Assignment: Police Discretion

Assignment: Police Discretion To me discretion is something that we always use like in how we choose things like a movie to watch food to eat we always have to be very discrete in what we choose to do. There are a lot of people that would think that it would be better if discretion was taken away from the police. What most of the people do not realize is that discretion needs to be exercised. Discretion is not the problem; the abuse of discretion by some people is.In this world there is always that bad area that has the normal answer to different situations that may not apply. Having that right to exercise to discretion a police officer may be able to find the best solution always. In the scenario there was a couple of times were the police officer had to use discretion the first one was when the suspect fell to the ground she could of just left him there and not return to check up on him the next one was when the suspect started running away she could of just left and let it be.The officer could of just stopped at the struggle and had called for backup but she did not she decided to continue. These are the type of discretions that I spotted in this scenario. In my opinion I think that discretion was not very well implemented because if it was going to be a long pursuit and the suspect was going to hurt her she could of easily called for backup immediately, even though she did not know it was going to be hard to catch this suspect the best thing to do was to call for help that way this situation would have been easier and less painful for her.I think that discretion should not be controlled. I think a lot of police officers by using good judgment they might and they will let some things slide if they are able to. Not in every situation is good it has ups and its downs, police officers should be able to make a good judgment calls on the scene. Arresting someone is not always the best solution for a situation they need to analyze how they could fix the situation with discretion.

Computers and Education Essay

Nowadays, it is generally believed that computers are essential for our modern education. They are indispensable studying tool that makes it easier for many people to learn subjects from mathematics to language skills. However, there are some aspects of a good education that cannot be taught using computers. Computers play a significant role in all fields of modern society. They are widely used by banks for account management and by stores for keeping records of sales and inventory. Computers are also necessary for interpreting data from a patient’s history and determining diagnosis. Moreover, computers make an important contribution to the education. They are widely used by school and university students and by students who study at home. Computers may be very helpful for learning most subjects. Some of those subjects are mathematics, languages, information technology that cannot be taught without computer, and so on. Computers are capable of storing and combining information in a way that makes is very simple to access and use. Computers simplify students studying by providing them with easy typing software, many useful exercises. In addition, they can make it easier for teachers to assess the students and mark their work. However, there are some features that cannot be taught by using computers. For example, it seems obvious that the subject like singing would be virtually impossible to learn without teacher’s involvement. Furthermore, while computers can be used by students for learning languages, they cannot provide them with an adequate feedback on their pronunciation or writing skills. Learning such subjects like chemistry and physics would be extremely difficult or sometimes even dangerous without teacher’s supervision while having done various experiments. In conclusion, it is important to point out that computers can be beneficial  for educational purposes and they can help students with learning most of the subjects. Despite this in some cases, it is also necessary to engage teacher to make the education more effective and complete. Teacher would also be helpful for pupils as he or she could answer their questions, provide them with a wide range of examples and give them more exercises on particular matters students have difficulties with.

Rentier state theory Essay Example | Topics and Well Written Essays - 250 words

Rentier state theory - Essay Example Monopolies- overreliance on external rent always comes at a cost. The fact that these parties involved may have in abundance the resources they engage in this kind of rent acquisition in itself may lead to adverse influence on the business behavior. This may lead to monopolization of the market since these resources are highly valued. The aspect of monopoly sets in when a nation enters a trade pact with your nation thus wanting to dictate the terms of trade. They may opt to be the only supplier of the resource thus monopolizing the economy. Trading restrictions- since the states involved are rich in certain highly valuable resources, they may decide to impose the terms of trade and even putting up some restriction measures to ensure they remain dominant. They restrict a party involved from engaging commercially with other nations. Solicitation of aids- States involved in rentierism may engage in a mutually benefiting way. They may engage in giving aids in order to get some political influence in that particular region or over the nation. This is majorly common with the United States who subsidizes project of other nations in exchange for influence. This may impact the business behavior by influencing its

Human Rights and English Law Essay Example | Topics and Well Written Essays - 1250 words

Human Rights and English Law - Essay Example As the paper declares our formulation of the function of the criminal law so far as it concerns the subject of this inquiry . . . is to preserve public order and decency, to protect the citizen from what is offensive or injurious, and to provide sufficient safeguards against exploitation and corruption of others, particularly those who are specially vulnerable because they are young, weak in body or mind, inexperienced, or in a state of special physical, official or economic dependence. It is not, in our view, the function of the law to intervene in the private lives of citizens, or to seek to enforce any particular patter of behaviour, further than is necessary to carry out the purposes we have outlined. From this paper it is clear that the committee report sparked the furious Devlin4-Hart5 debate and educated the public of the need for open-mindedness and clarity of reasoning resulting on the clarification of the problems or issues of homosexuality and prostitution, clearly positivist inputs. What previously has been the undoubted mechanism to enforce social morality, criminal law is being hedged out from private behaviour that does not harm other people; a concept that derived its roots from JS Mill's harm principle. The committee recommendation that "homosexual behaviour between consenting adults in private should no longer be a criminal offence," specifically between men over the age of 21, except in the armed forces, led to the passage of the 1967 Sexual Offences Act which replaced the 1861 Offences against Persons Act, the previous law against homosexuality and paved the way to legalizing homosexuality except for some homosexual acts. The age of consent for homosexual men was reduced in 1994 to 18 and in 2001 to 16 while homosexual acts in the armed forces were decriminalised. In May 2003 the Sexual Offences Act 2003 came into force, repealing the sexual offences of buggery and gross indecency and criminalised sexual behaviour that a person knew or ought to have known was likely to cause distress, alarm or offence to others in a public place, including sexual activity in public cruising and 'dogging' areas. The new act consolidated five previous statutes, particularly the Criminal Law Amendm ent Act 1885, Vagrants Act 1898, Incest Act 1908, Criminal Amendment Act 1912, and Criminal Amendment Act 1922 and further driven by public concern over children. The 1885 act repealed the Contagious Diseases Acts (1864, 1866 and 1869) directed against prostitution.

Business letter 2 Essay Example | Topics and Well Written Essays - 250 words

Business letter 2 - Essay Example A little reflection will show that there are a couple of reasons for this. One is that Emergent Technologies has developed a unique procedure for the mass storage of information via its SuperDiscâ„ ¢. As you know the patent and copyright for this invention has been lying with the US Patent Office for some time now, and it is only a matter of weeks before the patent will be registered in the name of your company. This alone is sufficient to increase the value of net assets by $500,000. Another thing to be considered is your excellent business reputation over ten years of business. Your company and its products are well-known and have considerable goodwill among the business community. According to Meigs and Meigs (1993: p 474), goodwill can result because of owner or product reputation, leading to extra sales and business contacts in the marketplace. In the event of a sellout, the new buyer will gain from this goodwill that you had earned and accordingly, you can arrange for an eva luation of goodwill and even record it on the books before making the sale. A conservative estimate by us looking at industry standards puts the value of Goodwill at $500,000 for your business at this point.

Text Analysis essay Example | Topics and Well Written Essays - 1500 words - 1

Text Analysis - Essay Example The paper adopts the thesis Steve jobs speech appeals more to college students than his academic background. Steve Jobs is one of most celebrated inventor, businessperson, philanthropist and personality (Wilson 56). Steve is as one of the cofounders of Apple Company and computerized animation (Pixar animation). However, analyzing Steve Jobs at an academically it a different story. The quagmire of the speech at one of the most respected academic institutions is the fact he openly refers to his academic life standing at the podium. Steve’s speech is well crafted and depicts all the three elements that are necessary to capture the audience attention. Steve Jobs effectively uses irony to introduce the fact that he has never graduated by uttering the words â€Å"†¦This is the closest I have ever got to college graduation†¦Ã¢â‚¬  (The Apple History Channel). Steve speech audience is composed of mostly young graduands from Stanford University. Steve Jobs understands well the level of education of his audience and goes directly to the main points in his speech. The environment and atmosphere that the audience offer Steve Jobs encourages him to continue with the speech. The audience is patient and responds well to Steve Jobs humor and emotional words. The composure of the audience implies they are eager to listen and learn new concepts. The audience responds well to Steve humour and applause him when he is for the first time. Steve Jobs uses tonal variation and posting from time to time giving audience time to comprehend his points. The audience respond during the pauses reveals they are attentive and listening to the speech keenly. There is very little murmuring during the speech, the audience in this case are a matured lot and respect the speaker Steve Jobs. The audience is more rejuvenated and fired up to face life at the end of the spe ech. Steve Jobs success overshadows the fact that he has never graduated from college and effectively

The Impact of the Great Depression on the African American Community Essay

The Impact of the Great Depression on the African American Community - Essay Example The civil war which gave people of black origin relatively equal rights had occurred only in 1861 and the misery that it had caused was fresh in the minds of many who were young at that time. In many ways, the great depression brought back for America the memories of the civil war. The community which suffered the brunt of the Great Depression was the African American community, which suffered from a greater racial discrimination during this time than during times of normalcy. In the absence of plentiful employment opportunities, the little that was available was fought for fiercely. The alternative was to stand in long queues for food where there was always the possibility of going hungry. In such a scenario, there was a propensity for job-givers, who were then mostly white, to discriminate on the basis of race when they gave out jobs. As a result of such discrimination the unemployment rates of African Americans during this period, in urban areas was thirty to sixty percent higher than the rates for people of white origin (Davis 82, 2003). Most of the available jobs were taken up by white people and the African Americans were left in a miserable situation. This was the result of many factors. One of the most important of these was the dismissal of African American workers to make way for white workers. This was compounded by the loss of domestic jobs that many African American depended on for their livelihood. Even after the emancipation of the slaves, many people of black origin continued to work for white masters, for a salary, in these domestic jobs. Many of them lost their jobs since their employers could no longer afford the luxury of domestic servants. They also depended to a great extent on the construction industry which provided them with employment in unskilled positions. With the construction industry suffering great losses, even this avenue was not open to them. Moreover in the few of these opportunities, they faced tough competition from skilled white workers. They however, were provided with a reservation in the reduced-rent government housing construction projects that turned out to be extremely beneficial for them as it kept many members of their race afloat during a difficult period of time (Davis 82, 2003). The loss of jobs owing to reservation in certain sectors, however, gave rise to widespread discontent among the whites who had lost their jobs. There was a revival of the Ku Klux Klan, an organization that worked for white supremacy over people who were racially black. This period thus was one when the blacks suffered in many ways. Not only was their livelihood taken away in most cases, but they were also culturally marginalized. The racist nature of arguably the most iconic work of literature to come out during this period, Margaret Mitchell’s Gone with the Wind stands testimony to the nostalgic desire of the whites for the return of the old order of which slavery was a part (Mitchell, 2008). Due to the wide spread migration from the countryside, a lot of African Americans who worked in farms faced unemployment. Having lost their jobs, they were faced with poverty and starvation, which the government of the time was not in a position to remedy. African Americans of the countryside of the south thus had to face a lot of hardships during the Great Depression. The African Americans

Ancient maya economics Assignment Example | Topics and Well Written Essays - 500 words

Ancient maya economics - Assignment Example The subsistence economy means the goods used for daily use by all the other classes of the society. Although two systems of economy existed, the economy was based on trade and agriculture. The trade system was extensive with the Mesoamerica that included trading of obsidian, jade, serpentine, ceramic vases, and feathers of Quetzalcoatl birds (Hirst, n.d). The trade network was expanded with the cities of Olmec, Zapotec, and Teotihuacan as well as other Caribbean islands and different groups in gulf coast of Mexico (Demarest, 2004). The trade relations were facilitated with efficient allocation of resources and specialization in different areas of crafts and skills (Demarest, 2004). Scholars have often used the economic laws of demand and supply to assess the ancient Mayan trade because of the vast availability of resources used by the Maya (Hirst, n.d). Given the growing population of the Maya, specialized exploitation of resources began giving the Maya specialization in trade (Hirst, n.d). This specialization combined with the availability of resources that each trade party had to offer was the key in the Maya commerce (Demarest, 2004). Many scholars believe that the long distance trade of the ancient Maya was accompanied by exchange of mathematical and writing knowledge along with other cultural manifestations (Demarest, 2004). This extensive trade network is the prime mechanism for the ancient Maya’s economic growth. The agriculture of Maya consisted of maize, beans, cucurbits, chili peppers, amaranth, palms, cocoa, vanilla, avocado, agave, ramon, and manioc (Hirst, n.d). Irrigation canals and terraces were constructed in the Maya highlands in order to take advantage of the environment there while crops were grown on raised platforms in the Maya lowlands. The household economy of the ancient Maya was related to the subsistence economy. Each household had their farmland where they planted corns, squash, beans and other

Porters 5-Force Analysis Essay Example | Topics and Well Written Essays - 1500 words

Porters 5-Force Analysis - Essay Example In the following paper the example of online university as a part of a strategic group within the larger context of "universities" will be considered to research the Porter's Five Forces model. The theory of five forces model along with practical analysis is combined in each of Porter's discussion within the chosen industry. In the analysis of online university it is important to carefully enumerate the supplier group. Suppliers to the online education industry would be faculty (content suppliers), mentors, software providers and perhaps in the case of state-supported institutions, the legislators and regents. Given that legislators and regents have considerable power in some instances, one has to acknowledge that the principal supplier group exerts relatively little power in relationship to the industry. Thus the bargaining power of suppliers is low. Barriers to entry deter new competitors from entering the market and creating more competition for established firms. There are several major barriers to entry and they include economies of scale, capital requirements, product differentiation, switching costs, cost disadvantages independent of scale, access to distribution channels, and government policy. One example of an industry with high barriers to entry is computer chip manufacturing. The extremely high cost of building a fabrication plant makes entry into this industry very risky. The resturaunt industry on the other hand has considerably fewer barriers to entry since almost everything can be leased and employees need not be highly experienced and trained. (Porter, 7). One has only to watch the Internet to see almost daily announcements of new email courses, programs and degrees rapidly proliferating. The reasons for this are fairly obvious. Barriers to entry are low. Capital requirements are minimal. Switching costs are not important to the buyers and brand identity is probably not nearly as important as access and convenience. Demand for this "product" is growing rapidly as industry demands larger numbers of advanced degrees and education to meet market demands. The threat of new entrants is high. III. THREAT OF SUBSTITUTES Threat of Substitutes exist when the demand for a product declines due to either lower prices of a better performing substitute product, low brand loyalty, new current trends, or low switching cost. When threat of substitutes is low the outcome is favorable to the industry,

Marketing Communication Approach Essay Example | Topics and Well Written Essays - 1500 words

Marketing Communication Approach - Essay Example There are various communication channels that any organization may use for corresponding with the consumers, investors, suppliers, social activist groups and media groups. These channels range from advertising, trade promotions, consumer promotions, event marketing and sponsorship, personal selling and publicity & public relations. The news release publication is concerned with and falls under the publicity and public relations category of marketing communication strategy. The news releases are issued by an organization whenever it has a worth mentioning news, event, or offer to announce publically that catches or is likely to grasp media’s, investors’ or consumers’ attention. These press or news releases are often open for free access to general public and at times these are characterized by restricted access to particular groups because of sensitive details and to secure confidential information disclosure. At times interested parties are encouraged to pay for these news releases to acquire access to valuable information discovery about an organization, for instance; financial news releases. Microsoft’s Marketing Communication Approach Introduction to Microsoft: Microsoft is a multinational public organization, which was founded in 1974 by Bill Gates, and is headquartered in America. The company operates in IT industry and serves consumers globally. Microsoft’s marketing offers comprise of a wide range of products which falls under the categories of operating systems, hardware devices, software applications, business solutions, developers and IT pro products, and miscellaneous products that comes from diverse orientations. The company’s moves exhibits fierce competition focused vision and strategic agenda for its business activities. It started as an operating system developer for IT industry but now the company has diversified and extended its operations across so many product categories. Recently Microsoft has launc hed mobile operating system as windows phone and has entered into PC vending market to leverage its brand reputation and give tough time to the competition. Marketing Communication Approach: Microsoft’s marketing communication approach, as reflected by the news releases and ads archives at the organization’s official website, is characterized as being overwhelmingly product oriented. The company has published around 28 news releases during the month of July this year; dated from 2nd to 30th July. These news releases primarily feature novel and latest product updates or launches across the various Microsoft product portfolios. These press releases also feature news pertaining to Microsoft’s patents and special agreements with business partners; financial reports and quarterly results of company’s progress; investment and investor news; mergers and acquisitions, acknowledgement and announcement regarding opening of new Microsoft office; Microsoft’s a ccomplishments; and also shares other news concerning internal happenings and affairs at Microsoft. The product featured news releases are preoccupied by updates pertaining to almost all of the products of Microsoft including three news releases about cloud computing technology, one related to consumer products, one about

Industrial Revolution Essay Example for Free

Industrial Revolution Essay The business environment has transformed drastically since the advent of new technology and Industrial Revolution became a period of radical change from manual work to automated technology and advancement, which kept making life simpler with time. Some of the greatest organizational and socioeconomic revolutions in history occurred as a consequence of innovations in communications technology and media. The contraption of the printing press, for instance, in the mid-fifteenth century by the German typographer Johann Gutenberg initiated the knowledge revolutions in science and technology, commerce, engineering, law, and politics. Ultimately, the print medium gave rise to the market economy based on paper and given to the industrial revolution. The development of electricity in the nineteenth century instigated a series of other revolutions that transformed industrial society in reflective ways. It led to an extensive range of electrical and electromechanical inventions, including the light bulb, the dynamo, the electric motor and hundreds of electric machines based on it, as well as the telegraph, the telephone, radio, and television. These diffused all through the economy, influencing the nature and location of production, the structure and operation of business organizations of Europe in 1900, including offices and factories and the marketplace itself. Eventually, they came to comprise the technological underpinnings of the hydroelectric and communications and transportation infrastructures we know today. These, in turn, inclined the evolution of the mass production, mass consumption, and mass communications society of the twentieth century. Business organizations have undertaken extreme restructuring by modifying their means of communication and synchronization of work activities. New technology has made it promise for companies to work on a real-time basis, whereby products and services are conveyed to the right place at the right time. Since then, information technology has propagated and has undergone significant improvements. Costs have sustained to decline as these new technologies have emerged. A business not supported by a network of computer systems (primary information technology) is more or less destined to fail, since it will be incapable to compete efficiently in todays complex and dynamic environment. The invention of the telegraph instigated the first truly electronic communications revolution and gave rise to the age of instantaneous global electronic communications. Besides representing a thriving commercial business itself, the telegraph became the foundation of a number of significant new business ventures. One of these was a printing telegraph invented in 1855 by David Hughes in which messages were typed out at the transmitted and receiving ends. It provided the incentive for P. J. von Reuter in Aachen, Germany, to form his own company in 1849 to transmit commercial intelligence including stock market information across Europe. The telegraph had an unusual impact on business in the late nineteenth and early twentieth centuries. By making information obtainable instantly across the markets of the world, it integrated local, national, and international markets, thus obliterating the monopoly power and control that numerous business organizations had over local and regional markets. The telegraph transformed the spatial and temporal organization of economic activity all through the world and came to synchronize the social, economic, and political activities of one and all across space and time. The telegraph provided the crucial and cumulative break of the identity of communications and transportation, wrote James Carey, author of three books and over 100 articles and essays on mass communications and the media. The telegraph became a model of and a mechanism for the control of the physical association of things, specifically for the railroad†¦ [It]†¦ brought a decline in arbitrage, [that is,] the buying cheap and selling dear by moving goods around in space . . . [and it affected] the practical awareness of time through the erection of standard time zones. (Carey 133-137). The development of the telephone precipitated the second electronic communication revolution in the late nineteenth century. Because it was a two-way medium and as it carried voice, the telephone initiated a more publicly and economically considerable communication revolution than the telegraph. The telephone is a wonder of technical and engineering design and operation, and it became the first true worldwide, instant, global, and personal, information, and communications medium. These days, the telephone system interconnects hundreds of millions of people around the world and provides them with the means to communicate instantaneously by voice, written message, computer, and facsimile whether they are at home, in the office, or in a car, a truck, or an airplane. The telephone became one of the most significant social and economic technologies in history by providing a medium for exchanging personal and business information, coordinating social, economic, and political activities, facilitating decision making, and merely keeping in touch. In addition, it does this with little or no human involvement. Developments in radio communications ushered in the age of commercial public broadcasting after the First World War. For nine months commencing on February 23, 1920, Guglielmo Marconi, commonly referred to as the â€Å"Father of Radio†, broadcasted a regular news service from his transmitter at Chelmsford in England. These developments are significant in retrospect because they are not unlike the wave of mergers and acquisition and strategic alliances that leading manufacturers, network operators, suppliers of software, content, and services are implementing today in an all-out effort to create and dominate the electronic superhighways of the future. The postwar period witnessed the spread of telephone networks into the rural and remote regions of industrialized countries and the linking of all of them into a nationalized telecommunications infrastructure. At the same time, this infrastructure was ongoing to undergo transformations as a consequence of major innovations in switching and transmission systems, many of which were developed by the Bell System also known as â€Å"THE telephone company†. One of the biggest technological breakthroughs was the prologue of automatic, electromechanical switching. As it was automatic, it was faster and more efficient than manual switching, and it transformed the telephone business from an extremely labor-intensive to a highly capital-intensive one; one of the consequences was the drastic cut of telephone operators. Electromechanical switching progressively gave way to fully electronic switching in the sixties and seventies, and these ultimately to the computerized switching systems of today with their highly automated, software features that give them the capability to process voice, data, and image communications, route traffic optimally throughout the network, and to monitor, detect, diagnose, and repair problems as they arise. Both local and long-distance communications were further transformed as a result of innovations in multiplexing and microwave radio and coaxial cable transmission systems. Both of these developments increased transmission competence and also improved economics by orders of magnitude that resulted in major reductions in the price of long-distance telephone service as well as stimulating a consequent increase in the demand for service. Multiplexing, invented by Bell Telephone Laboratories in 1927, was a way of modulating higher frequency transmission signals with lower frequency voice signals so that copper, for example, could carry several voice conversations concurrently. This meant a reduction in the use of copper and in the cost of local and long-distance services. The former transatlantic radiotelephone link was installed by ATT between the United States and England in 1929, and radiotelephone links were also recognized between North and South America. In 1933, European engineers began using microwave communications to transmit telephone signals across the English Channel, a distance of a dozen miles. But radiotelephone communications were not very reliable, and the quality of the signal was often poor for very long-distance transatlantic or transoceanic communications. A mass production, mass consumption culture, however, could not have advanced without the development of mass communications. Radio, television, newspapers and magazines, and advertising brought information, news, entertainment, and cultural content to an information-starved society, but all played fundamental roles in creating a mass consumption and mass production society. One of their most significant effects was through advertising. In the book, Communications in History, William Leiss, Stephen Kline, and Sut Jhally wrote, â€Å"The developed phase of the market industrial society is the consumer society†¦ What marketers had realized was that, with the population as a whole having far greater discretionary income, leisure time, and employment security than ever before, work was no longer the focus of everyday life. The sphere of consumption could take its place. By linking consumption through electronic media to popular entertainment and sports, marketers and advertisers eventually fashioned a richly decorated setting for an elaborate play of messages, increasingly in imagistic or iconic form, about the way to happiness and social success† (Leiss, Kline, Jhally 176). To keep their factories operating at maximum capacity and efficiency, in effect, to move the goods cascading off their assembly lines, business had to increase its selling efforts, and this meant tremendous investment and expenditures on advertising. Advertising played a big role in creating a consumer society in the early twentieth century. According to Daniel Pope, an expert on the history of American advertising, marketing, and consumer culture, as early as 1920, the lead in advertising had passed to manufacturers of nationally distributed brand-named goods†¦ it was in the formation of the national consumer market that the advertising industry as we know it these days was born and nurtured (Pope, 1983). Companies are not the only ones who have gained from advances in modern information technology. Consumers and interest groups have created strategic alliances and now capable to coordinate their activities as well as exchange ideas and thoughts through a number of database and network systems. For instance, owners of personal computers can subscribe to a computer network and, without difficulty, retrieve information concerning the products and corporations online. Such information can also be transmitted to other users without problems. This huge use of technology by both consumers and companies affects the way business is run today. These consumer strategic alliances know no geographical limitations; oftentimes, they are global in nature, particularly among the industrialized nations. As companies can get in enormous profits from the better coordination, greater product elasticity, improved quality, leaner production, and more time-based competitiveness that information technology offers, they also facades the threat that can come from these consumers strategic alliances. For instance, corporations can no longer ignore consumer demands for constant product quality, reliability and respect for the environment, or timely delivery of services. As we move towards an increase in advanced technologies, the labor force must be retrained. This training must not only expose workers to the technical matters adjoining the new process, but also to the new focus of the organization. They have to be made responsive of the importance of advanced technology in improving work methods and in remaining competitive and therefore employee compulsion to the new process is imperative. Advanced technology by itself adds little or no value to an organization. There should be organizational, as well as employee dedication, to exploit the technology to the maximum level. For instance, with an ever-increasing use of computer-integrated manufacturing systems, and the stream of technical documentation that accompanies it, employees have to be skilled in recognizing the critical information at the right time. Once that information is recognized and properly interpreted, there must be an organizational dedication to use the information to make better decisions. Without this potential, the organization cannot take advantage from new technologies. Human resources’ management, therefore, will persist to be a critical factor in the survival of any organization. We sum up the influence of information technology on human resources as follows: †¢ Information technology transforms the mode of communication and work processes. †¢ Custom or standardized operations are replaced with skilled and multi-skilled workers. An extremely trained labor force is desired to manage information technology. †¢ Worker motivation and satisfaction might improve since workers are no longer restricted to routine operations, enjoy management powers, and can contribute to developments in their work processes. New technology also has an impact on the organization itself, as follows: †¢ Organizational reformation is required. This reformation makes the organization flat. Decision-making powers are decentralized. †¢ Communications are better and the organization is capable to make timely responses to its environment. †¢ Introduction of new products and services is improved and varieties of products can be efficiently introduced and marketed by the organization. †¢ The organization is competent to improve its efficiency, quality, and competitiveness. Todays advanced technology can, conversely, easily become a basic technology. A rapid increase of new technologies also brings rapid obsolescence of earlier technologies. Policies concerning technology must not be static; they must keep evolving. George Stalk Jr, a writer of the Ivey Business Journal (1988) points out that competitive advantage is a persistently moving target†¦The best competitors, the most thriving ones, know how to keep moving and always stay on the cutting edge. A company should be able to evaluate potential new technologies quickly. The goal must be to remain competitive, and effective management of technology is a vital step in achieving this. With an increased focus on customer satisfaction, technology is a decisive means for achieving customer satisfaction. Browning, a writer for the Economist Magazine (1990) notes that a learning organization uses technology incessantly to refresh its knowledge of its customers’ wants and to work out new ways of satisfying them. This commitment to be a learning organization needs vast resources, however. For example, Browning also points out that building a learning organization necessitates new skills, clever people and capable machines. Noticeably, technology and human resources should be used together for the organization to stay competitive. Vincent Barabba and Gerald Zaltman, authors of Hearing the Voice of the Market (1991), note that hearing the accent of the market and making constructive use of it with respect to the voice of the firm is a learning progression. Essentially, the voice of the market has to be interpreted into facts and tasks that will lead to suitable products or services to satisfy customer needs. This is related to the application of quality function deployment, whereby the organization expands its strategic plans to assure customer needs. Thus, a learning organization should also be a caring organization. As a caring organization, its major objective is to please its stock or stakeholders, its customers, and employees, and also to be collectively responsible. The traditional organization, with the focus on satisfying stockholders alone, is varying to this new form, with a sophisticated stakeholder group. Thus, technology and human resources’ management are recognized as key variables that facilitate an organization to improve its productivity, quality, and competitiveness. A critical constituent is the information technology, which offers both opportunities and challenges. The organization should show understanding to its environment via its policies, and be learning and caring organization, as time and reliability influence competitiveness. Finally, organizations should innovate and constantly move to achieve new targets, particularly in view of todays rapidly developing new technologies. This is not to deny that the extent of interaction has increased gradually over time, though the time involved has been centuries somewhat than the last few decades. The diverse industrial revolutions paced this up. Basically, once two societies trade, they become mutually dependent. The stock markets subside in New York in 1929 triggered the Great Depression in all parts of the world because of their momentous economic relationships with the United States. Interactions were closer than they had been previously and they were to become even faster. The complex capitalist economies were tied intimately together in the long run, even if short-term fluctuations were less rapidly passed on (Aiki 83-87). Though, is speed of such enormous important? We have a global stock market today, where the information from a stock market in one part of the world is broadcasted instantly to those in others. Ever since the start of the electronic communication era this has been the case. For example, information in London about the New York Market passed far more gradually before 1939 and even more slowly before 1914. It was slower in spreading around and was far less comprehensive than it is now. Nevertheless, big movements in the stock markets were known and reflected in the stock markets of the world. Short-term and small fluctuations are imitated all through world markets today, much more rapidly than they were in the thirties, but big and long-term fluctuations have always been reflected around the world once markets had become consistent (Collins, Porras. 1991). We can go even a further back and argue that globalization, in the logic of a growth in interconnectedness between members of different states, is itself only a special case of something more universal. In medieval Europe, most people typically did not stray from the area they were born in. They inspired mainly local goods and primarily produced either for themselves or for a very local market (Schlossberg H. 1992). Economies were mainly local. Trade over considerable distances took place on water either by sea or river, which accounts for the inconsistent number of towns and villages that were either by the sea or on rivers. Human beings have had a steady urge to detach themselves from the area as much as the technology of the day permitted. Certainly there have always been big movements, due to populations looking for better circumstances or due to conquerors building new empires. Under the Roman Empire, for example, large parts of Europe were ‘globalizing’ in this sense and the degree of globalization declined with the Empire’s retreat. The medieval Church could be seen as a globalizing force but the degrees of interaction and interdependence were much reduced in the so-called Dark Ages.

Standard Operating Procedures (SOP) Essay Example for Free

Standard Operating Procedures (SOP) Essay 1. PURPOSE: This Standard Operating Procedures (SOP) defines how to conduct clearing, disassembling, cleaning, inspection for serviceability, and lubricating and reassembling of the M4 and/or the M4A1 carbine on a weekly basis. 2. APPLICABILITY: 3rd Platoon, HHC, 5th Signal Command 3. REFERENCES: Lubricate order (LO); Soldier Training Publication 21-1-Soldier Manual of Common Task; TM 9–1005–319–10; and DA Form 2404, Equipment Inspection and Maintenance Worksheet. 4. RESPONSIBILITIES: a. All Soldiers will be responsible for properly clearing, disassembling, cleaning, inspecting for serviceability, lubricating, and reassembling of their M4 or M4A1. b. All Soldiers will be responsible for their assigned weapon and make sure weekly maintenance is conducted and inform the unit armorer of any deficiencies found during training or weapon maintenance. c. Complete three copies of DA Form 2404 for each M4 or M4A1 carbine. Turn in one copy to the armorer, Keep one copy for individual records, and give a copy to the platoon sergeant. 5. PROCEDURES: a. Weapons will be checked and cleared prior to disassembly of your weapon. When clearing your weapon, put your weapon on safe if not done so already, and have your battle buddy ensure that the firing chamber is clear. b. When disassembling your weapon, follow procedures IAW TM 9-1005-319-10 for proper instructions. When disassembly is completed, keep all components in a centralized location so as to prevent misplacing weapon parts. c. Clean each part with the required weapons cleaning kit provided to you by the arms room. Ensure that all parts are free of dirt, grime, dust, and carbon. d. Upon cleaning, inspect your weapon to ensure that there are no missing  components, cracks, dents, or other discrepancies that would interfere with the weapon’s operation. Any and all discrepancies will be annotated on DA From 2404, Equipment Inspection, and Maintenance Worksheet. 6. SPECIFIC INSTRUCTIONS: The arms room is open daily from 0900 hrs to 1630 hrs.

Thermal Solutions to Reduce Electricity Costs

Thermal Solutions to Reduce Electricity Costs Executive summary This report investigates and analyses the thermal solutions to reduce the electricity cost for senior school at St Aidan’s Anglican Girls’ School. Approaches of analysis include calculating energy loss, thermal current and comparing current costs and revised costs, as well as the long-term (each term and annual) prediction for power consumption. The annual electricity cost is predicted to be $23064.56. All calculations can be found in the Appendix. Results from calculated data show that 29.09% of the power consumption can be reduced by replacing 36 W lights from 18 W tube light bulbs ($4.90 for two tubes, $44.10 overall) and installing the Hampton thermal curtains ($276 in total) with pelmet boxes ($183) of five years life expectancy. Hence, they are suggested to renovate every five years to maintain the efficiency of thermal curtains. Although these installations will need $503.10 initially, the payback will begin from the 7th month. This report evaluates that the current setting of the classroom in senior school can be altered to protect the environment and minimise electricity costs. Therefore, there are some recommendations: Install the Hampton thermal curtains with pelmet boxes Thermal curtains should be shut all the time in order to achieve the revised cost Small technology devices (e.g. projector, printer, iron and hot glue guns) usage should be minimised to reduce power usage (e.g. turn them off instead of stand-by when not using) There are some weaknesses of the report: Thermal current of furniture in the room is not considered. Monthly temperature data are not exact results, they are based on past average temperature data. Number of classrooms are an approximation instead of counting due to variation in classroom setting (e.g. one air-conditioner, more or less lights, fridge) Key assumptions The power is assumed to be used only on schooldays. The energy loss from the recorded data (the energy required to cool down) is assumed to be the same every day. The room is assumed to be a closed system, so the thermal current of windows is equivalent to the power usage of both air-conditionings. Power Usage Analysis Introduction Thermal (heat) energy always tends to transfer from one hot space spreading to colder surroundings space by conduction, convection and radiation (Cambridge University Press, 2014) and its flow is affected by the temperature difference. Thermal current () is the rate at which heat energy passes through a material, which is calculated as . The thermal conductivity (k) is a measure of how well the material transfers heat; lower values of conductivity indicate better insulating material. Thermal insulators such as thermal curtains and double glazing windows are commonly used in homes or buildings to maintain constant room temperature by prevention of convection current and minimise energy usage. This report will investigate, analyse and recommend thermal solutions for the school to reduce electricity usage and environmental benefits. Investigation and discussion Note: All data refers to Appendix – Calculation The data was collected by using Sparkvue temperature sensors connected to a computer. The first 30 minutes of the data was disregarded due to the sensor being exposed to direct sunlight, leading to the extremely high temperature (especially the peak at 3:19pm at 47.4Â °C) at the beginning of the data (Graph 1). Through analysis and calculations of the data, the internal temperature change had a positive gradient (between 5:04pm and 6:04pm) which indicated the room was gaining energy as the air-conditioning turned off (347.08 W). Current power usage During schooldays, 18 lights were used 1 hour 43 minutes per day and two air-conditionings were used 10 hours daily on average. The lights were found to consume a relatively low amount of energy of 1.11 kWh daily. Since the room was assumed to be a closed system, theoretically, the thermal current of the windows (137.14 kWh) should be equivalent to the power usage of air-conditioners. However, due to the information written on the air-conditioning was its upper most power usage, they would not be equal. In fact, the calculated consumption (Table 2) was less than the given data, which indicated the difference in power usage could be attributed to dissipation through the walls, floors and doors openings. Moreover, the total consumption (139.52 kWh) included the power consumption of lights and technology devices in the room to achieve higher accuracy. Thermal solutions Thermal solutions are reasonable and beneficial to diminish power consumption. The 36 W light bulbs can be replaced by 18 W lights, which each consume 0.56 kWh daily. Furthermore, thermal curtains are the most common thermal products, because more internal thermal convection current will be blocked, especially when the curtains are extended so that it reaches the floor. This would prevent the convection current and reduce energy flow into the room (Figure 9). Double and triple glazing of windows are commonly used as well, due to vacuum between glass panes eliminating losses by conduction and convection; however, installation is expensive, so thermal curtains are the most economic thermodynamic barriers to use in order to reduce the energy usage. Figure 9 – No gap (Rogers A, 2011) From researching thermal curtains, the Hampton thermal curtain is thermal coated which reduces a maximum of 25% energy loss (Energy.GOV, 2012). Only the front windows have contact with direct sunlight; others are all under shelter, so thermal curtains will only cover these. Hence, the Hampton thermal curtain is suggested to be installed for energy reduction, costing $276 in total. Pelmet boxes cost $183 overall, because the side of the front windows have a length of 6.02 m each, it would be reasonable to get two 6.10 m pelmet box on each side(some space for the curtain rod). The life expectancy of thermal curtains is usually five years; it is reasonable for the school to renovate new curtains every five years. It can be seen from Graph 2 that the costs maintain the same and increases by another full cost of $503.1 after renovating at the end of each five year cycle. Furthermore, the power usage with thermal solutions is calculated to be 97.25 kWh, having a 29.09% difference compared with the current settings. CBA – Cost Benefit Analysis The CBA graph (Graph 3) shows the current cost model and revised cost model accumulating over time. The break-even point occurs in the 7th month and when the current cost is approximately equivalent to the revised cost at $1661.8 and $1654.3, the current cost will exceed the revised cost. According to the CPI in Queensland has been fluctuating from 2007 to 2012 (Figure 10), which may continue changing in the next few years. By considering a long-term situation, Graph 4 illustrates an example of revised cost will increase every five years due to renovation of curtains, whilst maintaining a smaller rate of power consumption than the current cost. The power consumption for each term is calculated (Table 3-6) and used to investigate the annual revised cost of $23064.56 and 28.98% of electricity cost will be reduced from current cost in the senior school. If the electricity price increases 5% for both peak and off-peak hours, the trend would stay the same as the current cost has a higher gradient than the revised cost (Graph 4) and the fluctuation has an impact on the overall costs. (Australian Government, 2015) Figure 10 – CPI Annual Change Brisbane Recommendations The ultimate goal of diminishing the energy usage is to protect our environment and minimise energy consumption. Therefore: Thermal curtains with pelmet boxes and light bulbs should be installed. Curtains should be shut all the time in order to achieve the revised cost. It would be the most economical way if all small technology devices are not used at all (e.g. projector, printer, iron and hot glue guns). In conclusion, after installing the thermal solutions it is predicted to spend $23064.56 annually in the senior school, and results in saving approximately $13072 on power usage when all assumptions are valid, which will therefore reduce environment impact.

The Existence of Evil :: Philosophy Religion Ethics Essays

The Existence of Evil Six years ago a little girl from my church approached me and asked why the devil existed, and why bad things happen. At the moment I was a little perplexed and did not know what to say. All that came to my mind was that humankind needed a scapegoat to blame for the occurrence of unfavorable incidents. Blaming adverse conditions on the devil is the easy and obvious way out of any situation. All one has to do is to say that the devil was the cause of the situation and wash his hands of the entire problem. At twelve years old, I thought that humanity used the devil as a way to elude responsibility and to ignore the consequences of its actions. It was not until last year that I realized the answer to the little girl's question about the existence of evil. In English class last year I read Arthur Miller's play The Crucible as required reading. According to my English teacher, one theme of The Crucible was that having evil in the world is necessary to balance out the goodness. If either entity overpowered the other, they would throw off the entire balance. Beside maintaining balance, evilness helps humanity to appreciate the goodness in the world. Without ugliness, a person cannot enjoy beauty. Without misfortune, a person cannot enjoy fortune. And without evilness, a person cannot enjoy goodness. No one could enjoy goodness in the world, because there would be nothing to compare with it. Concerning religion, if there was no devil in the world to make humanity miserable, then it would not look forward to heaven. There would be no difference between the two, so humankind would not have to question its actions because there would not be any consequences such as heaven or hell. Imagine a world where everything is perfect, and there is no suffering. Natural laws are bent at the hint of harm to humanity. If a plane carrying passengers starts to plummet, gravity ceases and the plane floats down to earth like a feather. Or if a gun is shot at a person, the bullet turns into a marshmallow so it will not harm anyone. In that world there is no pain nor suffering, just existence. The people do not have to adapt to their environment, because the environment adapts to them. I find this version of life frightening, because the people would take everything for granted.

No Exit VS Scarlet Letter :: essays research papers

In the two works of literature The Scarlet Letter and No Exit, the relationships between the main characters can be used to question morality, and understand justice. The relationships in both works follow the same principals and trends, despite the time periods they were written in. In the play No Exit, by Jean Sartre, the author attempts to describe his vision of what Hell is, a subject that many have pondered, but none really know. Sartre was under the impression that Hell had nothing to do with the fire and brimstone, as many people before him believed. He instead voiced his thoughts through the characters of No Exit. â€Å"Obviously there aren’t any physical torments†¦and yet we’re in hell. And no one else will come here. We’ll stay in this room together, the three of us, forever and ever†¦in short there’s someone absent here, the official torturer†¦each of us shall act as the torturer of the two others.† (No Exit, p. 22) The three main characters in this play, Inez, Garcin, and Estelle create the hell they were banished to, but not by using the â€Å"racks and red-hot pincers† of the past, but by hurting each other in a disturbed form of a â€Å"love triangle†, where the love really doesnâ€⠄¢t exist. In this complicated triangle Inez is attracted to Estelle, who is in turn needs a man such as Garcin to desire and notice her. Thus Garcin can hurt Inez by pretending to desire Estelle, or hurt Estelle by not caring. Garcin however, will never be at rest until Inez recognizes that he is not a coward. Thus, the triangle is complete, and the three create hell for each other. Even when they realize the problem, they can do nothing to save each other. â€Å"They’ve laid their snare damned cunningly†¦Alone none of us can save himself or herself; we’re linked together inextricably.†(No Exit p. 38) On top of this, none of the three are very truthful with each other, and any relationship between them is strained at best. This is Sartre’s vision of hell. Very similar to Sartre’s hell, are the relationships between the characters in The Scarlet Letter. In Nathaniel Hawthorne’s novel, The Scarlet Letter the priest of a Puritan settlement, Arthur Dimmesdale commits adultery with a young woman by the name of Hester Prynne. When Hester’s husband, Roger Chillingsworth returns from overseas to find his wife with a newborn baby, and a brilliant scarlet letter across her chest, both constant reminders of her sin, he vows to find her partner and extract his revenge upon him.

city of god :: essays research papers

Introduction In my essay I will discuss the differences between national cinema and Hollywood cinema by using Rio de Janeiro ¡Ã‚ ¯s famous film City of God. There will be three parts in my following main body, the first part is a simple review of the film City of God, I will try to use the review to show the film structure and some different new points from this, show the how did the  ¡Ã‚ ®Shocking, frightening, thrilling and funny ¡Ã‚ ¯ (Nev Pierce) work in the film. The second part is my discussion parts; I will refer some typical Hollywood big name films such as Gangs in New York, Shawshank ¡Ã‚ ¯s Redemption, and Good Fellas to discuss the main differences between City of God and other national films. The third part is my summary, I will use my knowledge to analyse why there have big different between both kind of films and their advantages. Part One By simply review, I will say, "City of God" ("Cidade de Deus") is the story of a boy who lives in a "favela" what is the word of slum in english on the outskirts of Rio de Janeiro. The "favela" is like a shantytown witch called "Cidade de Deus" in the film. And from the beginning to the end, throughout this stylish movie both the boy and the favela grow. In the film, we can see the story telling styles are quite like the some Hollywood films such as Shawshank ¡Ã‚ ¯s Redemption. As Morgan Freeman been a narrator Ellis Boyd "Red" Redding in the film Shawshank ¡Ã‚ ¯s Redemption, The same roll in City of God is boy, Rocket (Buscap ¨Ã‚ ¦ in Portuguese, played by Alexandre Rodrigues), who is born in Cidade de Deus and grows up in Cidade. He is quiet and easygoing, just a non-violent person seeking a way to survive in a brutal environment. The director makes Rocket a narrator in this movie; I think the reason is find an intermediary between gangs and the press, inside of the evil world and the outside. So we can see, his voice that accompanies us throughout many of the stories that "City of God" has to offer by Rocket ¡Ã‚ ¯s photography dream became true. Still the same as Shawshank ¡Ã‚ ¯s Redemption, the main character also belongs to Andy Dufresne (by Tim Robbins). So in the City of God, The other main characters in City of God are the gangs, like Li'l Z ¨Ã‚ ¦ (by Leandro Frimino) who was one of the boys that used to play soccer with Rocket, grow up to become a murderer and a drug lord, someone that makes his own laws. city of god :: essays research papers Introduction In my essay I will discuss the differences between national cinema and Hollywood cinema by using Rio de Janeiro ¡Ã‚ ¯s famous film City of God. There will be three parts in my following main body, the first part is a simple review of the film City of God, I will try to use the review to show the film structure and some different new points from this, show the how did the  ¡Ã‚ ®Shocking, frightening, thrilling and funny ¡Ã‚ ¯ (Nev Pierce) work in the film. The second part is my discussion parts; I will refer some typical Hollywood big name films such as Gangs in New York, Shawshank ¡Ã‚ ¯s Redemption, and Good Fellas to discuss the main differences between City of God and other national films. The third part is my summary, I will use my knowledge to analyse why there have big different between both kind of films and their advantages. Part One By simply review, I will say, "City of God" ("Cidade de Deus") is the story of a boy who lives in a "favela" what is the word of slum in english on the outskirts of Rio de Janeiro. The "favela" is like a shantytown witch called "Cidade de Deus" in the film. And from the beginning to the end, throughout this stylish movie both the boy and the favela grow. In the film, we can see the story telling styles are quite like the some Hollywood films such as Shawshank ¡Ã‚ ¯s Redemption. As Morgan Freeman been a narrator Ellis Boyd "Red" Redding in the film Shawshank ¡Ã‚ ¯s Redemption, The same roll in City of God is boy, Rocket (Buscap ¨Ã‚ ¦ in Portuguese, played by Alexandre Rodrigues), who is born in Cidade de Deus and grows up in Cidade. He is quiet and easygoing, just a non-violent person seeking a way to survive in a brutal environment. The director makes Rocket a narrator in this movie; I think the reason is find an intermediary between gangs and the press, inside of the evil world and the outside. So we can see, his voice that accompanies us throughout many of the stories that "City of God" has to offer by Rocket ¡Ã‚ ¯s photography dream became true. Still the same as Shawshank ¡Ã‚ ¯s Redemption, the main character also belongs to Andy Dufresne (by Tim Robbins). So in the City of God, The other main characters in City of God are the gangs, like Li'l Z ¨Ã‚ ¦ (by Leandro Frimino) who was one of the boys that used to play soccer with Rocket, grow up to become a murderer and a drug lord, someone that makes his own laws.

Coffee Commodity Chain

DEPARTMENT OF ECONOMICS ISSN 1441-5429 DISCUSSION PAPER 06/08 COFFEE COMMODITY CHAIN Tine S. Olsen and Brett Inder ¦ ABSTRACT: To explain the value added along the coffee commodity chain we propose and estimate a theoretical model of the coffee commodity chain. The theoretical model consists of four markets and five agents in the coffee commodity chain and predicts that prices in the coffee commodity chain move together but are also influenced by income, technology and production. A vector error correction model is used to test the theoretical predictions.In addition to the theoretical conclusions the empirical model confirms the beneficial role of the International Coffee Agreement and the importance of the level of production in determining coffee prices. Key words: global commodity chain, vector error correction model, coffee, value added JEL classifications: O01, F02, Q110, C320, F230, F14  ¦ Monash University Department of Economics (Olsen), Monash University Department of E conometrics and Business Statistics (Olsen and Inder). Corresponding author Tine S. Olsen, [email  protected] monash. edu.  © 2008 Tine S. Olsen and Brett InderAll rights reserved. No part of this paper may be reproduced in any form, or stored in a retrieval system, without the prior written permission of the author COFFEE COMMODITY CHAIN 1. Introduction Between being grown and picked by a farmer in a developing country and being consumed, most often in a developed country, coffee passes through many sets of hands. Inspired by the global commodity chain literature we here propose a theoretical and an empirical model of the coffee commodity chain. We want to find out what determines the value added at each stage of the commodity chain.The question touches upon the distribution of income among agents and countries in the commodity chain, the prevailing market structure at each stage of the production process, trade, bargaining power and other factors influencing the commodity chai n. Figure 1 provides a graphical representation of the value chain for coffee in Brazil, Colombia and the US. [Figure 1] Value added at the various stages of the chain is the difference between input and output price. For Brazil and Colombia producer’s share is producer price and processing and transport is export price minus producer price.For Brazil international processing and transport is the difference between import price of Brazilian coffee in US and the export price in Brazil and processing in US is the US retail price minus the import price of Brazilian coffee in the US. For Colombia processing in US and transport is the difference between the US retail price and the Colombian export unit value. Regarding weight-loss due to roasting, green coffee is the commodity at all stages of the chain until it reaches the consumer. We follow one pound of green coffee along the commodity chain and multiply the retail price by 0. since coffee looses 20% of the weight in roasting ( Daviron and Ponte, 2005, p. 242, n. 5). 2 Figure 1 shows that the share of value added acquired by Brazil and Colombia has decreased after 1948. Behind this observation lies that the share to producers has decreased in Colombia but remained roughly constant in Brazil while the shares to domestic processing and transport have decreased in both countries, in particular after 1990. What we attempt to explain by this analysis are the decreasing shares of income to producing countries and the disappearing margins to exporters.The framework of this analysis is global commodity chains, terms of trade literature and price transmission literature. Commodity chains for coffee are described by Talbot (1997; 2002) and Ponte (2002). Commodity chain analysis focuses on the good along the nodes of the chain, and looks at the flow of the good through the commodity chain, the transactions which take place along the chain, the geographical location of the chain, the agents involved in the chain, and the rules governing the chain (Talbot, 2002).North-South trade and growth literature is relevant in the analysis of commodity chains to model the terms of trade between North and South. Darity and Davis (2005) argue that in the study of uneven development the North-South trade and growth literature provides insights which have been neglected by the later literature of new growth theory and new trade theory. This has encouraged us to apply North-South models to the coffee value chain. The theoretical model derived in section 2 builds on Bloch and Sapsford (2000) who model primary commodities used as inputs in the production of manufacturing.Where Bloch and Sapsford (2000) take an aggregate view of primary commodities and manufactures, we here focus on coffee and hereby take an approach similar to Boratav (2001) who examines terms of trade for individual commodities. And just like Bloch, Dockery, and Sapsford (2004) we analyse the effect of mark-up on wages and commodity prices on the final consumer prices. Price transmission literature such as Hazell, Jaramillo, and Williamson (1990), Mundlak and Larson (1992), Baffes and Gardner (2003), Krivonos (2004), Morisset (1998) and Weldegebriel (2004) also offer a framework to analyse prices of commodities at different 3 odes of the commodity chain. This part of the literature views producer and retail prices as determined by world prices. In Bloch and Sapsford (2000) the price of manufactures, which is a good higher up in the value chain if it is interpreted as roasted coffee, is a function of the price of primary products because primary products are inputs in the production of manufactures. In the transmission literature it is assumed that the price formation happens in the world market and that market forces allow prices movements to trickle down to producers and consumers.The price trickles down because of trade, price signals and arbitrage. The causality between world prices and producer prices is therefore oppos ite in the terms of trade literature and the price transmission literature. The contradiction is created because the value chain literature focuses on the flow of goods while the transmission literature focuses on the flow of information and market signals. We can look at the problem in multiple time frames. In the long run, prices may be determined by economic fundamentals and can be modelled according to the terms of trade literature.In the short run the price may be a result of the global market situation and the transmission literature is applicable. We here propose a theoretical model which builds on the terms of trade literature but the same time accommodates features from the price transmission literature. The choice of countries in the empirical model poses the main limitation of the empirical analysis. Coffee is consumed in all countries across the world and production statistics are available for 71 countries1. Though an analysis comprising all consuming and producing coun tries is possible, the approach here is to only look at a few countries.The countries for analysis in this study are the largest producer, Brazil, the largest consumer, US, and Colombia as a country which depends heavily on coffee. 2 In the following, the theoretical model is presented in section 2. The empirical model, data and preliminary data analysis are presented in section 3 and section 4 reports the results. The theoretical hypotheses and empirical results are evaluated in section 5, which concludes. 4 2. Theoretical Model The commodity chain, which spans from producers to consumers, is modelled in the form of the prices at each node of the chain.The model builds on Bloch and Sapsford (2000), but instead of primary commodities and manufactures, we here follow the same commodity along the chain and the commodity is an input in the production at the next stage of the chain. The producer and intermediary one (often the exporter) meet in market one where the producer price is det ermined. In market two intermediary one sells the commodity to intermediary two (often the importer) for the export price. In market three intermediary two sells the commodity to intermediary three (often the roaster) for the import price.Finally in market four intermediary three sells the commodity to the consumer and receives the retail price. The model has this set of agents to reflect what price data is available at the various stages of the supply chain. Except for intermediary three, each agent takes the price and quantity produced in other markets as given. This assumption makes the markets separable. Intermediary three determines the price in market four by mark-up and we hereby follow Bloch and Sapsford (2000) in the assumption of different market structures in developing and developed countries.The assumption of imperfect competition in market four reflects the high concentration in the coffee roasting sector as described by Talbot (1997). The commodity is produced by the farmer according to the production function G = Ae? 0t L? 1T ? 2 ? G . G (1) Where, in the case of coffee, G is green coffee, LG is the labour input in coffee production, T the number of coffee trees and ? G is a random disturbance term, such as weather. t is time and represents technological progress in the production techniques. ? 0 , ? 1 and ? 2 are elasticities of inputs and technology.The number of trees is assumed to be fixed in the short term and is therefore not a variable input. 5 Exporters constitute the demand side in market one. They have the production function: X = Be ? 0t L? 1 G ? 2 ? X , X (2) where X, in the case of coffee, is green coffee packed, sorted and graded and located in the producing country. LX is the labour input necessary to export the product. It should be noted that green coffee, which is the output produced by the farmer according to the production function (1), is an input in the exporter’s production function.As before, t represents technolo gical progress and ? 0 , ? 1 , and ? 2 are elasticities of inputs and technology. The shocks, ? X , may represent strikes or other random shocks to the production process. The production functions for importers and roasters are defined in a similar manner with coffee from the previous part of the chain as an input. 1 M = De? 0t L? M X ? 2 ? M (3) R = Fe? 0t L? R1 M ? 2 ? R (4) Equation (3) is the production function for importers and equation (4) is the production function for roasters. M is green packed and sorted coffee imported into the consuming country.R is roasted and ground coffee sold in retail. The importer employs labour LM and the roaster employs labour LR . The factor prices are as follows. The price of LG is the wage rate in agriculture, wG ; the price of LX is the wage paid by exporters, wX . The price of LM is wM and the price of LR is wR . Coffee at stage J of processing has price pJ , e. g. G has the price pG . It is assumed that all inputs have positive but diminis hing marginal products in all four production functions: 1 > ? 1 > 0 , 1 > ? 2 > 0 , 1 > ? 1 > 0 , 1 > ? 2 > 0 , 1 > ? > 0 , 1 > ? 2 > 0 , 6 1 > ? 1 > 0 and 1 > ? 2 > 0 . It is also assumed that inputs together do not give rise to increasing returns to scale: ? 1 + ? 2 < 1 , ? 1 + ? 2 < 1 , ? 1 + ? 2 < 1 and ? 1 + ? 2 < 1 . 2. 1 Price Determination in Market One In market one we assume perfect competition and the price paid to farmers, pG , is determined by equilibrium in the market with demand and supply for green coffee. Supply is determined by profit-maximising coffee farmers and demand by profit-maximising exporters. Profit maximisation gives the supply function: pG = wG? 1? 1 ? Ae? 0tTG 2 ? G ? ? ? ?1/? 1 G (1 1 )/? 1 . (5) The optimal amount of coffee demanded by the exporter who profit maximises is: ( ) 1/(1? ?1 ? ? 2 ) G = ? p X Be ? 0t ? X pG ? 1 ? 1? 21? ?1 wX ? ?1 ? 1? 1 ? ? ? (6) . The equilibrium price in market one is derived by equating supply given by equation (5) an d demand in equation (6): ln( pG ) = a0 + a1 ln( p X ) + a2 ln( wG ) + a3 ln( wX ) + a4 ln(T ) + a5t + ? G (7) Where ( ( a0 = 1 (1 ? ?1 ? ? 2 ) ln ? 1? 1 A? 1/? 1 B? 21? ?1 ? 1? 1 ) (1 1 )/[? 1 (1? ?1 ? ? 2 )] ), a > 0 0 (8) a1 = ? 1 ? ?1 ) , a1 > 0 (9) a2 = 1 (1 ? ?1 ? ? 2 ) , a2 > 0 (10) a3 = 1 (1 ? ?1 ) , a3 < 0 (11) a4 = 2 (1 ? ?1 ? ? 2 ) , a4 < 0 (12) a5 = ? ( ? 0 (1 ? ?1 ) ? ? 0 (1 ? ?1 ? ? 2 ) ) (13) & ?G = ? ( (1 ? ?1 ) ln(? X ) ? (1 ? ?1 ? ? 2 ) ln(? G ) ) (14) 7 ? = (1 ? ?1 ? ?1? 2 ) ?1 (15) The coefficients will be interpreted in section 2. 5 below together with the rest of the coefficients of the model. 2. 2 Price Determination in Market Two In market two exporters sell to importers. The price is again determined by equilibrium between demand and supply.Supply is determined by profit maximisation by exporters and demand by profit-maximising importers. Supply in market two by the exporter is calculated from what amount of coffee is demanded in market one: 1/(1? ?1 ? ? 2 ) X = ? Be ? 0t p X ? 1 + ? 2 ? X pG ? ? 2 ? 2 ? 2 wX ? ?1 ? 1? 1 ? ? ? (16) The demand function by importers is derived by profit maximisation in a similar manner to the derivation of the demand function for exporters above. Making use of the symmetry of the production functions, the demand function is similar to (6). The price in market two is determined by equating demand and supply: n( p X ) = b0 + b1 ln( pG ) + b2 ln( pM ) + b3 ln( wX ) + b4 ln( wM ) + b5t + ? X (17) where the b’s are: b0 = ? ?( ? 1 + ? 2 ? 1) ln ( B? 2 ? 2 ? 1? 1 ) + ( ? 1 + ? 2 ? 1) ln ( ? 2? 1 ? 1? 1 1 D ? 1 ) ? , b0 > 0 ? ? (18) b1 = 2 (? 1 + ? 2 ? 1) , b1 > 0 (19) b2 = ? (1 ? ?1 ? ? 2 ) , b2 > 0 (20) b3 = 1 (1 ? ? 1 ? ? 2 ) , b3 > 0 (21) b4 = 1 (1 ? ?1 ? ? 2 ) , b4 < 0 (22) b5 = ? [ ? 0 (? 1 + ? 2 ? 1) + ? 0 (1 ? ?1 ? ? 2 ) ] (23) 8 ? X = ? ( ( ? 1 + ? 2 ? 1) ln(? X ) + (1 ? ?1 ? ? 2 ) ln(? M ) ) (24) ? = (1 ? ? 1 ? ? 2 ( ? 1 + ? 2 ) ) > 0 (25) ?1 2. 3 Price Determination in Market ThreeIn mar ket three, intermediary three purchases green coffee from intermediary two, or in the example of Brazil, the roasters purchase the coffee from the importers and produce roasted coffee according to the production function (3). The roasters’ demand and the importers’ supply are again given by profit maximisation. Given the similar production functions for roasters and importers, the derivations of the equilibrium price are as for market two. The equilibrium price is (expected signs in parentheses under the coefficients): ln( pM ) = c0 + c1 ln( p X ) + c2 ln( pR ) + c3 ln( wM ) + c4 ln( wR ) + c5 t + ? M + + + + ? (26) + /?The signs of the coefficients are determined in a similar way as in market two since the market set-ups are identical. 2. 4 Price Determination in Market Four In market four the price is not determined by supply and demand, but rather by a mark-up on the unit cost function because of imperfect competition. This is one of the conclusions by Prebisch (195 0) and Singer (1950) which Bloch and Sapsford (2000) also model. The price is determined by: p M? ?L w pR = m ? R R + M ? R? ?R (27) Where m is the mark-up. To derive pR the cost-minimising demands for labour and green coffee are derived and inserted into (27) which gives the price of oasted coffee: ln( pR ) = d 0 + d1 ln( R) + d 2 ln( pM ) + d3 ln( wR ) + d 4 ln(m) + d5t + ? R (28) where 9 ( ) ( ) d 0 = (? 1 + ? 2 ) ? 1 ln( B) + ? 1 (? 1 + ? 2 ) ln ? 2? 1? 1 + ? 2 (? 1 + ? 2 ) ln ? 1? 2 ? 1 , d 0 > 0 (29) d1 = (? 1 + ? 2 ) (30) ?1 ?1 ?1 (1 ? ?1 ? ? 2 ) , d1 >0 d 2 = (? 1 + ? 2 ) ? 2 , d 2 > 0 and d3 = ? 1 (? 1 + ? 2 ) , d 3 > 0 (31) d5 = 0 (? 1 + ? 2 ) < 0 , d 5 < 0 (32) ? R = ? (? 1 + ? 2 ) ln(? R ) (33) ?1 ?1 ?1 ?1 2. 5 Hypotheses Before commencing to estimate the system of the four equations, equation (7), (17), (26) and (28), it is necessary to address data limitations.To test the four equations for the coffee market it is necessary to have wages in coffee farming, wages in th e coffee-exporting sector, wages in the coffee-importing sector and wages in the coffee-roasting sector. These wage data are not available and the wages in producing countries, wG and wX , will be approximated with the gross domestic product (GDP) per capita in producing countries, y P . Wages in the importing sector and the roasting sector in the consuming country, wM and wR , are approximated with the GDP per capita for a consuming country, yC .In addition to data on wages, data on coffee trees limit the empirical analysis since data for coffee trees or acreage are not available for the desired timeframe of the analysis. The quantity of coffee trees enters equation (7) and coffee production enters equation (28). Both variables are in the empirical model represented by world coffee production. The alterations to the theoretical model, give the following four equations: ? pG = a0 + a1 p X + a2 y P + a4 q + a5 t + ? G + + + /? ? + /? (34) 10 p X = b0 + b1 pG + b2 pM + b3 y P + b4 yC + b5 t + ? X (35) ? pM = c0 + c1 p X + c2 pR + c3 yC + c5 t + ? M (36) R = d 0 + d1 q + d 2 p M + d 3 yC + d 4 m + d 5 t + ? R (37) + + + + + + + + + ? + + /? + + /? + /? 1 ? The expected signs of the parameters are indicated under the respective parameters; +/– indicate that the sign is uncertain from the adjusted theoretical model. World production is q, and the coefficients on income in market one and three are defined as: ? a2 = a2 + a3 = ? ?1 (? 1 (1 ? ? 2 ) ? ?1 ) * c3 = c3 + c4 = [? 1 (1 ? ? 2 ) ? ?1 (1 ? ? 2 ) ] (1 ? ? 1 ? ? 2 ( ? 1 + ? 2 ) ) (38) ?1 (39) The coffee commodity chain model consists of the four simultaneous equations in equation (34) to (37) from which hypotheses can be derived.Firstly, it is apparent that all prices are positively correlated. An increase in the price of coffee in market i–1 (increased input price) shifts the supply curve in market i left since it increases marginal costs and the equilibrium price is higher and the quantity traded lower. An increase in the price of coffee in market i+1 increases the supply in market i+1 and hereby the demand for coffee in market i and increases the price in market i. Secondly, the coefficients on national incomes have mixed signs. They depend on the input elasticities of labour at different nodes of the chain.If the input elasticity of labour in coffee growing (importing) is relatively large compared to the input elasticity of labour in ? ? coffee exporting (roasting) then a2 ( c3 ) will be positive. It may be assumed that production processes are relatively more labour-intensive early in the commodity chain because of less reliance on capital. In market two the coefficient on producer income is positive because it is an input price for exporters. In contrast consumer income is an input price for importers and decreases the export price. The coefficient on income, d 3 , in market four expresses a markup, and is positive.Overall coefficients on national incomes are expected t o pull coffee prices 11 up, only with the exception of the income in the consuming country which is assumed to depress the export price of coffee. Thirdly, coffee production has a positive impact on the retail price, but a negative impact on the producer price. It is expected that the effect of output is largest on the producer price because prices paid to producers are primarily influenced by conditions in the coffee market while the retail prices in consuming countries are outcomes of many factors, such as market structures, wages and technology.In a system with all four equations the coefficient on production is therefore expected to be negative. Fourth, the effects of technological change on the prices in markets one, two and three are uncertain, and negative for the retail price in market four. If it is assumed that production methods become more technologically progressive the higher up they are in the chain, the coefficients on the time trend will be positive in market one, t wo and three. Constants a0 , b0 , c0 and d0 , are positive but do not have any economic interpretation. G , ? X , ? M and ? R are random shocks with expected value zero. ?G , ? X and ? M are linear combinations of shocks to production in two markets. Therefore, the residuals generated by estimation of equations (34), (35), (36) and (37) are not independent of each other. Furthermore, any given price in the commodity chain depends on the prices at the previous and next stage of the chain. The four equations are hence simultaneous, and the econometric model accommodates for this. 3. Econometric Model and Preliminary Data AnalysisAnnual data from 1948 to 2004 are employed to estimate the theoretical model. An empirical analysis of the commodity chain for coffee from a single origin in a time series framework is not possible due to data limitations. Instead eight price series are used. These are producer 12 and export prices in Brazil and Colombia, import price of Brazilian coffee into the US, import unit value of (all) coffee in the US, the world price and the US retail price of coffee. Given the non-stationarity of the time series used to estimate the model, a vector error correction model (VECM) is appropriate.A VECM captures long-run paths of the series in the cointegrating vectors and short-run dynamics in the error correction equations. It is formulated as: ?y t = ?y t + ? 1? y t ? 1 + L + ? p ? 1? y t ? p +1 + ut , (40) where y t = ( ptG , B , ptG ,C , ptX , B , ptX ,C , ptM , B , ptW , ptM ,US , ptR , yt )? , ? is the loading vector of coefficients on error correction terms, ? is the coefficient vector for the cointegrating vector, ? j is the coefficient matrix on lag j and ut is the vector of error terms. ptG , j and ptX , j are respectively the producer and the export price in country j, where B is Brazil and C is Colombia. tM ,US ? B is the import price of Brazilian coffee in the US, ptM ,US is the import price of (all) coffee in the US, ptW is the wor ld price and ptR ,US is the retail price in the US. yt is relative income between consuming and producing countries and is used to avoid that the rank of ? = ? is not higher than the number of truly endogenous variables. According to the theoretical model national incomes have an impact on coffee prices, but coffee prices do not have an impact on national incomes. This is though not true for Brazil and Colombia for parts of the sample.Today Brazil and Colombia no longer rely heavily on export earnings from coffee (ICO, 2003) but historically this is not the case, and this analysis covers 1948-2004. Therefore, yt is treated as an endogenous variable. Sources for prices are as in Figure 1 above. World production of coffee is included as an exogenous variable. Source are Departamento Nacional do Cafe (1938, 1939/40), Deaton and Laroque (2003) and FAOSTAT online (2007). Real GDP are from Maddison (2007) and GGDC (2005) and the US CPI from BLS (2005a) has been used to reach nominal GDP. 13 To determine the stationarity properties of the series, unit root tests are carried out.It is pointed out by Morisset (1998) and Krivonos (2004) that coffee price responses may be asymmetric and we follow Enders and Granger (1998) and conduct unit root tests for variables which possibly adjust asymmetrically. The results are outlined in Table 1. [Table 1] All variables in Table 1 are expressed in natural logarithms. Lag-length is determined by the Akaike Information Criterium (AIC) and inclusion of a trend is decided from visual inspection of the series and the decision noted under â€Å"Trend† where â€Å"y† indicates that a trend is included and â€Å"n† that it is not.The F-statistic for the hypothesis that the series has a unit root shall be held up against the Enders and Granger (1998) critical value of 7. 07 when a trend and a constant are included in the regression and 5. 14 when only a constant is included. The results in Table 1 show that all series but world production have one unit root and hence are non-stationary and integrated of order one. The test statistic for the stationarity of world production is close to the 5% critical value by Enders and Granger (1998), so depending on significance level the series could also have been concluded to be nonstationary.It is not important to correctly identify the stationarity properties of world production, since the series is not an endogenous variable in the VECM and furthermore, it enters the model in first differences. No series adjusts asymmetrically according to this analysis, and asymmetries are disregarded when formulating the empirical model. Due to the possible impact from the International Coffee Agreement (ICA) a dummy variable, which takes the value one in the years the agreement was in place (1962 to 1989), is included. The ICA dummy is included in the short-run regressions because the ICA had an impact only on prices in the short run.In the long run quotas were adjust ed to meet market forces on supply and demand, but in the short run quotas stabilised coffee prices. 14 4. Results Before estimating the VECM in equation (40) the lag-length and the rank of the VECM are determined. Schwartz Information Criteria points at one lag and the AIC and the HannanQuinn Criteria point towards four. In the estimation process the model was first estimated with one lag and tests of the residuals indicated no problems regarding normality. There was no need to expand the number of lags and the model reported here has one lag.With one lag Johansens’s cointegration test gives the following rank of the VECM: [Table 2] Using the trace test, the hypothesis of rank one cannot be rejected, and from the maximum-eigenvalue test the hypothesis of no cointegration cannot be rejected. The test statistics are close to the 5% critical values which makes the decision regarding the rank of the matrix equivocal. The trace statistic for the hypothesis of one or less cointegr ating vectors is close to the critical value, but the test statistic for the hypothesis of rank three or less is clearly rejected.Therefore, according to the trace statistic there are one or two cointegrating vectors. Looking at the maximum-eigenvalue statistic, the test statistics and 5% critical values are relatively close until the hypothesis of three or less cointegrating vectors. Again, rank up to two is acceptable according to the test statistics. A model with two cointegrating vectors is preferred because this indicates seven trends among the nine variables and some variables share trends. 4. 1 Long-Run Equilibrium The preferred model has the following two estimated cointegrating vectors: 15 ptW = 0. 24 ptM ,US ? B + 0. 4 ptX ,C + 0. 15 ptX ,B + 0. 18 ptR ,US (2. 95) (2. 22) (2. 61) (4. 01) ? 0. 05 ptG ,B + 0. 34 ptG ,C ? 0. 28 yt ? 0. 00 t + 0. 43 (3. 58) (6. 35) (2. 86) (3. 76) ptG ,C = ? 0. 23 ptM ,US + 0. 10 ptM ,US ? B + 1. 05 ptX ,C + 0. 91 yt + 0. 01t + 1. 97 (5. 05) ( 0. 70) (5. 71) (5. 09) (41) (4. 51) (42) t-statistics are in parentheses under the parameter estimates. The first cointegrating vector, CIV1, in equation (41) represents the long-run equilibrium in the world market. The second cointegrating vector, CIV2, in equation (42) represents the long-run equilibrium between the two Colombian prices.The two cointegrating vectors are found by commencing with a general model with one cointegrating vector and all nine endogenous variables in this cointegrating vector. Insignificant variables in the cointegrating vector are removed sequentially. It is clear that the US import unit value is not significant in CIV1 and it is moved out to a second cointegrating vector. Other variables were included in CIV2 if they obtain significant coefficients in CIV2 or exhibit significant error correction. According to the first cointegrating vector, CIV1, six prices move together in the long run, and one moves opposite to this group.The world price, the import p rice of Brazilian coffee in the US, the export price in Brazil, the export unit value in Colombia, the US retail price and the Colombian producer price all move together in the long run. Five of the prices have roughly the same influence on the common path, but the world price, to which CIV1 is normalised, dominates through a higher coefficient (one). The Brazilian producer price moves in opposite direction to these six prices, but has a small coefficient in equation (41). The prediction of the theoretical model is that all prices should move together.Therefore, the coefficient on the Brazilian producer price contradicts the model, but the coefficient is small. 16 The second cointegrating vector, CIV2, shows Colombian prices (producer and export price) and the import price of Brazilian coffee in the US move together in the long run. It is clear that the two Colombian prices dominate the movements of the group of prices since the Colombian export price obtains an estimated coefficien t above one and CIV2 is normalised to the Colombian producer price.The import price of Brazilian coffee into the US is the least influential in the group since its estimated coefficient is 0. 10 and hence a tenth of the estimated coefficient on the Colombian prices. The import unit value of (all) coffee into the US enters CIV2 with a negative coefficient indicating that the Colombian prices and the import unit value of coffee in the US move in opposite directions to each other in the long run. As the Brazilian producer price in CIV1, this poses a challenge to the theoretical model which predicts that all prices should move together.However, the US import price and the Colombian producer price are far from each other in the coffee commodity chain and the coefficient is less than a quarter of the coefficient on the Colombian export unit value. Therefore, this coefficient, like the Brazilian producer price in CIV1 above, does not mean that the theoretical model is rejected, and prices are found to generally co-move in the long run. The coefficients on relative income are significant in both cointegrating vectors but have different signs. When relative income decreases, the six prices in CIV1 increase. In contrast, the three prices which co-move in CIV2 decrease.The effect of relative income on coffee prices in the long run are hence not clear from looking at the cointegration vectors. Technological progress, here modelled as a time trend, obtains estimated coefficients in the cointegrating vectors of the same sign as relative income. Technological progress hence moves the two groups of prices in different directions. Alternatively, if something else than technological progress is the reason for the coefficients on the time trend, something else makes the two groups of prices diverge over time. Over time the six prices in CIV1, which are 17 lose to the world market, move closer together. Opposite to this, the Colombian producer price moves away from the path of ot her prices in CIV2. 4. 2 Short-Run Dynamics The short-run structures show how the series adjust towards the long-run equilibria, and how the endogenous variables respond to shocks in exogenous variables. Error correction towards the two long-run equilibria happens according to the estimates in Table 3. [Table 3] Whether a variable error corrects and restores the long-run equilibrium between prices in a cointegrating vector is determined by looking at its sign in the cointegrating vector (the sign of ? and its sign in the loading matrix (the sign of ? ). If the combined sign is negative, the variable works towards restoring equilibrium. The two export prices, ptX ,C and ptX , B , and the import price of Brazilian coffee into the US, ptM ,US ? B , are the only variables which significantly adjust to disequilibrium between the variables in CIV1. These three prices work to restore an equilibrium which is dominated by the world price. The world price in contrast moves further away from t he equilibrium when a shock has created disequilibrium.The import price of Brazilian coffee into the US and the Colombian export price significantly adjust to disequilibrium between the prices in CIV2. Though the import price of Brazilian coffee into the US was not significant in determining the second long-run equilibrium (CIV2), it significantly works to restore it. The estimated parameters on the error correction term in the equations for the import unit value in the US, the Colombian producer price and relative income are not different from zero. This suggests that these variables do not 18 ork to restore the long-run relationship described by CIV2. The Colombian producer price is an important determinant of the equilibrium described by CIV2, but it does not adjust to restore this equilibrium. It thus influences other prices, but is itself not influenced by other prices. Relative income does not adjust to disequilibrium between the variables in CIV1 but its error correction towa rds the equilibrium described by CIV2 is significant on the 10% level. Relative income therefore works in part to restore the equilibrium between (among others) the Colombian prices in CIV2.This could show that any endogeneity of relative income is due to the importance of coffee prices for national income in Colombia. In addition to the error correction terms, the short-run equations include exogeneous variables. The four exogenous variables in the VECM are a constant (c), the dummy for the International Coffee Agreement (ICA) and the current and lagged first difference of world production of coffee, d(qt) and d(qt-1). The estimated coefficients on the exogeneous variables in the short-run regressions are presented in Table 4. [Table 4]None of the estimated constants in the short-run equations for prices are significantly different from zero. This suggests that time trends have been captured in the cointegrating vectors, but it is noticeable that the constant is positive and has hi gh t-statistics in the equations for the price of coffee imported into the US and the retail price in the US. This indicates that the prices, which have increased in an unexplained way, are prices in the US and that value added is largest further up in the coffee commodity chain. The constant is also positive with a high tstatistic in the short-run equation for the Colombian producer price.This could indicate that the attempts by the Federacion Nacional de Cafeteros de Colombia3 (FNC) to influence the prices of Colombian coffee have been successful. 19 The estimated coefficient on the ICA dummy is positive in the equation for relative income and in six equations for prices but negative in two equations for prices. However, it is never significant. The ICA increased six of the eight prices and it should be pointed out that the most significant, though not significant even at the 10% level, increases are for export prices and the import price of Brazilian coffee into the US.It was not producers which gained from ICA but rather exporters and importers of Brazilian coffee. So, there is weak evidence that while exporters benefited from the agreement the producers did not; the effects of the commodity agreement did not trickle down and reach them. First differences of world production and lagged world production enter with negative and significant signs in all regressions but one. This stresses the importance of production in determining prices in the short run. This is predicted by the theoretical model; increased production lowers price regardless of where in the chain the price is situated. . 3 Weak Exogeneity Tests of weak exogeneity are carried out to further test the driving forces in the system. A weakly exogenous variable has an impact on the long-run path of the variables of the system, but is not itself influenced by the variables in the system. The results from likelihood ratio tests are given in Table 5. [Table 5] In Table 5 the test statistics for the w orld price, the import unit value into the US, the Colombian export unit price, the US retail price and the two producer prices are lower than the 5% critical value, and the null hypothesis can not be rejected for these variables.These six prices are hence weakly exogenous. Agents at the ends of the chain, retailers, importers and producers, are hence not responding to deviations from the long-run equilibrium relationships between prices. As such, they are somewhat isolated from the world market. This is not 20 surprising since the price transmission literature asserts that the price determination happens in the world. Further up and down the chain other factors, such as market set-ups, intervention and incomes determine the prices.The hypothesis of weakly exogenous relative income is clearly rejected, indicating that it is correct to model income as endogenous in the system as discussed above. Also, the likelihood ratio test shows that the causality between prices and relative inco me is uncertain. Coffee prices and national incomes in Brazil and Colombia are interrelated. Coffee prices are important determinants of income in Brazil and Colombia, but national incomes also determine coffee prices. Regarding relative income it is clear that the results are equivocal.The coefficients in the cointegrating vectors obtained different signs and it may or may not be weakly exogenous according to the error correction coefficients and weak exogeneity tests. The final set of results which can shed light on the effect which relative income has on prices, is impulse response functions. They were estimated for the VECM and show that relative income has a negative impact on all eight coffee prices and hence that a decreasing income gap between producing and consuming countries increases coffee prices. 5. DiscussionRegarding the central question of what determines the value added at each stage of the commodity chain, it can be concluded that the prices definitely determine ea ch other, and that from outside the system of prices quantity has a large impact, but only in the short run. In the long run, relative income has an effect on all prices, and a closing income gap between producers and consumers increases prices. In addition, prices move in response to changes in technological progress. In this concluding section four overall conclusions are drawn. The first is of how the prices influence each other.The second is of how relative income impacts prices. The third is 21 of how production influences prices. And last how the time trend, which represents technology, influences prices. It is of utmost importance to determine which prices are detached from the chain. The theoretical model predicts positive correlation between the prices and this is generally found in the empirical model both by long-run co-movements and by adjustments to restore the long-run equilibria in the short run. Both CIV1 and CIV2 show co-movement among prices, but the VECM is estima ted with two cointegrating vectors.This indicates that there may be a break in the coffee commodity chain since one group of prices moves together in one manner while the other group moves in a different manner in the long run. The world market prices in CIV1 move together but the Colombian prices in CIV2 do not follow their movement, and the Colombian prices may be detached from other prices, possibly due to FNC. Since the Brazilian producer price is not significant in CIV2 and moves against the other prices in CIV1 it can be said to also be detached from the value chain.The error correction properties of the system and the weak exogeneity tests show that prices in the middle of the chain work to restore the two long-run equilibria. The prices at the ends of the chain, the producer prices and the retail price, and the dominating world price do not error correct. The lack of error correction by the prices at the ends of the chain indicates that they are not influenced by the long-ru n paths and points at breaks in the coffee commodity chain.The empirical results suggest that the world market is characterized by close linkages between prices but retail price and producer prices are less integrated with other prices. This finding may support the arguments made by the price transmission literature. The limited trickle down of price signals to producer prices confirm the findings of Fitter and Kaplinsky (2001) and Ponte (2002) who argue that surplus created along the chain falls on agents further up the chain, and not on producers. The discussion of intervention and integration in the 22 ransmission literature (Baffes and Gardner, 2003; Hazell et al, 1990; Krivonos, 2004; Mundlak and Larson, 1992) explain why the Colombian producer price and export price, which have experienced considerable intervention by FNC, are detached from other prices. It is not possible to reach an unequivocal conclusion regarding the impact of relative income by looking at the cointegratin g vectors, short-run dynamics or weak exogeneity tests. It is concluded that decreasing income gap increases prices in the world market, whereas it decreases the Colombian producer price.The negative relationship between relative income and all eight prices found by the impulse response functions confirms the expected signs of the coefficients on income in market one and two. The negative relationship between relative income and prices extends to market three. However, since income in consuming countries occurs in the numerator of relative income, relative income should obtain a positive coefficient if the hypothesis of decreasing importance of labour along the coffee commodity chain is confirmed. A negative ? c3 in equation (36) suggests that the roasting sector relies more on labour than the importing ector, in light of the discussion of equation (35) above. Income’s significance in the determination of producer prices, both in the theoretical and the empirical model, offer s support for the terms of trade literature, where prices are determined by underlying macroeconomic factors. Relative income also helps explain divergence of producer and retail prices as these prices reflect relative overall economic performance of producer countries compared to consuming countries. The theoretical model predicts that there is a negative relationship between prices and production. This is fully supported by the empirical model.The negative and significant coefficients on the differences of world production show that it could be the supply curves which shift outwards and create the decreasing prices. 23 According to the theoretical model the sign on the time trend (technological progress) is unknown and depends on whether the supplier or the demander in a given market experiences the most significant technological innovations. The negative sign of the estimated coefficient on the time trend in CIV1 shows that the prices in CIV1 move closer together over time than w hat is explained by relative income.Technological progress can be the explanation for this. A negative sign indicates that the technological progress is largest for the supplying parties in markets one, two and three and/or the negative sign of d 5 is confirmed. The latter case is particularly neat since CIV2, which holds a positive time trend, does not contain the US retail price, and the different signs of the time trend in the cointegrating vectors are not conflicting. They are not conflicting because in CIV1, which describes all four markets, d 5 causes a negative time trend.In CIV2, which describes market one, two and three, a5 , b5 and c5 represent relatively bigger technological progress by demanders which creates a positive time trend. A positive time trend could occur in market one, two and three in the theoretical model if the technological progress is largest for the demanding parties in these three markets. This development is not unlikely in the coffee commodity chain i f agents along the chain become more able to improve their production methods (technological progress) because they become wealthier either through market power and/or the value they add to coffee.This hypothesis can however not be tested with the data used for this analysis, but touches on the discussion in Ponte (2002). Therefore, the positive time trend in CIV2 could be capturing technological progress or some factor not included in the model that coincides with the passing of time. Market power and bargaining power are examples of unmodelled variables in the VECM. The almost significant positive constants in the regressions of US prices show that US import and retail prices tend to increase more than other prices.This could capture the mark24 up, m in (37). The negative constant in the short-run regression for the Brazilian export price could be caused by the coffee commodity chain being a trader-driven commodity chain, as argued by Talbot (2002), where international traders tra de large amounts of coffee with very little margin. Looking at the value chain for Brazil in Figure 1 confirms this, since the value added at the exporting stage, which is denoted processing and transport in Brazil, reduces to almost zero after 1990.It is no coincidence that this is the year after the breakdown of ICA, and it is also argued by Ponte (2002) that this event changed the power relations along the coffee commodity chain. The empirical model gives some insight into issues which are not explicitly modelled in the theoretical model. The theoretical model did not predict which prices would be dominating and which would be adjusting to movements in other prices. However, it is found that the world price is dominating and the export prices are responding.Boratav (2001) found that the ratio between world price and export unit value was stable, and the analysis here can extend the conclusion by suggesting that the export prices follow the world price. If the aim is to create a m ore equal income distribution among agents in the global coffee commodity, this analysis offers some insights of policies to achieve this. Income levels in coffee-producing countries are important determinants of the coffee prices and low national incomes pull coffee prices down even though the retail and import price in consuming countries might increase.Unless the general income level in producing countries increases increased income in consuming countries will not trickle down to the coffee farmers. Alternatively the structure of the chain can be changed and an income distribution more favourable for coffee farmers could be achieved. At the international level the International Coffee Agreement increased coffee prices, but more so export and import prices than producer prices. If the aim is to benefit those in the global coffee commodity chain who has the least – the farmers – an international agreement is 5 hence not the most efficient tool. Improved technology for farmers and increases bargaining power are other factors which would redistribute value within the commodity chain. Producer and retail prices which are detached from the world market, technological progress mainly by demanding parties in the chain and increasing mark-ups (or market or bargaining power) in consuming countries are all findings which support the idea by Darity and Davis (2005) to bring Karl Marx back into the picture.Though international commodity agreements, producer cartels and attempts to change the structures of the centre and periphery are not policies currently in vogue, it may be useful to keep them in mind when engaging in the world coffee market. 26 Value Chain for Brazil 1950 1960 1970 1980 year 1990 2000 20 0 40 20 40 % 60 % 60 80 80 100 100 Value Chain for Colombia 1950 Processing in US International processing and transport Processing and transport in Brazil Brazilian producer's share 1960 1970 1980 year 1990 2000 Processing in US and transportProcessing and transport in Colombia Colombian producer's share Fig. 1. Distribution of the Coffee Dollar along the Commodity Chain. Sources: Brazilian and Colombian producer prices: FAO (various years), FAOSTAT (2006) and ICO (2005). Export and import unit values: FAOSTAT online (2006) and U. S. Department of Commerce: Bureau of the Census (1989). Wholesale prices for Brazil: IFS (various years). US Retail prices: BLS (2005b). 27 Table 1. Asymmetric Unit Root Tests n 1 pW n 1 pM,B-US n 1 pM,US n 1 pR,US y y# 8 4 0 0. 19 0. 33 0 1 3 1 0. 2 0. 48 4 1 3 0. 66 0. 78 2 6 3 0. 65 0. 55 4 6 6 0. 31 0. 99 6 0 5 0 0. 99 0. 99 0 2 5 4 0. 37 0. 07 1 8 n 0. 99 0. 99 3 3 0. 00 0. 97 5 3 0. 98 0. 87 0 3 0. 52 0. 89 4 3 0. 42 0. 69 2 0 0. 22 0. 90 9 1 0. 55 0. 89 5 1 0. 93 0. 92 5 8 0. 75 0. 60 25. 499 1 1 I(1) symm . . . . I(0) symm 1 26. 032 0. 38 0. 00 I(1) symm 0 # Unit Root 5 0 8. 87 q y 4 Bartlett’s White Noise pX,C Asymmetric Adjustment 1 0. 97 Lags Lags n 0. 95 0. 32 pX,B 0. 59 0. 53 1 8 1. 21 n 1 0. 15 pG,C 0 1. 31 1 0. 99 2. 62 n 0. 19 0. 19 Trend 1. 80 pG,B Bartlett’s WhiteNoise s Asymmetric Adjustment Conclusion Unit Root Analysis of Series in Levels Analysis of Series in 1st Differences Series 29. 849 26. 732 28. 028 0 0 0 # 28. 842 32. 509 27. 076 29. 196 I(1) symm I(1) symm I(1) symm I(1) symm I(1) symm I(1) symm I(1) symm 28 5 5 4 ## 1 6 â€Å"Unit Root† contains the F-statistic for the hypothesis that the series has a unit root. â€Å"Asymmetric Adjustment† contains the p-value for the hypothesis of symmetry. â€Å"Bartlett's White Noise† contains the p-value from Bartlett's periodogram-based test for white noise.The null is that the error terms are white noise. # indicates that the lag-length selected by AIC did not result in white noise residuals and increasing the laglength did not amend the problem and the lag-length was hence decreased until the indicated number of lags. ## indicates that residuals from the regressions with the first difference of relative income fail Bartlett's periodogram-based test for white noise regardless of variations of the number of lags and the lag-length is chosen by AIC. Table 2.Rank for VECM(1) with nominal prices and relative income Trace Test Maximum-Eigenvalue Test 5% 5% Test Critical Hypothesized Test Critical No. of CE(s) Statistic Value Prob. * Statistic Value Prob. * None 232. 686 228. 298 0. 031 49. 706 62. 752 0. 486 At most 1 182. 980 187. 470 0. 083 46. 246 56. 705 0. 367 At most 2 136. 734 150. 559 0. 230 36. 528 50. 600 0. 617 At most 3 100. 206 117. 708 0. 372 31. 817 44. 497 0. 570 At most 4 68. 389 88. 804 0. 570 21. 460 38. 331 0. 885 At most 5 46. 929 63. 876 0. 556 19. 020 32. 118 0. 728 At most 6 27. 909 2. 915 0. 628 13. 839 25. 823 0. 736 At most 7 14. 070 25. 872 0. 652 8. 642 19. 387 0. 761 At most 8 5. 428 12. 518 0. 536 5. 428 12. 518 0. 536 Trace test indicates 1 cointegrating equation at the 5% level. Max-eigenvalue test indicates no cointegration at the 5% level. * MacKinnon-Haug-Michelis (1999) p-values. 29 30 Table 3. Error Correction Parameters ? pW 2. 04 pM, US 0. 52 pM,US3. 68 pX,C 2. 33 pX,B 4. 20 pR,US 0. 99 pG,B 1. 73 pG,C 0. 96 y -0. 16 CIV1 (1. 64) (0. 44) (2. 92) (2. 09) (3. 04) (1. 59) (0. 94) (1. 11) (0. 97) EC ? N 0. 99 Y 0. 07