We See and Understand Things Not as They are But as We are Essay

We See and Understand Things Not as They are But as We are - Essay Example In any case, they regularly come to various end results in view of various capacities of observations by various individuals. For instance consider the buyer propensities. Same item may be seen contrastingly by even kin or twins. It isn't fundamental that two individuals making an acquisition of cell phone from a store may decide on same brand or model regardless of whether their monetary capacities are the equivalent. Them two may buy diverse PDAs in light of their distinction in observations. In this paper I will research why we see and comprehend things not as they are yet as we seem to be. Besides, I will explore whether the sight is the main method of observation that identifies with how we get things; and whether â€Å"things† means that physical or conceptual articles, hypotheses and thoughts. The impression of an item is really the translation and vibe of the object’s reality that might be influenced by our convictions and desires. It is in this manner, essential to break down human conduct regarding activities that depend on objective or unreasonable choices. Different scholars and social researchers have propounded hypotheses that attempt to clarify human conduct under typical and outrageous conditions. In any case, they concur that the reasonable or nonsensical conduct is emotional to one’s methodology and comprehension of the issue that extensively limits to individual’s decision and along these lines their activities. Subsequently, whatever we do, it depends on thinking or rousing powers that impact the manner in which we think. For instance, a woman saw as a lovely holy messenger by a male may be a demon for another male on account of their adjustments in the perspective. Here same article, the woman, saw diversely by two people despite the fact that the woman didn't experience any changes. Despite the fact that, we respond as indicated by our individual view of the occasion, it is similarly obvious that our responses are likewise affected by the controls of the data that are held in the

Family The Root of a Being free essay sample

â€Å"Family isn’t something imperative, it’s everything.† Michael J. Fox, a notable entertainer cites. All youngsters acquire a few things from their folks, may it be state of the nose or blue eyes; I acquired not many a greater number of characteristics than those. I found out about culture, qualities and convictions. I additionally found the genuine significance of collaboration, capacity and capacity from them. We frequently visit the realm of otherworldliness together. Each night my family supplicates together for improvement of lives, of our own as well as of every one of the individuals who are out of luck. We go to the sanctuary routinely and are clarified about the way of life: what we have faith in and significantly, why we put stock in it. It has done right by me about my roots and has given me to stand better in the nation with numerous decent varieties. Lessons from my folks on religion as well as about existence has instructed me enough. My folks are exceptionally functional educators on life, love, astuteness and considerably more. We will compose a custom article test on Family: The Root of a Being or on the other hand any comparable point explicitly for you Don't WasteYour Time Recruit WRITER Just 13.90/page I accept that family consistently has a bit of leeway over different gatherings of individuals, as it is a not a counterfeit synthetic gathering. Then again, it is normally sorted out gathering of individuals with the parity of good and terrible attributes who learn and advantage together; and that’s where I originate from. Each move we have settled on, may it be a choice or may it be moving nations, we have gripped together into an obstacle and secured and helped each other through those hardships. My folks helped me to battle out through the weight of various societies by molding my essential natural ethos; they supported me out through the period of personality emergency, to the friendly individual who I am currently and can speak with individuals without any problem. They highlighted my capacity and capacity by keeping confidence in my assurance during every one of those difficult situations of moving nations. They generally advised me to put stock in my ability so I have the ability to succeed. Having the option to think about others, get issues, look for arrangements, to be pleased with my creativity, being an equivalent piece of the group, to be versatile and mindful are a portion of the things from which I originate from. Molding my fantasies and making my yearnings more grounded by the durable qualities and childhood which makes me dream greater and committed to my objectives; I am appreciative to the family. If I somehow happened to characterize myself, it would have a significant commitment of my family and our convictions, since they are everything for me.

The Usefulness of Marketing for Media and Entertainment Companies such Essay - 1

The Usefulness of Marketing for Media and Entertainment Companies, for example, Disney - Essay Example Solid brand imaging is essential to immerse higher client value. On the off chance that taking the case of Disney, they are client centered yet their costs are not similarly lower. Presently they are increasingly faithful about infiltrating their current market e.g., offering more to the overall buyers, consistent extension in advertising endeavors to advance brands and improving the item quality to increase higher consumer loyalty by achieving desires for clients. Their present advertising methodology can be broke down as a â€Å"Brave† stroke of key blend. This involved in the wake of watching the colossal achievement of the film â€Å"Brave† which performed stupendously on the movies as thirteenth top of the rundown film successively yielding $66.7 Million. The experts had bested up that Brave will scarcely have the option to gain its expense on film industry however its prosperity made them to consider the Disney’s promoting techniques (Hughes, 2014). In the wake of inspecting the procedures of the Walt Disney and Time Warner, it has been presumed that client alliance is generally significant. Walt Disney has pointed on the correct stroke by misusing the specific entrepreneurial methodology for instance the vital accomplices, for example, McDonald. The characters embellishment of Time Warner is accounted for as higher as per Gallup among the youthful age yet the achievement pace of Disney is more than Time Warner (Gilchrist, 2013). The Dream works media diversion likewise has a feasible situation in the business yet the character embellishment and effect isn't practically identical as a result of key association and advertising rehearses (Hughes, 2014). Another significant recognizable element of Disney’s advertising practice is the utilization of CSM (Corporate Social Marketing) (Robbins, 2014). Advertising is anyway significant in this industry since all they need to spread and sell is the diversion. It

Marketing strategies of the Big Four U.K. banks Case Study

Promoting systems of the Big Four U.K. banks - Case Study Example The investigation results are summed up in Table 2. HSBC, as the greatest bank in the gathering, would need to remain ahead of the pack, even extend it by expanding its clients, so the advertisement crusade would mirror a methodology to achieve such, utilizing the slogan The World's Local Bank to impart the bank's certifications and feature its aptitude to give clients what they need. Striking pictures that produce inverse estimations permit its ads to accentuate HSBC's information on clients' cozy subtleties, sending the message that the bank realizes what they need. This depends on the acknowledgment that every individual may see something very similar in various manners on the grounds that every one is remarkable. Stressing its information on various societies where the bank works, HSBC shows that it holds a nearby touch, speaking to clients to confide in the bank. Picking up the client's trust is significant in light of the fact that the bank is a vault of something of significant worth to the client's present and future: riches. The bank needs to look dependable, skilled, yet brave. HSBC's ongoing change to the What's Your Point of View crusade depends on client produced substance to expand and fortify its past message in a manner that is reliable with the suspicion that in a world expanding in equality, clients are burnt out on very similar things and are searching for something new, and that being new and distinctive makes the possibility to find new encounters that could make the client wealthy in their humankind. Partner the information on different societies with self-improvement, HSBC sends the message that its commonality with the one of a kind, the unforeseen, decent variety and vulnerability is a quality that enables the bank to develop the client's riches. The bank's reliable utilization of The World's Local Bank and the single, bound together, and effectively conspicuous worldwide brand spoke to by the red and white hexagon logo uncovers HSBC's center advertising technique, which is to settle on the bank the favored decision for each client, holding what they have and urging potential clients to check out HSBC. HBOS: Always Giving You Extra Halifax Bank of Scotland (HBOS) is playing find HSBC and would need to separate itself from its Scottish cousin, the Royal Bank of Scotland. As can be seen from Table 1, HBOS isn't as beneficial as RBS, so it would plan a promoting system that would permit it to draw nearer to HSBC and make it more gainful than RBS. This implies expanding its client base and incomes, and figuring out how to get more benefits out of each. HBOS does this extraordinarily, utilizing its staff - partners as the bank calls them - to sell items in print and TV promotions. For a considerable length of time, HBOS has been running singing tryouts among its back office and bleeding edge associates to pick a Star Colleague to show up in their advertisements. Behind such an advertising system are two messages HBOS needs to send. In the first place, that the bank has a human contact, that its kin are additional exceptional and have a X-factor (playing on the bank's logo) that causes them to go to remarkable lengths for their clients. Second, expanding on this human and individual association makes it simpler to strategically pitch different items and administrations. The first acquires the clients, while the second gets the benefits on the grounds that as Reicheld (1994) contended, expanding client reliability can

Generate Topics For Your Local Business Blog

Generate Topics For Your Local Business Blog Make Money Online Queries? Struggling To Get Traffic To Your Blog? Sign Up On (HBB) Forum Now!Generate Topics For Your Local Business BlogUpdated On 23/04/2017Author : Chris MarentisTopic : BusinessShort URL : http://bit.ly/2ozlbh6 CONNECT WITH HBB ON SOCIAL MEDIA Follow @HellBoundBlogIf you’ve been blogging for your Local Business for period of time, you can relate to the unpleasantness of starring at a blank screening blinking back at you. You feel as though your mind is devoid of ideas for great content. You don’t, however, have to find yourself in this position if you’re aware of several approaches you can use to brainstorm and easily develop ideas for your local business blog.Four types of posts to consider writing if you’re struggling with ideas are:1. “How to” posts are often very popular with blog readers. The Internet has become the go to resource to quickly learn new skills or solve problems. We have become so accustomed to the easy access of information onlin e we often take it for granted! What are common questions you’ve received recently from customers? Could you turn these questions into a “how to” post? If you don’t have recent customer experiences to draw from, do an internet search of your own for topics related to your local business. Use your research to generate ideas on a topic with your personal tips and experiences.2. Conduct an interview with a well-known “expert” in your field. This type of blog post will take a different type of preparation than your traditional post. You’ll need to generate interesting and thought provoking questions for your interviewee. Once you conduct your interview, pull out the most engaging and novel aspects of your discussion to create a post. Likely, you will receive enough content for a multiple part series! Remember to build some extra time in your blogging calendar to get this interview arranged and conducted.3. Share your take on a recent story you’ve read. This suggestion wo rks well for those times when you need to generate conduct right away, but are truly stuck. Do a few searches online and read stories related to your blog topic. You’ll likely find a few of interest to you. Share the premise of the article as background for your readers and then provide your advice, suggestions, or opinion. If you select a current hot topic or controversial one, you may also generate significant reader discussion. 4. Generate a “must read (or watch or listen to) list.” As an expert in your local business area, readers are interested in your thoughts on what books are best to reader on your topic. Therefore, put together a top 10 or 25 to share. Consider adding a brief synopsis of the book or why you think it’s worthy to make your must read list. READSimple Tips To Maximize Your Earnings With HostGator Affiliate ProgramOne way to avoid a lack of content to write about is to constantly be seeking inspiration from everyday activities, movies/television, common experiences, etc… Tying together two seemingly unrelated concepts to illustrate an idea is a particularly powerful approach! Keep a notepad handy to write down ideas and concepts as they arise.Interested in learning more about this topic? Read Danny Iny’s post entitled The A to Z of Blog Post Idea Generation.

Inferential Statistics Math Problem - 275 Words

Inferential Statistics (Math Problem Sample) Content: Statistics[Name][Institutional Affiliation]Problem A light bulb manufacturer guarantees that the mean life of a certain light bulb is at least 750 hours. A random Sample of 36 light bulbs has a mean life of 745 hours with a standard deviation of 60 hours.The problem requires that we determine whether at ÃŽ =0.02, we can agree that there is evidence to reject the manufacturerà ¢Ã¢â€š ¬s claim, find the test statistic, the p-value, decide if we can reject the null hypothesis, and interpret the decision in the context of the original claim.CalculationsSteps followed are as follows;From the question presented alongside, the following can be deducted;n=36=750hrsà ¡Ã‚ ª =745hrs à ¢=60Hypothesis testing;In hypothesis testing we present both the null and alternative hypothesis; and prove their worthiness if true or false. Depending on what to test, we accept or accept the null hypothesis as shown below;Claim: H0: The mean half-life of light bulb is at least 750Hrs H1: Th e mean half-life of light bulb is less than 750HrsH0 = à ¢Ã‚ ¥750HrsH1 = 750Hrs This can be tested using a one tailed test in which alpha (ÃŽ=0.02). Hence,To find the statistic; P=, and hence, p=, = -0.5Consider the diagram below;0.02Z= -2.05From the calculation in the z-tables z= -2.05 an... Inferential Statistics Math Problem - 275 Words Inferential Statistics (Math Problem Sample) Content: Statistics[Name][Institutional Affiliation]Problem A light bulb manufacturer guarantees that the mean life of a certain light bulb is at least 750 hours. A random Sample of 36 light bulbs has a mean life of 745 hours with a standard deviation of 60 hours.The problem requires that we determine whether at ÃŽ =0.02, we can agree that there is evidence to reject the manufacturerà ¢Ã¢â€š ¬s claim, find the test statistic, the p-value, decide if we can reject the null hypothesis, and interpret the decision in the context of the original claim.CalculationsSteps followed are as follows;From the question presented alongside, the following can be deducted;n=36=750hrsà ¡Ã‚ ª =745hrs à ¢=60Hypothesis testing;In hypothesis testing we present both the null and alternative hypothesis; and prove their worthiness if true or false. Depending on what to test, we accept or accept the null hypothesis as shown below;Claim: H0: The mean half-life of light bulb is at least 750Hrs H1: Th e mean half-life of light bulb is less than 750HrsH0 = à ¢Ã‚ ¥750HrsH1 = 750Hrs This can be tested using a one tailed test in which alpha (ÃŽ=0.02). Hence,To find the statistic; P=, and hence, p=, = -0.5Consider the diagram below;0.02Z= -2.05From the calculation in the z-tables z= -2.05 an...

The Indonesian Financial Crisis Essay Online For Freedere - Free Essay Example

Sample details Pages: 9 Words: 2772 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Tags: Banking Essay Did you like this example? Introduction The occurrence and severity of the Indonesian financial crisis in 1997 surprised everyone. Indonesian economic performance has ranked among the best in the world, so that praised by the World Bank (1993) as a part of East Asian miracle. Hill (1998) notes that before the crisis almost every technical economic indicator looked safe. Don’t waste time! Our writers will create an original "The Indonesian Financial Crisis Essay Online For Freedere" essay for you Create order Economic growth was robust in average of 7.9 percent during 1990 to 1996. The inflation rate associated with the growth path was persistently high, but was still below 10 percent. The average inflation rate associated with the 7.9 percent was 8.3 percent in CPI, and even reached 6.5 percent in 1996. As pointed out by McLeod (1997), inflation was falling, not rising, and the relatively large current account deficit was not caused by unsustainably rapid growth but by high capital inflow, which made sustainable high growth possible, and was itself a response to high returns to investment in Indonesia. In other words, the deficit on current account of the balance of payments looked manageable. The fiscal accounts were in surplus, except a little negative in 1992 and 1993. The structure of savings and investment associated with the growth path was good enough. Official foreign exchange reserves looked adequate and were trending upwards. Even many also believed that Indonesia was in muc h better position and strategy in responding to the regional currency crisis compared to Thailand. (Feridhanusetyawan, et al, 1998). First, macroeconomic indicators, especially current account deficit was at around 4 percent of GDP while Thailand already reached around 9 percent. Second, Indonesias Rupiah was not fixed like the Thai Bath, which allowed for some adjustments in responding to the speculative attacks. Third, the slowdown in export growth in 1996 was not as severe as Thailand mainly because real wages grew at much slower rate due to less tight labor market compared to Thailand. In short time after the crisis started, however, it was clear that Indonesia was in much worse condition compared to other Asian countries in crisis. Both foreign and domestic investors have fled, and hundreds of corporations are bankrupt. The banking system has effectively ground to a halt, with very little new lending taking place and dozens of banks insolvent. Domestic demand has plummeted. Thousands of Indonesians have lost their jobs, and millions more face a substantial reduction in their standard of living. (Radelet, 1999) Even after ten years of Indonesian crisis, it is still unclear what really the roots of crisis. The common agreement among scholars is that the existing models so called first generation models (Krugman, 1979; Flood and Garber, 1984) and second generation models (Obstfeld, 1986) failed to explain the Indonesian financial crisis. The failure of the first generation models can be seen from these facts. Government budget was balance or moving into surplus (partly in appropriate fiscal response to higher net private capital flows). Growth in monetary aggregates was fairly high, but cannot be described as runaway monetary expansion. Inflation rate was coming down, nominal GDP growth was largely at levels corresponding to money creation, and Indonesia was at a stage of development where money demand was still growing. The logic of the second-generat ion crisis model does not apply to the Indonesian financial crisis either. There was no such trade-off between the benefits of a credible exchange rate peg and the costs in terms of higher interest rates, higher unemployment or lower growth of defending the peg before the crisis erupted. Past and expected growth was enviably high, interest rates and sovereign yield spreads were going down, not up, and unemployment was informal (as usual in developing countries). In other words, when the crisis began in mid-1997 Indonesia did not have substantial unemployment nor other apparent incentives to abruptly abandon the pegged exchange rate regimes generally followed in the region in order to pursue a more expansionary policy as suggested by second-generation crisis models. Research Objective While many studies are still difficult to find common agreement about the causes of the Indonesian financial crisis, this paper argues that the weak Indonesian banking sector as result of improper banking deregulation contributed to the crisis. In this respect, this paper provides an empirical test of the view that the banking was fragile, and to determine the factor contributing to banking fragility by using individual bank balance sheet data. Methodological Issues II.1. Framework Banks continue to dominate the financial systems of most developing and transition countries, as well as Indonesia. As illustration, the study of the World Bank (1997) shows that the ratio of banking sector assets to all financial institutions assets of Indonesia in 1994 was 0.9. The importance of banking system in Indonesia can also be considered from the ratio of deposit money bank assets to GDP at 0.65 in the same year. In another hand, banking is by nature a high exposure business. As financial intermediaries, it is the business of banks to take on risks passed on them. Banks are typically exposed to a host of different types of risks. Aside from credit risks (default risk) that arise from intermediating between depositors and borrowers, banks also face interest rate risk, currency risk, and market risk. (Bacha, 1998) Based on the importance and the nature of banking system as explained above, it is important to maintain bank soundness. For achieving sound banking system, si nce the early 1980s, the Indonesian government introduced banking deregulation. It seems such deregulation encouraged operating environment of the Indonesian financial system. However, discussions even prior to the crisis had pointed to the underdevelopment of governance in the Indonesian banking sector, resulting weak banking sector. Some analyses (including Frankel, 1998; Krugman, 1998; Noland, 1998; Yellen, 1998) as summarized by Cabalu (1999), note this stylist features: connected lending (i.e. lending to related parties); excessive concentration of lending to particular borrowers or areas; excessively high loan to valuation ratios; inadequate covenants to restrict the activities of borrowers; lending based on asset values, rather than capacity to service from income; failure to recognize and provide for deterioration in loan quality; lending to firms or individuals as a result of government directive, rather than on a commercial basis; lack of transparency and inadequate pruden tial regulations; strong expectations of government bailouts should banks get into difficulties. For maintaining sound banking system, Lindgren, et al. (1996) present a framework for sound banking that comprises a supportive operating environment, internal governance, external discipline provided by market forces, and external governance provided by regulation and supervision at the domestic and international levels. (Figure 1) No single of one of these elements is sufficient by itself; each is subject to failure, or may be underdeveloped in a given economy. Figure 1: Framework of banking sector soundness Supportive operating environment Internal governance Banking sector soundness External governance Market discipline Regulation and supervision Source: Lindgren, et al. (1996) In analyzing the existing weakness on the Indonesian banking sector, which contributed to the crisis, this paper employs that framework with some modifications. This paper argues that banking deregulation has imposed by the Indonesian government since the early 1980s significantly encouraged the operating environment of the Indonesian financial system. We can note the greater access to banking sector due to increasing the number of banks and branches, increasing bank lending, developing the size of financial sector, maturity structure that beneficial for corporate sector, and better performance and efficiency of banking sector. This good result, however, was undermined by underdevelopment of governance in the Indonesian banking sector. Refer to the framework presented by Lindgren et al. (1996); Indonesia did not yet successfully solve the existing governance failure, both internal and external governance failures. The se failures have caused unsoundness in the Indonesian banking sector, indicated by accumulation of non-performing assets in the banking sector. As further will be analyzed, such a banking weakness in the arena of international integration contributed in maintaining dynamics of sustained mispricings and continuous short-term capital inflows. The weak banking sector caused higher interest rates in the domestic markets so that interest rate arbitration does not take place. When interest rate arbitration does not take place, where i(d) i(f) + e + rp  [1]  , while large firms could, to some extent, take advantage of low foreign interest rates by borrowing abroad directly rather than via the intermediation of the domestic banking sector, it tended to be the smaller and perhaps less efficient firms that increased their demand for loans from the private banking sector. If this is so, then as far as the domestic banks are concerned, there is an adverse selection problem in terms of the nature of their assets, which further weakens their balance sheets. The proportion of non-performing loans (NPLs) burdening the banks may therefore be expected to rise over time. This in turn makes the supply curve of bank lending shift left (i.e. de facto increase in bank cost structure), leading to a reduction of domestic credit and a rise in the domestic equilibrium interest rate. In fact, if there is asymmetric information such that foreign investors are not aware of the increased NPLs and if consequently country/currency risk premia remain unchanged, we have the paradoxical result that increased domestic financial fragility could induce additional capital inflows in the short to medium term. Figure 2: Conceptual framework and flow of analysis Banking sector deregulation Better operating environment Governance Problem failure Weak banking sector Financial vulnerability Figure 3: Effects of banking deregulation number of banks and branches bank lending size of the financial sector Banking deregulation maturity structure performance: profitability efficiency: ex ante spreads and ex post spreads Figure 4: The governance failures in the Indonesian banking sector Internal governance failure Governance failure Market discipline failure External governance failures Regulatory and supervisory failure Figure 5: Weak banking sector and build up financial vulnerability International market integration Weak banking sector Capital inflows Interest rate differential External borrowing accumulation, especially in corporate sector Accumulation of NPLs Build up financial vulnerability A reasonable place to start is with a traditional model of the effects of financial liberalization against the background of financial repression, with an added assumption that financial intermediation occurs largely through the banking sector, with households placing their savings with the banks and the banks lending to firms for purposes of investment. Figure 6 illustrates this, where the authorities fix an interest rate at level (ic) below the equilibrium one. As a consequence there is excess demand and credit rationing. Financial liberalization allows a (higher) equilibrium rate (ie) to be established. This causes both the supply of loanable funds to increase, as saving is encouraged, and the demand for them to fall, as fewer investment projects appear profitable. Since at the equilibrium interest rate the market is cleared, there is no ration credit by other means. However, the model so far relates to a closed economy and needs to be modified to allow for a liberalized c apital account and access to international capital. International financial liberalization may also include trade in financial services. Here the key questions are: how does the domestic rate of interest compare with interest rates abroad, what is expected to happen to the exchange rate, is currency depreciation anticipated, and does the country carry a risk premium because of concerns about default and the small probability of a large negative exogenous shock. Making allowance for these factors, foreign capital will flow in for as long as the domestic rate of interest exceeds the foreign rate. In terms of Figure 7 the supply curve of loans will shift to the right, with Z2 Z1 reflecting capital inflows. However, of course, this increase in the supply of credit will tend to push down the domestic rate of interest until it is equal to the foreign rate (if), after allowing for expected currency depreciation and risk premia. Thus in equilibrium in a country with both a liberalized d omestic financial system and international financial liberalization, the following equality will tend to hold: i(d) = i(f) + e + rp where i(d) is the domestic interest rate, i(f) is the foreign interest rate, e is the expected exchange rate depreciation, and rp is the risk premium. But will it automatically follow that, with e and rp both equal to zero, i(d) = i(f)? The rapid convergence of interest rates may be prevented if the domestic banking sector is relatively inefficient and if capital inflows are intermediated only via the domestic banking sector. In these circumstances i(d) may continue to exceed i(f). However, with fuller international financial liberalization and increasing foreign competition, which may involve the establishment of foreign subsidiaries in the domestic banking sector, the costs of the domestic banks may be expected to fall. This will shift the supply curve of bank lending down and to the right. When interest rate arbitration does not take plac e, where i(d) i(f) + e + rp, while large firms could, to some extent, take advantage of low foreign interest rates by borrowing abroad directly rather than via the intermediation of the domestic banking sector, it tended to be the smaller and perhaps less efficient firms that increased their demand for loans from the private banking sector. If this is so, then as far as the domestic banks are concerned, there is an adverse selection problem in terms of the nature of their assets, which further weakens their balance sheets. The proportion of non-performing loans (NPLs) burdening the banks may therefore expected to rise over time. This in turn makes the supply curve of bank lending shift left (i.e. de facto increase in bank cost structure), leading to a reduction of domestic credit and a rise in the domestic equilibrium interest rate. In fact, if there is asymmetric information such that foreign investors are not aware of the increased NPLs and if consequently country/currency ris k premia remain unchanged, we have the paradoxical result that increased domestic financial fragility could induce additional capital inflows in the short to medium term. Figure 6: Loan market equilibrium with financial repression and financial liberalization SS0 DD0 i e ic Zd Zz Ze Zs Figure 7: International financial liberalization SS0 SS1 DD1 DD0 i id if Z2 Z1 Z II.2. Empirical Model and Econometric Procedures The empirical framework used to determine factors contribution to the banking fragility is a probit or normit model. The regression model is specified as: (1) where is commonly known as a latent variable. It is unobserved, and therefore is replaced by an observed dummy variable, , such that: (2) A bank is said to be solvent if it had a capital adequacy ratio (CAR) equal to, or more than, zero during the crisis. A bank is technically bankrupt if the CAR fell below zero. Because the shocks that occurred during the crisis were so large, a bank that maintained its CAR above zero can be called a resistant bank. Therefore, the latent variable can be defined as the ability to resist the crisis. The vector of explanatory variables, , represent the performance and conduct of a bank during the pre-crisis period. If these pre-crisis indicators can significantly explain the variation in , it can be claimed statistically that is detrimental for bank performance during the crisis. Technically, this requires relatively small error terms , in the sense that the variation in mostly belongs to the variation in . In order to accommodate the above idea, the probit estimation technique is used. In Shazam, the probability of occurrence of the dependent variable P(y=1), is described as: (3) Where F(.) represents the cumulative normal density function. The index is a linear function of , but the probabilities are not; therefore, the coefficient must be interpreted carefully. The estimation is done by maximizing the value of the log likelihood function, which is defined as: (4) The maximization of equation (4) is accomplished by non-linear estimation methods. Because it is a concave function, it has a unique solution and trial and error procedures can start from any value. The estimated coefficients tell the effect of a change in the explanatory variable on the index, rather than on the dependent variable. The effect on the dependent variable can b e computed as: (5) Where f(.) is the normal density function. It is clear from equation (5) that the effect on the dependent variable is different for each observation. Alternatively, the elasticity can be used, and is defined as: (6) Since the elasticity is different for every observation, either elasticity at means or weighted aggregate elasticity may be used. The elasticity at means is defined as: (7) The weighted aggregate elasticity is computed as: (8) A test of the null hypothesis that all are zero can be carried out by using the log-likelihood as follows: (9) Where L(0) is defined as: (10) Where N is the number of observations and S is the number of successes observed (=1). Various R ² can be computed, and the most appealing one can be selected. The Maddala R ² is computed as: (11) The Cragg-Uhler R ² is defined as: (12) The McFadden R ² is: (13) The Chow R ² is: (14)