Confidence Interval for a Population Proportion

Confidence Interval for a Population Proportion Confidence intervals can be used to estimate several population parameters. One type of parameter that can be estimated using inferential statistics is a population proportion. For example, we may want to know the percentage of the U.S. population who supports a particular piece of legislation. For this type of question, we need to find a confidence interval. In this article, we will see how to construct a confidence interval for a population proportion, and examine some of the theory behind this. Overall Framework We begin by looking at the big picture before we get into the specifics. The type of confidence interval that we will consider is of the following form: Estimate /- Margin of Error This means that there are two numbers that we will need to determine. These values are an estimate for the desired parameter, along with the margin of error. Conditions Before conducting any statistical test or procedure, it is important to make sure that all of the conditions are met. For a confidence interval for a population proportion, we need to make sure that the following hold: We have a simple random sample of size n from a large populationOur individuals have been chosen independently of one another.There are at least 15 successes and 15 failures in our sample. If the last item is not satisfied, then it may be possible to adjust our sample slightly and to use a plus-four confidence interval. In what follows, we will assume that all of the above conditions have been met. Sample and Population Proportions We start with the estimate for our population proportion. Just as we use a sample mean to estimate a population mean, we use a sample proportion to estimate a population proportion. The population proportion is an unknown parameter. The sample proportion is a statistic. This statistic is found by counting the number of successes in our sample and then dividing by the total number of individuals in the sample. The population proportion is denoted by p and is self-explanatory. The notation for the sample proportion is a little more involved. We denote a sample proportion as pÌ‚, and we read this symbol as p-hat because it looks like the letter p with a hat on top. This becomes the first part of our confidence interval. The estimate of p is pÌ‚. Sampling Distribution of Sample Proportion To determine the formula for the margin of error, we need to think about the sampling distribution of pÌ‚. We will need to know the mean, the standard deviation, and the particular distribution that we are working with. The sampling distribution of  pÌ‚ is a binomial distribution with probability of success p and n trials. This type of random variable has a mean of p and standard deviation of (p(1 - p)/n)0.5. There are two problems with this. The first problem is that a binomial distribution can be very tricky to work with. The presence of factorials can lead to some very large numbers. This is where the conditions help us. As long as our conditions are met, we can estimate the binomial distribution with the standard normal distribution. The second problem is that the standard deviation of  pÌ‚ uses p in its definition. The unknown population parameter is to be estimated by using that very same parameter as a margin of error. This circular reasoning is a problem that needs to be fixed. The way out of this conundrum is to replace the standard deviation with its standard error. Standard errors are based upon statistics, not parameters. A standard error is used to estimate a standard deviation.  What makes this strategy worthwhile is that we no longer need to know the value of the parameter p. Formula To use the standard error, we replace the unknown parameter p with the statistic pÌ‚. The result is the following formula for a confidence interval for a population proportion: pÌ‚ /- z* (pÌ‚(1 - pÌ‚)/n)0.5. Here the value of z* is determined by our level of confidence C.  For the standard normal distribution, exactly C percent of the standard normal distribution is between -z* and z*.  Common values for z* include 1.645 for 90% confidence and 1.96 for 95% confidence. Example Lets see how this method works with an example.  Suppose that we wish to know with 95% confidence the percent of the electorate in a county that identifies itself as Democratic.  We conduct a simple random sample of 100 people in this  county and find that 64 of them identify as a Democrat. We see that all of the conditions are met.  The estimate of our population proportion is 64/100 0.64.  This is the value of the sample proportion pÌ‚, and it is the center of our confidence interval. The margin of error is comprised of two pieces.  The first is z*.  As we said, for 95% confidence, the value of z* 1.96. The other part of the margin of error is given by the formula (pÌ‚(1 - pÌ‚)/n)0.5.  We set pÌ‚ 0.64 and calculate the standard error to be (0.64(0.36)/100)0.5 0.048. We multiply these two numbers together and obtain a margin of error of 0.09408.  The end result is: 0.64 /- 0.09408, or we can rewrite this as 54.592% to 73.408%.  Thus we are 95% confident that the true population proportion of Democrats is somewhere in the range of these percentages.  This means that in the long run, our technique and formula will capture the population proportion of 95% of the time. Related Ideas There are a number of ideas and topics that are connected to this type of confidence interval.  For instance, we could conduct a hypothesis test pertaining to the value of the population proportion.  We could also compare two proportions from two different populations.

Expression of power in art Essay Example | Topics and Well Written Essays - 750 words

Expression of power in art - Essay Example A great deal of information about the Egyptian culture and religion can be gained from the pyramids. The most obvious function of the pyramids was to serve as funerary complexes for the pharaohs whose bodies were preserved and kept here with the provisions needed for their afterlife. The pyramids served as the ceremonial cites and places of worship where the people worship the deceased king as God. In the Egyptian culture since the king was considered God, the line between politics and religion was very thin. Pharaohs used the beliefs of the people on their godhood to command unquestioned obedience and authority. The Stepped Pyramid and mortuary precinct of Djoser, Saqqara, Egypt, was built between 2630-2611 BCE. The shape of the pyramid with the slopes on the four sides protruding inward into structures that are raised toward the highest point representing the Pharaoh, also shows how pharaohs were deified. These pyramids give us an understanding of the political and cultural structu re of the kingdoms where the pharaoh was the single authority over the people and the affairs of the kingdom. The religion of the Egyptians centered on sun worship and their preoccupation with death and afterlife. Numerous symbolisms found in Egyptian art and hieroglyphics found on these pyramids points towards this idea. Egyptian art abounds with symbolism. The pharaoh's regalia symbolize power and his ability to control his environment. Colours also had special significance. While blue represented the river Nile, red represented power and authority and yellow represents the sun. These colors were used to show the pharaohs as all-powerful kings. Roman art and architecture has a lot of value while studying the expression of power and authority through the medium of art. The Romans ruled a vast and diverse group of people of different cultures, languages and dialects. The best means to demonstrate their power to the masses and the other rulers was the use of art. In specific we will discuss the Trajan's column erected between 106 and 113 AD by Roman emperor Trajan. This monument is an overt statement about his conquests and military power. The historical episodes are depicted in a sweeping narrative running around the huge column. Trajan is depicted many times in many different contexts, but his form is always majestic and larger than life. The narrative is the story of his courage, accomplishments and power. One can see very clearly that his images are carved with this purpose in mind. The details of the clothes, armor and shields of both armies are clearly distinguished and Trajan is depicted as the victor in no unclear term s. The fact that the enemies are not stripped of their dignity shows the way Trajan wanted to be portrayed as a good king throughout his empire. The expression of power is part and parcel of most Islamic monuments and forts. The gilt domes of the worship places are symbols of not only the holy place but also the rich kings and patrons who have been instrumental in building them. In a culture in which religion and state functioned together, complementing the growth of each other, it was only natural that their art had both religious and political connotations. The decorations on these buildings comprise a wide array of symbols depicting power. The high and mighty towers with huge gates and winding walls are also an expression of the military and defense might of the rulers. One of the best preserved sites

Troubleshooting electric circuits Essay Example | Topics and Well Written Essays - 250 words

Troubleshooting electric circuits - Essay Example As part of the pre-qualifying parameters, it is significant to identify the defected system, whether it is electrical or mechanical. This should be followed by a thorough analysis of the fault found in the identified system. Carrying out the troubleshooting steps would then follow for repairs. These techniques would make the troubleshooting a lot faster. In the scope of troubleshooting an electrical circuit, it is likewise of utmost importance to identify the controls and loads, clearly understand the sequence of the operation in a system, and the mastery of the basic circuit theory which will help in the analysis of the individual components at hand. To make the troubleshooting more systematic, I should look at the problem from a smaller view to a larger view which will project the picture as a whole. To carry the troubleshooting process effectively, I would extensively utilize the three important measuring devices: ohmmeter, voltmeter and ammeter. Nevertheless, these would not be e nough without having a view of the backbone of the system. This can be addressed by using schematic diagrams, electrical wiring diagram (EWD) and test lights. What should I do if the problem remains undetected after exhausting all the troubleshooting process? The answer depends on you

Howard Gardner Research Paper Example | Topics and Well Written Essays - 750 words

Howard Gardner - Research Paper Example As a result of further research Gardener and his colleagues have stated that there could be an addition of another 3 possible intelligences to the initial list of seven (Smith, 2002, 2008). The presence of one kind of intelligence is determined from several perspectives or criteria which were drawn from several fields such as biology, logical reasoning and various psychological factors. With this he concluded that every child whether normal, mentally or physically challenged will have their unique set of intelligences in which they will shine and both teachers and parents will have to employ a broad range of learning methods in order to identify the strengths and weaknesses of a child. Thus with his research on multiple intelligences Gardener sought to bring about a change in the system of learning with focus on the inherent abilities and interest of a child so that they will be able to pursue their interests and not succumb to external factors such as peer pressure (What are Multipl e Intelligences? n.d). ... e candidate intelligences in an individual include: the potential for brain isolation by brain damage, presence of an evolutionary history or possibility, a set of identifiable core operations, susceptibility to encoding, distinct developmental progression in which there is a defined end-state performance, the existence of idiot-savants, prodigies and other such unique individual, and aided with suitable support from psychological experiments and other psychometric findings (Gilman, 2001; Smith, 2002, 2008). The seven intelligences initially included in the MI theory are linguistic, logical-mathematical, musical, bodily-kinesthetic, spatial, interpersonal and intrapersonal. Of the seven the first two intelligences namely linguistic and logical have been used in the school curriculum to assess the language and reasoning skills of the students. The linguistic intelligence is the ability to read, write and effectively communicate in a language. Through this an individual should be able to express themselves and accomplish their set goals. The logical-mathematical reasoning is the ability to reason and analyze scientific issues and mathematical problems. The next three intelligences are associated with performing arts as they involve a coordination of the mind and the body. The musical intelligence includes performance, composition or listening skills in music. Understanding the musical pattern will enable an individual to compose pitches, rhythms and tones. Bodily-kinesthetic intelligence involves the effective use of bodily parts to perform an action. For example athletes, dancers and medical surgeons and craftsman have a high capacity for this intelligence. According to Gardener, this intelligence includes both the mind and the physical body as activities are performed

Death And Paralysis In The Sisters

Death And Paralysis In The Sisters In order to recognize that Joyces Dubliners is a work unified by death, it is necessary for one to return to the beginning, where a meticulous reading is paramount, and start again. The opening story, The Sisters, is concerned with death and its impact upon the living individuals left in its wake. If the reader considers its function as essentially an introductory chapter, one will start to detect a palpable semblance of unity throughout Dubliners, as this story establishes the overarching theme of death and its associated motifs: paralysis, silences, and epiphanies-the latter of which are inextricably rooted in the poetics of modernity. The Sisters is a story that is concerned with youth, which represents the beginning of a progression from childhood to maturity. In this regard, the storys form parallels the narrative for the reader, as the story at its heart is concerned with the young narrators developing awareness; at the same time, the reader starts to acquire a simultaneous awa reness of the afore-mentioned themes and motifs. As we shall see, The Sisters functions as a gnomon for the entire collection of stories, as its narrator is but one of many more who are stifled and subjugated by their environment-like a patient etherized upon a table, as the ubiquitous J. Alfred Prufrock might say (Eliott 1). The Sisters ushers the readers into the world of Dubliners through the eyes of a child narrator. The narrator, along with the reader, confronts images of death in the opening paragraph through a lighted square of window-analogous to the window-panes of J. Alfred Prufrock. It is here, at the very beginning, that the narrator introduces the word paralysis, heralding a theme which reoccurs with death throughout the entirety of Dubliners. In A Beginning: Signification, Story, and Discourse in Joyces The Sisters, Staley emphasizes the beginning paragraph as an overture for the themes, conflicts, and tensions that were to be evoked again and again à ¢Ã¢â€š ¬Ã‚ ¦ throughout all of Dubliners (20). Furthermore, Staley affirms that the initial sentences tone of finality and certainty à ¢Ã¢â€š ¬Ã‚ ¦ begins the circle of death for Dubliners (22). If one were to accept Staleys claim that the opening paragraph acts as an overture for the novel, it could then be argued that death and paralysis ar e not to be seen as separate entities in the context of Dubliners, but that the two are directly related, if not intertwined. Father Flynn, through his physical paralysis, comes to embody many of the characters in Dubliners, the majority of whom are paralyzed to some extent, whether it is physically, mentally, or emotionally. Later, the reader witnesses the manner in which death interrupts or arrests the living, as the narrator lays in the dark of [his] room and imagines that he sees the heavy grey face of the paralytic (Joyce 11). Already, one can intuit that the dead play a haunting role in Dubliners, as Gothic elements are common to modernist literature. This is evidenced here, as the narrator feels that he is smiling feebly like the paralytic priests cadaver (11). Indeed, at this point the living and dead start to merge as a single image, with the narrator mirroring the state of an immobile Father Flynn. In his critical essay on The Sisters, Corrington states that the boy and the old man fuse briefly through this smile, which contrasts elements of youth and death (24). The innocence of youth is tainted early in Dubliners, as death and Father Flynns deathly influence permeate The Sisters, looming behind both reader and narrator like an ominous shade. The child narrator may very well be a reflection of the reader, mirroring the thought processes that lead to a simultaneous realization of deaths paralyzing nature in the world of Dubliners. The narrators epiphany on deaths paralyzing quality is inadvertent, even ironic, as he calls attention to a sensation of freedom as if [he] had been freed from something by his death (Joyce 13). His actions in the story are contrary to this supposed sense of freedom; it becomes apparent that Father Flynns influence fills the silence that he left behind and acts as an interrupting force. Such a force bears similarities to the dead Catherines effect upon Heathcliff in Wuthering Heights, where the latters life is dominated by her memory. Indeed, the narrator goes so far as to anthropomorphize paralysis as a maleficent and sinful being that fill[s] [him] with fear, yet he long[s] to be nearer to it and to look upon its deadly work (Joyce 9). The boy is both repelled and oddly compelled by the paralysis he experiences here, which exposes his inability to be truly free from Father Flynns death. Therefore, paralysis can be regarded the work of death, as both the boy and his sisters find the mselves utterly torpid in the wake of Father Flynns passing. The boys inability to find any fraction of freedom from Father Flynns death becomes more evident as his mental haunting persists. Here, the child imagines the heavy grey face of the paralytic and feels the apparition follow [him] (Joyce 11). Father Flynn is referred to synecdochically here, defined by a heavy grey pallor that suggests death incarnate, further melding themes of death and paralysis. More importantly, perhaps, the narrator has rendered Father Flynn incomplete, a gnomon by definition. Joyce employs the Euclidian definition of gnomon: a remainder after something has been removed (Joyce 9). This depiction of Father Flynn becomes significant later when one considers who is left more complete by the end of the story, and further relates to Heathcliff of Wuthering Heights, who is left incomplete by his loss of Catherine, making him a gnomon of sorts as well. Nonetheless, this point illustrates the narrators inability, or perhaps reluctance, to be freed by Father Flynns passin g. Indeed, it seems significant that he imagine[s] Father Flynns face rather than dreaming about it, which would indicate a sort of conscious rejection of letting the dead be truly dead. In Dubliners: A Students Companion to the Stories, Werner states that when contemplating the word paralysis, the boy attributes to it an active presence that he wishes to observe rather than evade, and the same can be said about the concept of death for the narrator, as both themes are interlaced throughout the story (45). The development of consciousness in regard to death and its paralyzing quality is central to The Sisters. This development points to the storys role as a beginning, as the maturation, or lack thereof, of the various narrators consciousness and perception later becomes a major issue throughout Dubliners. Epiphanies are abundant in Dubliners, as they are in Virginia Woolfs To the Lighthouse, T.S. Eliots The Wasteland, and other modernist literature; nonetheless, as Werner notes in Dubliners: A Students Companion to the Stories, Joyce only gradually focuses his attention on the experience of revelation (47). Furthermore, the increasing complexity of his epiphanies is basic to the mature voice capable of articulating the contingent experiences of truth as an ongoing process for character, author, narrator, and reader (55). Such a development can be seen in the various protagonists encounters with death in Dubliners. In particular, The Sisters represents a beginning for both reader and na rrator. Just as the boy is experiencing his first encounter with death, the reader is experiencing his first bitter taste of life within the world of Dubliners. As a result, there is a simultaneous introduction to life and death. The moment of realization in the penultimate paragraph displays the narrators perception of death, as he states simply that the old priest was lying still in his coffin as we had seen him, solemn and truculent in death (Joyce 18). Here, the narrator still attributes a certain sense of hostility to Father Flynn as if to further affirm the haunting qualities of his death. The detached style in which Joyce imparts this realization is important, as it indicates that the narrator is barely cognizant of anything beyond the dead body. As Beck states in Joyces Dubliners: Substance, Vision, and Art , this realization communicates no incredibly precocious philosophical breakthrough, but the verisimilitude of a dawning awareness, a gradual, hushed, yet decisive epiphany (Beck 43). More importantly, the boy does not seem conscious of his paralysis as later narrators, such as Gabriel Conroy and Duffy, are. If the opening story is essentially a framing device, one can assume that the child narrator in The Sisters exhibits the start of a vicious cycle of internalizing paralysis. Werner claims that the narrator of Araby represents the first stage in the development of a destructive solipsism portrayed in adult characters such as Duffy, but one can argue that this stage actually begins with the narrator of The Sisters (54). Furthermore, Beck notes that the narrator of the Sisters eventually realizes his identity just that much more, and with it his secret isolation (43). Indeed, the core of the story is the boys beginning to see into himself as to the life around him, specifically the impedance of death upon that life. Death is the catalyst for epiphanies in both The Sisters and A Painful Case. In the former example, death triggers an emotional paralysis in the living, while in the latter story, death causes a realization of Duffys pre-existing emotional paralysis. Here, it is important to expound upon the significance of the narrators youth in the story. As Werner notes, the stories of childhood in Dubliners picture early confrontations of young boys with their corrupt environment (41). In The Sisters, such an environment is marked by an inevitable convergence of the living and the dead wherein the latter haunts the former. The young narrator is paralyzed by the external circumstances of his life, as Werner would argue. In fact, Werner goes on to claim that such a suffocating experience encourage[s] even the more sensitive à ¢Ã¢â€š ¬Ã‚ ¦ children to accept and internalize paralysis, which leads directly to adult counterparts who have surrendered utterly to paralysis (41, 42). James Duffy, the protagonist in A Painful Case, exemplifies the adult Dubliner who has repressed his emotional paralysis for entirely too long, measuring his life in coffee spoons in the same manner as J. Alfred Prufrock. Silence is introduced in the opening paragraph as yet another motif to be associated with death. As mentioned, the narrator of The Sisters characterizes the very presence of Father Flynns corpse with an antagonistic silence. However, one should note the relationship between Father Flynns silence and the sisters referenced in the title, as the two entities are almost at odds with one another. As the story progresses, the sisters keep attempting to break the persistent silence with their patter, but the dialogue is only ever about Father Flynn. In this manner, the dead haunt even the speech of the living. Corrington remarks that the old man has had a certain degree of ascendance over [the sisters] and even in death, he is their primary concern (22). Corringtons comments are primarily concerned with the sisters as a symbol of devoted service to the Catholic Church, the notion of Father Flynns ascendance and enduring presence speak to the haunting nature of the dead. Father Flynn is neve r more than a cadaver in The Sisters, yet his influence is undeniable. He looms over the environs silently, but to such an extent that the silence becomes a malevolent force. Rabate comments on the nature of silence in the context of Dubliners, writing that silence can finally appear as the end, the limit, the death of speech, its paralysis (33). If one works within the notion of silence as an antagonistic opposition to speech, the final moments of The Sisters can be seen as the ultimate paralysis inflicted by the dead Father Flynn. Joyce ends with Elizas speech, interrupted by ellipses before it finally trails off, imparting a paralyzing silence upon the reader. It is as if the characters, like J. Alfred Prufrock, are left wondering the same: how should I begin? Joyce extols little intimation of hope within the world of Dubliners, where the living portray an emotionally paralyzed life equivalent to that of the dead. It is only upon further examination that one can argue that Joyce actually glorifies death to some extent and indicates it as a more amenable condition. Although the eponymous sisters dialogue throughout the story is rife with clichà ©, a particular assertion is striking. Eliza declares that Father Flynn had a beautiful death, which brings to mind Joyces claim that death is the most beautiful form of life (Joyce, Dubliners 15; Joyce, James Clarence Mangan 60). She goes on to say that Father Flynn make[s] a beautiful corpse, which contrasts the paralyzed depiction of his earthly life. In fact, Father Flynn is marked by a certain incompleteness from the opening paragraph of The Sisters, when the narrator associates the priests paralysis with the word gnomon (Joyce 9). As mentioned, the narrator only represents Father Flynn symboli cally-by his face-which further suggests an incompleteness. Finally, the broken chalice symbolizes the beginning of Father Flynns broken state-his burgeoning madness. Another definition of the word gnomon is applicable to Father Flynn; as discussed in lecture, it is a shadow cast as on a sundial (66). Father Flynns influence as a deathly shade is undeniable, as he lingers throughout the story. On the other hand, his being, or lack thereof, serves to illuminate the partial, reduced lives of Joyces Dubliners, which seems to be Joyces ultimate goal here (66). The storys explicit concern with the dynamic of life and death is a deliberate one, as Joyce carefully arranged the order of stories in Dubliners (Beck 42). Indeed, the exploration of life and death is both central to modernity and the major crux upon which Dubliners is unified. Thus, Becks concern with the meaning and interpretation of the story are secondary to revealing the manner in which it functions as an overture to the novel (42). Ultimately, The Sisters establishes a pattern of the dead impacting life to the point of paralysis that is not altered until the final story. The Sisters makes it possible to explore the later stories of Dubliners in the context of themes and motifs set forth from the very beginning. Werner states that the remainder of Dubliners fulfills [the narrators] longing to be nearer to paralysis and its deadly work, which is an accurate assessment, as Joyce continues to develop this particular theme throughout the work (35). It is this inexplicable, paradoxical longing that harkens back to the poetics of modernity and notions of the sublime. The Sisters functions as an overture for Dubliners, introducing the themes and motifs that serve to unify the novel. Death and paralysis are intertwined throughout Dubliners, as they are in many other modernist works. Paralysis is present not only in The Sisters, but in A Love Song for J. Alfred Prufrock, in which the titular protagonist wonders endlessly, do I dare? The impact and implications of death can be seen as well through the influence of Father Flynn. Like Catherine of Wuthering Heights, he hovers over the lives of others like a shade, lending Gothic elements to an otherwise realistic, if stagnant depiction of Irish life. These themes provide an appropriate context-a modernist context-in which the rest of the novel can not only be enjoyed, but properly engaged.

Effects of Smoking Cigarettes Essay -- Nicotine Cigarettes Tobacco

The History of Tobacco In 3000 B.C the Ancient Egyptians burnt sweet herbs and frankincense when sacrificing to their gods. This was the beginning of smoking. Then in the beginning of the Christian era smoke was inhaled through the burning fur of a hare, the diagnoses for epilepsy was the inhalation of smoke from a goat's horn and for consumption, smoke inhaled through a reed of dried dung of an ox. Somewhere in the United States was believed to be the birthplace of tobacco, a plant of the genus Nicotiana. How and when it was discovered is unknown (Huron Indian myth has it that in ancient times, when the land was barren and the people were starving, the Great Spirit sent forth a woman to save humanity. As she travelled over the world, everywhere her right hand touched the soil, there grew potatoes. And everywhere her left hand touched the soil, there grew corn. And when the world was rich and fertile, she sat down and rested. When she arose, there grew tobacco). What is certain is that tobacco smoking was practised among the early Mayas, probably in the district of Tabasco, Mexico, as part of their religious ceremonies. The Mayans had no paper to wrap their tobacco in so they wrapped it in palm leaves or cornhusks, and stuffed it into reeds or bamboo. On the other hand they also smoked rolled tobacco leaves as crude cigars. Indians further north made pipes, some with a bowl and mouthpiece, others shaped like a Y, and placed the forked ends into their nostrils. They also blended their tobacco with other herbs and plants to vary the flavour. In South America, the Aztecs smoked and took snuff. Elsewhere in the American continent, tobacco was chewed, eaten, drunk as an in... ...f cigarettes a day. If you want to find out how much an average smoker pays for cigarettes per annum you do this: ÂÂ £4.33 (a packet of cigarettes) ÂÂ ´ 7 (days per week) = ÂÂ £ 30.31 (amount paid for cigarettes a week) ÂÂ £ 30.31 (amount paid for cigarettes a week) ÂÂ ´ 52 (weeks per year) = ÂÂ £1576.12 (amount paid for cigarettes a year) So an average smoker pays approximately ÂÂ £1576.12 a year, so if you take up smoking you are more than likely to spend more than ÂÂ £1500 a year in cigarettes. In the U.K the price of a pack of 20 premium brand cigarettes currently costs ÂÂ £4.33, of which ÂÂ £3.45 (80%) is tax. Thus out of the ÂÂ £1576.12 spent a year by a smoker 80% is taken by the Government, which is ÂÂ £1260.90. This is the main reason why the Government doesn?t ban smoking, because they are making ÂÂ £1260.90 per smoker per year in the U.K.

Successful Property Development

Throughout this paper the masculine gender is used when referring to developers. This is purely for convenience and does not imply that successful developers have to be male. Demand for new buildings from tenants and owner occupiers is the basis of all commercial property development in the United Kingdom. A typical development scheme will be initiated by a developer identifying a demand for a new building or buildings in a certain location. A major office user for example may wish to combine a number of regional offices into one new building able to accommodate new echnology and enable all of the Company's departments to be housed under one roof. The image to be presented by the new building will also be important and the Company may prefer a prominent town centre location with easy rail access or a fringe of town location on the motorway network. The experienced developer will know that if a development is to be successful the location must be the one which will appeal to tenants or purchasers who will either pay rent or a capital sum to occupy the property. There are many examples of unsuccessful schemes which failed because of poor location. With shopping centre evelopment the choice can be very subtle and a slightly ‘off-pitch' location may be enough to discourage tenants from leasing shop units in the new centre. If a site for a new development is identified and the site (or redundant buildings) is available for purchase, planning consent for the scheme must be sought from the Local Authority. It is usually the case that the developer will have concentrated on those locations where the planners will support development proposals and planning consent is likely to be received. If the location is correct and planning consent is likely the developer must also rrange finance to buy the site, build the scheme and let (or sell) it. He may also wish to sell the completed income producing investment. If he does so and the money he receives from the sale of the investment is more than the capital and interest he borrowed to build the scheme, he will receive a monetary profit. There are many sources of finance for developers but conventionally money will be borrowed from banks to buy the site and build a scheme with long term finance being provided by life assurance funds and pension funds. Long term finance in this ontext means the purchase of the completed investment by the fund which will enable the developer to repay all his short term debt and (hopefully) give him a profit. The investment market and development market are therefore closely linked and the developer will be mindful of the fund's requirements from the start of the development process. The most common form of development funding which involves the institutions if known as ‘profit erosion, priority yield'. This method allows the developer to borrow most of his short term finance from the institution and not pay it back until the cheme is completed and let. At this time the fund takes over the scheme in return for providing the developer's short term monies. The developer departs with a lump sum fee for carrying out the project which will be calculated by capitalising that amount of rent from the scheme which will be calculated by capitalising that amount of rent from the scheme which exceeds the fund's required return on the money lent; in other words its ‘priority yield'. Even if the rent from the scheme does not exceed the fund's priority yield, the developer will still receive a fee but obviously not as uch as he would get if he lets the building(s) at a high rent. There are many other types of development funding some of which are described in ‘Property and Money' by Michael Brett (see the bibliography at the back of this booklet). The developer will employ a professional team to design and cost the proposed building. The architect as leader of the design team has a crucial role to interpret his client's intentions and produce a design which will meet the requirements of tenants, planners and long term funders. Other commentators such as journalists, he general public, and the Prince of Wales may also criticise the design of a scheme where it is perceived to be ugly or inappropriate for its location. Successful commercial development requires therefore a combination of good location, planning consent, good design and funding. Even if these factors are present the scheme may still fail, at least in the short term, if the economy is weak and firms cannot expand. This introduction provides a resume of a typical development and the process can now be considered in more detail. The Developer The developer is the instigator of the scheme. He provides the entrepreneurial flair to identify the development opportunity and bring it to a successful conclusion. In doing so he will make use of established relationships with commercial estate agents and his knowledge of the occupier market. Most large development companies specialise in particular areas of the market. Slough Estates for example, built its reputation in the development of industrial and warehouse property whereas Hammersons developed the first shopping mall in the United Kingdom at Brent Cross. Some life assurance funds act as their own developer and one example is Norwich Union in the development of the Bentalls centre in Kingston on Thames. Various government agencies also act as developers such as District and Regional Health Authorities with hospital building. Increasingly, the newly privatised utilities will carry out their own developments. There are many types of developers. Some are ‘developer traders' who build with a view to selling the scheme when it is complete. Others will develop and hold the completed investment in their investment portfolio. Some developers are quoted on the stock exchange and others are little more than one man bands. Throughout the development process, but crucially at the start before funds are committed, the commercial developer will carry out an appraisal which will predict the eventual profits to be earned from the scheme. A considerable amount of work has to be done to produce a full appraisal as all the costs of the scheme have to be considered. The site itself will have to be fully investigated and this will involve bore hole surveys to enable the structural engineer to estimate the cost of the foundations. An environmental impact study may be required before planning consent is forthcoming. With the assistance of his agent, the developer will also predict the rent which the scheme will produce and (if the investment is to be sold), the investment value. If a scheme is to be successful the investment value less all capital and interest costs will have to leave an acceptable profit. If a developer has used rents in the appraisal which are too high, perhaps in expectation of rent rises in the development period, he may eventually make no profit at all and the scheme (from the developer's viewpoint) will have failed. To avoid risk and to attract other tenants to a development, a developer will often eek a pre-let tenant for a scheme. Before construction starts, a tenant will sign an agreement to lease all or part of the scheme at an agreed rent. This is particularly valuable in shopping centre development where an anchor tenant such as a department store will make a commitment before development commenced, thereby giving confidence to other lessees to take shop units. A developer who borrows money to buy a site, construct a building, and seek lessees will have no appreciable earnings until the scheme is let. It would be difficult therefore, for any interest on capital borrowed to be repaid during the development period. It is usually the case that interest is repaid as a lump sum when the fully let investment is eventually sold. Interest in these circumstances is said to be ‘rolled up' until the end of the development period. In arranging finance, the developer will often have a short term interest in the scheme, whereas the fund purchasing the investment when fully let, has a long term interest. Funds are, therefore, particularly interested in tenant quality in the longer term and building flexibility which may not be of primary importance to the developer. Local Authorities may initiate development, particularly retail, by making town centre ites available on ground leases to developers. The Authority will have a long term interest in the scheme's success, as they will receive a grounds rent, probably geared to the full rental value of the development. Not all developers have a short term interest in a development. Major developers may hold completed investments in a portfolio rather than ar range long term finance by selling the investment to a fund. Planning In the words of Clara Green ‘planning applications (like prayers) receive one of three answers – yes, no or yes but. ‘ The process can be one of great frustration and ifficulty for developers and for a major scheme it is usual for a specialist planning consultant to be employed to negotiate a consent with the Local Authority. Planning law is complicated but in general terms, planning consent is required for most major building in the United Kingdom. The department of the Environment is responsible for planning and the Secretary of State for the Environment is advised by teams of professional planners, surveyors and architects. All applications are made to local councils and it is only the most important or controversial applications which will be of interest to the higher tier of overnment. Most applications are, therefore, decided locally although the Secretary of State may decide to call in any application at his or her discretion. To obtain planning permission, an application will be made to the District Council although applications in the future also may be considered by the new unitary authorit ies. The developer can choose the type of application he wishes to make. If he wishes to seek approval to the principle of development, he can make an outline application. This is sometimes referred to as a red line application, as a red ine is drawn around the site plan supporting the application. If consent is granted, this will be subject to reserved matters and the developer will have to seek a subsequent consent for these detailed matters later. Alternatively a full application may be made which will include all detailed matters as well as the basic principles. The Local Authority will decide the application in the context of plans which will have been previously published and approved by the Secretary of State. Under the present two tier system of Local Government, the County Councils produce structure lans for their area which show in strategic terms the type and location of development which will be permitted during the period of the plan. The District Councils produce local plans which deal with detailed matters related to specific areas of land. If the planning application does not accord with the local plan, the Local Authority will be justified in refusing the application but obviously a developer would be unwise to make an application of this type. Structure plans have a life of between 5 and 15 years and comprise a lengthy written statement supported by explanatory diagrams. The important matters dealt with in the structure plan are strategic matters such as tourism and leisure, waste disposal, new housing, employment and transport. The Authority has a two month period in which to decide an application but it can ask the applicant for more time. If the application is refused the applicant can appeal to the Secretary of state and the matter in the majority of cases, will be decided by a Government Inspector. In major cases, the Inspector will make recommendations to the Secretary of State who will, after advice, take a decision. There may also be a Public Local Enquiry here evidence is heard by the Inspector over a number of days from all interested parties. In producing their structure and local plans as well as deciding applications, Councils have to take into account policy statement produced by the government. These are called Planning Policy Guidance Notes (PPGs) and they are published or amended from time to time. Two of the most important are PPG 6 which relates to out of town retail development and PPG 13 which deals with transport. There are a total of 25 PPGs and many are frequently revised. For example a new PPG 12 was produced in April 1999. This revision emphasised the importance of regional planning which now has it own PPG (PPG 11) and also stressed the government's commitment to a plan led system. Any developer seeking to build against government guidance as stated in the PPGs faces a long, expensive and uncertain battle and therefore is well advised to tailor development proposals to accord with published guidance. The government is at pains to demonstrate that the plan led system is sensitive to demographic changes and this is seen in the revisions to PPG 3 (Housing) which take account of the prediction that ‘7 out of ten new ouseholds forming over the next 20 years are likely to be single person households' (Nick Raynsford, Housing and Planning Minister). A topical revision PPG 25 (Flood Risk) which aims to avoid development in flood risk areas and emphasises a precautionary approach in marginal areas with flood defences to be shown to be in place (and paid for by the developer) before development is approved. The Development Team The team will be employed by the developer at the start of a project and it role will encompass design, costing, funding and marketing. In summary its functions are as follows: Architect The Architect is the leader and coordinator of the design team who has a major role in interpreting his client's requirements and producing a design brief. The brief establishes the client's basic requirements and from this the Architect and other members of the design team will produce detailed design drawings. These will eventually be given to selected building contractors who will tender for the job of constructing the building. During construction, the Architect will inspect the work as it proceeds on behalf of his client. Because the Architect's work is so important he ill be paid a fee based on a percentage of the total cost of the building work. For a new building this will normally be between 4% and 5% of the cost of the work. Quantity Surveyor The Quantity Surveyor estimates the eventual cost of the new building and will produce regular cost checks as the design is developed. Before tenders are invited from building contractors, he will inform the client of the estimated cost of the works (the pre-tender estimate) and the client can then proceed to tender with confidence. Services and Structural Engineers In some instances the engineers will be responsible for producing design drawings nd specifications of the building services (air-conditioning, electrical installation etc) and the structure (foundations, structural frame). Increasingly however, the services engineer will only produce a statement of how the services will perform (a performance specification) rather than a full design. In these circumstances, design becomes the responsibility of the contractor. Estate Agents Developers usually have established relationships with firms of estate agents who will be aware of development opportunities. The agent will also provide marketing advice and will be responsible for letting the building. Other Consultants Other consultants include solicitors, landscape architects and planning consultants. With some complicated and large schemes, a project manager may oversee the project on behalf of the client. Specialist noise or environmental consultants may be required where development will take place in environmentally sensitive areas where special planning conditions have been imposed. Successful Schemes A scheme will be successful if its location and design has attracted a number of first class tenants and will continue to do so in the future should any tenants vacate. A uccessful scheme will provide a secure and growing investment for the eventual long term investor as well as an adequate monetary profit for the developer. There are many reasons why development schemes are unsuccessful, some of which are discussed below: Poor Location This is the most obvious but nevertheless very common reason for failure. A shopping scheme may be located where there is a lack of pedestrian flow. An office building may be located where vehicular access is difficult or the chosen site does not provide the required image and identity for the tenant/s. On a wider scale, he development may be located in a city which is in decline, to the detriment of long term investment quality. Some commentators are casting doubt on the future quality of fringe of town retail warehousing schemes which do not have the support of an established town centre. Poor Design A shopping centre must be designed to maximise pedestrian flow and enable shoppers to both park and gain easy access. If the design fails to do this, the public may avoid the centre and tenants will be hard to find. Also shopping centres must allow frequent changes of image and must provide the correct ambience for the ublic. Attention to detail with the internal design will allow this to benefit the investment. Thee are many examples of office buildings constructed in the 1960's and 1970's which do not provide the necessary ducting and image for modern tenants using today's technology. These developments may have been regarded as successful when they were first constructed, but in terms of a long term investment are of dubious quality. Lack of flexibility with many buildings means that where occupier requirements change the buildings cannot and voids are the result. Increased Costs during Design or Construction If a developer allows costs to increase, he will eventually make no profit whatsoever from the scheme. If costs increase beyond those used in the appraisal the developers profit will be eroded. The expertise of the design team to contain costs whilst, at the same time, producing a quality building is of vital importance but sometimes mistakes are made. A lack of coordination between building work and services is a typical example leading to redesign, delay and increased costs. Planning Errors When a contract is awarded to a contractor, it is important that the site of the evelopment is firstly in the legal control of the developer and secondly the same site for which planning consent has been granted. There have been many examples of mistakes in this area to the detriment of the project. Empty Property A newly built shopping centre with few tenants is clear evidence of a scheme which falls short of success. There are many examples amongst those centres completed during the recession. As with office and warehousing property pre-let tenants are particularly valuable in recessionary periods. Public Sector Development The Private Finance Initiative. In the past public sector development such as roads, hospitals and bridges were built by government contracting with the private sector for the design and construction works. Civil servants and their consultants would work to precise specifications of what was required to be built. When the development was complete the government would then be responsible for running the completed hospital, road or whatever to the benefit of the public. The Private ~Finance Initiative (or PFI) is intended to revolutionise the traditional method of producing public facilities described above. It was conceived in 1992 during Norman Lamont's troubled chancellorship and was vigorously supported by his successor Kenneth Clarke. In essence PFI only required the government to state how the building is to be used and the performance it must achieve. The private sector is then invited to tender for the design, construction and running of the new facility. The reward for doing this is negotiated with the government agency responsible for the facility and will usually take the form of a regular monetary payment so long as the facilities provided continue to meet the agreed criteria. Kenneth Clarke stated that PFI is ‘a radical and far reaching change in capital investment in public services which will break down further barriers between the public and private sectors'. The central argument in favour of PFI is that the private sector is more capable of promoting efficiency than government and will provide business solutions to public sector requirements. It is also argued that the risks of increased construction and running costs, which appears to be a feature of public sector schemes, will disappear with PFI where all the risks are borne by the private sector. Critics of PFI point out that it is extremely difficult to produce a performance specification for, say, a highly complex building such as a hospital and this will lead to private sector contractors being allowed to cut corners to the detriment of the public. It is also pointed out that the government can always borrow money more cheaply than the private sector and that this will inevitably lead to increased costs which will be passed on to the public. The change of government in May 1997 led to a thorough review of the experience gained from using PFI in the previous five years. Malcolm Bates was appointed to arry out a review which resulted in 29 recommendations aimed at rationalising and reinvigorating the PFI process. The ‘Treasury Taskforce' was the government's response to the review and this body consisted mainly of city financiers who were charged with building up PFI expertise in government. The taskforce had a life of three years and is replaced by ‘Partnerships UK' which will operate as a joint private/public consultancy to assist with the PFI process. There are currently hundreds of PFI schemes in the process of completion and the present government is wedded to this form of procurement for public sector projects.