Understanding and interpreting financial statements Dissertation

Understanding and interpreting financial statements - Dissertation Example Understanding and interpreting financial statements The information contained in the financial statements can be used by financial analysts to perform ratio analysis. The purpose of this paper is to analyze the financial performance of Morrisons Inc. Company Profile: Morrisons Morrisons was founded in 1899 by William Morrison. The first supermarket chain was opened in 1961. Today the company has become the 4th largest supermarket retailer in the United Kingdom . The initial public offering of the company occurred in 1967. The company serves over 10 million customers each week across its network of 382 stores. Morrisons helps the United Kingdom’s economy by providing the community with 124,000 jobs. One of the aspects of the Morrisons operation that makes this company different is that the firm owns its supply chain logistics. The company has its own packing facilities, baking capabilities, distribution centers, and fleet of trucks to deliver fresh goods to its stores. Ratio Selection The use of ratio analysis can help a person evaluate the financial performance of a company. To perform ratio analysis one must retrieve the financial statements of the company. The two financial statements that are mostly used when performing ratio analysis are the income statement and the balance sheet. There are different categories of ratios that an analyst can utilize. The five categories of ratios are profitability, solvency, efficiency, liquidity, financial gearing, and investment. To evaluate Morrisons this paper uses a variety of financial ratios from the different categories mentioned. A profitability ratio that will be used in the paper is net margin. Net margin is calculated dividing net income by sales (Besley & Brigham, 2000). It is preferable to have a high net margin because higher net margins imply that the company is more profitable. Another profitability ratio of importance is the gross profit. The gross profit is calculated with the following formula. (Sales – CGS) / Sales (Weygandt & Kieso & Kimmel , 2002). High profit margins are preferable. Two additional metrics that will be used to evaluate Morrisons is return on assets and return on equity. Return on assets is calculated dividing net income by total assets, while return on equity is calculated dividing net income by total equity (Dictionary, 2011). An efficiency ratio that will be used to evaluate Morrisons is sales revenue per employee. Obtaining high sales revenue per employee is preferable because it implies that each employee of the company is helping the firm generate more money. Another efficiency ratio that will be used in the analysis of Morrisons is sales revenue to capital employed. The ratio is calculated dividing revenues by capital. A liquidity ratio that was selected for the Morrisons ratio analysis was the current ratio. The current ratio determines the capabilities of the company to pay off its short term debt (Investopedia, 2011). The formula to calculate current ratio is current assets divided by current liability. Two gearing ratios that will be used in the analysis of Morrisons are the debt ratio and the debt to equity ratio. The debt ratio is calculated by dividing total assets by total liabilities. The debt ratio measures the ability of the company to pay off its long term debt (Garrison & Noreen, 2003). The debt to equity ratio is calculated dividing total assets by total equity. The investment ratios chosen to perform the ratio analysis on

7 Chankras Essay Example for Free

7 Chankras Essay Chakra is a Sanskrit word meaning spinning wheel. Chakras are part of the subtle anatomy. The seven major chakras line up from the crown of the head to the base of the spine and connect to various endocrine glands. Each major chakra is directly associated with many aspects of the mind-body-spirit dynamic. When a specific chakra is closed, distorted, or congested, the perception of stress, disease, or illness may result (Seaward, 2012, p. 72.) Of the seven major subtle energy chakras, Western culture only recognizes the seventh chakra, known as the crown chakra. See more: Examples of satire in adventures of huckfinn essay The first chakra is known as the root chakra. It is found at the base of the spine. This chakra is associated with safety and security issues; it represents our foundation and feeling of being grounded (â€Å"The 7 Chakras for Beginners,† 2009.) Furthermore, the root chakra is connected energetically to some organs of the reproductive system, hip joints, lower back, and pelvic area. Some health issues that are believed to correspond with disturbances of the root chakra include lower-back pain, sciatica, rectal difficulties, and some cancers (Seaward, 2012, p. 73.) Some of the emotional issues tied to the root chakra include survival issues such as financial independence, money, and food (â€Å"The 7 Chakras for Beginners,† 2009.) This chakra is known as the seat of the Kundalini energy, a spiritually based concept that is yet to be understood in Western culture (Seaward, 2012, p. 73.) If the Western Culture were to accept the root chakra, it would promote a deep, person al relationship with Earth and nature. When one is rooted in life, they are filled with satisfaction, stability and inner strength (â€Å"The Human Chakra System,† 2009.) The second chakra, known as the sacral chakra, is associated with the sex organs, as well as personal power in terms of business and social relationships (Seaward, 2012, p. 74.) It describes our connection and ability to accept others and new experiences. It is located in the lower abdomen, about 2 inches below the navel and 2 inches in (â€Å"The 7 Chakras for Beginners,† 2009.) The sacral charka deals with emotional feelings that are associated with issues of sexuality, sense of abundance, pleasure, and self-worth. When self-worth is viewed through external means like money, job, or sexuality, this created an energy distortion in this region. Obsessiveness with material gain is believed to be a means to compensate for low self-worth, therefore, created a distortion to this chakra. Some of the symptoms associated with this chakra include menstrual difficulties, infertility, vaginal infections, ovarian cysts, impotency, lower-back pain, sexual dysfunction, slipped disks, and b ladder and urinary infections (Seaward, 2012, p. 74.) Accepting the sacral chakra would encourage people to more easily open themselves towards others, especially the opposite sex (â€Å"The Human Chakra System,† 2009.) The solar plexus chakra, located in the upper stomach region, is the third chakra. This chakra feeds into the organs of the gastrointestinal tract, including the abdomen, small intestine, colon, gallbladder, kidneys, liver, pancreas, adrenal glands, and spleen. This region is associated with self-confidence, self-respect, and empowerment (Seaward, 2012, p. 74.) It relates to our ability to be confident and in-control of our lives (â€Å"The 7 Chakras for Beginners,† 2009.) The solar plexus chakra is commonly known as a gut feeling – an intuitive sense closely connected to our level of personal power. Blockages to this chakra are thought to be related to ulcers, cancerous tumors, diabetes, hepatitis, anorexia, bulimia, and all stomach-related issues (Seaward, 2012, p. 74.) Should the Western Culture accept the solar plexus chakra, it would promote feelings of peace and inner harmony within one’s self and in life. It would allow people to accept themselves complete ly, and respect the feelings and character traits of others (â€Å"The Human Chakra System,† 2009.) The fourth chakra is known as the heart chakra. It is considered to be one of the most important energy centers of the body. The heart chakra refers to our ability to express love (Seaward, 2012, p. 74.) It is located in the center of the chest, just above the heart (â€Å"The 7 Chakras for Beginners,† 2009.) The heart is not the only organ closely tied to this chakra as the lungs, breasts, and esophagus are included. Symptoms of a blocked heart chakra include heart attacks, enlarged heart, asthma, allergies, lung cancer, bronchial difficulties, circulation problems, and problems associated with the upper back and shoulders. An important association exists between the heart chakra and the thymus gland. The thymus gland gets smaller with age and is believed to be a reflection of the state of the heart chakra (Seaward, 2012, p. 74.) The advantage those in the Western Culture would see from accepting the heart chakra involve warmth, sincerity and happiness. These energies open th e hearts of others, inspiring confidence and creating joy among them (â€Å"The Human Chakra System,† 2009.) The fifth charka is located and greatly connected to the throat. Organs associated with the throat chakra are the thyroid, parathyroid glands, mouth, vocal chords, and trachea. This chakra represents the development of personal expression, creativity, purpose in life, and willpower (Seaward, 2012, p. 74.) The inability to express oneself in feelings or creativity distorts the flow of energy to the throat chakra and is thought to result in chronic sore throat problems, throat and mouth cancers, stiffness in the neck area, thyroid dysfunction, migraines, and cancerous tumors in this region (Seaward, 2012, p. 75.) Upon acceptance of the throat chakra, individual feelings, thoughts and inner knowledge could be expressed freely and without fear. Individuals are not manipulated by other’s opinions and they are able to stay true to who they really are without fear (â€Å"The Human Chakra System,† 2009.) The sixth chakra, known as the brow or third eye, is located on the forehead, between the eye brows. It refers to our ability to focus on and see the big picture (â€Å"The 7 Chakras for Beginners,† 2009.) This chakra is associated with intuition and the ability to access the ageless wisdom or bank of knowledge in the depths of the universal consciousness. As energy moves through the dimension of universal wisdom into this chakra, it promotes the development of intelligence and reasoning skills. The sixth chakra is directly connected with the pituitary and pineal gland and feeds energy to the brain for information processing. The wisdom channeled through the brow chakra is more universal in nature with implications for the spiritual aspect of life. Diseases caused by dysfunction of the brow chakra include brain tumors, hemorrhages, blood clots, blindness, comas, depression, and schizophrenia. These types of diseases are believed to be caused by an individual’s inability to see something that is extremely important to their soul growth (Seaward, 2012, p. 75.) The biggest advantage to the acceptance of the third eye chakra is an increased ability of visualization and comprehension of things intuitively. In today’s society, too many people don’t trust their instincts (â€Å"The Human Chakra System,† 2009.) The seventh is the crown chakra. It is located at the very top of our head. It represents our ability to be fully connected spiritually (â€Å"The 7 Chakras for Beginners,† 2009.) The highest level of consciousness is reached when the crown chakra is fully open and functioning. Although no specific disease or illness may be associated the crown chakra, every disease has a spiritual significance (Seaward, 2012, p. 75.) Some of the emotional issues associated with this chakra include inner and outer beauty, our connection to spirituality, and pure bliss (â€Å"The 7 Chakras for Beginners,† 2009.) Western Culture is accepting only of this chakra. In fact, it is highly useful in acupuncture therapy. Resources MindBodyGreen. (2009, October 27). The 7 Chakras for Beginners: Healing, balancing, and opening your chakras with exercises, foods, colors. Retrieved January 10, 2013 from http://www.mindbodygreen.com/0-91/The-7-Chakras-for-Beginners.html Richards, R. (2009, September 20). The Human Chakra System. Retrieved January 10, 2013 from http://www.rickrichards.com/chakras/Chakras2.html Seward, B. L. (2012). Managing Stress: Principles and strategies for health and well-being. Burlington, MA: Jones Bartlett Learning

Antigone :: essays research papers

It takes a lot of courage to stand up and defend an action or idea that is forbidden by society. Not only did Antigone do that in Sophocles' story Antigone, but also comparing my life to the events that happened in Antigone, it was not long ago that I had to stand and take action on a forbidden idea. Antigone clearly disobeys King Creon's order that no person should bury Antigone's brother, Polynices, which is punishable by penalty of death. In this case, is Antigone's decision the correct one? Her actions affect many of her other countrymen negatively because they cause problems within the royal family, disagreement among the people and directly relate to the death of three people including her own. By burying her brother, Antigone knowingly and willingly went against royal orders and in doing so chooses her own death. She knows as well as anyone in the town that death would come to all that disobeyed Creon's order. Antigone says to this "no one will ever convict me for a traitor,"(Act I: Scene II: Line 361) and decides to bury the body, this is quite ironic because by burying her brother a traitor is exactly what she is convicted of being. This story somewhat relates to my life because there was an event that took place in High school that caused me to be viewed as a traitor, but at the same time in was in benefit of the school. In my High school there has and always been a mixed crowd of students such as blacks, whites, and Hispanics. At my school it was pretty obvious that blacks hung out with each other and whites hung out with each other. Towards the end of Davies 2 the school year I along with a couple of my friends started receiving races comments that where of course directed to the majority of the black students. As time went on the situation became worse. I was looked at as a traitor simply because I was always the one who hung out with everyone, not just the black students. I took the problem to the principal and nothing was done so we proceeded to go to the board of education and sure enough, Reginald F.

Education and Economics Essay

I. Introduction: The conventional theory of human capital developed by Becker (1962) and Mincer (1974) views education and training as the major sources of human capital accumulation that, in turn, have direct and positive effect on individuals’ life time earnings. In the Mincerian earning function, the coefficient of school years indicates the returns to education, i. e. , how much addition in earnings takes place with an additional school year. There exists a wide range of literature that estimated the rates of returns to education for different countries [Pascharapoulos (1980; 1985; and 1994); Pascharapoulos and Chu Ng (1992)]1. In Pakistan, most of the nationally representative household surveys do not contain information on variables, such as, completed years of schooling, age starting school, literacy and numeracy skills, quality of schooling, and technical training. Due to the unavailability of completed school years, one can neither compute the potential experience nor observe the effect of an additional year of schooling on individual earnings. Therefore, the available literature in Pakistan is lacking in estimating the returns to education by using the Mincerian earning function2. In recent years, the government of Pakistan has started nation-wide survey, Pakistan Integrated Household Survey (PIHS), to address the imbalances in the social sector. This survey ? The authors are Senior Research Economist and Research Economist at the Pakistan Institute of Development Economics (PIDE) Islamabad. 1 Pascharapoulos (1994) provide a comprehensive update of the estimated rates of returns to education at a global scale. He observed high social and private profitability of primary education (18%and 9% respectively) in all regions of world. The private rate of returns at this level were found highest in Asia (39%) as compared to other regions. He also noted a considerable increase in total earnings by an additional year of education in all regions of world; 13% in Sub-Saharan Africa; 10% in Asia; 12% in Europe/Middle East/North Africa; and 12% in Latin America/Caribbean. 2 At national level, only two studies are available in Pakistan that used the Mincerian earning function approach to examine the returns to education [see Shabbir and Khan (1991) and Shabbir (1994)]. However, both these studies are based on twenty years old data set. 2 provides rich information on the above mentioned variables that were missing in the earlier household surveys. This study uses the data of PIHS to examine the returns to education by using Mincerian earning function and thus aims to fill the vacuum that, due to the lack of appropriate data, exists in the literature on returns to education in Pakistan. In this paper we will first estimate the earning function with continuous school years with the assumption of uniform rate of returns for all school years. It is argued that different school years impart different skills therefore we extend our analysis to examine the addition in earning associated with extra years of schooling at different levels of education, i. e. , how much increase in earnings takes place with an extra year of schooling at different levels, such as, primary, middle, matric, intermediate, bachelors and masters. By doing so we overcome the problem that exists in the available literature in Pakistan. To our knowledge no study has yet adopted this method to examine the returns to education in Pakistan3. The impact of technical training and school quality on the earnings of fixed salaried and wage earners will be examined in this study. Based on the available data in Pakistan, most of the studies, for example, Haque (1977), Hamdani (1977), Guisinger et al (1984), Khan and Irfan (1985), Ahmad, et al (1991); and Ashraf and Ashraf (1993a, 1993b, and 1996) estimated the earning functions by defining the dummy variables for different levels of education4. These studies observe low rates of returns at different levels of education as compared to other developing countries. However, a positive association between levels of education and earnings and an inverse relationship between the degree of income inequality and educational attainment has been noted. In order to examine the inter- 3 Most of the studies on returns to education in Pakistan used dummy variables for different levels of education where the rates of returns at different levels of education are computed by the estimated coefficients. 4 In Pakistan, the data on education in most of the nationally representative household surveys have been reported in discrete form that denotes the completion of different levels of education, such as, ‘primary but incomplete middle’, ‘middle and incomplete matric’, and so on. 3 provincial differentials in returns to education, Shabbir and Khan (1991) estimated the Mincerian earning function by using a nationally representative sample, drawn from the of Population, Labour Force and Migration Survey (1979) for the literate wage earners and salaried males. Later Shabbir (1994) estimated the earning function on the extended sample of the same data set. These studies found 7 to 8 percent increase in earnings with an additional year of schooling. Although the results are consistent with those of comparable LDCs but may not reflect the recent developments in Pakistan’s economy as these studies are based on the data set which are 20 years old now. Since 1979, the economy of Pakistan has passed through various changes, especially after the inception of the Structural Adjustment Programme in late 1980s. For example, the literacy rate has increased from 26 percent to 45 percent and enrolment at primary level has increased by 67 percent. Public and household expenditures on education have also increased [Economic Survey (1998-99)]. Moreover, due to the fiscal constraints, the employment opportunities in the public sector have started shrinking and the economy is moving towards more openness with stronger role of private sector in recent years. In this scenario, it becomes imperative to re-test the role of human capital as both private and public sectors are moving towards more efficiency and productivity. This study is important from three standpoints. First, in order to estimate the effect of education on earnings, the most recent and nationally representative household survey data is used which provides detailed information on the variables that were missing in previous surveys. Second, it uses the splines of education in the earning function to examine the additional earnings associated with extra school years at different levels. Third, this study investigates the role of some important factors such as, technical training, school quality, and literacy and numeracy skills on earnings for the first time. 4 The rest of the paper is organised as follows: section 2 presents an overview of the education sector. Section 3 outlines the model for empirical estimation and describes data. Section 4 reports the results. Conclusions and policy Implications are presented in the last Section. II. The Education Sector in Pakistan: An Overview: Education plays an important role in human capital formation. It raises the productivity and efficiency of individuals and thus produces skilled manpower that is capable of leading the economy towards the path of sustainable economic development. Like many other developing countries, the situation of the education sector in Pakistan is not very encouraging. The low enrolment rates at the primary level, wide disparities between regions and gender, lack of trained teachers, deficiency of proper teaching materials and poor physical infrastructure of schools indicate the poor performance of this sector. The overall literacy rate for 1997-98 was estimated at 40 percent; 51 percent for males and 28 percent for females; 60 percent in urban areas and 30 percent in rural areas. These rates are still among the lowest in the world. Due to various measures in recent years, the enrolment rates have increased considerably. However, the high drop-out rate could not be controlled at primary level. Moreover, under-utilisation of the existing educational infrastructure can be seen through low student-institution ratio, (almost 18 students per class per institution) low teacher-institution ratio (2 teachers per institution) and high studentteacher ratio (46 students per teacher). The extremely low levels of public investment are the major cause of the poor performance of Pakistan’s education sector. Public expenditure on education remained less than 2 percent of GNP before 1984-85. In recent years it has increased to 2. 2 percent. In addition, the allocation of government funds is skewed towards higher education so that the benefits of public subsidy on education are largely reaped by the upper income class. Many of the highly educated 5 go abroad either for higher education or in search of better job opportunities. Most of them do not return and cause a large public loss. After mid-1980s, each government announced special programs for the improvement of the education sector. However, due to the political instability, none of these programs could achieve their targets. The Social Action Program was launched in early 1990s to address the imbalances in the social sector. This program aims to enhance education; to improve school environment by providing trained teachers, teaching aids and quality text books; and to reduce gender and regional disparities. The Phase-I of SAP (1993-96) has been completed and Phase-II is in progress. The gains from the Phase-I are still debatable because the rise in enrolment ratio has not been confirmed by the independent sources. Irrespective of this outcome, government has started work on Phase-II of SAP. In this Phase, government is paying special attention to promote technical and vocational education, expanding higher education in public as well as in the private sector, enhancing computer literacy, promoting scientific education, and improving curriculum for schools and teachers training institutions in addition to promoting primary and secondary education. Due to low levels of educational attainment and lack of technical and vocational education, Pakistan’s labour market is dominated by less educated and unskilled manpower. A considerable rise in the number of educational institutions and enrolment after 1980s is not yet reflected in Pakistan’s labour market. This might be due to the fact that most of the bachelor’s and master’s degree programmes emphasise only on academic education without developing specific skills. The sluggish demand for the graduates of these programs in the job markets leads to unemployment among the educated and the job market remains dominated by the less educated. In this scenario, it becomes important to explore the role of education for the economic benefit of individuals. 6 III. Theoretical Model and Estimation Methodology: We start with the human capital model developed by Becker (1964) and Mincer (1974) where natural logarithm of monthly earnings are the linear function of completed school years, experience and its square. In mathematical form the equation can be written as: ln Wi = ? 0 + ? 1 EDU i + ? 2 EXPi + ? 3 ( EXPi ) 2 + Ui (1) where ln Wi stands for natural logarithm of monthly earnings, EDUi represents completed years of schooling, and EXPi is the labor market experience of ith individual. ?1 implies the marginal rate of return to schooling. A positive value of ? 2 and negative value of ? 3 reflects the concavity of the earning function with respect to experience. Ui is the error term, assumed to be normally and identically distributed. It has been argued in the literature that different school years impart different skills and hence affect earnings differently. Therefore, it is misleading to assume a uniform rate of return for all educational levels. Most of the previous studies used dummy variables to capture the effect of different levels of education. In order to examine the effect of school years at different levels of education, van der Gaag and Vijverberg (1989) divided the years of schooling according to the school systems of Cote d’ Ivore. Similarly Khandker (1990) also used years of primary, secondary and post-secondary schooling in wage function for Peru. Both studies found significant differences in returns to education at different levels of education. Following van der Gaag and Vijverberg (1989), we divide the school years into seven categories according to the education system of Pakistan. In Pakistan, the primary education consists of 5 years of schooling; middle requires 3 more years; and by completing 2 more years of schooling after middle, an individual obtains a secondary school certificate i. e., Matric. After matric , i. e. , 10 years of schooling, students have a choice between technical and formal education. Technical education 7 can be obtained from technical institutions which award diploma after 3 years of education while the certificate of intermediate can be obtained after two years of formal education. After the completion of intermediate certificate, students can enter either in the professional colleges for four years or in non-professional bachelors degree program for two years in a college. Those who choose non-professional degree can pursue their studies in a university for masters for two more years. At this stage the graduates of professional and non-professional colleges complete 16 years of education. They can now proceed to the M. Phil. or Ph. D. degrees. In order to examine the returns to education at different splines of education, we estimate the following extended earning function. ln Wi = ? 0 + ? 1Yrs Pr imi + ? 2 YrsMid i + ? 3YrsMati + ? 4 YrsInteri + ? 5 YrsBAi + (2) ? 6 Yrs Pr of i + ? 7 EXPi + ? 8 ( EXPi ) 2 + Ui where YrsPrim, YrsMid, YrsMat YrsInter YrsBA YrsProf are defined as: YrsPrim = D5EDUi YrsMid = D8EDUi YrsMat = D10EDUi YrsInter = D12EDUi YrsBA = D14EDUi YrsProf = D16EDUi where D5 = 1 if where D8 = 1 if where D10 = 1 if where D12 = 1 if where D14 = 1 if where D16 = 1 if 0< EDU ? 5 5< EDU ? 8 8< EDU ? 10 10< EDU ? 12 12< EDU ? 14 EDU > 14 The coefficients associated with YrsPrim, YrsMid, YrsMat YrsInter YrsBA YrsProf in equation 2 imply an increase in income with one year increase in education at respective levels. For example, the returns to five completed years of education at primary level will be 5*? 1. Similarly, the returns to for six, seven and eight of education will be 5*? 1+? 2, 5*? 1+2? 2, and 5*? 1+3? 2 respectively. On the same lines we can compute the returns to education at each level as: 8 Returns to Primary =5*? 1 Returns to Middle =5*? 1+3*? 2 Returns to Matric= 5*? 1+3*? 2+2*? 3 Returns to Intermediate=5*? 1+3*? 2+2*? 3 +2*? 4 Returns to Bachelor’s =5*? 1+3*? 2+2*? 3 +2*? 4 +2*? 5 Returns to MA/Prof=5*? 1+3*? 2+2*? 3 +2*? 4 +2*? 5 +2*? 6 The data are drawn from the nationally representative Pakistan Integrated Household Survey 1995-96. In order to assess the performance of the Social Action Programme (SAP), the government of Pakistan has launched the series of Pakistan Integrated Household Surveys (PIHS), a collaborative nation wide data collection effort undertaken by the Federal Bureau of Statistics (FBS). So far two rounds have been completed. The first round of the PIHS is different from other round on two counts. Firstly, the information on employment and wages is available only in this round. Secondly, only 33 percent of the sample used in the first round is being repeated in the subsequent rounds. This implies that all of these rounds are independent cross-section data sets and can not be properly linked with each other to be used as panel data. Therefore, the appropriate sample can only be drawn from the first round of PIHS. This round was conducted in 1995-96, which covers 12,622 households and more than 84,000 individuals. The 1995-96 PIHS provides a detailed information on completed school years5. In addition, this survey contains information on age started school. This information is particularly important for our study to calculate the potential experience of a worker. The indicator for experience used by Mincer (1974) is a good proxy for U. S. workers as they start school at the uniform age of six years6. However, this assumption does not hold in Pakistan, as in this country there is no uniform age to start school. In urban areas, children as young as three years start going to school whereas in rural 5 This is the only nation-wide data set that provides this particular information. Similarly no other survey contains information on public and private school attendence and year starting school. 6 Mincer defined experience as (Age-education-6). 9 areas the school starting age is higher. 7 This information enables us to construct potential experience as (age-schools years-age starting school). Although experience is still a proxy for actual experience but it is relatively better measure than age and the Mincer type potential experience. In addition to education and experience, various other factors, such as quality of schooling, technical training and quality of schooling have significant impact on earning8. It has been argued that because of the market-oriented approach adopted by the private schools, the graduates of these schools earn more as compared to the graduates of public schools9. According to Sabot (1992), Behrman, Ross, Sabot and Tropp (1994), Alderman, Behrman, Ross and Sabot (1996a), Alderman, Behrman, Ross and Sabot (1996b), and Behrman, Khan, Ross and Sabot (1997), the quality of education has positive, significant and substantial impact on cognitive achievements and hence on post school productivity, measured by earnings. These studies observed higher earnings of the graduates of high quality school than those who attended a low quality school. A recent study by Nasir (1999) found considerably higher earnings for the private school graduates. These schools, however, charge higher fees. â€Å"Estimates of average annual expenditure per pupil in both government and private schools indicates that the total cost of primary level in rural areas is Rs. 437 (Rs 355 for government schools and Rs. 1252 for private schools), compared with Rs. 2038 in urban areas (Rs.1315 for government and Rs. 3478 for private schools). This means that the cost of primary schooling is almost three times that of public schools in urban 7 The issue of age starting school has been highlighted by Ashraf and Ashraf (1993) and because of the nonavailability of this information, they used age as proxy for experience. 8 See Summers and Wolf (1977); Rizzuto and Wachtel (1980); Behrman and Birdsall (1983); Booissiere, Knight and Sabot (1985); Knight and Sabot (1990);Behrman, Ross, Sabot, and Tropp (1994); Behrman, Khan, Ross and Sabot (1997). 9 Various studies found the effectiveness of private schools to acquire cognitive skills [Colemen, Hoffer and Kilgore (1982); and Jimenez, Lockheed, Luna and Paqueo (1989)]. For Pakistan, Sabot (1992), Behrman, Ross, Sabot and Tropp (1994), Alderman, Behrman, Ross and Sabot (1996a), Alderman, Behrman, Ross and Sabot (1996b), and Behrman, Khan, Ross and Sabot (1997) found a significant variation in the cognitive skills among children with same number of school years. These studies conclude that some of the differences are due to the family characteristics while some are due to the quality of schooling. 10  areas and nearly four times in rural areas. The differences in cost of schooling also reflect the degree of quality differentials in public and private schools, and between urban and rural schools. A relatively better provision of school facilities and quality of education in private schools is causing a continuous rise in school enrolment in urban areas† [Mehmood (1999) page 20]. The PIHS provides information on the type of school attended10. On the basis of this information we can identify workers according to the school they attended and therefore examine the effect of type of school on individual earnings. In order to capture the quality of education an individual received, a dummy variable is included in the model that takes the value ‘1’ if individual is a graduate of private schools and ‘0’ otherwise. The effect of post-school training on earning has been found positive and substantial in many developing countries [see Jimenez and Kugler (1987); van der Gaag and Vijverberg (1989); Khandker (1990); and Nasir (1999)]. The PIHS contains information on years of technical training. This information helps us to examine the effect of technical training received on individual earnings. We use completed years of technical training as independent variable in the earning function. The existence of vast gender gap in human capital accumulation is evidenced by various studies in Pakistan11. The PIHS reports vast gender disparities in literacy and enrolment rates. The literacy rate among females is half than that of males’ literacy rate for whole Pakistan. This difference has increased to three-folds for rural areas. The gender difference is however smaller for the gross enrolment rate at primary level. For the higher levels of education, this difference 10. The coefficient of private school may also capture the effect of socio-economic background of workers. The data, however, does not contain such information, therefore we are unable to separate the effect of parental characteristics from the effect of private schools in worker’s earnings. 11 Sabot (1992); and Alderman, Behrman, Ross and Sabot (1996b); Sawada (1997); Shabbir (1993); and Ashraf and Ashraf (1993a, 1993b, and 1996) 11 shows an increasing trend. Similarly vast gender gap has been observed in returns to education where males earn more than the female workers [Ashraf and Ashraf (1993a, 1993b and 1996) and Nasir (1999)]. In order to capture the effect of gender, a dummy variable is introduced in the model that takes the value ‘1’ for males and ‘0’ otherwise. The regional imbalances in the provision of limited available social services are more pronounced in Pakistan. Rural areas are not only underdeveloped in terms of physical infrastructure but also neglected in gaining basic amenities. Haq (1997) calculated the disaggregated human development index for Pakistan and its provinces. He noted that nearly 56 percent of population is deprived of basic amenities of life in Pakistan; 58 percent in rural areas and 48 percent in urban areas. According to the 1995-96 PIHS, the literacy rate in urban areas is 57 percent and in rural areas it is 31 percent. The gross enrolment rate was noted 92 percent in urban areas and 68 percent in rural areas. Because of these differences low returns to education are observed in rural areas [Shabbir (1993 and 1994) and Nasir (1999)]. To capture the effect of regional differences, a dummy variable is used that takes the value ‘1’ if individual lives in urban areas and zero otherwise. The four provinces of Pakistan exhibit different characteristics in terms of economic as well as social and cultural values. Significant provincial differentials in rates of returns to education have been noted that reflect not only the differences in market opportunities but also indicate uneven expansion of social services across provinces [Khan and Irfan (1985); Shabbir and Khan (1991); Shabbir (1993); Shabbir (1994); and Haq (1997)]. The effects of these differences are captured through the use of dummy variables for each province in the earning function, Sindh being the excluded category. 12 For the purpose of analysis we restrict our sample to wage earners and salaried persons. Our sample contains 4828 individuals. Among them, 4375 are males and 453 are females. Table 1 presents the descriptive statistics of some of the salient features of the important variables. According to the statistics in table 1, average age of the individuals included in the sample is 34 years with 18 years of experience. A typical worker in the sample has completed approximately 10 years of education. A majority is graduated from public schools. Most of the workers live in urban areas. On average an individual earns Rs. 3163 per month. In our sample, there are only 22 percent individuals who received technical training. The average years spent for training are less than one year. A majority of wage earners belong to Punjab, followed by Sindh and Balochistan. Table1 Mean, Standard Deviation and Brief Definitions of Important Variables Variables W Age EDU EXP RWA MALE Urban Private Training Punjab Sindh NWFP Balochistan Mean SD Variables Definitions 3163. 34 3397. 39 Individual’s monthly earnings in rupees consist of wages and salaries. 34. 07 12. 36 Age of an individual in years. 9. 53 4. 36 Completed years of schooling. 18. 14 11. 80 Total Years of labour market experience calculated as (age-school years-age starting school). 2. 37 1. 07 Categorical variables, contains 4 categories of literacy and numeracy. 0. 91 0. 29 Dichotomous variable equal to 1 if individual is male. 0. 60 0. 49 Dichotomous variable equal to 1 if individual belongs to urban area 0. 04 0. 19 Dichotomous variable equal to 1 if individual is a graduate of private school 0. 35 0. 87 Completed years of technical training 0. 38 0. 49 Dichotomous variable equal to 1 if individual belongs to Punjab 0. 31 0. 46 Dichotomous variable equal to 1 if individual belongs to Sindh 0. 15 0. 36 Dichotomous variable equal to 1 if individual belongs to NWFP 0. 16 0. 36 Dichotomous variable equal to 1 if individual belongs to Balochistan 13 IV. Empirical Results The estimated results of equation 1 and equation 2 are reported in table 2. The highly significant coefficients of school years and experience indicate the applicability of human capital model for Pakistan. An additional year of schooling raises individual’s monthly income by 7. 3 percent, which is very close to the prior studies. 12 13 The coefficient of experience shows substantial increase in wages with each additional year. The concavity of age-earnings profile is evident from the negative and significant coefficient of experience squared. The results reveal that an individual with five years of experience earns 31 percent higher wages as compared to non-experience worker. The highest level of earnings is achieved with approximately 30 years of experience. These estimates are relatively low compared to prior studies14. The positive and significant coefficients of gender (0. 401) and regional dummies (0. 178) strengthens the a priori expectation that males earn more than females and earnings are higher in urban areas as compared to rural areas. These estimates are consistent with earlier studies [see Arshaf and Ashraf (1993), Khan and Irfan (1985)]. Furthermore, significant inter-provincial differences in individual’s earnings can be observed in the estimated model. Many studies indicate substantial differences in earnings across school levels. For example, van der Gaag and Vijverberg (1989) noted that an increase of one year in elementary, high and university education causes an increase of 12 percent, 20 percent and 22 percent respectively in 12 The estimated coefficients of school years by Shabbir and Khan (1991), Shabbir (1991), Shabbir (1993) and Shabbir (1994) are found to be in the range of 6 percent to 9. 7 percent. 13 The returns to education are calculated by taking the anti-log of 0. 092 (estimated coefficient of completed school years) and subtracting from 1. To convert into percentage, multiply the value by 100. For details, please see Gujrati (1988) page 149. 14 The difference in the returns to experience could be due to the approach adopted by these studies. Most of the studies used age as a proxy for experience [see for example Khan and Irfan (1985); Ashraf and Ashraf (1993); and Nasir (1999)]. Shabbir (1991) used the Mincerian approach to calculate experience. The present study uses actual age of starting school and actual years of education. These information enable us to calculate total years of labor market experience. This approach is also not the perfect alternative for actual experience, as we do not have information about the starting time of the first job. But when compared with other approaches, it is more precise in measuring experience. 14 earnings. In order to examine the returns to education across different school years, we include the information on schooling according to the education system of Pakistan (equation 2). The results reported in column 3 of table 2 show a positive and significant impact of school years at each educational level on earnings. For example, an increase of one year in education at primary level increases the earnings by 3 percent. Similarly, at middle level, one year of schooling brings about an increase of 4 percent in earnings and the total returns to schooling at middle level are 27 percent. Table 2 Earning Function with and without Levels of Education Variables Coefficient s 6. 122 0. 072* 0. 058* -0. 001* 0. 178* 0. 401* 0. 127* -0. 113* -0. 203* 0. 412 t-ratios Coefficient s 6. 380 0. 058* -0. 001* 0. 150* 0. 264* 0. 098* -0. 112* -0. 166* 0. 027** 0. 040* 0. 050* 0. 057* 0. 071* 0. 082* 0. 429 t-ratios Coefficient s 6. 342 0. 058* -0. 001* 0. 152* 0. 262* 0. 096* -0. 108* -0. 164* 0. 052* 0. 007 0. 025* 0. 038* 0. 047* 0. 063* 0. 075* 0. 429 t-ratios Constant EDU EXP EXP2 Urban Male Balochistan NWFP Punjab RWA Yrs-Prim Yrs-Mid Yrs-Mat Yrs-Inter Yrs-BA Yrs-Prof Adj R2 148. 91 46. 71 26. 49 -19. 20 10. 31 13. 98 4. 94 -4. 34 -10. 21 – 92. 03 23. 85 -16. 84 7. 87 8. 15 3. 40 -4. 06 -7. 75 2. 03 5. 07 8. 69 11. 41 16. 85 21. 98 – 89. 25 23. 84 -16. 88 7. 98 8. 09 3. 32 -3. 91 -7. 63 2. 41 0. 45 2. 45 5. 02 7. 28 11. 47 15. 57 – * significant at 99 percent level. ** significant at 95 percent level. One can note higher returns of additional year of schooling for higher educational levels from this table. For example, the returns to masters and professional education (Yrs-Prof) are more than five- 15 times higher than that of primary school years (Yrs-Prim). The results exhibit a difference of 15 percent between primary graduates and illiterates, the excluded category. This category includes illiterates as well as all those who have not obtained any formal schooling but have literacy and numeracy skills15. To further explore the earning differential between primary school graduates and those who never attended school but have literacy and numeracy skills, we have constructed an index RWA that separates illiterates from those who have literacy and numeracy skills. This index takes the value ‘zero’ if individual does not have any skill; ‘1’ if individual has only one skill; ‘2’ if individual has two skills; and ‘3’ if individual has all three skills. We re-estimated equation 2 with this new variable and the results are reported in column 5 of table 2. According to our expectations, the coefficient of RWA is found not only large (0. 05) in magnitude but also statistically significant at 99 percent level. This indicates that the individuals with all three skills earn 15 percent more than those who have no skill. On the other hand, the coefficient of Yrs-Prim dropped to 0. 007 and became insignificant16. The differential in the earnings of illiterates and those having five years of primary education was 15 percent (0. 03*5=0. 15). This differential however, reduced to approximately 9 percent (0. 007*5+0. 053=8. 8) when we include those who have no formal education but have literacy and numeracy skills. These high returns to cognitive skills indicates the willingness of employer to pay higher wages to the able workers as compared to those who have five or less years of schooling but do not have these skills. Now we examine the effect of technical training and quality of schooling on earnings, first in separate equations and then in a single equation. The impact of technical training on earnings is examined by including years of apprenticeship as continuous variable in our model. The results are reported in column 1 of table 3. The results show a positive and significant impact of technical 15 There are 48 wage earners in our sample who have education less than primary but do not have any of these skill. Whereas we found 76 wage earners who do not have any formal education but have at least one of these skills. 16 This result is consistent with van der Gaag and Vijierberg (1989). 16 Table 3 Earning Functions : Impact of Technical Training and School Quality (Separate Functions) Variables Constant EDU EXP EXP2 Urban Male Balochistan NWFP Punjab Tra.

Police Brutality Essay

Police work is dangerous. Sometimes police put in situations that excessive force is needed. But, because some officers use these extreme measures in situations when it is not, police brutality should be addressed. The use of excessive force may or may not be large problem, but it should be looked into by both the police and the public. For those people who feel racism is not a factor in causing the use of excessive force, here is a fact. In Tampa Bay, Florida five men died while in the custody of the Tampa Bay police department. The thing is the Tampa Bay Police Department is made up of mostly white officers, but of the five men who died none where white. Four of the five men that died were African Americans, and the other man was a Mexican. If the incident in Tampa Bay does not show person racism, this event might. In New York City, an average of seven Latin Americans were killed a year between 1986 to 1989, but in 1990, that number increased. In that year, twenty-three Latin Americans were killed by police gunfire. Police brutality is involving the unnecessary and unjustified use of force that is either physical or verbal. Other than the police stopping brutality, the use of review boards can be used. These boards must be able to receive all the evidence in a case, including the police audio tapes, in order to make fair judgment if excessive force was used or not. If excessive force is present in cases, these review boards must be able to punish the police or they are almost useless. Whether or not a person believes police brutality is a serious problem, it must be stopped. In some cases, where more force is needed than in others, it is still there. Even in areas where police and the use of excessive force is not a huge problem, it must be decreased by both the police and the public. Finally, there needs to be rules making sure that this never happens again.