI crude has two effects on housing. First, it brings about diminishing of spending power on other goods and services for individuals together with a lower demand of housing (Fereidouni 2010; Grossman et al. 2019). Second, it increases logistic cost which escalates building material and labour costs. Both forces are contradictory as the first one leads to more supply than demand, hence, a decrease in housing price whilst the latter push up housing prices due to higher construction cost. Spearman’s rho correlation analysis indicates a mild significant positive impact of WTI crude on Sydney’s housing price. Other cities however are displaying insignificant relationship with WTI crude movements.
The literature generally indicates a negative relationship between the performance of the share market and interest rates (Bayer et al. 2013). A higher interest rate discourages investment and promotes savings. In addition, as investment in housing represents a substitution of share investment, a negative relationship is expected. Nonetheless, only Brisbane and Gold Coast, Perth and Adelaide are displaying the expected sign in the Spearman’s rho test analysis but insignificant. On the contrary, for the more affluent cities, such as Sydney and Melbourne, stock market performance is positively related to housing price movement. Possible explanations for this phenomenon are (i) investors are more affluent in these two cities and, therefore, are financially capable of forming a more diversified investment portfolio, (ii) investors from these two larger cities have better financial literacy and hence, value portfolio diversification more and do not view property and stock investment as substitutes. Bootstrap regression analysis was conducted on the variables under study and the findings are discussed in the next section.
5.3. Bootstrap Regression Analysis and Results
As can been seen from Table 2, regressions are performed on five models to gauge the relations of housing performance across five cities with independent variables including mortgage rates, WTI crude index and ASX200 index. Results of R2 obtained from the analyses indicate that independent variables included in the model are able to explain variations of the housing performance in Sydney by 84.4 percent and Melbourne 87.5 percent, whereas the other three cities are in the range of 0.1 to 5 percent. The findings in Panel 1 (Sydney) and 2 (Melbourne) reveal that there is a significant negative relationship between mortgage rate and housing performance of Sydney and Melbourne. These findings are consistent with Chong (2020), Xu and Tang (2014) and Chong and Liew 2020). However, housing prices in smaller cities including Perth, Adelaide and Brisbane and Gold Coast are unaffected by interest rate during the study period. Indeed, larger cities, such as Sydney and Melbourne, display different characteristics comparing to other cities in Australia (Cho et al. 2021). | {instruction}
==========
In your answer, refer only to the context document. Do not employ any outside knowledge
{question}
==========
Please compare the results of the five major cities and explain why the housing prices are different in the cities. Please use dot points to explain the results in simple terms.
{passage 0}
==========
According to the OECD Report (2004) and Cox (2021) in Demographia International Housing Affordability 2021, Australian housing prices are overvalued and unaffordable. These reports indicated a 51.8 percent and 40 percent overvaluation in 2004 and 2021, respectively. The ratios of house prices to incomes and rents are also at the highest quantile of the OECD countries since 2003. In terms of affordability, Cox (2021) indicated that the median multiple of national house prices to household income was 6.4 times in Australia compared to the US’s 3.7 and UK’s 4.6 times in 2016. In the third quarter of 2021, the national house price to household income ratio deteriorated to 12.1 times to become severely unaffordable comparing to 5.1 times in UK and 5.0 times in the US (Cox 2022). In Sydney, it was 15.3 times, Melbourne 9.7 times, Adelaide 8 times, Perth 7.1 times and Brisbane 7.4 times, respectively. Generally, all five Australian major cities are in the severely unaffordable category. Sydney has become the second least affordable metropolitan in the world after Hong Kong. This overvaluation and severe unaffordability concur with increases in debt-to-income ratio, place Australia’s housing at the top quantile of the OECD countries. A recent study on the Australian housing market by Cho et al. (2021) asserts that the steadily increasing housing prices have attributed to a steady decline of home ownership. Additionally, they also found that the fundamental housing prices of all Australian cities are significantly overvalued. Melbourne and Sydney had their housing prices overvalued for the last two decades. The authors content that the near zero interest rate was one of the variables that affects the fundamental prices of the housing in Australia.
Figure 1 presents the development of Australia housing prices from 1996 to 2021. As can be seen from this figure, housing prices have surpassed the performance of GDP per capital in the past few years. Since the Global Financial Crisis (GFC) in 2008, researchers and industry analysts have been predicting an imminent housing market meltdown. Nonetheless, in the absence of a prominent trigger, the housing market crash predictions remains a common subject of talk until recently. In the past decade, despite being overvalued and coupled with high debt-to-income ratio, mortgage stress remains insignificant due to record low interest rates. An easing of monetary policy offers liquidity to the market whilst a contracting monetary policy works in the opposite direction. The historical low interest rate was one of the key factors that drove housing prices to greater heights (Cho et al. 2021). However, the recent surge in inflation rate has prompted the Reserve Bank of Australia to increase its cash rate each month since May 2022. These moves drive mortgage rates higher. The current high inflation and growing mortgage rates environment has put homeowners and investors into a new and uncertain situation.
Based on the Spearman’s rho results shown in Table 1, among the five cities under study, housing values of Sydney and Melbourne are positively associated and this relationship is significant. However, housing prices in these two cities are negatively associated with those of Adelaide, Brisbane and Gold Coast and Perth. Results also indicated that Adelaide, Brisbane and Gold Coast and Perth are positively associated with each other.
On the other hand, analysis of the relationship between mortgage rate with variables included in this study indicate that there is an inverse relationship between mortgage rate with housing price of all cities, but this relationship is only significant for Sydney and Melbourne. A plausible reason is a higher mortgage rate in a stagnant wage growth and a high inflation environment has deteriorated borrowing power. With that, a house price correction is inevitable for the top two severely unaffordable cities. In addition, the mortgage rate was found to have a significant positive relationship with inflation rate and WTI crude, but it reported a significant negative relationship with ASX 200 performance.
The increasing CPI over the past twelve months shows a negative relationship with housing prices in all five cities, but only Sydney and Melbourne are significantly affected. CPI is also showing a significant positive relationship with WTI crude and mortgage rate. In addition, result of the analysis also indicates a significant inverse relationship between CPI and ASX200 performance.
A rise in WTI crude has two effects on housing. First, it brings about diminishing of spending power on other goods and services for individuals together with a lower demand of housing (Fereidouni 2010; Grossman et al. 2019). Second, it increases logistic cost which escalates building material and labour costs. Both forces are contradictory as the first one leads to more supply than demand, hence, a decrease in housing price whilst the latter push up housing prices due to higher construction cost. Spearman’s rho correlation analysis indicates a mild significant positive impact of WTI crude on Sydney’s housing price. Other cities however are displaying insignificant relationship with WTI crude movements.
The literature generally indicates a negative relationship between the performance of the share market and interest rates (Bayer et al. 2013). A higher interest rate discourages investment and promotes savings. In addition, as investment in housing represents a substitution of share investment, a negative relationship is expected. Nonetheless, only Brisbane and Gold Coast, Perth and Adelaide are displaying the expected sign in the Spearman’s rho test analysis but insignificant. On the contrary, for the more affluent cities, such as Sydney and Melbourne, stock market performance is positively related to housing price movement. Possible explanations for this phenomenon are (i) investors are more affluent in these two cities and, therefore, are financially capable of forming a more diversified investment portfolio, (ii) investors from these two larger cities have better financial literacy and hence, value portfolio diversification more and do not view property and stock investment as substitutes. Bootstrap regression analysis was conducted on the variables under study and the findings are discussed in the next section.
5.3. Bootstrap Regression Analysis and Results
As can been seen from Table 2, regressions are performed on five models to gauge the relations of housing performance across five cities with independent variables including mortgage rates, WTI crude index and ASX200 index. Results of R2 obtained from the analyses indicate that independent variables included in the model are able to explain variations of the housing performance in Sydney by 84.4 percent and Melbourne 87.5 percent, whereas the other three cities are in the range of 0.1 to 5 percent. The findings in Panel 1 (Sydney) and 2 (Melbourne) reveal that there is a significant negative relationship between mortgage rate and housing performance of Sydney and Melbourne. These findings are consistent with Chong (2020), Xu and Tang (2014) and Chong and Liew 2020). However, housing prices in smaller cities including Perth, Adelaide and Brisbane and Gold Coast are unaffected by interest rate during the study period. Indeed, larger cities, such as Sydney and Melbourne, display different characteristics comparing to other cities in Australia (Cho et al. 2021).
https://www.mdpi.com/1911-8074/16/2/61 |
Give an answer using only the context provided. | How are interest rates set? | NBER WORKING PAPER SERIES
HOW DO BANKS SET INTEREST RATES?
Leonardo Gambacorta
Working Paper 10295
http://www.nber.org/papers/w10295
NATIONAL BUREAU OF ECONOMIC RESEARCH
1050 Massachusetts Avenue
Cambridge, MA 02138
February 2004
This research was done during a period as a visiting scholar at the NBER. The views expressed herein are
those of the author and not necessarily those of the Banca d’Italia or the National Bureau of Economic
Research.
©2004 by Leonardo Gambacorta. All rights reserved. Short sections of text, not to exceed two paragraphs,
may be quoted without explicit permission provided that full credit, including © notice, is given to the source.
How Do Banks Set Interest Rates?
Leonardo Gambacorta
NBER Working Paper No. 10295
February 2004
JEL No. E44, E51, E52
ABSTRACT
The aim of this paper is to study cross-sectional differences in banks interest rates. It adds to the
existing literature in two ways. First, it analyzes in a systematic way both micro and macroeconomic
factors that influence the price setting behavior of banks. Second, by using banks’ prices (rather than
quantities) it provides an alternative way to disentangle loan supply from loan demand shift in the
“bank lending channel” literature. The results, derived from a sample of Italian banks, suggest that
heterogeneity in the banking rates pass-through exists only in the short run. Consistently with the
literature for Italy, interest rates on short-term lending of liquid and well-capitalized banks react less
to a monetary policy shock. Also banks with a high proportion of long-term lending tend to change
their prices less. Heterogeneity in the pass-through on the interest rate on current accounts depends
mainly on banks’ liability structure. Bank’s size is never relevant.
Leonardo Gambacorta
Banca d’Italia
Research Department
Via Nazionale, 91
00184 Rome, Italy
[email protected]
1. Introduction1
This paper studies cross-sectional differences in the price setting behavior of Italian
banks in the last decade. The main motivations of the study are two. First, heterogeneity in
the response of bank interest rates to market rates helps in understanding how monetary
policy decisions are transmitted through the economy independently of the consequences on
bank lending. The analysis of heterogeneous behavior in banks interest setting has been
largely neglected by the existing literature. The vast majority of the studies on the “bank
lending channel” analyze the response of credit aggregates to a monetary policy impulse,
while no attention is paid on the effects on prices. This seems odd because, in practice, when
banks interest rates change, real effects on consumption and investment could be produced
also if there are no changes in total lending. The scarce evidence on the effects of monetary
shocks on banks prices, mainly due to the lack of available long series of micro data on
interest rates, contrasts also with some recent works that highlight a different adjustment of
retail rates in the euro area (see, amongst others, de Bondt, Mojon and Valla, 2003).
Second, this paper wants to add to the “bank lending channel” literature by identifying
loan supply shocks via banks’ prices (rather than quantities). So far to solve the
“identification problem” it has been claimed that certain bank-specific characteristics (i.e.
size, liquidity, capitalization) influence only loan supply movements while banks’ loan
demand is independent of them. After a monetary tightening, the drop in the supply of credit
should be more important for small banks, which are financed almost exclusively with
deposits and equity (Kashyap and Stein, 1995), less liquid banks, that cannot protect their
loan portfolio against monetary tightening simply by drawing down cash and securities
(Stein, 1998; Kashyap and Stein, 2000) and poorly capitalized banks, that have less access to
markets for uninsured funding (Peek and Rosengren, 1995; Kishan and Opiela, 2000; van
den Heuvel, 2001a; 2001b).2 The intuition of an identification via prices of loan supply shift
is very simple: if loan demand is not perfectly elastic, also the effect of a monetary
1
This study was developed while the author was a visiting scholar at the NBER. The opinions expressed in
this paper are those of the author only and in no way involve the responsibility of the Bank of Italy and the
NBER.
2
All these studies on cross-sectional differences in the effectiveness of the “bank lending channel” refer to
the US. The literature on European countries is instead far from conclusive (see Altunbas et al., 2002; Ehrmann
et al., 2003). For the Italian case see Gambacorta (2003) and Gambacorta and Mistrulli (2003).
3
tightening on banks’ interest rate should be more pronounced for small, low-liquid and lowcapitalized banks .
Apart from these standard indicators other bank-specific characteristics could influence
banks’ price-setting behavior (Weth, 2002). Berlin and Mester (1999) claim that banks
which heavily depend upon non-insured funding (i.e. bonds) will adjust their deposit rates
more (and more quickly) than banks whose liabilities are less affected by market
movements. Berger and Udell (1992) sustain that banks that maintain a close tie with their
customers will change their lending rates comparatively less and slowly.
In this paper the search for heterogeneity in banks’ behavior is carried out by using a
balanced panel of 73 Italian banks that represent more than 70 per cent of the banking
system. Heterogeneity is investigated with respect to the interest rate on short-term lending
and that on current accounts. The use of microeconomic data is particularly appropriate in
this context because aggregation may significantly bias the estimation of dynamic economic
relations (Harvey, 1981). Moreover, information at the level of individual banks provides a
more precise understanding of their behavioral patterns and should be less prone to structural
changes like the formation of EMU.
The main conclusions of this paper are two. First, heterogeneity in the banking rates
pass-through exists, but it is detected only in the short run: no differences exist in the longrun elasticities of banking rates to money market rates. Second, consistently with the existing
literature for Italy, interest rates on short-term lending of liquid and well-capitalized banks
react less to a monetary policy shock. Also banks with a high proportion of long-term
lending tend to change less their prices. Heterogeneity in the pass-through on the interest rate
on current accounts depends mainly on banks’ liability structure. Bank’s size is never
relevant.
The paper is organized as follows. Section 2 describes some institutional
characteristics that help to explain the behavior of banking rates in Italy in the last two
decades. Section 3 reviews the main channels that influence banks’ interest rate settings
trying to disentangle macro from microeconomic factors. After a description of the
econometric model and the data in Section 4, Section 5 shows the empirical results.
Robustness checks are presented in Section 6. The last section summarizes the main
conclusions.
4
2. Some facts on bank interest rates in Italy
Before discussing the main channels that influence banks’ price setting, it is important
to analyze the institutional characteristics that have influenced Italian bank interest rates in
the last two decades. The scope of this section is therefore to highlight some facts that could
help in understanding differences, if any, with the results drawn by the existing literature for
the eighties and mid-nineties.
For example, there is evidence that in the eighties Italian banks were comparatively
slow in adjusting their rates (Verga, 1984; Banca d’Italia, 1986, 1988; Cottarelli and
Kourelis, 1994) but important measures of liberalization of the markets and deregulation
over the last two decades should have influenced the speed at which changes in the money
market conditions are transmitted to lending and deposit rates (Cottarelli et al. 1995;
Passacantando, 1996; Ciocca, 2000; Angelini and Cetorelli, 2002).
In fact, between the mid-1980s and the early 1990s all restrictions that characterized
the Italian banking system in the eighties were gradually removed. In particular: 1) the
lending ceiling was definitely abolished in 1985; 2) foreign exchange controls were lifted
between 1987 and 1990; 3) branching was liberalized in 1990; 4) the 1993 Banking Law
allowed banks and special credit institutions to perform all banking activities.
In particular, the 1993 Banking Law (Testo Unico Bancario, hereafter TUB) completed
the enactment of the institutional, operational and maturity despecialization of the Italian
banking system and ensured the consistency of supervisory controls and intermediaries’
range of operations within the single market framework. The business restriction imposed by
the 1936 Banking Law, which distinguished between banks that could raise short-term funds
(“aziende di credito”) and those that could not (“Istituti di credito speciale”), was
eliminated.3 To avoid criticism of structural breaks, the econometric analysis of this study
will be based on the period 1993:03-2001:03, where all the main reforms of the Italian
banking system had already taken place.
3
For more details see Banca d’Italia, Annual Report for 1993.
5
The behavior of bank interest rates in Italy reveals some stylized facts (see Figures 1
and 2). First, a remarkable fall in the average rates since the end of 1992. Second a strong
and persistent dispersion of rates among banks. These stylized facts suggest that both the
time series and the cross sections dimensions are important elements in understanding the
behavior of bank interest setting. This justifies the use of panel data techniques.
The main reason behind the fall in banking interest rates is probably the successful
monetary policy aiming at reducing the inflation rate in the country to reach the Maastricht
criteria and the third stage of EMU. As a result, the interbank rate decreased by more than 10
percentage points in the period 1993-1999. Excluding the 1995 episode of the EMS crisis, it
is only since the third quarter of 1999 that it started to move upwards until the end of 2000
when it continued a declining trend. From a statistical point of view, this behavior calls for
the investigation of a possible structural break in the nineties.4
The second stylized fact is cross-sectional dispersion among interest rates. Figure 2
shows the coefficient of variation for loan and deposit rates both over time and across banks
in the period 1987-2001.5 The temporal variation (dotted line) of the two rates show a
different behavior from the mid of the nineties when the deposit rate is more variable,
probably for a catching-up process of the rate toward a new equilibrium caused by the
convergence process. Also the cross-sectional dispersion of the deposit rate is greater than
that of the loan rate, especially after the introduction of euro.6
4
In the period 1995-98, that coincides with the convergence process towards stage three of EMU, it will be
necessary to allow for a change in the statistical properties of interest rates (see Appendix 2).
5
The coefficient of variation is given by the ratio of the standard errors to the mean. The series that refer to
the variability “over time” shows the coefficient of variation in each year of monthly figures. In contrast, the
series that capture the variability “across banks” shows the coefficient of variation of annual averages of bankspecific interest rates.
6
In the period before the 1993 Banking Law deposit interest rates were quite sticky to monetary policy
changes. Deposit interest rate rigidity in this period has been extensively analyzed also for the US. Among the
market factors that have been found to affect the responsiveness of bank deposit rates are the direction of the
change in market rates (Ausubel, 1992; Hannan and Berger, 1991), if the bank interest rate is above or below a
target rate (Hutchison, 1995; Moore, Porter and Small, 1990; Neumark and Sharpe, 1992) and market
concentration in the bank’s deposit market (Hannan and Berger, 1991). Rosen (2001) develops a model of price
settings in presence of heterogeneous customers explaining why bank deposits interest rates respond sluggishly
to some extended movements in monetary market rates but not to others. Hutchinson (1995) presents a model
of bank deposit rates that includes a demand function for customers and predicts a linear (but less than one for
one) relationship between market interest rate changes and bank interest rate changes. Green (1998) claims that
the rigidity is due to the fact that bank interest rate management is based on a two-tier pricing system; banks
offer accounts at market related interest rates and at posted rates that are changed at discrete intervals.
6
3. What does influence banks’ interest rate setting?
The literature that studies banks’ interest rate setting behavior generally assumes that
banks operate under oligopolistic market conditions.7 This means that a bank does not act as
a price-taker but sets its loan rates taking into account the demand for loans and deposits.
This section reviews the main channels that influence banks interest rates (see Figure 3).
A simple analytical framework is developed in Appendix 1.
Loan and deposit demand
The interest rate on loans depends positively on real GDP and inflation (y and p).
Better economic conditions improve the number of projects becoming profitable in terms of
expected net present value and, therefore, increase credit demand (Kashyap, Stein and
Wilcox, 1993). As stressed by Melitz and Pardue (1973) only increases in permanent income
(yP) have a positive influence on loan demand, while the effect due to the transitory part (yT)
could also be associated with a self-financing effect that reduces the proportion of bank debt
(Friedman and Kuttner, 1993).8 An increase in the money market rate (iM) raises the
opportunity cost of other forms of financing (i.e. bonds), making lending more attractive.
This mechanism also boosts loan demand and increases the interest rate on loans.
The interest rate on deposits is negatively influenced by real GDP and inflation. A
higher level of income increases the demand for deposits9 and reduces therefore the
incentive for banks to set higher deposit rates. In this case the shift of deposit demand should
be higher if the transitory component of GDP is affected (unexpected income is generally
first deposited on current accounts). On the contrary, an increase in the money market rate,
ceteris paribus, makes more attractive to invest in risk-free securities that represent an
alternative to detain deposits; the subsequent reduction in deposits demand determines an
upward pressure on the interest rate on deposits.
7
For a survey on modeling the banking firm see Santomero (1984). Among more recent works see Green
(1998) and Lim (2000).
8
Taking this into account, in Section 4 I tried to disentangle the two effects using a Beveridge and Nelson
(1981) decomposition.
9
The aim of this paper is not to answer to the question if deposits are input or output for the bank (see
Freixas and Rochet, 1997 on this debate). For simplicity here deposits are considered a service supplied by the
bank to depositors and are therefore considered an output (Hancock, 1991).
7
Operating cost, credit risk and interest rate volatility
The costs of intermediation (screening, monitoring, branching costs, etc.) have a
positive effect on the interest rate on loans and a negative effect on that of deposits
(efficiency is represented by e). The interest rate on lending also depends on the riskiness of
the credit portfolio; banks that invest in riskier project will have a higher rate of return in
order to compensate the higher percentage of bad loans that have to be written off (j).
Banking interest rates are also influenced by interest rate volatility. A high volatility in
the money market rate (σ) should increase lending and deposit rates. Following the
dealership model by Ho and Saunders (1981) and its extension by Angbazo (1997) the
interest rate on loans should be more affected by interbank interest rate volatility with
respect to that on deposits (diL/dσ>diD/dσ). This should reveal a positive correlation between
interest rate volatility and the spread.
Interest rate channel
Banking interest rates are also influenced by monetary policy changes. A monetary
tightening (easing) determines a reduction (increase) of reservable deposits and an increase
(reduction) of market interest rates. This has a “direct” and positive effect on bank interest
rates through the traditional “interest rate channel”. Nevertheless, the increase in the cost of
financing could have a different impact on banks depending on their specific characteristics.
There are two channels through which heterogeneity among banks may cause a different
impact on lending and deposit rates: the “bank lending channel” and the “bank capital
channel”. Both mechanisms are based on adverse selection problems that affect banks fundraising but from different perspectives.
Bank lending channel
According to the “bank lending channel” thesis, a monetary tightening has effect on
bank loans because the drop in reservable deposits cannot be completely offset by issuing
other forms of funding (i.e. uninsured CDs or bonds; for an opposite view see Romer and
Romer, 1990) or liquidating some assets. Kashyap and Stein (1995, 2000), Stein (1998) and
Kishan and Opiela (2000) claim that the market for bank debt is imperfect. Since nonreservable liabilities are not insured and there is an asymmetric information problem about
8
the value of banks’ assets, a “lemon’s premium” is paid to investors. According to these
authors, small, low-liquid and low-capitalized banks pay a higher premium because the
market perceives them more risky. Since these banks are more exposed to asymmetric
information problems they have less capacity to shield their credit relationships in case of a
monetary tightening and they should cut their supplied loans and raise their interest rate by
more. Moreover, these banks have less capacity to issue bonds and CDs and therefore they
could try to contain the drain of deposits by raising their rate by more. In Figure 3 three
effects are highlighted: the “average” effect due to the increase of the money market rate
(which is difficult to disentangle from the “interest rate channel”), the “direct”
heterogeneous effect due to bank-specific characteristics (Xt-1) and the “interaction effect”
between monetary policy and the bank-specific characteristic (iM Xt-1). These last two effects
can genuinely be attributed to the “bank lending channel” because bank-specific
characteristics influence only loan supply movements. Two aspects deserve to be stressed.
First, to avoid endogeneity problems bank-specific characteristics should refer to the period
before banks set their interest rates. Second, heterogeneous effects, if any, should be detected
only in the short run while there is no a priori that these effects should influence the long run
relationship between interest rates.
Apart from the standard indicators of size (logarithm of total assets), liquidity (cash
and securities over total assets) and capitalization (excess capital over total assets),10 two
other bank-specific characteristics deserve to be investigated: a) the ratio between deposits
and bonds plus deposits; b) the ratio between long-term loans and total loans.
The first indicator is in line with Berlin and Mester (1999): banks that heavily depend
upon non-deposit funding (i.e. bonds) will adjust their deposits rates by more (and more
quickly) than banks whose liabilities are less affected by market movements. The intuition of
this result is that, other things being equal, it is more likely that a bank will adjust her terms
10
It is important to note that the effect of bank capital on the “bank lending channel” cannot be easily
captured by the capital-to-asset ratio. This measure, generally used by the existing literature to analyze the
distributional effects of bank capitalization on lending, does not take into account the riskiness of a bank
portfolio. A relevant measure is instead the excess capital that is the amount of capital that banks hold in excess
of the minimum required to meet prudential regulation standards. Since minimum capital requirements are
determined by the quality of bank’s balance sheet activities, the excess capital represents a risk-adjusted
measure of bank capitalization that gives more indications on the probability of a bank default. Moreover, the
excess capital is a relevant measure of the availability of the bank to expand credit because it directly controls
for prudential regulation constraints. For more details see Gambacorta and Mistrulli (2004).
9
for passive deposits if the conditions of her own alternative form of refinancing change.
Therefore an important indicator to analyze the pass-through between market and banking
rates is the ratio between deposits and bonds plus deposits. Banks which use relatively more
bonds than deposits for financing purpose fell more under pressure because their cost
increase contemporaneously and to similar extent as market rates.
The Berger and Udell (1992) indicator represents a proxy for long-term business; those
credit institutions that maintain close ties with their non-bank customers will adjust their
lending rates comparatively less and slowly. Banks may offer implicit interest rate insurance
to risk-averse borrowers in the form of below-market rates during periods of high market
rates, for which the banks are later compensated when market rates are low. Having this in
mind, banks that have a higher proportion of long-term loans should be more inclined to split
the risk of monetary policy change with their customers and preserve credit relationships.
For example, Weth (2002) finds that in Germany those banks with large volumes of longterm business with households and firms change their prices less frequently than the others.
Bank capital channel
The “bank capital channel” is based on three hypotheses. First, there is an imperfect
market for bank equity: banks cannot easily issue new equity for the presence of agency
costs and tax disadvantages (Myers and Majluf, 1984; Cornett and Tehranian, 1994;
Calomiris and Hubbard, 1995; Stein, 1998). Second, banks are subject to interest rate risk
because their assets have typically a higher maturity with respect to liabilities (maturity
transformation). Third, regulatory capital requirements limit the supply of credit (Thakor,
1996; Bolton and Freixas, 2001; Van den Heuvel, 2001a; 2001b).
The mechanism is the following. After an increase of market interest rates, a lower
fraction of loans can be renegotiated with respect to deposits (loans are mainly long term,
while deposits are typically short term): banks suffer therefore a cost due to the maturity
mismatch that reduces profits and then capital accumulation.11 If equity is sufficiently low
and it is too costly to issue new shares, banks reduce lending (otherwise they fail to meet
11
In Figure 3, the cost per unit of asset due to the maturity transformation at time t-1 ( ρit −1 ) is multiplied by
the actual change in the money market rate ( ∆iM ). For more details see Appendix 1.
10
regulatory capital requirements) and amplify their interest rate spread. This determines
therefore an increase in the interest rates on loans and a decrease in that on deposits:12 in the
oligopolistic version of the Monti-Klein model, the maturity transformation cost has the
same effect of an increase in operating costs.
Industry structure
The literature underlines two possible impacts of concentration on pricing behavior
of banks (Berger and Hannan, 1989). A first class of models claims that more concentrated
banking industry will behave oligopolistically (structure-performance hypothesis), while
another class of models stresses that concentration is due to more efficient banks taking over
less efficient counterparts (efficient-structure hypothesis). This means that in the first case
lower competition should result in higher spreads, while in the second case a decrease in
managerial costs due to increased efficiency should have a negative impact on the spread. In
the empirical part great care will be given therefore to the treatment of bank mergers (see
Appendix 2). Nevertheless, the scope of this paper is not to extract policy implications about
this issue, for which a different analysis is needed. The introduction of bank-specific dummy
variables (µi) tries to control for this and other missing aspects.13
4. Empirical specification and data
The equations described in Figure 3 and derived analytically in Appendix 1 are
expressed in levels. Nevertheless, since interest rates are likely to be non-stationary
variables, an error correction model has been used to capture bank’s interest rate setting.14
Economic theory on oligopolistic (and perfect) competition suggests that, in the long run,
both banking rates (on lending and deposits) should be related to the level of the monetary
12
The “bank capital channel” can also be at work even if capital requirement is not currently binding. Van
den Heuvel (2001a) shows that low-capitalized banks may optimally forgo lending opportunities now in order
to lower the risk of capital inadequacy in the future. This is interesting because in reality, most banks are not
constrained at any given time.
13
In Section 6 this hypothesis will be tested introducing a specific measure of the degree of competition
that each banks faces. For a more detailed explanation on the effect of concentration on the pricing behavior of
Italian banks see Focarelli and Panetta (2003).
14
This is indeed the standard approach used for interest rate equations (Cottarelli et al. 1995; Lim, 2000;
Weth 2002). From a statistical point of view, the error correction representation is adopted because the lending
rate and the deposit rate result to be cointegrated with the money market rate.
11
rate, that reflects the marginal yield of a risk-free investment (Klein, 1971). We have:
2
(1)
1
∆i L k ,t = µ k + å κ j ∆i L k ,t − j + å ( β j + β *j X k ,t −1 ) ∆i M t − j + ϕ p t + δ 1 ∆ ln y tP + δ 2 ∆ ln y tT + λX k ,t −1 +
j =1
j =0
φ∆ ( ρ k ,t −1 ∆i M t ) + (α + α X k ,t −1 )i L k ,t −1 + (γ + γ * X k ,t −1 )i M t −1 + θ j k ,t + ξ e k ,t + ψσ t + Φ k ,t + ε k ,t
*
1
2
(2)
∆i D k ,t = µ k + å κ j ∆i D k ,t − j + å ( β j + β *j X k ,t −1 )∆i M t − j + ϕ p t + δ 1 ∆ ln y tP + δ 2 ∆ ln y tT + λX k ,t −1 +
j =1
j =0
φ∆ ( ρ k ,t −1 ∆i M t ) + (α + α X k ,t −1 )i D k ,t −1 + (γ + γ * X k ,t −1 )i M t −1 + ξ e k ,t + ψσ t + Φ k ,t + ε k ,t
*
with k=1,…, N (k=number of banks) and t=1, …,T (t= periods). Data are quarterly (1993:032001:03) and not seasonally adjusted. The panel is balanced with N=73 banks. Lags have
been selected in order to obtain white noise residuals. The description of the variables is
reported in Table 1.15
The model allows for fixed effects across banks, as indicated by the bank-specific
intercept µi. The long-run elasticity between each banking rate and the money market rate is
given by: (γ + γ * X k ,t −1 ) /(α + α * X k ,t −1 ) . Therefore to test if the pass-through between the
money market rate and the banking rate is complete it is necessary to verify that this
elasticity is equal to one. If this is the case there is a one-to-one long-run relationship
between the lending (deposit) rate and the money market rate, while the individual effect µi
influences the bank-specific mark-up (mark-down). The loading coefficient (α + α * X k ,t −1 )
must be significantly negative if the assumption of an equilibrium relationship is correct. In
fact, it represents how many percent of an exogenous variation from the steady state between
the rates is brought back towards the equilibrium in the next period.16
The degree of banks’ interest rate stickiness in the short run can be analyzed by the
impact multiplier ( β 0 + β 0* X k ,t −1 ) and the total effect after three months.17
15
For more details on data sources, variable definitions, merger treatment and trimming of the sample see
Appendix 2.
16
Testing for heterogeneity in the loading coefficient means to verify if α * is significant or not. At the same
time heterogeneity in the long-run elasticity can be proved if α *γ − αγ * is statistically different from zero.
17
In the first case heterogeneity among banks is simply tested through the significance of β 0 while in the
*
second case, since the effect is given by a convolution of the structural parameters it is possible to accept the
12
The variable Xk,t-1 represents a bank-specific characteristic that economic theory
suggests to influence only loan and deposit supply movements, without affecting loan and
deposit demands. In particular, all bank-specific indicators ( χ k ,t ) have been re-parameterized
in the following way:
N
æ
ö
ç T å χ k ,t ÷
÷ /T
X k ,t = χ k ,t − ç å k =1
ç t =1 N ÷
ç
÷
è
ø
Each indicator is therefore normalized with respect to the average across all the banks
in the respective sample, in order to obtain a variable whose sum over all observations is
zero.18 This has two implications. First, the interaction terms between interest rates and
X k , t −1 in equations (1) and (2) are zero for the average bank (this because X k ,t −1 =0). Second,
the coefficients β0, β1, α and γ are directly interpretable as average effects.
To test for the existence of a “bank capital channel” we have introduced the variable
ρ k , t −1∆iM that represents the bank-specific cost of monetary policy due to maturity
transformation. In particular ρ k , t −1 measures the loss per unit of asset a bank suffers when
the monetary policy interest rate is raised of one percent. The cost at time t is influenced by
the maturity transformation in t-1. This variable is computed according to supervisory
regulation relative to interest rate risk exposure that depends on the maturity mismatch
among assets and liabilities (see Appendix 2 for further details). To work out the real cost we
have therefore multiplied ρ k , t −1 for the realized change in interest rates. Therefore ρ k , t −1∆iM
represents the cost (gain) that a bank suffers (obtain) in each quarter. As formalized in
Appendix 1, this measure influences the level of bank interest rates. Since the model is
expressed in error correction form we have included this variable in first difference as well.
null hypothesis of absence of heterogeneity if and only if éë β 0α * + β 0* (1 + α + κ 1 ) + β1* + γ * ùû X k ,t −1 + α * β 0* X k2,t −1 is
equal to zero. The significance of this expression has been checked using the delta method (Rao, 1973).
18
The size indicator has been normalized with respect to the mean on each single period. This procedure
removes trends in size (for more details see Ehrmann et al., 2003).
13
4.1 Characteristics of the dataset
The dataset includes 73 banks that represent more than 70 per cent of total Italian
banking system in term of loans over the whole sample period. Since information on interest
rates is not available for Mutual banks, the sample is biased towards large banks. Foreign
banks and special credit institution are also excluded.
This bias toward large banks has two consequences. First, the distributional effects of
the size variable would be treated with extreme cautious because a “small” bank inside this
sample could not be considered with the same characteristic using the full population of
Italian banks.19 The size grouping in this study mainly controls for variations in scale,
technology and scope efficiencies across banks but it is not able to shed light on differences
between Mutual and other banks. Second, results for the average bank will provide more
“macroeconomic insights” than studies on the whole population (where the average bank
dimension is very small).
Table 2 gives some basic information on the dataset. Rows are organized dividing the
sample with respect to the bank-specific characteristics that are potential candidates to cause
heterogeneous shifts in loan supply in case of a monetary policy shock. On the columns, the
table reports summary statistics for the two interest rates and for each indicator.
Several clear patterns emerge. Considering size, small banks charge higher interest
rates on lending but show a lower time variation. This fits with the standard idea of a close
customer relationships between small firms and small banks that provides them with an
incentive to smooth the effect of a monetary tightening (Angelini, Di Salvo and Ferri, 1998).
Moreover, small banks are more liquid and capitalized than average and this should help
them to reduce the effect of cyclical variation on supplied credit. On the liability side, the
percentage of deposits (overnight deposits, CDs and savings accounts) is greater among
small banks, while their bonds issues are more limited than the ones of large banks.
Nevertheless, there are no significant differences that emerge in the level and volatility of the
interest rate on current accounts.
19
In particular, banks that are considered “small” in this study are labeled as “medium” in other studies for
the Italian banking system that analyze quantities (see for example, Gambacorta, 2003; Gambacorta and
Mistrulli, 2004). This is clear noting that the average assets of a “small” bank in my data (1.6 billions of euros)
over the sample period is very similar to that of the “medium” bank of the total system (1.7 billions of euros).
14
High-liquid banks are smaller than average and are more capitalized. These
characteristics should reduce the speed of the “bank lending channel” transmission through
interest rates. In particular, since deposits represent a high share of their funding they should
have a smoother transmission on passive rates.
Well-capitalized banks make relatively more short-term loans. They are in general not
listed and issue less subordinated debt to meet the capital requirement. This evidence is
consistent with the view that, ceteris paribus, capitalization is higher for those banks that
bear more adjustment costs from issuing new (regulatory) capital. Well-capitalized banks
charge a higher interest rate on lending; this probably depend upon their higher ratios of bad
loans that increase their credit risk. In other words their higher capitalization is necessary to
face a riskier portfolio. Moreover, the interest rate on deposit is lower for low-capitalized
banks indicating that agents do not perceive these deposits as riskier than those at other
banks. This has two main explanations. First, the impact of bank failures has been very small
in Italy, especially with respect to deposits.20 Second, the presence of deposit insurance that
insulates deposits of less capitalized banks from the risk of default.21
The Berlin-Mester and the Berger-Udell indicators seem to have a high power in
explaining heterogeneity in banks’ price setting behavior. Differences in the standard
deviations of the two groups are particularly sensitive, calling for a lower interest rates
variability of banks with a high percentage of deposits and long-term loans.
20
During our sample period, the share of deposits of failed banks to total deposits approached 1 per cent
only twice, namely in 1987 and 1996 (Boccuzzi, 1998).
21
Two explicit limited-coverage deposit insurance schemes (DISs) currently operate in Italy. Both are
funded ex-post; that is, member banks have a commitment to make available to the Funds the necessary
resources should a bank default. All the banks operating in the country, with the exception of mutual banks,
adhere to the main DIS, the ‘Fondo Interbancario di Tutela dei Depositi’ (FITD). Mutual banks (‘Banche di
Credito Cooperativo’) adhere to a special Fund (‘Fondo di Garanzia dei Depositanti del Credito Cooperativo’)
created for banks belonging to their category. The ‘Fondo Interbancario di Tutela dei Depositi’ (FITD), the
main DIS, is a private consortium of banks created in 1987 on a voluntary basis. In 1996, as a consequence of
the implementation of European Union Directive 94/19 on deposit guarantee schemes, the Italian Banking Law
regulating the DIS was amended, and FITD became a compulsory DIS. FITD performs its tasks under the
supervision of and in cooperation with the banking supervision authority, Banca d’Italia. The level of
protection granted to each depositor (slightly more than 103,000 euros) is one of the highest in the European
Union. FITD does not adopt any form of deposit coinsurance.
15
5. Results
The main channels that influence the interest rate on short term lending and that on
current accounts are summarized, respectively, in Tables 3 and 4. The first part of each table,
show the influence of the permanent and transitory component of real GDP and inflation.
These macro variables capture cyclical movements and serves to isolate shifts in loan and
deposit demand from monetary policy changes. The second part of the tables presents the
effects of bank’s efficiency, credit risk and interest rate volatility. The third part highlights
the effects of monetary policy. These are divided into four components: i) the immediate
pass-through; ii) the one-quarter pass-through; iii) the long-run elasticity between each
banking rate and the monetary policy indicator; iv) the loading coefficient of the
cointegrating relationship.22 The last part of the tables shows the significance of the “bank
capital channel”. Each table is divided in five columns that highlight, one at the time,
heterogeneous behavior of banks with different characteristics in the response to a monetary
shock. The existence of distributional effects is tested for all the four components of the
monetary policy pass-through. The models have been estimated using the GMM estimator
suggested by Arellano and Bond (1991) which ensures efficiency and consistency provided
that the models are not subject to serial correlation of order two and that the instruments used
are valid (which is tested for with the Sargan test).23
22
The immediate pass-trough is given by the coefficient β 0 + β 0* X k ,t −1 and heterogeneity among banks is
simply tested through the significance of β 0* . The effect for a bank with a low value of the characteristic under
0.25
evaluation is worked out through the expression β 0 + β 0* X k0.25
, t −1 , where X k , t −1 is the average for the banks below
the first quartile. Vice versa the effect for a bank with a high value of the characteristic is calculated using
X k0.75
, t −1 . The total effect after three months for the average bank is given by β 0 (1 + α1 + κ 1 ) + β1 + γ ' while
heterogeneity
among
banks
can
be
accepted
if
and
only
if
the
expression
éë β 0α * + β 0* (1 + α + κ 1 ) + β1* + γ * ùû X k ,t −1 + α * β 0* X k2,t −1 is equal to zero. The long run elasticity is given by:
(γ + γ * X k ) /(α + α * X k ) , while the loading coefficient is α1 + α1* X k ,t −1 . Standard errors have been
approximated with the “delta method” (Rao, 1973).
23
In the GMM estimation, instruments are the second lag of the dependent variable and of the bank-specific
characteristics included in each equation. Inflation, GDP growth rate and the monetary policy indicator are
considered as exogenous variables.
16
Loan and deposit demand
As predicted by theory only changes in permanent income have a positive and
significant effect on the interest rate on short term lending while the transitory component is
never significant. In fact, as discussed in Section 3, the effect of transitory changes may be
also due to a self-financing effect that reduces the proportion of bank debt. On the contrary
the interest rate on deposits is negatively influenced by real GDP. In this case the effect is
higher when a change in the transitory component occurs because it is directly channeled
through current accounts. The effect of inflation is positive on both interest rates but is
significantly higher for short-term lending.
Operating costs, credit risk and interest rate volatility
Bank’s efficiency reduces the interest rate on loans and increase that of deposits.
Nevertheless, the effect is not always significant at conventional levels, especially in the
equation for the interest rate on current accounts. These results call for further robustness
checks using a cost-to-asset ratio (see Section 6).
The relative amount of bad loans has a positive and significant effect on the interest
rate on loans. This is in line with the standard result that banks that invest in riskier project
ask for a higher rate of return to compensate credit risk.
Both banking rates are positively correlated with money market rate volatility. The
correlation is higher for the interest rate on loans with respect to that of deposits. This is
consistent with the prediction of the dealership model by Ho and Saunders (1981) and its
extension by Angbazo (1997) where an increase in interbank interest rate volatility is
associated with a higher spread.
Bank capital channel
As expected the “bank capital channel” (based on the maturity mismatch between
bank’s assets an liabilities, see Section 3) has a positive effect on the interest rate on shortterm lending and a negative effect on the interest rate on current account. The absolute
values of the coefficients are greater in the first case calling for a stronger adjustment on
credit contracts than on deposits. Since this channel can be interpreted similarly to a general
17
increase in the costs for the banks, it is worth comparing this result with that obtained for the
efficiency indicator. In both cases the effect is strongest for the interest rate on short-term
lending and this is consistent with the view that the interest rate on deposit is more sluggish.
Interest rate channel
A monetary tightening positively influences banks’ interest rate. After a one per cent
increase in the monetary policy indicator, interest rate on short term lending are immediately
raised of around 0.5 per cent and of around 0.9 per cent after a quarter. Moreover, the passthrough is complete in the long run (the null hypothesis of a unitary elasticity is accepted in
all models). The reaction of the short term lending rate is higher with respect to previous
studies on the Italian case and this calls for an increase in competition after the introduction
of the 1993 Banking Law. Cottarelli et al. (1995), analyzing the period 1986:02-1993:04,
find that the immediate pass through is of around 0.2, while the effect after three months is
0.6 per cent. Their long run elasticity is equal to 0.9 per cent but also in their model the null
hypothesis of a complete pass-through in the long run is accepted.24
The long run elasticity of the interest rate on current accounts is around 0.7 per cent.
This result is in line with the recent findings by de Bondt et al. (2003) under a similar sample
period and only a little higher with respect to the long-run elasticity in Angeloni et al. (1995)
for the period 1987:1-1993:04.25
The standard answer to the incomplete pass-through of money market changes on the
deposit rate is the existence of market power by banks. Another explanation is the presence
of compulsory reserves. To analyze this, we can refer to the theoretical elasticity in the case
24
The main differences between Cottarelli et al. (1995) and this paper are three. First, they use the Treasury
bill rate as the reference monetary interest rate. However from the early nineties this indicator became less
important as “reference rate” because the interbank market became more competitive and efficient (Gaiotti,
1992). This is indeed stated also by Cottarelli et al. (page 19). Second, they do not include macro variables
controls in their equation. Third, their dataset is based on monthly data. To allow comparability among the
results of this paper and those in Cottarelli et al. (1995) I have: 1) checked the results to different monetary
policy indicators (i.e. the interbank rate; see Section 6); 2) excluded the macro variables from equation (1) to
verify if the results were sensitive to their inclusion. In all cases the conclusion of an increase of speed in the
reaction of short-term interest rate on loans to money market rate resulted unchanged.
25
The VAR model in Angeloni et al. considers the interest rate on total deposits (sight, time deposits and
CDs), which is typically more reactive to monetary policy than that on current account because the service
component in time deposits and CDs is less important. This means that in comparing our result with Angeloni
et al. we are underestimating the potential effect of competition.
18
of perfect competition.26 This benchmark case is very instructive because it allows to analyze
what happens if banks are price takers (they take as given not only the monetary market rate
but also the interest rate on loans and that on deposits), set the quantity of loans and deposits
and obtain a zero profit (the sum of the intermediation margins equals management costs). In
this case the long-run elasticities become:
∂iL
∂i
= 1 and D = 1 − α where α is the fraction of
∂iM
∂iM
deposits invested in risk-free assets (this includes the “compulsory” reserves). Therefore in
principle, an incomplete pass-through from market rates to deposits rates is also consistent
with the fact that banks decide (or are constrained by regulation) to detain a certain fraction
of their deposits in liquid assets.
The loading coefficients are significantly negative. It is around –0.4 in the loan
equation and –0.6 in the current account equation. This means that if an exogenous shock
occurs, respectively 40 and 60 per cent of the deviation is canceled out within the first
quarter in each banking rate.
Bank lending channel
In case of a monetary shock, banks with different characteristics behave differently
only in the short run. On the contrary no heterogeneity emerges in the long run relationship
between each banking rate and the monetary policy indicator.
Considering each bank’s specific characteristic one at the time (Tables 3 and 4),
interest rates of small, liquid and well-capitalized banks react less to a monetary policy
shock. Also the Berlin-Mester and the Berger-Udell indicators have an high power in
explaining heterogeneity in banks’ price setting behavior.
Nevertheless, the robustness of these distributional effects has to be checked in a
model that takes all these five indicators together into account. In this model, in order to save
degrees of freedom, the long-run elasticity between the money market rate and the short-
26
The case of perfect competition can be easily obtained from equation (A1.8) and A1.9) in Appendix 1
considering loan and deposit demand (equations A1.3 and A1.4) infinitely elastic with respect the bank rates
(c0→∞, d0→∞). Moreover, we will consider the benchmark case were no heterogeneity emerges in the “bank
lending channel” (b1=0) and bonds can be issued at the risk free rate (b0=1). See Freixas and Rochet (1997) for
an analogous treatment.
19
term lending rate has been imposed to one; that with the interest rate on current account has
been fixed to 0.7.
Results are reported in Table 5. Interest rates on short-term lending of liquid and wellcapitalized banks react less to a monetary policy shock. Also banks with a high proportion of
long-term lending tend to change less their prices. Size is not significant.
This evidence matches with previous results on lending. Liquid banks can protect their
loan portfolio against a monetary tightening simply by drawing down cash and securities
(Gambacorta, 2003). Well-capitalized banks that are perceived as less risky by the market
are better able to raise uninsured funds in order to compensate the drop in deposits
(Gambacorta and Mistrulli, 2004). Therefore the effects on lending detected for liquid and
well-capitalized banks are mirrored by their higher capacity to insulate the clients also from
the effects on interest rates. It is interesting to note that, in contrast with the evidence for the
US (Kashyap and Stein; 1995), the interaction terms between size and monetary policy are
insignificant. The fact that the interest rate on short term lending of smaller banks is not
more sensitive to monetary policy than that of larger banks is well documented in the
literature for Italy and reflects the close customer relationship between small banks and
small firms (Angeloni et al. 1995; Conigliani et al., 1997; Angelini, Di Salvo and Ferri,
1998; Ferri and Pittaluga, 1996). This result is also consistent with Ehrmann et al. (2003)
where size does not emerge as a useful indicator for the distributional effect of monetary
policy on lending not only in Italy but also in France, Germany and Spain.
As regards the interest rate on current accounts, the Berlin-Mester indicator is the only
bank-specific characteristic that explains heterogeneity in banks price setting behavior. In
particular, banks that heavily depend upon non-deposit funding (banks with a low BM
indicator) will adjust their interest rate on current account by more (and more quickly) than
banks whose liabilities are less affected by market movements. As explained in Section 3,
the intuition of this result is that, other things being equals, it is more likely that a bank will
adjust her terms on deposits if the other conditions of her refinancing change. The liability
structure seems to influence not only the short-run adjustment but also the loading
coefficient. This implies that banks with a high BM ratio react less when there is a deviation
in the long run mark-down: banks with a higher percentage of deposits have more room in
adjusting their prices toward the optimal equilibrium. As expected, no cross sectional
20
differences emerges among banks due to size, liquidity and capitalization because current
accounts are typically insured.
6. Robustness checks
The robustness of the results has been checked in several ways. The first test was to
introduce as additional control variable a bank-specific measure of the degree of competition
that each bank faces in the market. In particular, the average value of the Herfindahl index in
the different “local markets” (corresponding to the administrative provinces of Italy) in
which the bank operates was introduced in each equation. The reason of this test is that the
fixed effect (that captures also industry structure) remains stable over the whole period while
the degree of competition could change over time due to the effect of concentration.
Therefore this test allows us also to check if the treatment of bank mergers is carried out
properly. The Herfindahl index did not show to be statistically significant and the results of
the study did not change.
The second test was to use as bank’s efficiency indicator the cost-to-total asset ratio
instead than the ratio of total loans and deposits to the number of branches. In all cases the
results remained unchanged.
The third test was to consider if different fiscal treatments over the sample period
could have changed deposit demand (from June 1996 the interest rate on current account is
subject to a fiscal deduction of 27 per cent; 12.5 per cent before). However, using the net
interest rate on current account instead than the gross rate nothing changed.
The fourth robustness check was the introduction of a dummy variables to take into
account of the spike in the change of the repo interest rate caused by the EMS crisis in the
first quarter of 1995. Also in this case results remained the same.
The fifth test was to introduce additional interaction terms combining the bank-specific
characteristic with inflation, permanent and transitory changes in real income. The reason for
this test is the possible presence of endogeneity between bank characteristics and cyclical
factors. Performing the test, however, nothing changed, and the double interactions were
almost always not significant (it turned out to be statistically not different from zero in the
case of the interaction of capitalization and permanent income).
21
The final robustness check was to introduce a dummy variable that indicates if the
bank belongs to a group (1) or not (0). Banks belonging to a group may be less influenced by
monetary changes if they can benefit of an internal liquidity management; in other words,
bank holding companies establish internal capital markets in an attempt to allocate capital
among their various subsidiaries (Houston and James, 1998; Upper and Worms, 2001). The
introduction of this dummy did not change the results of the study.
7. Conclusions
This paper investigates which factors influence price setting behavior of Italian banks.
It adds to the existing literature in two ways. First, it analyzes systematically a wide range of
micro and macroeconomic variables that have an effect on bank interest rates: permanent
and transitory changes in income, interest and credit risk, interest rate volatility, banks’
efficiency. Second, the analysis of banks’ prices (rather than quantities) provides an
alternative way to disentangle loan supply from loan demand shift in the “bank lending
channel” literature.
The search for heterogeneity in banks’ behavior is carried out by using a balanced
panel of 73 Italian banks that represent more than 70 per cent of the banking system. The use
of microeconomic data help in reducing the problems of aggregation that may significantly
bias the estimation of dynamic economic relations and it is less prone to structural changes
like the formation of EMU.
The main results of the study are the following. First, heterogeneity in the banking
rates pass-through exists, but it is detected only in the short run: no differences exist in the
long-run elasticities of banking rates to the money market rate. Second, consistently with the
existing literature for Italy, interest rates on short-term lending of liquid and well-capitalized
banks react less to a monetary policy shock. Also banks with a high proportion of long-term
lending tend to change their prices less. Heterogeneity in the pass-through on the interest rate
on current accounts depends on banks’ liability structure. Bank’s size is never relevant.
Appendix 1 - A simple theoretical model
This Appendix develops a one-period model of a risk neutral bank that operates under
oligopolistic market conditions.
The balance sheet of the representative bank is as follows:
(A1.1) L + S = D + B + K
where L stands for loans, S for securities, D for deposits, B for bonds, K for capital.
The bank holds securities as a buffer against contingencies. We assume that security
holdings are a fixed share of the outstanding deposits (α). They represent a safe asset and
fruit the risk-free interest rate.27 We have therefore:
(A1.2) S = α D
For simplicity, bank capital is exogenously given in the period and greater than
capital requirements.28
The bank faces a loan demand and a deposit demand. The first one is given by:
(A1.3)
Ld = c0 i L + c1 y + c 2 p + c3 i M (c0<0, c1>0, c2>0, c3>0)
that is negatively related to the interest rate on loans (il ) and it is positively related to real
income (y) and prices (p) and the opportunity cost of self-financing, proxied by the money
market interest rate (im).29
Alternatively S can be considered as the total amount of bank’s liquidity, where α is the coefficient of
free and compulsory reserves. In this case reserves are remunerated by the money market rate fixed by the
Central Bank. This alternative interpretation does not change the results of the model.
27
28
In the spirit of the actual BIS capital adequacy rules, capital requirements on credit risks are given by a
fixed amount (k) of loans. If bank capital perfectly meets Basle standard requirement the amount of loans
would be L=K/k. We rule out this possibility because banks typically hold a buffer as a cushion against
contingencies (Wall and Peterson, 1987; Barrios and Blanco, 2001). Excess capital allows them to face capital
adjustment costs and to convey positive information on their economic value (Leland and Pile, 1977; Myers
and Majluf, 1984). Another explanation is that banks face a private cost of bankruptcy, which reduces their
expected future income (Dewatripont and Tirole, 1994). Van den Heuvel (2001a) argues that even if capital
requirement is not currently binding, a low capitalized bank may optimally forego profitable lending
opportunities now, in order to lower the risk of future capital inadequacy. A final explanation for the existence
of excess capital is given by market discipline; well-capitalized banks obtain a lower cost of uninsured funding,
such as bonds or CDs, because they are perceived less risky by the market (Gambacorta and Mistrulli, 2004).
29
As far as the GDP is concerned, there is no clear consensus about how economic activity affects credit
demand. Some empirical works underline a positive relation because better economic conditions would
23
The deposit demand is standard. It depends positively on the interest rate on deposits,
the level of real income (the scale variable) and the price level and negatively on the interest
rate on securities that represent an alternative to the investment to deposits.
(A1.4)
D d = d 0id + d1 y + d 2 p + d 3im
(d0>0, d1>0, d2>0, d3<0)
Because banks are risky and bonds are not insured, bond interest rate incorporates a
risk premium that we assume depends on specific banks’ characteristics. The latter are
balance sheet information or institutional characteristics exogenously given at the end of
previous period.
(A1.5)
ib ( im , xt −1 ) = b0im + b1im xt −1 + b2 xt −1
(b0>1)
In other words, this assumption implies that the distributional effects via the bank
lending channel depends on some characteristics that allow the bank to substitute insured,
typically deposits, with uninsured banks’ debt, like bonds or CDs (Romer and Romer, 1990).
For example, theory predicts that big, liquid and well-capitalized banks should be perceived
less risky by the market and obtain a lower cost on their uninsured funding (b2<0). Moreover
they could react less to monetary change (b1<0)
The effects of the so-called “bank capital channel” are captured by the following
equation:
(A1.6)
C MT = ρt −1∆im ( L + S )
(ρ >0)
where C MT represents the total cost suffered by the bank in case of a change in monetary
policy due to the maturity transformation. Since loans have typically a longer maturity than
improve the number of project becoming profitable in terms of expected net present value and, therefore,
increase credit demand (Kashyap, Stein and Wilcox, 1993). This is also the hypothesis used in Bernanke and
Blinder (1988). On the contrary, other works stress the fact that if expected income and profits increase, the
private sector has more internal source of financing and this could reduce the proportion of bank debt
(Friedman and Kuttner, 1993). A compromise position is taken by Melitz and Pardue (1973): only increases in
permanent income have a positive influence on loan demand, while the effect due to the transitory part could
also be associated with a self-financing effect in line with Friedman and Kuttner. Taking this into account, in
the econometric part (see Section 4) I will try to disentangle the two effects using a Beveridge and Nelson
(1981). For simplicity in the model I assume that the first effect dominates and that a higher income determines
an increase in credit demand (c2>0). This is indeed consistent with the evidence provided by Ehrmann et al.
(2001) for the four main countries of the euro area.
24
bank fund-raising, the variable ρ represents the cost (gain) per unit of asset that the bank
incurs in case of a one per cent increase (decrease) in the monetary policy interest rate.
The cost of intermediation is given by:
(A1.7) C IN = g1 L + g 2 D
(g1>0, g2>0)
where the component g1L can be interpreted as screening and monitoring cost while g2D as
the cost of the branching.30
Loans are risky and, in each period, a percentage j of them is written off from the
balance sheet, therefore reducing bank’s profitability.
The representative bank maximizes her profits subject to the balance-sheet constraint.
The bank optimally sets the interest rates on loans and deposits (iL, iD), while she takes the
money market interest rate (iM) as given (it is fixed by the Central Bank).
Max π = (iL − j ) L + im S − iD D − iB B − C MT − C IN
il ,id
s.t.
L+Q = D+ B+ K
Solving the maximization problem, the optimal levels of the two interest rates are:
(A1.8) iL = Ψ 0 + Ψ1 p + (Ψ 2 + Ψ 3 xt −1 )im + Ψ 4 y P + Ψ 5 ρt −1∆im + Ψ 6 j + Ψ 7 xt −1
(A1.9) id = Φ 0 + Φ1 p + (Φ 2 + Φ 3 xt −1 )im + Φ 4 y P + Φ 5 ρt −1∆im + Φ 6 xt −1
where:
g1
c
b
c
c
b
1
> 0 ; Ψ1 = 2 > 0 ; Ψ 2 = 0 + 3 > 0 ; Ψ 3 = 1 ; Ψ 4 = 1 > 0 ; Ψ 5 = ;
2
−2c0
2 −2c0
−2c0
2
2
b (1 − α ) −d 3 α
g
d
b
1
Φ0 = − 2 < 0 ;
Ψ7 = 2
Φ2 = 0
+
+ >0;
Φ1 = − 2 < 0 ;
Ψ6 = ;
2
2d 0 2
2
2d 0
2
2
d
b (1 − α )
α
b (1 − α )
Φ3 = − 1
; Φ 4 = − 1 < 0 ; Φ5 = − < 0 ; Φ6 = 2
.
2d 0
2
2d 0
2
Ψ0 =
30
The additive linear form of the management cost simplifies the algebra. The introduction of a quadratic
cost function would not have changed the result of the analysis. An interesting consequence of the additive
form of the management cost is that bank’s decision problem is separable: the optimal interest rate on deposits
is independent of the characteristic of the loan market while the optimal interest rate on loans is independent of
the characteristics of the deposit market. For a discussion see Dermine (1991).
25
Equation (A1.8) states that a monetary tightening determines an increase in the interest
rate on loans (Ψ2>0): the total effect could be divided into two parts: the “bank lending
channel” (b0/2>0) and the “opportunity cost” effect (-c3/2c0>0) The effect of a monetary
squeeze is smaller if the bank-specific characteristic reduces the impact of monetary policy
on the cost of funding (b1<0 and Ψ3<0). In this case banks have a greater capacity to
compensate the deposit drop by issuing uninsured funds at a lower price. Loan interest rate
reacts positively to an output expansion (Ψ4>0) and to a raise in prices (Ψ1>0). The effect of
the so-called “bank capital channel” is also positive ( Ψ 5 > 0 ); due to the longer maturity of
bank assets with respect to liabilities (ρ>0), in case of a monetary tightening ( ∆im >0) the
bank suffers a cost and a subsequent reduction in profit; given the capital constraint, this
effect determines an increase in loan interest rates (the mirror effect is a decrease in lending).
The equation (A1.9) for deposit interest rate is slightly different. Also in this case the
impact of a monetary tightening is positive (Φ2>0) but it can now be split in three parts: the
“bank lending channel” (b0(1-α)/2>0), the “opportunity cost” (-d3/2d0>0) and the “liquidity
buffer”(α/2>0) effects. The intuition of this result is that a monetary squeeze automatically
increase the cost of borrowing of bank uninsured fund and the return on securities (the
alternative investment for depositors); therefore the first two effects push the bank to
increase the interest rate on deposits to raise more insured funds. The percentage of deposits
invested in securities (α) act, on the one hand, as a simple “reserve coefficient” that reduces
the effectiveness of the “bank lending channel” while, on the other, it increases the revenue
on liquid portfolio and the market power of the bank to offset the interest rate on deposits.
The distributional effects of monetary policy are equal to the ones described above for the
interest rate on loans. The effects on the cost of deposits are smaller for banks with certain
characteristics only if b1<0 and Ψ3<0. Deposit interest rate reacts negatively to an output
expansion (Φ4<0) and to an increase in prices (Φ1<0). An economic expansion pushes the
deposits demand to the left and causes a decrease in cost of deposits (remember that deposit
demand is upward sloping with respect to id). The effect should be greater for increases in
transitory income. Also the effect of the “bank capital channel” are negative (Φ5<0); as we
have seen, in case of a monetary tightening (ρ ∆im >0) the bank suffers a cost and a reduction
in profit; this induces the bank to increase her interest rate margin, reducing the interest rates
on deposits.
26
Appendix 2 – Technical details on the data
The dataset has been constructed using three sources. Interest rates are taken from the
10-day report survey conducted by the Bank of Italy. Bank’s balance sheet information
comes from the Banking Supervision Register at the Bank of Italy. Data on macroeconomic
variables are taken from the International Financial Statistics.
Data on interest rates refer to transactions in euros (Italian lira before 1999). The
deposit interest rate is the weighted average rate paid by the single banks on current
accounts, which are highly homogenous deposits products.31 The rate on domestic shortterm lending for the single bank is the weighted average of all lending positions. From this
computation, overdraft fees are excluded. The choice of the short-term rate as a measure of
the bank interest lending pass-through is due to several reasons. First, short-term lending
excludes subsidized credit. Second, short-term loans typically are not collateralised and this
allows insulating the “bank lending” channel from the “balance sheet” channel. Broadly
speaking, the pass-through from market interest rates to the interest rate on loans does not
depend upon market price variations that influence the value of collateral. Nearly half of
bank’s business is done at this rate.
Both interest rates are posted rates that are changed at discrete intervals (often less
frequently than weekly, see Green, 1998). In our case, the quarterly frequency of the data is
sufficient enough to capture all relevant changes due to a monetary policy shock. Both rates
are gross of fiscal deduction.
The interest rate taken as monetary policy indicator is that on repurchase agreements
between the Bank of Italy and credit institutions in the period 1993-1998, and the interest
rates on main refinancing operation of the ECB for the period 1999-2001.32
31
Current accounts are the most common type of deposit (at the end of 2001 they represented around 70 per
cent of total bank deposits and passive repos). Current accounts allow unlimited checking for depositor that can
close the account without notice. The bank, in turn, can change the remuneration of the account at any point in
time. Therefore differences in deposit rates are not influenced by heterogeneity in maturity (see Focarelli and
Panetta, 2003).
32
As pointed out by Buttiglione, Del Giovane and Gaiotti (1997), in the period under investigation the repo
rate mostly affected the short-term end of the yield curve and, as it represented the cost of banks’ refinancing, it
represented the value to which market rates and bank rates eventually tended to converge. The interest rate on
main refinancing operation of the ECB does not present any particular break with the repo rate.
27
The cost a bank suffers from her maturity transformation function is due to the
different sensitivity of her assets and liabilities to interest rates. Using a maturity ladder, we
have:
å(χ ⋅ A −ζ P )
*100
ρ =
åA
j
j
j
j
j
i
j
j
where Aj (Pj) is the amount of assets (liabilities) of j months-to-maturity and χj (ζj) measures
the increase in interest on assets (liabilities) of class j due to a one-per-cent increase in the
monetary policy interest rate (∆im=0.01). In other words, if
å ( χ ⋅ A − ζ P ) >0, ρ
j
j
j
j
i
j
represents the cost per unit of asset bank i suffers in case the monetary policy interest rate is
raised of one percentage point. We obtain χi and ζi directly from supervisory regulation on
interest rates risk exposure. In particular, the regulation assumes, for any given class j of
months-to-maturity: 1) the same sensitivity parameter (χj =ζj) and 2) a non-parallel shift of
the yield curve (∆im=0.01 for the first maturity class and then decreasing for longer maturity
classes). Then, for each bank, after having classified assets and liabilities according to their
months-to-maturity class, we have computed the bank specific variable ρi . This variable has
been then multiplied by the change of the monetary policy indicator (∆im) to obtain the
realized loss (or gain) per unit of asset in each quarter.
In assembling our sample, the so-called special credit institutions (long-term credit
banks) have been excluded since they were subject to different supervisory regulations
regarding the maturity range of their assets and liabilities. Nevertheless, special long-term
credit sections of commercial banks have been considered part of the banks to which they
belonged.
Particular attention has been paid to the treatment of mergers. In practice, it has been
assumed that these have been taken place at the beginning of the sample period, summing
the balance-sheet items of the merging parties. For example, if bank A has been
incorporated by bank B at time t, bank B has been reconstructed backward as the sum of the
28
merging banks before the merger. Bank interest rates have been reconstructed backwards
using as weights short-term loans and current accounts of the merging parties.33
Only banks reporting detailed lending and deposit rates over the whole sample period
were considered. I refrain from adopting short time series to ensure sufficient asymptotic in
the context of the error correction estimation. Bank observations that were missing or
misreported or that constituted clear outliers were excluded from the sample.
Bad loans are defined as loans for which legal procedures aimed at their repayment
have been started.
The permanent component of GDP has been computed using the Beveridge and
Nelson (1981) decomposition. An ARIMA model (1,1,1) was applied to the logarithm of the
series. Computations have been carried out using the algorithm described in Newbold
(1990). Robustness of the results have been checked by means of a statistical analysis of the
residuals.
The possible presence of structural breaks in interest rates series have been
investigated by means of the procedure developed by Banerjee, Lumsdaine and Stock
(1992). Figure A1 shows sequential test for changes in the mean of each interest rate series.
The hypothesis of this procedure is that, if there is a break, its date is not known a priori but
rather is gleaned from the data. The results clearly show that unit-root/no-break null can be
rejected at the 2.5 per cent critical value level against the stationarity/mean-shift alternative
for the period 1995:03-1998:03. In equation (1) and (2) a convergence dummy, that takes the
value of 1 in this period and 0 elsewhere, has been introduced.
33
The same methodology has been used, among others by Peek and Rosengreen (1995), Kishan and Opiela
(2000) and Ehrmann et al. (2001).
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Table 1
VARIABLES DESCRIPTION
Variables
Dependent variables
Fixed effects
Symbols
iLt
Interest rate on domestic short term loans
iDt
Interest rate on current account deposits
µi
imt
Macro variables
Description
y tP , y Tt
pt
Bank-specific dummy variable
Monetary policy indicator
Permanent and transitory components of real GDP computed using the
Beveridge and Nelson (1981) decomposition
Inflation rate
Size: log of total assets (Kashyap and Stein, 1995; Ehrmann et al. 2003)
Liquidity: cash and securities over total assets (Stein, 1998; Kashyap and
Stein, 2000)
Excess capital: difference between regulatory capital and capital
requirements (Peek and Rosengren, 1995; Kishan and Opiela, 2000;
Gambacorta and Mistrulli, 2004)
Deposit strength: ratio between deposits and bonds plus deposits (Berlin
and Mester,1999; Weth, 2002)
Credit relationship: ratio between long term loans and total loans (Berger
and Udell, 1992)
Bank-specific
characteristics that
influence the “bank
lending channel”
X it −1
Measure for the “bank
capital channel”
ρit −1
Risk-measure
jit
Efficiency ratio
eit
Interest rate volatility
σt
Cost per unit of asset that the bank incurs in case of a one per cent
increase in MP
Ratio between bad loans and total loans. This variable captures the
riskiness of lending operations and should be offset by a higher expected
yield of loans.
Management efficiency: ratio of total loans and deposits to the number
of branches.
Interest rate volatility: coefficient of variation of iM .
Control variables
Φ it
Convergence dummy: step dummy that takes the value of 1 in the period
1995:03-1998:03 and 0 elsewhere.
Seasonal dummies.
Note: For more information on the definition of the variables see Appendix 2.
18
18
18
18
Big banks
Small banks
Liquid banks
(2) Low liquid banks
18
18
18
18
18
18
Well capitalized banks
Low capitalized banks
Banks with high BM ratio
Banks with low BM ratio
(3)
(4)
Banks with high BU ratio
(5) Banks with low BU ratio
(1)
73
Number
of banks
Total sample
Bank-characteristics (*)
8.51
10.97
11.78
7.77
9.71
9.42
9.51
9.33
9.28
10.02
9.51
Mean
2.59
2.12
1.49
2.24
2.73
2.81
2.72
2.73
2.81
2.73
2.72
St. dev.
3.69
4.00
4.88
3.69
3.69
4.75
3.69
4.42
3.69
5.03
3.69
Min
15.06
16.12
16.12
15.06
16.12
15.93
15.94
14.86
15.06
16.12
16.12
Max
Interest rate on short term lending
2.80
4.68
5.15
2.41
3.68
3.53
3.57
3.61
3.57
3.55
3.58
Mean
1.67
1.44
0.96
1.45
1.80
1.79
1.80
1.71
1.74
1.79
1.79
St. dev.
0.65
0.53
0.74
0.52
0.52
0.74
0.65
0.73
0.73
0.52
0.52
Min
7.36
7.43
8.21
7.35
7.18
8.21
8.21
7.35
7.35
8.21
8.21
Max
Interest rate on current accounts
definition of the variables see Appendix 2. The sources of the dataset are Bank of Italy supervisory returns and 10-days reports.
21.92
8.51
6.58
27.00
9.66
24.28
4.67
43.75
51.15
1.55
16.20
Size
(1)
19.98
28.26
29.69
18.56
26.15
20.82
33.07
14.91
19.01
25.11
24.00
Liq.
(2)
3.80
3.95
4.46
3.42
6.86
1.49
4.27
3.13
2.56
4.81
3.91
Cap.
(3)
71.84
93.13
98.53
66.10
85.49
78.40
86.27
72.43
77.60
84.40
82.40
BM
(4)
53.29
22.46
28.72
45.30
37.22
38.46
36.15
43.66
38.98
41.72
37.66
BU
(5)
average ratio below the third quartile. Since the characteristics of each bank could change through time, percentiles have been worked out on mean values. For more details on the
long-term loans and total loans. A bank with a "high" characteristic has the average ratio above the first quartile of the distribution. (*) A bank with a "low"characteristic has the
capital requirements. (4) The Berlin and Mester indicator (BM) is the ratio between deposits and deposits plus bonds. (5) The Berger and Udell indicator (BU) is the ratio between
government securities over total assets. (3) The capital ratio is given by excess capital divided by total assets. Excess capital is the difference between regulatory capital and total
interest rate are annualized and given in percentages. (1) The size indicator is given by total asset (billions of euros). (2) The liquidity indicator is represented by the sum of cash and
Ex special credit institutions, foreign banks and "banche di credito cooperativo" are excluded. The sample represents more than 70 per cent of total system in terms of lending. All
SUMMARY STATISTICS
(1993:03-2001:03)
Table 2
Table 3
RESULTS FOR THE EQUATION ON THE INTEREST RATE ON SHORT-TERM LENDING
This table shows the results of the equation for the interest rate on short term lending. The model is given by the following equation, which includes
interaction terms that are the product of the monetary policy indicator and a bank specific characteristic:
∆ iL k ,t = µ k +
2
1
j =1
j =0
å κ j ∆iL k ,t − j + å ( β j + β *j X k ,t −1 )∆iM t − j + ϕ pt + δ1∆ ln ytP + δ 2∆ ln ytT + λX k ,t −1 + φ∆ ( ρ k ,t −1∆iM t ) +
+ (α + α X k ,t −1 )iL k ,t −1 + (γ + γ * X k ,t −1 )iM t −1 + θ jk ,t + ξ ek ,t + ψσ t + Φ k ,t + ε k ,t
*
with k=1,…, N (k=number of banks) and t=1, …,T (t= periods). Data are quarterly (1993:03-2001:03) and not seasonally adjusted. The panel is
balanced with N=73 banks. Lags have been selected in order to obtain white noise residuals. The description of the variables is reported in Table 1.
The model have been estimated using the GMM estimator suggested by Arellano and Bond (1991) which ensures efficiency and consistency
provided that the models are not subject to serial correlation of order two and that the instruments used are valid (which is tested for with the Sargan
test). A bank with “low characteristic” has the average ratio of the banks below the first quartile, a bank with "high characterisic” has the average
ratio of the banks above third quartile. For more details on the data see Appendix 2. *=significance at the 10 per cent; **=significance at the 5 per
cent; ***=significance at the 1 per cent.
Dependent variable: quarterly change
of the interest rate on short-term
lending
(1)
Size
Coeff.
(2)
Liquidity
(5)
Long term loans/
Total loans
S.Error Coeff.
S.Error
(4)
Dep./(Bonds+Dep.)
S.Error Coeff.
S.Error Coeff.
0.017
0.012
0.025
0.145 ***
0.032 **
0.012
0.015
0.013
0.026
0.149 ***
0.025 **
0.012
0.018 0.187 ***
0.012 0.043 ***
0.024 0.026
0.015
0.010
0.020
Costs, credit risk and int.rate volatility
Bank's efficiency:
-0.004 ** 0.002 -0.001
Bad loans:
0.020 *** 0.002 0.016 ***
Interest rate volatility:
0.011 *** 0.001 0.012 ***
0.002 -0.006 **
0.002 0.017 ***
0.001 0.010 ***
0.002
0.001
0.001
-0.001
0.020 ***
0.014 ***
0.001 -0.001
0.002 0.019 ***
0.001 0.012 ***
0.001
0.002
0.001
Immediate pass-through
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.569 *** 0.027
0.003
0.556 *** 0.028
0.586 *** 0.026
0.031
0.018
0.027
0.036
0.023
0.418
0.022
0.026
0.465 ***
0.030 0.497 ***
0.023
0.028 0.529 ***
0.032 0.463 ***
0.034
0.000
0.033
0.035
Pass-through after a quarter
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.938 *** 0.013
0.000
0.913 *** 0.015
0.971 *** 0.014
0.016 0.878 ***
0.159
0.017 0.889 ***
0.016 0.863 ***
0.013
0.000
0.014
0.012
Long run elasticity
Average bank:
Ho: unitary long run elasticity (p-val.)
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
1.017 *** 0.014
0.056
0.509
0.996 *** 0.014
1.049 *** 0.016
0.015 1.012 ***
0.235
0.924
0.026 0.992 ***
0.012 1.040 ***
0.018
0.489
0.644
0.016
0.023
Loading of the long run relationship
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.017
0.000
0.017
0.020
Bank capital channel
Loan demand
Inflation:
Permanent Income:
Transitory Income:
Miss-specification tests
MA(1), MA(2) (p-value)
Sargan test (p-value)
No of banks, no of observations
S.Error Coeff.
(3)
Capitalization
0.159 *** 0.019
0.033 ** 0.015
0.012
0.031
0.145 ***
0.030 ***
0.013
0.403 ***
0.414 ***
0.383 ***
0.941 ***
0.962 ***
0.920 ***
0.954 ***
0.958 ***
0.949 ***
0.869 ***
0.862 ***
0.878 ***
-0.477 *** 0.023 -0.422 ***
0.000
-0.505 *** 0.026 -0.391 ***
-0.441 *** 0.023 -0.451 ***
0.019 -0.507 ***
0.000
0.023 -0.482 ***
0.019 -0.539 ***
0.023
0.035
0.028
0.026
-0.234 ***
-0.519 ***
0.043 -0.382 ***
0.000
0.021 -0.434 ***
0.020 -0.330 ***
0.104 *
0.055
0.409 ***
0.070
0.178 ***
0.051
0.197 ***
0.066 0.109 *
0.066
0.000
0.949
0.087
2336
0.000
0.367
0.099
2336
0.000
0.702
0.088
2336
0.000
0.185 0.000
0.101
2336
73
0.116
0.057
2336
73
1.023 ***
0.012
0.037
0.011
0.015
0.474 ***
0.456 ***
1.031 ***
1.015 ***
0.987 ***
1.005 ***
0.014
0.816
0.822
0.015
0.015
0.536 ***
0.529 ***
0.012
0.047
0.883
0.013
0.012
73
0.996 ***
0.018
0.000
0.018
0.018
0.533 ***
73
0.982 ***
0.990 ***
0.978 ***
-0.381 ***
73
Table 4
RESULTS FOR THE EQUATION ON INTEREST RATE ON CURRENT ACCOUNTS
This table shows the results of the equation for the interest rate on current accounts. The model is given by the following equation, which includes
interaction terms that are the product of the monetary policy indicator and a bank specific characteristic:
∆i D k , t = µ k +
2
1
j =1
j =0
åκ j ∆iD k ,t − j + å ( β j + β *j X k ,t −1)∆iM t − j + ϕ pt + δ1∆ ln ytP + δ 2∆ ln ytT + λX k ,t −1 + φ∆( ρ k ,t −1∆iM t ) +
+ (α + α X k ,t −1 )iD k ,t −1 + (γ + γ * X k ,t −1 )iM t −1 + ξ ek ,t + ψσ t + Φ k ,t + ε k ,t
*
with k=1,…, N (k=number of banks) and t=1, …,T (t= periods). Data are quarterly (1993:03-2001:03) and not seasonally adjusted. The panel is
balanced with N=73 banks. Lags have been selected in order to obtain white noise residuals. The description of the variables is reported in Table 1. The
model have been estimated using the GMM estimator suggested by Arellano and Bond (1991) which ensures efficiency and consistency provided that
the models are not subject to serial correlation of order two and that the instruments used are valid (which is tested for with the Sargan test). A bank
with “low characteristic” has the average ratio of the banks below the first quartile, a bank with "high characterisic” has the average ratio of the banks
above third quartile. For more details on the data see Appendix 2. *=significance at the 10 per cent; **=significance at the 5 per cent; ***=significance
at the 1 per cent.
(1)
Size
Dependent variable: quarterly change
of the interest rate on current accounts
Coeff.
(2)
Liquidity
S.Error Coeff.
(3)
Capitalization
(5)
Long term loans/
Total loans
S.Error Coeff.
S.Error
(4)
Dep./(Bonds+Dep.)
S.Error Coeff.
S.Error Coeff.
Deposit demand
Inflation:
Permanent Income:
Transitory Income:
0.049 *** 0.015 0.091 ***
-0.058 *** 0.006 -0.048 ***
-0.222 *** 0.012 -0.204 ***
0.012 0.058 ***
0.006 -0.058 ***
0.012 -0.223 ***
0.015
0.005
0.011
0.099 ***
-0.024 *
-0.102 ***
0.008 0.039 ***
0.013 -0.052 ***
0.012 -0.202 ***
0.009
0.004
0.010
Costs, credit risk and int.rate volatility
Bank's efficiency:
Interest rate volatility:
0.001
0.001 **
0.001
0.001
0.001
0.002 ***
0.001
0.001
0.001
0.001 ***
0.002
0.001
0.012 ***
0.005 ***
0.001
0.000
0.002 *
0.002 ***
0.001
0.001
Immediate pass-through
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.413 *** 0.013
0.000
0.400 *** 0.015
0.429 *** 0.012
0.411 ***
0.010
0.000
0.010
0.010
0.410 ***
0.008
0.742
0.009
0.009
0.418 ***
0.009
0.000
0.009
0.010
0.388 ***
0.408 ***
0.366 ***
0.008
0.000
0.007
0.010
Pass-through after a quarter
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.546 *** 0.009
0.000
0.512 *** 0.010
0.588 *** 0.008
0.006 0.540 ***
0.000
0.006 0.536 ***
0.008 0.542 ***
0.006
0.776
0.006
0.008
Long run elasticity
Average bank:
Ho: unitary long run elasticity (p-val.)
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.685 *** 0.013
0.000
0.905
0.688 *** 0.014
0.682 *** 0.013
0.007
0.000
0.444
0.006
0.009
0.675 ***
0.661 ***
0.010
0.000
0.717
0.010
0.011
Loading of the long run relationship
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.016
0.000
0.017
0.017
Bank capital channel
Miss-specification tests
MA(1), MA(2) (p-value)
Sargan test (p-value)
No of banks, no of observations
0.431 ***
0.394 ***
0.541 ***
0.551 ***
0.530 ***
0.551 ***
0.535 ***
0.507 ***
0.526 ***
0.493 ***
-0.572 *** 0.018 -0.646 ***
0.000
-0.537 *** 0.018 -0.657 ***
-0.610 *** 0.023 -0.634 ***
0.018 -0.609 ***
0.016
0.020 -0.645 ***
0.017 -0.564 ***
0.020
0.000
0.019
0.025
-0.725 ***
-0.795 ***
0.016 -0.572 ***
0.000
0.019 -0.610 ***
0.017 -0.533 ***
-0.055 *** 0.015 -0.036 ***
0.012 -0.049 ***
0.009
-0.039 ***
0.013 -0.034 ***
0.009
0.000
0.976
0.960
2336
0.785
0.094
2336
0.000
0.340
0.092
2336
0.508
0.095
2336
73
0.000
73
0.676 ***
0.007
0.049
0.007
0.009
0.663 ***
0.694 ***
0.670 ***
0.699 ***
0.009
0.000
0.205
0.010
0.009
0.544 ***
0.451 ***
0.387 ***
0.009
0.000
0.463
0.009
0.011
0.953
0.091
2336
0.685 ***
0.008
0.000
0.008
0.008
0.411 ***
0.409 ***
0.000
73
0.643 ***
0.631 ***
0.654 ***
-0.760 ***
73
0.669 ***
0.000
73
Table 5
BANK LENDING CHANNEL
This table shows the results of the equation for the interest rate on short-term lending (panel A) and current accounts (panel B) when all bank-specific
characteristics are taken simultaneously into account. The model is given by the following equation, which includes interaction terms that are the
product of the monetary policy indicator and each bank-specific characteristic:
∆iψ k ,t = µ k +
2
5
1
5
å κ j ∆iψ k ,t − j + å å ( β j + β *j X k , m,t −1)∆iM t − j + ϕ pt + δ1∆ ln ytP + δ 2∆ ln ytT + å λm X k , m,t −1 +
j =1
m =1 j = 0
+ φ∆ ( ρ k ,t −1∆iM t ) + (α +
m =1
5
å α m* X k ,m,t −1)(iψ k ,t −1 − γ iM t −1) + θ jk ,t + ξ ek ,t + ψσ t + Φ k ,t + ε k ,t
m =1
with i ψ= quarterly change of the interest rate on short-term lending or current accounts k=1,…, N (k=number of banks) and t=1, …,T (t= periods).
Bank-specific characteristics are size,liquidity, capitalization, Berlin-Mester and Berger-Udell indicators (m =5). Data are quarterly (1992:032001:03) and not seasonally adjusted. The panel is balanced with N=73 banks. Lags have been selected in order to obtain white noise residuals. The
description of the variables is reported in Table 1. The model have been estimated using the GMM estimator suggested by Arellano and Bond (1991)
which ensures efficiency and consistency provided that the models are not subject to serial correlation of order two and that the instruments used are
valid (which is tested for with the Sargan test). A bank with “low characteristic” has the average ratio of the banks below the first quartile, a bank
with "high characterisic” has the average ratio of the banks above third quartile. For more details on the data see Appendix 2. *=significance at the 10
per cent; **=significance at the 5 per cent; ***=significance at the 1 per cent.
(1)
Size
Coeff.
(2)
Liquidity
S.Error Coeff.
(3)
Capitalization
S.Error Coeff.
(5)
Long term loans/
Total loans
S.Error Coeff.
S.Error
(4)
Dep./(Bonds+Dep.)
S.Error Coeff.
(A) Dependent variable is the quarterly change of the interest rate on short-term lending
Immediate pass-through
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.452 *** 0.062
0.159
0.492 *** 0.064
0.393 *** 0.080
Pass-through after a quarter
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.879 *** 0.039
0.639
0.895 *** 0.058
0.857 *** 0.040
0.891 ***
0.868 ***
Long run elasticity
All banks:
1.000
1.000
Loading of the long run relationship
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
-0.354 *** 0.050 -0.354 ***
0.681
-0.377 *** 0.072 -0.354 ***
-0.324 *** 0.092 -0.354 ***
Miss-specification tests
MA(1), MA(2) (p-value)
Sargan test (p-value)
No of banks, no of observations
-
0.000
-
0.452 ***
0.476 ***
0.421 ***
0.879 ***
-
0.062
0.027
0.058
0.069
0.039
0.317
0.036
0.033
-
0.452 ***
0.558 ***
0.308 ***
0.879 ***
0.914 ***
0.847 ***
1.000
-
0.050 -0.354 ***
0.990
0.063 -0.318 ***
0.046 -0.399 ***
0.062
0.043
0.065
0.110
0.039
0.744
0.082
0.075
0.050
0.536
0.070
0.095
0.452 ***
0.519 ***
0.375 ***
0.062
0.016
0.050
0.084
0.883 ***
0.876 ***
0.039 0.879 ***
0.913
0.050 0.888 ***
0.047 0.873 ***
0.039
0.912
0.039
0.053
1.000
-
0.460 ***
0.437 ***
0.879 ***
-
-0.354 ***
-0.332 ***
-0.375 ***
0.062
0.702
0.059
0.077
0.452 ***
1.000
-
0.050 -0.354 ***
0.761
0.089 -0.332 ***
0.085 -0.376 ***
0.050
0.773
0.086
0.095
0.073
0.985
2336
73
(B) Dependent variable is the quarterly change of the interest rate on current accounts
Immediate pass-through
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.452 *** 0.042
0.972
0.453 *** 0.043
0.452 *** 0.050
Pass-through after a quarter
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.545 *** 0.033
0.160
0.572 *** 0.032
0.524 *** 0.043
0.546 ***
0.545 ***
Long run elasticity
Average bank:
0.700
0.700
Loading of the long run relationship
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
-0.570 *** 0.043 -0.570 ***
0.388
-0.537 *** 0.048 -0.565 ***
-0.612 *** 0.074 -0.575 ***
Miss-specification tests
MA(1), MA(2) (p-value)
Sargan test (p-value)
No of banks, no of observations
0.000
73
-
-
0.915
0.180
2336
0.452 ***
0.470 ***
0.434 ***
0.545 ***
-
0.042
0.129
0.050
0.037
0.033
0.978
0.038
0.033
-
0.452 ***
0.479 ***
0.419 ***
0.545 ***
0.566 ***
0.517 ***
0.700
-
0.043 -0.570 ***
0.820
0.050 -0.607 ***
0.047 -0.523 ***
0.042
0.529
0.054
0.074
0.033
0.481
0.055
0.045
0.043
0.481
0.019
0.025
0.452 ***
0.497 ***
0.406 ***
0.042
0.112
0.062
0.062
0.590 ***
0.516 ***
0.033 0.545 ***
0.203
0.045 0.563 ***
0.039 0.525 ***
0.033
0.224
0.041
0.034
0.700
-
0.509 ***
0.400 ***
0.545 ***
-
-0.570 ***
-0.452 ***
-0.680 ***
0.042
0.032
0.044
0.054
0.452 ***
0.700
-
0.043 -0.570 ***
0.004
0.062 -0.589 ***
0.054 -0.550 ***
0.043
0.575
0.059
0.051
Fig. 1
Banking interest rates
(quarterly data, percentage points)
19.0
3-month interbank rate
Repo rate
17.0
Interest rate on current accounts
Estimation period
1993:03-2001:03
Short term lending rate
15.0
13.0
Euro
11.0
9.0
7.0
5.0
Period before T.U.B.
1987:01-1993:02
3.0
1.0
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Fig. 2
Cross sectional and time series dispersion of interest rates
0.350
(a) Interest rate on short-term loans
0.300
0.250
0.200
0.150
0.100
0.050
0.000
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
1998
1999
2000
2001
0.350
(b) Interest rate on current accounts
0.300
0.250
0.200
0.150
0.100
0.050
0.000
1987
1988
1989
ACROSS BANKS
1990
1991
1992
OVER TIME
1993
1994
1995
1996
1997
Fig. 3
Determinants of bank’s interest rates
i L = f ( y P , y T , p, i M ,
+
?
+
+
X t −1 , i M X t −1 , ρ t −1 ∆i M , j , costs , σ , µ k )
?
+
+
+
?
+
Loan
demand
Interest
rate
channel
Bank
lending
channel
Cost of intermediation,
credit risk
and interest
rate volatility
Bank
capital
channel
Deposit
demand
i D = f ( y P , y T , p, i M ,
−
−
−
+
Industry
structure
X t −1 , i M X t −1 , ρ t −1 ∆i M , costs , σ , µ k )
?
−
−
?
+
Note: the meaning of all the symbols is reported in Table 1.
Fig. A1
Search for mean shift breaks
(monthly data, sequential minimum unit root tests)
0
Dec-87
Dec-88
Dec-89
Dec-90
Dec-91
Dec-92
Dec-93
Dec-94
Dec-95
Dec-96
Dec-97
Dec-98
Dec-99
-1
-2
-3
-4
-5
-6
-7
Interest rate on current accounts
-8
Interest rate on short-term loans
3-month interbank market rate
-9
10% critical value
2.5% critical value
-10
Note: The estimated model tests for a shift in the constant. No trend is included. Sequential statistic are
computed using the sample 1984:7-2002:12, sequentially incrementing the date of the hypothetical shift.
A fraction equal to 15 per cent of the total sample at the beginning and at the end of the sample is not
considered for the test. For more details see Banerjee, Lumsdaine and Stock (1992).
| Give an answer using only the context provided.
How are interest rates set?
NBER WORKING PAPER SERIES
HOW DO BANKS SET INTEREST RATES?
Leonardo Gambacorta
Working Paper 10295
http://www.nber.org/papers/w10295
NATIONAL BUREAU OF ECONOMIC RESEARCH
1050 Massachusetts Avenue
Cambridge, MA 02138
February 2004
This research was done during a period as a visiting scholar at the NBER. The views expressed herein are
those of the author and not necessarily those of the Banca d’Italia or the National Bureau of Economic
Research.
©2004 by Leonardo Gambacorta. All rights reserved. Short sections of text, not to exceed two paragraphs,
may be quoted without explicit permission provided that full credit, including © notice, is given to the source.
How Do Banks Set Interest Rates?
Leonardo Gambacorta
NBER Working Paper No. 10295
February 2004
JEL No. E44, E51, E52
ABSTRACT
The aim of this paper is to study cross-sectional differences in banks interest rates. It adds to the
existing literature in two ways. First, it analyzes in a systematic way both micro and macroeconomic
factors that influence the price setting behavior of banks. Second, by using banks’ prices (rather than
quantities) it provides an alternative way to disentangle loan supply from loan demand shift in the
“bank lending channel” literature. The results, derived from a sample of Italian banks, suggest that
heterogeneity in the banking rates pass-through exists only in the short run. Consistently with the
literature for Italy, interest rates on short-term lending of liquid and well-capitalized banks react less
to a monetary policy shock. Also banks with a high proportion of long-term lending tend to change
their prices less. Heterogeneity in the pass-through on the interest rate on current accounts depends
mainly on banks’ liability structure. Bank’s size is never relevant.
Leonardo Gambacorta
Banca d’Italia
Research Department
Via Nazionale, 91
00184 Rome, Italy
[email protected]
1. Introduction1
This paper studies cross-sectional differences in the price setting behavior of Italian
banks in the last decade. The main motivations of the study are two. First, heterogeneity in
the response of bank interest rates to market rates helps in understanding how monetary
policy decisions are transmitted through the economy independently of the consequences on
bank lending. The analysis of heterogeneous behavior in banks interest setting has been
largely neglected by the existing literature. The vast majority of the studies on the “bank
lending channel” analyze the response of credit aggregates to a monetary policy impulse,
while no attention is paid on the effects on prices. This seems odd because, in practice, when
banks interest rates change, real effects on consumption and investment could be produced
also if there are no changes in total lending. The scarce evidence on the effects of monetary
shocks on banks prices, mainly due to the lack of available long series of micro data on
interest rates, contrasts also with some recent works that highlight a different adjustment of
retail rates in the euro area (see, amongst others, de Bondt, Mojon and Valla, 2003).
Second, this paper wants to add to the “bank lending channel” literature by identifying
loan supply shocks via banks’ prices (rather than quantities). So far to solve the
“identification problem” it has been claimed that certain bank-specific characteristics (i.e.
size, liquidity, capitalization) influence only loan supply movements while banks’ loan
demand is independent of them. After a monetary tightening, the drop in the supply of credit
should be more important for small banks, which are financed almost exclusively with
deposits and equity (Kashyap and Stein, 1995), less liquid banks, that cannot protect their
loan portfolio against monetary tightening simply by drawing down cash and securities
(Stein, 1998; Kashyap and Stein, 2000) and poorly capitalized banks, that have less access to
markets for uninsured funding (Peek and Rosengren, 1995; Kishan and Opiela, 2000; van
den Heuvel, 2001a; 2001b).2 The intuition of an identification via prices of loan supply shift
is very simple: if loan demand is not perfectly elastic, also the effect of a monetary
1
This study was developed while the author was a visiting scholar at the NBER. The opinions expressed in
this paper are those of the author only and in no way involve the responsibility of the Bank of Italy and the
NBER.
2
All these studies on cross-sectional differences in the effectiveness of the “bank lending channel” refer to
the US. The literature on European countries is instead far from conclusive (see Altunbas et al., 2002; Ehrmann
et al., 2003). For the Italian case see Gambacorta (2003) and Gambacorta and Mistrulli (2003).
3
tightening on banks’ interest rate should be more pronounced for small, low-liquid and lowcapitalized banks .
Apart from these standard indicators other bank-specific characteristics could influence
banks’ price-setting behavior (Weth, 2002). Berlin and Mester (1999) claim that banks
which heavily depend upon non-insured funding (i.e. bonds) will adjust their deposit rates
more (and more quickly) than banks whose liabilities are less affected by market
movements. Berger and Udell (1992) sustain that banks that maintain a close tie with their
customers will change their lending rates comparatively less and slowly.
In this paper the search for heterogeneity in banks’ behavior is carried out by using a
balanced panel of 73 Italian banks that represent more than 70 per cent of the banking
system. Heterogeneity is investigated with respect to the interest rate on short-term lending
and that on current accounts. The use of microeconomic data is particularly appropriate in
this context because aggregation may significantly bias the estimation of dynamic economic
relations (Harvey, 1981). Moreover, information at the level of individual banks provides a
more precise understanding of their behavioral patterns and should be less prone to structural
changes like the formation of EMU.
The main conclusions of this paper are two. First, heterogeneity in the banking rates
pass-through exists, but it is detected only in the short run: no differences exist in the longrun elasticities of banking rates to money market rates. Second, consistently with the existing
literature for Italy, interest rates on short-term lending of liquid and well-capitalized banks
react less to a monetary policy shock. Also banks with a high proportion of long-term
lending tend to change less their prices. Heterogeneity in the pass-through on the interest rate
on current accounts depends mainly on banks’ liability structure. Bank’s size is never
relevant.
The paper is organized as follows. Section 2 describes some institutional
characteristics that help to explain the behavior of banking rates in Italy in the last two
decades. Section 3 reviews the main channels that influence banks’ interest rate settings
trying to disentangle macro from microeconomic factors. After a description of the
econometric model and the data in Section 4, Section 5 shows the empirical results.
Robustness checks are presented in Section 6. The last section summarizes the main
conclusions.
4
2. Some facts on bank interest rates in Italy
Before discussing the main channels that influence banks’ price setting, it is important
to analyze the institutional characteristics that have influenced Italian bank interest rates in
the last two decades. The scope of this section is therefore to highlight some facts that could
help in understanding differences, if any, with the results drawn by the existing literature for
the eighties and mid-nineties.
For example, there is evidence that in the eighties Italian banks were comparatively
slow in adjusting their rates (Verga, 1984; Banca d’Italia, 1986, 1988; Cottarelli and
Kourelis, 1994) but important measures of liberalization of the markets and deregulation
over the last two decades should have influenced the speed at which changes in the money
market conditions are transmitted to lending and deposit rates (Cottarelli et al. 1995;
Passacantando, 1996; Ciocca, 2000; Angelini and Cetorelli, 2002).
In fact, between the mid-1980s and the early 1990s all restrictions that characterized
the Italian banking system in the eighties were gradually removed. In particular: 1) the
lending ceiling was definitely abolished in 1985; 2) foreign exchange controls were lifted
between 1987 and 1990; 3) branching was liberalized in 1990; 4) the 1993 Banking Law
allowed banks and special credit institutions to perform all banking activities.
In particular, the 1993 Banking Law (Testo Unico Bancario, hereafter TUB) completed
the enactment of the institutional, operational and maturity despecialization of the Italian
banking system and ensured the consistency of supervisory controls and intermediaries’
range of operations within the single market framework. The business restriction imposed by
the 1936 Banking Law, which distinguished between banks that could raise short-term funds
(“aziende di credito”) and those that could not (“Istituti di credito speciale”), was
eliminated.3 To avoid criticism of structural breaks, the econometric analysis of this study
will be based on the period 1993:03-2001:03, where all the main reforms of the Italian
banking system had already taken place.
3
For more details see Banca d’Italia, Annual Report for 1993.
5
The behavior of bank interest rates in Italy reveals some stylized facts (see Figures 1
and 2). First, a remarkable fall in the average rates since the end of 1992. Second a strong
and persistent dispersion of rates among banks. These stylized facts suggest that both the
time series and the cross sections dimensions are important elements in understanding the
behavior of bank interest setting. This justifies the use of panel data techniques.
The main reason behind the fall in banking interest rates is probably the successful
monetary policy aiming at reducing the inflation rate in the country to reach the Maastricht
criteria and the third stage of EMU. As a result, the interbank rate decreased by more than 10
percentage points in the period 1993-1999. Excluding the 1995 episode of the EMS crisis, it
is only since the third quarter of 1999 that it started to move upwards until the end of 2000
when it continued a declining trend. From a statistical point of view, this behavior calls for
the investigation of a possible structural break in the nineties.4
The second stylized fact is cross-sectional dispersion among interest rates. Figure 2
shows the coefficient of variation for loan and deposit rates both over time and across banks
in the period 1987-2001.5 The temporal variation (dotted line) of the two rates show a
different behavior from the mid of the nineties when the deposit rate is more variable,
probably for a catching-up process of the rate toward a new equilibrium caused by the
convergence process. Also the cross-sectional dispersion of the deposit rate is greater than
that of the loan rate, especially after the introduction of euro.6
4
In the period 1995-98, that coincides with the convergence process towards stage three of EMU, it will be
necessary to allow for a change in the statistical properties of interest rates (see Appendix 2).
5
The coefficient of variation is given by the ratio of the standard errors to the mean. The series that refer to
the variability “over time” shows the coefficient of variation in each year of monthly figures. In contrast, the
series that capture the variability “across banks” shows the coefficient of variation of annual averages of bankspecific interest rates.
6
In the period before the 1993 Banking Law deposit interest rates were quite sticky to monetary policy
changes. Deposit interest rate rigidity in this period has been extensively analyzed also for the US. Among the
market factors that have been found to affect the responsiveness of bank deposit rates are the direction of the
change in market rates (Ausubel, 1992; Hannan and Berger, 1991), if the bank interest rate is above or below a
target rate (Hutchison, 1995; Moore, Porter and Small, 1990; Neumark and Sharpe, 1992) and market
concentration in the bank’s deposit market (Hannan and Berger, 1991). Rosen (2001) develops a model of price
settings in presence of heterogeneous customers explaining why bank deposits interest rates respond sluggishly
to some extended movements in monetary market rates but not to others. Hutchinson (1995) presents a model
of bank deposit rates that includes a demand function for customers and predicts a linear (but less than one for
one) relationship between market interest rate changes and bank interest rate changes. Green (1998) claims that
the rigidity is due to the fact that bank interest rate management is based on a two-tier pricing system; banks
offer accounts at market related interest rates and at posted rates that are changed at discrete intervals.
6
3. What does influence banks’ interest rate setting?
The literature that studies banks’ interest rate setting behavior generally assumes that
banks operate under oligopolistic market conditions.7 This means that a bank does not act as
a price-taker but sets its loan rates taking into account the demand for loans and deposits.
This section reviews the main channels that influence banks interest rates (see Figure 3).
A simple analytical framework is developed in Appendix 1.
Loan and deposit demand
The interest rate on loans depends positively on real GDP and inflation (y and p).
Better economic conditions improve the number of projects becoming profitable in terms of
expected net present value and, therefore, increase credit demand (Kashyap, Stein and
Wilcox, 1993). As stressed by Melitz and Pardue (1973) only increases in permanent income
(yP) have a positive influence on loan demand, while the effect due to the transitory part (yT)
could also be associated with a self-financing effect that reduces the proportion of bank debt
(Friedman and Kuttner, 1993).8 An increase in the money market rate (iM) raises the
opportunity cost of other forms of financing (i.e. bonds), making lending more attractive.
This mechanism also boosts loan demand and increases the interest rate on loans.
The interest rate on deposits is negatively influenced by real GDP and inflation. A
higher level of income increases the demand for deposits9 and reduces therefore the
incentive for banks to set higher deposit rates. In this case the shift of deposit demand should
be higher if the transitory component of GDP is affected (unexpected income is generally
first deposited on current accounts). On the contrary, an increase in the money market rate,
ceteris paribus, makes more attractive to invest in risk-free securities that represent an
alternative to detain deposits; the subsequent reduction in deposits demand determines an
upward pressure on the interest rate on deposits.
7
For a survey on modeling the banking firm see Santomero (1984). Among more recent works see Green
(1998) and Lim (2000).
8
Taking this into account, in Section 4 I tried to disentangle the two effects using a Beveridge and Nelson
(1981) decomposition.
9
The aim of this paper is not to answer to the question if deposits are input or output for the bank (see
Freixas and Rochet, 1997 on this debate). For simplicity here deposits are considered a service supplied by the
bank to depositors and are therefore considered an output (Hancock, 1991).
7
Operating cost, credit risk and interest rate volatility
The costs of intermediation (screening, monitoring, branching costs, etc.) have a
positive effect on the interest rate on loans and a negative effect on that of deposits
(efficiency is represented by e). The interest rate on lending also depends on the riskiness of
the credit portfolio; banks that invest in riskier project will have a higher rate of return in
order to compensate the higher percentage of bad loans that have to be written off (j).
Banking interest rates are also influenced by interest rate volatility. A high volatility in
the money market rate (σ) should increase lending and deposit rates. Following the
dealership model by Ho and Saunders (1981) and its extension by Angbazo (1997) the
interest rate on loans should be more affected by interbank interest rate volatility with
respect to that on deposits (diL/dσ>diD/dσ). This should reveal a positive correlation between
interest rate volatility and the spread.
Interest rate channel
Banking interest rates are also influenced by monetary policy changes. A monetary
tightening (easing) determines a reduction (increase) of reservable deposits and an increase
(reduction) of market interest rates. This has a “direct” and positive effect on bank interest
rates through the traditional “interest rate channel”. Nevertheless, the increase in the cost of
financing could have a different impact on banks depending on their specific characteristics.
There are two channels through which heterogeneity among banks may cause a different
impact on lending and deposit rates: the “bank lending channel” and the “bank capital
channel”. Both mechanisms are based on adverse selection problems that affect banks fundraising but from different perspectives.
Bank lending channel
According to the “bank lending channel” thesis, a monetary tightening has effect on
bank loans because the drop in reservable deposits cannot be completely offset by issuing
other forms of funding (i.e. uninsured CDs or bonds; for an opposite view see Romer and
Romer, 1990) or liquidating some assets. Kashyap and Stein (1995, 2000), Stein (1998) and
Kishan and Opiela (2000) claim that the market for bank debt is imperfect. Since nonreservable liabilities are not insured and there is an asymmetric information problem about
8
the value of banks’ assets, a “lemon’s premium” is paid to investors. According to these
authors, small, low-liquid and low-capitalized banks pay a higher premium because the
market perceives them more risky. Since these banks are more exposed to asymmetric
information problems they have less capacity to shield their credit relationships in case of a
monetary tightening and they should cut their supplied loans and raise their interest rate by
more. Moreover, these banks have less capacity to issue bonds and CDs and therefore they
could try to contain the drain of deposits by raising their rate by more. In Figure 3 three
effects are highlighted: the “average” effect due to the increase of the money market rate
(which is difficult to disentangle from the “interest rate channel”), the “direct”
heterogeneous effect due to bank-specific characteristics (Xt-1) and the “interaction effect”
between monetary policy and the bank-specific characteristic (iM Xt-1). These last two effects
can genuinely be attributed to the “bank lending channel” because bank-specific
characteristics influence only loan supply movements. Two aspects deserve to be stressed.
First, to avoid endogeneity problems bank-specific characteristics should refer to the period
before banks set their interest rates. Second, heterogeneous effects, if any, should be detected
only in the short run while there is no a priori that these effects should influence the long run
relationship between interest rates.
Apart from the standard indicators of size (logarithm of total assets), liquidity (cash
and securities over total assets) and capitalization (excess capital over total assets),10 two
other bank-specific characteristics deserve to be investigated: a) the ratio between deposits
and bonds plus deposits; b) the ratio between long-term loans and total loans.
The first indicator is in line with Berlin and Mester (1999): banks that heavily depend
upon non-deposit funding (i.e. bonds) will adjust their deposits rates by more (and more
quickly) than banks whose liabilities are less affected by market movements. The intuition of
this result is that, other things being equal, it is more likely that a bank will adjust her terms
10
It is important to note that the effect of bank capital on the “bank lending channel” cannot be easily
captured by the capital-to-asset ratio. This measure, generally used by the existing literature to analyze the
distributional effects of bank capitalization on lending, does not take into account the riskiness of a bank
portfolio. A relevant measure is instead the excess capital that is the amount of capital that banks hold in excess
of the minimum required to meet prudential regulation standards. Since minimum capital requirements are
determined by the quality of bank’s balance sheet activities, the excess capital represents a risk-adjusted
measure of bank capitalization that gives more indications on the probability of a bank default. Moreover, the
excess capital is a relevant measure of the availability of the bank to expand credit because it directly controls
for prudential regulation constraints. For more details see Gambacorta and Mistrulli (2004).
9
for passive deposits if the conditions of her own alternative form of refinancing change.
Therefore an important indicator to analyze the pass-through between market and banking
rates is the ratio between deposits and bonds plus deposits. Banks which use relatively more
bonds than deposits for financing purpose fell more under pressure because their cost
increase contemporaneously and to similar extent as market rates.
The Berger and Udell (1992) indicator represents a proxy for long-term business; those
credit institutions that maintain close ties with their non-bank customers will adjust their
lending rates comparatively less and slowly. Banks may offer implicit interest rate insurance
to risk-averse borrowers in the form of below-market rates during periods of high market
rates, for which the banks are later compensated when market rates are low. Having this in
mind, banks that have a higher proportion of long-term loans should be more inclined to split
the risk of monetary policy change with their customers and preserve credit relationships.
For example, Weth (2002) finds that in Germany those banks with large volumes of longterm business with households and firms change their prices less frequently than the others.
Bank capital channel
The “bank capital channel” is based on three hypotheses. First, there is an imperfect
market for bank equity: banks cannot easily issue new equity for the presence of agency
costs and tax disadvantages (Myers and Majluf, 1984; Cornett and Tehranian, 1994;
Calomiris and Hubbard, 1995; Stein, 1998). Second, banks are subject to interest rate risk
because their assets have typically a higher maturity with respect to liabilities (maturity
transformation). Third, regulatory capital requirements limit the supply of credit (Thakor,
1996; Bolton and Freixas, 2001; Van den Heuvel, 2001a; 2001b).
The mechanism is the following. After an increase of market interest rates, a lower
fraction of loans can be renegotiated with respect to deposits (loans are mainly long term,
while deposits are typically short term): banks suffer therefore a cost due to the maturity
mismatch that reduces profits and then capital accumulation.11 If equity is sufficiently low
and it is too costly to issue new shares, banks reduce lending (otherwise they fail to meet
11
In Figure 3, the cost per unit of asset due to the maturity transformation at time t-1 ( ρit −1 ) is multiplied by
the actual change in the money market rate ( ∆iM ). For more details see Appendix 1.
10
regulatory capital requirements) and amplify their interest rate spread. This determines
therefore an increase in the interest rates on loans and a decrease in that on deposits:12 in the
oligopolistic version of the Monti-Klein model, the maturity transformation cost has the
same effect of an increase in operating costs.
Industry structure
The literature underlines two possible impacts of concentration on pricing behavior
of banks (Berger and Hannan, 1989). A first class of models claims that more concentrated
banking industry will behave oligopolistically (structure-performance hypothesis), while
another class of models stresses that concentration is due to more efficient banks taking over
less efficient counterparts (efficient-structure hypothesis). This means that in the first case
lower competition should result in higher spreads, while in the second case a decrease in
managerial costs due to increased efficiency should have a negative impact on the spread. In
the empirical part great care will be given therefore to the treatment of bank mergers (see
Appendix 2). Nevertheless, the scope of this paper is not to extract policy implications about
this issue, for which a different analysis is needed. The introduction of bank-specific dummy
variables (µi) tries to control for this and other missing aspects.13
4. Empirical specification and data
The equations described in Figure 3 and derived analytically in Appendix 1 are
expressed in levels. Nevertheless, since interest rates are likely to be non-stationary
variables, an error correction model has been used to capture bank’s interest rate setting.14
Economic theory on oligopolistic (and perfect) competition suggests that, in the long run,
both banking rates (on lending and deposits) should be related to the level of the monetary
12
The “bank capital channel” can also be at work even if capital requirement is not currently binding. Van
den Heuvel (2001a) shows that low-capitalized banks may optimally forgo lending opportunities now in order
to lower the risk of capital inadequacy in the future. This is interesting because in reality, most banks are not
constrained at any given time.
13
In Section 6 this hypothesis will be tested introducing a specific measure of the degree of competition
that each banks faces. For a more detailed explanation on the effect of concentration on the pricing behavior of
Italian banks see Focarelli and Panetta (2003).
14
This is indeed the standard approach used for interest rate equations (Cottarelli et al. 1995; Lim, 2000;
Weth 2002). From a statistical point of view, the error correction representation is adopted because the lending
rate and the deposit rate result to be cointegrated with the money market rate.
11
rate, that reflects the marginal yield of a risk-free investment (Klein, 1971). We have:
2
(1)
1
∆i L k ,t = µ k + å κ j ∆i L k ,t − j + å ( β j + β *j X k ,t −1 ) ∆i M t − j + ϕ p t + δ 1 ∆ ln y tP + δ 2 ∆ ln y tT + λX k ,t −1 +
j =1
j =0
φ∆ ( ρ k ,t −1 ∆i M t ) + (α + α X k ,t −1 )i L k ,t −1 + (γ + γ * X k ,t −1 )i M t −1 + θ j k ,t + ξ e k ,t + ψσ t + Φ k ,t + ε k ,t
*
1
2
(2)
∆i D k ,t = µ k + å κ j ∆i D k ,t − j + å ( β j + β *j X k ,t −1 )∆i M t − j + ϕ p t + δ 1 ∆ ln y tP + δ 2 ∆ ln y tT + λX k ,t −1 +
j =1
j =0
φ∆ ( ρ k ,t −1 ∆i M t ) + (α + α X k ,t −1 )i D k ,t −1 + (γ + γ * X k ,t −1 )i M t −1 + ξ e k ,t + ψσ t + Φ k ,t + ε k ,t
*
with k=1,…, N (k=number of banks) and t=1, …,T (t= periods). Data are quarterly (1993:032001:03) and not seasonally adjusted. The panel is balanced with N=73 banks. Lags have
been selected in order to obtain white noise residuals. The description of the variables is
reported in Table 1.15
The model allows for fixed effects across banks, as indicated by the bank-specific
intercept µi. The long-run elasticity between each banking rate and the money market rate is
given by: (γ + γ * X k ,t −1 ) /(α + α * X k ,t −1 ) . Therefore to test if the pass-through between the
money market rate and the banking rate is complete it is necessary to verify that this
elasticity is equal to one. If this is the case there is a one-to-one long-run relationship
between the lending (deposit) rate and the money market rate, while the individual effect µi
influences the bank-specific mark-up (mark-down). The loading coefficient (α + α * X k ,t −1 )
must be significantly negative if the assumption of an equilibrium relationship is correct. In
fact, it represents how many percent of an exogenous variation from the steady state between
the rates is brought back towards the equilibrium in the next period.16
The degree of banks’ interest rate stickiness in the short run can be analyzed by the
impact multiplier ( β 0 + β 0* X k ,t −1 ) and the total effect after three months.17
15
For more details on data sources, variable definitions, merger treatment and trimming of the sample see
Appendix 2.
16
Testing for heterogeneity in the loading coefficient means to verify if α * is significant or not. At the same
time heterogeneity in the long-run elasticity can be proved if α *γ − αγ * is statistically different from zero.
17
In the first case heterogeneity among banks is simply tested through the significance of β 0 while in the
*
second case, since the effect is given by a convolution of the structural parameters it is possible to accept the
12
The variable Xk,t-1 represents a bank-specific characteristic that economic theory
suggests to influence only loan and deposit supply movements, without affecting loan and
deposit demands. In particular, all bank-specific indicators ( χ k ,t ) have been re-parameterized
in the following way:
N
æ
ö
ç T å χ k ,t ÷
÷ /T
X k ,t = χ k ,t − ç å k =1
ç t =1 N ÷
ç
÷
è
ø
Each indicator is therefore normalized with respect to the average across all the banks
in the respective sample, in order to obtain a variable whose sum over all observations is
zero.18 This has two implications. First, the interaction terms between interest rates and
X k , t −1 in equations (1) and (2) are zero for the average bank (this because X k ,t −1 =0). Second,
the coefficients β0, β1, α and γ are directly interpretable as average effects.
To test for the existence of a “bank capital channel” we have introduced the variable
ρ k , t −1∆iM that represents the bank-specific cost of monetary policy due to maturity
transformation. In particular ρ k , t −1 measures the loss per unit of asset a bank suffers when
the monetary policy interest rate is raised of one percent. The cost at time t is influenced by
the maturity transformation in t-1. This variable is computed according to supervisory
regulation relative to interest rate risk exposure that depends on the maturity mismatch
among assets and liabilities (see Appendix 2 for further details). To work out the real cost we
have therefore multiplied ρ k , t −1 for the realized change in interest rates. Therefore ρ k , t −1∆iM
represents the cost (gain) that a bank suffers (obtain) in each quarter. As formalized in
Appendix 1, this measure influences the level of bank interest rates. Since the model is
expressed in error correction form we have included this variable in first difference as well.
null hypothesis of absence of heterogeneity if and only if éë β 0α * + β 0* (1 + α + κ 1 ) + β1* + γ * ùû X k ,t −1 + α * β 0* X k2,t −1 is
equal to zero. The significance of this expression has been checked using the delta method (Rao, 1973).
18
The size indicator has been normalized with respect to the mean on each single period. This procedure
removes trends in size (for more details see Ehrmann et al., 2003).
13
4.1 Characteristics of the dataset
The dataset includes 73 banks that represent more than 70 per cent of total Italian
banking system in term of loans over the whole sample period. Since information on interest
rates is not available for Mutual banks, the sample is biased towards large banks. Foreign
banks and special credit institution are also excluded.
This bias toward large banks has two consequences. First, the distributional effects of
the size variable would be treated with extreme cautious because a “small” bank inside this
sample could not be considered with the same characteristic using the full population of
Italian banks.19 The size grouping in this study mainly controls for variations in scale,
technology and scope efficiencies across banks but it is not able to shed light on differences
between Mutual and other banks. Second, results for the average bank will provide more
“macroeconomic insights” than studies on the whole population (where the average bank
dimension is very small).
Table 2 gives some basic information on the dataset. Rows are organized dividing the
sample with respect to the bank-specific characteristics that are potential candidates to cause
heterogeneous shifts in loan supply in case of a monetary policy shock. On the columns, the
table reports summary statistics for the two interest rates and for each indicator.
Several clear patterns emerge. Considering size, small banks charge higher interest
rates on lending but show a lower time variation. This fits with the standard idea of a close
customer relationships between small firms and small banks that provides them with an
incentive to smooth the effect of a monetary tightening (Angelini, Di Salvo and Ferri, 1998).
Moreover, small banks are more liquid and capitalized than average and this should help
them to reduce the effect of cyclical variation on supplied credit. On the liability side, the
percentage of deposits (overnight deposits, CDs and savings accounts) is greater among
small banks, while their bonds issues are more limited than the ones of large banks.
Nevertheless, there are no significant differences that emerge in the level and volatility of the
interest rate on current accounts.
19
In particular, banks that are considered “small” in this study are labeled as “medium” in other studies for
the Italian banking system that analyze quantities (see for example, Gambacorta, 2003; Gambacorta and
Mistrulli, 2004). This is clear noting that the average assets of a “small” bank in my data (1.6 billions of euros)
over the sample period is very similar to that of the “medium” bank of the total system (1.7 billions of euros).
14
High-liquid banks are smaller than average and are more capitalized. These
characteristics should reduce the speed of the “bank lending channel” transmission through
interest rates. In particular, since deposits represent a high share of their funding they should
have a smoother transmission on passive rates.
Well-capitalized banks make relatively more short-term loans. They are in general not
listed and issue less subordinated debt to meet the capital requirement. This evidence is
consistent with the view that, ceteris paribus, capitalization is higher for those banks that
bear more adjustment costs from issuing new (regulatory) capital. Well-capitalized banks
charge a higher interest rate on lending; this probably depend upon their higher ratios of bad
loans that increase their credit risk. In other words their higher capitalization is necessary to
face a riskier portfolio. Moreover, the interest rate on deposit is lower for low-capitalized
banks indicating that agents do not perceive these deposits as riskier than those at other
banks. This has two main explanations. First, the impact of bank failures has been very small
in Italy, especially with respect to deposits.20 Second, the presence of deposit insurance that
insulates deposits of less capitalized banks from the risk of default.21
The Berlin-Mester and the Berger-Udell indicators seem to have a high power in
explaining heterogeneity in banks’ price setting behavior. Differences in the standard
deviations of the two groups are particularly sensitive, calling for a lower interest rates
variability of banks with a high percentage of deposits and long-term loans.
20
During our sample period, the share of deposits of failed banks to total deposits approached 1 per cent
only twice, namely in 1987 and 1996 (Boccuzzi, 1998).
21
Two explicit limited-coverage deposit insurance schemes (DISs) currently operate in Italy. Both are
funded ex-post; that is, member banks have a commitment to make available to the Funds the necessary
resources should a bank default. All the banks operating in the country, with the exception of mutual banks,
adhere to the main DIS, the ‘Fondo Interbancario di Tutela dei Depositi’ (FITD). Mutual banks (‘Banche di
Credito Cooperativo’) adhere to a special Fund (‘Fondo di Garanzia dei Depositanti del Credito Cooperativo’)
created for banks belonging to their category. The ‘Fondo Interbancario di Tutela dei Depositi’ (FITD), the
main DIS, is a private consortium of banks created in 1987 on a voluntary basis. In 1996, as a consequence of
the implementation of European Union Directive 94/19 on deposit guarantee schemes, the Italian Banking Law
regulating the DIS was amended, and FITD became a compulsory DIS. FITD performs its tasks under the
supervision of and in cooperation with the banking supervision authority, Banca d’Italia. The level of
protection granted to each depositor (slightly more than 103,000 euros) is one of the highest in the European
Union. FITD does not adopt any form of deposit coinsurance.
15
5. Results
The main channels that influence the interest rate on short term lending and that on
current accounts are summarized, respectively, in Tables 3 and 4. The first part of each table,
show the influence of the permanent and transitory component of real GDP and inflation.
These macro variables capture cyclical movements and serves to isolate shifts in loan and
deposit demand from monetary policy changes. The second part of the tables presents the
effects of bank’s efficiency, credit risk and interest rate volatility. The third part highlights
the effects of monetary policy. These are divided into four components: i) the immediate
pass-through; ii) the one-quarter pass-through; iii) the long-run elasticity between each
banking rate and the monetary policy indicator; iv) the loading coefficient of the
cointegrating relationship.22 The last part of the tables shows the significance of the “bank
capital channel”. Each table is divided in five columns that highlight, one at the time,
heterogeneous behavior of banks with different characteristics in the response to a monetary
shock. The existence of distributional effects is tested for all the four components of the
monetary policy pass-through. The models have been estimated using the GMM estimator
suggested by Arellano and Bond (1991) which ensures efficiency and consistency provided
that the models are not subject to serial correlation of order two and that the instruments used
are valid (which is tested for with the Sargan test).23
22
The immediate pass-trough is given by the coefficient β 0 + β 0* X k ,t −1 and heterogeneity among banks is
simply tested through the significance of β 0* . The effect for a bank with a low value of the characteristic under
0.25
evaluation is worked out through the expression β 0 + β 0* X k0.25
, t −1 , where X k , t −1 is the average for the banks below
the first quartile. Vice versa the effect for a bank with a high value of the characteristic is calculated using
X k0.75
, t −1 . The total effect after three months for the average bank is given by β 0 (1 + α1 + κ 1 ) + β1 + γ ' while
heterogeneity
among
banks
can
be
accepted
if
and
only
if
the
expression
éë β 0α * + β 0* (1 + α + κ 1 ) + β1* + γ * ùû X k ,t −1 + α * β 0* X k2,t −1 is equal to zero. The long run elasticity is given by:
(γ + γ * X k ) /(α + α * X k ) , while the loading coefficient is α1 + α1* X k ,t −1 . Standard errors have been
approximated with the “delta method” (Rao, 1973).
23
In the GMM estimation, instruments are the second lag of the dependent variable and of the bank-specific
characteristics included in each equation. Inflation, GDP growth rate and the monetary policy indicator are
considered as exogenous variables.
16
Loan and deposit demand
As predicted by theory only changes in permanent income have a positive and
significant effect on the interest rate on short term lending while the transitory component is
never significant. In fact, as discussed in Section 3, the effect of transitory changes may be
also due to a self-financing effect that reduces the proportion of bank debt. On the contrary
the interest rate on deposits is negatively influenced by real GDP. In this case the effect is
higher when a change in the transitory component occurs because it is directly channeled
through current accounts. The effect of inflation is positive on both interest rates but is
significantly higher for short-term lending.
Operating costs, credit risk and interest rate volatility
Bank’s efficiency reduces the interest rate on loans and increase that of deposits.
Nevertheless, the effect is not always significant at conventional levels, especially in the
equation for the interest rate on current accounts. These results call for further robustness
checks using a cost-to-asset ratio (see Section 6).
The relative amount of bad loans has a positive and significant effect on the interest
rate on loans. This is in line with the standard result that banks that invest in riskier project
ask for a higher rate of return to compensate credit risk.
Both banking rates are positively correlated with money market rate volatility. The
correlation is higher for the interest rate on loans with respect to that of deposits. This is
consistent with the prediction of the dealership model by Ho and Saunders (1981) and its
extension by Angbazo (1997) where an increase in interbank interest rate volatility is
associated with a higher spread.
Bank capital channel
As expected the “bank capital channel” (based on the maturity mismatch between
bank’s assets an liabilities, see Section 3) has a positive effect on the interest rate on shortterm lending and a negative effect on the interest rate on current account. The absolute
values of the coefficients are greater in the first case calling for a stronger adjustment on
credit contracts than on deposits. Since this channel can be interpreted similarly to a general
17
increase in the costs for the banks, it is worth comparing this result with that obtained for the
efficiency indicator. In both cases the effect is strongest for the interest rate on short-term
lending and this is consistent with the view that the interest rate on deposit is more sluggish.
Interest rate channel
A monetary tightening positively influences banks’ interest rate. After a one per cent
increase in the monetary policy indicator, interest rate on short term lending are immediately
raised of around 0.5 per cent and of around 0.9 per cent after a quarter. Moreover, the passthrough is complete in the long run (the null hypothesis of a unitary elasticity is accepted in
all models). The reaction of the short term lending rate is higher with respect to previous
studies on the Italian case and this calls for an increase in competition after the introduction
of the 1993 Banking Law. Cottarelli et al. (1995), analyzing the period 1986:02-1993:04,
find that the immediate pass through is of around 0.2, while the effect after three months is
0.6 per cent. Their long run elasticity is equal to 0.9 per cent but also in their model the null
hypothesis of a complete pass-through in the long run is accepted.24
The long run elasticity of the interest rate on current accounts is around 0.7 per cent.
This result is in line with the recent findings by de Bondt et al. (2003) under a similar sample
period and only a little higher with respect to the long-run elasticity in Angeloni et al. (1995)
for the period 1987:1-1993:04.25
The standard answer to the incomplete pass-through of money market changes on the
deposit rate is the existence of market power by banks. Another explanation is the presence
of compulsory reserves. To analyze this, we can refer to the theoretical elasticity in the case
24
The main differences between Cottarelli et al. (1995) and this paper are three. First, they use the Treasury
bill rate as the reference monetary interest rate. However from the early nineties this indicator became less
important as “reference rate” because the interbank market became more competitive and efficient (Gaiotti,
1992). This is indeed stated also by Cottarelli et al. (page 19). Second, they do not include macro variables
controls in their equation. Third, their dataset is based on monthly data. To allow comparability among the
results of this paper and those in Cottarelli et al. (1995) I have: 1) checked the results to different monetary
policy indicators (i.e. the interbank rate; see Section 6); 2) excluded the macro variables from equation (1) to
verify if the results were sensitive to their inclusion. In all cases the conclusion of an increase of speed in the
reaction of short-term interest rate on loans to money market rate resulted unchanged.
25
The VAR model in Angeloni et al. considers the interest rate on total deposits (sight, time deposits and
CDs), which is typically more reactive to monetary policy than that on current account because the service
component in time deposits and CDs is less important. This means that in comparing our result with Angeloni
et al. we are underestimating the potential effect of competition.
18
of perfect competition.26 This benchmark case is very instructive because it allows to analyze
what happens if banks are price takers (they take as given not only the monetary market rate
but also the interest rate on loans and that on deposits), set the quantity of loans and deposits
and obtain a zero profit (the sum of the intermediation margins equals management costs). In
this case the long-run elasticities become:
∂iL
∂i
= 1 and D = 1 − α where α is the fraction of
∂iM
∂iM
deposits invested in risk-free assets (this includes the “compulsory” reserves). Therefore in
principle, an incomplete pass-through from market rates to deposits rates is also consistent
with the fact that banks decide (or are constrained by regulation) to detain a certain fraction
of their deposits in liquid assets.
The loading coefficients are significantly negative. It is around –0.4 in the loan
equation and –0.6 in the current account equation. This means that if an exogenous shock
occurs, respectively 40 and 60 per cent of the deviation is canceled out within the first
quarter in each banking rate.
Bank lending channel
In case of a monetary shock, banks with different characteristics behave differently
only in the short run. On the contrary no heterogeneity emerges in the long run relationship
between each banking rate and the monetary policy indicator.
Considering each bank’s specific characteristic one at the time (Tables 3 and 4),
interest rates of small, liquid and well-capitalized banks react less to a monetary policy
shock. Also the Berlin-Mester and the Berger-Udell indicators have an high power in
explaining heterogeneity in banks’ price setting behavior.
Nevertheless, the robustness of these distributional effects has to be checked in a
model that takes all these five indicators together into account. In this model, in order to save
degrees of freedom, the long-run elasticity between the money market rate and the short-
26
The case of perfect competition can be easily obtained from equation (A1.8) and A1.9) in Appendix 1
considering loan and deposit demand (equations A1.3 and A1.4) infinitely elastic with respect the bank rates
(c0→∞, d0→∞). Moreover, we will consider the benchmark case were no heterogeneity emerges in the “bank
lending channel” (b1=0) and bonds can be issued at the risk free rate (b0=1). See Freixas and Rochet (1997) for
an analogous treatment.
19
term lending rate has been imposed to one; that with the interest rate on current account has
been fixed to 0.7.
Results are reported in Table 5. Interest rates on short-term lending of liquid and wellcapitalized banks react less to a monetary policy shock. Also banks with a high proportion of
long-term lending tend to change less their prices. Size is not significant.
This evidence matches with previous results on lending. Liquid banks can protect their
loan portfolio against a monetary tightening simply by drawing down cash and securities
(Gambacorta, 2003). Well-capitalized banks that are perceived as less risky by the market
are better able to raise uninsured funds in order to compensate the drop in deposits
(Gambacorta and Mistrulli, 2004). Therefore the effects on lending detected for liquid and
well-capitalized banks are mirrored by their higher capacity to insulate the clients also from
the effects on interest rates. It is interesting to note that, in contrast with the evidence for the
US (Kashyap and Stein; 1995), the interaction terms between size and monetary policy are
insignificant. The fact that the interest rate on short term lending of smaller banks is not
more sensitive to monetary policy than that of larger banks is well documented in the
literature for Italy and reflects the close customer relationship between small banks and
small firms (Angeloni et al. 1995; Conigliani et al., 1997; Angelini, Di Salvo and Ferri,
1998; Ferri and Pittaluga, 1996). This result is also consistent with Ehrmann et al. (2003)
where size does not emerge as a useful indicator for the distributional effect of monetary
policy on lending not only in Italy but also in France, Germany and Spain.
As regards the interest rate on current accounts, the Berlin-Mester indicator is the only
bank-specific characteristic that explains heterogeneity in banks price setting behavior. In
particular, banks that heavily depend upon non-deposit funding (banks with a low BM
indicator) will adjust their interest rate on current account by more (and more quickly) than
banks whose liabilities are less affected by market movements. As explained in Section 3,
the intuition of this result is that, other things being equals, it is more likely that a bank will
adjust her terms on deposits if the other conditions of her refinancing change. The liability
structure seems to influence not only the short-run adjustment but also the loading
coefficient. This implies that banks with a high BM ratio react less when there is a deviation
in the long run mark-down: banks with a higher percentage of deposits have more room in
adjusting their prices toward the optimal equilibrium. As expected, no cross sectional
20
differences emerges among banks due to size, liquidity and capitalization because current
accounts are typically insured.
6. Robustness checks
The robustness of the results has been checked in several ways. The first test was to
introduce as additional control variable a bank-specific measure of the degree of competition
that each bank faces in the market. In particular, the average value of the Herfindahl index in
the different “local markets” (corresponding to the administrative provinces of Italy) in
which the bank operates was introduced in each equation. The reason of this test is that the
fixed effect (that captures also industry structure) remains stable over the whole period while
the degree of competition could change over time due to the effect of concentration.
Therefore this test allows us also to check if the treatment of bank mergers is carried out
properly. The Herfindahl index did not show to be statistically significant and the results of
the study did not change.
The second test was to use as bank’s efficiency indicator the cost-to-total asset ratio
instead than the ratio of total loans and deposits to the number of branches. In all cases the
results remained unchanged.
The third test was to consider if different fiscal treatments over the sample period
could have changed deposit demand (from June 1996 the interest rate on current account is
subject to a fiscal deduction of 27 per cent; 12.5 per cent before). However, using the net
interest rate on current account instead than the gross rate nothing changed.
The fourth robustness check was the introduction of a dummy variables to take into
account of the spike in the change of the repo interest rate caused by the EMS crisis in the
first quarter of 1995. Also in this case results remained the same.
The fifth test was to introduce additional interaction terms combining the bank-specific
characteristic with inflation, permanent and transitory changes in real income. The reason for
this test is the possible presence of endogeneity between bank characteristics and cyclical
factors. Performing the test, however, nothing changed, and the double interactions were
almost always not significant (it turned out to be statistically not different from zero in the
case of the interaction of capitalization and permanent income).
21
The final robustness check was to introduce a dummy variable that indicates if the
bank belongs to a group (1) or not (0). Banks belonging to a group may be less influenced by
monetary changes if they can benefit of an internal liquidity management; in other words,
bank holding companies establish internal capital markets in an attempt to allocate capital
among their various subsidiaries (Houston and James, 1998; Upper and Worms, 2001). The
introduction of this dummy did not change the results of the study.
7. Conclusions
This paper investigates which factors influence price setting behavior of Italian banks.
It adds to the existing literature in two ways. First, it analyzes systematically a wide range of
micro and macroeconomic variables that have an effect on bank interest rates: permanent
and transitory changes in income, interest and credit risk, interest rate volatility, banks’
efficiency. Second, the analysis of banks’ prices (rather than quantities) provides an
alternative way to disentangle loan supply from loan demand shift in the “bank lending
channel” literature.
The search for heterogeneity in banks’ behavior is carried out by using a balanced
panel of 73 Italian banks that represent more than 70 per cent of the banking system. The use
of microeconomic data help in reducing the problems of aggregation that may significantly
bias the estimation of dynamic economic relations and it is less prone to structural changes
like the formation of EMU.
The main results of the study are the following. First, heterogeneity in the banking
rates pass-through exists, but it is detected only in the short run: no differences exist in the
long-run elasticities of banking rates to the money market rate. Second, consistently with the
existing literature for Italy, interest rates on short-term lending of liquid and well-capitalized
banks react less to a monetary policy shock. Also banks with a high proportion of long-term
lending tend to change their prices less. Heterogeneity in the pass-through on the interest rate
on current accounts depends on banks’ liability structure. Bank’s size is never relevant.
Appendix 1 - A simple theoretical model
This Appendix develops a one-period model of a risk neutral bank that operates under
oligopolistic market conditions.
The balance sheet of the representative bank is as follows:
(A1.1) L + S = D + B + K
where L stands for loans, S for securities, D for deposits, B for bonds, K for capital.
The bank holds securities as a buffer against contingencies. We assume that security
holdings are a fixed share of the outstanding deposits (α). They represent a safe asset and
fruit the risk-free interest rate.27 We have therefore:
(A1.2) S = α D
For simplicity, bank capital is exogenously given in the period and greater than
capital requirements.28
The bank faces a loan demand and a deposit demand. The first one is given by:
(A1.3)
Ld = c0 i L + c1 y + c 2 p + c3 i M (c0<0, c1>0, c2>0, c3>0)
that is negatively related to the interest rate on loans (il ) and it is positively related to real
income (y) and prices (p) and the opportunity cost of self-financing, proxied by the money
market interest rate (im).29
Alternatively S can be considered as the total amount of bank’s liquidity, where α is the coefficient of
free and compulsory reserves. In this case reserves are remunerated by the money market rate fixed by the
Central Bank. This alternative interpretation does not change the results of the model.
27
28
In the spirit of the actual BIS capital adequacy rules, capital requirements on credit risks are given by a
fixed amount (k) of loans. If bank capital perfectly meets Basle standard requirement the amount of loans
would be L=K/k. We rule out this possibility because banks typically hold a buffer as a cushion against
contingencies (Wall and Peterson, 1987; Barrios and Blanco, 2001). Excess capital allows them to face capital
adjustment costs and to convey positive information on their economic value (Leland and Pile, 1977; Myers
and Majluf, 1984). Another explanation is that banks face a private cost of bankruptcy, which reduces their
expected future income (Dewatripont and Tirole, 1994). Van den Heuvel (2001a) argues that even if capital
requirement is not currently binding, a low capitalized bank may optimally forego profitable lending
opportunities now, in order to lower the risk of future capital inadequacy. A final explanation for the existence
of excess capital is given by market discipline; well-capitalized banks obtain a lower cost of uninsured funding,
such as bonds or CDs, because they are perceived less risky by the market (Gambacorta and Mistrulli, 2004).
29
As far as the GDP is concerned, there is no clear consensus about how economic activity affects credit
demand. Some empirical works underline a positive relation because better economic conditions would
23
The deposit demand is standard. It depends positively on the interest rate on deposits,
the level of real income (the scale variable) and the price level and negatively on the interest
rate on securities that represent an alternative to the investment to deposits.
(A1.4)
D d = d 0id + d1 y + d 2 p + d 3im
(d0>0, d1>0, d2>0, d3<0)
Because banks are risky and bonds are not insured, bond interest rate incorporates a
risk premium that we assume depends on specific banks’ characteristics. The latter are
balance sheet information or institutional characteristics exogenously given at the end of
previous period.
(A1.5)
ib ( im , xt −1 ) = b0im + b1im xt −1 + b2 xt −1
(b0>1)
In other words, this assumption implies that the distributional effects via the bank
lending channel depends on some characteristics that allow the bank to substitute insured,
typically deposits, with uninsured banks’ debt, like bonds or CDs (Romer and Romer, 1990).
For example, theory predicts that big, liquid and well-capitalized banks should be perceived
less risky by the market and obtain a lower cost on their uninsured funding (b2<0). Moreover
they could react less to monetary change (b1<0)
The effects of the so-called “bank capital channel” are captured by the following
equation:
(A1.6)
C MT = ρt −1∆im ( L + S )
(ρ >0)
where C MT represents the total cost suffered by the bank in case of a change in monetary
policy due to the maturity transformation. Since loans have typically a longer maturity than
improve the number of project becoming profitable in terms of expected net present value and, therefore,
increase credit demand (Kashyap, Stein and Wilcox, 1993). This is also the hypothesis used in Bernanke and
Blinder (1988). On the contrary, other works stress the fact that if expected income and profits increase, the
private sector has more internal source of financing and this could reduce the proportion of bank debt
(Friedman and Kuttner, 1993). A compromise position is taken by Melitz and Pardue (1973): only increases in
permanent income have a positive influence on loan demand, while the effect due to the transitory part could
also be associated with a self-financing effect in line with Friedman and Kuttner. Taking this into account, in
the econometric part (see Section 4) I will try to disentangle the two effects using a Beveridge and Nelson
(1981). For simplicity in the model I assume that the first effect dominates and that a higher income determines
an increase in credit demand (c2>0). This is indeed consistent with the evidence provided by Ehrmann et al.
(2001) for the four main countries of the euro area.
24
bank fund-raising, the variable ρ represents the cost (gain) per unit of asset that the bank
incurs in case of a one per cent increase (decrease) in the monetary policy interest rate.
The cost of intermediation is given by:
(A1.7) C IN = g1 L + g 2 D
(g1>0, g2>0)
where the component g1L can be interpreted as screening and monitoring cost while g2D as
the cost of the branching.30
Loans are risky and, in each period, a percentage j of them is written off from the
balance sheet, therefore reducing bank’s profitability.
The representative bank maximizes her profits subject to the balance-sheet constraint.
The bank optimally sets the interest rates on loans and deposits (iL, iD), while she takes the
money market interest rate (iM) as given (it is fixed by the Central Bank).
Max π = (iL − j ) L + im S − iD D − iB B − C MT − C IN
il ,id
s.t.
L+Q = D+ B+ K
Solving the maximization problem, the optimal levels of the two interest rates are:
(A1.8) iL = Ψ 0 + Ψ1 p + (Ψ 2 + Ψ 3 xt −1 )im + Ψ 4 y P + Ψ 5 ρt −1∆im + Ψ 6 j + Ψ 7 xt −1
(A1.9) id = Φ 0 + Φ1 p + (Φ 2 + Φ 3 xt −1 )im + Φ 4 y P + Φ 5 ρt −1∆im + Φ 6 xt −1
where:
g1
c
b
c
c
b
1
> 0 ; Ψ1 = 2 > 0 ; Ψ 2 = 0 + 3 > 0 ; Ψ 3 = 1 ; Ψ 4 = 1 > 0 ; Ψ 5 = ;
2
−2c0
2 −2c0
−2c0
2
2
b (1 − α ) −d 3 α
g
d
b
1
Φ0 = − 2 < 0 ;
Ψ7 = 2
Φ2 = 0
+
+ >0;
Φ1 = − 2 < 0 ;
Ψ6 = ;
2
2d 0 2
2
2d 0
2
2
d
b (1 − α )
α
b (1 − α )
Φ3 = − 1
; Φ 4 = − 1 < 0 ; Φ5 = − < 0 ; Φ6 = 2
.
2d 0
2
2d 0
2
Ψ0 =
30
The additive linear form of the management cost simplifies the algebra. The introduction of a quadratic
cost function would not have changed the result of the analysis. An interesting consequence of the additive
form of the management cost is that bank’s decision problem is separable: the optimal interest rate on deposits
is independent of the characteristic of the loan market while the optimal interest rate on loans is independent of
the characteristics of the deposit market. For a discussion see Dermine (1991).
25
Equation (A1.8) states that a monetary tightening determines an increase in the interest
rate on loans (Ψ2>0): the total effect could be divided into two parts: the “bank lending
channel” (b0/2>0) and the “opportunity cost” effect (-c3/2c0>0) The effect of a monetary
squeeze is smaller if the bank-specific characteristic reduces the impact of monetary policy
on the cost of funding (b1<0 and Ψ3<0). In this case banks have a greater capacity to
compensate the deposit drop by issuing uninsured funds at a lower price. Loan interest rate
reacts positively to an output expansion (Ψ4>0) and to a raise in prices (Ψ1>0). The effect of
the so-called “bank capital channel” is also positive ( Ψ 5 > 0 ); due to the longer maturity of
bank assets with respect to liabilities (ρ>0), in case of a monetary tightening ( ∆im >0) the
bank suffers a cost and a subsequent reduction in profit; given the capital constraint, this
effect determines an increase in loan interest rates (the mirror effect is a decrease in lending).
The equation (A1.9) for deposit interest rate is slightly different. Also in this case the
impact of a monetary tightening is positive (Φ2>0) but it can now be split in three parts: the
“bank lending channel” (b0(1-α)/2>0), the “opportunity cost” (-d3/2d0>0) and the “liquidity
buffer”(α/2>0) effects. The intuition of this result is that a monetary squeeze automatically
increase the cost of borrowing of bank uninsured fund and the return on securities (the
alternative investment for depositors); therefore the first two effects push the bank to
increase the interest rate on deposits to raise more insured funds. The percentage of deposits
invested in securities (α) act, on the one hand, as a simple “reserve coefficient” that reduces
the effectiveness of the “bank lending channel” while, on the other, it increases the revenue
on liquid portfolio and the market power of the bank to offset the interest rate on deposits.
The distributional effects of monetary policy are equal to the ones described above for the
interest rate on loans. The effects on the cost of deposits are smaller for banks with certain
characteristics only if b1<0 and Ψ3<0. Deposit interest rate reacts negatively to an output
expansion (Φ4<0) and to an increase in prices (Φ1<0). An economic expansion pushes the
deposits demand to the left and causes a decrease in cost of deposits (remember that deposit
demand is upward sloping with respect to id). The effect should be greater for increases in
transitory income. Also the effect of the “bank capital channel” are negative (Φ5<0); as we
have seen, in case of a monetary tightening (ρ ∆im >0) the bank suffers a cost and a reduction
in profit; this induces the bank to increase her interest rate margin, reducing the interest rates
on deposits.
26
Appendix 2 – Technical details on the data
The dataset has been constructed using three sources. Interest rates are taken from the
10-day report survey conducted by the Bank of Italy. Bank’s balance sheet information
comes from the Banking Supervision Register at the Bank of Italy. Data on macroeconomic
variables are taken from the International Financial Statistics.
Data on interest rates refer to transactions in euros (Italian lira before 1999). The
deposit interest rate is the weighted average rate paid by the single banks on current
accounts, which are highly homogenous deposits products.31 The rate on domestic shortterm lending for the single bank is the weighted average of all lending positions. From this
computation, overdraft fees are excluded. The choice of the short-term rate as a measure of
the bank interest lending pass-through is due to several reasons. First, short-term lending
excludes subsidized credit. Second, short-term loans typically are not collateralised and this
allows insulating the “bank lending” channel from the “balance sheet” channel. Broadly
speaking, the pass-through from market interest rates to the interest rate on loans does not
depend upon market price variations that influence the value of collateral. Nearly half of
bank’s business is done at this rate.
Both interest rates are posted rates that are changed at discrete intervals (often less
frequently than weekly, see Green, 1998). In our case, the quarterly frequency of the data is
sufficient enough to capture all relevant changes due to a monetary policy shock. Both rates
are gross of fiscal deduction.
The interest rate taken as monetary policy indicator is that on repurchase agreements
between the Bank of Italy and credit institutions in the period 1993-1998, and the interest
rates on main refinancing operation of the ECB for the period 1999-2001.32
31
Current accounts are the most common type of deposit (at the end of 2001 they represented around 70 per
cent of total bank deposits and passive repos). Current accounts allow unlimited checking for depositor that can
close the account without notice. The bank, in turn, can change the remuneration of the account at any point in
time. Therefore differences in deposit rates are not influenced by heterogeneity in maturity (see Focarelli and
Panetta, 2003).
32
As pointed out by Buttiglione, Del Giovane and Gaiotti (1997), in the period under investigation the repo
rate mostly affected the short-term end of the yield curve and, as it represented the cost of banks’ refinancing, it
represented the value to which market rates and bank rates eventually tended to converge. The interest rate on
main refinancing operation of the ECB does not present any particular break with the repo rate.
27
The cost a bank suffers from her maturity transformation function is due to the
different sensitivity of her assets and liabilities to interest rates. Using a maturity ladder, we
have:
å(χ ⋅ A −ζ P )
*100
ρ =
åA
j
j
j
j
j
i
j
j
where Aj (Pj) is the amount of assets (liabilities) of j months-to-maturity and χj (ζj) measures
the increase in interest on assets (liabilities) of class j due to a one-per-cent increase in the
monetary policy interest rate (∆im=0.01). In other words, if
å ( χ ⋅ A − ζ P ) >0, ρ
j
j
j
j
i
j
represents the cost per unit of asset bank i suffers in case the monetary policy interest rate is
raised of one percentage point. We obtain χi and ζi directly from supervisory regulation on
interest rates risk exposure. In particular, the regulation assumes, for any given class j of
months-to-maturity: 1) the same sensitivity parameter (χj =ζj) and 2) a non-parallel shift of
the yield curve (∆im=0.01 for the first maturity class and then decreasing for longer maturity
classes). Then, for each bank, after having classified assets and liabilities according to their
months-to-maturity class, we have computed the bank specific variable ρi . This variable has
been then multiplied by the change of the monetary policy indicator (∆im) to obtain the
realized loss (or gain) per unit of asset in each quarter.
In assembling our sample, the so-called special credit institutions (long-term credit
banks) have been excluded since they were subject to different supervisory regulations
regarding the maturity range of their assets and liabilities. Nevertheless, special long-term
credit sections of commercial banks have been considered part of the banks to which they
belonged.
Particular attention has been paid to the treatment of mergers. In practice, it has been
assumed that these have been taken place at the beginning of the sample period, summing
the balance-sheet items of the merging parties. For example, if bank A has been
incorporated by bank B at time t, bank B has been reconstructed backward as the sum of the
28
merging banks before the merger. Bank interest rates have been reconstructed backwards
using as weights short-term loans and current accounts of the merging parties.33
Only banks reporting detailed lending and deposit rates over the whole sample period
were considered. I refrain from adopting short time series to ensure sufficient asymptotic in
the context of the error correction estimation. Bank observations that were missing or
misreported or that constituted clear outliers were excluded from the sample.
Bad loans are defined as loans for which legal procedures aimed at their repayment
have been started.
The permanent component of GDP has been computed using the Beveridge and
Nelson (1981) decomposition. An ARIMA model (1,1,1) was applied to the logarithm of the
series. Computations have been carried out using the algorithm described in Newbold
(1990). Robustness of the results have been checked by means of a statistical analysis of the
residuals.
The possible presence of structural breaks in interest rates series have been
investigated by means of the procedure developed by Banerjee, Lumsdaine and Stock
(1992). Figure A1 shows sequential test for changes in the mean of each interest rate series.
The hypothesis of this procedure is that, if there is a break, its date is not known a priori but
rather is gleaned from the data. The results clearly show that unit-root/no-break null can be
rejected at the 2.5 per cent critical value level against the stationarity/mean-shift alternative
for the period 1995:03-1998:03. In equation (1) and (2) a convergence dummy, that takes the
value of 1 in this period and 0 elsewhere, has been introduced.
33
The same methodology has been used, among others by Peek and Rosengreen (1995), Kishan and Opiela
(2000) and Ehrmann et al. (2001).
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Table 1
VARIABLES DESCRIPTION
Variables
Dependent variables
Fixed effects
Symbols
iLt
Interest rate on domestic short term loans
iDt
Interest rate on current account deposits
µi
imt
Macro variables
Description
y tP , y Tt
pt
Bank-specific dummy variable
Monetary policy indicator
Permanent and transitory components of real GDP computed using the
Beveridge and Nelson (1981) decomposition
Inflation rate
Size: log of total assets (Kashyap and Stein, 1995; Ehrmann et al. 2003)
Liquidity: cash and securities over total assets (Stein, 1998; Kashyap and
Stein, 2000)
Excess capital: difference between regulatory capital and capital
requirements (Peek and Rosengren, 1995; Kishan and Opiela, 2000;
Gambacorta and Mistrulli, 2004)
Deposit strength: ratio between deposits and bonds plus deposits (Berlin
and Mester,1999; Weth, 2002)
Credit relationship: ratio between long term loans and total loans (Berger
and Udell, 1992)
Bank-specific
characteristics that
influence the “bank
lending channel”
X it −1
Measure for the “bank
capital channel”
ρit −1
Risk-measure
jit
Efficiency ratio
eit
Interest rate volatility
σt
Cost per unit of asset that the bank incurs in case of a one per cent
increase in MP
Ratio between bad loans and total loans. This variable captures the
riskiness of lending operations and should be offset by a higher expected
yield of loans.
Management efficiency: ratio of total loans and deposits to the number
of branches.
Interest rate volatility: coefficient of variation of iM .
Control variables
Φ it
Convergence dummy: step dummy that takes the value of 1 in the period
1995:03-1998:03 and 0 elsewhere.
Seasonal dummies.
Note: For more information on the definition of the variables see Appendix 2.
18
18
18
18
Big banks
Small banks
Liquid banks
(2) Low liquid banks
18
18
18
18
18
18
Well capitalized banks
Low capitalized banks
Banks with high BM ratio
Banks with low BM ratio
(3)
(4)
Banks with high BU ratio
(5) Banks with low BU ratio
(1)
73
Number
of banks
Total sample
Bank-characteristics (*)
8.51
10.97
11.78
7.77
9.71
9.42
9.51
9.33
9.28
10.02
9.51
Mean
2.59
2.12
1.49
2.24
2.73
2.81
2.72
2.73
2.81
2.73
2.72
St. dev.
3.69
4.00
4.88
3.69
3.69
4.75
3.69
4.42
3.69
5.03
3.69
Min
15.06
16.12
16.12
15.06
16.12
15.93
15.94
14.86
15.06
16.12
16.12
Max
Interest rate on short term lending
2.80
4.68
5.15
2.41
3.68
3.53
3.57
3.61
3.57
3.55
3.58
Mean
1.67
1.44
0.96
1.45
1.80
1.79
1.80
1.71
1.74
1.79
1.79
St. dev.
0.65
0.53
0.74
0.52
0.52
0.74
0.65
0.73
0.73
0.52
0.52
Min
7.36
7.43
8.21
7.35
7.18
8.21
8.21
7.35
7.35
8.21
8.21
Max
Interest rate on current accounts
definition of the variables see Appendix 2. The sources of the dataset are Bank of Italy supervisory returns and 10-days reports.
21.92
8.51
6.58
27.00
9.66
24.28
4.67
43.75
51.15
1.55
16.20
Size
(1)
19.98
28.26
29.69
18.56
26.15
20.82
33.07
14.91
19.01
25.11
24.00
Liq.
(2)
3.80
3.95
4.46
3.42
6.86
1.49
4.27
3.13
2.56
4.81
3.91
Cap.
(3)
71.84
93.13
98.53
66.10
85.49
78.40
86.27
72.43
77.60
84.40
82.40
BM
(4)
53.29
22.46
28.72
45.30
37.22
38.46
36.15
43.66
38.98
41.72
37.66
BU
(5)
average ratio below the third quartile. Since the characteristics of each bank could change through time, percentiles have been worked out on mean values. For more details on the
long-term loans and total loans. A bank with a "high" characteristic has the average ratio above the first quartile of the distribution. (*) A bank with a "low"characteristic has the
capital requirements. (4) The Berlin and Mester indicator (BM) is the ratio between deposits and deposits plus bonds. (5) The Berger and Udell indicator (BU) is the ratio between
government securities over total assets. (3) The capital ratio is given by excess capital divided by total assets. Excess capital is the difference between regulatory capital and total
interest rate are annualized and given in percentages. (1) The size indicator is given by total asset (billions of euros). (2) The liquidity indicator is represented by the sum of cash and
Ex special credit institutions, foreign banks and "banche di credito cooperativo" are excluded. The sample represents more than 70 per cent of total system in terms of lending. All
SUMMARY STATISTICS
(1993:03-2001:03)
Table 2
Table 3
RESULTS FOR THE EQUATION ON THE INTEREST RATE ON SHORT-TERM LENDING
This table shows the results of the equation for the interest rate on short term lending. The model is given by the following equation, which includes
interaction terms that are the product of the monetary policy indicator and a bank specific characteristic:
∆ iL k ,t = µ k +
2
1
j =1
j =0
å κ j ∆iL k ,t − j + å ( β j + β *j X k ,t −1 )∆iM t − j + ϕ pt + δ1∆ ln ytP + δ 2∆ ln ytT + λX k ,t −1 + φ∆ ( ρ k ,t −1∆iM t ) +
+ (α + α X k ,t −1 )iL k ,t −1 + (γ + γ * X k ,t −1 )iM t −1 + θ jk ,t + ξ ek ,t + ψσ t + Φ k ,t + ε k ,t
*
with k=1,…, N (k=number of banks) and t=1, …,T (t= periods). Data are quarterly (1993:03-2001:03) and not seasonally adjusted. The panel is
balanced with N=73 banks. Lags have been selected in order to obtain white noise residuals. The description of the variables is reported in Table 1.
The model have been estimated using the GMM estimator suggested by Arellano and Bond (1991) which ensures efficiency and consistency
provided that the models are not subject to serial correlation of order two and that the instruments used are valid (which is tested for with the Sargan
test). A bank with “low characteristic” has the average ratio of the banks below the first quartile, a bank with "high characterisic” has the average
ratio of the banks above third quartile. For more details on the data see Appendix 2. *=significance at the 10 per cent; **=significance at the 5 per
cent; ***=significance at the 1 per cent.
Dependent variable: quarterly change
of the interest rate on short-term
lending
(1)
Size
Coeff.
(2)
Liquidity
(5)
Long term loans/
Total loans
S.Error Coeff.
S.Error
(4)
Dep./(Bonds+Dep.)
S.Error Coeff.
S.Error Coeff.
0.017
0.012
0.025
0.145 ***
0.032 **
0.012
0.015
0.013
0.026
0.149 ***
0.025 **
0.012
0.018 0.187 ***
0.012 0.043 ***
0.024 0.026
0.015
0.010
0.020
Costs, credit risk and int.rate volatility
Bank's efficiency:
-0.004 ** 0.002 -0.001
Bad loans:
0.020 *** 0.002 0.016 ***
Interest rate volatility:
0.011 *** 0.001 0.012 ***
0.002 -0.006 **
0.002 0.017 ***
0.001 0.010 ***
0.002
0.001
0.001
-0.001
0.020 ***
0.014 ***
0.001 -0.001
0.002 0.019 ***
0.001 0.012 ***
0.001
0.002
0.001
Immediate pass-through
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.569 *** 0.027
0.003
0.556 *** 0.028
0.586 *** 0.026
0.031
0.018
0.027
0.036
0.023
0.418
0.022
0.026
0.465 ***
0.030 0.497 ***
0.023
0.028 0.529 ***
0.032 0.463 ***
0.034
0.000
0.033
0.035
Pass-through after a quarter
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.938 *** 0.013
0.000
0.913 *** 0.015
0.971 *** 0.014
0.016 0.878 ***
0.159
0.017 0.889 ***
0.016 0.863 ***
0.013
0.000
0.014
0.012
Long run elasticity
Average bank:
Ho: unitary long run elasticity (p-val.)
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
1.017 *** 0.014
0.056
0.509
0.996 *** 0.014
1.049 *** 0.016
0.015 1.012 ***
0.235
0.924
0.026 0.992 ***
0.012 1.040 ***
0.018
0.489
0.644
0.016
0.023
Loading of the long run relationship
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.017
0.000
0.017
0.020
Bank capital channel
Loan demand
Inflation:
Permanent Income:
Transitory Income:
Miss-specification tests
MA(1), MA(2) (p-value)
Sargan test (p-value)
No of banks, no of observations
S.Error Coeff.
(3)
Capitalization
0.159 *** 0.019
0.033 ** 0.015
0.012
0.031
0.145 ***
0.030 ***
0.013
0.403 ***
0.414 ***
0.383 ***
0.941 ***
0.962 ***
0.920 ***
0.954 ***
0.958 ***
0.949 ***
0.869 ***
0.862 ***
0.878 ***
-0.477 *** 0.023 -0.422 ***
0.000
-0.505 *** 0.026 -0.391 ***
-0.441 *** 0.023 -0.451 ***
0.019 -0.507 ***
0.000
0.023 -0.482 ***
0.019 -0.539 ***
0.023
0.035
0.028
0.026
-0.234 ***
-0.519 ***
0.043 -0.382 ***
0.000
0.021 -0.434 ***
0.020 -0.330 ***
0.104 *
0.055
0.409 ***
0.070
0.178 ***
0.051
0.197 ***
0.066 0.109 *
0.066
0.000
0.949
0.087
2336
0.000
0.367
0.099
2336
0.000
0.702
0.088
2336
0.000
0.185 0.000
0.101
2336
73
0.116
0.057
2336
73
1.023 ***
0.012
0.037
0.011
0.015
0.474 ***
0.456 ***
1.031 ***
1.015 ***
0.987 ***
1.005 ***
0.014
0.816
0.822
0.015
0.015
0.536 ***
0.529 ***
0.012
0.047
0.883
0.013
0.012
73
0.996 ***
0.018
0.000
0.018
0.018
0.533 ***
73
0.982 ***
0.990 ***
0.978 ***
-0.381 ***
73
Table 4
RESULTS FOR THE EQUATION ON INTEREST RATE ON CURRENT ACCOUNTS
This table shows the results of the equation for the interest rate on current accounts. The model is given by the following equation, which includes
interaction terms that are the product of the monetary policy indicator and a bank specific characteristic:
∆i D k , t = µ k +
2
1
j =1
j =0
åκ j ∆iD k ,t − j + å ( β j + β *j X k ,t −1)∆iM t − j + ϕ pt + δ1∆ ln ytP + δ 2∆ ln ytT + λX k ,t −1 + φ∆( ρ k ,t −1∆iM t ) +
+ (α + α X k ,t −1 )iD k ,t −1 + (γ + γ * X k ,t −1 )iM t −1 + ξ ek ,t + ψσ t + Φ k ,t + ε k ,t
*
with k=1,…, N (k=number of banks) and t=1, …,T (t= periods). Data are quarterly (1993:03-2001:03) and not seasonally adjusted. The panel is
balanced with N=73 banks. Lags have been selected in order to obtain white noise residuals. The description of the variables is reported in Table 1. The
model have been estimated using the GMM estimator suggested by Arellano and Bond (1991) which ensures efficiency and consistency provided that
the models are not subject to serial correlation of order two and that the instruments used are valid (which is tested for with the Sargan test). A bank
with “low characteristic” has the average ratio of the banks below the first quartile, a bank with "high characterisic” has the average ratio of the banks
above third quartile. For more details on the data see Appendix 2. *=significance at the 10 per cent; **=significance at the 5 per cent; ***=significance
at the 1 per cent.
(1)
Size
Dependent variable: quarterly change
of the interest rate on current accounts
Coeff.
(2)
Liquidity
S.Error Coeff.
(3)
Capitalization
(5)
Long term loans/
Total loans
S.Error Coeff.
S.Error
(4)
Dep./(Bonds+Dep.)
S.Error Coeff.
S.Error Coeff.
Deposit demand
Inflation:
Permanent Income:
Transitory Income:
0.049 *** 0.015 0.091 ***
-0.058 *** 0.006 -0.048 ***
-0.222 *** 0.012 -0.204 ***
0.012 0.058 ***
0.006 -0.058 ***
0.012 -0.223 ***
0.015
0.005
0.011
0.099 ***
-0.024 *
-0.102 ***
0.008 0.039 ***
0.013 -0.052 ***
0.012 -0.202 ***
0.009
0.004
0.010
Costs, credit risk and int.rate volatility
Bank's efficiency:
Interest rate volatility:
0.001
0.001 **
0.001
0.001
0.001
0.002 ***
0.001
0.001
0.001
0.001 ***
0.002
0.001
0.012 ***
0.005 ***
0.001
0.000
0.002 *
0.002 ***
0.001
0.001
Immediate pass-through
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.413 *** 0.013
0.000
0.400 *** 0.015
0.429 *** 0.012
0.411 ***
0.010
0.000
0.010
0.010
0.410 ***
0.008
0.742
0.009
0.009
0.418 ***
0.009
0.000
0.009
0.010
0.388 ***
0.408 ***
0.366 ***
0.008
0.000
0.007
0.010
Pass-through after a quarter
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.546 *** 0.009
0.000
0.512 *** 0.010
0.588 *** 0.008
0.006 0.540 ***
0.000
0.006 0.536 ***
0.008 0.542 ***
0.006
0.776
0.006
0.008
Long run elasticity
Average bank:
Ho: unitary long run elasticity (p-val.)
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.685 *** 0.013
0.000
0.905
0.688 *** 0.014
0.682 *** 0.013
0.007
0.000
0.444
0.006
0.009
0.675 ***
0.661 ***
0.010
0.000
0.717
0.010
0.011
Loading of the long run relationship
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.016
0.000
0.017
0.017
Bank capital channel
Miss-specification tests
MA(1), MA(2) (p-value)
Sargan test (p-value)
No of banks, no of observations
0.431 ***
0.394 ***
0.541 ***
0.551 ***
0.530 ***
0.551 ***
0.535 ***
0.507 ***
0.526 ***
0.493 ***
-0.572 *** 0.018 -0.646 ***
0.000
-0.537 *** 0.018 -0.657 ***
-0.610 *** 0.023 -0.634 ***
0.018 -0.609 ***
0.016
0.020 -0.645 ***
0.017 -0.564 ***
0.020
0.000
0.019
0.025
-0.725 ***
-0.795 ***
0.016 -0.572 ***
0.000
0.019 -0.610 ***
0.017 -0.533 ***
-0.055 *** 0.015 -0.036 ***
0.012 -0.049 ***
0.009
-0.039 ***
0.013 -0.034 ***
0.009
0.000
0.976
0.960
2336
0.785
0.094
2336
0.000
0.340
0.092
2336
0.508
0.095
2336
73
0.000
73
0.676 ***
0.007
0.049
0.007
0.009
0.663 ***
0.694 ***
0.670 ***
0.699 ***
0.009
0.000
0.205
0.010
0.009
0.544 ***
0.451 ***
0.387 ***
0.009
0.000
0.463
0.009
0.011
0.953
0.091
2336
0.685 ***
0.008
0.000
0.008
0.008
0.411 ***
0.409 ***
0.000
73
0.643 ***
0.631 ***
0.654 ***
-0.760 ***
73
0.669 ***
0.000
73
Table 5
BANK LENDING CHANNEL
This table shows the results of the equation for the interest rate on short-term lending (panel A) and current accounts (panel B) when all bank-specific
characteristics are taken simultaneously into account. The model is given by the following equation, which includes interaction terms that are the
product of the monetary policy indicator and each bank-specific characteristic:
∆iψ k ,t = µ k +
2
5
1
5
å κ j ∆iψ k ,t − j + å å ( β j + β *j X k , m,t −1)∆iM t − j + ϕ pt + δ1∆ ln ytP + δ 2∆ ln ytT + å λm X k , m,t −1 +
j =1
m =1 j = 0
+ φ∆ ( ρ k ,t −1∆iM t ) + (α +
m =1
5
å α m* X k ,m,t −1)(iψ k ,t −1 − γ iM t −1) + θ jk ,t + ξ ek ,t + ψσ t + Φ k ,t + ε k ,t
m =1
with i ψ= quarterly change of the interest rate on short-term lending or current accounts k=1,…, N (k=number of banks) and t=1, …,T (t= periods).
Bank-specific characteristics are size,liquidity, capitalization, Berlin-Mester and Berger-Udell indicators (m =5). Data are quarterly (1992:032001:03) and not seasonally adjusted. The panel is balanced with N=73 banks. Lags have been selected in order to obtain white noise residuals. The
description of the variables is reported in Table 1. The model have been estimated using the GMM estimator suggested by Arellano and Bond (1991)
which ensures efficiency and consistency provided that the models are not subject to serial correlation of order two and that the instruments used are
valid (which is tested for with the Sargan test). A bank with “low characteristic” has the average ratio of the banks below the first quartile, a bank
with "high characterisic” has the average ratio of the banks above third quartile. For more details on the data see Appendix 2. *=significance at the 10
per cent; **=significance at the 5 per cent; ***=significance at the 1 per cent.
(1)
Size
Coeff.
(2)
Liquidity
S.Error Coeff.
(3)
Capitalization
S.Error Coeff.
(5)
Long term loans/
Total loans
S.Error Coeff.
S.Error
(4)
Dep./(Bonds+Dep.)
S.Error Coeff.
(A) Dependent variable is the quarterly change of the interest rate on short-term lending
Immediate pass-through
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.452 *** 0.062
0.159
0.492 *** 0.064
0.393 *** 0.080
Pass-through after a quarter
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.879 *** 0.039
0.639
0.895 *** 0.058
0.857 *** 0.040
0.891 ***
0.868 ***
Long run elasticity
All banks:
1.000
1.000
Loading of the long run relationship
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
-0.354 *** 0.050 -0.354 ***
0.681
-0.377 *** 0.072 -0.354 ***
-0.324 *** 0.092 -0.354 ***
Miss-specification tests
MA(1), MA(2) (p-value)
Sargan test (p-value)
No of banks, no of observations
-
0.000
-
0.452 ***
0.476 ***
0.421 ***
0.879 ***
-
0.062
0.027
0.058
0.069
0.039
0.317
0.036
0.033
-
0.452 ***
0.558 ***
0.308 ***
0.879 ***
0.914 ***
0.847 ***
1.000
-
0.050 -0.354 ***
0.990
0.063 -0.318 ***
0.046 -0.399 ***
0.062
0.043
0.065
0.110
0.039
0.744
0.082
0.075
0.050
0.536
0.070
0.095
0.452 ***
0.519 ***
0.375 ***
0.062
0.016
0.050
0.084
0.883 ***
0.876 ***
0.039 0.879 ***
0.913
0.050 0.888 ***
0.047 0.873 ***
0.039
0.912
0.039
0.053
1.000
-
0.460 ***
0.437 ***
0.879 ***
-
-0.354 ***
-0.332 ***
-0.375 ***
0.062
0.702
0.059
0.077
0.452 ***
1.000
-
0.050 -0.354 ***
0.761
0.089 -0.332 ***
0.085 -0.376 ***
0.050
0.773
0.086
0.095
0.073
0.985
2336
73
(B) Dependent variable is the quarterly change of the interest rate on current accounts
Immediate pass-through
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.452 *** 0.042
0.972
0.453 *** 0.043
0.452 *** 0.050
Pass-through after a quarter
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
0.545 *** 0.033
0.160
0.572 *** 0.032
0.524 *** 0.043
0.546 ***
0.545 ***
Long run elasticity
Average bank:
0.700
0.700
Loading of the long run relationship
Average bank:
Ho: no heterogeneity (p-value)
Low characteristic
High characteristic
-0.570 *** 0.043 -0.570 ***
0.388
-0.537 *** 0.048 -0.565 ***
-0.612 *** 0.074 -0.575 ***
Miss-specification tests
MA(1), MA(2) (p-value)
Sargan test (p-value)
No of banks, no of observations
0.000
73
-
-
0.915
0.180
2336
0.452 ***
0.470 ***
0.434 ***
0.545 ***
-
0.042
0.129
0.050
0.037
0.033
0.978
0.038
0.033
-
0.452 ***
0.479 ***
0.419 ***
0.545 ***
0.566 ***
0.517 ***
0.700
-
0.043 -0.570 ***
0.820
0.050 -0.607 ***
0.047 -0.523 ***
0.042
0.529
0.054
0.074
0.033
0.481
0.055
0.045
0.043
0.481
0.019
0.025
0.452 ***
0.497 ***
0.406 ***
0.042
0.112
0.062
0.062
0.590 ***
0.516 ***
0.033 0.545 ***
0.203
0.045 0.563 ***
0.039 0.525 ***
0.033
0.224
0.041
0.034
0.700
-
0.509 ***
0.400 ***
0.545 ***
-
-0.570 ***
-0.452 ***
-0.680 ***
0.042
0.032
0.044
0.054
0.452 ***
0.700
-
0.043 -0.570 ***
0.004
0.062 -0.589 ***
0.054 -0.550 ***
0.043
0.575
0.059
0.051
Fig. 1
Banking interest rates
(quarterly data, percentage points)
19.0
3-month interbank rate
Repo rate
17.0
Interest rate on current accounts
Estimation period
1993:03-2001:03
Short term lending rate
15.0
13.0
Euro
11.0
9.0
7.0
5.0
Period before T.U.B.
1987:01-1993:02
3.0
1.0
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Fig. 2
Cross sectional and time series dispersion of interest rates
0.350
(a) Interest rate on short-term loans
0.300
0.250
0.200
0.150
0.100
0.050
0.000
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
1998
1999
2000
2001
0.350
(b) Interest rate on current accounts
0.300
0.250
0.200
0.150
0.100
0.050
0.000
1987
1988
1989
ACROSS BANKS
1990
1991
1992
OVER TIME
1993
1994
1995
1996
1997
Fig. 3
Determinants of bank’s interest rates
i L = f ( y P , y T , p, i M ,
+
?
+
+
X t −1 , i M X t −1 , ρ t −1 ∆i M , j , costs , σ , µ k )
?
+
+
+
?
+
Loan
demand
Interest
rate
channel
Bank
lending
channel
Cost of intermediation,
credit risk
and interest
rate volatility
Bank
capital
channel
Deposit
demand
i D = f ( y P , y T , p, i M ,
−
−
−
+
Industry
structure
X t −1 , i M X t −1 , ρ t −1 ∆i M , costs , σ , µ k )
?
−
−
?
+
Note: the meaning of all the symbols is reported in Table 1.
Fig. A1
Search for mean shift breaks
(monthly data, sequential minimum unit root tests)
0
Dec-87
Dec-88
Dec-89
Dec-90
Dec-91
Dec-92
Dec-93
Dec-94
Dec-95
Dec-96
Dec-97
Dec-98
Dec-99
-1
-2
-3
-4
-5
-6
-7
Interest rate on current accounts
-8
Interest rate on short-term loans
3-month interbank market rate
-9
10% critical value
2.5% critical value
-10
Note: The estimated model tests for a shift in the constant. No trend is included. Sequential statistic are
computed using the sample 1984:7-2002:12, sequentially incrementing the date of the hypothetical shift.
A fraction equal to 15 per cent of the total sample at the beginning and at the end of the sample is not
considered for the test. For more details see Banerjee, Lumsdaine and Stock (1992).
|
[question]
[user request]
=====================
[text]
[context document]
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[instruction]
Answer the question using only the information provided in the context. Do not rely on external knowledge or sources. | What are the differences between antibacterial soap and regular soap? Which soap would you recommend as being better for preventing ilness? Answer in a minimum of 200 words. | We’re exposed to millions of germs and bacteria every day. Many of us use antibacterial products to reduce our risk of getting sick or passing germs and bacteria onto others – but are they really more effective at killing the “bad guys” than regular soap? Eric Haugen, MD, UnityPoint Health helps us understand the pros and cons.
Antibacterial Soap
Antibacterial soap (also called antimicrobial or antiseptic) is any cleaning product with active antimicrobial ingredients added and not found in regular soaps.
“An antimicrobial is something that works to kills microorganisms or stops their growth. For example, antibiotics and antibacterial soaps are used to fight bacteria,” Dr. Haugen says.
Antibacterial soaps used to contain the chemical triclosan, but the U.S. Food and Drug Administration (FDA) banned it from household and health care products, because research suggests it may impact hormone levels and bacterial resistance.
“While bacteria sound like a bad thing, it can actually be good for you. Your body needs bacteria to maintain a healthy, balanced environment on your skin," Dr. Haugen says.
If you’re not sure if your soap is antibacterial, look for the word “antibacterial” on the label. The FDA says a Drug Fact Label is another sign a hand soap or body wash has antibacterial ingredients in it.
Pros of Antibacterial Soap
Antibacterial soap still kills bad bacteria, but it shouldn’t be overused.
It's easy to find in most stores.
Cons of Antibacterial Soap
Overuse of antibacterial products can reduce the healthy bacteria on your skin.
Added chemicals to antibacterial soaps can remove natural oils, making skin drier.
Using antibacterial soap or hand sanitizer can make people think they do not have to wash their hands as thoroughly or frequently.
Tips for Using Hand Sanitizer
When soap and running water are unavailable, using hand sanitizers with at least 60 percent alcohol levels can be an effective alternative.
“While hand sanitizer is nice in a pinch, it doesn’t eliminate all germs and should not be used when hands are visibly greasy or dirty,” Dr. Haugen says.
The Centers for Disease Control and Prevention (CDC) recommends the following tips for children and adults using hand sanitizer:
Apply enough hand sanitizer to cover all surfaces of the hands.
Rub sanitizer on hands covering the tops, between fingers and fingertips.
Keep rubbing until hands are dry or for about 20 seconds.
Regular or Plain Soap
Regular soap is designed to decrease water’s surface tension and lift dirt and oils off surfaces, so it can be easily rinsed away. Though regular soap does not contain added antibacterial chemicals, it's effective in getting rid of bacteria and other virus-causing germs.
Pros of Regular Soap
Antibacterial soaps are no more effective than regular soap and water for killing disease-causing germs.
Regular soap tends to be less expensive than antibacterial soap and hand sanitizers.
Regular soap won’t kill healthy bacteria on the skin’s surface.
Cons of Regular Soap
People may not wash hands thoroughly enough for regular soap to kill bad bacteria.
You must look at the labels closely to find a regular soap.
5 Steps for Effective Handwashing
“It’s more important for you to focus on your handwashing technique than what type of soap you use. Washing hands with soap (either antibacterial or regular) and water is one of the best ways to remove germs, avoid getting sick and prevent the spread of germs to others,” Dr. Haugen says.
The CDC recommends these five tips for effective handwashing:
Wet. Place your hands under running (cold or warm) water and add soap.
Lather. Rub your hands together, making a soapy lather.
Scrub. Wash the front and back of hands, between your fingers and under nails for at least 20 seconds or two rounds of the song “Happy Birthday.”
Rinse. Place your hands well under running (cold or warm) water until the soap is gone.
Dry. hands thoroughly with a clean towel or air dry them.
Have little ones around? Read 6 ways to make handwashing fun for kids next. | [question]
What are the differences between antibacterial soap and regular soap? Which soap would you recommend as being better for preventing ilness? Answer in a minimum of 200 words.
=====================
[text]
We’re exposed to millions of germs and bacteria every day. Many of us use antibacterial products to reduce our risk of getting sick or passing germs and bacteria onto others – but are they really more effective at killing the “bad guys” than regular soap? Eric Haugen, MD, UnityPoint Health helps us understand the pros and cons.
Antibacterial Soap
Antibacterial soap (also called antimicrobial or antiseptic) is any cleaning product with active antimicrobial ingredients added and not found in regular soaps.
“An antimicrobial is something that works to kills microorganisms or stops their growth. For example, antibiotics and antibacterial soaps are used to fight bacteria,” Dr. Haugen says.
Antibacterial soaps used to contain the chemical triclosan, but the U.S. Food and Drug Administration (FDA) banned it from household and health care products, because research suggests it may impact hormone levels and bacterial resistance.
“While bacteria sound like a bad thing, it can actually be good for you. Your body needs bacteria to maintain a healthy, balanced environment on your skin," Dr. Haugen says.
If you’re not sure if your soap is antibacterial, look for the word “antibacterial” on the label. The FDA says a Drug Fact Label is another sign a hand soap or body wash has antibacterial ingredients in it.
Pros of Antibacterial Soap
Antibacterial soap still kills bad bacteria, but it shouldn’t be overused.
It's easy to find in most stores.
Cons of Antibacterial Soap
Overuse of antibacterial products can reduce the healthy bacteria on your skin.
Added chemicals to antibacterial soaps can remove natural oils, making skin drier.
Using antibacterial soap or hand sanitizer can make people think they do not have to wash their hands as thoroughly or frequently.
Tips for Using Hand Sanitizer
When soap and running water are unavailable, using hand sanitizers with at least 60 percent alcohol levels can be an effective alternative.
“While hand sanitizer is nice in a pinch, it doesn’t eliminate all germs and should not be used when hands are visibly greasy or dirty,” Dr. Haugen says.
The Centers for Disease Control and Prevention (CDC) recommends the following tips for children and adults using hand sanitizer:
Apply enough hand sanitizer to cover all surfaces of the hands.
Rub sanitizer on hands covering the tops, between fingers and fingertips.
Keep rubbing until hands are dry or for about 20 seconds.
Regular or Plain Soap
Regular soap is designed to decrease water’s surface tension and lift dirt and oils off surfaces, so it can be easily rinsed away. Though regular soap does not contain added antibacterial chemicals, it's effective in getting rid of bacteria and other virus-causing germs.
Pros of Regular Soap
Antibacterial soaps are no more effective than regular soap and water for killing disease-causing germs.
Regular soap tends to be less expensive than antibacterial soap and hand sanitizers.
Regular soap won’t kill healthy bacteria on the skin’s surface.
Cons of Regular Soap
People may not wash hands thoroughly enough for regular soap to kill bad bacteria.
You must look at the labels closely to find a regular soap.
5 Steps for Effective Handwashing
“It’s more important for you to focus on your handwashing technique than what type of soap you use. Washing hands with soap (either antibacterial or regular) and water is one of the best ways to remove germs, avoid getting sick and prevent the spread of germs to others,” Dr. Haugen says.
The CDC recommends these five tips for effective handwashing:
Wet. Place your hands under running (cold or warm) water and add soap.
Lather. Rub your hands together, making a soapy lather.
Scrub. Wash the front and back of hands, between your fingers and under nails for at least 20 seconds or two rounds of the song “Happy Birthday.”
Rinse. Place your hands well under running (cold or warm) water until the soap is gone.
Dry. hands thoroughly with a clean towel or air dry them.
Have little ones around? Read 6 ways to make handwashing fun for kids next.
https://www.unitypoint.org/news-and-articles/antibacterial-soap-vs-regular-soap-which-one-is-better
=====================
[instruction]
Answer the question using only the information provided in the context. Do not rely on external knowledge or sources. |
Use only the provided text to answer the question. Do not use external information or any prior knowledge. Avoid using contractions in your writing. | How do the metrics of occupancy rate and property capitalization rate compare in regards to their usefulness to developers? | Multifamily properties that generate stable revenues (via collection of rents from tenants) have
predictable profitability levels, which can make them attractive investments. By contrast, the
profit potential of riskier properties, such as those experiencing above-normal vacancy rates and
rental income declines (e.g., due to neighborhood location, poor management, or upkeep), may be
less predictable yet still be attractive investments. After substantial rehabilitation, a rental
property may appeal to tenants with more stable and higher incomes and possibly fetch a higher
resale value—or it may still fail to generate the anticipated rental income, resulting in
substantially greater losses. Thus, risker financial investment opportunities may translate into
greater profits or greater losses.
Real estate properties are categorized as Class A, Class B, and Class C, which provides
developers and lenders with the financial risk characteristics of the prospective investment
properties (defined in more detail in the text box below). Restating the preceding investment
strategy, acquiring a riskier Class C property may initially be less expensive and have greater
profit potential than a less risky Class A property investment. If, however, a Class C property after
rehabilitation would continue to generate low or below-market rents, the losses are likely to be
significant. In short, developers decide whether to invest in low- or high-risk multifamily
projects.
One criterion for determining whether to invest in Class A, Class B, or Class C income-
generating properties is current and expected future performance of rents. Anticipated rent growth
is a favored metric developers use to evaluate a prospective investment’s profitability.10
Occupancy rates also provide information about anticipated rent increases or decreases. As
multifamily properties’ occupancy rates increase (decrease), the overall rental income the
properties generate is more likely to increase (decrease).11 A related concept, the property
capitalization (cap) rate, is the annual net operating income generated by the property divided by
its purchase price. In other words, the cap rate measures a property’s yield, the annual return in
the form of (rental) income generated by the investment. (The cap rate does not account for any
outstanding debt such as a mortgage amount.) The interpretation of a high cap rate, however, may
be ambiguous. Although a higher cap rate may be indicative of higher profit potential, it may also
be indicative of a limited ability to raise future rents on some tenants (e.g., the elderly, those with
higher delinquency rates, and those currently with long leases). | system instruction: [Use only the provided text to answer the question. Do not use external information or any prior knowledge. Avoid using contractions in your writing.]
question: [How do the metrics of occupancy rate and property capitalization rate compare in regards to their usefulness to developers?]
context block: [Multifamily properties that generate stable revenues (via collection of rents from tenants) have
predictable profitability levels, which can make them attractive investments. By contrast, the
profit potential of riskier properties, such as those experiencing above-normal vacancy rates and
rental income declines (e.g., due to neighborhood location, poor management, or upkeep), may be
less predictable yet still be attractive investments. After substantial rehabilitation, a rental
property may appeal to tenants with more stable and higher incomes and possibly fetch a higher
resale value—or it may still fail to generate the anticipated rental income, resulting in
substantially greater losses. Thus, risker financial investment opportunities may translate into
greater profits or greater losses.
Real estate properties are categorized as Class A, Class B, and Class C, which provides
developers and lenders with the financial risk characteristics of the prospective investment
properties (defined in more detail in the text box below). Restating the preceding investment
strategy, acquiring a riskier Class C property may initially be less expensive and have greater
profit potential than a less risky Class A property investment. If, however, a Class C property after
rehabilitation would continue to generate low or below-market rents, the losses are likely to be
significant. In short, developers decide whether to invest in low- or high-risk multifamily
projects.
One criterion for determining whether to invest in Class A, Class B, or Class C income-
generating properties is current and expected future performance of rents. Anticipated rent growth
is a favored metric developers use to evaluate a prospective investment’s profitability.10
Occupancy rates also provide information about anticipated rent increases or decreases. As
multifamily properties’ occupancy rates increase (decrease), the overall rental income the
properties generate is more likely to increase (decrease).11 A related concept, the property
capitalization (cap) rate, is the annual net operating income generated by the property divided by
its purchase price. In other words, the cap rate measures a property’s yield, the annual return in
the form of (rental) income generated by the investment. (The cap rate does not account for any
outstanding debt such as a mortgage amount.) The interpretation of a high cap rate, however, may
be ambiguous. Although a higher cap rate may be indicative of higher profit potential, it may also
be indicative of a limited ability to raise future rents on some tenants (e.g., the elderly, those with
higher delinquency rates, and those currently with long leases).] |
Use only information from the provided text to answer questions. Do not use outside knowledge and do not answer based on common sense. If you can't determine the answer based on the provided text, you should say "I can't find the answer to your question in the provided text." | In brief, what are 2-3 issues foreseen with this bill? | On July 20, 2022, the House Energy and Commerce Committee voted 53-2 to advance the American Data
Privacy and Protection Act (ADPPA), H.R. 8152, to the full House of Representatives. The ADPPA would
create a comprehensive federal consumer privacy framework. Some commentators have noted the bill’s
novel compromises on two issues that have impeded previous attempts to create a national privacy
framework: whether to preempt state privacy laws and whether to create a private right of action.
The bipartisan bill is co-sponsored by House Energy and Commerce Committee Chairman Frank Pallone,
Jr. and Ranking Member Cathy McMorris Rogers, and is promoted in the Senate by Commerce
Committee Ranking Member Roger Wicker. In a joint statement, Representatives Pallone and McMorris
Rodgers and Senator Wicker described the bill as “strik[ing] a meaningful balance” on key issues. Senate
Commerce Committee Chair Maria Cantwell has critiqued the ADPPA as having “major enforcement
holes,” prompting other commentators to question whether the Senate will pass the bill.
This Sidebar first provides a summary of the version of the ADPPA ordered to be reported by the House
Commerce Committee on July 20. It then compares several of the bill’s key provisions to other privacy
bills from the 117th and 116th Congresses before examining some considerations for Congress.
Summary of the Bill
The ADPPA would govern how companies across different industries treat consumer data. While not an
exhaustive summary, some key facets of the bill are as follows:
Covered Entities. The bill would apply to most entities, including nonprofits and
common carriers. Some entities, such as those defined as large data holders that meet
certain thresholds and service providers that use data on behalf of other entities
(including covered entities, government entities, and other service providers), would face
different or additional requirements.
Covered Data. The bill would apply to information that “identifies or is linked or
reasonably linkable” to an individual.
Duties of Loyalty. The bill would prohibit covered entities from collecting, using, or
transferring covered data beyond what is reasonably necessary and proportionate to
provide a service requested by the individual, unless the collection, use, or disclosure
would fall under one of seventeen permissible purposes. It also would create special
protections for certain types of sensitive covered data, defined as sixteen different
categories of data. Among other things, the bill would require covered entities to get a
consumer’s affirmative, express consent before transferring their sensitive covered data to
a third party, unless a specific exception applies.
Transparency. The bill would require covered entities to disclose, among other things,
the type of data they collect, what they use it for, how long they retain it, and whether
they make the data accessible to the People’s Republic of China, Russia, Iran, or North
Korea.
Consumer Control and Consent. The bill would give consumers various rights over
covered data, including the right to access, correct, and delete their data held by a
particular covered entity. It would further require covered entities to give consumers an
opportunity to object before the entity transfers their data to a third party or targets
advertising toward them.
Youth Protections. The bill would create additional data protections for individuals under
age 17, including a prohibition on targeted advertising, and it would establish a Youth
Privacy and Marketing Division at the Federal Trade Commission (FTC). These
additional protections would only apply when the covered entity knows the individual in
question is under age 17, though certain social media companies or large data holders
would be deemed to “know” an individual’s age in more circumstances.
Third-Party Collecting Entities. The bill would create specific obligations for third-party
collecting entities, which are entities whose main source of revenue comes from
processing or transferring data that they do not directly collect from consumers (e.g., data
brokers). These entities would have to comply with FTC auditing regulations and, if they
collect data above the threshold amount of individuals or devices, would have to register
with the FTC. The FTC would establish a searchable registry of third-party collecting
entities and a “Do Not Collect” mechanism by which individuals could request that all
registered entities refrain from collecting covered data relating to the individual.
The ADPPA has bipartisan support, and various interest groups and commentators, such as the Electronic
Privacy Information Center, the Center for Democracy & Technology, and the Washington Post’s editorial
board, have expressed enthusiasm for the bill. In an August 25 letter to House Speaker Nancy Pelosi,
forty-eight different public interest groups urged Congress to move the ADPPA forward through
Congress, stating that the bill is a “meaningful compromise” and that a failure to act may “forestall
progress on this issue for years to come.” At the same time, some Members of Congress and other
commentators have raised concerns with the bill. Senators Cantwell and Schatz, for example, have both
criticized the bill’s failure to impose a “duty of loyalty” on covered entities. While the ADPPA has
various requirements that are classified under a “Duty of Loyalty” heading, these requirements differ
from those included in COPRA or the Data Care Act. COPRA’s “duty of loyalty” would prohibit
businesses from engaging in “harmful” data practices, which the bill defines to mean using covered data
“in a manner that causes or is likely to cause” injury to the subject of the covered data. The Data Care
Act’s “duty of loyalty” would prohibit covered providers from using data in a way that would “benefit the
[provider] to the detriment of the end user” and would “result in reasonably foreseeable and material
physical harm” or “be unexpected and highly offensive” to the end user. The ADPPA’s “Duty of Loyalty”
imposes a data minimization requirement and defines several specific prohibited data practices, but it
does not broadly prohibit providers from acting in ways that could harm individuals.
Some have also raised concerns over the ADPPA’s preemption provisions. The Attorney General of
California sent Congress a letter co-signed by nine other state attorneys general criticizing the ADPPA
because it would set a “ceiling” for privacy rights rather than a “floor.” These state attorneys general
argue that states should be allowed to adopt their own privacy laws so they can “legislate responsively” to
changes in technology and practices. In the Commerce Committee’s July 20 markup of the ADPPA, some
Members expressed similar concerns over the ADPPA’s preemption of state law. Other Members and
commentators have pushed back on these criticisms, pointing to the strengths of the ADPPA’s protections
and the importance of setting a federal standard. | On July 20, 2022, the House Energy and Commerce Committee voted 53-2 to advance the American Data
Privacy and Protection Act (ADPPA), H.R. 8152, to the full House of Representatives. The ADPPA would
create a comprehensive federal consumer privacy framework. Some commentators have noted the bill’s
novel compromises on two issues that have impeded previous attempts to create a national privacy
framework: whether to preempt state privacy laws and whether to create a private right of action.
The bipartisan bill is co-sponsored by House Energy and Commerce Committee Chairman Frank Pallone,
Jr. and Ranking Member Cathy McMorris Rogers, and is promoted in the Senate by Commerce
Committee Ranking Member Roger Wicker. In a joint statement, Representatives Pallone and McMorris
Rodgers and Senator Wicker described the bill as “strik[ing] a meaningful balance” on key issues. Senate
Commerce Committee Chair Maria Cantwell has critiqued the ADPPA as having “major enforcement
holes,” prompting other commentators to question whether the Senate will pass the bill.
This Sidebar first provides a summary of the version of the ADPPA ordered to be reported by the House
Commerce Committee on July 20. It then compares several of the bill’s key provisions to other privacy
bills from the 117th and 116th Congresses before examining some considerations for Congress.
Summary of the Bill
The ADPPA would govern how companies across different industries treat consumer data. While not an
exhaustive summary, some key facets of the bill are as follows:
Covered Entities. The bill would apply to most entities, including nonprofits and
common carriers. Some entities, such as those defined as large data holders that meet
certain thresholds and service providers that use data on behalf of other entities
(including covered entities, government entities, and other service providers), would face
different or additional requirements.
Covered Data. The bill would apply to information that “identifies or is linked or
reasonably linkable” to an individual.
Duties of Loyalty. The bill would prohibit covered entities from collecting, using, or
transferring covered data beyond what is reasonably necessary and proportionate to
provide a service requested by the individual, unless the collection, use, or disclosure
would fall under one of seventeen permissible purposes. It also would create special
protections for certain types of sensitive covered data, defined as sixteen different
categories of data. Among other things, the bill would require covered entities to get a
consumer’s affirmative, express consent before transferring their sensitive covered data to
a third party, unless a specific exception applies.
Transparency. The bill would require covered entities to disclose, among other things,
the type of data they collect, what they use it for, how long they retain it, and whether
they make the data accessible to the People’s Republic of China, Russia, Iran, or North
Korea.
Consumer Control and Consent. The bill would give consumers various rights over
covered data, including the right to access, correct, and delete their data held by a
particular covered entity. It would further require covered entities to give consumers an
opportunity to object before the entity transfers their data to a third party or targets
advertising toward them.
Youth Protections. The bill would create additional data protections for individuals under
age 17, including a prohibition on targeted advertising, and it would establish a Youth
Privacy and Marketing Division at the Federal Trade Commission (FTC). These
additional protections would only apply when the covered entity knows the individual in
question is under age 17, though certain social media companies or large data holders
would be deemed to “know” an individual’s age in more circumstances.
Third-Party Collecting Entities. The bill would create specific obligations for third-party
collecting entities, which are entities whose main source of revenue comes from
processing or transferring data that they do not directly collect from consumers (e.g., data
brokers). These entities would have to comply with FTC auditing regulations and, if they
collect data above the threshold amount of individuals or devices, would have to register
with the FTC. The FTC would establish a searchable registry of third-party collecting
entities and a “Do Not Collect” mechanism by which individuals could request that all
registered entities refrain from collecting covered data relating to the individual.
The ADPPA has bipartisan support, and various interest groups and commentators, such as the Electronic
Privacy Information Center, the Center for Democracy & Technology, and the Washington Post’s editorial
board, have expressed enthusiasm for the bill. In an August 25 letter to House Speaker Nancy Pelosi,
forty-eight different public interest groups urged Congress to move the ADPPA forward through
Congress, stating that the bill is a “meaningful compromise” and that a failure to act may “forestall
progress on this issue for years to come.” At the same time, some Members of Congress and other
commentators have raised concerns with the bill. Senators Cantwell and Schatz, for example, have both
criticized the bill’s failure to impose a “duty of loyalty” on covered entities. While the ADPPA has
various requirements that are classified under a “Duty of Loyalty” heading, these requirements differ
from those included in COPRA or the Data Care Act. COPRA’s “duty of loyalty” would prohibit
businesses from engaging in “harmful” data practices, which the bill defines to mean using covered data
“in a manner that causes or is likely to cause” injury to the subject of the covered data. The Data Care
Act’s “duty of loyalty” would prohibit covered providers from using data in a way that would “benefit the
[provider] to the detriment of the end user” and would “result in reasonably foreseeable and material
physical harm” or “be unexpected and highly offensive” to the end user. The ADPPA’s “Duty of Loyalty”
imposes a data minimization requirement and defines several specific prohibited data practices, but it
does not broadly prohibit providers from acting in ways that could harm individuals.
Some have also raised concerns over the ADPPA’s preemption provisions. The Attorney General of
California sent Congress a letter co-signed by nine other state attorneys general criticizing the ADPPA
because it would set a “ceiling” for privacy rights rather than a “floor.” These state attorneys general
argue that states should be allowed to adopt their own privacy laws so they can “legislate responsively” to
changes in technology and practices. In the Commerce Committee’s July 20 markup of the ADPPA, some
Members expressed similar concerns over the ADPPA’s preemption of state law. Other Members and
commentators have pushed back on these criticisms, pointing to the strengths of the ADPPA’s protections
and the importance of setting a federal standard.
Use only information from the provided text to answer questions. Do not use outside knowledge and do not answer based on common sense. If you can't determine the answer based on the provided text, you should say "I can't find the answer to your question in the provided text."
In brief, what are 2-3 issues foreseen with this bill? |
Answer the following question using only the information provided in the prompt. Do not use any external resources to formulate your answer. | What are the advantages of using Wi-Fi or cellular networks to send EEWs compared to FEMA communication pathways? | According to the 2023 USGS National Seismic Hazard Model (NSHM), nearly 75% of the area of the conterminous United States, Alaska, and Hawaii could experience damaging earthquake shaking. According to the USGS, the congressionally requested NSHM update utilized the latest techniques and technologies and incorporated more data to identify nearly 500 additional faults in the United States. The USGS considers the NSHM an essential tool to help engineers and others mitigate the impact of earthquake hazards on people and property.
The NSHM will benefit the USGS-led ShakeAlert, an earthquake early warning (EEW) system operating in California, Oregon, and Washington by providing more information about faults and potential shaking intensity. People and automated systems receive an EEW before potential strong ground shaking reaches their locations after detecting an earthquake. Upon receiving the alerts, people can protect themselves and automated systems can protect property from the impending shaking. EEW is among the most challenging types of emergency communications, in part because earthquakes cannot be predicted and occur suddenly. In addition, mass notification to high-risk areas must occur within seconds of earthquake detection to be effective.
In 2021, EEWs sent via the Federal Emergency Management Agency (FEMA) communication pathways often did not arrive before intense shaking occurred. EEWs sent in 2021 via cell phone applications over Wi-Fi or cellular networks were typically faster, and most alerts arrived before intense shaking occurred. Congress may be interested in how to improve emergency communications, especially for mass notifications, using FEMA communication pathways or the First Responder Network so that alerts arrive before the shaking occurs. | System Instructions: Answer the following question using only the information provided in the context block. Do not use any external resources to formulate your answer.
Question: What are the advantages of using Wi-Fi or cellular networks to send EEWs compared to FEMA communication pathways?
Context Block: According to the 2023 USGS National Seismic Hazard Model (NSHM), nearly 75% of the area of the conterminous United States, Alaska, and Hawaii could experience damaging earthquake shaking. According to the USGS, the congressionally requested NSHM update utilized the latest techniques and technologies and incorporated more data to identify nearly 500 additional faults in the United States. The USGS considers the NSHM an essential tool to help engineers and others mitigate the impact of earthquake hazards on people and property.
The NSHM will benefit the USGS-led ShakeAlert, an earthquake early warning (EEW) system operating in California, Oregon, and Washington by providing more information about faults and potential shaking intensity. People and automated systems receive an EEW before potential strong ground shaking reaches their locations after detecting an earthquake. Upon receiving the alerts, people can protect themselves and automated systems can protect property from the impending shaking. EEW is among the most challenging types of emergency communications, in part because earthquakes cannot be predicted and occur suddenly. In addition, mass notification to high-risk areas must occur within seconds of earthquake detection to be effective.
In 2021, EEWs sent via the Federal Emergency Management Agency (FEMA) communication pathways often did not arrive before intense shaking occurred. EEWs sent in 2021 via cell phone applications over Wi-Fi or cellular networks were typically faster, and most alerts arrived before intense shaking occurred. Congress may be interested in how to improve emergency communications, especially for mass notifications, using FEMA communication pathways or the First Responder Network so that alerts arrive before the shaking occurs. |
Please answer the following question in one sentence, using only information found in the text provided below: | What factors can impact a person's target replacement rate for retirement? | The first issue is to define the concept of adequate saving, which is surprisingly controversial.3 For pur- poses of this paper, we define adequate saving as sufficient to provide a household with an expected
standard of living in retirement that is commensurate with its standard of living during its working years. This definition has the advantage of conforming to people's "common sense" views of how they would like
to live their lives.
But it comes with an important caveat. Our definition focuses on expected retirement living standards rel- ative to pre-retirement living standards. Many things can go wrong between saving the right amount to
maintain living standards on an expected basis and being able to maintain living standards in actuality. Individuals face numerous risks in preparing for retirement. Disability or layoffs may stop people from
working as long as they had planned and hence reduce their ability to accumulate wealth. Assets may ac- crue less than the expected rate of return over time. A household may face disproportionate uninsured
health care costs, including those associated with long-term care. People may face mental or physical de- clines that require expensive daily assistance. Household members may live longer than expected, which,
while generally a good thing, has the side effect of generating higher saving needs to maintain pre-retire- ment living standards. Alternatively, a person may become widowed and thus lose important sources of
income in retirement. Children may present unexpected financial burdens.
Many of these concerns relate to adequate insurance (for example, against risks associated with disability,
rate of return, inflation, health care costs, health status, lifespan, and children's circumstances) as op-
posed to adequate saving, but the two issues are related and both are part of retirement preparation. So-
cial Security, of course, is intended to cover only a portion of adequate retirement income, not all of it. In the absence of well-functioning insurance markets, people will to some extent need to save more in order
to partially self-insure and be in a position to mitigate the negative consequences of adverse outcomes.
A definition of adequate saving that allows people to self-insure against all risks is probably an exces-
sively high standard for all but the super-rich. But the distinction between saving enough to maintain ex- pected living standards in retirement and saving enough to insure against all risks helps explain why there are different standards for "adequate saving."
One approach to measuring whether people are saving adequately is to compare their wealth accumula-
tion behavior to that implied by an economic model that prescribes that people save optimally.4 The
standard economic approach is to equate the household's discounted marginal utility of consumption in
3 For a recent review of the literature on the adequacy of retirement saving, see Mackenzie (forthcoming).
4 Engen, Gale, and Uccello (1999); Gale, Scholz, and Seshadri (2009); Scholz, Seshadri, and Khitatrakun (2006).
5
each period. This approach has the advantage of being fully consistent with economic theory, but it is not
always easy for people to translate this approach into practical advice, or to see where their preparations
land them relative to the benchmark. And the results are sensitive to model specification, especially in the
presence of major changes, such as those that occur in family size, marital status, or work status.5
A more common, intuitive, and flexible approach focuses on replacement rates. A replacement rate is a
ratio of post-retirement income to pre-retirement income. The target replacement rate that a household
should aim for is one that will allow it to replicate its pre-retirement living standards in retirement. It is
essential to emphasize that 100 percent is not a natural benchmark for an adequate replacement. The typ- ical advice of financial planners is to target a replacement rate of between 70 and 85 percent and some
evidence suggests this is consistent with optimal models of saving.6
Table 1 provides an extremely stylized example of how target replacement ratios in this range might come
about. Suppose a worker earns $100 in gross wages, and has $62 remaining after work expenses, mort-
gage costs, retirement saving contributions, health insurance premiums, payroll taxes, and federal and
state income taxes. Suppose the worker reaches age 65, pays off the mortgage, and retires. The payments
for work expenses, the mortgage, 401(k) contributions, payroll taxes, and health insurance stop (the last
because the worker becomes eligible for Medicare) and let's say taxes fall by one-third (because income
declines and because there are currently benefits in the tax code for the elderly). That means the worker
would only need $70 per year in retirement to replace the living standard that $100 provided during working years, or a 70 percent replacement rate.
This stylized example serves to show that adequate retirement income need not replace 100 percent of
pre-retirement income and that there may be a sizable difference between saving enough and saving "a
lot." For example, in the scenario above, if Social Security and a defined benefit plan replaced two-thirds of the worker's wages in retirement, very little additional saving would be required to maintain pre-retire- ment living standards in retirement.
Several qualifications are crucial. First, it is not clear what the "right" pre-retirement wage should be for
purposes of the calculation. Oft-used measures include final earnings, an average of the highest three or
five years of earnings, or average lifetime earnings. Empirical measures of the target replacement rate are
sensitive to which measure is used as the denominator. Second, different households will have different
target replacement rates. Factors such as the presence of children during working years or increased health needs during retirement years will influence how much spending is needed in retirement to main-
tain pre-retirement living standards. The target replacement rate would be higher to the extent that pre- retirement expenses on mortgages, health insurance, retirement contributions, and taxes were lower, or
to the extent that post-retirement health care needs or bequest motives were stronger. Third, different
5 Dushi et al. (2016).
6 Scholz and Seshadri (2009); Engen, Gale, and Uccello (1999).
6
households may want to include varying measures of assets as sources of available retirement income.
Some might want to tap housing equity, while others may choose not to do so. For all of these reasons, the
replacement rate needed to maintain pre-retirement living standards in retirement will vary across house-
holds.
| Please answer the following question in one sentence, using only information found in the text provided below:
What factors can impact a person's target replacement rate for retirement?
The first issue is to define the concept of adequate saving, which is surprisingly controversial.3 For pur- poses of this paper, we define adequate saving as sufficient to provide a household with an expected
standard of living in retirement that is commensurate with its standard of living during its working years. This definition has the advantage of conforming to people's "common sense" views of how they would like
to live their lives.
But it comes with an important caveat. Our definition focuses on expected retirement living standards rel- ative to pre-retirement living standards. Many things can go wrong between saving the right amount to
maintain living standards on an expected basis and being able to maintain living standards in actuality. Individuals face numerous risks in preparing for retirement. Disability or layoffs may stop people from
working as long as they had planned and hence reduce their ability to accumulate wealth. Assets may ac- crue less than the expected rate of return over time. A household may face disproportionate uninsured
health care costs, including those associated with long-term care. People may face mental or physical de- clines that require expensive daily assistance. Household members may live longer than expected, which,
while generally a good thing, has the side effect of generating higher saving needs to maintain pre-retire- ment living standards. Alternatively, a person may become widowed and thus lose important sources of
income in retirement. Children may present unexpected financial burdens.
Many of these concerns relate to adequate insurance (for example, against risks associated with disability,
rate of return, inflation, health care costs, health status, lifespan, and children's circumstances) as op-
posed to adequate saving, but the two issues are related and both are part of retirement preparation. So-
cial Security, of course, is intended to cover only a portion of adequate retirement income, not all of it. In the absence of well-functioning insurance markets, people will to some extent need to save more in order
to partially self-insure and be in a position to mitigate the negative consequences of adverse outcomes.
A definition of adequate saving that allows people to self-insure against all risks is probably an exces-
sively high standard for all but the super-rich. But the distinction between saving enough to maintain ex- pected living standards in retirement and saving enough to insure against all risks helps explain why there are different standards for "adequate saving."
One approach to measuring whether people are saving adequately is to compare their wealth accumula-
tion behavior to that implied by an economic model that prescribes that people save optimally.4 The
standard economic approach is to equate the household's discounted marginal utility of consumption in
3 For a recent review of the literature on the adequacy of retirement saving, see Mackenzie (forthcoming).
4 Engen, Gale, and Uccello (1999); Gale, Scholz, and Seshadri (2009); Scholz, Seshadri, and Khitatrakun (2006).
5
each period. This approach has the advantage of being fully consistent with economic theory, but it is not
always easy for people to translate this approach into practical advice, or to see where their preparations
land them relative to the benchmark. And the results are sensitive to model specification, especially in the
presence of major changes, such as those that occur in family size, marital status, or work status.5
A more common, intuitive, and flexible approach focuses on replacement rates. A replacement rate is a
ratio of post-retirement income to pre-retirement income. The target replacement rate that a household
should aim for is one that will allow it to replicate its pre-retirement living standards in retirement. It is
essential to emphasize that 100 percent is not a natural benchmark for an adequate replacement. The typ- ical advice of financial planners is to target a replacement rate of between 70 and 85 percent and some
evidence suggests this is consistent with optimal models of saving.6
Table 1 provides an extremely stylized example of how target replacement ratios in this range might come
about. Suppose a worker earns $100 in gross wages, and has $62 remaining after work expenses, mort-
gage costs, retirement saving contributions, health insurance premiums, payroll taxes, and federal and
state income taxes. Suppose the worker reaches age 65, pays off the mortgage, and retires. The payments
for work expenses, the mortgage, 401(k) contributions, payroll taxes, and health insurance stop (the last
because the worker becomes eligible for Medicare) and let's say taxes fall by one-third (because income
declines and because there are currently benefits in the tax code for the elderly). That means the worker
would only need $70 per year in retirement to replace the living standard that $100 provided during working years, or a 70 percent replacement rate.
This stylized example serves to show that adequate retirement income need not replace 100 percent of
pre-retirement income and that there may be a sizable difference between saving enough and saving "a
lot." For example, in the scenario above, if Social Security and a defined benefit plan replaced two-thirds of the worker's wages in retirement, very little additional saving would be required to maintain pre-retire- ment living standards in retirement.
Several qualifications are crucial. First, it is not clear what the "right" pre-retirement wage should be for
purposes of the calculation. Oft-used measures include final earnings, an average of the highest three or
five years of earnings, or average lifetime earnings. Empirical measures of the target replacement rate are
sensitive to which measure is used as the denominator. Second, different households will have different
target replacement rates. Factors such as the presence of children during working years or increased health needs during retirement years will influence how much spending is needed in retirement to main-
tain pre-retirement living standards. The target replacement rate would be higher to the extent that pre- retirement expenses on mortgages, health insurance, retirement contributions, and taxes were lower, or
to the extent that post-retirement health care needs or bequest motives were stronger. Third, different
5 Dushi et al. (2016).
6 Scholz and Seshadri (2009); Engen, Gale, and Uccello (1999).
6
households may want to include varying measures of assets as sources of available retirement income.
Some might want to tap housing equity, while others may choose not to do so. For all of these reasons, the
replacement rate needed to maintain pre-retirement living standards in retirement will vary across house-
holds.
|
Using only the provided text, answer all following questions and follow all guidelines that are explicitly given. | What is the meaning of "forward-looking statements," what terms are listed as examples, and why should the reader be made aware of these kinds of statements according to the text? | JOANN Receives Court Approval for Prepackaged Financial Recapitalization Plan
Apr 25, 2024
Expects to Emerge from Court-Supervised Process in the Coming Days with the Lowest Level of Debt in More than a Decade
HUDSON, Ohio, April 25, 2024 (GLOBE NEWSWIRE) -- JOANN Inc. (“JOANN” or the “Company”), the nation’s category leader in sewing and fabrics
with one of the largest arts and crafts offerings, today announced that the U.S. Bankruptcy Court for the District of Delaware has confirmed the
Company’s Prepackaged Joint Plan of Reorganization. JOANN expects to successfully complete its financial restructuring and emerge from the court supervised process in the coming days.
As reiterated throughout this expedited process, the Company’s more than 800 store locations remain open and JOANN.com continues to offer
supplies for any creative need, and the Company was able to preserve the jobs of its more than 18,000 Team Members in connection with this
process.
About JOANN
For 80 years, JOANN has inspired creativity in the hearts, hands, and minds of its customers. From a single storefront in Cleveland, Ohio, the nation’s
category leader in sewing and fabrics and one of the fastest growing competitors in the arts and crafts industry has grown to include 829 store
locations across 49 states and a robust e-commerce business. With the goal of helping every customer find their creative Happy Place, JOANN serves
as a convenient single source for all of the supplies, guidance, and inspiration needed to achieve any project or passion.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company
intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers can generally identify forward-looking statements by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,”
“might,” “plan,” “potential,” “predict,” “seek,” “vision,” “should,” or the negative thereof or other variations thereon or comparable terminology. Forward-looking statements include those we make regarding the Company’s ability to continuing operating its business and implement the restructuring
pursuant to the Chapter 11 cases, including the timetable of completing such transactions, if at all.
The preceding list is not intended to be an exhaustive list of all of the Company’s forward-looking statements. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations,
assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks
and uncertainties, many of which are beyond the Company’s control. Given these risks and uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. The forward-looking statements included elsewhere in this press release are not guarantees. Any
forward-looking statement that the Company makes in this press release speaks only as of the date of such statement. Except as required by law, the
Company does not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking
statements, whether as a result of new information, future events or otherwise after the date of this press release. | Using only the provided text, answer all following questions and follow all guidelines that are explicitly given.
What is the meaning of "forward-looking statements," what terms are listed as examples, and why should the reader be made aware of these kinds of statements according to the text?
JOANN Receives Court Approval for Prepackaged Financial Recapitalization Plan
Apr 25, 2024
Expects to Emerge from Court-Supervised Process in the Coming Days with the Lowest Level of Debt in More than a Decade
HUDSON, Ohio, April 25, 2024 (GLOBE NEWSWIRE) -- JOANN Inc. (“JOANN” or the “Company”), the nation’s category leader in sewing and fabrics
with one of the largest arts and crafts offerings, today announced that the U.S. Bankruptcy Court for the District of Delaware has confirmed the
Company’s Prepackaged Joint Plan of Reorganization. JOANN expects to successfully complete its financial restructuring and emerge from the court supervised process in the coming days.
As reiterated throughout this expedited process, the Company’s more than 800 store locations remain open and JOANN.com continues to offer
supplies for any creative need, and the Company was able to preserve the jobs of its more than 18,000 Team Members in connection with this
process.
About JOANN
For 80 years, JOANN has inspired creativity in the hearts, hands, and minds of its customers. From a single storefront in Cleveland, Ohio, the nation’s
category leader in sewing and fabrics and one of the fastest growing competitors in the arts and crafts industry has grown to include 829 store
locations across 49 states and a robust e-commerce business. With the goal of helping every customer find their creative Happy Place, JOANN serves
as a convenient single source for all of the supplies, guidance, and inspiration needed to achieve any project or passion.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company
intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers can generally identify forward-looking statements by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,”
“might,” “plan,” “potential,” “predict,” “seek,” “vision,” “should,” or the negative thereof or other variations thereon or comparable terminology. Forward-looking statements include those we make regarding the Company’s ability to continuing operating its business and implement the restructuring
pursuant to the Chapter 11 cases, including the timetable of completing such transactions, if at all.
The preceding list is not intended to be an exhaustive list of all of the Company’s forward-looking statements. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations,
assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks
and uncertainties, many of which are beyond the Company’s control. Given these risks and uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. The forward-looking statements included elsewhere in this press release are not guarantees. Any
forward-looking statement that the Company makes in this press release speaks only as of the date of such statement. Except as required by law, the
Company does not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking
statements, whether as a result of new information, future events or otherwise after the date of this press release. |
Provide your response in a professional and formal tone.
Use the information given in the document without referring to external sources or requiring additional context.
Avoid using technical jargon or acronyms that are not explained within the document. | What are all of the different landline features available on the 5ESS Class 5 electronic switching system? | CentraNet
CustoPAK
®
®
USER GUI DE
Telephone Number
Verizon Telephone Number
Switch Type:
GTD-5 5ESS DMS 100 DMS 10
© 2002 Verizon Communications
www.verizon.com/smallbiz
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3056-0402Thank You for
Selecting Verizon
CentraNet ® CustoPAK® Service.
1
Downloaded from www.Manualslib.com manuals search engineTable of Contents
Introduction to This Guide.............................................................................. 4
Overview of Your CustoPAK System ............................................................... 6
Terms You Should Know................................................................................ 8
CustoPAK Basic Features
✓ Assume Dial “9” .................................................................................. 9
❑
✓
❑ Call Hold ............................................................................................. 10
✓ Call Transfer ........................................................................................ 11
❑
✓ Consultation Hold ................................................................................ 12
❑
✓ Direct Inward/Outward Dialing (DID/DOD).............................................. 13
❑
✓ Distinctive Ringing (Inside/Outside Ringing) ......................................... 13
❑
✓ Intercom ............................................................................................. 14
❑
✓ Three-Way Calling ............................................................................... 15
❑
✓ Touch-Tone ......................................................................................... 16
❑
CustoPAK Selectable Features
❑ Automatic Callback .............................................................................. 18
❑ Call Forwarding Options ....................................................................... 19
❑ Call Forwarding ................................................................................... 20
❑ Call Forwarding – Busy Line................................................................. 22
❑ Call Forwarding – Don’t Answer ........................................................... 23
❑ Call Pick-Up – Group ........................................................................... 24
❑ Call Restriction Options ........................................................................ 25
❑ Call Waiting ....................................................................................... 26
❑ Cancel Call Waiting (Tone Block) ......................................................... 27
❑ Dial Call Waiting (for Intercom dialing)................................................... 28
❑ Hunting ............................................................................................. 29
❑ Speed Dialing .................................................................................... 30
2
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CustoPAK Optional Features
❑ 69 .................................................................................................. 32
❑ Busy Redial ....................................................................................... 33
❑ Call Block ( 60)................................................................................. 34
❑ Call Park ........................................................................................... 35
❑ Call Park – Directed .......................................................................... 36
❑ Call Trace .......................................................................................... 37
❑ Caller ID ........................................................................................... 38
❑ Caller ID – Number Only .................................................................... 39
❑ Enhanced Call Forwarding .................................................................. 40
❑ Executive Busy Override ..................................................................... 41
❑ Last Number Redial ........................................................................... 41
❑ Priority Call........................................................................................ 42
❑ Select Call Forwarding ....................................................................... 43
Voice Mail and CustoPAK ............................................................................ 44
*
*
Appendix.................................................................................................... 45
Intercom Code Charts............................................................................. 46
Speed Dialing Code Charts ..................................................................... 49
CustoPAK Feature Activation/Deactivation Codes ...................................... 52
Feature Availability by Switch Type .......................................................... 53
Your CustoPAK Feature Selections........................................................... 54
Please be sure to read the Introduction and Overview sections of this
guide prior to operating your new CustoPAK system.
3Introduction to This Guide
This guide is intended to provide you with information to help you learn to
operate the features within your new CustoPAK system and get the most out
of its many benefits.
Before you begin using your new CustoPAK system, it is important to know your
switch type, or the type of equipment in the Verizon central office that handles
your telephone service. Your switch type is shown on the front cover of this
guide and may affect which features are available with your CustoPAK system.
Basic Features are automatically activated for each of your lines when
you purchase your CustoPAK system.Upon installation of your system, your Verizon representative will assist you in
filling out your Feature Grid (see Appendix). Once complete, this grid indicates
which features you have selected for each of your CustoPAK lines. The Appendix
section also contains your Intercom and Speed Calling code charts. You may
wish to make copies of these handy tools and distribute them to other users in
your CustoPAK system for easy reference.
Selectable Features are available for each of your CustoPAK lines at no
additional monthly charge, but must be installed to be used.1The Overview section which follows this Introduction will begin to acquaint you with
your new CustoPAK system and the many benefits it provides.
Optional Features are available at an additional charge per line and must
also be installed to be used.1We are delighted that you have chosen Verizon. We hope this guide makes the
transition to your new CustoPAK system as smooth as possible.
The Features section of this guide describes the three types of features which
are available to choose from:
You may select as many or as few of the Selectable and Optional features as
you like for each of your CustoPAK lines, and may change them at any time.
Should you need assistance selecting additional features or changing features,
your Verizon representative is available to guide you. All features available with
CustoPAK are included in this guide regardless of whether you have selected
them for your system.
1
To install these features, contact your Verizon representative. Installation charges may apply.
4
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For Customer Services, call
1-800 -483-5000
In Hawaii, call
643-4411
5Overview of Your CustoPAK System
Your CustoPAK system is a central office-based service, meaning all equipment
required to operate the system is in the Verizon central office. That also means
you have purchased a reliable, worry-free telephone system, as our central
offices are monitored 24 hours a day, 365 days a year.
Your CustoPAK system can grow as your business grows. It has the capacity
to handle up to 30 telephone lines, and offers a flexible package of features
designed specifically with the small business customer in mind. You can
select which features you want for each of your CustoPAK lines based on your
business and communications needs. You may add or change features at any
time by contacting your Verizon representative (additional charges may apply).
CustoPAK can be customized to perform as a complete telephone system
working on standard single-line telephones or as feature-rich access lines
enhancing your existing telephone system. When used with existing telephone
systems, features like Call Transfer, Three-Way Calling and Consultation Hold
give you the functionality of a built-in second line. When using these features,
other lines remain free for incoming or outgoing calls. And, Call Forwarding
and Call Transfer allow you to easily transfer your calls to another location
outside your system without additional equipment.
Most of the features are activated by the use of codes. You’ll find all of the
information required to activate the CustoPAK features listed in the Features
section of this guide.
Your CustoPAK system comes with a 30-day satisfaction guarantee (except
California). We are confident that this system is the right solution for your
business needs. However, with this guarantee you are entitled to a full credit
of the CustoPAK charges and a change back to your previous Verizon service
if you are not satisfied and notify us within 30 calendar days.
Repair
The Repair Center handles service problems and out-of-service conditions on
your telephone lines and/or features, and the wiring to your location. It does
not handle and cannot fix your telephone equipment.
For problems with the wiring inside your business, you may repair it yourself,
hire a contractor or an electrician, or call Verizon. Verizon does this type of
repair for a fee based on the amount of time and the cost of the materials
required to correct the problem. For information on these services, contact
your Verizon representative.
The Verizon repair number is 1-800-483-2000. The Repair Center is open
24 hours a day, including holidays.
Help Desk
The CentraNet/Voice Mail Help Desk was established to answer your questions
about the operation of your CentraNet CustoPAK and Voice Mail services. Our
Help Desk will explain how the services and features operate, e.g., How do
I transfer a call? How do I reset my Passcode?
If you have questions about your CentraNet CustoPAK service, please call the
Help Desk at 1-800 - 483 -2000.
The Help Desk is available Monday-Friday between the hours of 5 a.m.-7 p.m.
and Saturday between the hours of 7 a.m.- 4 p.m. Pacific Time. The Help Desk
is closed on Sunday.
IMPORTANT INFORMATION: Verizon is in the process of updating all our
central office switches to provide access to Per Call Blocking. This feature
allows you to prevent the appearance of your phone number on Caller ID
display units on a per call basis.
Press *
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6
7
before placing an outgoing call to activate this feature.
7Terms You Should KnowCustoPAK Basic Features
Confirmation Tone
Three short bursts of tone heard when using some CustoPAK features. The
confirmation tone lets you know you have completed the activation or deactivation
of the features.The features listed in this section are automatically included on each of your
CustoPAK lines. These basic features are the backbone of your new CustoPAK
system. Three of these features, Consultation Hold, Call Transfer and Three-Way
Calling provide you with the functionality of a built-in second line.
Regional Calling Area
The area within which Verizon can provide local and regional toll calling services.
Switch Type
This term identifies the types of equipment in Verizon’s central office that
handles your telephone service. Your switch type is shown on the front cover of
this guide. It is very important to be aware of your switch type, as it may affect
which features are available with your CustoPAK system.
Assume Dial “9”
This convenient feature allows you to place calls outside of the CustoPAK system
without having to dial the access code “9”.
NOTE: Verizon has automatically activated this feature. You cannot activate or
deactivate the feature as you choose.
Switchhook
The buttons or bar generally located under the receiver on a standard desk
telephone or electronic set. The switchhook initiates dial tone and is used to
operate some of the CustoPAK features.
Tap
Flash
Recall
Link
These terms refer to preprogrammed buttons on some telephones, that when
used replace the switchhook. If your telephone is equipped with one of these
buttons, always use it instead of the switchhook to operate the CustoPAK features.
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9Call HoldNOTES:
Call Hold allows you to place an established call on hold for an extended period
of time—provided neither you nor the other person hangs up—freeing up the
line to place or receive another call. Use Call Hold to help improve response time
while reducing equipment costs and callbacks.1.) Only one call can be placed on hold at a time per telephone line.
2.) A holding call cannot be added to another call.
3.) Call Hold overrides Dial Call Waiting and Call Waiting. When you put a call
on hold to use the line to make or receive a second call, a third incoming
call will receive a busy signal.
To place an established call on hold:
Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Call Transfer
Listen for dial tone.Press *You will hear confirmation tone, followed by dial tone.This valuable feature enables you to transfer an incoming call to any other
number either inside or outside of your CustoPAK system. You can privately
speak with the called party to announce the call prior to completing the transfer.
Use Call Transfer as an efficient way to process misdirected calls and reduce
message-taking and call handling time.
The call is on hold. Place the handset beside the telephone—do not hang up!To transfer an incoming call:
0
1 .
To place another call, while the first caller is on hold:Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on
your telephone set).
Listen for dial tone.
To transfer to an internal CustoPAK line, dial the intercom code assigned
to the internal line. To transfer to an outside line dial the number to which
you wish to transfer the call.
Privately announce the transfer to the recipient. Hang up.
Key in destination phone number of the third party. Wait for the party to
answer. If you encounter a busy signal, no answer or if an error is made in
dialing, press the switchhook (or the Tap/Flash/Recall/Link button, depending
on your telephone set) twice to connect to the original party.
When party answers you may consult privately.
To return to a call that is on hold:
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Listen for confirmation tone.
Press *
0
1
(you may now talk to the person that was on hold).
-OR-
Hang up (your phone will ring).
Lift the handset (you may now talk to the party that was on hold).
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-OR-
Hang up (the call is automatically transferred).
NOTES:
1.) If you receive a busy signal, no answer or if an error is made in dialing,
press the switchhook twice to reconnect to the original call.
2.) You cannot transfer a call while on a Three-Way or Call Waiting call.
3.) A call placed from a CustoPAK line to a number outside the system cannot
be transferred to another number outside the system.
4.) Call Transfer may generate local, regional toll or long distance charges.
11Consultation HoldDirect Inward/Outward Dialing (DID/DOD)
Consultation Hold provides a temporary or “soft” hold without having to dial
an activation code. This allows you to place another call for private consultation
or to initiate a three-way call. Use Consultation Hold to quickly verify customer
inquiries and reduce costly and time-consuming callbacks.Direct Inward Dialing allows you to receive incoming calls directly at your station.
This can help enhance customer service by allowing incoming callers to quickly
reach you without the delay of a call transfer. Direct Outward Dialing improves
efficiency by enabling you to place calls to locations outside the system without
first dialing an access code or going through a central attendant.
To place a call on hold:
Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Listen for dial tone.
Dial the third party (if you encounter a busy signal, no answer or if an error is
made in dialing, press the switchhook twice to reconnect to the original call).
When the third party answers, you may consult privately before reconnecting
to the original call.
To return to the original caller:
Allow the third party to hang up.
Press the switchhook twice (if the switchhook is only pressed once, a three-way
call will be established).
NOTES:
1.) Consultation Hold overrides Dial Call Waiting and Call Waiting. When you put
a call on hold to use the line to place a second call, a third incoming call will
receive a busy signal.
2.) Call Forwarding cannot be activated while a call is on Consultation Hold.
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NOTE: Verizon has automatically activated this feature. You cannot activate or
deactivate the feature as you choose.
Distinctive Ringing (Inside/Outside Ringing)
CustoPAK Distinctive Ringing provides you with the ability to distinguish between
internal and external incoming calls, allowing you to greet customers and callers
from outside of your system more professionally. Internal calls—calls placed by
someone within the CustoPAK system using the Intercom feature—will ring with
a single ring. External calls—calls made from outside of the CustoPAK system—
are identified by a double ring. This feature is not available in the GTD-5
switch.
NOTES:
1.) Many telephone sets have their own distinctive ringing patterns that are not
associated with CustoPAK Distinctive Ringing.
2.) Priority Call and Distinctive Ringing cannot be on the same CustoPAK line,
since they share the same ring patterns.
3.) On forwarded calls, the ring pattern will be based on the original line, not the
forwarding line.
4.) On transferred calls, the ring pattern will be based on the transferring line,
not the original line.
5.) Verizon has automatically activated this feature. You cannot activate or
deactivate the feature as you choose.
13IntercomThree-Way Calling
The Intercom feature allows you to speak to, or transfer a call to, any other
person within your CustoPAK system—without incurring local usage charges.
Simply dial the two-digit code that was assigned to the line. See the Appendix
on page 45 of this guide to locate the Intercom Code Chart for your switch type.
The intercom codes are pre-assigned and programmed by Verizon.Three-Way Calling enables you to add a third party from either inside or
outside of your CustoPAK system to any established call to create a three-way
conference arrangement. This maximizes line efficiency and reduces costly
and time-consuming callbacks by allowing you to obtain answers to urgent
inquiries from two separate sources in a single call — reducing the costs and
lost productivity of multiple telephone calls.
To use the Intercom feature:
Pick up the handset and listen for dial tone.
Dial the intercom code:
20#– 49
#2–#for DMS 10 switch types.
7
#
for 5ESS, GTD-5 and DMS 100 switch types.
NOTE: For the Intercom feature to function properly, individual telephone
numbers must be assigned to a Multi-Line Hunt group.
While engaged in a two-way conversation:
Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Listen for dial tone.
Dial the number of the party you wish to add to the call (if you encounter
a busy signal, no answer or an error is made in dialing, press the switchhook
twice or hang up to reconnect to the original call).
Announce that you are setting up a conference call.
Press the switchhook again (the three-way conference is established).
NOTES:
1.) You may use Three-Way Calling to add another person no matter who
placed the original call. However, if you placed both calls and they are
outside of your CustoPAK system, when you hang up the other two people
will automatically disconnect.
2.) Three-Way Calling may generate local, regional toll or long distance charges.
If you hang up, you will be billed the appropriate charges for the portion of
the call for which you are responsible.
3.) You cannot establish a three-way call using the Automatic Callback feature.
4.) A three-way conference cannot be made between an established call and
a Call Waiting call.
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15Touch-Tone
Touch-Tone provides the ability to push-button dial on tone-signaling telephones
to access CustoPAK features and dial telephone numbers. Rotary dial telephones
are not compatible with CustoPAK service.
NOTE: Verizon has automatically activated this feature. You cannot activate or
deactivate the feature as you choose.
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CustoPAK Selectable Features
The features listed in this section are available for each of your CustoPAK lines
at no additional monthly charge. You may select as many or as few of these
features as you like, giving you the flexibility to customize each individual CustoPAK
line in the manner which best suits your business. As you read through this sec-
tion, be aware of your switch type (found on the front cover of this guide), since
some features are not available for certain switch types. To add or change features
at any time after your initial installation, contact your Verizon representative.
17Automatic CallbackCall Forwarding Options
When you encounter a busy line within your CustoPAK system, a code can be
dialed which will connect you when both lines are idle. The request will remain
active for 30 minutes unless canceled. Use Automatic Callback to increase
productivity by eliminating “telephone tag”, manual callbacks and unnecessary
dialing. This feature only works within the CustoPAK system, and the system
can only accommodate one request at a time per line. This feature is not
available in the GTD-5 switch type.Your CustoPAK system can be equipped with one or all of its five Call Forwarding
options. You may select or combine these features to meet your business needs.
The Call Forwarding options and their descriptions can be found by referring to
the list below:
Option
Section
Page
Call Forwarding ..................................... Selectable Features .................................. 20
To activate Automatic Callback once you’ve reached a busy line within
your CustoPAK system:Call Forwarding – Busy Line ................. Selectable Features .................................. 22
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).Call Forwarding – Don’t Answer............ Selectable Features .................................. 23
Listen for dial tone.Press *Listen for confirmation tone.Hang up (when the called line is idle, your line will ring with a distinctive ring).
5
Enhanced Call Forwarding1 .................... Optional Features ..................................... 40
Select Call Forwarding1.......................... Optional Features ..................................... 43
2 .
To cancel an Automatic Callback request:
Lift handset and press
Listen for confirmation tone.
Hang up.
#
5
2 .
NOTES:
1.) If an Automatic Callback is not answered by the originating station, the
request will be canceled.
2.) Automatic Callback can only be active on one station at a time.
3.) An Automatic Callback request can only be activated if the called number is
in a busy condition and within the CustoPAK group.
1
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Additional charges apply.
19Call ForwardingNOTES:
This Call Forwarding option allows you to have all incoming calls forwarded
to a pre-determined telephone number either inside or outside the CustoPAK
system. Call Forwarding provides you with the flexibility to choose your own
forward-to number, to change it as often as you like and to turn the feature
on or off as needed. When activated, it overrides Call Forwarding – Busy Line/
Don’t Answer and gives you the mobility you need to be productive outside the
office and after hours.1.) Calls forwarded outside the system are subject to local, regional toll or long
distance charges, as applicable.
2.) To confirm that Call Forwarding is on, press * 7 2 and if the feature is
on you will hear a fast busy tone. If it is off you’ll hear normal dial tone.
3.) You can place calls when Call Forwarding is on, however, you cannot answer
incoming calls. You will hear one short ring each time a call forwards to
remind you that the service is on.
4.) Call Forwarding overrides Call Waiting, Dial Call Waiting, Hunting arrange-
ments and Call Forwarding – Busy Line/Don’t Answer.
5.) Voice Mail service will not work when Call Forwarding is on, unless you have
activated forwarding to the Voice Mail service access number.
6.) A line with Call Forwarding activated cannot have an Automatic Callback
request initiated against it.
To turn Call Forwarding on:
Lift the handset and listen for dial tone.
Press *
At the tone, dial the telephone number you want your calls forwarded to.
When the call is answered, the feature has been activated. If the call is
not answered, hang up and repeat the above steps within two minutes.
The feature is activated when you hear the confirmation tone.
7
2 .
To turn Call Forwarding off:
Press *
7
3
(two short tones indicate that the service has been turned off).
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21Call Forwarding – Busy LineCall Forwarding – Don’t Answer
This feature automatically routes incoming calls to a pre-determined number
(either inside or outside of your CustoPAK system) when your line is busy. Use
Call Forwarding – Busy Line to improve customer service by forwarding calls
to alternate answering points, ensuring that all incoming calls are covered. This
feature can be separate on the line or can be combined with Call Forwarding –
Don’t Answer. The forward-to number must be programmed by Verizon.This feature automatically routes incoming calls to a telephone number (either
inside or outside of your CustoPAK system, or to Voice Messaging) when your
line is unanswered after a pre-determined number of rings (4-ring maximum).
Use Call Forwarding – Don’t Answer to improve customer service by forwarding
calls to alternate answering points, ensuring that no opportunities are lost
due to an unanswered call. This feature can be separate on the line or can
be combined with Call Forwarding – Busy Line. The forward-to number must
be programmed by Verizon.
NOTES:
1.) Calls forwarded outside the system are subject to local, regional toll or long
distance charges, as applicable.
2.) Call Forwarding – Busy Line overrides Dial Call Waiting (see page 29).
Therefore, if you place a call to a number with Call Forwarding – Busy Line,
the call is forwarded and the Dial Call Waiting treatment is not given during
a busy condition.
3.) Call Forwarding overrides Call Forwarding – Busy Line.
4.) For Multi-Line Hunt groups, Call Forwarding – Busy Line can only be
assigned on a group basis and will apply to every line in the group.
5.) Call Forwarding – Busy Line can only be assigned to the last member of
a Series Hunt group.
6.) If you have Voice Messaging, it is not necessary to subscribe to this feature.
7.) Verizon must automatically activate this feature. You cannot activate or
deactivate the feature as you choose.
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NOTES:
1.) Calls forwarded outside the system are subject to local, regional toll or long
distance charges, as applicable.
2.) Call Forwarding overrides Call Forwarding – Don’t Answer.
3.) Call Waiting and Dial Call Waiting override Call Forwarding – Don’t Answer.
4.) For Multi-Line Hunt groups, Call Forwarding – Don’t Answer can only be
assigned on a group basis and will apply to every line in the group.
5.) If the forward-to number is busy, the call will not forward. The line will
continue to ring, or you may get a busy signal, depending upon the location
of the forward-to number.
6.) If you have Voice Messaging, it is not necessary to subscribe to this feature.
7.) Verizon must automatically activate this feature. You cannot activate or
deactivate the feature as you choose.
23Call Pick-Up – GroupCall Restriction Options
Call Pick-Up – Group enables you to answer (pick-up) calls directed to any other
line within your Call Pick-Up group by dialing a code. If more than one person tries
to pick-up the call, the first user will receive the call, and the others will receive a
busy signal as confirmation that the call was answered. Use Call Pick-Up – Group
to provide maximum call coverage and ensure against missed calls.This feature enables you to select and control the incoming and outgoing
calling capabilities of each of your CustoPAK lines. Each line can only be
equipped with one Call Restriction option, which has been programmed by Verizon.
To use Call Pick-Up – Group:
Lift the handset and listen for dial tone.
Press *
1
7
NOTE: Verizon must automatically activate this feature. You cannot activate
or deactivate the feature as you choose. If you want to add or update Call
Restriction options, please contact your Verizon representative.
(the incoming call is connected to your station).
To use Call Pick-Up – Group when you are already on the phone:
Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Listen for dial tone.
Press *
0
1
to put the first call on hold.
Press *
1
7
(the incoming call is connected to your station).
NOTES:
1.) You cannot use Call Pick-Up – Group to connect to an Automatic Callback call.
2.) If more than one line in your Call Pick-Up group is ringing, you cannot select
which line to answer. The system will automatically direct the pick-up to the
call that came in first.
3.) All lines in a Multi-Line Hunt group must be in the same Call Pick-Up group.
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25Call Waiting
This valuable feature provides an audible tone while you are on the line that
alerts you of another incoming call. You then have the option to either place
the present call on hold to answer the incoming call or to disregard it. The
calling party will receive ringing tone instead of a busy tone. Use Call Waiting
to maximize line efficiency and improve customer service by ensuring prompt
responses to urgent inquiries.
Cancel Call Waiting (Tone Block)
When you don’t want to be disturbed or interrupted during an important call,
you can temporarily deactivate Call Waiting. You can activate Cancel Call Waiting
before you place a call or at any point during the conversation. Cancel Call
Waiting works only for the length of one call. When you hang up, Call Waiting
returns automatically to your phone.
To cancel the Call Waiting tone before placing a call:
After hearing the Call Waiting tone:
Lift the handset and listen for dial tone.
Either end your first call or tell the person to whom you are speaking that
you are going to put them on hold.Press *
Press and release the switchhook (or the Tap/Flash/Recall/Link button,
depending on your telephone set) to put the first person on hold and answer
the second call in the GTD-5 switch.Listen for confirmation tone, followed by normal dial tone.
Dial the telephone number.
7
0 .
To cancel the Call Waiting tone during a call:
Press and release the switchhook (or the Tap/Flash/Recall/Link button,
depending on your telephone set), listen for the flash tone, then dial * 0 1
to put the first person on hold and answer the second call in the DMS 100,
DMS 10 and 5ESS switches (may also be required for GTD-5 switch).Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Press *
To return to the first call and put the second call on hold, repeat bullet two or
three (depending on switch type). You can alternate between calls as often as
desired by repeating bullets two or three (depending on switch type).NOTE: In some areas you can only activate Cancel Call Waiting before placing a call.
7
0
(you will reconnect automatically to your call).
NOTES:
1.) Call Waiting allows you to have two calls on your line at the same time
(one on hold and one to whom you are talking). A third caller will hear a
busy signal.
2.) Call Waiting cannot be assigned to lines in a Multi-Line Hunt group.
3.) Call Waiting overrides Call Forwarding – Busy Line/Don’t Answer.
4.) Call Forwarding overrides Dial Call Waiting.
5.) Series Hunting overrides Call Waiting, which should be assigned to the last
number of a Series Hunt group.
6.) A three-way conference cannot be made between an established call and
a Call Waiting call.
7.) If Call Waiting and Call Forwarding – Don’t Answer are active on the same
line and you choose to ignore the Call Waiting tone, the call will forward to
your Call Forwarding – Don’t Answer number.
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27Dial Call Waiting (for Intercom dialing)Hunting
This feature allows you to send a Call Waiting tone to another line within your
CustoPAK system when that line is busy, letting the called party know that some-
one is trying to reach them. The called party then has the option to answer or
ignore the Call Waiting tone. Use Dial Call Waiting to help ensure the timely and
efficient flow of information within your business. This feature is not available
for GTD-5 switch types.Hunting allows your business to reduce busy signals and increase accessibility
by expanding call coverage. A Hunting arrangement begins with a call to a lead,
or pilot number and searches for an idle line beginning with the first number of a
pre-assigned Hunt group and ending with the last number in the group.
Upon dialing an internal station number and hearing a busy tone:
Hang up.
Lift the handset and listen for dial tone.
Press *
Dial the number of the busy station (the called party hears a Call Waiting tone).
Remain off-hook until the called party answers.
5
4
and listen for confirmation tone.
NOTES:
NOTES:
1.) When a Multi-Line Hunt group is assigned to a CustoPAK customer, individual
telephone numbers must be assigned in order for the Intercom feature to work.
2.) Call Waiting cannot be assigned to lines in a Hunt group.
3.) Automatic Callback cannot be activated against lines in a Hunt group.
4.) Call Forwarding and Call Forwarding – Busy Line/Don’t Answer can only be
assigned to a Multi-Line Hunt group on a group basis.
5.) All lines in a Multi-Line Hunt group must be in the same Call Pick-Up group.
6.) Caller ID will work in a Hunt group, however, the feature must be assigned to
every line in the Hunt group.
7.) Verizon must automatically activate this feature. You cannot activate or
deactivate the feature as you choose.
1.) Dial Call Waiting only works within your CustoPAK system.
2.) Dial Call Waiting cannot be assigned to lines in a Multi-Line Hunt group.
3.) Dial Call Waiting overrides Call Forwarding – Busy Line/Don’t Answer.
4.) Call Forwarding overrides Dial Call Waiting.
5.) If Call Waiting and Call Forwarding – Don’t Answer are active on the same
line and the called party chooses to ignore the Dial Call Waiting tone, the call
will forward to the called party’s Call Forwarding – Don’t Answer number.
6 .) Series Hunting overrides Dial Call Waiting, which should be assigned to the
last number of a Series Hunt group.
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29Speed Dialing
Speed Dialing allows you to call frequently dialed numbers by using an
abbreviated code, reducing dialing time and time spent searching for telephone
numbers. Speed Dialing gives you the flexibility to create and edit your own
Speed Dialing list. The Speed Dialing short list consists of 8 numbers unless
you have a 5ESS switch type, which provides a 6-number Speed Dialing list.
CustoPAK Optional Features
The following features are available for each of your CustoPAK lines at an additional
monthly charge per line. As you read through this section, be aware of your
switch type (found on the front cover of this guide), since some of these Optional
features are not available for certain switch types. To add or change any of these
features after your initial installation, contact your Verizon representative.
To establish/add or change a number on your Speed Dialing list:
Lift the handset and listen for dial tone.
Press *
7
4
Press
1
(GTD-5 only, skip this step in all other switches).
Press the Speed Dialing code numbers to be programmed (2-9 for all switches
except 5ESS, press 2-7 for 5ESS).
Dial the telephone number to be assigned to the code, along with any required
access codes, ( i.e., long distance carrier access code) up to 28 digits.
Listen for confirmation tone.
Hang up.
Repeat steps for each code number to be programmed.
#
and listen for confirmation tone.
To place a Speed Call from the short list:
Lift the handset and listen for dial tone.
Press # 1 (all switches) and then dial the Speed Dialing code number
(2-9 or 2-7 depending on what switch type you have). See page 50 for
Speed Dialing code charts.
Wait for party to answer.
NOTES:
1.) OPTIONAL: After you press # 1 and the code number, press # again
for a quicker connection.
2.) Service codes such as 911, cannot be programmed.
3.) Fully restricted lines cannot have Speed Dialing.
4.) Customers may experience a 2- to 3-second timing delay when activating
Speed Dialing codes that match other feature activation codes.
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31* 69Busy Redial
This convenient feature automatically stores and allows you to redial the number
of the last person who called you. *69 only works on calls made from numbers
within your regional calling area and can be used whether you answered the
last call or not. If you return the call and the number is busy, *69 will monitor the
busy line and attempt to connect your call for up to 30 minutes, unless canceled.
In most cases, your phone will ring with a series of short-short-long rings when
the number you called is no longer busy. This feature is not available in the
DMS 10 switch type.After reaching a busy line within your regional calling area, this convenient service
allows you to dial a code that will automatically connect you when both lines
are idle. Once activated, Busy Redial will monitor the busy line and attempt to
connect your call for up to 30 minutes, unless canceled. You will be alerted with
a special ring when the call is returned. You can use Busy Redial to help reduce
multiple callbacks, dialing time and lost productivity. This feature is not available
in the DMS 10 switch type.
After dialing a busy number:
To activate * 69:
Hang up.
Lift the handset and listen for dial tone.Lift the handset and listen for dial tone.
Press *Press * 6 6 . You will hear two normal ringing tones or an announce-
ment. If the called number is still busy, a voice recording will tell you that
your call is next in line.
Hang up. When the number you called is no longer busy, your telephone
will ring with a series of short-short-long rings (ringing tones may vary).
Lift the handset. You will hear normal ringing tone.
6
9
(a voice recording may provide additional instructions).
To deactivate * 69:
Lift the handset and listen for dial tone.
Press *
8
9 .
NOTES:
1.) If you hear the Call Waiting tone while you are on the line, you have two
choices: you can use *69 to call back later, or you can use Call Waiting
during the call.
2.) A *69 callback will not activate a Call Waiting tone; the line must be idle.
3.) *69 and Automatic Callback cannot be on the same line.
4.) This feature must be applied to all members of a Hunt group.
5.) *69 ring patterns may duplicate those of Distinctive Ringing.
6.) *69 will not work when activated against a line with Call Forwarding.
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To deactivate Busy Redial:
Lift the handset and listen for dial tone.
Press *
8
6
.
NOTES:
1.) The number you called will not ring until you pick up your telephone.
2.) Occasionally, the person you are calling uses the phone before Busy Redial
can complete your call. If this happens, a voice recording will tell you to
hang up and reactivate Busy Redial.
3.) You can use Busy Redial to return calls to more than one busy number at a time.
4.) When your phone rings with a short-short-long ring, you need to answer by
the third series of rings or Busy Redial will pause and try to complete your
call 5 minutes later.
5.) Busy Redial and Automatic Callback cannot be on the same line.
6.) This feature must be applied to all members of a Hunt group.
7.) Busy Redial will not activate a Call Waiting tone.
33Call Block (*60)
Call Block provides you with the capability to block up to 12 external telephone
numbers (within your regional calling area) from calling your number, preventing
unwanted and nuisance calls. Once activated, any calls from these 12 numbers
will be routed to an intercept message. For your protection, calls from outside
of your regional calling area and operator-handled calls cannot be blocked.
This feature is not available in the DMS 10 switch type.Call Park
To access the Call Block feature:To “park” a call against your number:
Lift the handset and listen for dial tone.Tell the person to whom you are speaking that you are going to put them on hold.
Press *Listen to the voice-recorded instructions for Call Block options.Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Press *
Hang-up.
6
0
.
GTD-5 switch type only:
If you are a member of a Hunt group, you must:
Lift the handset and listen for dial tone.
Press
Listen to the voice-recorded instructions for Call Block options.
#
6
0
.
Call Park functions like Call Pick-Up except that the call is already in progress.
You can “park” an established call on your line against your own number, freeing
up your line to place or receive another call. The parked call can be retrieved
from any other station within the CustoPAK system, including your own. Only one
call can be parked against a CustoPAK line at a given time. This feature is not
available in the DMS 10 switch type.
1
1
and listen for confirmation tone.
To retrieve a call you “parked” against your number:
Lift the handset and listen for dial tone.
Press *
Begin your conversation.
1
3
and listen for confirmation tone.
NOTES:
1.) Blocked calls will not be forwarded on any Call Forwarding arrangement
and will not appear on Caller ID displays.
2.) Call Block takes precedence over Series Hunting.
3.) This feature must be applied to all members of a Hunt group.
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NOTES:
1.) If a parked call is not retrieved, the parking station will be recalled when idle.
2.) A station in the “call parked” condition cannot use the Three-Way Calling feature.
3.) Call Waiting will not activate against a number in a “parked” condition.
35Call Park – DirectedCall Trace
This feature is an enhancement to Call Park. It performs the same functions
as Call Park, but it allows you to park calls against any number in the CustoPAK
system except your own. Only one call can be parked against a CustoPAK line at a
given time. This feature is not available for GTD-5 and DMS 10 switch types.This protective feature enables you to trace the number of the last threatening or
harassing call received, as long as the call originates from within your regional
calling area. The calling party’s number will automatically be reported to Verizon,
and in some areas you will be charged for each successful trace. This feature
is not available in the DMS 10 switch type.
To park a call against another CustoPAK number:
Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on
your telephone set).
Press *
1
4 .
If you receive a life-threatening or harassing call:
Hang up.
Lift the handset and listen for dial tone.
Press *
A voice recording will tell you if the call trace has been completed successfully.
To take legal action, record the exact date and time of the call and contact
Verizon within 10 days at the number provided by the voice recording. If
you forget that number, call the Customer Contact Center for assistance. If
the situation is an emergency, call your local law enforcement agency.
Dial the Intercom number of the station where you wish to park the call.
Hang-up.
To retrieve parked calls from any line:
Lift the handset and listen for dial tone.
Press * 1 2 . If a call is parked against the line from which you are
retrieving it, you will be automatically connected. If you are retrieving the
call from a different line, dial the Intercom number of the line that the call
is parked against.
Begin your conversation.
NOTES:
1.) If a parked call is not retrieved, the parking station will be recalled when idle.
2.) The station in the “call parked” condition and the station with Call Park –
Directed activated cannot use the Three-Way Calling or Executive Busy
Override features.
3.) Call Waiting will not activate against a number in a “parked” condition.
4.) Call Park – Directed cannot be used to answer an Automatic Callback call.
5.) Call Park – Directed cannot be activated against a line with Call Forwarding.
6.) Call Park – Directed cannot be applied to a member of a Hunt group.
7.) Call Park – Directed overrides Series Hunting and Call Forwarding – Don’t Answer.
8.) The Call Park – Directed access code and the station number must be dialed
before you know if the call has already been retrieved.
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5
7
and follow the voice-recorded instructions.
NOTES:
1.) If you successfully trace a call and choose to take further action, you
must contact Verizon within 10 days or the call record will no longer be
stored in the system.
2.) The records of any Call Trace request will be released only to a law
enforcement agency.
3.) In some areas, Call Trace is available on a pay-per-use or subscription basis.
4.) Call Trace cannot trace a call that was forwarded by way of Call Forwarding or
Call Forwarding – Busy Line.
5.) If Call Trace is activated after receiving a Call Waiting tone, the waiting call
will be traced, whether answered or not.
6.) This feature must be applied to all members of a Hunt group.
37Caller IDCaller ID – Number Only
Caller ID, along with compatible display telephones or separate Caller ID display
box, lets you view the listed name and number of the incoming call before you
pick it up. Use Caller ID to help improve customer service by personalizing your
greetings and gathering information pertinent to a call before you answer it. You
can also use the service to prioritize and screen calls when you are expecting an
important call from a customer or supplier. Caller ID display devices vary in
design, available features and the amount of information that may be retained in
memory. The service will display information between the first and second rings
for most calls, including long distance. However, some calls may be shown as
“Out-of-Area” or as “Private Number” and the information will not be displayed.
This feature is not available in the DMS 10 switch type.Caller ID – Number Only, along with compatible display telephones or separate
Caller ID display box, lets you view the number of the incoming call before
you pick it up. Use Caller ID – Number Only to help improve customer service by
personalizing your greetings and gathering information pertinent to a call before
you answer it. You can also use the service to prioritize and screen calls when
you are expecting an important call from a customer or supplier. Caller ID display
devices vary in design, available features and the amount of numbers that may be
retained in memory. Caller ID will display numbers between the first and second
rings for most calls, including long distance. However, some calls may be shown
as “Out-of-Area” or as “Private Number” and the number will not be displayed.
This feature is not available in the DMS 10 switch type.
NOTES:NOTES:
1.) This feature must be applied to all members of a Hunt group.
2.) If Call Forwarding or Select Call Forwarding is activated, the call information
will not be displayed at the forward-from location, but will be passed to the
forward-to number.
3.) With Call Forwarding – Busy Line, the call information will not be passed
to the forward-to number.
4.) With Call Waiting, the call information will not be displayed, unless the line
has Call Waiting ID and the phone has the appropriate display unit.
5.) Caller ID is not available with Off Premises station lines or Foreign Exchange
station lines.
6.) Verizon must automatically activate this feature. You cannot activate or
deactivate the feature as you choose.1.) This feature must be applied to all members of a Hunt group.
2.) If Call Forwarding or Select Call Forwarding is activated, the calling number
will not be displayed at the forward-from location, but will be passed to the
forward-to number.
3.) With Call Forwarding – Busy Line, the calling number will not be passed to
forward-to number.
4.) With Call Waiting, the calling number will not be displayed, unless the line
has Call Waiting ID and the phone has the appropriate display unit.
5.) Caller ID – Number Only is not available with Off Premises station lines or
Foreign Exchange station lines.
6.) Verizon must automatically activate this feature. You cannot activate or
deactivate the feature as you choose.
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39Enhanced Call ForwardingExecutive Busy Override
Using a toll free 800 number, you can forward calls from anywhere in the
country to any other number of your choice (pager, cellular phone, work phone
or home phone). Enhanced Call Forwarding has been installed with a default
destination number that you have chosen, and provides you with the flexibility
to override the default number whenever necessary. This feature is not avail-
able in the DMS 10 switch type.Executive Busy Override allows you to gain access to a busy line within your
CustoPAK system by dialing a code, thus establishing a three-way call. The
called number will receive a warning tone prior to the establishment of the
three-way conference call. The person to whom the called party is speaking
can be either inside or outside of the CustoPAK system. This feature is not
available in the GTD-5 switch type.
While using Enhanced Call Forwarding, certain buttons always have the same
standard function:Upon reaching a busy internal station:
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Press * 4 0 (both parties will hear break-in tone and you can now join
the conversation).
Press8to jump to the Main Menu.Press9to hear a menu again.Press0to hear help information.Press * to return to the previous menu.NOTES:
If you’re entering a string of digits (a phone number or a time) and make
a mistake, press * to clear the entry so you can start over again.After entering a string of digits, press # to end the string.1.) If a three-way conference is already in progress on the called number, the
feature will not operate.
2.) If the called party presses the switchhook (or the Tap/Flash/Recall/Link button,
depending on the telephone set), the overriding party will be disconnected
from the three-way call. If any of the three parties hang up, the remaining
two parties will still be connected.
Calling Enhanced Call Forwarding
From a touch-tone telephone:
Dial 1-888-483-3230.
Enter your 10-digit Enhanced Call Forwarding account number, then press
Enter your Verizon-provided temporary PIN, then press # . If this is the first
time you’ve used Enhanced Call Forwarding, you’ll be prompted to create your
new 6- to 10-digit PIN.
Refer to your Enhanced Call Forwarding User Guide for detailed
information on how to use this feature.
#
.
Last Number Redial
This convenient service enables you to be connected to the last number you
dialed. Use Last Number Redial to save time and improve efficiency by reducing
dialing time and time spent looking for telephone numbers. This feature is not
available for 5ESS and DMS 10 switch types.
To be connected to the last number you dialed:
Lift the handset and listen for dial tone.
Press
#
7
7
and wait for the call to connect.
NOTE: If you called both numbers when establishing a three-way conference,
the second number is the one stored for a Last Number Redial request.
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41Priority CallSelect Call Forwarding
Priority Call enables you to program up to 12 numbers—from within your
regional calling area—to be identified with a special ring pattern (short-long-
short). Use Priority Call to help you know when an important call comes in so
you can give superior service to your high-priority callers. This feature is not
available in the DMS 10 switch type.Select Call Forwarding lets you program up to 12 numbers — from within your
regional calling area— that you wish to have call forwarded. When a number on
your Select Call Forwarding list calls you, it will be forwarded to the number
you have programmed to receive the call. Calls from all other numbers will be
handled in the normal manner. You can program calls to forward to virtually
any number— local or long distance — and Select Call Forwarding allows
you to change your forward-to number whenever necessary. Use Select Call
Forwarding to remain accessible and give top priority to your most important
callers. This feature may generate local, regional toll or long distance charges.
This feature is not available in the DMS 10 switch type.
To turn Priority Call on or off:
Lift the handset and listen for dial tone.
Press *
Listen to the voice recording for instructions on how to turn Priority Call on or
off, and how to change or review your Priority Call list.
6
1 .
To update your Priority Call list:
Press * 6 1 and follow the voice-recorded instructions. If your list is full,
you must erase one number before you can add another.
To turn Select Call Forwarding on or off:
Lift the handset and listen for dial tone.
Press *
Listen to the voice recording for instructions on how to turn your Select Call
Forwarding service on and off and how to change or review your Select Call
Forwarding list.
NOTES:
1.) The Priority Call special ring will not follow a Call Forwarding or Select Call
Forwarding call.
2.) This feature must be applied to all members of a Hunt group.
3.) The Priority Call special ring will not hunt.
4.) This feature will not work on a Hunt group’s pilot number.
6
3 .
To update your Select Call Forwarding list:
Press * 6 3 and follow the voice-recorded instructions. If your list is full,
you must delete one number before you can add another.
NOTES:
1.) When Select Call Forwarding is on and a call forwards:
- Calls from numbers on your Select Call Forwarding list cannot be answered at
the forward-from number, however, they will generate one short ring to remind
you that the call is being forwarded. The forward-to number will ring normally.
- All calls from numbers not on your Select Call Forwarding list will ring
normally and can be answered.
- If you also have Call Forwarding and it is turned on, all calls from phone
numbers not on your Select Forwarding list will forward to the number you
have chosen as the Call Forwarding Select destination.
2.) Blocked calls will not forward.
3.) This feature must be applied to all members of a Hunt group.
4.) Select Call Forwarding overrides all other Call Forwarding arrangements.
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43Voice Mail and CustoPAKAppendix
Verizon Voice Mail offers an efficient, businesslike way to capture important
messages when you’re away from the office or on the phone 24 hours a day,
365 days a year. If you are unable to answer your line, or you are using your line
(line busy), up to 3 calls can forward to your mailbox.Intercom Code Charts
GTD-5, 5ESS and DMS 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
You can set up your Verizon Voice Mail to enable callers to transfer out of
the mailbox to a local telephone number selected by you for live answering.
In addition to a Main Greeting, Verizon Voice Mail offers the option of an
Alternate Greeting for times when you are away from the office.
If you wish to transfer a caller on your line to another CustoPAK line
which has Verizon Voice Mail:
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on
your telephone set).
Dial the Intercom number.
IF the line is answered, press the switchhook for a three-way call. If you wish
to exit, simply hang up and the two parties will remain in conference.
IF the line is not answered, you can hang up after the first ring, and the caller
will forward to the second station line user’s mailbox greeting. The caller can
then leave a recorded message in the second mailbox user’s mailbox.
DMS 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Speed Dialing Code Charts
GTD-5, DMS 100 and DMS 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5ESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
CustoPAK Feature Activation/Deactivation Codes . . . . . . . . . . . . . . . . . . . . . . 52
Feature Availability by Switch Type. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Your CustoPAK Feature Selections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
NOTE: Please refer to the Verizon Voice Mail User Guide for information on how
to use your mailbox.
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45Intercom Code Charts
GTD-5, 5ESS and DMS 100 Intercom Code Chart
The following charts are provided for you to list your Intercom codes. Each
telephone number has been assigned an intercom code, and depending on your
switch type, you must press # either before or after the Intercom code number.
These Intercom codes have been programmed by Verizon. Instructions for using
the Intercom feature are found below and also on page 14 of this guide.
To make an Intercom call:
Pick up the handset and listen for dial tone.
Press the Intercom code
2
Press the Intercom code
#
0
2
#–49
–#7(DMS 10).
#
(GTD-5, 5ESS and DMS 100).
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Name
Code
Telephone Number
20#
21#
22#
23#
24#
25#
26#
27#
28#
29#
30#
31#
32#
33#
34#
35#
36#
37#
38#
39#
40#
41#
42#
43#
44#
45#
46#
47#
48#
49#
47Speed Dialing Code Charts
DMS 10 Intercom Code Chart
Name
Code
Telephone Number
#2
#3
#4
#5
The following charts are provided for you to list your Speed Dialing codes. The
length of your individual Speed Dialing list is determined by your switch type.
Your switch type can be found on the front cover of this guide. Be sure to use
the Speed Dialing list that corresponds to your switch type. The instructions for
setting up a list and making calls using Speed Dialing can be found below and
also on page 30 of this guide.
To establish or change your Speed Dialing list:
#6
#7
Lift the receiver and listen for dial tone.
Press *
Press #
7
4
and listen for dial tone.
1 .(GTD-5 only, skip this step in all other switches).
Press the Speed Dialing 1-digit code number to be programmed
(see pages 50-51).
Dial the telephone number to be assigned to the code.
Listen for confirmation tone.
Hang up.
Repeat steps for each Speed Dialing code number to be programmed.
To make a call using Speed Dialing:
48
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Lift the receiver and listen for dial tone.
Press # 1 .(all switches) and then dial the Speed Dialing code number
(see pages 50-51).
You will hear the called number ringing.
Wait for party to answer.
49GTD-5, DMS 100 and DMS 10 Speed Dialing List
Name
Code
Telephone Number
5ESS Speed Dialing List
Name
Code
22
33
44
55
66
77
Telephone Number
8
9
50
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51CustoPAK® Feature Activation/Deactivation Codes
FeatureActivation Code
*69
Automatic Callback
Busy Redial
Call Block
Call Forwarding
Call Hold
Call Park
Call Park – Directed
Call Pick-Up – Group
Call Trace
Cancel Call Waiting
Dial Call Waiting
Executive Busy Override*69
*52
*66
*60
*72
*01
*11
*14
*17
*57
*70
*54
*40
20# - 49# for 5ESS,
IntercomGTD-5 and DMS 100.
#2 - #7 for DMS 10.
#77
61
63
74, then #1 (GTD-5 only)
to program.
2 - 9 to use feature
for all switches,
except the 5ESS.
2 - 7 to use feature
for the 5ESS.
Last Number Redial
Priority Call
Select Call Forwarding
*
Speed Dialing
*
*
Deactivation or
Retrieval Code
89
#52
86
*
*
*73
*01
*13
*12
Feature Availability by Switch Type
Feature
GTD-5
Basic Features
Assume Dial “9”
Call Hold
Call Transfer
Consultation Hold
Direct Inward/Outward Dialing (DID/DOD)
Distinctive Ringing (Inside/Outside Ringing)
Intercom Dialing
Three-Way Calling
Touch-Tone
Selectable Features
Automatic Callback
Call Forwarding
Call Forwarding – Busy Line
Call Forwarding – Don’t Answer
Call Pick-Up – Group
Call Restriction Options
Call Waiting
Cancel Call Waiting
Dial Call Waiting
Hunting
Speed Dialing
Optional Features:
69
Busy Redial
Call Block ( 60)
Call Park
Call Park – Directed
Call Trace
Caller ID services
Enhanced Call Forwarding
Executive Busy Override
Last Number Redial
Priority Call
Select Call Forwarding
Voice Mail
*
*
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✓
✓
✓
✓
✓
✓(30)
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓(8)
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
Switch Type
5ESS DMS 100 DMS 10
✓
✓
✓
✓
✓
✓
✓(30)
✓
✓✓
✓
✓
✓
✓
✓
✓(30)
✓
✓✓
✓
✓
✓
✓
✓
✓(6)
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓(6)✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓(8)✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓(8)
✓
✓
✓
✓
✓
✓
✓
✓
✓✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
53Your CustoPAK® Feature Selections
Feature
Telephone Numbers
Basic Features
Assume Dial “9”
Call Hold
Call Transfer
Consultation Hold
Direct Inward/Outward Dialing (DID/DOD)
Distinctive Ringing (Inside/Outside Ringing)
Intercom Dialing
Three-Way Calling
Touch-Tone
Selectable Features
Automatic Callback
Call Forwarding
Call Forwarding – Busy Line
Call Forwarding – Don’t Answer
Call Pick-Up – Group
Call Restriction Options
Call Waiting
Cancel Call Waiting
Dial Call Waiting
Hunting
Speed Calling
Optional Features:
69
Busy Redial
Call Block ( 60)
Call Park
Call Park – Directed
Call Trace
Caller ID services
Enhanced Call Forwarding
Executive Busy Override
Last Number Redial
Priority Call
Select Call Forwarding
Voice Mail
*
*
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55Notes
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
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| Provide your response in a professional and formal tone.
Use the information given in the document without referring to external sources or requiring additional context.
Avoid using technical jargon or acronyms that are not explained within the document.
What are all of the different landline features available on the 5ESS Class 5 electronic switching system?
CentraNet
CustoPAK
®
®
USER GUI DE
Telephone Number
Verizon Telephone Number
Switch Type:
GTD-5 5ESS DMS 100 DMS 10
© 2002 Verizon Communications
www.verizon.com/smallbiz
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3056-0402Thank You for
Selecting Verizon
CentraNet ® CustoPAK® Service.
1
Downloaded from www.Manualslib.com manuals search engineTable of Contents
Introduction to This Guide.............................................................................. 4
Overview of Your CustoPAK System ............................................................... 6
Terms You Should Know................................................................................ 8
CustoPAK Basic Features
✓ Assume Dial “9” .................................................................................. 9
❑
✓
❑ Call Hold ............................................................................................. 10
✓ Call Transfer ........................................................................................ 11
❑
✓ Consultation Hold ................................................................................ 12
❑
✓ Direct Inward/Outward Dialing (DID/DOD).............................................. 13
❑
✓ Distinctive Ringing (Inside/Outside Ringing) ......................................... 13
❑
✓ Intercom ............................................................................................. 14
❑
✓ Three-Way Calling ............................................................................... 15
❑
✓ Touch-Tone ......................................................................................... 16
❑
CustoPAK Selectable Features
❑ Automatic Callback .............................................................................. 18
❑ Call Forwarding Options ....................................................................... 19
❑ Call Forwarding ................................................................................... 20
❑ Call Forwarding – Busy Line................................................................. 22
❑ Call Forwarding – Don’t Answer ........................................................... 23
❑ Call Pick-Up – Group ........................................................................... 24
❑ Call Restriction Options ........................................................................ 25
❑ Call Waiting ....................................................................................... 26
❑ Cancel Call Waiting (Tone Block) ......................................................... 27
❑ Dial Call Waiting (for Intercom dialing)................................................... 28
❑ Hunting ............................................................................................. 29
❑ Speed Dialing .................................................................................... 30
2
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CustoPAK Optional Features
❑ 69 .................................................................................................. 32
❑ Busy Redial ....................................................................................... 33
❑ Call Block ( 60)................................................................................. 34
❑ Call Park ........................................................................................... 35
❑ Call Park – Directed .......................................................................... 36
❑ Call Trace .......................................................................................... 37
❑ Caller ID ........................................................................................... 38
❑ Caller ID – Number Only .................................................................... 39
❑ Enhanced Call Forwarding .................................................................. 40
❑ Executive Busy Override ..................................................................... 41
❑ Last Number Redial ........................................................................... 41
❑ Priority Call........................................................................................ 42
❑ Select Call Forwarding ....................................................................... 43
Voice Mail and CustoPAK ............................................................................ 44
*
*
Appendix.................................................................................................... 45
Intercom Code Charts............................................................................. 46
Speed Dialing Code Charts ..................................................................... 49
CustoPAK Feature Activation/Deactivation Codes ...................................... 52
Feature Availability by Switch Type .......................................................... 53
Your CustoPAK Feature Selections........................................................... 54
Please be sure to read the Introduction and Overview sections of this
guide prior to operating your new CustoPAK system.
3Introduction to This Guide
This guide is intended to provide you with information to help you learn to
operate the features within your new CustoPAK system and get the most out
of its many benefits.
Before you begin using your new CustoPAK system, it is important to know your
switch type, or the type of equipment in the Verizon central office that handles
your telephone service. Your switch type is shown on the front cover of this
guide and may affect which features are available with your CustoPAK system.
Basic Features are automatically activated for each of your lines when
you purchase your CustoPAK system.Upon installation of your system, your Verizon representative will assist you in
filling out your Feature Grid (see Appendix). Once complete, this grid indicates
which features you have selected for each of your CustoPAK lines. The Appendix
section also contains your Intercom and Speed Calling code charts. You may
wish to make copies of these handy tools and distribute them to other users in
your CustoPAK system for easy reference.
Selectable Features are available for each of your CustoPAK lines at no
additional monthly charge, but must be installed to be used.1The Overview section which follows this Introduction will begin to acquaint you with
your new CustoPAK system and the many benefits it provides.
Optional Features are available at an additional charge per line and must
also be installed to be used.1We are delighted that you have chosen Verizon. We hope this guide makes the
transition to your new CustoPAK system as smooth as possible.
The Features section of this guide describes the three types of features which
are available to choose from:
You may select as many or as few of the Selectable and Optional features as
you like for each of your CustoPAK lines, and may change them at any time.
Should you need assistance selecting additional features or changing features,
your Verizon representative is available to guide you. All features available with
CustoPAK are included in this guide regardless of whether you have selected
them for your system.
1
To install these features, contact your Verizon representative. Installation charges may apply.
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For Customer Services, call
1-800 -483-5000
In Hawaii, call
643-4411
5Overview of Your CustoPAK System
Your CustoPAK system is a central office-based service, meaning all equipment
required to operate the system is in the Verizon central office. That also means
you have purchased a reliable, worry-free telephone system, as our central
offices are monitored 24 hours a day, 365 days a year.
Your CustoPAK system can grow as your business grows. It has the capacity
to handle up to 30 telephone lines, and offers a flexible package of features
designed specifically with the small business customer in mind. You can
select which features you want for each of your CustoPAK lines based on your
business and communications needs. You may add or change features at any
time by contacting your Verizon representative (additional charges may apply).
CustoPAK can be customized to perform as a complete telephone system
working on standard single-line telephones or as feature-rich access lines
enhancing your existing telephone system. When used with existing telephone
systems, features like Call Transfer, Three-Way Calling and Consultation Hold
give you the functionality of a built-in second line. When using these features,
other lines remain free for incoming or outgoing calls. And, Call Forwarding
and Call Transfer allow you to easily transfer your calls to another location
outside your system without additional equipment.
Most of the features are activated by the use of codes. You’ll find all of the
information required to activate the CustoPAK features listed in the Features
section of this guide.
Your CustoPAK system comes with a 30-day satisfaction guarantee (except
California). We are confident that this system is the right solution for your
business needs. However, with this guarantee you are entitled to a full credit
of the CustoPAK charges and a change back to your previous Verizon service
if you are not satisfied and notify us within 30 calendar days.
Repair
The Repair Center handles service problems and out-of-service conditions on
your telephone lines and/or features, and the wiring to your location. It does
not handle and cannot fix your telephone equipment.
For problems with the wiring inside your business, you may repair it yourself,
hire a contractor or an electrician, or call Verizon. Verizon does this type of
repair for a fee based on the amount of time and the cost of the materials
required to correct the problem. For information on these services, contact
your Verizon representative.
The Verizon repair number is 1-800-483-2000. The Repair Center is open
24 hours a day, including holidays.
Help Desk
The CentraNet/Voice Mail Help Desk was established to answer your questions
about the operation of your CentraNet CustoPAK and Voice Mail services. Our
Help Desk will explain how the services and features operate, e.g., How do
I transfer a call? How do I reset my Passcode?
If you have questions about your CentraNet CustoPAK service, please call the
Help Desk at 1-800 - 483 -2000.
The Help Desk is available Monday-Friday between the hours of 5 a.m.-7 p.m.
and Saturday between the hours of 7 a.m.- 4 p.m. Pacific Time. The Help Desk
is closed on Sunday.
IMPORTANT INFORMATION: Verizon is in the process of updating all our
central office switches to provide access to Per Call Blocking. This feature
allows you to prevent the appearance of your phone number on Caller ID
display units on a per call basis.
Press *
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6
7
before placing an outgoing call to activate this feature.
7Terms You Should KnowCustoPAK Basic Features
Confirmation Tone
Three short bursts of tone heard when using some CustoPAK features. The
confirmation tone lets you know you have completed the activation or deactivation
of the features.The features listed in this section are automatically included on each of your
CustoPAK lines. These basic features are the backbone of your new CustoPAK
system. Three of these features, Consultation Hold, Call Transfer and Three-Way
Calling provide you with the functionality of a built-in second line.
Regional Calling Area
The area within which Verizon can provide local and regional toll calling services.
Switch Type
This term identifies the types of equipment in Verizon’s central office that
handles your telephone service. Your switch type is shown on the front cover of
this guide. It is very important to be aware of your switch type, as it may affect
which features are available with your CustoPAK system.
Assume Dial “9”
This convenient feature allows you to place calls outside of the CustoPAK system
without having to dial the access code “9”.
NOTE: Verizon has automatically activated this feature. You cannot activate or
deactivate the feature as you choose.
Switchhook
The buttons or bar generally located under the receiver on a standard desk
telephone or electronic set. The switchhook initiates dial tone and is used to
operate some of the CustoPAK features.
Tap
Flash
Recall
Link
These terms refer to preprogrammed buttons on some telephones, that when
used replace the switchhook. If your telephone is equipped with one of these
buttons, always use it instead of the switchhook to operate the CustoPAK features.
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9Call HoldNOTES:
Call Hold allows you to place an established call on hold for an extended period
of time—provided neither you nor the other person hangs up—freeing up the
line to place or receive another call. Use Call Hold to help improve response time
while reducing equipment costs and callbacks.1.) Only one call can be placed on hold at a time per telephone line.
2.) A holding call cannot be added to another call.
3.) Call Hold overrides Dial Call Waiting and Call Waiting. When you put a call
on hold to use the line to make or receive a second call, a third incoming
call will receive a busy signal.
To place an established call on hold:
Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Call Transfer
Listen for dial tone.Press *You will hear confirmation tone, followed by dial tone.This valuable feature enables you to transfer an incoming call to any other
number either inside or outside of your CustoPAK system. You can privately
speak with the called party to announce the call prior to completing the transfer.
Use Call Transfer as an efficient way to process misdirected calls and reduce
message-taking and call handling time.
The call is on hold. Place the handset beside the telephone—do not hang up!To transfer an incoming call:
0
1 .
To place another call, while the first caller is on hold:Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on
your telephone set).
Listen for dial tone.
To transfer to an internal CustoPAK line, dial the intercom code assigned
to the internal line. To transfer to an outside line dial the number to which
you wish to transfer the call.
Privately announce the transfer to the recipient. Hang up.
Key in destination phone number of the third party. Wait for the party to
answer. If you encounter a busy signal, no answer or if an error is made in
dialing, press the switchhook (or the Tap/Flash/Recall/Link button, depending
on your telephone set) twice to connect to the original party.
When party answers you may consult privately.
To return to a call that is on hold:
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Listen for confirmation tone.
Press *
0
1
(you may now talk to the person that was on hold).
-OR-
Hang up (your phone will ring).
Lift the handset (you may now talk to the party that was on hold).
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-OR-
Hang up (the call is automatically transferred).
NOTES:
1.) If you receive a busy signal, no answer or if an error is made in dialing,
press the switchhook twice to reconnect to the original call.
2.) You cannot transfer a call while on a Three-Way or Call Waiting call.
3.) A call placed from a CustoPAK line to a number outside the system cannot
be transferred to another number outside the system.
4.) Call Transfer may generate local, regional toll or long distance charges.
11Consultation HoldDirect Inward/Outward Dialing (DID/DOD)
Consultation Hold provides a temporary or “soft” hold without having to dial
an activation code. This allows you to place another call for private consultation
or to initiate a three-way call. Use Consultation Hold to quickly verify customer
inquiries and reduce costly and time-consuming callbacks.Direct Inward Dialing allows you to receive incoming calls directly at your station.
This can help enhance customer service by allowing incoming callers to quickly
reach you without the delay of a call transfer. Direct Outward Dialing improves
efficiency by enabling you to place calls to locations outside the system without
first dialing an access code or going through a central attendant.
To place a call on hold:
Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Listen for dial tone.
Dial the third party (if you encounter a busy signal, no answer or if an error is
made in dialing, press the switchhook twice to reconnect to the original call).
When the third party answers, you may consult privately before reconnecting
to the original call.
To return to the original caller:
Allow the third party to hang up.
Press the switchhook twice (if the switchhook is only pressed once, a three-way
call will be established).
NOTES:
1.) Consultation Hold overrides Dial Call Waiting and Call Waiting. When you put
a call on hold to use the line to place a second call, a third incoming call will
receive a busy signal.
2.) Call Forwarding cannot be activated while a call is on Consultation Hold.
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NOTE: Verizon has automatically activated this feature. You cannot activate or
deactivate the feature as you choose.
Distinctive Ringing (Inside/Outside Ringing)
CustoPAK Distinctive Ringing provides you with the ability to distinguish between
internal and external incoming calls, allowing you to greet customers and callers
from outside of your system more professionally. Internal calls—calls placed by
someone within the CustoPAK system using the Intercom feature—will ring with
a single ring. External calls—calls made from outside of the CustoPAK system—
are identified by a double ring. This feature is not available in the GTD-5
switch.
NOTES:
1.) Many telephone sets have their own distinctive ringing patterns that are not
associated with CustoPAK Distinctive Ringing.
2.) Priority Call and Distinctive Ringing cannot be on the same CustoPAK line,
since they share the same ring patterns.
3.) On forwarded calls, the ring pattern will be based on the original line, not the
forwarding line.
4.) On transferred calls, the ring pattern will be based on the transferring line,
not the original line.
5.) Verizon has automatically activated this feature. You cannot activate or
deactivate the feature as you choose.
13IntercomThree-Way Calling
The Intercom feature allows you to speak to, or transfer a call to, any other
person within your CustoPAK system—without incurring local usage charges.
Simply dial the two-digit code that was assigned to the line. See the Appendix
on page 45 of this guide to locate the Intercom Code Chart for your switch type.
The intercom codes are pre-assigned and programmed by Verizon.Three-Way Calling enables you to add a third party from either inside or
outside of your CustoPAK system to any established call to create a three-way
conference arrangement. This maximizes line efficiency and reduces costly
and time-consuming callbacks by allowing you to obtain answers to urgent
inquiries from two separate sources in a single call — reducing the costs and
lost productivity of multiple telephone calls.
To use the Intercom feature:
Pick up the handset and listen for dial tone.
Dial the intercom code:
20#– 49
#2–#for DMS 10 switch types.
7
#
for 5ESS, GTD-5 and DMS 100 switch types.
NOTE: For the Intercom feature to function properly, individual telephone
numbers must be assigned to a Multi-Line Hunt group.
While engaged in a two-way conversation:
Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Listen for dial tone.
Dial the number of the party you wish to add to the call (if you encounter
a busy signal, no answer or an error is made in dialing, press the switchhook
twice or hang up to reconnect to the original call).
Announce that you are setting up a conference call.
Press the switchhook again (the three-way conference is established).
NOTES:
1.) You may use Three-Way Calling to add another person no matter who
placed the original call. However, if you placed both calls and they are
outside of your CustoPAK system, when you hang up the other two people
will automatically disconnect.
2.) Three-Way Calling may generate local, regional toll or long distance charges.
If you hang up, you will be billed the appropriate charges for the portion of
the call for which you are responsible.
3.) You cannot establish a three-way call using the Automatic Callback feature.
4.) A three-way conference cannot be made between an established call and
a Call Waiting call.
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15Touch-Tone
Touch-Tone provides the ability to push-button dial on tone-signaling telephones
to access CustoPAK features and dial telephone numbers. Rotary dial telephones
are not compatible with CustoPAK service.
NOTE: Verizon has automatically activated this feature. You cannot activate or
deactivate the feature as you choose.
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CustoPAK Selectable Features
The features listed in this section are available for each of your CustoPAK lines
at no additional monthly charge. You may select as many or as few of these
features as you like, giving you the flexibility to customize each individual CustoPAK
line in the manner which best suits your business. As you read through this sec-
tion, be aware of your switch type (found on the front cover of this guide), since
some features are not available for certain switch types. To add or change features
at any time after your initial installation, contact your Verizon representative.
17Automatic CallbackCall Forwarding Options
When you encounter a busy line within your CustoPAK system, a code can be
dialed which will connect you when both lines are idle. The request will remain
active for 30 minutes unless canceled. Use Automatic Callback to increase
productivity by eliminating “telephone tag”, manual callbacks and unnecessary
dialing. This feature only works within the CustoPAK system, and the system
can only accommodate one request at a time per line. This feature is not
available in the GTD-5 switch type.Your CustoPAK system can be equipped with one or all of its five Call Forwarding
options. You may select or combine these features to meet your business needs.
The Call Forwarding options and their descriptions can be found by referring to
the list below:
Option
Section
Page
Call Forwarding ..................................... Selectable Features .................................. 20
To activate Automatic Callback once you’ve reached a busy line within
your CustoPAK system:Call Forwarding – Busy Line ................. Selectable Features .................................. 22
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).Call Forwarding – Don’t Answer............ Selectable Features .................................. 23
Listen for dial tone.Press *Listen for confirmation tone.Hang up (when the called line is idle, your line will ring with a distinctive ring).
5
Enhanced Call Forwarding1 .................... Optional Features ..................................... 40
Select Call Forwarding1.......................... Optional Features ..................................... 43
2 .
To cancel an Automatic Callback request:
Lift handset and press
Listen for confirmation tone.
Hang up.
#
5
2 .
NOTES:
1.) If an Automatic Callback is not answered by the originating station, the
request will be canceled.
2.) Automatic Callback can only be active on one station at a time.
3.) An Automatic Callback request can only be activated if the called number is
in a busy condition and within the CustoPAK group.
1
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Additional charges apply.
19Call ForwardingNOTES:
This Call Forwarding option allows you to have all incoming calls forwarded
to a pre-determined telephone number either inside or outside the CustoPAK
system. Call Forwarding provides you with the flexibility to choose your own
forward-to number, to change it as often as you like and to turn the feature
on or off as needed. When activated, it overrides Call Forwarding – Busy Line/
Don’t Answer and gives you the mobility you need to be productive outside the
office and after hours.1.) Calls forwarded outside the system are subject to local, regional toll or long
distance charges, as applicable.
2.) To confirm that Call Forwarding is on, press * 7 2 and if the feature is
on you will hear a fast busy tone. If it is off you’ll hear normal dial tone.
3.) You can place calls when Call Forwarding is on, however, you cannot answer
incoming calls. You will hear one short ring each time a call forwards to
remind you that the service is on.
4.) Call Forwarding overrides Call Waiting, Dial Call Waiting, Hunting arrange-
ments and Call Forwarding – Busy Line/Don’t Answer.
5.) Voice Mail service will not work when Call Forwarding is on, unless you have
activated forwarding to the Voice Mail service access number.
6.) A line with Call Forwarding activated cannot have an Automatic Callback
request initiated against it.
To turn Call Forwarding on:
Lift the handset and listen for dial tone.
Press *
At the tone, dial the telephone number you want your calls forwarded to.
When the call is answered, the feature has been activated. If the call is
not answered, hang up and repeat the above steps within two minutes.
The feature is activated when you hear the confirmation tone.
7
2 .
To turn Call Forwarding off:
Press *
7
3
(two short tones indicate that the service has been turned off).
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21Call Forwarding – Busy LineCall Forwarding – Don’t Answer
This feature automatically routes incoming calls to a pre-determined number
(either inside or outside of your CustoPAK system) when your line is busy. Use
Call Forwarding – Busy Line to improve customer service by forwarding calls
to alternate answering points, ensuring that all incoming calls are covered. This
feature can be separate on the line or can be combined with Call Forwarding –
Don’t Answer. The forward-to number must be programmed by Verizon.This feature automatically routes incoming calls to a telephone number (either
inside or outside of your CustoPAK system, or to Voice Messaging) when your
line is unanswered after a pre-determined number of rings (4-ring maximum).
Use Call Forwarding – Don’t Answer to improve customer service by forwarding
calls to alternate answering points, ensuring that no opportunities are lost
due to an unanswered call. This feature can be separate on the line or can
be combined with Call Forwarding – Busy Line. The forward-to number must
be programmed by Verizon.
NOTES:
1.) Calls forwarded outside the system are subject to local, regional toll or long
distance charges, as applicable.
2.) Call Forwarding – Busy Line overrides Dial Call Waiting (see page 29).
Therefore, if you place a call to a number with Call Forwarding – Busy Line,
the call is forwarded and the Dial Call Waiting treatment is not given during
a busy condition.
3.) Call Forwarding overrides Call Forwarding – Busy Line.
4.) For Multi-Line Hunt groups, Call Forwarding – Busy Line can only be
assigned on a group basis and will apply to every line in the group.
5.) Call Forwarding – Busy Line can only be assigned to the last member of
a Series Hunt group.
6.) If you have Voice Messaging, it is not necessary to subscribe to this feature.
7.) Verizon must automatically activate this feature. You cannot activate or
deactivate the feature as you choose.
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NOTES:
1.) Calls forwarded outside the system are subject to local, regional toll or long
distance charges, as applicable.
2.) Call Forwarding overrides Call Forwarding – Don’t Answer.
3.) Call Waiting and Dial Call Waiting override Call Forwarding – Don’t Answer.
4.) For Multi-Line Hunt groups, Call Forwarding – Don’t Answer can only be
assigned on a group basis and will apply to every line in the group.
5.) If the forward-to number is busy, the call will not forward. The line will
continue to ring, or you may get a busy signal, depending upon the location
of the forward-to number.
6.) If you have Voice Messaging, it is not necessary to subscribe to this feature.
7.) Verizon must automatically activate this feature. You cannot activate or
deactivate the feature as you choose.
23Call Pick-Up – GroupCall Restriction Options
Call Pick-Up – Group enables you to answer (pick-up) calls directed to any other
line within your Call Pick-Up group by dialing a code. If more than one person tries
to pick-up the call, the first user will receive the call, and the others will receive a
busy signal as confirmation that the call was answered. Use Call Pick-Up – Group
to provide maximum call coverage and ensure against missed calls.This feature enables you to select and control the incoming and outgoing
calling capabilities of each of your CustoPAK lines. Each line can only be
equipped with one Call Restriction option, which has been programmed by Verizon.
To use Call Pick-Up – Group:
Lift the handset and listen for dial tone.
Press *
1
7
NOTE: Verizon must automatically activate this feature. You cannot activate
or deactivate the feature as you choose. If you want to add or update Call
Restriction options, please contact your Verizon representative.
(the incoming call is connected to your station).
To use Call Pick-Up – Group when you are already on the phone:
Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Listen for dial tone.
Press *
0
1
to put the first call on hold.
Press *
1
7
(the incoming call is connected to your station).
NOTES:
1.) You cannot use Call Pick-Up – Group to connect to an Automatic Callback call.
2.) If more than one line in your Call Pick-Up group is ringing, you cannot select
which line to answer. The system will automatically direct the pick-up to the
call that came in first.
3.) All lines in a Multi-Line Hunt group must be in the same Call Pick-Up group.
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25Call Waiting
This valuable feature provides an audible tone while you are on the line that
alerts you of another incoming call. You then have the option to either place
the present call on hold to answer the incoming call or to disregard it. The
calling party will receive ringing tone instead of a busy tone. Use Call Waiting
to maximize line efficiency and improve customer service by ensuring prompt
responses to urgent inquiries.
Cancel Call Waiting (Tone Block)
When you don’t want to be disturbed or interrupted during an important call,
you can temporarily deactivate Call Waiting. You can activate Cancel Call Waiting
before you place a call or at any point during the conversation. Cancel Call
Waiting works only for the length of one call. When you hang up, Call Waiting
returns automatically to your phone.
To cancel the Call Waiting tone before placing a call:
After hearing the Call Waiting tone:
Lift the handset and listen for dial tone.
Either end your first call or tell the person to whom you are speaking that
you are going to put them on hold.Press *
Press and release the switchhook (or the Tap/Flash/Recall/Link button,
depending on your telephone set) to put the first person on hold and answer
the second call in the GTD-5 switch.Listen for confirmation tone, followed by normal dial tone.
Dial the telephone number.
7
0 .
To cancel the Call Waiting tone during a call:
Press and release the switchhook (or the Tap/Flash/Recall/Link button,
depending on your telephone set), listen for the flash tone, then dial * 0 1
to put the first person on hold and answer the second call in the DMS 100,
DMS 10 and 5ESS switches (may also be required for GTD-5 switch).Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Press *
To return to the first call and put the second call on hold, repeat bullet two or
three (depending on switch type). You can alternate between calls as often as
desired by repeating bullets two or three (depending on switch type).NOTE: In some areas you can only activate Cancel Call Waiting before placing a call.
7
0
(you will reconnect automatically to your call).
NOTES:
1.) Call Waiting allows you to have two calls on your line at the same time
(one on hold and one to whom you are talking). A third caller will hear a
busy signal.
2.) Call Waiting cannot be assigned to lines in a Multi-Line Hunt group.
3.) Call Waiting overrides Call Forwarding – Busy Line/Don’t Answer.
4.) Call Forwarding overrides Dial Call Waiting.
5.) Series Hunting overrides Call Waiting, which should be assigned to the last
number of a Series Hunt group.
6.) A three-way conference cannot be made between an established call and
a Call Waiting call.
7.) If Call Waiting and Call Forwarding – Don’t Answer are active on the same
line and you choose to ignore the Call Waiting tone, the call will forward to
your Call Forwarding – Don’t Answer number.
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27Dial Call Waiting (for Intercom dialing)Hunting
This feature allows you to send a Call Waiting tone to another line within your
CustoPAK system when that line is busy, letting the called party know that some-
one is trying to reach them. The called party then has the option to answer or
ignore the Call Waiting tone. Use Dial Call Waiting to help ensure the timely and
efficient flow of information within your business. This feature is not available
for GTD-5 switch types.Hunting allows your business to reduce busy signals and increase accessibility
by expanding call coverage. A Hunting arrangement begins with a call to a lead,
or pilot number and searches for an idle line beginning with the first number of a
pre-assigned Hunt group and ending with the last number in the group.
Upon dialing an internal station number and hearing a busy tone:
Hang up.
Lift the handset and listen for dial tone.
Press *
Dial the number of the busy station (the called party hears a Call Waiting tone).
Remain off-hook until the called party answers.
5
4
and listen for confirmation tone.
NOTES:
NOTES:
1.) When a Multi-Line Hunt group is assigned to a CustoPAK customer, individual
telephone numbers must be assigned in order for the Intercom feature to work.
2.) Call Waiting cannot be assigned to lines in a Hunt group.
3.) Automatic Callback cannot be activated against lines in a Hunt group.
4.) Call Forwarding and Call Forwarding – Busy Line/Don’t Answer can only be
assigned to a Multi-Line Hunt group on a group basis.
5.) All lines in a Multi-Line Hunt group must be in the same Call Pick-Up group.
6.) Caller ID will work in a Hunt group, however, the feature must be assigned to
every line in the Hunt group.
7.) Verizon must automatically activate this feature. You cannot activate or
deactivate the feature as you choose.
1.) Dial Call Waiting only works within your CustoPAK system.
2.) Dial Call Waiting cannot be assigned to lines in a Multi-Line Hunt group.
3.) Dial Call Waiting overrides Call Forwarding – Busy Line/Don’t Answer.
4.) Call Forwarding overrides Dial Call Waiting.
5.) If Call Waiting and Call Forwarding – Don’t Answer are active on the same
line and the called party chooses to ignore the Dial Call Waiting tone, the call
will forward to the called party’s Call Forwarding – Don’t Answer number.
6 .) Series Hunting overrides Dial Call Waiting, which should be assigned to the
last number of a Series Hunt group.
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29Speed Dialing
Speed Dialing allows you to call frequently dialed numbers by using an
abbreviated code, reducing dialing time and time spent searching for telephone
numbers. Speed Dialing gives you the flexibility to create and edit your own
Speed Dialing list. The Speed Dialing short list consists of 8 numbers unless
you have a 5ESS switch type, which provides a 6-number Speed Dialing list.
CustoPAK Optional Features
The following features are available for each of your CustoPAK lines at an additional
monthly charge per line. As you read through this section, be aware of your
switch type (found on the front cover of this guide), since some of these Optional
features are not available for certain switch types. To add or change any of these
features after your initial installation, contact your Verizon representative.
To establish/add or change a number on your Speed Dialing list:
Lift the handset and listen for dial tone.
Press *
7
4
Press
1
(GTD-5 only, skip this step in all other switches).
Press the Speed Dialing code numbers to be programmed (2-9 for all switches
except 5ESS, press 2-7 for 5ESS).
Dial the telephone number to be assigned to the code, along with any required
access codes, ( i.e., long distance carrier access code) up to 28 digits.
Listen for confirmation tone.
Hang up.
Repeat steps for each code number to be programmed.
#
and listen for confirmation tone.
To place a Speed Call from the short list:
Lift the handset and listen for dial tone.
Press # 1 (all switches) and then dial the Speed Dialing code number
(2-9 or 2-7 depending on what switch type you have). See page 50 for
Speed Dialing code charts.
Wait for party to answer.
NOTES:
1.) OPTIONAL: After you press # 1 and the code number, press # again
for a quicker connection.
2.) Service codes such as 911, cannot be programmed.
3.) Fully restricted lines cannot have Speed Dialing.
4.) Customers may experience a 2- to 3-second timing delay when activating
Speed Dialing codes that match other feature activation codes.
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31* 69Busy Redial
This convenient feature automatically stores and allows you to redial the number
of the last person who called you. *69 only works on calls made from numbers
within your regional calling area and can be used whether you answered the
last call or not. If you return the call and the number is busy, *69 will monitor the
busy line and attempt to connect your call for up to 30 minutes, unless canceled.
In most cases, your phone will ring with a series of short-short-long rings when
the number you called is no longer busy. This feature is not available in the
DMS 10 switch type.After reaching a busy line within your regional calling area, this convenient service
allows you to dial a code that will automatically connect you when both lines
are idle. Once activated, Busy Redial will monitor the busy line and attempt to
connect your call for up to 30 minutes, unless canceled. You will be alerted with
a special ring when the call is returned. You can use Busy Redial to help reduce
multiple callbacks, dialing time and lost productivity. This feature is not available
in the DMS 10 switch type.
After dialing a busy number:
To activate * 69:
Hang up.
Lift the handset and listen for dial tone.Lift the handset and listen for dial tone.
Press *Press * 6 6 . You will hear two normal ringing tones or an announce-
ment. If the called number is still busy, a voice recording will tell you that
your call is next in line.
Hang up. When the number you called is no longer busy, your telephone
will ring with a series of short-short-long rings (ringing tones may vary).
Lift the handset. You will hear normal ringing tone.
6
9
(a voice recording may provide additional instructions).
To deactivate * 69:
Lift the handset and listen for dial tone.
Press *
8
9 .
NOTES:
1.) If you hear the Call Waiting tone while you are on the line, you have two
choices: you can use *69 to call back later, or you can use Call Waiting
during the call.
2.) A *69 callback will not activate a Call Waiting tone; the line must be idle.
3.) *69 and Automatic Callback cannot be on the same line.
4.) This feature must be applied to all members of a Hunt group.
5.) *69 ring patterns may duplicate those of Distinctive Ringing.
6.) *69 will not work when activated against a line with Call Forwarding.
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To deactivate Busy Redial:
Lift the handset and listen for dial tone.
Press *
8
6
.
NOTES:
1.) The number you called will not ring until you pick up your telephone.
2.) Occasionally, the person you are calling uses the phone before Busy Redial
can complete your call. If this happens, a voice recording will tell you to
hang up and reactivate Busy Redial.
3.) You can use Busy Redial to return calls to more than one busy number at a time.
4.) When your phone rings with a short-short-long ring, you need to answer by
the third series of rings or Busy Redial will pause and try to complete your
call 5 minutes later.
5.) Busy Redial and Automatic Callback cannot be on the same line.
6.) This feature must be applied to all members of a Hunt group.
7.) Busy Redial will not activate a Call Waiting tone.
33Call Block (*60)
Call Block provides you with the capability to block up to 12 external telephone
numbers (within your regional calling area) from calling your number, preventing
unwanted and nuisance calls. Once activated, any calls from these 12 numbers
will be routed to an intercept message. For your protection, calls from outside
of your regional calling area and operator-handled calls cannot be blocked.
This feature is not available in the DMS 10 switch type.Call Park
To access the Call Block feature:To “park” a call against your number:
Lift the handset and listen for dial tone.Tell the person to whom you are speaking that you are going to put them on hold.
Press *Listen to the voice-recorded instructions for Call Block options.Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Press *
Hang-up.
6
0
.
GTD-5 switch type only:
If you are a member of a Hunt group, you must:
Lift the handset and listen for dial tone.
Press
Listen to the voice-recorded instructions for Call Block options.
#
6
0
.
Call Park functions like Call Pick-Up except that the call is already in progress.
You can “park” an established call on your line against your own number, freeing
up your line to place or receive another call. The parked call can be retrieved
from any other station within the CustoPAK system, including your own. Only one
call can be parked against a CustoPAK line at a given time. This feature is not
available in the DMS 10 switch type.
1
1
and listen for confirmation tone.
To retrieve a call you “parked” against your number:
Lift the handset and listen for dial tone.
Press *
Begin your conversation.
1
3
and listen for confirmation tone.
NOTES:
1.) Blocked calls will not be forwarded on any Call Forwarding arrangement
and will not appear on Caller ID displays.
2.) Call Block takes precedence over Series Hunting.
3.) This feature must be applied to all members of a Hunt group.
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NOTES:
1.) If a parked call is not retrieved, the parking station will be recalled when idle.
2.) A station in the “call parked” condition cannot use the Three-Way Calling feature.
3.) Call Waiting will not activate against a number in a “parked” condition.
35Call Park – DirectedCall Trace
This feature is an enhancement to Call Park. It performs the same functions
as Call Park, but it allows you to park calls against any number in the CustoPAK
system except your own. Only one call can be parked against a CustoPAK line at a
given time. This feature is not available for GTD-5 and DMS 10 switch types.This protective feature enables you to trace the number of the last threatening or
harassing call received, as long as the call originates from within your regional
calling area. The calling party’s number will automatically be reported to Verizon,
and in some areas you will be charged for each successful trace. This feature
is not available in the DMS 10 switch type.
To park a call against another CustoPAK number:
Tell the person to whom you are speaking that you are going to put them on hold.
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on
your telephone set).
Press *
1
4 .
If you receive a life-threatening or harassing call:
Hang up.
Lift the handset and listen for dial tone.
Press *
A voice recording will tell you if the call trace has been completed successfully.
To take legal action, record the exact date and time of the call and contact
Verizon within 10 days at the number provided by the voice recording. If
you forget that number, call the Customer Contact Center for assistance. If
the situation is an emergency, call your local law enforcement agency.
Dial the Intercom number of the station where you wish to park the call.
Hang-up.
To retrieve parked calls from any line:
Lift the handset and listen for dial tone.
Press * 1 2 . If a call is parked against the line from which you are
retrieving it, you will be automatically connected. If you are retrieving the
call from a different line, dial the Intercom number of the line that the call
is parked against.
Begin your conversation.
NOTES:
1.) If a parked call is not retrieved, the parking station will be recalled when idle.
2.) The station in the “call parked” condition and the station with Call Park –
Directed activated cannot use the Three-Way Calling or Executive Busy
Override features.
3.) Call Waiting will not activate against a number in a “parked” condition.
4.) Call Park – Directed cannot be used to answer an Automatic Callback call.
5.) Call Park – Directed cannot be activated against a line with Call Forwarding.
6.) Call Park – Directed cannot be applied to a member of a Hunt group.
7.) Call Park – Directed overrides Series Hunting and Call Forwarding – Don’t Answer.
8.) The Call Park – Directed access code and the station number must be dialed
before you know if the call has already been retrieved.
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5
7
and follow the voice-recorded instructions.
NOTES:
1.) If you successfully trace a call and choose to take further action, you
must contact Verizon within 10 days or the call record will no longer be
stored in the system.
2.) The records of any Call Trace request will be released only to a law
enforcement agency.
3.) In some areas, Call Trace is available on a pay-per-use or subscription basis.
4.) Call Trace cannot trace a call that was forwarded by way of Call Forwarding or
Call Forwarding – Busy Line.
5.) If Call Trace is activated after receiving a Call Waiting tone, the waiting call
will be traced, whether answered or not.
6.) This feature must be applied to all members of a Hunt group.
37Caller IDCaller ID – Number Only
Caller ID, along with compatible display telephones or separate Caller ID display
box, lets you view the listed name and number of the incoming call before you
pick it up. Use Caller ID to help improve customer service by personalizing your
greetings and gathering information pertinent to a call before you answer it. You
can also use the service to prioritize and screen calls when you are expecting an
important call from a customer or supplier. Caller ID display devices vary in
design, available features and the amount of information that may be retained in
memory. The service will display information between the first and second rings
for most calls, including long distance. However, some calls may be shown as
“Out-of-Area” or as “Private Number” and the information will not be displayed.
This feature is not available in the DMS 10 switch type.Caller ID – Number Only, along with compatible display telephones or separate
Caller ID display box, lets you view the number of the incoming call before
you pick it up. Use Caller ID – Number Only to help improve customer service by
personalizing your greetings and gathering information pertinent to a call before
you answer it. You can also use the service to prioritize and screen calls when
you are expecting an important call from a customer or supplier. Caller ID display
devices vary in design, available features and the amount of numbers that may be
retained in memory. Caller ID will display numbers between the first and second
rings for most calls, including long distance. However, some calls may be shown
as “Out-of-Area” or as “Private Number” and the number will not be displayed.
This feature is not available in the DMS 10 switch type.
NOTES:NOTES:
1.) This feature must be applied to all members of a Hunt group.
2.) If Call Forwarding or Select Call Forwarding is activated, the call information
will not be displayed at the forward-from location, but will be passed to the
forward-to number.
3.) With Call Forwarding – Busy Line, the call information will not be passed
to the forward-to number.
4.) With Call Waiting, the call information will not be displayed, unless the line
has Call Waiting ID and the phone has the appropriate display unit.
5.) Caller ID is not available with Off Premises station lines or Foreign Exchange
station lines.
6.) Verizon must automatically activate this feature. You cannot activate or
deactivate the feature as you choose.1.) This feature must be applied to all members of a Hunt group.
2.) If Call Forwarding or Select Call Forwarding is activated, the calling number
will not be displayed at the forward-from location, but will be passed to the
forward-to number.
3.) With Call Forwarding – Busy Line, the calling number will not be passed to
forward-to number.
4.) With Call Waiting, the calling number will not be displayed, unless the line
has Call Waiting ID and the phone has the appropriate display unit.
5.) Caller ID – Number Only is not available with Off Premises station lines or
Foreign Exchange station lines.
6.) Verizon must automatically activate this feature. You cannot activate or
deactivate the feature as you choose.
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39Enhanced Call ForwardingExecutive Busy Override
Using a toll free 800 number, you can forward calls from anywhere in the
country to any other number of your choice (pager, cellular phone, work phone
or home phone). Enhanced Call Forwarding has been installed with a default
destination number that you have chosen, and provides you with the flexibility
to override the default number whenever necessary. This feature is not avail-
able in the DMS 10 switch type.Executive Busy Override allows you to gain access to a busy line within your
CustoPAK system by dialing a code, thus establishing a three-way call. The
called number will receive a warning tone prior to the establishment of the
three-way conference call. The person to whom the called party is speaking
can be either inside or outside of the CustoPAK system. This feature is not
available in the GTD-5 switch type.
While using Enhanced Call Forwarding, certain buttons always have the same
standard function:Upon reaching a busy internal station:
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on your
telephone set).
Press * 4 0 (both parties will hear break-in tone and you can now join
the conversation).
Press8to jump to the Main Menu.Press9to hear a menu again.Press0to hear help information.Press * to return to the previous menu.NOTES:
If you’re entering a string of digits (a phone number or a time) and make
a mistake, press * to clear the entry so you can start over again.After entering a string of digits, press # to end the string.1.) If a three-way conference is already in progress on the called number, the
feature will not operate.
2.) If the called party presses the switchhook (or the Tap/Flash/Recall/Link button,
depending on the telephone set), the overriding party will be disconnected
from the three-way call. If any of the three parties hang up, the remaining
two parties will still be connected.
Calling Enhanced Call Forwarding
From a touch-tone telephone:
Dial 1-888-483-3230.
Enter your 10-digit Enhanced Call Forwarding account number, then press
Enter your Verizon-provided temporary PIN, then press # . If this is the first
time you’ve used Enhanced Call Forwarding, you’ll be prompted to create your
new 6- to 10-digit PIN.
Refer to your Enhanced Call Forwarding User Guide for detailed
information on how to use this feature.
#
.
Last Number Redial
This convenient service enables you to be connected to the last number you
dialed. Use Last Number Redial to save time and improve efficiency by reducing
dialing time and time spent looking for telephone numbers. This feature is not
available for 5ESS and DMS 10 switch types.
To be connected to the last number you dialed:
Lift the handset and listen for dial tone.
Press
#
7
7
and wait for the call to connect.
NOTE: If you called both numbers when establishing a three-way conference,
the second number is the one stored for a Last Number Redial request.
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41Priority CallSelect Call Forwarding
Priority Call enables you to program up to 12 numbers—from within your
regional calling area—to be identified with a special ring pattern (short-long-
short). Use Priority Call to help you know when an important call comes in so
you can give superior service to your high-priority callers. This feature is not
available in the DMS 10 switch type.Select Call Forwarding lets you program up to 12 numbers — from within your
regional calling area— that you wish to have call forwarded. When a number on
your Select Call Forwarding list calls you, it will be forwarded to the number
you have programmed to receive the call. Calls from all other numbers will be
handled in the normal manner. You can program calls to forward to virtually
any number— local or long distance — and Select Call Forwarding allows
you to change your forward-to number whenever necessary. Use Select Call
Forwarding to remain accessible and give top priority to your most important
callers. This feature may generate local, regional toll or long distance charges.
This feature is not available in the DMS 10 switch type.
To turn Priority Call on or off:
Lift the handset and listen for dial tone.
Press *
Listen to the voice recording for instructions on how to turn Priority Call on or
off, and how to change or review your Priority Call list.
6
1 .
To update your Priority Call list:
Press * 6 1 and follow the voice-recorded instructions. If your list is full,
you must erase one number before you can add another.
To turn Select Call Forwarding on or off:
Lift the handset and listen for dial tone.
Press *
Listen to the voice recording for instructions on how to turn your Select Call
Forwarding service on and off and how to change or review your Select Call
Forwarding list.
NOTES:
1.) The Priority Call special ring will not follow a Call Forwarding or Select Call
Forwarding call.
2.) This feature must be applied to all members of a Hunt group.
3.) The Priority Call special ring will not hunt.
4.) This feature will not work on a Hunt group’s pilot number.
6
3 .
To update your Select Call Forwarding list:
Press * 6 3 and follow the voice-recorded instructions. If your list is full,
you must delete one number before you can add another.
NOTES:
1.) When Select Call Forwarding is on and a call forwards:
- Calls from numbers on your Select Call Forwarding list cannot be answered at
the forward-from number, however, they will generate one short ring to remind
you that the call is being forwarded. The forward-to number will ring normally.
- All calls from numbers not on your Select Call Forwarding list will ring
normally and can be answered.
- If you also have Call Forwarding and it is turned on, all calls from phone
numbers not on your Select Forwarding list will forward to the number you
have chosen as the Call Forwarding Select destination.
2.) Blocked calls will not forward.
3.) This feature must be applied to all members of a Hunt group.
4.) Select Call Forwarding overrides all other Call Forwarding arrangements.
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43Voice Mail and CustoPAKAppendix
Verizon Voice Mail offers an efficient, businesslike way to capture important
messages when you’re away from the office or on the phone 24 hours a day,
365 days a year. If you are unable to answer your line, or you are using your line
(line busy), up to 3 calls can forward to your mailbox.Intercom Code Charts
GTD-5, 5ESS and DMS 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
You can set up your Verizon Voice Mail to enable callers to transfer out of
the mailbox to a local telephone number selected by you for live answering.
In addition to a Main Greeting, Verizon Voice Mail offers the option of an
Alternate Greeting for times when you are away from the office.
If you wish to transfer a caller on your line to another CustoPAK line
which has Verizon Voice Mail:
Press the switchhook (or the Tap/Flash/Recall/Link button, depending on
your telephone set).
Dial the Intercom number.
IF the line is answered, press the switchhook for a three-way call. If you wish
to exit, simply hang up and the two parties will remain in conference.
IF the line is not answered, you can hang up after the first ring, and the caller
will forward to the second station line user’s mailbox greeting. The caller can
then leave a recorded message in the second mailbox user’s mailbox.
DMS 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Speed Dialing Code Charts
GTD-5, DMS 100 and DMS 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5ESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
CustoPAK Feature Activation/Deactivation Codes . . . . . . . . . . . . . . . . . . . . . . 52
Feature Availability by Switch Type. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Your CustoPAK Feature Selections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
NOTE: Please refer to the Verizon Voice Mail User Guide for information on how
to use your mailbox.
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45Intercom Code Charts
GTD-5, 5ESS and DMS 100 Intercom Code Chart
The following charts are provided for you to list your Intercom codes. Each
telephone number has been assigned an intercom code, and depending on your
switch type, you must press # either before or after the Intercom code number.
These Intercom codes have been programmed by Verizon. Instructions for using
the Intercom feature are found below and also on page 14 of this guide.
To make an Intercom call:
Pick up the handset and listen for dial tone.
Press the Intercom code
2
Press the Intercom code
#
0
2
#–49
–#7(DMS 10).
#
(GTD-5, 5ESS and DMS 100).
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Name
Code
Telephone Number
20#
21#
22#
23#
24#
25#
26#
27#
28#
29#
30#
31#
32#
33#
34#
35#
36#
37#
38#
39#
40#
41#
42#
43#
44#
45#
46#
47#
48#
49#
47Speed Dialing Code Charts
DMS 10 Intercom Code Chart
Name
Code
Telephone Number
#2
#3
#4
#5
The following charts are provided for you to list your Speed Dialing codes. The
length of your individual Speed Dialing list is determined by your switch type.
Your switch type can be found on the front cover of this guide. Be sure to use
the Speed Dialing list that corresponds to your switch type. The instructions for
setting up a list and making calls using Speed Dialing can be found below and
also on page 30 of this guide.
To establish or change your Speed Dialing list:
#6
#7
Lift the receiver and listen for dial tone.
Press *
Press #
7
4
and listen for dial tone.
1 .(GTD-5 only, skip this step in all other switches).
Press the Speed Dialing 1-digit code number to be programmed
(see pages 50-51).
Dial the telephone number to be assigned to the code.
Listen for confirmation tone.
Hang up.
Repeat steps for each Speed Dialing code number to be programmed.
To make a call using Speed Dialing:
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Lift the receiver and listen for dial tone.
Press # 1 .(all switches) and then dial the Speed Dialing code number
(see pages 50-51).
You will hear the called number ringing.
Wait for party to answer.
49GTD-5, DMS 100 and DMS 10 Speed Dialing List
Name
Code
Telephone Number
5ESS Speed Dialing List
Name
Code
22
33
44
55
66
77
Telephone Number
8
9
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51CustoPAK® Feature Activation/Deactivation Codes
FeatureActivation Code
*69
Automatic Callback
Busy Redial
Call Block
Call Forwarding
Call Hold
Call Park
Call Park – Directed
Call Pick-Up – Group
Call Trace
Cancel Call Waiting
Dial Call Waiting
Executive Busy Override*69
*52
*66
*60
*72
*01
*11
*14
*17
*57
*70
*54
*40
20# - 49# for 5ESS,
IntercomGTD-5 and DMS 100.
#2 - #7 for DMS 10.
#77
61
63
74, then #1 (GTD-5 only)
to program.
2 - 9 to use feature
for all switches,
except the 5ESS.
2 - 7 to use feature
for the 5ESS.
Last Number Redial
Priority Call
Select Call Forwarding
*
Speed Dialing
*
*
Deactivation or
Retrieval Code
89
#52
86
*
*
*73
*01
*13
*12
Feature Availability by Switch Type
Feature
GTD-5
Basic Features
Assume Dial “9”
Call Hold
Call Transfer
Consultation Hold
Direct Inward/Outward Dialing (DID/DOD)
Distinctive Ringing (Inside/Outside Ringing)
Intercom Dialing
Three-Way Calling
Touch-Tone
Selectable Features
Automatic Callback
Call Forwarding
Call Forwarding – Busy Line
Call Forwarding – Don’t Answer
Call Pick-Up – Group
Call Restriction Options
Call Waiting
Cancel Call Waiting
Dial Call Waiting
Hunting
Speed Dialing
Optional Features:
69
Busy Redial
Call Block ( 60)
Call Park
Call Park – Directed
Call Trace
Caller ID services
Enhanced Call Forwarding
Executive Busy Override
Last Number Redial
Priority Call
Select Call Forwarding
Voice Mail
*
*
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✓
✓
✓
✓
✓
✓(30)
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓(8)
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
Switch Type
5ESS DMS 100 DMS 10
✓
✓
✓
✓
✓
✓
✓(30)
✓
✓✓
✓
✓
✓
✓
✓
✓(30)
✓
✓✓
✓
✓
✓
✓
✓
✓(6)
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓(6)✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓(8)✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓(8)
✓
✓
✓
✓
✓
✓
✓
✓
✓✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
53Your CustoPAK® Feature Selections
Feature
Telephone Numbers
Basic Features
Assume Dial “9”
Call Hold
Call Transfer
Consultation Hold
Direct Inward/Outward Dialing (DID/DOD)
Distinctive Ringing (Inside/Outside Ringing)
Intercom Dialing
Three-Way Calling
Touch-Tone
Selectable Features
Automatic Callback
Call Forwarding
Call Forwarding – Busy Line
Call Forwarding – Don’t Answer
Call Pick-Up – Group
Call Restriction Options
Call Waiting
Cancel Call Waiting
Dial Call Waiting
Hunting
Speed Calling
Optional Features:
69
Busy Redial
Call Block ( 60)
Call Park
Call Park – Directed
Call Trace
Caller ID services
Enhanced Call Forwarding
Executive Busy Override
Last Number Redial
Priority Call
Select Call Forwarding
Voice Mail
*
*
54
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55Notes
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You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." | Given the recent advancements of mRNA technology, how might future influenza vaccines be designed to provide a more comprehensive protection against emerging variants, potentially reducing the need for annual revaccinations? | Annually, seasonal influenza is responsible for millions of infections and hundreds of thousands of deaths. The current method for managing influenza is vaccination using a standardized amount of the influenza virus’ primary surface antigen, hemagglutinin (HA), as the intended target of the immune response. This vaccination strategy results in vaccines with variable efficacy year to year due to antigenic drift of HA, which can be further exacerbated by manufacturing processes optimizing growth of vaccine virus in eggs. Due to these limitations, alternative vaccine platforms are actively being explored to improve influenza vaccine efficacy, including cell-based, recombinant protein, and mRNA vaccines. mRNA’s rapid, in vitro production makes it an appealing platform for influenza vaccination, and the success of SARS-CoV-2 mRNA vaccines in the clinic has encouraged the development of mRNA vaccines for other pathogens. Here, the immunogenicity and protective efficacy of a quadrivalent mRNA vaccine encoding HA from four seasonal influenza viruses, A/California/07/2009 (H1N1), A/Hong Kong/4801/2014 (H3N2), B/Brisbane/60/2008 (B-Victoria lineage), and B/Phuket/3073/2013 (B-Yamagata lineage), was evaluated. In mice, a 120 μg total dose of this quadrivalent mRNA vaccine induced robust antibody titers against each subtype that were commensurate with titers when each antigen was administered alone. Following A/California/04/2009 challenge, mice were fully protected from morbidity and mortality, even at doses as low as 1 μg of each antigen. Additionally, a single administration of 10 μg of quadrivalent mRNA was sufficient to prevent weight loss caused by A/California/04/2009. These results support the promise of this mRNA vaccine for prevention and mitigation of influenza vaccine.The results presented here are encouraging and support the effectiveness of GLB quadrivalent influenza mRNA vaccines in generating HA-targeted neutralizing antibody responses which have been well-documented to correlate with protection from disease44,45,46. In addition to antibodies targeting HA, T cells are also an important immune mediator of infection and deserve analyses in future studies47. The presence of pre-existing CD4+ T cells has been shown to correlate with protection from influenza disease in humans, while memory CD8+ T cell activity is associated with protection from emerging influenza viruses48,49,50. An early study of influenza mRNA vaccines by Petsch et al. found mice vaccinated with PR8 HA mRNA exhibited CD4+ responses against a variety of MHC class II PR8 peptides as well as greater CD8+ cytotoxic activity than controls when tested with MHC class I PR8 peptides. The mRNA platform is a powerful development in vaccine technology, not only in regards to their flexibility, speed, and scalability, but in that they offer an alternative approach to the development of a universal influenza vaccine. To that end, in a 2022 paper by Arevalo et al., vaccination with mRNA encoding 20 different HAs, representative of all A and B subtypes, induced humoral responses against all antigens and protected mice and ferrets from influenza challenge with matched and mismatched strains22. Furthermore, a natural extension of immunization with multivalent HA mRNA vaccines are multi-antigenic mRNA vaccines. In 2020 Freyn et al. reported broad protection in mice vaccinated with modified mRNA encoding conserved sequences from HA, NA, M2, and NP on a single strand of mRNA at a dose as low as 50 ng23. A recent study of a pentavalent modified mRNA vaccine targeting HA, NA, NP, and matrix protein 2 (M2) from B/Victoria/2/1987-like lineage and HA from B/Yamagata/16/1988-like lineage was found to induce broadly cross-reactive antibodies against ancestral and contemporary B viruses from both lineages, as well as protect mice from morbidity and mortality following challenge with a panel of influenza B viruses24. Similarly, a 2022 study of mRNA vaccines containing HA, NA, NP, and M2 targeting group 2 influenza viruses was found to protect mice from all challenge viruses, even when administered as a single dose of 125 ng25. These results demonstrate the promise of mRNA vaccines to improve breadth and efficacy of influenza vaccines. | "================
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Annually, seasonal influenza is responsible for millions of infections and hundreds of thousands of deaths. The current method for managing influenza is vaccination using a standardized amount of the influenza virus’ primary surface antigen, hemagglutinin (HA), as the intended target of the immune response. This vaccination strategy results in vaccines with variable efficacy year to year due to antigenic drift of HA, which can be further exacerbated by manufacturing processes optimizing growth of vaccine virus in eggs. Due to these limitations, alternative vaccine platforms are actively being explored to improve influenza vaccine efficacy, including cell-based, recombinant protein, and mRNA vaccines. mRNA’s rapid, in vitro production makes it an appealing platform for influenza vaccination, and the success of SARS-CoV-2 mRNA vaccines in the clinic has encouraged the development of mRNA vaccines for other pathogens. Here, the immunogenicity and protective efficacy of a quadrivalent mRNA vaccine encoding HA from four seasonal influenza viruses, A/California/07/2009 (H1N1), A/Hong Kong/4801/2014 (H3N2), B/Brisbane/60/2008 (B-Victoria lineage), and B/Phuket/3073/2013 (B-Yamagata lineage), was evaluated. In mice, a 120 μg total dose of this quadrivalent mRNA vaccine induced robust antibody titers against each subtype that were commensurate with titers when each antigen was administered alone. Following A/California/04/2009 challenge, mice were fully protected from morbidity and mortality, even at doses as low as 1 μg of each antigen. Additionally, a single administration of 10 μg of quadrivalent mRNA was sufficient to prevent weight loss caused by A/California/04/2009. These results support the promise of this mRNA vaccine for prevention and mitigation of influenza vaccine.The results presented here are encouraging and support the effectiveness of GLB quadrivalent influenza mRNA vaccines in generating HA-targeted neutralizing antibody responses which have been well-documented to correlate with protection from disease44,45,46. In addition to antibodies targeting HA, T cells are also an important immune mediator of infection and deserve analyses in future studies47. The presence of pre-existing CD4+ T cells has been shown to correlate with protection from influenza disease in humans, while memory CD8+ T cell activity is associated with protection from emerging influenza viruses48,49,50. An early study of influenza mRNA vaccines by Petsch et al. found mice vaccinated with PR8 HA mRNA exhibited CD4+ responses against a variety of MHC class II PR8 peptides as well as greater CD8+ cytotoxic activity than controls when tested with MHC class I PR8 peptides. The mRNA platform is a powerful development in vaccine technology, not only in regards to their flexibility, speed, and scalability, but in that they offer an alternative approach to the development of a universal influenza vaccine. To that end, in a 2022 paper by Arevalo et al., vaccination with mRNA encoding 20 different HAs, representative of all A and B subtypes, induced humoral responses against all antigens and protected mice and ferrets from influenza challenge with matched and mismatched strains22. Furthermore, a natural extension of immunization with multivalent HA mRNA vaccines are multi-antigenic mRNA vaccines. In 2020 Freyn et al. reported broad protection in mice vaccinated with modified mRNA encoding conserved sequences from HA, NA, M2, and NP on a single strand of mRNA at a dose as low as 50 ng23. A recent study of a pentavalent modified mRNA vaccine targeting HA, NA, NP, and matrix protein 2 (M2) from B/Victoria/2/1987-like lineage and HA from B/Yamagata/16/1988-like lineage was found to induce broadly cross-reactive antibodies against ancestral and contemporary B viruses from both lineages, as well as protect mice from morbidity and mortality following challenge with a panel of influenza B viruses24. Similarly, a 2022 study of mRNA vaccines containing HA, NA, NP, and M2 targeting group 2 influenza viruses was found to protect mice from all challenge viruses, even when administered as a single dose of 125 ng25. These results demonstrate the promise of mRNA vaccines to improve breadth and efficacy of influenza vaccines.
https://www.nature.com/articles/s41541-023-00752-5#:~:text=Seasonal%20quadrivalent%20mRNA%20vaccine%20prevents%20and%20mitigates%20influenza%20infection%20%7C%20npj%20Vaccines
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Given the recent advancements of mRNA technology, how might future influenza vaccines be designed to provide a more comprehensive protection against emerging variants, potentially reducing the need for annual revaccinations?
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You are an expert in question answering. Your task is to reply to a query or question, based only on the information provided by the user. It should only use information in the article provided." |
For this task, you must only answer using the context block provided. Prior knowledge and external resources are disallowed. | Summarise the court findings of the Silkroad case | Silk Road
In 2013, federal authorities shut down Silk Road, which they alleged was “the most sophisticated
and extensive criminal marketplace on the Internet,” enabling tens of thousands of users to
anonymously buy and sell illegal drugs, malicious software, and other illicit goods and services.
38
Federal prosecutors charged the site’s creator with, among other things, conspiracy to commit
money laundering under Section 1956.
39 The prosecutors alleged that the site’s creator conspired
to conduct “financial transactions” involving the proceeds of unlawful activity—namely,
narcotics trafficking and computer hacking—with the intent to promote the carrying on of such
activity.40 In defending this charge, Silk Road’s creator argued that his alleged conduct—
facilitating the exchange of Bitcoin for illegal goods and services—did not involve “financial
transactions” within the meaning of Section 1956, which defines that term to include (among
other things) transactions “involving one or more monetary instruments.”
41 Specifically, the site’s
creator contended that because Bitcoin does not qualify as a “monetary instrument”—which
Section 1956 defines to mean the currency of a country, personal checks, bank checks, money
orders, investment securities, or negotiable instruments—transactions involving Bitcoin do not
represent “financial transactions” under Section 1956.42
The U.S. District Court for the Southern District of New York rejected this argument, holding that
transactions involving Bitcoin can qualify as “financial transactions” under Section 1956 because
they fall under a separate category of transactions identified by the relevant statutory definition:
transactions involving “the movement of funds.”43 Specifically, the court reasoned that Bitcoin
transactions involve “the movement of funds” because the term “funds” includes “money,” which
in turn refers to “an object used to buy things.”
44 Because Bitcoin can be used to buy things, the
court reasoned that Bitcoin transactions involve “the movement of funds” and therefore qualify as
“financial transactions” under Section 1956.45 As a result, the court explained, “[o]ne can money
launder using Bitcoin.”
46
AlphaBay
Similarly, in 2017, federal prosecutors brought money-laundering conspiracy charges against the
creator of AlphaBay, another online marketplace that allowed its users to exchange virtual
currency for illicit goods and services.47 The prosecutors alleged that by facilitating the exchange
of virtual currencies (including Bitcoin, Monero, and Ether) for illegal narcotics and other illicit
goods and services, the site’s creator had conspired to conduct “financial transactions” involving
the proceeds of unlawful activities.
48 However, the federal government dismissed these charges
after AlphaBay’s creator died in July 2017.49
Virtual Currency Payment Systems Used for Illicit Purposes
Federal prosecutors have also pursued charges against the developers of certain virtual currency
payment systems allegedly designed to facilitate illicit transactions and launder the proceeds of
criminal activity.50 Specifically, prosecutors have charged these developers with conspiring to
commit money laundering and operating unlicensed money transmitting businesses under
Sections 1956 and 1960, respectively. In adjudicating the second category of charges, courts have
concluded that the relevant virtual currency payment systems were “unlicensed money
transmitting businesses” under Section 1960, rejecting the argument that the provision applies
only to money transmitters that facilitate cash transactions.
e-Gold
In 2007, federal prosecutors charged e-Gold—an “alternative payment system” and virtual
currency purportedly backed by stored physical gold—and its founders and director with money
laundering and operating an unlicensed money transmitting business.51 The prosecutors alleged
that e-Gold “was widely accepted as a payment mechanism for transactions involving credit card
and identification fraud, high yield investment programs and other investment scams, and child
exploitation” because of the anonymity it offered its users.52
In charging the defendants for failing to register their business, prosecutors alleged that e-Gold
operated as an “unlicensed money transmitting business” in each of the three ways identified by
Section 1960—the provision criminalizing the operation of “unlicensed money transmitting
businesses.” Specifically, the prosecutors alleged that e-Gold (1) lacked a required state money
transmitter license, (2) failed to comply with the BSA’s federal registration requirements for
“money transmitting businesses” (requirements set forth in Section 5330 of Title 31), and (3) was
involved in the transmission of funds that were “known to have been derived from a criminal
offense” or that were “intended to be used to promote and support unlawful activity.”
53
In defending these charges, the defendants presented an intricate argument for the proposition that
Section 1960 applies only to businesses that facilitate cash (as opposed to virtual currency)
transactions. Specifically, the defendants argued that because Section 1960 does not define the
term “money transmitting business,” it must “borrow” the definition of that term in Section
5330—the BSA provision establishing federal registration requirements for “money transmitting
businesses.”
54 The defendants further reasoned that (1) Section 5330 provides that an entity is a
“money transmitting business” only if it must file currency transaction reports (CTRs), and (2)
businesses that do not facilitate cash transactions need not file CTRs.55 Accordingly, under the
defendants’ theory, a business like e-Gold that does not facilitate cash transactions does not
qualify as a “money transmitting business” under Section 5330 and (by extension) Section
1960.
56
The U.S. District Court for the District of Columbia rejected this argument, holding that e-Gold
was indeed a “money transmitting business” under Section 1960 for two reasons. First, the court
rejected the defendants’ contention that Section 1960 must “borrow” Section 5330’s definition of
“money transmitting business.”
57 The court rejected this argument on the grounds that Section
1960 contains its own definition of the term “money transmitting” and does not reflect an intent
to “borrow” the definition of “money transmitting business” from Section 5330.58 The court
further explained that because e-Gold was a business engaged in “money transmitting” as defined
by Section 1960—that is, “transferring funds on behalf of the public”—it was a “money
transmitting business” under Section 1960.59
Second, the court evaluated whether e-Gold also qualified as a “money transmitting business”
under Section 5330—an issue that remained relevant because of the federal government’s charge
that the defendants violated Section 1960 by violating Section 5330’s registration requirements.
The court concluded that e-Gold was indeed a “money transmitting business” under Section 5330,
rejecting the defendants’ argument that e-Gold did not fall within that category because it was not
required to file CTRs.60 Specifically, the court rejected the argument that a business is required to
file CTRs only if it facilitates cash transactions. Instead, the court explained that because the
statute imposing CTR obligations imposes such obligations when money transmitting businesses
facilitate cash transactions (as opposed to if they facilitate such transactions), all money
transmitting businesses have a continuing obligation to file CTRs “in the eventuality that they
ever are involved” in a reportable cash transaction.61 The court accordingly concluded that
because e-Gold was required to file CTRs and satisfied the other elements of the relevant
statutory definition, e-Gold was a “money transmitting business” under Section 5330 even though
it did not process cash transactions.62 After the court denied the defendants’ motion to dismiss the
charges for operating an unlicensed money transmitting business, the defendants pleaded guilty to
those charges and money laundering. | Summarise the court findings of the Silkroad case
Silk Road
In 2013, federal authorities shut down Silk Road, which they alleged was “the most sophisticated
and extensive criminal marketplace on the Internet,” enabling tens of thousands of users to
anonymously buy and sell illegal drugs, malicious software, and other illicit goods and services.
38
Federal prosecutors charged the site’s creator with, among other things, conspiracy to commit
money laundering under Section 1956.
39 The prosecutors alleged that the site’s creator conspired
to conduct “financial transactions” involving the proceeds of unlawful activity—namely,
narcotics trafficking and computer hacking—with the intent to promote the carrying on of such
activity.40 In defending this charge, Silk Road’s creator argued that his alleged conduct—
facilitating the exchange of Bitcoin for illegal goods and services—did not involve “financial
transactions” within the meaning of Section 1956, which defines that term to include (among
other things) transactions “involving one or more monetary instruments.”
41 Specifically, the site’s
creator contended that because Bitcoin does not qualify as a “monetary instrument”—which
Section 1956 defines to mean the currency of a country, personal checks, bank checks, money
orders, investment securities, or negotiable instruments—transactions involving Bitcoin do not
represent “financial transactions” under Section 1956.42
The U.S. District Court for the Southern District of New York rejected this argument, holding that
transactions involving Bitcoin can qualify as “financial transactions” under Section 1956 because
they fall under a separate category of transactions identified by the relevant statutory definition:
transactions involving “the movement of funds.”43 Specifically, the court reasoned that Bitcoin
transactions involve “the movement of funds” because the term “funds” includes “money,” which
in turn refers to “an object used to buy things.”
44 Because Bitcoin can be used to buy things, the
court reasoned that Bitcoin transactions involve “the movement of funds” and therefore qualify as
“financial transactions” under Section 1956.45 As a result, the court explained, “[o]ne can money
launder using Bitcoin.”
46
AlphaBay
Similarly, in 2017, federal prosecutors brought money-laundering conspiracy charges against the
creator of AlphaBay, another online marketplace that allowed its users to exchange virtual
currency for illicit goods and services.47 The prosecutors alleged that by facilitating the exchange
of virtual currencies (including Bitcoin, Monero, and Ether) for illegal narcotics and other illicit
goods and services, the site’s creator had conspired to conduct “financial transactions” involving
the proceeds of unlawful activities.
48 However, the federal government dismissed these charges
after AlphaBay’s creator died in July 2017.49
Virtual Currency Payment Systems Used for Illicit Purposes
Federal prosecutors have also pursued charges against the developers of certain virtual currency
payment systems allegedly designed to facilitate illicit transactions and launder the proceeds of
criminal activity.50 Specifically, prosecutors have charged these developers with conspiring to
commit money laundering and operating unlicensed money transmitting businesses under
Sections 1956 and 1960, respectively. In adjudicating the second category of charges, courts have
concluded that the relevant virtual currency payment systems were “unlicensed money
transmitting businesses” under Section 1960, rejecting the argument that the provision applies
only to money transmitters that facilitate cash transactions.
e-Gold
In 2007, federal prosecutors charged e-Gold—an “alternative payment system” and virtual
currency purportedly backed by stored physical gold—and its founders and director with money
laundering and operating an unlicensed money transmitting business.51 The prosecutors alleged
that e-Gold “was widely accepted as a payment mechanism for transactions involving credit card
and identification fraud, high yield investment programs and other investment scams, and child
exploitation” because of the anonymity it offered its users.52
In charging the defendants for failing to register their business, prosecutors alleged that e-Gold
operated as an “unlicensed money transmitting business” in each of the three ways identified by
Section 1960—the provision criminalizing the operation of “unlicensed money transmitting
businesses.” Specifically, the prosecutors alleged that e-Gold (1) lacked a required state money
transmitter license, (2) failed to comply with the BSA’s federal registration requirements for
“money transmitting businesses” (requirements set forth in Section 5330 of Title 31), and (3) was
involved in the transmission of funds that were “known to have been derived from a criminal
offense” or that were “intended to be used to promote and support unlawful activity.”
53
In defending these charges, the defendants presented an intricate argument for the proposition that
Section 1960 applies only to businesses that facilitate cash (as opposed to virtual currency)
transactions. Specifically, the defendants argued that because Section 1960 does not define the
term “money transmitting business,” it must “borrow” the definition of that term in Section
5330—the BSA provision establishing federal registration requirements for “money transmitting
businesses.”
54 The defendants further reasoned that (1) Section 5330 provides that an entity is a
“money transmitting business” only if it must file currency transaction reports (CTRs), and (2)
businesses that do not facilitate cash transactions need not file CTRs.55 Accordingly, under the
defendants’ theory, a business like e-Gold that does not facilitate cash transactions does not
qualify as a “money transmitting business” under Section 5330 and (by extension) Section
1960.
56
The U.S. District Court for the District of Columbia rejected this argument, holding that e-Gold
was indeed a “money transmitting business” under Section 1960 for two reasons. First, the court
rejected the defendants’ contention that Section 1960 must “borrow” Section 5330’s definition of
“money transmitting business.”
57 The court rejected this argument on the grounds that Section
1960 contains its own definition of the term “money transmitting” and does not reflect an intent
to “borrow” the definition of “money transmitting business” from Section 5330.58 The court
further explained that because e-Gold was a business engaged in “money transmitting” as defined
by Section 1960—that is, “transferring funds on behalf of the public”—it was a “money
transmitting business” under Section 1960.59
Second, the court evaluated whether e-Gold also qualified as a “money transmitting business”
under Section 5330—an issue that remained relevant because of the federal government’s charge
that the defendants violated Section 1960 by violating Section 5330’s registration requirements.
The court concluded that e-Gold was indeed a “money transmitting business” under Section 5330,
rejecting the defendants’ argument that e-Gold did not fall within that category because it was not
required to file CTRs.60 Specifically, the court rejected the argument that a business is required to
file CTRs only if it facilitates cash transactions. Instead, the court explained that because the
statute imposing CTR obligations imposes such obligations when money transmitting businesses
facilitate cash transactions (as opposed to if they facilitate such transactions), all money
transmitting businesses have a continuing obligation to file CTRs “in the eventuality that they
ever are involved” in a reportable cash transaction.61 The court accordingly concluded that
because e-Gold was required to file CTRs and satisfied the other elements of the relevant
statutory definition, e-Gold was a “money transmitting business” under Section 5330 even though
it did not process cash transactions.62 After the court denied the defendants’ motion to dismiss the
charges for operating an unlicensed money transmitting business, the defendants pleaded guilty to
those charges and money laundering.
For this task, you must only answer using the context block provided. Prior knowledge and external resources are disallowed. |
Answer the question in the prompt based only on the text provided in the prompt itself. | The text below includes the reactions of a number of organizations to proposed changes to the availability of legal aid in the United Kingdom. According to the text, what is the financial case against these changes? | The most vulnerable will not get the help they need People need advice across different areas of legal scope to solve their problems sustainably
Respondents also observed that the client groups who seek help with these areas are amongst the most vulnerable, usually they have multiple problems or experience ‘clusters’ of interrelated problems so need a seamless (or ’holistic’) service.
The blanket removal of many areas of civil law from legal aid funding will prevent many people with mental health problems from accessing legal support for issues that cannot be neatly delineated into different types and are often central to managing their mental health. Mind/Rethink joint response
Members of migrant communities, may be more likely to present particularly complex cases involving a range of different factors, or to find that language and cultural barriers mean that it is more difficult for them to resolve cases without legal aid support. Migrants Rights
Network Priority debts, which could lead to the loss of a home, must be balanced with other key debts, such as council tax arrears and energy bill arrears, which also have a profound effect on consumers’ lives. Addressing a housing related debt in isolation is impracticable and unlikely to lead to a sustainable financial solution. Consumer Focus Wales
As a matter of principle, we think that the Government’s list of criteria justifying the retention of legal aid should be supplemented by acknowledging cases where the disparity of resources between the parties is such as to unduly restrict the effective participation of one party in the proceedings for redress. Justice
While the attempt to offer legal aid to victims of domestic violence is welcome, it does not cover other vulnerabilities in these cases such as substance misuse, disabilities, and mental health problems. Coordinated Action Against Domestic Abuse
To exclude areas of law such as housing and debt from the legal aid scheme denies victims of violence the support they need to live a life free from violence. National Federation of Women’s Institutes
Agencies also questioned whether the new proposed definitions and criteria for the scope of civil funding could work actually in practice.
The gateways for demonstrating domestic violence are very limited and confined to ongoing proceedings…they do not reflect the pathways victims of domestic violence access to find help and support. Gingerbread
It is nonsensical to create a system where the victim would be entitled to legal aid for related family law proceedings if the perpetrator of domestic violence had been convicted of assault occasioning actual bodily harm, but would be denied legal aid and have to represent herself if the perpetrator had been cautioned for the same offence. Rights of Women
All the areas which will remain in scope are clearly important, but we believe the definitions and tests proposed would involve greater bureaucracy and problems of legal challenge and interpretation (and) result in many vulnerable people being unable to get the help they need at an early stage if definitions are set too tightly… for example, advising only on debts where a home is at ‘immediate risk’ is not practical, as most clients have multiple debts which must be addressed for them to achieve a sustainable financial position. Citizens Advice
No legal aid will mean no help or advice for many
There was a widespread view from respondents that for the ‘out of scope’ categories, the Green Paper contained misleading assertions about alternative sources of advice, and the capacity within the pro-bono and voluntary sectors to provide appropriate help. For example, National Debtline do not provide face-to-face debt advice and refer cases requiring specialist legal advice elsewhere.5
The ability of clients to use paid for, or conditional fee (CFA) and insurance funded services as an alternative to public funding was also questioned. The implication that charities like Disability Alliance are available to help people in the advent of legal aid cuts misrepresents the reality that we do not provide such support. Disability Alliance
The Green Paper mentions IPSEA, the Advisory Centre for Education (ACE) and Parent Partnership Services (PPS) as alternative sources of support to legal aid in education cases…they do not have the capacity, and in some cases do not have the remit to deliver the level of support parents need in SEN education cases. Ambitious about Autism
Reducing legal aid in the area of employment law will increase the demand on our free helpline but in the current economic climate it is unlikely that we will be able to meet the additional demand. Working Families
One of the major barriers to the greater use of CFAs is disbursement funding and the costs of investigation. These costs are substantial in clinical negligence claims. Action Against Medical Accidents
Legal aid saves the public purse money
Many responses pointed to the value of legal aid, both in terms of its social value and its outcomes for clients, but also in terms of the cost savings to the justice system and to other statutory services, and the Government’s broader agenda to improve family and relationship support. Legal aid in administrative justice represents exceptional value for money. For example, welfare benefits legal aid cost £28.3 million in 2009/10, representing less than 0.18 per cent of the £16 billion value of unclaimed benefits. The success rate of legally-aided clients in this and several other administrative jurisdictions is over 90 per cent. Administrative Justice and Tribunals Council
There is a strong case for targeting legal aid investment where it can have the greatest impact – this involves taking a broader view than simply looking at issues of loss of liberty or imminent homelessness, but should involve reconfiguring services to be more client-centred and targeting services better at those client groups for whom getting advice has the greatest beneficial impact. Youth Access
In many of our cases at the CLC, the provision of legal advice and assistance can help resolve problems quickly and prevent matters from escalating. Removing access to legal advice in many civil and family law matters removes the possibility for problems to be resolved early and efficiently without the need for litigation. Childrens’ Legal Centre
Proposals to withdraw legal aid when combined with the evidence of the lack of awareness of alternative support services will undermine Government’s broader agenda for relationship support...and increases the risk of the divorcing and separating population’s personal indebtedness...Couples spend an average of £28,000 when a marriage ends. National Family Mediation
If the legal aid cuts go through and people are denied a lawyer for custody cases, I will lose all chance of ever seeing my children again. Client from Crossroads Women’s Centre
Respondents found evidence to back this up such as the Legal Services Research Centre’s work on exclusion and legal problems.6 The General Council of the Bar for example had commissioned a ‘cohort’ analysis which compared the outcomes for advice seekers recorded by the LSRC’s civil and social justice survey as between those who sought help from informal sources, non-legal service providers, and legal aid providers. This identified a statistically significant better level of outcomes from legal aid services.7
The Law Society, LAPG, ILPA, EHRC, LASA, ASA and many others referred to the ‘business case’ research by Citizens Advice which used LSC outcomes and data from the LSRC’s civil and social justice survey to estimate (on 2008-9 figures) the cost-benefit ratio for key civil categories of legal aid advice. This research looked at the ‘adverse consequences’ of civil problems and found that:
• for every £1 of legal aid expenditure on housing advice, the state potentially saves £2.34
• for every £1 of legal aid expenditure on debt advice, the state potentially saves £2.98
• for every £1 of legal aid expenditure on benefits advice, the state potentially saves £8.80
• for every £1 of legal aid expenditure on employment advice, the state potentially saves £7.13.8
Some respondents referred to work undertaken by the New Economics Foundation for the Law Centres Federation also suggested that the ‘social return’ for legal help for clients with the most complex problems could be as high £10 to every £1 invested.9
| The text below includes the reactions of a number of organizations to proposed changes to the availability of legal aid in the United Kingdom. According to the text, what is the financial case against these changes?
The most vulnerable will not get the help they need People need advice across different areas of legal scope to solve their problems sustainably
Respondents also observed that the client groups who seek help with these areas are amongst the most vulnerable, usually they have multiple problems or experience ‘clusters’ of interrelated problems so need a seamless (or ’holistic’) service.
The blanket removal of many areas of civil law from legal aid funding will prevent many people with mental health problems from accessing legal support for issues that cannot be neatly delineated into different types and are often central to managing their mental health. Mind/Rethink joint response
Members of migrant communities, may be more likely to present particularly complex cases involving a range of different factors, or to find that language and cultural barriers mean that it is more difficult for them to resolve cases without legal aid support. Migrants Rights
Network Priority debts, which could lead to the loss of a home, must be balanced with other key debts, such as council tax arrears and energy bill arrears, which also have a profound effect on consumers’ lives. Addressing a housing related debt in isolation is impracticable and unlikely to lead to a sustainable financial solution. Consumer Focus Wales
As a matter of principle, we think that the Government’s list of criteria justifying the retention of legal aid should be supplemented by acknowledging cases where the disparity of resources between the parties is such as to unduly restrict the effective participation of one party in the proceedings for redress. Justice
While the attempt to offer legal aid to victims of domestic violence is welcome, it does not cover other vulnerabilities in these cases such as substance misuse, disabilities, and mental health problems. Coordinated Action Against Domestic Abuse
To exclude areas of law such as housing and debt from the legal aid scheme denies victims of violence the support they need to live a life free from violence. National Federation of Women’s Institutes
Agencies also questioned whether the new proposed definitions and criteria for the scope of civil funding could work actually in practice.
The gateways for demonstrating domestic violence are very limited and confined to ongoing proceedings…they do not reflect the pathways victims of domestic violence access to find help and support. Gingerbread
It is nonsensical to create a system where the victim would be entitled to legal aid for related family law proceedings if the perpetrator of domestic violence had been convicted of assault occasioning actual bodily harm, but would be denied legal aid and have to represent herself if the perpetrator had been cautioned for the same offence. Rights of Women
All the areas which will remain in scope are clearly important, but we believe the definitions and tests proposed would involve greater bureaucracy and problems of legal challenge and interpretation (and) result in many vulnerable people being unable to get the help they need at an early stage if definitions are set too tightly… for example, advising only on debts where a home is at ‘immediate risk’ is not practical, as most clients have multiple debts which must be addressed for them to achieve a sustainable financial position. Citizens Advice
No legal aid will mean no help or advice for many
There was a widespread view from respondents that for the ‘out of scope’ categories, the Green Paper contained misleading assertions about alternative sources of advice, and the capacity within the pro-bono and voluntary sectors to provide appropriate help. For example, National Debtline do not provide face-to-face debt advice and refer cases requiring specialist legal advice elsewhere.5
The ability of clients to use paid for, or conditional fee (CFA) and insurance funded services as an alternative to public funding was also questioned. The implication that charities like Disability Alliance are available to help people in the advent of legal aid cuts misrepresents the reality that we do not provide such support. Disability Alliance
The Green Paper mentions IPSEA, the Advisory Centre for Education (ACE) and Parent Partnership Services (PPS) as alternative sources of support to legal aid in education cases…they do not have the capacity, and in some cases do not have the remit to deliver the level of support parents need in SEN education cases. Ambitious about Autism
Reducing legal aid in the area of employment law will increase the demand on our free helpline but in the current economic climate it is unlikely that we will be able to meet the additional demand. Working Families
One of the major barriers to the greater use of CFAs is disbursement funding and the costs of investigation. These costs are substantial in clinical negligence claims. Action Against Medical Accidents
Legal aid saves the public purse money
Many responses pointed to the value of legal aid, both in terms of its social value and its outcomes for clients, but also in terms of the cost savings to the justice system and to other statutory services, and the Government’s broader agenda to improve family and relationship support. Legal aid in administrative justice represents exceptional value for money. For example, welfare benefits legal aid cost £28.3 million in 2009/10, representing less than 0.18 per cent of the £16 billion value of unclaimed benefits. The success rate of legally-aided clients in this and several other administrative jurisdictions is over 90 per cent. Administrative Justice and Tribunals Council
There is a strong case for targeting legal aid investment where it can have the greatest impact – this involves taking a broader view than simply looking at issues of loss of liberty or imminent homelessness, but should involve reconfiguring services to be more client-centred and targeting services better at those client groups for whom getting advice has the greatest beneficial impact. Youth Access
In many of our cases at the CLC, the provision of legal advice and assistance can help resolve problems quickly and prevent matters from escalating. Removing access to legal advice in many civil and family law matters removes the possibility for problems to be resolved early and efficiently without the need for litigation. Childrens’ Legal Centre
Proposals to withdraw legal aid when combined with the evidence of the lack of awareness of alternative support services will undermine Government’s broader agenda for relationship support...and increases the risk of the divorcing and separating population’s personal indebtedness...Couples spend an average of £28,000 when a marriage ends. National Family Mediation
If the legal aid cuts go through and people are denied a lawyer for custody cases, I will lose all chance of ever seeing my children again. Client from Crossroads Women’s Centre
Respondents found evidence to back this up such as the Legal Services Research Centre’s work on exclusion and legal problems.6 The General Council of the Bar for example had commissioned a ‘cohort’ analysis which compared the outcomes for advice seekers recorded by the LSRC’s civil and social justice survey as between those who sought help from informal sources, non-legal service providers, and legal aid providers. This identified a statistically significant better level of outcomes from legal aid services.7
The Law Society, LAPG, ILPA, EHRC, LASA, ASA and many others referred to the ‘business case’ research by Citizens Advice which used LSC outcomes and data from the LSRC’s civil and social justice survey to estimate (on 2008-9 figures) the cost-benefit ratio for key civil categories of legal aid advice. This research looked at the ‘adverse consequences’ of civil problems and found that:
• for every £1 of legal aid expenditure on housing advice, the state potentially saves £2.34
• for every £1 of legal aid expenditure on debt advice, the state potentially saves £2.98
• for every £1 of legal aid expenditure on benefits advice, the state potentially saves £8.80
• for every £1 of legal aid expenditure on employment advice, the state potentially saves £7.13.8
Some respondents referred to work undertaken by the New Economics Foundation for the Law Centres Federation also suggested that the ‘social return’ for legal help for clients with the most complex problems could be as high £10 to every £1 invested.9
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