advertisement
objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. Corporate Headquarters 1776 Main Street P.O. Box 2138 Santa Monica, CA 90407-2138 V 310.393.0411 F 310.393.4818 Washington Office 1200 South Hayes Street Arlington, VA 22202- 5050 V 703.413.1100 F 703.413.8111 annual report The RAND Corporation is a nonprofit research organization providing Building on a Leg acy Pittsburgh Office 201 North Craig Street Suite 202 Pit tsburgh, PA 15213 -1516 V 412.683.2300 F 412.683.2800 New York Office 215 Lexington Avenue, 21st Floor New York, NY 10016 - 6023 V ( Council for Aid to Education ): 212.661.5800 V ( New York External Af fairs ): 212.661.3166 F 212.661.9766 RAND - Qatar Policy Institute P.O. Box 23644 Doha, Qatar V +974.492.7400 F +974.492.7410 RAND Europe—Berlin Uhlandstrasse 14 10623 Berlin Germany V +49.30.310.1910 F +49.30.310.19119 RAND Europe—Cambridge Graf ton House 64 Maids Causeway Cambridge CB5 8DD United Kingdom V +44.1223.353.329 F +44.1223.358.845 RAND Europe—Leiden New tonweg 1 2333 CP Leiden The Netherlands V +31.71.524.5151 F +31.71.524.5191 w w w.rand.org R AR_cover_final_cgla.indd 1 annual report 4/21/05 3:25:49 PM objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. Corporate Headquarters 1776 Main Street P.O. Box 2138 Santa Monica, CA 90407-2138 V 310.393.0411 F 310.393.4818 Washington Office 1200 South Hayes Street Arlington, VA 22202- 5050 V 703.413.1100 F 703.413.8111 annual report The RAND Corporation is a nonprofit research organization providing Building on a Leg acy Pittsburgh Office 201 North Craig Street Suite 202 Pit tsburgh, PA 15213 -1516 V 412.683.2300 F 412.683.2800 New York Office 215 Lexington Avenue, 21st Floor New York, NY 10016 - 6023 V ( Council for Aid to Education ): 212.661.5800 V ( New York External Af fairs ): 212.661.3166 F 212.661.9766 RAND - Qatar Policy Institute P.O. Box 23644 Doha, Qatar V +974.492.7400 F +974.492.7410 RAND Europe—Berlin Uhlandstrasse 14 10623 Berlin Germany V +49.30.310.1910 F +49.30.310.19119 RAND Europe—Cambridge Graf ton House 64 Maids Causeway Cambridge CB5 8DD United Kingdom V +44.1223.353.329 F +44.1223.358.845 RAND Europe—Leiden New tonweg 1 2333 CP Leiden The Netherlands V +31.71.524.5151 F +31.71.524.5191 w w w.rand.org R AR_cover_final_cgla.indd 1 annual report 4/21/05 3:25:49 PM H I G H L I G H T S O F R A N D H I G H L I G H T S R E S E A R C H Efficiency and Economy in Government Through New Budgeting and Accounting Procedures Air Defense Strategic Offensive Forces Study Missiles vs. Aircraft Packet Switching: Seed of the Internet Computer Security Information Processing Language (IPL) Problem-Solving with Monte Carlo Techniques The Operational Code of the Politburo First On-Line, Time-Shared Computer System Reconnaissance Satellites JOHNNIAC Digital Computer Selection and Use of Strategic Air Bases Preliminary Design of an Experimental World-Circling Spaceship (1946) Strategic Bombing Analysis Aerial Refueling Exotic Materials and Fuels Economics of Defense in the Nuclear Age History of Soviet Nuclear Research Systems Analysis Systems Research Laboratory RAND Tablet: Communicating with Computers in Real Time Via Hand-Printed Text A Proposed Strategy for the Acquisition of Avionics Equipment Future of Cable Television System Analysis and Public Policy Space Systems Mapping the Planets Electromagnetic Pulse (EMP) Alternative Approaches to the Defense of Europe Game Theory A Million Random Digits with 100,000 Normal Deviates Strategy in the Missile Age Space Handbook Strategic ForceBuilding and Crisis Management JOSS (JOHNNIAC Open Shop System) Delphi Method CORONA Project Dynamic Programming Expert Judgment Water Supply: Economics, Technology, and Policy Air-Launched vs. Ground-Launched Satellite Boosters I N S T I T U T I O N A L First Project RAND letter contract (to Douglas Aircraft Co.) AR_cover_final_cgla.indd 2 All-Volunteer Force Private Security Industry Studies for ARPA, NASA, OSD, AID, NSF, and NIH begin Headquarters opens at 1700 Main Street, Santa Monica New York CityRAND Institute established Systems Development Division created; spun off as SDC in 1957 Domestic Research Division established; includes programs on Education, Health, and Labor & Population Computer Resource Management Study Ballistic Missile Basing Alternatives RAND Strategy Assessment Center A Framework for Defense Planning: Strategies-to-Tasks Punitive Damages Velocity Management Air Crash Litigation Appropriateness of Acute Medical Care Effective Teacher Selection Toward Ethics and Etiquette for Electronic Mail Evaluation of CHAMPUS Reform Initiative Health Insurance and the Demand for Medical Care Cost and Use of Capitated Medical Services Recruiting Effects of Army Advertising Costs of Treating AIDS Under Medicaid Closing the Gap: Forty Years of Economic Progress for Blacks Malaysian Family Life Survey Economics of Drug Dealing Survivability and Utility of Tactical Air Next Phase of U.S.–Soviet Relations Equity in Public School Finance Terrorism in the United States I N S T I T U T I O N A L Emerging Technology and Arms Control Decline of U.S. Machine Tool Industry Urban America: Policy Choices for Los Angeles and the Nation Leadership Change in North Korean Politics Costs of Asbestos Litigation Water Resource Management in the Netherlands Three Strikes and You’re Out Lessons from the Gulf War Defense Base Closures Preparing for Conflict in the Information Age Training Emergency Responders Inadequate Compensation for Worker Injuries Nation-Building in Iraq Health Care Quality Military Transformation Education Reform In Qatar Rapidly Deployable Ground Forces Costs of Obesity Treatment of Depression Interventions in the First Three Years of Life Fiscal Federalism and the Social Safety Net Sexual Orientation and U.S. Military Personnel Policy Reducing Violent Gang-Related Crime Changing Role of Information in Warfare Large-Scale Education Testing Universal Access to E-Mail: Feasibility and Societal Implications Homeland Security Military Operations Other Than War Mandatory Minimum Sentences for Drug Cases Judicial Case Management Under the Civil Justice Reform Act The Changing Workplace Senior Leadership Development in the DoD Counterterrorism How Americans Were Affected by the Events of 9/11 California Energy Crisis Public Health Preparedness Safety of Ephedra Education Vouchers and Charter Schools Quadrennial Defense Review Alternative for the Next Generation Gunship M I L E S T O N E S National Defense Research Institute and the Arroyo Center established Cost of Prescription Drug Plans Fiscal Crisis in Higher Education Superfund and Transaction Costs Center for Domestic and International Health Security created European American Center opens (later becomes RAND Europe) RAND opens an office in Pittsburgh, Pennsylvania Critical Technologies Institute established Institute for Civil Justice established Unequal Wealth and Incentives to Save NATO Expansion Decentralization and Accountability in Public Education Social Security Concerns Lean Logistics HIV Cost and Services Utilization Study (HCSUS) Parity Legislation for Mental Health Quality of Health Care Operational Issues for GPS Medicare Payment for Rehabilitation Effective Power Generation Under Deregulation FORWARD–Freight Options for Road, Water, and Rail for the Dutch No-Fault Approaches to Compensating Auto Accident Injuries Workers’ Compensation and Workplace Safety Preventive Dental Care for Children Immigration: Effects on Education, Jobs, and Government Spending The New Calculus: Analyzing Airpower’s Changing Role Prevalence, Predictability, and Policy Implications of Recidivism LHX: Army Light Attack Helicopter Revitalization of Cleveland’s Economy National Security Research Division established Washington Defense Research Division established Dyna-METRIC Impact of Deductibles on the Demand for Medical Care Conventional Arms Control Revisited Strategic Defense and Deterrence Resolution of Medical Malpractice Claims RAND Graduate School founded Court-Centered Arbitration Use and Misuse of California’s Water Resources Scheduling Aircrews and Aircraft Health Insurance Experiment Soviet Military Research and Development Career Criminals Policy Options and the Impact of National Health Insurance R A N D First non–Air Force study (for the Atomic Energy Commission) Computer Privacy and Security STAR: Impact of Alternative Intercity Short-Haul Transportation Systems Simulations Using SIMSCRIPT Teen Drug Abuse and Smoking Prevention: Project ALERT Asian Security: Policies for a Time of Transition M I L E S T O N E S RAND Corporation established Tactical Air Capabilities Strategic Airlift Needs and Alternatives for the 1980s Evaluations and Options for Vietnam Federal Programs Supporting Educational Change Vulnerability of U.S. Army Equipment Prepositioned in Central Europe Housing Assistance Supply Experiment R E S E A R C H Civil Jury Verdicts and Awards Red Strategic Campaign Analysis Water Quality Simulation Model New York City Police Project Soviet Cybernetics Technology R A N D Alternative Logistics Structures: ANALOGS 80 Air Reserve Forces Study ICBM Modernization and Basing Concepts System Acquisition Air Force Health Care System Space Defense NATO Force Planning PPBS Air Force Long-Range Planning Studies Sea-Based vs. LandBased Tactical Air Remote Area Conflict Remotely Piloted Vehicles Manpower and Personnel Policies Military R&D Policies Design of Multiple Independently Targetable Reentry Vehicles Defense of the Tactical Air Force in Europe Handbook on the Theory of Games Linear Programming and Extensions Detecting Nuclear Tests R A N D TSAR/TSARINA Air Base Attack Simulation Models Strategic Analysis: The Long-Term Competition METRIC O F RAND division on Infrastructure, Safety, and the Environment established RAND-Qatar Policy Institute opens RAND moves into new headquarters at 1776 Main Street, Santa Monica 4/21/05 3:26:49 PM c o n t e n t s Building on a Legacy Message from the Chairman and the President The Year in R eview R AND Staff Investing in Ideas Educational Opportunities Clients and Sponsors Advisory Boards Financial R eport Bu i l di ng on Message from the Chairman and the President Now that the boxes are unpacked in our new headquarters building, we can reflect on the process of moving our address a couple hundred yards south from 1700 to 1776 Main Street. The movement, though modest, bespeaks of larger things. RAND’s leaders identified the need for a new facility 20 years ago. The movement might have seemed glacial to some, but our progress was steady, even under budget once we fixed on our plan five years ago. Each step led to the next, and we ended up in a much better place. It is fitting to wax philosophical, or at least metaphorical. For nearly six decades, we at the RAND Corporation have been building on a legacy of accomplishments, adding new stories to the foundation and scaling heights that never could have been imagined at the outset. At times, our progress might have seemed imperceptible. But throughout it all, we have taken what we have learned, and we have kept growing and reaching beyond our last best success. m e s s a g e f r o m t h e c h a i r m a n a n d t h e p r e s i de n t a L e g ac y The roots of many of our accomplishments in 2004 can be traced to earlier decades. The pioneers of the Delphi technique, a groundbreaking RAND methodology of the 1950s, probably never envisioned the day when an underlying concept of their technique, first used to forecast future military technologies, would be used to assess the benefits of the arts. Equally unanticipated, our extensive work in securing the skies has spread, more than ever, to securing the seas. Meanwhile, our latest work in the field of human health has led to an utterly unprecedented area of inquiry regarding healthful versus unhealthful built environments. In the pages that follow, we describe these developments in greater detail. We also summarize five other examples of building on our legacies in strikingly dissimilar fields: military personnel, civil justice, homeland security, education, and religion. Judging by our work in 2004, we could never rightfully claim that RAND’s best days lie in its past. Our latest legacies compel us to believe that RAND’s best days are yet to come. Ann McLaughlin Korologos Chairman James A. Thomson President and CEO For nearly six decades, we have been building on a legacy of accomplishments, adding new stories to the foundation and scaling heights that never could have been imagined at the outset. bu i l di ng on a l e g a c y From the Delphi Technique to an Arts Critique In the 1950s, RAND researchers formulated the Delphi technique, a methodology for eliciting the intuitive judgments of experts and for building a group consensus. The technique has proven useful in extrapolating informed opinion in the absence of exact knowledge. In 2004, RAND analysts applied the spirit of this technique in distilling expert intuition about the benefits of the arts. The analysts found that policymakers today need this kind of broader expert perspective—one that draws on the knowledge of philosophers, art critics, and artists themselves as well as social scientists and economists—to account for the benefits of the arts to individuals and society. In recent years, political and financial pressures have compelled arts advocates to justify public support for the arts by trumpeting their “instrumental” benefits— that is, benefits that are not unique to the arts experience per se but that serve as a means, or instrument, toward achieving other social and economic ends. Examples of such benefits of the arts are enhanced learning and higher student test scores, more self-discipline, improved mental health, greater civic involvement, and various economic payoffs, such as income, employment, investment, and tax revenue. But these instrumental benefits fail to capture the true value of the arts, according to the RAND team led by social scientist Kevin McCarthy. In fact, people flock to the arts not to improve their tests scores or to stimulate the economy but to reap the intrinsic benefits of the arts. And many of the intrinsic benefits have value not only for individuals but also for society as a whole. Grounding their analysis in literature from several disciplines, the RAND team identified three general categories of intrinsic benefits: (1) individual benefits, such as the captivation and pleasure that come from arts experiences and that motivate people to seek more such experiences; (2) individual benefits that also have spillover effects for society, such as cognitive growth in observing details, patterns, and relationships—and an expanded capacity for empathy with people of different backgrounds and cultures; and (3) public benefits, such as the creation of social bonds among those who share and discuss an artistic experience—and the expression of communal meaning. These intrinsic benefits can be sustained and expanded only by strengthening the capacity of individuals to appreciate the arts, according to the RAND team. Therefore, policymakers should focus on building demand for the arts (by introducing more Americans to engaging arts experiences, especially when they are young) rather than focusing solely on expanding the supply of arts experiences (such as live theater, concerts, and museum exhibits). Related Reading Arts Education Partnerships: Lessons Learned from One School District’s Experience, 2004, Melissa K. Rowe, Laura Werber Castaneda, Tessa Kaganoff, Abby Robyn, MG-222- EDU. From Celluloid to Cyberspace: The Media Arts and the Changing Arts World, 2002, Kevin F. McCarthy, Elizabeth Ondaatje, MR-1552-WF. Gifts of the Muse: Reframing the Debate About the Benefits of the Arts, 2005, Kevin F. McCarthy, Elizabeth H. Ondaatje, Laura Zakaras, Arthur Brooks, MG-218-WF. A New Framework for Building Participation in the Arts, 2001, Kevin F. McCarthy, Kimberly Jinnett, MR-1323-WRDF. The Performing Arts in a New Era, 2001, Kevin F. McCarthy, Arthur Brooks, Julia Lowell, Laura Zakaras, MR-1367-PCT. State Arts Agencies 1965–2003: Whose Interests to Serve? 2004, Julia F. Lowell, MG-121-WF. K EVIN MCCARTHY Kevin McCarthy is a senior social scientist at the RAND Corporation. He has led several recent arts projects: reframing the debate about the benefits of the arts; a series of separate studies of the state of the performing arts and the visual arts, funded by The Pew Charitable Trusts; a study of the media arts, funded by the Rockefeller Foundation; and an analysis of how to build public involvement in the arts, commissioned by The Wallace Foundation. Dr. McCarthy has also written extensively on demographic trends and their policy implications. bu i l di ng on a l e g a c y From Air Defense to Sea Defense In 1953, in response to Soviet belligerence, RAND completed vital projects on the defense of the United States against air attack. In 2004, in response to terrorist belligerence, RAND completed vital projects on the defense of the United States and its allies against sea attack. Our efforts on behalf of maritime security in 2004 focused on averting terrorist threats both to homeland security in general and to seaports and global commerce in particular. We conducted the work on behalf of the U.S. Coast Guard and the global container shipping industry. In the wake of the terrorist attacks of September 11, 2001, the Coast Guard was placed within the U.S. Department of Homeland Security and was asked to perform expanded homeland defense duties and other maritime responsibilities in addition to its traditional missions. But to fulfill all of these responsibilities, the Coast Guard will have to accelerate and expand its modernization plans, according to a RAND team led by physicist John Birkler (see Table 1). The RAND team proposed a dual strategy: The Coast Guard should (1) accelerate and expand the acquisition of modernized cutters, aircraft, helicopters, and unmanned air vehicles, and (2) identify and explore new technologies and platform options, such as stationary offshore platforms, that could leverage the capabilities of the newly acquired surface and air vehicles. In a study of the global container shipping industry, a separate RAND team found that the U.S. government should take a stronger role in developing a strategy to prepare the container shipping industry for terrorist attacks and to help the industry recover quickly if attacks occur. During an age of increased terrorist threats, the ability of the global container supply chain to deliver goods efficiently and securely relies on more than just the traditional requirements for cheap and timely deliveries. In TABLE 1—To Fulfill Both Its Traditional Missions and Emerging Responsibilities, the Coast Guard Will Need Many More Assets Than Originally Planned Asset National Security Cutter Offshore Patrol Cutter Fast Response Cutter Maritime Patrol Aircraft High Altitude Endurance Unmanned Air Vehicle Vertical Recovery System Multimission Cutter Helicopter Vertical Unmanned Air Vehicle In Original Deepwater Plan* 8 25 58 35 7 34 93 69 Number Needed to Needed to Meet 60% Meet 80% of Total of Total Demands Demands 26 35 28 37 54 72 24 29 13 33 112 75 Needed to Meet 100% of Total Demands 44 46 90 35 17 33 126 99 25 33 139 123 SOURCE: The U.S. Coast Guard’s Deepwater Force Modernization Plan, 2004. * The original Deepwater plan—short for the Integrated Deepwater System Program—is the U.S. Coast Guard modernization plan that began in 1998. addition, cargo must be declared appropriately to trade and other governmental officials. Cargo must also be inspected to minimize smuggling, entry of illegal immigrants, and the use of containers as a means for terrorist attack. Efforts to secure U.S. ports must address all of these priorities. The RAND report, by Henry Willis and David Ortiz, recommends that the public and private sectors work together on security measures to address the vulnerabilities on global supply routes. Examples of such measures are (1) tamper-evident seals on shipping containers and (2) radio frequency identification devices that monitor ships along their routes. Finally, research and development should focus on improving remote sensing and scanning capabilities to monitor high volumes of shipping traffic. Current technologies are time-consuming, can be inaccurate, and can potentially be circumvented. Related Reading Evaluating the Security of the Global Containerized Supply Chain, 2004, Henry H. Willis, David S. Ortiz, TR-214-RC. “Seacurity”: Improving the Security of the Global Sea-Container Shipping System, 2003, Maarten van de Voort, Kevin A. O’Brien, MR-1695- JRC. The U.S. Coast Guard’s Deepwater Force Modernization Plan: Can It Be Accelerated? Will It Meet Changing Security Needs? 2004, John Birkler, Brien Alkire, Robert Button, Gordon Lee, Raj Raman, John Schank, Carl Stephens, MG-114-USCG. HENRY WILLIS AND DAV I D ORT I Z Henry Willis (right) is an associate policy researcher whose research interests include risk assessment, risk communication, and decision analysis. He has applied these methods to allocation of counterterrorism resources, the health risks of beryllium exposures, threats to adolescent welfare, evaluation of federal investments in research and development, and the ranking of ecological risks. David Ortiz (left) is an associate engineer who specializes in mathematical modeling, simulation, and numerical optimization in support of policy. His current interests are energy and space policy, including assessments of energy infrastructure and supply vulnerability, and civilian space strategy. r a nd a nnua l r eport From Health Plans to Healthy Planning Our pioneering work in the field of public health commenced in 1971 with the Health Insurance Experiment, a 15-year study of the rates at which families utilized alternative health insurance plans. In 2004, we continued our pioneering tradition in the field of public health by sparking a lively national discussion about the nationwide obesity epidemic and the mounting threat it poses to the nation’s health care system and public health insurance programs. Our work in this field also linked some obesity-related chronic health conditions to suburban sprawl. Thus, we extended the salience of our work in health care to the field of urban planning. RAND economists Roland Sturm and Darius Lakdawalla and their teams documented both the disturbing spread of the obesity epidemic over the past 20 years among all U.S. demographic groups and the alarming health and financial consequences. Obesity and its attendant disorders—particularly diabetes, arthritis, and back problems—appear to be associated with steadily rising disability levels nationwide. By the year 2020, one in five health care dollars for those between the ages of 50 and 69 could be consumed by treating only the consequences of obesity, up from less than one in ten dollars for this age group in 1985. In one hopeful finding, RAND analysts Ashlesha Datar and Roland Sturm found that modest increases in physical education instruction in kindergarten of just one hour per week could reduce the number of overweight five- and six-year-old girls nationally by as much as 10 percent. Providing every child in kindergarten and first grade with five hours of such instruction per week— close to the level recommended—could cut both the number of overweight girls in those two grades by 43 percent and the number of such girls at risk of being overweight by 60 percent. One factor that contributes to obesity is a sedentary lifestyle, which can be exacerbated by suburban sprawl FIGURE 1—The Greater the Sprawl, the Greater the Number of Chronic Health Conditions 1,600 1,500 Number of Chronic Health 1,400 Conditions 1,300 Reported Per 1,000 Adults 1,200 1,100 1,000 Examples of Metropolitan Areas More Suburban Sprawl Atlanta Less Suburban Sprawl Seattle-BellevueEverett San Francisco SOURCE: “Suburban Sprawl and Physical and Mental Health,” 2004. that is friendly to cars but hostile to walking and biking. Roland Sturm and Deborah Cohen found that people who live in areas with a high degree of suburban sprawl are more likely to report one or more of 16 chronic health conditions, including arthritis and diabetes, than people who live in less sprawling areas (see Figure 1). If future research confirms these initial results, then policies that shape a healthier built environment could play a critical role in preventing obesity as well as a wide variety of chronic diseases. Related Reading “Are the Young Becoming More Disabled? Rates of Disability Appear to Be on the Rise Among People Ages Eighteen to Fifty-Nine, Fueled by a Growing Obesity Epidemic,” Health Aff airs, Vol. 23, No. 1, January/February 2004, pp. 168–176, Darius N. Lakdawalla, Jayanta Bhattacharya, Dana P. Goldman. “The Economics of Physical Activity: Societal Trends and Rationales for Interventions,” American Journal of Preventive Medicine, Vol. 27, No. 3, October 2004, pp. 126–135, Roland Sturm. “The Effects of Obesity, Smoking, and Drinking on Medical Problems and Costs,” Health Aff airs, Vol. 21, No. 2, March/April 2002, pp. 245–253, Roland Sturm. Also available as RAND/RP-1003. “Increases in Clinically Severe Obesity in the United States, 1986–2000,” Archives of Internal Medicine, Vol. 163, No. 18, October 13, 2003, pp. 2146–2148, Roland Sturm. “Increasing Obesity Rates and Disability Trends: If It Continues at Its Current Rate, Rising Obesity Could Wipe Out Recent Improvements in Disability Among Older Americans,” Health Aff airs, Vol. 23, No. 2, March/April 2004, pp. 199–205, Roland Sturm, Jeanne S. Ringel, Tatiana Andreyeva. “Physical Education in Elementary School and Body Mass Index: Evidence from the Early Childhood Longitudinal Study,” American Journal of Public Health, Vol. 94, No. 9, September 2004, pp. 1501–1506, Ashlesha Datar, Roland Sturm. “Suburban Sprawl and Physical and Mental Health,” Public Health, Vol. 118, No. 7, October 2004, pp. 488–496, Roland Sturm, Deborah A. Cohen. A SHLESH A DATA R AND ROLAND STURM In 2004, Ashlesha Datar and Roland Sturm wrote articles that were published in Archives of Pediatric and Adolescent Medicine, the American Journal of Public Health, and (with Jennifer Magnabosco) Obesity Research. Dr. Datar, an associate economist whose research interests include child care, child health, and early childhood education, holds a Ph.D. in policy analysis from the Pardee RAND Graduate School. Dr. Sturm is a senior economist whose recent work has focused on the economics of healthy living; health care costs of poor health habits; changes of mental health and substance abuse services under managed care; and effects of the parity legislation for behavioral health care. He has testified on health care issues in Congress and several state legislatures. r a nd a nnua l r eport From a Volunteer Force to an Entrepreneur Force RAND found in 1977 that the move to an all-volunteer military force in 1973 had succeeded in attracting a socially representative mix of the desired quantity and quality of recruits at a cost substantially lower than had been commonly assumed. The work confirmed RAND’s leadership in military personnel research and led to decades of subsequent work in this area. innovation, intelligent risk-taking, and entrepreneurship. The system must also begin to produce greater variation in career paths. These changes are crucial for military transformation—or for developing the kinds of personnel capabilities that will be needed to defend the United States against a spectrum of unknown or uncertain threats, ranging from weapons of mass destruction to attacks on information systems. Nearly 30 years later, two teams of RAND researchers proposed how the U.S. military might derive greater capability, accountability, and creativity from its personnel. In the first study, Margaret Harrell, Harry Thie, and their team found that senior military officers spend much less time in their high-level assignments and retire much earlier than do their private-sector counterparts. Thus, the rapidly revolving door of military leadership could be depriving the services of higher degrees of effectiveness and accountability. FIGURE 2—Generals and Admirals Have Shorter Tenures and Retire Younger than CEOs 100 Mean Age When Appointed Mean Tenure 80 Percentage Retiring 60 Under 40 Age 60 O-10s 20 CEOs 35 At the most senior levels in the military, four-star officers average only 3.5 years there before they retire (and that might include more than one assignment at that rank). In contrast, chief executive officers in the private sector typically spend 8.4 years in their positions. Furthermore, nearly 90 percent of four-star officers retire before reaching age 60, compared with only about a third of their private-sector peers (see Figure 2). 45 55 65 0 O-10s CEOs Age SOURCES: O-10 data from Directorate for Information Operations and Reports (Washington Headquarters Service), General and Flag Officer Database, combined with Defense Manpower Data Center and Joint Duty Assignment Management Information System databases. CEO data based on a study of CEO turnover between 1971 and 1994 (“Why CEOs Fall: The Causes and Consequences of Turnover at the Top,” Strategy & Business, Third Quarter, 2002,Chuck Lucier, Eric Spiegel, Rob Schuyt) and a study of CEOs in regulated and unregulated firms (“Chief Executive Officer Careers in Regulated Environments: Evidence from Electric and Gas Utilities,” Journal of Law and Economics, Vol. 45, October 2002, pp. 535–563, Charles J. Hadlock, Scott Lee, Robert Parrino). CEO data in figure are for unregulated firms from the latter study and are similar to data in the former. NOTE: O-10 rank signifies admiral in the U.S. Navy and general in the U.S. Air Force, U.S. Army, and U.S. Marine Corps. Military leaders have worried that lengthening the careers of senior officers would clog the system and thus delay promotions throughout the officer corps. But Harrell and her team found that lengthening the assignments of many of the highest-ranking military positions to four years would enhance stability and accountability without unreasonably stifling any promotion opportunity. Asch and Hosek recommend four ways for military commanders to update the personnel system: (1) Place greater emphasis on innovation, creativity, and entrepreneurship in performance appraisals; (2) grant awards to innovators; (3) allow service members more choice in duty and job assignments; and (4) offer service members performance-based pay raises without promotions. These measures would help military commanders to build the kind of force required for military transformation. In the second study, Beth Asch and James Hosek found that the entire military personnel and compensation system must begin to place a higher value on Related Reading Aligning the Stars: Improvements to General and Flag Officer Management, 2004, Margaret C. Harrell, Harry J. Th ie, Peter Schirmer, Kevin Brancato, MR-1712-OSD. Looking to the Future: What Does Transformation Mean for Military Manpower and Personnel Policy? 2004, Beth Asch, James R. Hosek, OP-108-OSD. BETH ASCH AND JA MES HOSEK Beth Asch is a senior economist whose areas of study include labor economics and defense manpower. She has led numerous studies on compensation design in the military and in the federal civil service, and on military recruiting and personnel supply to the armed forces. Her research has been widely disseminated as reports, briefings, and journal articles among the policy community, the media, and the academic community. Jim Hosek is editor-in-chief of the RAND Journal of Economics and professor of economics at the Pardee RAND Graduate School. In recent years, he has examined the structure of military compensation, personnel quality, information technology personnel, and the impact of peacetime operations on promotion and retention. r a nd a nnua l r eport From Air Crash Litigation to Terrorism Compensation In a 1988 landmark study of air crash litigation in the United States, RAND described the characteristics of the decedents and compiled data on the economic losses suffered by survivors, the compensation paid, and the costs of litigation. In 2004, we built on this expertise, first by examining the impact of medical malpractice reform legislation and then by giving the nation an accounting of the payouts made in response to the terrorist attacks of September 2001. RAND researcher Nicholas Pace and his colleagues assessed the impact on jury awards of California’s Medical Injury Compensation Reform Act of 1975. The law “caps” the amount that a malpractice plaintiff can recover at trial to $250,000 for noneconomic damages—pain, suffering, emotional distress, and mental anguish—but does not cap the amount for economic damages, such as the costs of medical care and lost wages. The law also limits the fees that plaintiffs’ attorneys can collect, based on a sliding scale that reduces the allowable percentage paid to attorneys as the size of any trial award or settlement grows. The law has had intended and unintended effects. It has reduced the aggregate amount of jury awards by 30 percent, skimming the net recoveries for plaintiffs by 15 percent while slashing the net recoveries for attorneys by 60 percent. But the law has had dramatically different effects on different types of cases. For example, the net recoveries for some plaintiffs have actually increased, especially for plaintiffs with initially modest awards for noneconomic damages. In contrast, the net recoveries for plaintiffs in death cases and the most serious nonfatal injury cases have often decreased, sometimes sharply. Also in 2004, the RAND team of Lloyd Dixon and Rachel Kaganoff Stern compiled national data on the amount of compensation paid to the victims of the 9/11 terrorist attacks. The team calculated that businesses and individuals received a total of $38 billion from three sources of compensation: the insurance industry, government agencies, and charitable organizations. FIGURE 3—Most Benefits Paid to Victims of 9/11 Attacks Came from Insurance Companies 20 $19.6 billion Victim Group $15.8 billion 15 Compensation Paid 10 (Billions of Dollars) 5 $2.7 billion 0 Insurance Government Industry Civilians killed/ seriously injured Emergency responders killed/seriously injured Businesses Workers Residents Unallocated Other Charity Compensation Source SOURCE: Compensation for Losses from the 9/11 Attacks, 2004. The insurance industry paid more than half of the benefits ($19.6 billion), with a predominant share of insurance payouts going to businesses in New York City. Government agencies paid more than 40 percent of the benefits, with large shares set aside for civilians killed or seriously injured and for businesses. Charitable organizations paid 7 percent of the total benefits (see Figure 3). There is no guarantee that a similar mix of resources will be available for victims of future terrorist attacks. Moreover, the RAND analysts warn, there is no consensus in the public policy community about the appropriate and respective roles that should be played by government, the insurance industry, charities, and the legal system. Related Reading Capping Non-Economic Awards in Medical Malpractice Trials: California Jury Verdicts Under MICRA, 2004, Nicholas M. Pace, Daniela Golinelli, Laura Zakaras, MG-234-ICJ. Compensation for Losses from the 9/11 Attacks, 2004, Lloyd Dixon, Rachel Kaganoff Stern, MG-264-ICJ. “Forty Years of Civil Jury Verdicts,” Journal of Empirical Legal Studies, Vol. 1, No. 1, March 2004, pp. 1–25, Seth A. Seabury, Nicholas M. Pace, Robert T. Reville. LLOY D DIXON Lloyd Dixon is a senior economist at the RAND Corporation with expertise in resource and environmental economics and policy. In addition to his recent research on compensation to victims of the 9/11 terrorist attacks, he has focused on such topics as California’s strategies for reducing air pollution; the economic consequences of water-supply reductions; Southern California’s cleanup programs for the ocean, rivers, and creeks; the legal and other transaction costs of the federal Superfund cleanup program; and the effects of extending emission-system warranties on the auto-repair industry and on the role of expert evidence in the courts. r a nd a nnua l r eport From Nuclear Plant Security to Airport Security In the 1970s and 1980s, RAND analyzed the motives and capabilities of potential adversaries of U.S. nuclear programs and suggested a strategy, later employed by the U.S. Department of Energy, to safeguard nuclear facilities from terrorist attacks and other forms of sabotage. In 2004, we continued to identify the components of the civilian infrastructure that are most vulnerable to terrorism and to propose ways to mitigate the vulnerabilities. For example, a RAND team led by Donald Stevens found the most cost-effective ways to reduce the impact of a potential terrorist attack at Los Angeles International Airport, believed to be one of the country’s prime terrorist targets. The RAND team examined a number of plausible attack scenarios and concluded that various kinds of potential bomb attacks present the greatest and most plausible risks (see Figure 4). The major threats include bombs placed on airplanes—either as cargo or by an insider who plants a bomb without boarding—and bombs placed in vehicles or in luggage around the airport. Given the scenarios, the most cost-effective short-term option for protecting the traveling public is simply to add more employees to check luggage. That would expedite passenger check-in and Transportation Security Administration screening, thereby reducing the number of travelers gathered in a tightly confined area. In fact, increasing the number of check-in and screening workers by just 5 percent could reduce fatalities by 80 percent if terrorists detonated a luggage bomb in a check-in area. In addition to reducing the density of crowds in the terminals, it would be cost-effective to add a permanent vehicle checkpoint program to spot vehicles that might FIGURE 4—Potential Bomb Attacks Pose the Greatest Risks to Security at Los Angeles International Airport Insider Planted Bomb Uninspected Cargo Bomb Large Truck Bomb Luggage Bomb Curbside Car Bomb Public Grounds Attack Air Operations Attack MANPADs Attack Control Tower Bomb Sniper Attack Mortar Attack Major Threats Lesser Threats Potential Fatalities SOURCE: Near-Term Options for Improving Security at Los Angeles International Airport, 2004. NOTE: MANPADS = man-portable air defense system (also known as shoulder-fired surface-to-air missile). be carrying large bombs. A vehicle screening system might eventually include scales embedded in the roadway to quickly weigh all vehicles entering the airport, allowing officials to identify those that might be weighed down with explosives. Beyond these two security measures that would address vulnerabilities at a relatively low cost, four other measures should be considered for improving airport security. Two would address major vulnerabilities but are relatively expensive: screening all cargo transported in passenger planes and improving the employee selection and clearance procedures. The other two measures— improving perimeter fencing and improving the airport’s rapid-response capability—would address less serious vulnerabilities but could be implemented at low cost. Related Reading The Benefits of Positive Passenger Profiling on Baggage Screening Requirements, 2004, Russell Shaver, Michael Kennedy, DB-411-RC. How Much Is Enough? Sizing the Deployment of Baggage Screening Equipment by Considering the Economic Cost of Passenger Delays, 2004, Russell Shaver, Michael Kennedy, Chad Shirley, Paul Dreyer, DB-410-RC. How Much Is Enough? Sizing the Deployment of Baggage Screening Equipment to Minimize the Cost of Flying: Executive Summary, 2004, Russell Shaver, Michael Kennedy, Chad Shirley, Paul Dreyer, DB-412-RC. Near-Term Options for Improving Security at Los Angeles International Airport, 2004, Donald Stevens, Terry Schell, Thomas Hamilton, Richard Mesic, Michael Scott Brown, Edward Wei-Min Chan, Mel Eisman, Eric V. Larson, Marvin Schaffer, Bruce Newsome, John Gibson, Elwyn Harris, DB-468-1-LAWA. DONALD STEVENS Donald Stevens is a senior engineer who led the 2004 study examining short-term options for improving security at LAX. Other recent projects include examining the military force posture overseas and the role of the military in fighting terrorism. For the Quadrennial Defense Review, he is leading a study that examines the risks in the force structure. He has written numerous books including The Requirements and Affordability of the Joint Strike Fighter and United States Air and Space Power in the 21st Century. bu i l di ng on a l e g a c y From Educational Reforms to Scaling Them Up In 1975, RAND evaluated an array of “top-down” federal educational programs and concluded that many of them had undergone significant adaptation at local sites. The study helped launch an area of research on the importance of implementation in improving the performance of students in America’s public schools. In 2004, a RAND team led by Thomas Glennan and Susan Bodilly completed an analysis of 15 educational reforms and the efforts involved in taking them “to scale”—that is, replicating the reforms at many sites. Central to the analysis was a concept of scale-up that emphasized not just spreading to more sites but also enhancing implementation at the school and classroom level, sustaining the new practices over time, and shifting ownership of the reforms from developers to educators. Developers of the reforms have made some progress toward improving teaching and learning, with several reforms demonstrating measurable gains in student performance in multiple schools or districts. Some of the efforts have focused on teachers, some on schools, and some on clusters of schools. But two common lessons have emerged for future efforts at widespread and lasting educational reform. First, no matter the target of reform or its design, the scale-up process is necessarily iterative and complex and requires the support of multiple actors. Key to success is rejecting a one-way replication model in favor of an interactive model that requires coordination among developers, district officials, school leaders, and teachers. The interactive model implies give-andtake, reciprocal learning, and mutual adaptation. Second, if scale-up is to succeed according to the criteria defined by the RAND authors, the actors involved must jointly address a set of known, interconnected tasks, especially the alignment of school policies and infrastructure to sustain the reform effort. The infrastructural requirements are more than textbooks and technologies. Of noteworthy importance is a human-resource infrastructure—encompassing professional development, hiring and retention policies, and performance incentives—that can ensure an adequate supply of teachers and administrators with the skills needed to sustain reform. In both cases, all actors must take ownership of the effort. According to the RAND team, the faddism prevalent in public education improvement strategies is testimony to the fact that a shift in ownership seldom takes place. Without this shift, developers must permanently subsidize the reform efforts, a relationship that cannot be, and has not been, sustained over the long haul. Related Reading Challenges and Potential of a Collaborative Approach to Education Reform, 2004, Susan J. Bodilly, Joan Chun, Gina Ikemoto, Sue Stockly, MG-216-FF. Expanding the Reach of Education Reforms: Perspectives from Leaders in the Scale-Up of Educational Interventions, 2004, Thomas K. Glennan, Jr., Susan J. Bodilly, Jolene R. Galegher, Kerri A. Kerr, MG-248-FF. THO M A S K . G L E N N A N , JR . The late Thomas Glennan was an architect of RAND’s first education work in the late 1960s. His research spanned a wide variety of policy planning issues in such diverse areas as education, manpower training, energy, environmental enforcement, demonstration program management in health and human services, and military research and development. In 1971, he published one of the classic pieces of work (with Burton H. Klein and Gustave H. Shubert) in the area of weapon acquisition strategy that examined the role of prototypes. His father, T. Keith Glennan, was a member of the RAND Board of Trustees and the first of three generations to serve RAND. His son Stuart was a member of the research staff in the late 1980s. bu i l di ng on a l e g a c y From Regional Studies to Religio-Political Studies RAND pioneered the field of Soviet Studies in 1950 and has since pursued regional studies that focus on Russia, Europe, Asia, Eurasia, and the Middle East. In 2004, we broadened the scope of our regional studies by examining how Muslim religious trends extend far beyond any single geographic region and affect regions differently. Because of the tectonic events of the past four years— from the 9/11 attacks to the wars in Afghanistan and Iraq—the United States needs to craft a new strategy toward the entire Muslim world, according to RAND analyst Angel Rabasa and his team. They outlined such a strategy by sketching a “religio-political map” of the ideological orientations across the Muslim world, by charting critical cleavages among Muslims, and by tracing the roots of Islamic radicalism. The team proposed that the United States consider a variety of social, political, and military options to ameliorate the conditions that produce Islamic radicalism. Socially, the United States could support moderate Islamic networks in opposition to radical networks, use psychological operations for disrupting radical networks, deny radical networks their financial resources, foster madrassa and mosque reform, and expand economic opportunities, particularly for the young. Politically, the United States could support secular and moderate Muslim organizations that are working for democracy and human rights, encourage other Islamic groups to participate in the democratic political process, and engage international Muslim organizations in responding to humanitarian crises. Militarily, the United States could rebuild close military ties with key countries, notably Pakistan and Indonesia, two of the most important countries in the Muslim world. The United States also needs to assert a different type of military presence in sensitive regions, reducing U.S. visibility as an “occupying power” and increasing its capabilities in areas such as civil affairs (offering medical assistance) and cultural intelligence (deploying more linguists and regional specialists). In all of its dealings with the Muslim world, the United States should demonstrate that its efforts are intended not to strengthen authoritarian or oppressive regimes but rather to promote democratic change. Fundamental to such efforts is differentiating among the Muslim religious and political currents according to several criteria, such as overarching ideology, political and legal orientation, preferred form of government, attitude toward human rights, social agenda, links to terrorism, and propensity for violence. Based on these distinctions, U.S. policymakers can choose suitable partners for promoting democratic change in the Muslim world. Related Reading “A Chance to Overcome Religious Divisions,” The San Diego Union-Tribune, May 27, 2004, Rollie Lal. Civil Democratic Islam: Partners, Resources, and Strategies, 2003, Cheryl Benard, MR1716-CMEPP. “French Tussle over Muslim Head Scarf Is Positive Push for Women’s Rights,” Christian Science Monitor, January 5, 2004, Cheryl Benard. The Muslim World After 9/11, 2004, Angel M. Rabasa, Cheryl Benard, Peter Chalk, C. Christine Fair, Theodore Karasik, Rollie Lal, Ian Lesser, David Th aler, MG-246-AF. ANGEL R ABASA Angel Rabasa is a senior policy analyst whose research interests include regional security, Colombia, Latin America, South East Asia, Indonesia, and Malaysia. He is coauthor of The Role of Southeast Asia in U.S. Strategy Toward China; Indonesia’s Transformation and the Stability of Southeast Asia; and Colombian Labyrinth: The Synergy of Drugs and Insurgency and Its Implications for Regional Stability. Before coming to RAND in 1999, Dr. Rabasa served as Deputy Director, Office of Philippines, Indonesia, Malaysia, Brunei, and Singapore Affairs at the U.S. Department of State. r a nd a nnua l r eport Th e Ye a r i n R e v i e w RAND’s mission calls for us to communicate our research to key decisionmakers and the public. Each year, in addition to the numerous briefings and other research products, we publish hundreds of books, reports, and articles to enrich and shape the public debate about major issues of importance. Regular updates on our projects and results are posted at www.rand.org. CHILD POLICY Selected Publications “Acceptability of Asking Parents of Traumatized Children About the Children’s Symptoms,” Psychiatric Services, Vol. 55, No. 8 [Datapoints], August 2004, p. 866, K. L. Dean, B. D. Stein, L. H. Jaycox, S. H. Kataoka, M. Wong. “Access and Quality in Child Health Services: Voltage Drops Whether Access Is Approached Incrementally or Comprehensively, Children Will Not Fully Realize the Benefits Until Quality Is Addressed,” Health Affairs, Vol. 23, No. 5, September/October 2004, pp. 77–87, P. J. Chung, M. A. Schuster. Are L.A.’s Children Ready for School? Sandraluz Lara-Cinisomo, Anne R. Pebley, Mary E. Vaiana, Elizabeth Maggio, MG-145-FFLA. “Childhood Overweight and Academic Performance: National Study of Kindergartners and First-Graders,” Obesity Research, Vol. 12, No. 1, January 2004, pp. 58–68, Ashlesha Datar, Roland Sturm, Jennifer L. Magnabosco. “Indirect vs. Direct Hospital Quality Indicators for Very Low-Birth-Weight Infants,” Journal of the American Medical Association, Vol. 291, No. 2, January 14, 2004, pp. 202–209, J. A. Rogowski, J. D. Horbar, D. O. Staiger, M. Kenny, J. Carpenter, J. Geppert. “Measuring Health Status and Quality of Life for U.S. Children: Relationship to Race, Ethnicity, and Income Status,” Ambulatory Pediatrics, Vol. 4, No. 4, July/August 2004, pp. 377–386, L. M. Olson, M. Lara, M. Pat Frintner. “Physical Education in Elementary School and Body Mass Index: Evidence from the Early Childhood Longitudinal Study,” American Journal of Public Health, Vol. 94, No. 9, September 2004, pp. 1501–1506, A. Datar, R. Sturm. “Watching Sex on TV Predicts Adolescent Initiation of Sexual Behavior,” Pediatrics [Electronic], Vol. 114, No. 3, September 2004, pp. e280–e289, R. L. Collins, M. N. Elliott, S. H. Berry, D. E. Kanouse, D. Kunkel, S. B. Hunter, A. Miu. 2004 Milestones As part of its Initiative for Middle East Youth, the RAND Center for Middle East Public Policy (CMEPP) helped develop a specially adapted version of Sesame Street to be shown in schools and other settings in Afghanistan. CIVIL JUSTICE Selected Publications Assessment of 24-Hour Care Options for California, Donna O. Farley, Michael Greenberg, Christopher Nelson, Seth Seabury, MG-280-ICJ. Capping Non-Economic Awards in Medical Malpractice Trials: California Jury Verdicts Under MICRA, Nicholas M. Pace, Daniela Golinelli, Laura Zakaras, MG-234-ICJ. Compensation for Losses from the 9/11 Attacks, Lloyd Dixon, Rachel Kaganoff Stern, MG-264-ICJ. “Forty Years of Civil Jury Verdicts,” Journal of Empirical Legal Studies, Vol. 1, No. 1, March 2004, pp. 1–25, Seth A. Seabury, Nicholas M. Pace, Robert T. Reville. Issues and Options for Government Intervention in the Market for Terrorism Insurance, Lloyd Dixon, John Arlington, Stephen Carroll, Darius Lakdawalla, Robert Reville, David Adamson, OP-135-ICJ. 2004 Milestones A RAND Institute for Civil Justice (ICJ) evaluation of California’s permanent disability rating system led to significant reform of California’s workers’ compensation system. The ICJ launched the Kauffman-RAND Center for the Study of Small Business and Regulation, which will study the way legal and regulatory policymaking affects small businesses and entrepreneurship. The Center will endeavor to assess and improve legal and regulatory policymaking as it relates specifically to small businesses and entrepreneurship in a wide range of settings, including corporate governance, employment law, consumer law, securities regulation, and business ethics. RAND and LRN, the nation’s leading provider of legal, compliance, ethics management, and corporate governance services, established the LRN-RAND Center for Corporate Ethics, Law and Governance to study ways businesses can best conduct operations ethically, legally, and profitably at the same time. the year in review EDUCATION Selected Publications Achieving State and National Literacy Goals, a Long Uphill Road: A Report to Carnegie Corporation of New York, Jennifer Sloan McCombs, Sheila Nataraj Kirby, Heather Barney, Hilary Darilek, Scarlett Magee, TR-180-EDU. Arts Education Partnerships: Lessons Learned from One School District’s Experience, Melissa K. Rowe, Laura Werber Castaneda, Tessa Kaganoff, Abby Robyn, MG-222-EDU. Challenges and Potential of a Collaborative Approach to Education Reform, Susan J. Bodilly, Joan Chun, Gina Ikemoto, Sue Stockly, MG-216-FF. Efforts to Improve the Quality of Vocational Education in Secondary Schools: Impact of Federal and State Policies, Cathleen Stasz, Susan J. Bodilly, MR-1655-USDE. 2004 Milestones RAND, Educational Testing Service, and CTB/McGraw-Hill have cooperated with the Evaluation Institute to develop the world’s first standardized tests in Arabic. Implementation of many education reforms based on RAND recommendations began at Qatar University, which has embarked on a comprehensive reform effort to strengthen its key governance and management processes. The RAND Council for Aid to Education released the results of its annual Voluntary Support of Education survey, showing that contributions to colleges and universities in the United States remained stable in 2003. ENERGY AND ENVIRONMENT Selected Publications Expanding the Reach of Education Reforms: Perspectives from Leaders in the Scale-Up of Educational Interventions, Thomas K. Glennan, Jr., Susan J. Bodilly, Jolene R. Galegher, Kerri A. Kerr, MG-248-FF. “Demand-Side Management and Energy Efficiency in the United States,” Energy Journal, Vol. 25, No. 1, 2004, David Loughran, Jonathan Kulich. External Audiences for Test-Based Accountability: The Perspectives of Journalists and Foundations, Laura Hamilton, Brian Stecher, OP-111-FF. Estimating the Benefits of the GridWise Initiative: Phase 1 Report, Walter S. Baer, Brent Fulton, Sergej Mahnovski, TR-160PNNL. Focus on the Wonder Years: Challenges Facing the American Middle School, Jaana Juvonen, Vi-Nhuan Le, Tessa Kaganoff, Catherine Augustine, Louay Constant, MG-139-EDU. The Future of Genetically Modified Crops: Lessons from the Green Revolution, Felicia Wu, William P. Butz, MG-161-RC. Organizational Improvement and Accountability: Lessons for Education from Other Sectors, Brian Stecher, Sheila Nataraj Kirby, eds., MG-136-WFHF. Reforming Teacher Education: A First-Year Progress Report on Teachers for a New Era, Sheila Nataraj Kirby, Jennifer Sloan McCombs, Scott Naftel, Heather Barney, Hilary Darilek, Frederick Doolittle, Joseph Cordes, TR-149-EDU. A Review of the Research Literature on Teacher Recruitment and Retention, Cassandra Guarino, Lucrecia Santibañez, Glenn Daley, Dominic Brewer, TR-164-EDU. When Computers Go to School: How Kent School Implements Information Technology to Enrich Teaching and Learning, Phillip D. Devin, TR-126-EDU. Long Range Energy R&D: A Methodology for Program Development and Evaluation, James T. Bartis, TR-112-NETL. HEALTH AND HEALTH CARE Selected Publications “Are the Young Becoming More Disabled? Rates of Disability Appear to Be on the Rise Among People Ages Eighteen to Fifty-Nine, Fueled by a Growing Obesity Epidemic,” Health Affairs, Vol. 23, No. 1, January/February 2004, pp. 168–176, D. N. Lakdawalla, J. Bhattacharya, D. P. Goldman. “Comparison of Quality of Care for Patients in the Veterans Health Administration and Patients in a National Sample,” Annals of Internal Medicine, Vol. 141, No. 12, December 21, 2004, pp. 938–945, Steven M. Asch, Elizabeth A. McGlynn, Mary M. Hogan, Rodney A. Hayward, Paul Shekelle, Lisa Rubenstein, Joan Keesey, John Adams, Eve A. Kerr. “Detection and Management of Falls and Instability in Vulnerable Elders by Community Physicians,” Journal of the American Geriatrics Society, Vol. 52, No. 9, September 2004, pp. 1527–1531, Laurence Z. Rubenstein, David H. Solomon, Carol P. Roth, Roy T. Young, Paul G. Shekelle, John T. Chang, Catherine H. MacLean, Caren J. Kamberg, Debra Saliba, Neil S. Wenger. “Differences in Medicare Expenditures During the Last Three Years of Life,” Journal of General Internal Medicine, Vol. 19, No. 2, February 19, 2004, pp. 127–135, L. R. Shugarman, D. E. Campbell, C. E. Bird, J. Gabel, T. A. Louis, J. Lynn. “Disputes Over Coverage of Emergency Department Services: A Study of Two Health Maintenance Organizations,” Annals of Emergency Medicine, Vol. 32, No. 2, February 2004, pp. 155–162, C. R. Gresenz, D. M. Studdert. “Do the Effects of Quality Improvement for Depression Care Differ for Men and Women? Results of a Group-Level Randomized Controlled Trial,” Medical Care, Vol. 42, No. 12, December 2004, pp. 1186–1193, C. D. Sherbourne, R. Weiss, N. Duan, C. E. Bird, K. B. Wells. “The Economics of Physical Activity: Societal Trends and Rationales for Interventions,” American Journal of Preventive Medicine, Vol. 27, No. 3, October 2004, pp. 126–135, Roland Sturm. Evaluation of the Low Back Pain Practice Guideline Implementation in the Army Medical Department, Donna O. Farley, Georges Vernez, Will Nicholas, Elaine S. Quiter, George J. Dydek, Suzanne Pieklik, Shan Cretin, MR-1758-A. “Five-Year Impact of Quality Improvement for Depression: Results of a Group-Level Randomized Controlled Trial,” Archives of General Psychiatry, Vol. 61, No. 4, April 2004, pp. 378–386, K. Wells, C. Sherbourne, M. Schoenbaum, S. Ettner, N. Duan, J. Miranda, J. Unützer, L. Rubenstein. r a nd a nnua l r eport “Increasing Obesity Rates and Disability Trends: If It Continues at Its Current Rate, Rising Obesity Could Wipe Out Recent Improvements in Disability Among Older Americans,” Health Affairs, Vol. 23, No. 2, March/April 2004, pp. 199–205, Roland Sturm, Jeanne S. Ringel, Tatiana Andreyeva. “Medicare Program Costs Associated with Hospice Use,” Annals of Internal Medicine, Vol. 140, No. 4, February 17, 2004, pp. 269–277, D. E. Campbell, J. Lynn, T. A. Louis, L. R. Shugarman. “Pharmacy Benefits and the Use of Drugs by the Chronically Ill,” Journal of the American Medical Association, Vol. 291, No. 19, May 18, 2004, pp. 2344–2350, D. P. Goldman, G. F. Joyce, J. J. Escarce, J. E. Pace, M. D. Solomon, M. Laouri, P. B. Landsman, S. M. Teutsch. “Profiling the Quality of Care in Twelve Communities: Results from the CQI Study,” Health Affairs, Vol. 23, No. 3, May/June 2004, pp. 247–256, E. A. Kerr, E. A. McGlynn, J. Adams, J. Keesey, S. M. Asch. Public Health Preparedness in California: Lessons Learned from Seven Health Jurisdictions, Nicole Lurie, R. Burciaga Valdez, Jeffrey Wasserman, Michael Stoto, Sarah Myers, Roger Molander, Steven Asch, B. David Mussington, Vanessa Solomon, TR-181. “The Quality of Pharmacologic Care for Vulnerable Older Patients,” Annals of Internal Medicine, Vol. 140, No. 8, May 4, 2004, pp. 714–720, T. Higashi, P. G. Shekelle, D. H. Solomon, E. L. Knight, C. Roth, J. T. Chang, C. J. Kamberg, C. H. MacLean, R. T. Young, J. Adams, D. B. Reuben, J. Avorn, N. S. Wenger. “Suburban Sprawl and Physical and Mental Health,” Public Health, Vol. 118, No. 7, October 2004, pp. 488–496, Roland Sturm, Deborah A. Cohen. 2004 Milestones RAND Health interviewed a diverse sample of individuals from Capitol Hill and from the Brentwood postal facility, including Hill staffers who were either directly or potentially indirectly exposed to the letter containing anthrax that was sent to Senator Tom Daschle’s office in 2001. The results highlighted the need to provide clear, accurate information on an ongoing basis during a public health emergency and to integrate private physicians into the public health response. Humana Inc. became the first health benefits company to test the Quality Assessment Tools—software that scans and analyzes health claims data—developed by RAND Health to ascertain whether consumers are receiving appropriate care. RAND Health began the third phase of its ACOVE study (Assessing Care of Vulnerable Elders), which will expand upon the quality-of-care measurements developed by RAND in conjunction with Pfizer. Must All Join? America, 1788; Europe, 2004, James Thomson, OP-136-RC. Public Diplomacy: How to Think About and Improve It, Charles Wolf, Jr., Brian Rosen, OP-134-RC. Shanghaied? The Economic and Political Implications of the Flow of Information Technology and Investment Across the Taiwan Strait, Michael S. Chase, Kevin L. Pollpeter, James C. Mulvenon, TR-133. The United States, Europe, and the Wider Middle East, Shahram Chubin, Bruce Hoffman, William Rosenau, CF-210-GCSP/ CMEPP. U.S.-China Security Management: Assessing the Military-to-Military Relationship, Kevin Pollpeter, MG-143-AF. INTERNATIONAL AFFAIRS Testimony Selected Publications Aid During Conflict: Interaction Between Military and Civilian Assistance Providers in Afghanistan, September 2001–June 2002, Olga Oliker, Richard Kauzlarich, James Dobbins, Kurt W. Basseuner, Donald L. Sampler, John G. McGinn, Michael J. Dziedzic, Adam Grissom, Bruce Pirnie, Nora Bensahel, A. Istar Guven, MG-212-OSD. Ambivalent Allies? A Study of South Korean Attitudes Toward the United States, Eric V. Larson, Norman D. Levin, Seonhae Baik, Bogdan Savych, TR-141-SRF. Cuba After Castro: Legacies, Challenges, and Impediments, Edward Gonzalez, Kevin F. McCarthy, MG-111-RC. Do the Ties Still Bind? The U.S.-ROK Security Relationship After 9/11, Norman D. Levin, MG-115-AF/KF. The Future Security Environment in the Middle East: Conflict, Stability, and Political Change, Nora Bensahel, Daniel L. Byman, eds., MR-1640-AF. Insurgency and Counterinsurgency in Iraq, Bruce Hoffman, OP-127-IPC/CMEPP. The Lessons of the Asian and Latin American Financial Crises for Chinese Bond Markets, William H. Overholt, OP-117-CAPP. The Muslim World After 9/11, Angel M. Rabasa, Cheryl Benard, Peter Chalk, C. Christine Fair, Theodore Karasik, Rollie Lal, Ian Lesser, David Thaler, MG-246-AF. Analyzing China’s Defense Industries and the Implications for Chinese Military Modernization, Evan S. Medeiros, CT-217. A Fresh Start for Haiti? Charting Future U.S. Haitian Relations, James Dobbins, CT-219. Hong Kong at the Crossroads, William H. Overholt, CT-228. The Hong Kong Legislative Election of September 12, 2004: Assessment and Implications, William H. Overholt, CT-232-1. U.S. Policy Toward Southeast Europe: Unfinished Business in the Balkans, James Dobbins, CT-230-1. 2004 Milestones RAND projects in Qatar now include work on information technology, a national health care strategy, the environment, public infrastructure, quality-of-life monitoring, effective governance, long-range planning, quality improvement and innovation, and military strategy and operations. RAND continues its analytical support to the Iraqi Reconstruction Management Office, an element of the U.S. Embassy in Baghdad. On-the-ground support included participation in the development of the national counterterrorism strategy, disarmament and integration of the military into the Iraq police, and building the defense ministry’s capabilities. the year in review Based on recommendations made by RAND, the Bush administration created a new interagency unit, housed in the State Department, dedicated to providing institutional continuity to future American nation-building operations. NATIONAL SECURITY Selected Publications Air Force Procurement Workforce Transformation: Lessons from the Commercial Sector, John Ausink, Laura H. Baldwin, Christopher Paul, MG-214-AF. Aligning the Stars: Improvements to General and Flag Officer Management, Margaret C. Harrell, Harry J. Thie, Peter Schirmer, Kevin Brancato, MR-1712-OSD. Assuring Access in Key Strategic Regions: Toward a Long-Term Strategy, Eric V. Larson, Derek Eaton, Paul Elrick, Theodore Karasik, Robert Klein, Sherrill Lingel, Brian Nichiporuk, Robert Uy, John Zavadil, MG-112-A. Base Realignment and Closure (BRAC) and Organizational Restructuring in the DoD: Implications for Education and Training Infrastructure, Dina G. Levy, Joy S. Moini, Tessa Kaganoff, Edward G. Keating, Catherine H. Augustine, Tora K. Bikson, Kristin Leuschner, Susan M. Gates, MG-153-OSD. Communications Networks to Support Integrated Intelligence, Surveillance, Reconnaissance, and Strike Operation, Elham Ghashghai, TR-159-AF. The Effects of Equipment Age on MissionCritical Failure Rates: A Study of M1 Tanks, Eric Peltz, Lisa Colabella, Brian Williams, Patricia M. Boren, MR-1789-A. Examining the Army’s Future Warrior: Forceon-Force Simulation of Candidate Technologies, Randall Steeb, John Matsumura, Paul Steinberg, Tom Herbert, Phyllis Kantar, Patrick Bogue, MG-140-A. Expanding Enlisted Lateral Entry: Options and Feasibility, Dina Levy, Joy Moini, Jennifer Sharp, Harry J. Thie, MG-134-OSD. Information Sharing Among Military Headquarters: The Effects on Decisionmaking, Walter L. Perry, James Moffat, MG-226-UK. Intern Programs as a Human Resources Management Tool for the Department of Defense, Susan M. Gates, Christopher Paul, MG-138-OSD. Lessons from the North: Canada’s Privatization of Military Ammunition Production, W. Michael Hix, Bruce Held, Ellen M. Pint, MG-169-OSD. Looking to the Future: What Does Transformation Mean for Military Manpower and Personnel Policy? Beth Asch, James R. Hosek, OP-108-OSD. Modeling the Departure of Military Pilots from the Services, Marc N. Elliott, Kanika Kapur, Carole Roan Gresenz, MR-1327-OSD. Network-Based Operations for the Swedish Defence Forces: An Assessment Methodology, Walter Perry, John Gordon IV, Michael Boito, Gina Kingston, TR-119-FOI. Organizational Concepts for Purchasing and Supply Management Implementation, Lynne M. Leftwich, James A. Leftwich, Nancy Y. Moore, C. Robert Roll, Jr., MG-116-AF. Past and Future: Insights for Reserve Component Use, Harry J. Thie, Raymond E. Conley, Henry A. Leonard, Megan Abbott, Eric V. Larson, K. Scott McMahon, Michael G. Shanley, Ronald E. Sortor, William Taylor, Stephen Dalzell, Roland J. Yardley, TR-140-OSD. Policy and Methodology to Incorporate Wartime Plans into Total U.S. Air Force Manpower Requirements, Manuel J. Carrillo, Hugh G. Massey, Joseph G. Bolten, TR-144-AF. Policy Options for Military Recruiting in the College Market: Results from a National Survey, Beth Asch, Can Du, Matthias Schonlau, MG-105-OSD. Portfolio Analysis and Management for Naval Research and Development, Richard Silberglitt, Lance Sherry, Carolyn Wong, Michael Tseng, Emile Ettedgui, Aaron Watts, Geoffrey Stothard, MG-271-NAVY. Reporters on the Battlefield: The Embedded Press System in Historical Context, Christopher Paul, James J. Kim, MG-200-RC. Stretching the Network: Using Transformed Forces in Demanding Contingencies Other Than War, David C. Gompert, Hans Pung, Kevin A. O’Brien, Jeffrey Peterson, OP-109-RC. Supporting Air and Space Expeditionary Forces: Analysis of Maintenance Forward Support Location Operations, Amanda Geller, David George, Robert S. Tripp, Mahyar A. Amouzegar, C. Robert Roll, Jr., MG-151-AF. Supporting Air and Space Expeditionary Forces: Lessons from Operation Enduring Freedom, Robert S. Tripp, Kristin F. Lynch, John G. Drew, Edward W. Chan, MR-1819-AF. Supporting Air and Space Expeditionary Forces: Lessons from Operation Iraqi Freedom, Kristin F. Lynch, John G. Drew, Robert S. Tripp, C. Robert Roll, Jr., MG193-AF. Supporting Air and Space Expeditionary Forces: A Methodology for Determining Air Force Deployment Requirements, Don Snyder, Patrick Mills, MG-176-AF. Survivability Options for Maneuver and Transport Aircraft: Analytic Support to the Army Science Board, John Matsumura, Randall Steeb, Blake Crowe, Nicholas Dienna, Yuna Huh, Gary Quintero, William Sollfrey, MG-123-A. Test and Evaluation Trends and Costs for Aircraft and Guided Weapons, Bernard Fox, Michael Boito, John C. Graser, Obaid Younossi, MG-109-AF. Unexploded Ordnance: A Critical Review of Risk Assessment Methods, Jacqueline McDonald, Debra Knopman, J.R. Lockwood, Gary Cecchine, Henry H. Willis, MR-1674-A. U.S. Army Security Cooperation: Toward Improved Planning and Management, Thomas S. Szayna, Adam Grissom, Jefferson P. Marquis, Thomas-Durell Young, Brian Rosen, Yuna Huh, MG-165-A. The U.S. Coast Guard’s Deepwater Force Modernization Plan: Can It Be Accelerated? Will It Meet Changing Security Needs? John Birkler, Brien Alkire, Robert Button, Gordon Lee, Raj Raman, John Schank, Carl Stephens, MG-114-USCG. r a nd a nnua l r eport Testimony Developing and Using General and Flag Officers, Harry J. Thie, CT-221. Deployment, Retention, and Compensation, James Hosek, CT-222. Toward an Expeditionary Army: New Options for Combatant Commanders, Eric Peltz, CT-223. 2004 Milestones RAND Project AIR FORCE research helped the Air Force explore its options for replacing the AC-130 gunship platform. The nextgeneration gunship needs to be much more survivable; to operate over longer distances and over remote, hostile areas; and to be able to attack stationary or moving ground targets with precision. The Air Force asked PAF to conduct an analysis of alternatives (AoA) to identify the most cost-effective options for providing these capabilities. A study conducted in the RAND National Security Research Division has played a central role in the National Security Agency’s sweeping efforts to reshape its business practices. The RAND Arroyo Center analyzed Operation Iraqi Freedom logistics support and identified the problem areas, resulting in much faster, more reliable service for units in Iraq and reduced burdens on the forces in theater. POPULATION AND AGING Selected Publications Assimilating Immigrants: Why America Can and France Cannot, Robert A. Levine, OP-132-RC. “Changes in American Opinion About Family Planning,” Studies in Family Planning, Vol. 35, No. 3, September 2004, Clifford A. Grammich, Julie DaVanzo, Kate Stewart. “Incentives and Exit Routes to Retirement in the Netherlands,” in Jonathan Gruber and David A. Wise (eds.), Social Security and Retirement Around the World: MicroEstimation, The University of Chicago Press, pp. 461–498, A. Kapteyn and K. de Vos. Indonesian Living Standards Before and After the Financial Crisis: Evidence from the Indonesia Family Life Survey, John Strauss, Kathleen Beegle, Agus Dwiyanto, Yulia Herawati, Daan Pattinasarany, Elan Satriawan, Bondan Sikoki, Sukamdi, Firman Witoelar, MG-137. An Investigation of the Factors Influencing Breastfeeding Patterns, Alison Jacknowitz, RGSD-182. Low Fertility and Population Ageing: Causes, Consequences, and Policy Options, Jonathan Grant, Stijn Hoorens, Suja Sivadasan, Mirjam van het Loo, Julie DaVanzo, Lauren Hale, Shawna Gibson, William Butz, MG-206-EC. “The Myth of Worksharing,” Labour Economics, Vol. 11, pp. 293–313, A. Kapteyn, A. Kalwij, A. Zaidi. “Self-Employment Among Older U.S. Workers,” Monthly Labor Review, July 2004, Lynn A. Karoly, Julie Zissimopoulos. “Self-Employment and the 50+ Population,” Lynn A. Karoly, Julie Zissimopoulos, AARP Public Policy Institute Issue Paper, March 2004. “Trends in Socioeconomic Inequalities in Mortality in Developing Countries: The Case of Child Survival in São Paulo, Brazil,” Demography, Vol. 41, No. 3, August 2004, Narayan Sastry. The 21st Century at Work: Forces Shaping the Future Workforce and Workplace in the United States, Lynn A. Karoly, Constantijn W. A. Panis, MG-164-DOL. “Urbanization, Development, and UnderFive Mortality Differentials by Place of Residence in São Paulo, Brazil, 1970–1991,” Demographic Research, Special Collection 2, Article 14, April 2004, Narayan Sastry. PUBLIC SAFETY Selected Publications “Analysis of Oakland Stop and Search Data,” chapter 9 in Promoting Cooperative Strategies to Reduce Racial Profiling: A Technical Guide, Oakland Police Department, April 2004. The Benefits of Positive Passenger Profiling on Baggage Screening Requirements, Russell Shaver, Michael Kennedy, DB-411-RC. Emergency Responder Injuries and Fatalities: An Analysis of Surveillance Data, Ari N. Houser, Brian A. Jackson, James T. Bartis, D. J. Peterson, TR-100-NIOSH. Evaluating the Security of the Global Containerized Supply Chain, Henry H. Willis, David S. Ortiz, TR-214-RC. How Much Is Enough? Sizing the Deployment of Baggage Screening Equipment by Considering the Economic Cost of Passenger Delays, Russell Shaver, Michael Kennedy, Chad Shirley, Paul Dreyer, DB-410-RC. Near-Term Options for Improving Security at Los Angeles International Airport, Donald Stevens, Terry Schell, Thomas Hamilton, Richard Mesic, Michael Scott Brown, Edward Wei-Min Chan, Mel Eisman, Eric V. Larson, Marvin Schaffer, Bruce Newsome, John Gibson, Elwyn Harris, DB-468-1-LAWA. Protecting Emergency Responders, Volume 3: Safety Management in Disaster and Terrorism Response, Brian A. Jackson, John C. Baker, M. Susan Ridgely, James T. Bartis, Herbert I. Linn, MG-170-NIOSH. 2004 Milestones 2004 Milestones RAND Labor and Population’s Center for the Study of Aging received multimillion-dollar funding ($7.3 million) from the National Institute on Aging to do research on the economic and health determinants of retirement. Los Angeles Family and Neighborhood Survey, a project within RAND Labor and Population, began wave 2 (Socioeconomic and Ethnic Disparities in Adult Health) with funding from the National Institute on Aging and the National Institute on Child Health and Human Development ($10.6 million combined). RAND Infrastructure, Safety, and Environment signed a memorandum of understanding with Northwestern University Center for Public Safety to collaboratively develop research pertaining to law enforcement and transportation safety. SCIENCE AND TECHNOLOGY Selected Publications Attracting the Best: How the Military Competes for Information Technology Personnel, James R. Hosek, Michael G. Mattock, C. Christine Fair, Jennifer Kavanagh, Jennifer Sharp, Mark Totten, MG-108-OSD. the year in review Challenges in Virtual Collaboration: Videoconferencing, Audioconferencing, and Computer-Mediated Communications, Lynne Wainfan, Paul K. Davis, MG-273. Collecting the Dots: Problem Formulation and Solution Elements, Martin C. Libicki, Shari Lawrence Pfleeger, OP-103-RC. Exploring Information Superiority: A Methodology for Measuring the Quality of Information and Its Impact on Shared Awareness, Walter Perry, David Signori, John Boon, MR-1467-OSD. Framework for Quantifying Uncertainty in Electric Ship Design, Isaac Porche, Henry Willis, Martin Ruszkowski, DB-407-ONR. Future Army Bandwidth Needs and Capabilities, Leland Joe, Isaac Porche III, MG-156-A. High-Technology Manufacturing and U.S. Competitiveness, Charles Kelley, Mark Wang, Gordon Bitko, Michael Chase, Aaron Kofner, Julia Lowell, James Mulvenon, David Ortiz, Kevin Pollpeter, TR-136-OSTP. Understanding the Insider Threat: Proceedings of a March 2004 Workshop, Richard C. Brackney, Robert H. Anderson, CF-196-ARDA. The U.S. Scientific and Technical Workforce: Improving Data for Decisionmaking, Terrence K. Kelly, William P. Butz, Stephen Carroll, David M. Adamson, Gabrielle Bloom, eds., CF-194-OSTP/SF. Vital Assets: Federal Investment in Research and Development at the Nation’s Universities and Colleges, Donna Fossum, Lawrence S. Painter, Elisa Eiseman, Emile Ettedgui, David M. Adamson, MR-1824-NSF. Will the Scientific and Technology Workforce Meet the Requirements of the Federal Government? William P. Butz, Terrence K. Kelly, David M. Adamson, Gabrielle A. Bloom, Donna Fossum, Mihal E. Gross, MG-118-OSTP. Wind Tunnel and Propulsion Test Facilities: An Assessment of NASA’s Capabilities to Serve National Needs, Philip S. Antón, Eugene C. Gritton, Richard Mesic, Paul Steinberg, MG-178-NASA/OSD. Testimony Identifying Federally Funded Research and Development on Information Technology, Donna Fossum, CT-229-1. Strengthening Research & Development for Wind Hazard Mitigation, Charles Meade, CT-215. 2004 Milestones Researchers from RAND Europe have completed a yearlong “foresight” project for the UK government to explore the application and implications of nextgeneration information technologies in such areas as identity and authenticity, surveillance, system robustness, security, and information assurance. SUBSTANCE ABUSE Selected Publications “Antecedents and Outcomes of Marijuana Use Initiation During Adolescence,” Preventive Medicine, Vol. 39, No. 5, November 2004, pp. 976–984, P. L. Ellickson, J. S. Tucker, D. J. Klein, H. Saner. Cannabis Policy, Implementation and Outcomes, Mirjam van het Loo, Stijn Hoorens, Christian van’t Hof, James P. Kahan, MR-1805-VWS. “Developmental Trajectories of Cigarette Smoking and Their Correlates from Early Adolescence to Young Adulthood,” Journal of Consulting and Clinical Psychology, Vol. 72, No. 3, June 2004, pp. 400–410, M. Orlando, J. S. Tucker, P. L. Ellickson, D. J. Klein. “Effectiveness of Community-Based Treatment for Substance-Abusing Adolescents: 12-Month Outcomes of Youths Entering Phoenix Academy or Alternative Probation Dispositions,” Psychology of Addictive Behaviors, Vol. 18, No. 3, September 2004, pp. 257–268, A. R. Morral, D. F. McCaffrey, G. Ridgeway. “From Adolescence to Young Adulthood: Racial/Ethnic Disparities in Smoking,” American Journal of Public Health, Vol. 94, No. 2, February 2004, pp. 293–299, P. L. Ellickson, M. Orlando, J. S. Tucker, D. J. Klein. Getting to Outcomes 2004: Promoting Accountability Through Methods and Tools for Planning, Implementation, and Evaluation, Matthew Chinman, Pamela Imm, Abraham Wandersman, TR-101-CDC. “Marijuana Use from Adolescence to Young Adulthood: Multiple Developmental Trajectories and Their Associated Outcomes,” Health Psychology, Vol. 23, No. 3, May 2004, pp. 299–307, P. L. Ellickson, S. C. Martino, R. L. Collins. “Sterile Syringe Access Conditions and Variations in HIV Risk Among Drug Injectors in Three Cities,” Addiction, Vol. 99, No. 9, September 2004, pp. 1136–1146, R. N. Bluthenthal, M. R. Malik, L. E. Grau, M. Singer, P. Marshall, R. Heimer for the Diffusion of Benefit through Syringe Exchange Study Team. Visies op Financiering van Ondersteuning bij Stoppen met roken [Perceptions on a Reimbursement Scheme for Quitting Smoking Support], Rebecca Hamer, Mirjam van het Loo, MR-1769-RE/CVZ. TERRORISM & HOMELAND SECURITY Selected Publications Army Forces for Homeland Security, Lynn E. Davis, David E. Mosher, Richard R. Brennan, Michael D. Greenberg, K. Scott McMahon, Charles W. Yost, MG-221-A. Confronting the “Enemy Within”: Security Intelligence, the Police, and Counterterrorism in Four Democracies, Peter Chalk, William Rosenau, MG-100-RC. Coordinating the War on Terrorism, Lynn E. Davis, Gregory F. Treverton, Daniel Byman, Sara Daly, William Rosenau, OP-110-RC. The Counterterror Coalitions: Cooperation with Pakistan and India, C. Christine Fair, MG-141-AF. The Dynamic Terrorist Threat: An Assessment of Group Motivations and Capabilities in a Changing World, Kim Cragin, Sara A. Daly, MR-1782-AF. Gearing Up and Getting There: Improving Local Response to Chemical Terrorism, Brian K. Houghton, RGSD-181. r a nd a nnua l r eport Hitting America’s Soft Underbelly: The Potential Threat of Deliberate Biological Attacks Against the U.S. Agricultural and Food Industry, Peter Chalk, MG-135-OSD. Mapping the Risks: Assessing the Homeland Security Implications of Publicly Available Geospatial Information, John C. Baker, Beth E. Lachman, David R. Frelinger, Kevin M. O’Connell, Alexander C. Hou, Michael S. Tseng, David Orletsky, Charles Yost, MG-142-NGA. The Office of Science and Technology Policy Blue Ribbon Panel on the Threat of Biological Terrorism Directed Against Livestock, Terrence K. Kelly, Peter Chalk, James Bonomo, John Parachini, Brian A. Jackson, Gary Cecchine, CF-193-OSTP. Out of the Ordinary: Finding Hidden Threats by Analyzing Unusual Behavior, John Hollywood, Diane Snyder, Kenneth McKay, John Boon, MG-126-RC. “Terrorism and Business Continuity,” Kevin O’Brien, David Claridge, RAND Europe, Janusian Security Risk Management, The Financial Times, May 2004. Triage for Civil Support: Using Military Medical Assets to Respond to Terrorist Attacks, Gary Cecchine, Michael A. Wermuth, Roger C. Molander, K. Scott McMahon, Jesse Malkin, Jennifer Brower, John D. Woodward, Donna F. Barbisch, MG-217-OSD. Urban Battle Fields of South Asia: Lessons Learned from Sri Lanka, India, and Pakistan, C. Christine Fair, MG-210-A. What You Should Do to Prepare for and Respond to Chemical, Radiological, Nuclear, and Biological Terrorist Attacks: Pocket Edition Survival Guide, Lynn E. Davis, Tom LaTourrette, David Mosher, Lois Davis, David Howell, MR-1731/2-SF. When Terrorism Hits Home: How Prepared Are State and Local Law Enforcement? Lois M. Davis, K. Jack Riley, Greg Ridgeway, Jennifer Pace, Sarah K. Cotton, Paul S. Steinberg, Kelly Damphousse, Brent L. Smith, MG-104-MIPT. Testimony Combating Terrorism: The 9/11 Commission Recommendations and the National Strategies, John V. Parachini, CT-231-1. Empowering State and Local Emergency Preparedness: Recommendations of the Advisory Panel to Assess Domestic Response Capabilities for Terrorism Involving Weapons of Mass Destruction, Michael A. Wermuth, CT-216. The Effect of Terrorist Attacks in Spain on Transatlantic Cooperation in the War on Terror, James Dobbins, CT-225. Improving Terrorism Warnings: The Homeland Security System, Michael A. Wermuth, CT-220. Terrorism and Rail Security, Jack Riley, CT-224. Terrorism and the Security of Public Surface Transportation, Brian Michael Jenkins, CT-226. Europe, Competing: Market Prospects, Business Needs and Technological Trends for Virtual, Smart Organisations in Europe, Caroline Wagner, Maarten Botterman, Erik Feijen, Lars Schmidt, Steve Simmons, Christian van’t Hof, Jonas Svava Iverson, Leander van Laerhoven, MG-195-EC. An Executive Perspective on Workforce Planning, Robert M. Emmerichs, Cheryl Y. Marcum, Albert A. Robbert, MR-1684/2-OSD. Gifts of the Muse: Reframing the Debate About the Benefits of the Arts, Kevin F. McCarthy, Elizabeth H. Ondaatje, Laura Zakaras, Arthur Brooks, MG-218-WF. 2004 Milestones Hoofdonderzoek naar de reistijdwaardering in het vervoer van goederen over de weg [Main Survey into the Value of Time in Freight Transport by Road], Gerard de Jong, Sjoerd Bakker, Marits Pieters, TR-110-AVV. A survey conducted by RAND Europe, in conjunction with Janusian Security Risk Management, highlighted the growing nature of the terrorist threat to business. An Operational Process for Workforce Planning, Robert M. Emmerichs, Cheryl Y. Marcum, Albert A. Robbert, MR-1684/ 1-OSD. RAND hosted a conference in Washington, D.C., entitled Three Years After: Next Steps in the War on Terror. The conference was attended by more than 200 people, including current administration officials, military officers, congressional staff, foreign embassy representatives, members of nongovernmental organizations (NGOs), the private sector, and the media. Participants heard six presentations by RAND researchers and a keynote address by the Deputy Secretary of Defense. Recent Large Service Acquisitions in the Department of Defense: Lessons for the Office of the Secretary of Defense, Frank Camm, Irv Blickstein, Jose Venzor, MG-107-OSD. RAND National Security Research Division prepared a primer for law enforcement personnel that describes the logic behind suicide bombing, how others have coped, and the lessons they learned in the process. TRANSPORTATION & INFRASTRUCTURE Regionale luchthavens in Nederland: Een raamwerk voor het bepalen van het maatschappelijk belang van regionale luchthavens in Nederland [Regional Airports in the Netherlands: A Framework to Determine the Added Value of the Regional Airports in the Netherlands], Bouke Veldman, Irma Graafland-Essers, Abigail Lierens, Maarten van de Voort, TR-138-VROM. The Shipbuilding and Force Structure Analysis Tool: A User’s Guide, Mark V. Arena, John F. Schank, Megan Abbott, MR-1743-NAVY. State Arts Agencies 1965–2003: Whose Interests to Serve? Julia F. Lowell, MG-121-WF. Selected Publications “A Comparison of Car Ownership Models,” Transport Reviews, Vol. 24, No. 4, July 2004, pp. 379–408, G. De Jong, J. Fox, A. Daly, M. Pieters, R. Smit. Testimony Stabilization and Reconstruction Civilian Management Act of 2004, James Dobbins, CT-218. r a nd sta ff R A ND Sta ff The full- and part-time staff of more than 1,600 represent diversity in work experience; political and ideological outlook; race, gender, and ethnicity; and academic training. Most staff members work at RAND’s three principal U.S. locations: Santa Monica, California; Arlington, Virginia; and Pittsburgh, Pennsylvania. Others operate from RAND Europe in Leiden, the Netherlands; Berlin, Germany; and Cambridge, U.K.; from the RAND-Qatar Policy Institute in Doha, Qatar; from the RAND Council for Aid to Education in New York City; and from several smaller sites. Eighty-five percent of the research staff hold advanced degrees, with more than 50 percent having earned Ph.D.’s or M.D.’s. To provide the varied expertise needed to fully address public policy issues, the staff’s training reflects the broad scope of disciplines shown in the figure. Political science and International relations 13% Social sciences 8% Arts and letters Policy analysis 5% 7% 10% Physical sciences Behavioral sciences 3% No degree 1% 12% Law and business 9% Math operations research, and statistics 2% 6% Life sciences 9% Engineering 15% Economics Computer sciences r a nd a nnua l r eport President’s Awards President’s Awards recognize individuals whose work exemplifies RAND’s two core values of quality and objectivity and who have also recently made exemplary contributions to the RAND community, through new business development or fund-raising initiatives, outstanding outreach and dissemination efforts, or effective participation in internal activities aimed at improving the efficiency of our research environment. Made possible by the generosity of donors to the RAND Policy Circle, the awards provide staff with research time and support to pursue activities related to career development or exploratory research. These individuals are the fiscal year 2005 President’s Award recipients. Ross Anthony, senior economist and Director, Global Health, RAND Center for Domestic and International Health Security, for his intellectual leadership of RAND’s global health initiatives in Asia, the Middle East, and Latin America; as well as his leadership of RAND’s research on ensuring a stable, peaceful, and prosperous Palestinian state. Bart Bennett, senior operations researcher, group manager for the Management Sciences Group, and Professor of Operations Research in the Pardee RAND Graduate School (PRGS), for his exemplary development of future generations of policy analysts, particularly in his service to PRGS, where he was voted Distinguished Teacher in 2004 and chaired the 2004 qualifying examination committee. Sandra Berry, senior behavioral/social scientist; Senior Director, Survey Research Group; and Professor of Policy Analysis in the Pardee RAND Graduate School (PRGS), for her long track record of developing innovative analytic methods, her wide-ranging service to PRGS, and her multiple contributions to the planning process for RAND’s new headquarters campus. Lynn Davis, senior political scientist, for her leadership of several complex research projects, especially the development of guidelines for individual preparedness for terrorist attacks with weapons of mass destruction; and for her skillful and tireless efforts to disseminate the findings to policymakers, the media, and members of the general public. James Dobbins, senior fellow and Director, International Security and Defense Policy Center, for leading a multiyear effort to analyze U.S. and U.N. experiences in peacekeeping and nation-building and apply those lessons to current challenges; and for making numerous other contributions to RAND’s research on international security. Russell Glenn, senior policy researcher, for his growing body of research on strategies and tactics for effective urban operations, drawing on extensive field work in Afghanistan and Iraq; and his contributions to the growth of RAND’s office in Pittsburgh. Charles Goldman, senior economist; Associate Director, RAND Education; and Professor of Economics in the Pardee RAND Graduate School (PRGS), for his steady leadership in helping to shape and conduct research on education reform in Qatar, his skill as a mentor of junior and other new researchers, and his multiple contributions to the PRGS. Meg Matthius, Director of Events for Corporate Outreach, for her diligent planning and organizational skill in helping to build and strengthen RAND’s fund-raising and outreach efforts throughout the United States. Andrew Rathmell, Director of RAND Europe’s Defense and Security research team, for his analytical contributions and exemplary service as Director of Policy Planning for the Coalition Provisional Authority in Baghdad, during which time he was awarded the Office of the Secretary of Defense Medal for Valor for bravery under fire, as well as his contributions to the growth of RAND Europe’s office in Cambridge. Lynn Helbling Sirinek, Associate Director, Business Development and Planning, Pittsburgh Office, for her creative efforts to elevate RAND’s profile and effectiveness in the Pittsburgh region by making new connections to the philanthropic, government, and business communities and devising new approaches for disseminating relevant RAND research findings. RAND researchers operate on a uniquely broad front, assisting public policymakers at all levels, private-sector leaders in many industries, and the public at large. In the photo below, Narayan Sastry, associate director of RAND Labor and Population, speaks with research group managers Jeff Marquis and Nell Griffith Forge at the headquarters campus in Santa Monica. In the adjacent photo, Merit Award winners Dan Gonzales, Terri Tanielian, and Walt Perry gather in our Washington office. r a nd sta ff Management Office of the President James A. Thomson President and Chief Executive Officer Michael D. Rich Executive Vice President Vivian J. Arterbery Corporate Secretary Karen Treverton Special Assistant Research Units RAND National Security Research Division RAND Arroyo Center National Defense Research Institute Thomas McNaugher Eugene C. Gritton Vice President and Director Vice President and Director Tim Bonds Susan Everingham Deputy Director Director, International Programs RAND Education Dominic Brewer Office of the Chief Financial Officer RAND Project AIR FORCE Natalie Crawford Vice President and Director Vice President and Director Sheila Kirby Cynthia Cook Associate Director Richard Fallon Associate Director Vice President and Chief Financial Officer Susan Bodilly Kenneth M. Krug Associate Director Treasurer Charles Goldman Frederick S. Pardee RAND Graduate School Associate Director Robert Klitgaard Dean Staff Development and Management Office RAND Europe Greg Treverton Adele R. Palmer L. Martin van der Mandele Associate Dean for Research Vice President and Chair, Research Staff Management Department President Melissa Rowe Associate Chair, Research Staff Management Department Bill Skinner Director, Human Resources Hugo Barbas Chief Financial Officer RAND Health Robert H. Brook Vice President and Director Office of External Affairs Paul Koegel Other Corporate Research Activities RAND Frederick S. Pardee Center for Longer Range Global Policy and the Future Human Condition James A. Dewar Director Associate Director RAND-Qatar Policy Institute Vice President for External Affairs Elizabeth McGlynn C. Richard Neu Alan L. Hoffman (acting) Associate Director Director Alan L. Hoffman Executive Director, Office of Development Iao Katagiri Deputy Vice President, Community Relations David Egner RAND Infrastructure, Safety and Environment Debra Knopman Director, Washington External Affairs Rebecca Kilburn Director Vice President and Director RAND Survey Research Group Jack Riley Sandra Berry Associate Director Senior Director Director, External Communications Shirley Ruhe RAND Child Policy Julie Brown Office of Services Patrick Horrigan Vice President and Director Woody Stoeger Chief Information Officer RAND Institute for Civil Justice Director Robert Reville Director Washington Office Carole Roan Gresenz Bruce Hoffman Associate Director for Research Director RAND Labor and Population Arie Kapteyn Pittsburgh Office Barry Balmat Director Director Rebecca Kilburn Associate Director Narayan Sastry Associate Director New York Office James Hundley Director Doha Office C. Richard Neu Director r a nd a nnua l r eport In v e s t i ng i n Ide a s Philanthropic donations are a true testament to RAND’s enduring value as a charitable organization. As a nonprofit organization, RAND funds groundbreaking research and centers of excellence through the generous contributions of individual donors, foundations, and corporations. These critical funds allow RAND to address pressing global public policy issues confronting the world. The support RAND receives from all of its donors is critical to ensuring that RAND’s contributions to policy in the next half-century of public service can match those of the past 50 years. Funds from donors have enabled RAND to make the following contributions to society. • Earlier in RAND’s history, we used funds from the RAND endowment to model the AIDS epidemic before it emerged on the public health radar screen. • RAND helped underwrite research on preventing drug abuse and crime and supported analyses that illuminated the trade-offs between various policies— for example, the reduction in drug use resulting from treatment or imprisonment of addicts. • The RAND endowment supported analyses of the economic progress of immigrants and the savings behavior of the elderly—work that is informing current debates on Social Security reform. • RAND-sponsored work that synthesized three decades of research on the quality of health care helped put quality on the national policy agenda and shaped the discussion about how quality can be measured and improved. • RAND funds built a database that profiles terrorist activities and modes of operating. Investigators draw upon this unique resource after terrorist incidents. In the process of building it, we established terrorism as a scholarly discipline and trained many current experts. In 2004, donors enabled RAND to investigate and propose solutions for issues ranging from ending world hunger to improving homeland security. Some of the most recent contributions include the following examples. • Designing a concept for a new computer network and database that could help the U.S. intelligence community “connect the dots” by quickly identifying and interpreting the clues of a possible terrorist attack. • Proposing a new approach to conceptualizing and conducting public diplomacy, convincing foreign societies, especially those in the Muslim world, that the ideals such as pluralism, freedom, women’s rights, and democracy are fundamental human values that will resonate in their own countries. • Comparing the Green Revolution with the current genetically modified crop movement to assess not only the technological differences in the crops and agricultural methods of these two movements, but more generally to examine the economic, cultural, and political factors that influence whether a new agricultural technology is adopted and accepted by farmers, consumers, and governments. • Finding ways to eliminate certain passengers as airline security risks through a ”registered traveler” program, thus making it possible to concentrate on screening the baggage of other passengers. And then, calculating the minimum cost to the nation’s economy of providing baggage scanning at all U.S. airports without affecting security. Phil a nthropic donations a r e a true testa ment to R A ND’s endur ing va lue as a ch a r ita ble orga niz ation. Bruce Karatz Bruce Karatz serves as vice chairman on the Board of Trustees. Bruce Karatz Chairman and Chief Executive Officer, KB Home “I know of no other organization with the depth and breadth of RAND’s research agenda. . . . I know my gift to RAND is a wise investment in improving my future, my children’s future, and the world’s future.” Mr. Karatz is vice chairman of the RAND Corporation Board of Trustees. Mr. Karatz chaired the RAND Education Advisory Board for many years and more recently played a critical role in the development of RAND’s new headquarters, providing guidance, support, and expertise. “I know of no other organization with the depth and breadth of RAND’s research agenda,” says Mr. Karatz. “In a single year, RAND researchers can be looking at the quality of health care in America, reforming education in Qatar, adapting Sesame Street for the children in Afghanistan, and helping the Pentagon transform the military. I know my gift to RAND is a wise investment in improving my future, my children’s future, and the world’s future.” “My father’s research was always on social welfare issues, such as education reform, housing, and racial discrimination. . . . That’s the RAND I know.” Amy Pascal Chairman, Motion Picture Group, Sony Pictures Entertainment Major donor Amy Pascal has been connected to RAND for many years. Since 1999, she has served on the RAND Corporation Board of Trustees, but her familiarity with RAND reaches back to her childhood. Her father, Anthony Pascal, was an economist at RAND for several decades. “When many people hear ‘the RAND Corporation,’ they conjure up images of the Soviet Union or the Cold War. But that wasn’t the RAND that I grew up with,” says Ms. Pascal. “My father’s research was always on social welfare issues, such as education reform, housing, and racial discrimination. He was one of the first economists to look at the cost of treating AIDS. That’s the RAND I know. So when I wanted to donate money to help make the world a better place, the first organization that came to mind was one I know the best: RAND.” Amy Pascal Amy Pascal’s generosity enabled her to dedicate an arbor in the new headquarters in honor of her father, Tony Pascal, a RAND researcher from 1958 to 1998. ”I feel so strongly about the contributions RAND has made to the world that I am helping to underwrite a documentary film that will tell the RAND story.” Frank Carlucci Former Secretary of Defense Frank Carlucci began his third (nonconsecutive) term on the Board of Trustees in 2000; his first was in 1983. Carlucci Investigator Award recipient Rollie Lal has been working at RAND since 2002. Frank Carlucci Chairman Emeritus, The Carlyle Group “My intent is to provide seed money to explore research in areas that are unexplored.... We need to take full advantage of the creativity and insightfulness of our researchers.” Mr. Carlucci chairs the RAND Center for Middle East Public Policy Advisory Board and serves on the RAND Corporation Board of Trustees. Through his generous donation, RAND created the Carlucci Investigator Award. “My intent is to provide seed money to explore research in areas that are unexplored. I recognize that RAND’s clients need to find solutions to current problems but we also need to take full advantage of the creativity and insightfulness of our researchers. This grant should help them do that.” Rollie Lal, the most recent winner of the Carlucci Investigator Award, explored the working mechanisms of organized crime in South Asia and its influence on terrorist networks. She began by looking solely at India, but soon her research branched out to include all of South Asia. r a nd a nnua l r eport Donors PRESIDENT ’S CIRCLE By Invitation Members of the Circle provide extraordinary service and financial support to RAND. Hushang Ansary Paul Baran Peter S. Bing Lloyd E. Cotsen Thomas V. Jones Charles N. Martin, Jr. Frederick S. Pardee Robin Renwick James F. Rothenberg Eleanor B. Sheldon Joseph P. Sullivan Ratan Tata John L. Vogelstein Paul A. Volcker Alcoa Foundation Allstate Insurance Company The Chubb Corporation ExxonMobil Corporation The Ford Foundation Kaiser Permanente State Farm Insurance VISIONARIES $250,000 and above Anonymous Kip and Mary Ann Hagopian Bruce Karatz Paul H. and Nancy J. O’Neill Ewing Marion Kauffman Foundation PNC Foundation Sony Pictures Entertainment GUARDIANS Charles G. Koch Charitable Foundation Liberty Mutual Insurance Companies Neotrade Partners The Starr Foundation Swiss Re America Holding Corp. BENEFACTORS $50,000–$99,999 Harold Brown Frank C. and Marcia Carlucci Po Chung Arthur and Marylin Levitt Peter Norton Amy B. Pascal Cindy and John S. Reed Maxine and Eugene S. Rosenfeld Association of Trial Lawyers of America Farmers Insurance Group/ Zurich U.S. The Horace W. Goldsmith Foundation Hartford Financial Services Group Hepo Filters, LLC International Council of Shopping Centers, Inc. LRN MassMutual Financial Group The Merck Company Foundation Pfizer Inc The Real Estate Roundtable The REBNY Foundation, Inc. The SahanDaywi Foundation LEADERS $100,000–$249,999 $25,000–$49,999 Lovida H. Coleman, Jr. Ann and Tom Korologos James E. and Sharon C. Rohr ACE USA Alfa Group American Re-Insurance Company The Dow Chemical Company General Motors Corporation The Hauser Foundation KB Home Anonymous Thomas Epley and Linnae Anderson Robert Ferguson Robert G. Funari Ronald J. Gidwitz Tone N. Grant Karen Elliott House Benny T. Hu Ray R. Irani Peter Kwok Woong-Yeul Lee Santiago Morales Jane and Marc Nathanson Younes Nazarian Jane and Ronald L. Olson Jean and Donald Tang Stanley A. Weiss Adamant Financial Corporation AKB Probusiness Bank Alcan, Inc. Alcoa Archer Daniels Midland Company Association for the Defense of Investor’s Rights Bank of Japan Bank of Moscow Base Element J.P. Morgan Chase, Inc. ChevronTexaco Corporation City National Bank Commercial Mortgage Securities Association ESN Group EvrazHolding Far East National Bank Honeywell International Launch Services Investment Group Renaissance Capital A.T. Kearney AG KidsOhio Lazare Kaplan International, Inc. Lianozova Dairy Plant Los Angeles Times MDM Bank Moscow Telecommunications Corporation The NAREIT Foundation Neftyanoi Concern Novolipetsky Metallurgical Plant PacifiCare Health Systems, Inc. Refco Group, Ltd. The Rohatyn Group Severstal Siguler Guff & Company Lucille Ellis Simon Foundation SUAL-Holding Chung Ying Tang Foundation i n v e s t i ng i n i de a s The Tata Group The UPS Foundation Vash Finansovy Popechitel, AO Vimpelcom Volga Prom Gaz Warburg Pincus PATRONS $10,000–$24,999 Corporations and foundations make annual gifts to RAND at the Patrons level and above. Robert and Patricia Curvin Roy Doumani Ken Senjong Hsui Suzanne Nora Johnson Caroline and Seymour F. Kaufman Michael B. Kim Janet Crown Peterson Enzo Viscusi Lois and Gail L. Warden Susan J. Way-Smith and Douglas J. Smith Aegon USA, Inc. Baraboo Growth, LLC The Boeing Company Bristol-Myers Squibb Foundation, Inc. Capital Research and Management Company Charter One Bank The Family Connection Partnership, Inc. The Feinberg Group, LLP IBS Group Holding The Robert and Ardis James Foundation Johnson & Johnson Family of Companies Liz Claiborne, Inc. The McGraw-Hill Companies Metropolitan Life Foundation National Association of Realtors The Rosenkranz Foundation The San Francisco Foundation State Farm Companies Foundation Toyota Motor Sales, USA, Inc. ASSOCIATES $5,000–$9,999 Anonymous Odeh F. Aburdene Victor K. Atkins Louis L. Borick Nadine and Edward M. Carson George N. Chammas Natalie W. Crawford Maxwell E. Greenberg Pedro J. Greer, Jr. Palmer G. Jackson Paul G. Kaminski Iao Katagiri Eve M. Kurtin John H. O. La Gatta Ben Mathis Gertrude G. Michelson Wilma C. Mundie Paul D. Rheingold Donald B. and Susan F. Rice Stanley M. Rumbough, Jr. Alice and Raymond I. Skilling Gerald J. Sullivan Jean and Donald Tang James A. Thomas Theresa and Charles Wolf, Jr. FRIENDS $1,000–$4,999 Individuals make annual gifts to RAND at the Friends level and above. Anonymous Sherry and Barry Balmat Norman Barker, Jr. Mark Benjamin Maurine Bernstein Linda and Brent D. Bradley Edmund D. Brunner, Jr. Jean and Waldo H. Burnside Jacqueline and Andrew I. Caster Jane and Louis M. Castruccio Margery A. Colloff Richard P. Cooley Gordon B. Crary Richard J. and Mildred Cross Brownlee Currey Eugene J. Ellis Paul G. Flynn James C. Gaither William T. Golden Lucille Goldsen Debra Granfield and Michael D. Rich James A. Greer, II Susan G. and William M. Guttman Ralph E. Hansmann James D. Hodgson Alan L. Hoffman Leonard Horwin Vicki Huth Phyllis Kantar Susan Koehler Kenneth Krug and Andrea Scharf Daniel D. Kusar Philip Lader Carol Lyden Sue Mallett Michael M. May Glen T. Meakem Norman Metcalfe Steven Miller Joel R. Mogy Lloyd and Mary Morrisett Thomas P. Mullaney Frank S. Palatnick Marie-Anne and Malcolm A. Palmatier Donald E. Petersen Robert L. Petkun Patricia Salas Pineda John Edward Porter Murray Pepper and Vicki Reynolds Pepper Paul G. Rogers Louis Rowell Henry S. and Beverly Rowen Jacques H. Schraven Brent Scowcroft Donald W. Seldin Nina and Ivan Selin Dorothy R. Sherwood Gunjit S. Sikand H. Russell Smith Robert Spinrad Larry S. Stewart Marjorie and Robert Templeton Darlene and James A. Thomson Marianne and Wesley Truitt Heike and Ralph Turchiano Barbara and Milton G. Weiner John P. White Bill Williams James Q. Wilson Paul S. Wise Linda Tsao Yang LEGACY CIRCLE The following individuals have committed estate gifts to RAND. Frank C. Carlucci James A. Greer, II Olaf Helmer Bruce Karatz G. G. Michelson Newton N. Minow Eleanor B. Sheldon Willis Ware r a nd a nnua l r eport Educational Opportunities The Pardee RAND Graduate School With 54 professors and a student body of 91, the School enjoys one of the most favorable facultystudent ratios in higher education. Its student body is remarkable and remarkably diverse. Most students have already earned advanced degrees, ranging from doctorates in the sciences or in medicine to master’s degrees in a variety of disciplines. Graduates have gone to high-level positions in government, the private sector, academia, and nonprofit groups. In all their diversity, its students have three things in common: passion, discipline, and intellectual power. The School’s Ph.D. in policy analysis is designed to train creative thinkers to play important roles in solving major problems facing the nation and the world. Rigorous courses all operate as seminars, and students get the The Pardee RAND Graduate School (PRGS) grants more Ph.D.’s in public policy analysis annually than any other educational institution in the United States. Pictured: Assistant deans Rachel Swanger (seated, center) and Alex Duke (seated, right) in the new PRGS courtyard in Santa Monica with PRGS fellows (left to right) Hilary Rhodes, Thomas Lang, John Fei, and Sai Ma. opportunity to work alongside top RAND researchers on a broad range of projects as part of their on-the-job training. All students receive fellowships that pay for all tuition costs and health care, and a stipend based on the work they perform on RAND research projects. The RAND Graduate Student Summer Associate Program The Graduate Student Summer Associate Program is designed for students who have completed at least two years in a graduate program leading to a doctorate or other advanced degree. Each summer associate conducts independent research during the approximately 12 weeks that he or she spends at RAND assigned to a research project and mentored by a research staff member. e du c a t ion a l op p o r t u n i t i e s In 2004, 28 summer associates from 20 different universities applied their skills to the analysis of a wide range of public policy problems. A sample of summer associate research topics in 2004 includes • an examination of advanced automotive engine technologies, particularly hybrid-electric vehicles • a project that examined how terrorist attacks might affect oil supplies • an education project on organizational responses to accountability in education and the impact of the No Child Left Behind Act • the development of case studies pertaining to creating police forces in nation-building efforts, and initiatives to study and reduce violence • a study of the social impacts of defense applications of nanotechnology • a health study relating to the effectiveness and utility of syndromic surveillance in public health practice Students are selected for associateships based on their interests and skills and their match with current RAND research projects. Several hundred individuals apply each year. In 2004, 12 of the associates worked in the Santa Monica Office, 10 in the Washington Office, and 6 in the Pittsburgh Office. Other Educational Opportunities Several specialized pre- and postdoctoral programs are conducted under the auspices of individual research units. The programs offer formal and informal training and extensive collaboration with RAND researchers. RAND Labor and Population offers the RAND Fellows in Population Studies and the Study of Aging program, sponsored by the National Institutes of Health. The program enables outstanding junior scholars in demographic and aging research to sharpen their analytic skills, learn to communicate research results effectively, and advance their research agenda. The program has also sponsored yearlong fellowships and shorter study visits for students and researchers from a number of developing countries, including Bangladesh, Cameroon, Guatemala, India, Indonesia, Kenya, Malaysia, Mexico, Pakistan, the Gambia, and the Philippines. Many of these students return to their countries to work in universities, government, or international agencies. For more than two decades, the program has offered these fellowships and study visits, supported by grants from the Agency for International Development, the Population Council, and the Hewlett Foundation. • Participants in the Robert Wood Johnson Clinical Scholars Program at the University of California, Los Angeles (UCLA), have the opportunity to involve themselves in RAND Health projects as part of their training. The program is designed to allow young physicians committed to clinical medicine to acquire new skills and training in the nonbiological sciences that are important to medical care systems. The program prepares physicians to act as health services research leaders and agents for change in diverse settings such as the community, federal and state governments, health care organizations, and academic departments. The program focuses on two priority areas: Improving the Care for America’s At-Risk Populations and Improving Quality of Care in a Changing Social and Economic Environment. • RAND Health and the UCLA School of Public Health jointly sponsor a postdoctoral training program that offers training in health services research methods and policy analysis and research experience through ongoing research projects at RAND or UCLA. • RAND Summer Institute (RSI) consists of two annual conferences that address critical issues facing our aging population: the MiniMedical School for Social Scientists and a workshop on Demography, Economics, and Epidemiology of Aging. The MiniMedical School, sponsored by the National Institute on Aging and the NIH Office of Behavioral and Social Sciences Research, is offered to non-medically trained scholars whose research relates to the aging process and the medical treatment of elderly. Gr aduates have gone to high-level positions in government, the private sector, academia, and nonprofit groups. In all their diversity, its students have three things in common: passion, discipline, and intellectual power. r a nd a nnua l r eport Clients and Sponsors U.S. Government Agency for International Development Department of Agriculture Department of Commerce National Institute of Standards and Technology Department of Defense Counterdrug Technology Development Program Department of the Air Force Department of the Army Biometrics Management Office Department of the Navy Marine Corps Joint Staff Office of the Secretary of Defense Assistant Secretary of Defense (Command, Control, Communications, and Intelligence) Deputy Secretary of Defense Centers for Medicare and Medicaid Services Dutch Ministry of Education, Culture, and Science Centers for Disease Control and Prevention Dutch Ministry of Transport, Public Works, and Water Management National Institute for Occupational Safety and Health Health Resources and Services Administration National Institutes of Health Dutch Railways European Commission, Directorate General Education and Culture European Commission, Directorate General Enterprise National Cancer Institute European Commission, DG TREN National Center for Complementary and Alternative Medicine Fraport AG (Germany) National Heart, Lung, and Blood Institute German Ministry of Environment National Institute on Aging National Institute on Alcohol Abuse and Alcoholism German Ministry of Education and Research German Ministry of Transport Italian Ministry of Defense Lithuanian Ministry of Defense National Institute of Child Health and Human Development Mexico National Institute for Dental and Craniofacial Research United Kingdom Secretary of Public Education Department for Transport National Institute on Drug Abuse Medical Research Council National Institute of Environmental Health Sciences Ministry of Defence Defense Advanced Research Projects Agency National Institute of Mental Health National Health Service Defense Threat Reduction Agency National Institute of Nursing Research Under Secretary of Defense for Acquisition, Technology, and Logistics Missile Defense Agency Under Secretary of Defense (Comptroller) Defense Finance and Accounting Service Substance Abuse and Mental Health Services Administration Department of Homeland Security Federal Emergency Management Agency National Audit Office Office of Science and Technology Romanian Ministry of Defense State of Qatar Armed Forces Supreme Education Council Supreme Council for Family Affairs Department of Justice Director, Program Analysis and Evaluation Federal Bureau of Investigation International Organizations National Institute of Justice Under Secretary of Defense for Personnel and Readiness Office of Justice Programs Arthritis Research Campaign (ARC), United Kingdom TRICARE Management Activity Under Secretary of Defense for Policy Director, Net Assessment Department of Labor Berlin-Brandenburg Flughafen Holding Department of State Information Assurance Advisory Council (IAAC) Department of Transportation Federal Railroad Administration Korean Institute of Science and Technology Evaluation and Planning (KISTEP) Department of Veterans Affairs Matt MacDonald Group Department of Education Environmental Protection Agency Department of Energy Medicare Payment Advisory Commission SIKA (Swedish Institute for Transport and Communications Analysis) U.S. Coast Guard National Renewable Energy Laboratory National Reconnaissance Office Oak Ridge National Laboratory Social Security Administration Department of Health and Human Services National Science Foundation Unified Commands United States Capitol Police Administration for Children and Families U.S. Intelligence Community Agency for Healthcare Research and Quality Foreign Government Agencies Ministries Assistant Secretary for Planning and Evaluation STIF (Syndicat des Transports d’Ile-de-France) State and Local Governments State of California Air Resources Board California Arts Council Australian Ministry of Defense Danish Ministry of Transport California Legislative Analyst’s Office California State Auditor Bureau of State Audits c l i e n t s a n d s p on s o r s Department of Industrial Relations California Endowment Equitable Resources, Inc. Department of Social Services California HealthCare Foundation Department of Transportation (CalTrans) Carnegie Corporation of New York Ford, General Motors, and Daimler Chrysler Casey Family Programs Health Services Advisory Group City of Los Angeles Edna McConnell Clark Foundation Hewlett-Packard Development Company Los Angeles County Core Knowledge Foundation Honda Motor Company Los Angeles County Probation Department Energy Foundation Humana Inc. The Ford Foundation The Leads Corporation Los Angeles County Proposition 10 Commission, California Bill and Melinda Gates Foundation Merck & Co., Inc. William T. Grant Foundation Pfizer Inc Hartford Foundation PNC Financial Services Group John Randolph and Dora Haynes Foundation Row Sciences Heinz Foundation Telomer Consortium Howard Heinz Endowment ValueOptions The William and Flora Hewlett Foundation Wellpoint Health Networks, Inc. James Irvine Foundation Westat Research Corporation Japan Foundation Center for Global Partnership Professional Associations California City and County Offices Los Angeles Unified School District Orange County Probation Department San Diego County Chief Probation Officers of California Santa Barbara High School District Ventura County Probation Agency City of Cincinnati Commonwealth of Pennsylvania Allegheny Intermediate Unit University Center for Southwest Pennsylvania Christian A. Johnson Endeavor Foundation The Robert Wood Johnson Foundation New Mexico Workers’ Compensation Administration Ewing Marion Kauffman Foundation New York City Palliative Care Quality Improvement Lila Wallace–Reader’s Digest Fund City of Seattle Tennessee Department of Education Colleges and Universities Andrews University Dartmouth Institute for Security Technology Studies Korea Foundation The John D. and Catherine T. MacArthur Foundation Medi-Cal Policy Institute National Energy Foundation The Nuffield Trust Save the World Air, Inc. Wells Fargo AARP American Medical Association American Physical Society American Society of Clinical Oncology Blue Cross and Blue Shield Association Building Industry Institute Building Owners Management Association–Los Angeles Health Industry Manufacturers Association National Board for Professional Teaching Standards Open Society Institute David and Lucile Packard Foundation Other Nonprofit Organizations George Washington University Qatar Foundation American Institutes for Research Harvard University The Rockefeller Foundation Arkansas Tobacco Settlement Commission The Johns Hopkins University Alfred P. Sloan Foundation Battelle Pacific Northwest Laboratories Kent School Smith Richardson Foundation DC Asthma Coalition Los Angeles Community College The Spencer Foundation Oregon Health and Science University Starr Foundation District of Columbia Primary Care Association Rutgers University U.S.-China Legal Cooperation Foundation Group Health Cooperative of Puget Sound Industry Health Research, Inc. University of California, Los Angeles ABM Engineering Healthy Home Resources, Inc. University of California, San Diego Alan’s Medical Systems, Inc. Institute for Health Policy Solutions University of California, San Francisco Amgen Integrated Healthcare Association University of Maryland Amtrak National Bureau of Economic Research University of Michigan AstraZeneca International National Chamber Foundation University of Minnesota Blue Cross & Blue Shield of Rhode Island National Forum for Health Care Quality Measurement and Reporting Cerner Corporation Nuclear Threat Initiative Colorado Health Networks Oklahoma City National Memorial Institute for the Prevention of Terrorism Stanford University University of California, Berkeley University of Pittsburgh University of Southern California University of Washington Foundations Arthritis Foundation Archstone Foundation BEST Foundation Concurrent Technologies Corporation CorSolutions DMJMH+N Edison Schools, Inc. Educare Corporation Eli Lilly and Company Research Triangle Institute Sandia Laboratories Shelter Partnership Inc. r a nd a nnua l r eport A dv isory B oa r ds RAND advisory boards enrich our research agenda by adding their experience, perspective, and expertise. Interactions between a unit and its board vary, but advisory board members may advise on research directions, comment on the relevancy and occasionally the quality of work, facilitate dissemination of research results, provide financial support, and assist with fund-raising from others. Promising Practices Network Board of Advisors James A. Thomson (Chairman) President and CEO, RAND Corporation Douglas A. Brengel Senior Managing Director, Citigroup Global Markets Inc. Judith K. Chynoweth Executive Director, Foundation Consortium for California’s Children & Youth Virginia Mason Executive Director, Family Support America Ricardo A. Millet Roy Doumani Cyrus Tang Member of the Board of Directors and Acting Chief Operations Officer, California Nanosystems Institute President and Chairman of the Board, Tang Industries, Inc. Robert Ferguson Vice Chairman, Bear, Stearns & Co. Inc.; Chairman, Bear Stearns Asia Deputy Chairman, The Sydney Institute; Chairman, IMF Australia Limited Matthew K. Fong President, Strategic Advisory Group; former California State Treasurer Shinji Fukukawa Executive Advisor, Dentsu Institute for Human Studies Lalita D. Gupte Joint Managing Director, ICICI Bank Limited President, Woods Fund of Chicago James Hodgson Lloyd N. Morrisett Former U.S. Ambassador to Japan President (retired), The Markle Foundation Ken Senjong Hsui Paul H. O’Neill Former Secretary of the Treasury Mark Real President and CEO, KidsOhio.org Steve Renne Deputy Director, Missouri Department of Social Services Norman S. Rosenberg President and CEO, Parents Action for Children Ken Seeley Founder and Executive Director, The Colorado Foundation for Families and Children Gaye Morris Smith Executive Director, Family Connection Partnership Gary Withers President, The Children’s Institute RAND Center for Asia Pacific Policy Advisory Board Ratan N. Tata (Chair) Chairman, TATA Industries Limited, Mumbai, India Donald Tang Frank G. Wisner Vice Chairman, External Affairs, American International Group, Inc.; former U.S. Ambassador to India Linda Tsao Yang Chairman, Asian Corporate Governance Association Daniel Yun Chairman and CEO, Voyager Group, LLC Ex Officio James A. Thomson President, Prince Motors Group President and CEO, RAND Corporation Benny T. Hu Nina Hachigian Chairman, CDIB BioScience Venture Management, Inc. Director, RAND Center for Asia Pacific Policy Michael ByungJu Kim Susan Everingham President, Carlyle Asia Director of International Programs, RAND Corporation Peter Kwok Chairman, CITIC Resources Holdings Limited Woong-Yeul Lee RAND Center for Middle East Public Policy Advisory Board Chairman, Kolon Group Frank C. Carlucci (Chair) Robert Oehler Chairman Emeritus, The Carlyle Group Vice Chairman, Far East National Bank Patricia Salas Pineda Group Vice President and General Counsel, Corporate Communications, Toyota Motor of North America Kenneth J. Abdalla Managing Member, Waterton Management, LLC Odeh F. Aburdene Hushang Ansary Nicholas Rockefeller Chairman, Parman Capital Group Partner, Perkins Coie LLP Rebecka Belldegrun Richard H. Solomon Alexander L. Cappello President, U.S. Institute of Peace; former Assistant Secretary of State for East Asian and Pacific Affairs; former U.S. Ambassador to the Philippines Chairman and CEO, Cappello Group Inc. George N. Chammas Copresident and Chief Financial Officer, NavLink Inc. a d v i s or y b o a r d s Lloyd E. Cotsen President, Cotsen Management Corporation Roy Doumani Member of the Board of Directors and Acting Chief Operations Officer, California Nanosystems Institute Ahmet M. Ertegun Cochairman and Co-CEO, Atlantic Recording Corporation Guilford Glazer Guilford Glazer Associated Companies Tone N. Grant Maxwell E. Greenberg Consultant to the Board, Med-Net Elcam Rita E. Hauser President, The Hauser Foundation, Inc. Joel Z. Hyatt Graduate School of Business, Stanford University Ray R. Irani Chairman and CEO, Occidental Petroleum Corporation Joseph Jacobs Chairman, Jacobs Engineering Group, Inc. Peter A. Joseph Palladium Equity Partners Ann Kerr Director, Fulbright Program, University of California, Los Angeles Ray Mabus Younes Nazarian The Nazarian Companies RAND Council for Aid to Education Board of Directors RAND Europe Executive Board Michael D. Rich (Chairman) President and CEO, RAND Corporation Executive Vice President, RAND Corporation James A. Thomson (Chairman) Stephen M. Drezner Roger Benjamin Senior Advisor, RAND Corporation President, RAND Council for Aid to Education L. Martin van der Mandele Brent Bradley Special Assistant to the President for Corporate Strategy, RAND Corporation President, RAND Europe Floris A. Maljers Retired Chairman, Unilever N.V., The Netherlands Maarten C. van Veen RAND Council for Aid to Education Board of Advisors John H. Augustine Managing Director, Lehman Brothers, Inc. Retired Chairman, Hoogovens, The Netherlands Lo C. van Wachem Chairman, Board of Directors, Zurich, The Netherlands; former Chairman, Supervisory Board, Royal Dutch Shell, The Netherlands Roger Benjamin President, RAND Council for Aid to Education Robert L. Bovinette President Emeritus, Commonfund Group Gordon Davies Former President, Kentucky Council on Post-Secondary Education Russell C. Deyo Vice President and General Counsel, Johnson & Johnson Ronald J. Gidwitz Chairman, GCG Partners RAND Europe (UK) Board of Trustees L. Martin van der Mandele (Chairman) President, RAND Europe Sir John Boyd Master, Churchill College, United Kingdom Sir Lawrence Freedman Vice-Principal (Research) and Head, School of Social Science and Public Policy, King’s College London, United Kingdom Charles E. M. Kolb President, Committee for Economic Development Harold W. McGraw, Jr. RAND Europe (UK) Advisory Board Robin Renwick of Clifton (Chairman) David Richards (Special Advisor) Chairman Emeritus, The McGraw-Hill Companies, Inc. Donald Ellis Simon Yolanda T. Moses President, The Lucille Ellis Simon Foundation Enzo Viscusi Special Assistant to the Chancellor for Excellence and Diversity/Vice Provost, Conflict Resolution, University of California, Riverside Group Senior Vice President, ENI SpA William C. Nelsen Stanley A. Weiss President Emeritus, Citizen’s Scholarship Foundation of America Chairman, Business Executives for National Security Michael O’Keefe Partner, August & Debouzy, France Poju C. Zabludowicz President, Minneapolis College of Art and Design Thérèse Delpech Chairman of the Board of Trustees, The Zabludowicz Trust Charles B. Reed Chancellor, California State University Ex Officio James A. Thomson President and CEO, RAND Corporation Michael D. Rich Executive Vice President, RAND Corporation Benno C. Schmidt, Jr. Chairman, Edison Schools John Brooks Slaughter President and CEO, National Action Council for Minorities in Engineering Sara Martinez Tucker President and CEO, Hispanic Scholarship Fund Chairman, J. P. Morgan plc., United Kingdom Jan K. Bielecki President, Bank Polska Kasa Opieki S.A., Poland Carl Bildt Special Envoy of the United Nations Secretary-General for the Balkans Olivier Debouzy Director, Atomic Energy Commission, France Jacques H. Schraven Chairman, Federation of Netherlands Industry and Employers (VNO-NCW), The Netherlands Karsten D. Voigt Coordinator for German-American Cooperation, Foreign Office, Germany Matti Vuoria Executive Vice President, Varma Mutual Pension Insurance Company, Finland r a nd a nnua l r eport Jacques H. Wahl Sir Michael Marmot Senior Advisors Director, Senior Advisor, and Member of the Managing Board, Banque Nationale de Paris Paribas, France Director, International Centre for Health and Society, University College London Gavin de Becker H. C. Werner Weidenfeld Chairman and CEO, Vanguard Health Systems Professor of Political Science, Geschwister-Scholl-Institute, Ludwig-Maximilians-University, Germany; Director, Center for Applied Policy Research (CAP), Germany Charles N. Martin, Jr. Elizabeth A. McGlynn James Q. Wilson James A. Collins Professor Emeritus of Management, The John E. Anderson Graduate School of Management, University of California, Los Angeles Neal L. Patterson Chairman and CEO, Cerner Corporation John Edward Porter Private Investor Partner, Hogan and Hartson LLP Neal A. Baer, M.D. Carol A. Richards Executive Producer, Law & Order: Special Victims Unit Director, Carol Richards Associates David K. Richards Private Investor Vice President, Corporate Fellow, and Director of RAND Health John J. Rydzewski Ronald I. Dozoretz, M.D. Partner, Benedetto, Gartland & Company, Inc Chairman and CEO, ValueOptions Senior Counsel, Sidley Austin Brown & Wood LLP Paul H. O’Neill Joseph P. Sullivan (Chair) Robert H. Brook, M.D., Sc.D., F.A.C.P. Newton N. Minow Associate Director, RAND Health Former Secretary of the Treasury RAND Health Board of Advisors Gavin de Becker and Associates, Senior Fellow, UCLA School of Public Policy Sir Maurice Shock RAND Institute for Civil Justice Board of Overseers Raymond I. Skilling (Chair) Executive Vice President, Aon Corporation Sheila L. Birnbaum (Vice Chair) Skadden, Arps, Slate, Meagher, & Flom Chairman, The Nuffield Trust Steven Bennett Trustee, Hospital for Special Surgery, New York James A. Thomson General Counsel, United Services Automobile Association Robert G. Funari President and CEO, RAND Corporation James L. Brown Former President and CEO, Syncor International Gail L. Warden Frederick W. Gluck President and CEO, Henry Ford Health System Director, Center for Consumer Affairs, University of Wisconsin– Milwaukee Mary Kay Farley Former Managing Director, McKinsey & Company, Inc. Kim M. Brunner Senior Vice President and General Counsel, State Farm Insurance Assistant Dean, University of Miami School of Medicine RAND Infrastructure, Safety, and Environment Advisory Board Karen Hein, M.D. John K. Van de Kamp (Chairman) Clifford Law Offices Immediate Past President, William T. Grant Foundation Dewey Ballantine LLP John J. Degnan Dede Thompson Bartlett Vice Chairman and CAO, The Chubb Corporation Pedro Jose Greer, Jr., M.D. Suzanne Nora Johnson Vice Chairman, Goldman Sachs Group Inc. Karen L. Katen Vice Chairman, Pfizer Inc, and President, Pfizer Human Health Paul Koegel Chair, Advisory Council, National Domestic Violence Hotline Lovida H. Coleman, Jr. Partner, Sutherland, Asbill & Brennan LLP Margery Colloff Counsel, White and Case Associate Director, RAND Health Joseph S. Konowiecki Executive Vice President and General Counsel, PacifiCare Health Systems, Inc. Robert Curvin President (retired), Greentree Foundation Alan F. Charles Robert A. Clifford Markus U. Diethelm Chief Legal Officer, Head of Group Regulatory Affairs and Government Relations, Swiss Reinsurance Company Kenneth R. Feinberg The Feinberg Group, LLP Paul G. Flynn Judge, Los Angeles Superior Court Scott M. Gordon Kenneth C. Frazier Eve M. Kurtin Superior Court Commissioner, Los Angeles County Superior Court Senior Vice President and General Counsel, Merck & Co., Inc. Managing Director, Pacific Venture Group Janet Green James A. Greer, II David M. Lawrence, M.D. Managing Director, Cappello Group, Inc. Terry J. Hatter, Jr. Chairman Emeritus, Kaiser Foundation Health Plan, Inc. Janet Crown Peterson Steven Lazarus Managing Partner, ARCH Venture Partners District Judge, U.S. District Court, Central District of California Managing Partner, Outside Shot LLC Deborah R. Hensler Jane Randel Judge John W. Ford Professor of Dispute Resolution, Stanford Law School Vice President, Liz Claiborne, Inc. James A. Thomas Chairman and Chief Executive Officer, Thomas Properties Group a d v i s or y b o a r d s Patrick E. Higginbotham Circuit Judge, U.S. Court of Appeals, 5th Circuit Jeffrey B. Kindler Senior Vice President and General Counsel, Pfizer Inc Steven J. Kumble Chairman of the Board and CEO, Lincolnshire Management Ann Lomeli Co-General Counsel, MassMutual Financial Group James W. Macdonald Executive Vice President and Chief Underwriting Officer, ACE USA Joseph D. Mandel Vice Chancellor, Legal Affairs, University of California, Los Angeles Christopher C. Mansfield Senior Vice President and General Counsel, Liberty Mutual Insurance Company Charles W. Matthews, Jr. Vice President and General Counsel, ExxonMobil Corporation RAND-Qatar Policy Institute Board of Overseers Her Highness Sheikha Mozah Bint Nasser Al Missned (Cochair) Michael Rich (Cochair) Executive Vice President, RAND Corporation Frank Carlucci Chairman Emeritus, The Carlyle Group David L. Aaron Director, RAND Center for Middle East Public Policy Lulwa Abdullah Al-Misned Assistant Secretary General of Industrial Studies and Projects, Gulf Organization for Industrial Consulting Robert S. Peck President, Center for Constitutional Litigation, American Trial Lawyers Association Robert W. Pike Executive Vice President and Secretary, Allstate Insurance Company Paul M. Pohl President, California Labor Federation, AFL-CIO Charles R. Schader Senior Vice President, American International Group Daniel I. Schlessinger Seymour F. Kaufman Managing Director, Crosslink Capital Lydia H. Kennard Former Executive Director, Los Angeles World Airports Sherry Lansing Chairman and CEO, Paramount Pictures—Motion Picture Group John Mack Ruben F. Mettler Farouk El-Baz Retired Chairman and CEO, TRW, Inc. Director, Center for Remote Sensing, Boston University Marc Nathanson Ex Officio Joseph P. Newhouse Charles Young John D. MacArthur Professor of Health Policy and Management, Harvard University President, Qatar Foundation C. Richard Neu Director, RAND-Qatar Policy Institute Vice Chairman, Charter Communications Frederick S. Pardee Investor Eugene S. Rosenfeld Frederick S. Pardee RAND Graduate School Board of Governors Donald B. Rice (Chair) Chairman, President, and CEO, Agensys, Inc. Don R. Conlan President (retired), The Capital Group Companies Thomas E. Epley Global Managing Partner, Lord, Bissell & Brook Dov L. Seidman Steve Fetter Chairman and Chief Executive Officer, LRN, The Legal Knowledge Company Professor, School of Public Affairs, University of Maryland; Associate Director, Joint Global Change Research Institute President and Chief Executive Officer, Risk Management Solutions, Inc. Managing Director, Apple Oaks Partners, LLC; Special Limited Partner, Brentwood Venture Capital; Special Advisory Partner, Redpoint Ventures General Manager, Qatar Industrial Development Bank Director, Paradyne Corporation; Director, AMI Semiconductor Corporation Hemant H. Shah B. Kipling (“Kip”) Hagopian President, Los Angeles Urban League Jones Day Thomas E. Rankin Assistant Dean, University of Miami School of Medicine Sheikh Hamad Nasser Al-Thani Margaret McKeown Circuit Judge, U.S. Court of Appeals, 9th Circuit Pedro Jose Greer, Jr., M.D. Francis Fukuyama Managing Partner, Highridge Partners James F. Rothenberg President, Capital Research and Management Company; Treasurer, Harvard University Robert Spinrad Vice President, Technology Strategy (retired), Xerox Corp. James A. Thomson President and CEO, RAND Corporation John L. Vogelstein Vice Chairman, Warburg Pincus Paul A. Volcker Former Chairman of the Federal Reserve Faye Wattleton President, Center for the Advancement of Women Stewart Tilghman Fox & Bianchi Dean of Faculty and Bernard L. Schwartz Professor of International Political Economy, Paul H. Nitze School of Advanced International Studies, Johns Hopkins University Wayne D. Wilson John Gage James Q. Wilson Vice President, Legislative and Regulatory Affairs, Farmers Insurance Group Chief Researcher, Sun Microsystems Neal S. Wolin Chairman and CEO, City National Bank James A. Collins Professor Emeritus of Management, The John E. Anderson Graduate School of Management, University of California, Los Angeles Larry S. Stewart Executive Vice President and General Counsel, The Hartford Financial Services Group, Inc. Russell Goldsmith Susan J. Way-Smith Former President and CEO, Urban Education Partnership r a nd a nnua l r eport These are the advisory boards for RAND’s federally funded research and development centers (FFRDCs). Air Force Steering Group RAND Arroyo Center Policy Committee Gen T. Michael Moseley (Chairman) GEN Richard A. Cody (Cochair) Vice Chief of Staff Lt Gen Kevin P. Chilton Assistant Vice Chief of Staff (Acting) Lt Gen Ronald E. Keys Deputy Chief of Staff, Air and Space Operations Lt Gen William T. (Tom) Hobbins Deputy Chief of Staff, Warfighting Integration Lt Gen John D. W. Corley Principal Deputy Assistant Secretary for Acquisition; Lt Gen Donald J. Wetekam Deputy Chief of Staff for Installations and Logistics Lt Gen Roger A. Brady Vice Chief of Staff, U.S. Army Claude M. Bolton, Jr. (Cochair) Assistant Secretary of the Army (Acquisition, Logistics, and Technology) Walter W. Hollis Deputy Under Secretary of the Army (Operations Research) GEN Kevin P. Byrnes Commanding General, U.S. Army Training and Doctrine Command GEN Benjamin S. Griffin Commanding General, U.S. Army Materiel Command GEN Dan K. McNeill Commanding General, U.S. Army Forces Command Deputy Chief of Staff, Personnel LTG Philip R. Kensinger, Jr. Lt Gen Stephen G. Wood Commanding General, U.S. Army Special Operations Command Deputy Chief of Staff for Plans and Programs LTG Kevin C. Kiley Maj Gen Ronald J. Bath (Executive Agent) Command General, U.S. Army Medical Command/The Surgeon General, U.S. Army Director, Strategic Planning, Office of the Deputy Chief of Staff, Plans and Programs LTG Franklin L. Hagenbeck Deputy Chief of Staff, G-1, U.S. Army LTG Keith B. Alexander, Jr. Deputy Chief of Staff, G-2, U.S. Army LTG James J. Lovelace Deputy Chief of Staff, G-3, U.S. Army LTG Claude V. Christianson Deputy Chief of Staff, G-4, U.S. Army LTG Steven W. Boutelle Chief Information Officer, G-6, U.S. Army MG David F. Melcher Deputy Chief of Staff, G-8, U.S. Army MG Larry J. Lust Assistant Chief of Staff for Installation Management, U.S. Army MG N. Ross Thompson, III (Executive Agent) Director, Program Analysis and Evaluation RAND National Defense Research Institute Advisory Board Michael W. Wynne (Acting Chair) Under Secretary of Defense (Acquisition, Technology, and Logistics) Thomas Behling Principal Deputy Under Secretary of Defense for Intelligence VADM Arthur Cebrowski, USN (ret.) Director, Force Transformation, Office of the Secretary of Defense Lt Gen James Clapper, USAF (ret.) Director, National Geospatial-Intelligence Agency Jeanne B. Fites Deputy Under Secretary of Defense for Program Integration, Office of the Under Secretary of Defense (Personnel and Readiness) Ryan Henry Principal Deputy Under Secretary of Defense Policy MG Kenneth Hunzeker, USA Vice Director, J-8 Force Structure, Resources and Assessment Directorate Ken Krieg Director, Program Analysis and Evaluation, Office of the Secretary of Defense Trip Barber Deputy Director, Assessment Division, Office of the Deputy Chief of Naval Operations Cheryl Roby Deputy Assistant Secretary of Defense for Resources, Office of the Assistant Secretary of Defense (Networks and Information Integration) Anthony Tether Director, Defense Advanced Research Projects Agency Nancy Spruill (Executive Agent) Director, Acquisition Resources and Analysis, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) trustees RAND Board of Trustees Ann McLaughlin Korologos Robert Curvin Lydia H. Kennard John Edward Porter Chairman President (retired), Greentree Foundation Former Executive Director, Los Angeles World Airports Partner, Hogan and Hartson LLP Pedro Jose Greer, Jr., M.D. Philip Lader John S. Reed Assistant Dean, University of Miami School of Medicine Chairman, The WPP Group Chairman (retired), Citigroup; Chairman, New York Stock Exchange Rita E. Hauser Senior Advisor, The Carlyle Group Chairman Emeritus, The Aspen Institute; former Secretary of Labor Bruce Karatz Vice Chairman Chairman and CEO, KB Home Carl Bildt Former Prime Minister (Sweden) Harold Brown Counselor, Center for Strategic and International Studies Frank C. Carlucci Chairman Emeritus, The Carlyle Group Lovida H. Coleman, Jr. Partner, Sutherland, Asbill & Brennan LLP President, The Hauser Foundation, Inc. Karen Elliott House Publisher, The Wall Street Journal; Senior Vice President, Dow Jones and Company, Inc. Arthur Levitt Lloyd N. Morrisett President (retired), The Markle Foundation Donald B. Rice Chairman, President, and CEO, Agensys, Inc. James E. Rohr Paul H. O’Neill Chairman and CEO, PNC Financial Services Group Former Secretary of the Treasury Jerry I. Speyer Amy B. Pascal President, Tishman Speyer Properties, Inc. Paul G. Kaminski Chairman, Motion Picture Group, Sony Pictures Entertainment James A. Thomson Chairman and CEO, Technovation, Inc. Patricia Salas Pineda Jen-Hsun Huang President and CEO, NVIDIA Corporation President and CEO, RAND Corporation Group Vice President and General Counsel, Corporate Communications, Toyota Motor North America, Inc. Advisory Trustees Lewis M. Branscomb Walter E. Massey Paul G. Rogers Dennis Stanfill 1972–1982* 1983–1991; 1993 1979–1989 1978–1988 William T. Coleman, Jr. Michael M. May Henry S. Rowen Frank Stanton 1972–1975; 1977–1987 1972–1982; 1983–1993 1967–1972 1957–1967; 1968–1978 Michael Collins G. G. Michelson Brent Scowcroft Charles H. Townes 1979–1989 1984–1994; 1995–1998 1984–1988; 1993–1997 1965–1970 Richard P. Cooley Newton N. Minow Donald W. Seldin George H. Weyerhaeuser 1971–1981; 1982–1992 1965–1975; 1976–1986; 1987–1997 1975–1985; 1986–1993 1975–1985 Walter F. Mondale Eleanor B. Sheldon John P. White 1972–1982 1973–1977 Gustave H. Shubert Charles Zwick 1973–1989 1969–1979; 1980–1990; 1991–1999 Harold J. Haynes 1988–1989 Walter J. Humann 1979–1989; 1990–2000 1991–1993 J. Richard Munro 1984–1994 Former Trustees Peter S. Bing Sam Ginn Alfred L. Loomis Donald H. Rumsfeld 1988–1998; 1999–2002* 1997–1999 1948–1957 T. Keith Glennan Edwin M. McMillan 1977–1987; 1988–1998; 1999–2001 Frederick L. Anderson 1963–1974 1959–1969 1959–1969 J. Richard Goldstein Soia Mentschikoff J. Paul Austin 1951–1973 1972–1982 1971–1981 W. Richard Goodwin Philip M. Morse Robert F. Bacher 1972–1982 1948–1949; 1950–1962 1950–1960 Philip L. Graham Philip E. Mosely Solomon J. Buchsbaum 1961–1963 1951–1961; 1963–1972 1982–1992 Alan Greenspan Harvey S. Mudd Frank R. Collbohm 1986–1987 1949–1955 1948–1967 Caryl P. Haskins Lauris A. Norstad Mark W. Cresap, Jr. 1955–1965; 1966–1976 1963–1973 1960–1963 Lawrence J. Henderson, Jr. Ronald L. Olson Charles Dollard 1948–1971 1994–2004 1948–1961 William R. Hewlett James A. Perkins Lee A. DuBridge 1962–1972 1961–1971 1948–1961 Carla A. Hills Samuel R. Pierce, Jr. Michael Ference, Jr. 1983–1987 1976–1981 1963–1973 Edwin E. Huddleson, Jr. Thomas P. Pike Ann F. Friedlaender 1955–1965; 1966–1976; 1977–1984 1971–1976 John A. Hutcheson 1962–1972 1988–1992 H. Rowan Gaither, Jr. 1948–1959; 1960–1961 James C. Gaither 1984–1994; 1995–2000 Christopher B. Galvin 1994–2000 1948–1959 Charles F. Knight 1981–1986 Ernest O. Lawrence 1956–1958 Kenneth S. Pitzer Wesley W. Posvar 1973–1983 Don K. Price 1961–1971 David A. Shephard 1959–1963; 1965–1973 Kenneth I. Shine 1993–2002 Frederick F. Stephan 1948–1961 George D. Stoddard 1948–1963 Julius A. Stratton 1955–1965 George K. Tanham 1971–1982 Charles Allen Thomas 1959–1969 Paul A. Volcker 1993–2000 William Webster 1950–1960; 1961–1971 John F. Welch, Jr. 1991–1992 Albert D. Wheelon 1993-2001 Clyde E. Williams 1948–1963 Walter B. Wriston 1973–1983 Condoleezza Rice 1991–1997 *Dates indicate service as a RAND trustee. r a nd a nnua l r eport Financial Report f i n a nc i a l r e p o r t The RAND Corporation CONSOLIDATED STATEMENTS OF FINANCIAL POSITION with summarized financial information for the year ended September 28, 2003 (in thousands) ASSETS Current assets Cash and cash equivalents Receivables Billed and unbilled costs and fees Other receivables Prepaid expenses and other current assets September 26, 2004 September 28, 2003 $ $ Total current assets Property and equipment Land Buildings and improvements Leasehold improvements Equipment Construction in progress Less: Accumulated depreciation and amortization Net property and equipment Long-term investments Building project fund investments Other assets Total assets LIABILITIES AND NET ASSETS Current liabilities Accounts payable and other liabilities Unexpended portion of grants and contracts received Accrued compensation and vacation 5,727 8,681 39,824 5,979 4,267 32,837 3,661 6,473 55,797 51,652 1,334 213 6,753 33,498 105,437 1,334 183 6,518 28,505 53,699 147,235 (25,542) 90,239 (22,075) 121,693 68,164 159,289 38,605 11,983 141,255 87,686 9,988 $ 387,367 $ 358,745 $ 33,755 19,096 14,676 $ 32,618 15,074 13,887 Total current liabilities 67,527 61,579 Accrued postretirement benefit liability Long-term debt 11,471 130,177 11,148 130,184 Total liabilities Commitments and contingencies (Note 8) Net assets Unrestricted Operations Designated for investment Designated for special use 209,175 202,911 5,235 122,602 6,547 3,229 116,094 5,146 134,384 13,182 30,626 124,469 11,883 19,482 Total unrestricted Temporarily restricted Permanently restricted Total net assets Total liabilities and net assets The accompanying notes are an integral part of these consolidated financial statements. 178,192 $ 387,367 155,834 $ 358,745 r a nd a nnua l r eport The RAND Corporation CONSOLIDATED STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS with summarized financial information for the year ended September 28, 2003 (in thousands) For the Years Ended September 26, 2004 September 28, 2003 Unrestricted Net Assets Operations Total Designated Unrestricted Temporarily Permanently Restricted Restricted Total Total REVENUES, GAINS, AND OTHER SUPPORT Contracts and grants $ 208,305 $ — $ 208,305 $ — $ — $ 208,305 9,478 — 9,478 — — 9,478 7,926 — 2,938 2,938 491 — 3,429 3,783 Net realized gains on investments — 5,318 5,318 921 — 6,239 1,328 Net unrealized gains on investments — 3,265 3,265 631 — 3,896 9,671 Contributions 4,574 150 4,724 2,970 11,144 18,838 8,272 Other investment income 1,067 — 1,067 — — 1,067 1,886 Transfer of designated net assets to operations 3,762 (3,762) — — — — — Net assets released from restrictions due to satisfaction of program restrictions 3,714 — 3,714 (3,714) — — — 230,900 7,909 238,809 1,299 11,144 251,252 227,199 181,726 — 181,726 — — 181,726 174,218 44,568 — 44,568 — — 44,568 41,049 Fees Income on investments, net Total revenues, gains, and other support $ 194,333 EXPENSES Research Management and general 226,294 — 226,294 — — 226,294 215,267 Change in net assets before other item Total expenses 4,606 7,909 12,515 1,299 11,144 24,958 11,932 Other item—loss on sale of land (Note 8) (2,600) — (2,600) — — (2,600) — Change in net assets after other item Net assets at beginning of year Net assets at end of year $ 2,006 7,909 9,915 1,299 11,144 22,358 11,932 3,229 121,240 124,469 11,883 19,482 155,834 143,902 13,182 $ 30,626 $ 178,192 5,235 $ 129,149 $ 134,384 $ The accompanying notes are an integral part of these consolidated financial statements. $ 155,834 f i n a nc i a l r e p o r t The RAND Corporation CONSOLIDATED STATEMENTS OF CASH FLOWS with summarized financial information for the year ended September 28, 2003 (in thousands) For the Year Ended September 26, 2004 Cash flows from operating activities: Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities: Adjustment to postretirement benefit liability Depreciation Amortization Loss on disposition of property and equipment Contributions restricted for purchase of property and equipment Permanently restricted contributions Net realized/unrealized gains Exchange gains Decrease (increase) in billed and unbilled costs and fees Decrease (increase) in other receivables Increase in prepaid expenses and other current assets (Increase) decrease in other long-term assets Increase in accounts payable and other liabilities Increase (decrease) in unexpended portion of grants and contracts received Increase in accrued compensation, vacation, and retirement Decrease in other liabilities $ Net cash provided by operating activities Cash flows from investing activities: Purchase of investments Proceeds from sale of investments Purchases of building project fund investments Purchases for construction in progress Purchases of property and equipment Net cash used in investing activities Cash flows from financing activities: Contributions restricted for purchase of property and equipment Permanently restricted contributions Net repayments under line-of-credit Payment of bond issue costs Net cash provided by (used in) financing activities Effect of exchange rate changes on cash Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ The accompanying notes are an integral part of these consolidated financial statements. 22,358 For the Year Ended September 28, 2003 $ 11,932 323 4,404 85 — (378) (8,220) (10,135) (258) (6,987) (2,318) 2,206 (2,087) 1,380 169 4,260 720 102 — (355) (10,999) (720) 4,759 (1,399) (1,085) 602 12,074 4,022 789 — (3,521) 520 (697) 5,184 16,362 (97,253) 89,354 49,081 (53,112) (4,821) (22,602) 24,146 29,545 (37,734) (4,227) (16,751) (10,872) 378 8,220 — — — 355 (1,000) (192) 8,598 (837) 15 220 (2,954) 8,681 4,873 3,808 5,727 $ 8,681 r a nd a nnua l r eport The RAND Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Corporate Organization: RAND Corporation (RAND) is a nonprofit, tax-exempt corporation performing research and analysis funded by contracts, grants, and contributions. In addition, RAND conducts educational programs that provide graduate training. The consolidated financial statements of RAND include the accounts of two controlled affiliates: RAND Europe, a foundation domiciled in The Netherlands, and the Council for Aid to Education (CAE), a nonprofit organization in New York. All intercompany balances and transactions have been eliminated in consolidation. 2. Summary of Significant Accounting Policies: Fiscal Year. RAND’s fiscal reporting for both financial statement and tax purposes is based on a 52- or 53-week year ending on the Sunday closest to September 30. The fiscal years include operations for 52-week periods in 2004 and 2003. Basis of Presentation. The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with the American Institute of Certified Public Accountants Audit and Accounting Guide, “Not-for-Profit Organizations.” Net assets are classified into three categories according to donor-imposed restrictions, as follows: Permanently restricted—Net assets subject to donor-imposed stipulations that neither expire by passage of time nor can be fulfilled or otherwise removed by actions of RAND. Generally, the donors of these assets permit RAND to use all or part of the investment return on these assets. Temporarily restricted—Net assets whose use by RAND is subject to donor-imposed stipulations that either expire by passage of time or can be fulfilled and removed by actions of RAND. Unrestricted—Net assets that are not subject to donor-imposed stipulations. Unrestricted assets may be designated for specific purposes by action of the Board of Trustees. The financial statements include certain prior-year summarized comparative information in total but not by net asset category. Such prior-year information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with RAND’s financial statements for the year ended September 28, 2003, from which the summarized financial information was derived. Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amount of revenues, expenses, or other changes in net assets during the reporting period. Actual results could differ from these estimates. Revenue and Expense Recognition. Contract and grant revenues are recognized as the related services are performed in accordance with the terms of the contract or grant or using the percentage of completion method. Contributions, including unconditional promises to give, are recognized as revenue in the period received and are reported as increases in the appropriate category of net assets. Donor-restricted contributions that are received and either spent or deemed spent within the same fiscal year are reported as unrestricted revenue. Expenses are generally reported as decreases in unrestricted net assets. Expirations of donor-imposed stipulations or of board designations that simultaneously increase one class of net assets and decrease another are reported as transfers between the applicable classes of net assets. Concentrations of Risk. Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and therefore bear minimal credit risk. RAND derived 72 percent of its research revenues in fiscal years 2004 and 2003 from contracts, grants, and fees with agencies of the federal government. Cash and Cash Equivalents. RAND considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Property and Equipment. Property and equipment is stated at cost. Depreciation is computed by the straight-line method over the following estimated useful lives of the assets: 5 to 40 years for building and improvements and 3 to 20 years for equipment. Leasehold improvements are amortized by the straight-line method over the shorter of the estimated useful lives of the assets or the term of the lease. Construction in progress will be amortized over the estimated useful lives of the respective assets when they are ready for their intended use. When assets are retired, the assets and related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in operations. As of September 26, 2004, and September 28, 2003, approximately $11,913,000 and $7,952,000, respectively, of fully depreciated assets were in use. Investments. All investments of permanently restricted net assets and unrestricted net assets board designated for investment are pooled in a long-term investment fund. Income on pooled investments is allocated to the general use or individual special use funds based on the average balance for each fund (see Note 9). The percentage of board-designated funds distributed for unrestricted use was 3.75 percent and 4.25 percent in fiscal years 2004 and 2003, respectively, based on the trailing twelve-quarter market value of the unrestricted funds. f i n a nc i a l r e p o r t Gains and losses on investments and investment income are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation. Building Project Fund Investments. The net proceeds from the tax-exempt bond issuance (see Note 7) have been invested under a collateralized flexible draw investment agreement. The interest rate is based on the Bond Market Association Municipal Swap Index Rate plus sixty-five (65) basis points. Other investment income includes interest earned of $1,042,000 and $1,866,000 on these investments in fiscal years 2004 and 2003, respectively. Withdrawals are made to fund the Santa Monica building project. Bond Issuance Costs. Bond issuance costs represent expenses incurred in connection with issuing RAND’s revenue bonds (see Note 7) and are being amortized over the term of the related bond issue. Unamortized costs were $3,173,000 and $3,265,000 at September 26, 2004, and September 28, 2003, respectively, and are included in other assets on the consolidated statements of financial position. Income Tax Status. RAND is exempt from income tax under Section 501(c)(3) of the U.S. Internal Revenue Code and corresponding California provisions and has qualified for the 50 percent charitable contributions limitation. RAND has been classified as an organization that is not a private foundation under Section 509(a)(1) and has been designated a “publicly supported” organization under Section 170(b)(1)(A)(vi) of the Internal Revenue Code. Foreign Currency Translation. The assets and liabilities of RAND Europe are translated at year-end exchange rates; transactions are translated at the average exchange rates during the year. The accumulated unrealized gain included in unrestricted net assets from operations on the statement of financial position was $442,000 and $199,000 as of September 26, 2004, and September 28, 2003, respectively. Gains and losses from foreign currency translation for the period are included in the statement of activities and changes in net assets. Supplemental Cash Flow Information. Cash paid for interest was $1,180,000 in fiscal year 2004 and $1,779,000 in fiscal year 2003. These amounts are net of capitalized interest of $1,470,000 and $544,000, in the respective years. Reclassifications. Certain prior-year amounts have been reclassified to conform with the current-year presentation. 3. Billed and Unbilled Costs and Fees: The following table summarizes the components of billed and unbilled contract and grant costs and fees (in thousands): U.S. government agencies Billed Unbilled September 26, 2004 September 28, 2003 $ $ State, local, and private sponsors Billed Unbilled 9,215 10,554 19,769 19,539 10,983 9,072 6,909 6,389 20,055 $ 7,123 12,416 39,824 13,298 $ 32,837 Unbilled amounts principally represent recoverable costs and accrued fees billed in October 2004 and October 2003, respectively. No significant contract terminations are anticipated at present, and past contract terminations have not resulted in significant unreimbursed costs. 4. Contributions Receivable: At September 26, 2004, and September 28, 2003, RAND included $7,706,000 and $3,437,000, respectively, of unconditional promises to give in the financial statements as part of other receivables and other assets. The receivables are recorded net of the discount for future cash flows. The discount rate applied was 5 percent for pledges due within five years and 7 percent for pledges due after five years. Receivables expected in one year or less are included in other receivables and receivables expected after one year are included in other assets on the consolidated statements of financial position. Realization of the pledges is expected in the following periods (in thousands): In one year or less Between one year and five years Five years or more Less discount September 26, 2004 September 28, 2003 $ 4,315 2,217 3,156 (1,982) $ 2,218 1,307 — (88) $ 7,706 $ 3,437 Contributions receivable are intended for the following uses (in thousands): Temporarily restricted Permanently restricted September 26, 2004 September 28, 2003 $ 4,454 3,252 $ 3,109 328 $ 7,706 $ 3,437 r a nd a nnua l r eport During the fiscal year ended September 26, 2004, RAND received payments of prior-year pledges in the amount of $1,418,000. No allowance for uncollectible pledges was deemed necessary at September 26, 2004, or September 28, 2003. Donors have made conditional promises to give of $4,603,000 and $4,537,000 as of September 26, 2004, and September 28, 2003, respectively. These conditional pledges, which include revocable deferred gifts, are not recorded in these consolidated financial statements. 5. Long-Term Investments: Cash and cash equivalents included in long-term investments consist of commercial paper, money market funds, and other short-term investments and are carried at cost, which approximates fair value. Shares of bond funds and equity funds are presented at fair value. These funds consist of investments in both domestic and foreign equity securities and bonds. Approximately 24 percent of the long-term assets consist of foreign stocks and bonds. RAND also has equity interest in alternative investments that invest in securities and other instruments, some of which do not have a readily available market value. The alternative investments are carried at RAND’s portion of each investment’s net book value which approximates fair value. Cost of securities sold is determined by the specific identification method. As of September 26, 2004, and September 28, 2003, RAND had commitments outstanding to purchase alternative investments of $702,000 and $962,000, respectively. Investment income is shown net of related expenses of $617,000 and $404,000, for the fiscal years ended September 26, 2004, and September 28, 2003, respectively. Long-term investments consist of the following (in thousands): Cash and cash equivalents September 26, 2004 September 28, 2003 $ $ 6,228 78,791 75,579 Shares of equity funds, at fair value (cost, 2004—$ 37,377, and 2003—$ 34,607) 46,356 37,037 Alternative investments (cost, 2004—$ 19,842, and 2003—$ 15,224) 29,644 $ 6. 4,498 Shares of bond funds, at fair value (cost, 2004—$ 78,479, and 2003—$ 70,031) 159,289 22,411 $ 141,255 Postretirement Benefits Other Than Pensions: In addition to providing certain retirement benefits, RAND provides health care benefits to certain employees who retire having met the required age and years of service with RAND. This coverage also applies to their dependents. Retirees may elect coverage under the Preferred Provider Organization, various HMOs, or reimbursement of individually purchased Medigap policies. Medicare becomes the primary coverage for retirees when they reach age 65. Retirees and dependents share substantially in the cost of coverage. RAND retains the right, subject to existing agreements, to change or eliminate these benefits. RAND has not yet determined whether the benefits provided by this plan are actuarially equivalent to the drug benefits provided under the Medicare Prescription Drug Improvement and Modernization Act of 2003 (the Act). Therefore, the effects of the Act are not reflected in the accrued liability and net periodic benefit cost of the plan. The following table sets forth the plan’s funded status reconciled with the amount shown in the consolidated statements of financial position (in thousands): Change in benefit obligation Benefit obligation at beginning of year Service cost Increase due to passage of time Plan participants’ contributions Amendments Actuarial (gain) loss Benefits paid September 26, 2004 September 28, 2003 $ $ Benefit obligation at end of year Change in plan assets Fair value of plan assets at beginning of year Actual return on plan assets Employer contributions Plan participants’ contributions Benefits paid Fair value of plan assets at end of year Funded status Unrecognized net actuarial gain Unrecognized prior service cost $ 16,586 548 1,036 277 — 2,617 (893) 12,428 378 824 227 — 3,496 (767) 20,171 16,586 3,863 328 950 277 (893) 3,293 490 620 227 (767) 4,525 3,863 (15,646) 4,356 (181) (12,723) 1,850 (275) (11,471) $ (11,148) f i n a nc i a l r e p o r t The health care cost trend rate assumption has a significant effect on the amounts reported. Increasing the assumed health care cost trend rates by one percentage point in each year would increase the service cost and increase due to passage-of-time components of the fiscal year 2004 expense by $367,000 and the accumulated postretirement benefit obligation as of September 26, 2004, by $3,025,000. Decreasing the assumed health care cost trend rates by one percentage point in each year would decrease the service cost and decrease due to passage-of-time components of the fiscal year 2004 expense by $294,000 and the accumulated postretirement benefit obligation as of September 26, 2004, by $2,493,000. For measuring the liabilities, the health care cost trend rates were assumed to be 9.5 percent for the fiscal year ended September 26, 2004, for pre-65 and post-65 benefits, gradually declining to 5.0 percent for both after 7 years, and remaining at that level thereafter. The APBO discount rate was 6.10 percent and 6.35 percent at September 26, 2004, and September 28, 2003, respectively. The net periodic postretirement benefit cost (credit) for fiscal years ended September 26, 2004, and September 28, 2003, included the following components (in thousands): 2004 Service cost-benefits attributed to service during the period Increase in the accumulated postretirement benefit obligation to recognize the effects of the passage of time Return on plan assets Recognition of gain Recognition of prior service cost $ 548 2003 $ 1,036 (318) 85 (93) $ 1,258 378 824 (266) (70) (93) $ 773 RAND contributes to a Voluntary Employee Benefit Association irrevocable trust that is used to partially fund health care benefits for future retirees. In general, retiree health benefits are paid as covered expenses are incurred. 7. Borrowing Arrangements: Revenue Bonds. In July 2002, RAND issued $130,000,000 of tax-exempt revenue bonds to finance construction of its new Santa Monica facility. The payment of the principal and interest on the bonds is insured by a third party. Long-term debt, including unamortized bond premium, is as follows (in thousands): California Infrastructure and Economic Development Fixed Rate Revenue Bonds, Series 2002A, issued in the original principal amount of $32,500,000, in connection with the construction of a new facility in Santa Monica, California, in July 2002; interest rates ranging from 3.50% to 5.50%; annual principal payments ranging from $345,000 to $1,905,000, beginning April 1, 2006, and ending April 1, 2042, including unamortized bond premium of $177,000 and $184,000 as of September 26, 2004, and September 28, 2003, respectively September 26, 2004 September 28, 2003 $ 32,677 $ 32,684 $ 130,177 $ 130,184 $ — 2,415 1,785 1,835 1,910 122,055 $ 130,000 California Infrastructure and Economic Development Bank Variable Rate Revenue Bonds, Series 2002B, issued in the original principal amount of $97,500,000, in connection with the construction of a new facility in Santa Monica, California, in July 2002; weighted average interest rate of 1.05% inception to date as of September 26, 2004; annual principal payments ranging from $1,430,000 to $4,400,000, beginning April 1, 2006, and ending April 1, 2042 97,500 97,500 Annual bond principal payments are required in the following fiscal years (in thousands): 2005 2006 2007 2008 2009 Thereafter Accrued interest payable relating to the bonds was $937,000 and $896,000 as of September 26, 2004, and September 28, 2003, respectively. Line of Credit. RAND has an uncollateralized line of credit in the principal amount of $18,000,000 at September 26, 2004, which expires in June 2005. The line of credit contains covenants that require RAND to maintain a minimum amount of liquid assets and tangible net worth. There were no amounts outstanding at September 26, 2004, and September 28, 2003. Under the terms of the credit agreement, interest is payable monthly at either the prime rate less .75 percent or the LIBOR rate plus 1.5 percent, as selected by RAND. The largest r a nd a nnua l r eport amounts drawn on the line-of-credit agreement were $11,700,000 and $8,400,000 in fiscal years 2004 and 2003, respectively. Interest expense was $46,000 and $29,000 for the fiscal years ended September 26, 2004, and September 28, 2003, respectively. 8. Commitments and Contingencies: Lease Commitments. Operating lease commitments, net of sublease income of $1,922,000, are as follows (in thousands): 2005 2006 2007 2008 2009 Thereafter $ 7,818 8,649 8,701 8,330 7,972 46,372 $ 87,842 Future minimum rentals are primarily comprised of microcomputer, equipment, office, and warehouse space leases. All property leases generally require RAND to pay for utilities, insurance, taxes, and maintenance. RAND’s net rental expense was $10,380,000 and $10,439,000 for the fiscal years ended September 26, 2004, and September 28, 2003, respectively. Construction Commitment. RAND is obligated for $77,185,000 under the Final Guaranteed Maximum Price Contract related to the construction of a new headquarters facility in Santa Monica, California. As of September 26, 2004, and September 28, 2003, $74,039,000 and $33,689,000 had been expended under the contract and recorded as construction in progress. Also included in construction in progress are $3,023,000 and $1,552,000 for capitalized interest as of September 26, 2004, and September 28, 2003, respectively. Other Commitments. Contract costs billed to government clients are subject to audit by the Defense Contract Audit Agency (“DCAA”). Resulting indirect cost adjustments, if any, are prorated to all contracts. Contract costs billed prior to September 28, 2003, have been audited and accepted. To date, there have been no significant cost disallowances. In the opinion of management, contract costs billed subsequent to September 28, 2003, are allowable, and any potential cost disallowance would not materially affect RAND’s consolidated financial position or results of operations. RAND has certain contingent liabilities with respect to claims arising from the ordinary course of business. In the opinion of management, such contingent liabilities will not result in any loss that would materially affect RAND’s financial position or results of operations. Environmental Remediation. Under the terms of an agreement with the City of Santa Monica (the City) for the sale of land owned by RAND, RAND is responsible for the demolition of existing buildings on the site and environmental remediation with respect to the underlying land. In addition, RAND will be entitled to reimbursement from the City of specified entitlement costs, including costs of energy-efficient construction of the new headquarters building. During 2004, RAND reevaluated its best estimate of costs related to the demolition and remediation and, based on the new information available, accrued additional expenses and liability of $2,600,000 included in other item—loss on sale of land and other liabilities. The estimated outstanding liability associated with the demolition and environmental remediation, net of the receivable for specified entitlement costs, is $7,175,000 and $4,637,000 as of September 26, 2004, and September 28, 2003, respectively. In accordance with the terms of the agreement, an escrow account has been established to ensure performance of these matters. 9. Net Assets: Board-Designated Net Assets. Board-designated net assets are available for the following purposes (in thousands): Designated for investment September 26, 2004 September 28, 2003 $ $ Designated for special use: RAND Education RAND Institute for Civil Justice National Security Research and Training President’s Fund RAND Center for Russia and Eurasia Lectureship on Science Policy Pardee RAND Graduate School Paul O’Neill Alcoa Professorship in Policy Analysis Pardee Center for Longer Range Global Policy Other 122,602 2,139 1,946 1,669 478 105 100 43 31 24 12 1,027 1,834 1,381 407 364 80 31 — — 22 6,547 $ 129,149 116,094 5,146 $ 121,240 f i n a nc i a l r e p o r t Temporarily Restricted Net Assets. Temporarily restricted net assets are available for the following purposes (in thousands): Pardee RAND Graduate School RAND Center for Middle East Public Policy National Security Research and Training RAND Center for Russia and Eurasia: RAND Business Leaders Forum General support RAND Center for Domestic and International Health Security RAND Headquarters RAND Center for Asia Pacific Policy RAND Health RAND Child Policy Paul O’Neill Alcoa Professorship in Policy Analysis RAND Institute for Civil Justice Pardee Center for Longer Range Global Policy RAND Center for Terrorism Risk Management Policy Lectureship on Science Policy RAND Alumni RAND Drug Policy Research Center RAND Infrastructure, Safety, and Environment RAND Education Other September 26, 2004 September 28, 2003 $ $ $ 2,252 2,240 1,610 1,270 2,778 1,603 1,272 396 1,490 — 1,224 904 683 542 455 348 286 255 168 136 133 119 44 31 84 2,032 153 707 274 — 201 358 449 30 144 121 214 32 14 13 13,182 $ 11,883 Permanently Restricted Net Assets. Permanently restricted assets are shown below by the purpose designated by the donor. The assets are invested in perpetuity and the income is available to support the restricted activities (in thousands): Pardee RAND Graduate School: General support Awards and Scholarships National Security Research and Training RAND Institute for Civil Justice Pardee Center for Longer Range Global Policy Paul O’Neill Alcoa Professorship in Policy Analysis RAND—general support RAND Center for Russia and Eurasia Lectureship on Science Policy RAND Education Other September 26, 2004 September 28, 2003 $ 10,420 2,254 4,500 4,125 3,670 2,479 2,410 250 246 241 31 $ 1,574 970 4,500 4,125 3,670 2,479 1,396 250 246 241 31 $ 30,626 $ 19,482 10. Employee Retirement Plans: RAND has three defined contribution employee plans: a Qualified Retirement Plan (“QRP”), a Supplemental Retirement Annuity Plan (“SRAP”), and a Nonqualified Supplementary Plan (“NSP”). Most full-time, regular employees are eligible to participate in the QRP and SRAP. Certain employees are eligible to participate in the NSP. RAND has reserved the right to terminate the plans at any time, but in such an event, the benefits already purchased by the participant and contributions already made by RAND would not be affected. The QRP and the NSP are entirely RAND-financed. RAND’s contributions to the Plans for eligible employees range from 5 percent to 14 percent of salaries, depending on the level of wages and age of the participating employee. RAND’s contributions to the QRP vest at the earlier of retirement or four years of service. Vesting begins after two years of service and increases weekly to 100 percent at the end of four years of service. The NSP vests under various conditions specified in the plan. All contributions made by RAND are charged to operations. RAND’s contributions were $8,865,000 and $8,590,000 for the fiscal years ended September 26, 2004, and September 28, 2003, respectively. The SRAP only requires employee contributions and RAND does not contribute to this plan. 11. Subsequent Event: On September 29, 2004, RAND obtained the certification of occupancy for its new facility in Santa Monica, California. In relation to that event, $3,127,000 of buildings and improvements and $6,387,000 of equipment as of September 26, 2004, were sold or retired. A loss of $323,000 was recorded in fiscal year 2005 relating to those transactions. Construction in progress of $105,437,000 was placed in service in fiscal year 2005. For more information about philanthropic support to RAND Photo Credits Call 800.757.4618 AP/WIDE WORLD PHOTOS/CHITOSE SUZUKI Young cellist, Symphony Hall, Boston, November 2004 (page 4) Write The RAND Corporation Development Office Alan Hoffman, Vice President for External Affairs 1776 Main Street P.O. 2138 Santa Monica, CA 90407-2138 Email Alan_Hoffman@rand.org AP/WIDE WORLD PHOTOS/U.S. COAST GUARD Search mission off Nantucket, Massachusetts, December 2004 (page 6) AP/WIDE WORLD PHOTOS/RIC FRANCIS Suburban sprawl, Corona, California, December 2002 (page 9) U.S. DEPARTMENT OF DEFENSE/TECHNICAL SERGEANT JUSTIN D. PYLE/U.S. AIR FORCE Staff Sergeant Sally McCabe, Lackland Air Force Base, Texas, October 2004 (page 11) Visit us on the Web http://www.rand.org/giving/ AP/WIDE WORLD PHOTOS/MICHAEL ALBANS Memorial service, World Trade Center site, New York City, September 2004 (page 13) AP/WIDE WORLD PHOTOS/NICK UT Holiday travelers, Los Angeles International Airport, December 2004 (page 15) To order RAND publications cited in this document AP/WIDE WORLD PHOTOS/JASON HIRSCHFELD Call 310.451.7002 or toll free 877.584.8642 Reading lesson, Newport News, Virginia, May 2004 (page 16) AP/WIDE WORLD PHOTOS/EMILIO MORENATTI Fax 310.451.6915 Woman reading Koran, Kabul, Afghanistan, October 2004 (page 18) Email order@rand.org DIANE BALDWIN Sheila Kirby (inside front cover) Or send order to Distribution Services The RAND Corporation P.O. Box 2138 Santa Monica, CA 90407-2138 James Thomson and Ann McLaughlin Korologos (page 2) Kevin McCarthy (page 5) Ashlesha Datar and Roland Sturm (page 8) Beth Asch and James Hosek (page 10) Lloyd Dixon (page 12) Donald Stevens (page 14) Visit RAND on the Web www.rand.org Thomas K. Glennan, Jr. (page 17) Narayan Sastry, Jeff Marquis, and Nell Griffith Forge (page 28, left) Amy Pascal and Tony Pascal (page 32) Pardee RAND Graduate School (page 36) Bruce Hoffman (back cover) 2004 Annual Report Team CRIS MOLINA David Ortiz and Henry Willis (page 7) PEG SCHUMACHER Special Projects Manager, Office of External Affairs Angel Rabasa (page 19) Dan Gonzales, Terri Tanielian, and Walt Perry (page 28, right) Frank Carlucci and Rollie Lal (page 33) JOHN GODGES Communications Analyst JON SOOHOO STEVE BAECK Bruce Karatz (page 31) Editor RON MILLER Art Director PETER SORIANO Design and Production BUILDING ON A LEGACY (Front cover) RAND researcher Harriet Kagiwada, circa 1960 (Inside front cover) Sheila Kirby, Associate Director, RAND Education, circa 2004 (Back cover) Bruce Hoffman, Director, Washington Office, circa 2004 (Inside back cover) RAND researcher Amron Katz, circa 1950 H I G H L I G H T S O F R A N D H I G H L I G H T S R E S E A R C H Efficiency and Economy in Government Through New Budgeting and Accounting Procedures Air Defense Strategic Offensive Forces Study Missiles vs. Aircraft Packet Switching: Seed of the Internet Computer Security Information Processing Language (IPL) Problem-Solving with Monte Carlo Techniques The Operational Code of the Politburo First On-Line, Time-Shared Computer System Reconnaissance Satellites JOHNNIAC Digital Computer Selection and Use of Strategic Air Bases Preliminary Design of an Experimental World-Circling Spaceship (1946) Strategic Bombing Analysis Aerial Refueling Exotic Materials and Fuels Economics of Defense in the Nuclear Age History of Soviet Nuclear Research Systems Analysis Systems Research Laboratory RAND Tablet: Communicating with Computers in Real Time Via Hand-Printed Text A Proposed Strategy for the Acquisition of Avionics Equipment Future of Cable Television System Analysis and Public Policy Space Systems Mapping the Planets Electromagnetic Pulse (EMP) Alternative Approaches to the Defense of Europe Game Theory A Million Random Digits with 100,000 Normal Deviates Strategy in the Missile Age Space Handbook Strategic ForceBuilding and Crisis Management JOSS (JOHNNIAC Open Shop System) Delphi Method CORONA Project Dynamic Programming Expert Judgment Water Supply: Economics, Technology, and Policy Air-Launched vs. Ground-Launched Satellite Boosters I N S T I T U T I O N A L First Project RAND letter contract (to Douglas Aircraft Co.) AR_cover_final_cgla.indd 2 All-Volunteer Force Private Security Industry Studies for ARPA, NASA, OSD, AID, NSF, and NIH begin Headquarters opens at 1700 Main Street, Santa Monica New York CityRAND Institute established Systems Development Division created; spun off as SDC in 1957 Domestic Research Division established; includes programs on Education, Health, and Labor & Population Computer Resource Management Study Ballistic Missile Basing Alternatives RAND Strategy Assessment Center A Framework for Defense Planning: Strategies-to-Tasks Punitive Damages Velocity Management Air Crash Litigation Appropriateness of Acute Medical Care Effective Teacher Selection Toward Ethics and Etiquette for Electronic Mail Evaluation of CHAMPUS Reform Initiative Health Insurance and the Demand for Medical Care Cost and Use of Capitated Medical Services Recruiting Effects of Army Advertising Costs of Treating AIDS Under Medicaid Closing the Gap: Forty Years of Economic Progress for Blacks Malaysian Family Life Survey Economics of Drug Dealing Survivability and Utility of Tactical Air Next Phase of U.S.–Soviet Relations Equity in Public School Finance Terrorism in the United States I N S T I T U T I O N A L Emerging Technology and Arms Control Decline of U.S. Machine Tool Industry Urban America: Policy Choices for Los Angeles and the Nation Leadership Change in North Korean Politics Costs of Asbestos Litigation Water Resource Management in the Netherlands Three Strikes and You’re Out Lessons from the Gulf War Defense Base Closures Preparing for Conflict in the Information Age Training Emergency Responders Inadequate Compensation for Worker Injuries Nation-Building in Iraq Health Care Quality Military Transformation Education Reform In Qatar Rapidly Deployable Ground Forces Costs of Obesity Treatment of Depression Interventions in the First Three Years of Life Fiscal Federalism and the Social Safety Net Sexual Orientation and U.S. Military Personnel Policy Reducing Violent Gang-Related Crime Changing Role of Information in Warfare Large-Scale Education Testing Universal Access to E-Mail: Feasibility and Societal Implications Homeland Security Military Operations Other Than War Mandatory Minimum Sentences for Drug Cases Judicial Case Management Under the Civil Justice Reform Act The Changing Workplace Senior Leadership Development in the DoD Counterterrorism How Americans Were Affected by the Events of 9/11 California Energy Crisis Public Health Preparedness Safety of Ephedra Education Vouchers and Charter Schools Quadrennial Defense Review Alternative for the Next Generation Gunship M I L E S T O N E S National Defense Research Institute and the Arroyo Center established Cost of Prescription Drug Plans Fiscal Crisis in Higher Education Superfund and Transaction Costs Center for Domestic and International Health Security created European American Center opens (later becomes RAND Europe) RAND opens an office in Pittsburgh, Pennsylvania Critical Technologies Institute established Institute for Civil Justice established Unequal Wealth and Incentives to Save NATO Expansion Decentralization and Accountability in Public Education Social Security Concerns Lean Logistics HIV Cost and Services Utilization Study (HCSUS) Parity Legislation for Mental Health Quality of Health Care Operational Issues for GPS Medicare Payment for Rehabilitation Effective Power Generation Under Deregulation FORWARD–Freight Options for Road, Water, and Rail for the Dutch No-Fault Approaches to Compensating Auto Accident Injuries Workers’ Compensation and Workplace Safety Preventive Dental Care for Children Immigration: Effects on Education, Jobs, and Government Spending The New Calculus: Analyzing Airpower’s Changing Role Prevalence, Predictability, and Policy Implications of Recidivism LHX: Army Light Attack Helicopter Revitalization of Cleveland’s Economy National Security Research Division established Washington Defense Research Division established Dyna-METRIC Impact of Deductibles on the Demand for Medical Care Conventional Arms Control Revisited Strategic Defense and Deterrence Resolution of Medical Malpractice Claims RAND Graduate School founded Court-Centered Arbitration Use and Misuse of California’s Water Resources Scheduling Aircrews and Aircraft Health Insurance Experiment Soviet Military Research and Development Career Criminals Policy Options and the Impact of National Health Insurance R A N D First non–Air Force study (for the Atomic Energy Commission) Computer Privacy and Security STAR: Impact of Alternative Intercity Short-Haul Transportation Systems Simulations Using SIMSCRIPT Teen Drug Abuse and Smoking Prevention: Project ALERT Asian Security: Policies for a Time of Transition M I L E S T O N E S RAND Corporation established Tactical Air Capabilities Strategic Airlift Needs and Alternatives for the 1980s Evaluations and Options for Vietnam Federal Programs Supporting Educational Change Vulnerability of U.S. Army Equipment Prepositioned in Central Europe Housing Assistance Supply Experiment R E S E A R C H Civil Jury Verdicts and Awards Red Strategic Campaign Analysis Water Quality Simulation Model New York City Police Project Soviet Cybernetics Technology R A N D Alternative Logistics Structures: ANALOGS 80 Air Reserve Forces Study ICBM Modernization and Basing Concepts System Acquisition Air Force Health Care System Space Defense NATO Force Planning PPBS Air Force Long-Range Planning Studies Sea-Based vs. LandBased Tactical Air Remote Area Conflict Remotely Piloted Vehicles Manpower and Personnel Policies Military R&D Policies Design of Multiple Independently Targetable Reentry Vehicles Defense of the Tactical Air Force in Europe Handbook on the Theory of Games Linear Programming and Extensions Detecting Nuclear Tests R A N D TSAR/TSARINA Air Base Attack Simulation Models Strategic Analysis: The Long-Term Competition METRIC O F RAND division on Infrastructure, Safety, and the Environment established RAND-Qatar Policy Institute opens RAND moves into new headquarters at 1776 Main Street, Santa Monica 4/21/05 3:26:49 PM objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. Corporate Headquarters 1776 Main Street P.O. Box 2138 Santa Monica, CA 90407-2138 V 310.393.0411 F 310.393.4818 Washington Office 1200 South Hayes Street Arlington, VA 22202- 5050 V 703.413.1100 F 703.413.8111 annual report The RAND Corporation is a nonprofit research organization providing Building on a Leg acy Pittsburgh Office 201 North Craig Street Suite 202 Pit tsburgh, PA 15213 -1516 V 412.683.2300 F 412.683.2800 New York Office 215 Lexington Avenue, 21st Floor New York, NY 10016 - 6023 V ( Council for Aid to Education ): 212.661.5800 V ( New York External Af fairs ): 212.661.3166 F 212.661.9766 RAND - Qatar Policy Institute P.O. Box 23644 Doha, Qatar V +974.492.7400 F +974.492.7410 RAND Europe—Berlin Uhlandstrasse 14 10623 Berlin Germany V +49.30.310.1910 F +49.30.310.19119 RAND Europe—Cambridge Graf ton House 64 Maids Causeway Cambridge CB5 8DD United Kingdom V +44.1223.353.329 F +44.1223.358.845 RAND Europe—Leiden New tonweg 1 2333 CP Leiden The Netherlands V +31.71.524.5151 F +31.71.524.5191 w w w.rand.org R AR_cover_final_cgla.indd 1 annual report 4/21/05 3:25:49 PM objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. Corporate Headquarters 1776 Main Street P.O. Box 2138 Santa Monica, CA 90407-2138 V 310.393.0411 F 310.393.4818 Washington Office 1200 South Hayes Street Arlington, VA 22202- 5050 V 703.413.1100 F 703.413.8111 annual report The RAND Corporation is a nonprofit research organization providing Building on a Leg acy Pittsburgh Office 201 North Craig Street Suite 202 Pit tsburgh, PA 15213 -1516 V 412.683.2300 F 412.683.2800 New York Office 215 Lexington Avenue, 21st Floor New York, NY 10016 - 6023 V ( Council for Aid to Education ): 212.661.5800 V ( New York External Af fairs ): 212.661.3166 F 212.661.9766 RAND - Qatar Policy Institute P.O. Box 23644 Doha, Qatar V +974.492.7400 F +974.492.7410 RAND Europe—Berlin Uhlandstrasse 14 10623 Berlin Germany V +49.30.310.1910 F +49.30.310.19119 RAND Europe—Cambridge Graf ton House 64 Maids Causeway Cambridge CB5 8DD United Kingdom V +44.1223.353.329 F +44.1223.358.845 RAND Europe—Leiden New tonweg 1 2333 CP Leiden The Netherlands V +31.71.524.5151 F +31.71.524.5191 w w w.rand.org R AR_cover_final_cgla.indd 1 annual report 4/21/05 3:25:49 PM
