IMPORTANCE OF PLACE
Why the New Research on Mobility Matters: An Economist’s View
By Justin Wolfers
Hundreds of studies have demonstrated that the odds of economic success vary across neighborhoods. The far more difficult question is whether that’s because neighborhoods nurture success (or failure), or whether they just attract those who would succeed (or fail) anyway.
A new study by the Harvard economists Raj Chetty and Nathaniel Hendren, when read in combination with an important study they wrote with Lawrence Katz, makes the most compelling case to date that good neighborhoods nurture success. (The Upshot has just published a package of articles and interactives on the study.)
Let me be upfront about my own reading: These two new studies are the most powerful demonstration yet that neighborhoods — their schools, community, neighbors, local amenities, economic opportunities and social norms — are a critical factor shaping your children’s outcomes. It’s an intuitive idea, although the earlier evidence for it had been surprisingly thin. As Sean Reardon, a professor of education and sociology at Stanford, said of the study, “I think it will change some of the discussion around how where children grows up matters.”
Why is the new research so important?
I will start with the smaller of their two studies, which is the very rare case in which the federal government ran an experiment to test whether a policy idea actually worked. In the Moving to Opportunity experiment in the mid-to-late 1990s, 4,600 families living in public housing entered a lottery in which the winners were offered a voucher that enabled them to move to better neighborhoods.
Because any differences between lottery winners and losers are random, many social scientists view experiments like this as the gold standard for evidence. Consequently, the results from this experiment have been closely watched. Early findings had been disappointing, with no effect on the employment and earnings of parents, some positive effects seen on their physical and mental health, and few notable effects on their children. But the new studies provide a far more optimistic lens for interpreting this evidence.
Those earlier analyses grouped children who moved to a neighborhood as toddlers with those who moved in their late teens. So comparing all of the children whose parents won the lottery with all of those whose parents lost showed small effects. Yet if what matters are years of exposure to a good neighborhood — a hypothesis strongly suggested by the second of these two studies — then the effects might be very different, as those who moved as toddlers enjoyed most of their childhood in better neighborhoods, while those who moved as teens received few such benefits yet still had to deal with the disruption of moving.
Armed with this hypothesis and also newer data on the longer-run outcomes of these children, Mr. Chetty, Mr. Hendren and Mr. Katz reanalyzed the outcomes of the same families. (Full disclosure: Lawrence Katz was my Ph.D. adviser.)
And the findings are remarkable. In particular, the previous results actually hide two quite distinct findings, one positive and one negative. The children who moved when they were young enjoyed much greater economic success than similarly aged children who had not won the lottery. And the children who moved when they were older experienced no gains or perhaps worse outcomes, probably the result of a disruptive move, paired with few benefits from spending only a short time in a better neighborhood.
The sharpest test comes from those who won an experimental housing voucher that could be used only if they moved to low-poverty areas. Here the findings are striking, as those who moved as a result of winning this voucher before their teens went on to earn 31 percent more than those who did not win the lottery. They are also more likely to attend college. Other families were awarded Section 8 housing vouchers, which subsidize renting a house or apartment. But because they did not require the winners to move to better parts of the city, people typically moved to neighborhoods that were better but perhaps by only half as much. As a result, the eventual income gains to the preteen children who won this the lottery were about half as large.
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The Harvard economics professor Raj Chetty.Credit…Evan McGlinn for The New York Times
But those who were teens when their families won the lottery — the typical child was 15 — saw few years in their better neighborhoods and also had to deal with the disruption of moving. A result is that their incomes were 13 to 15 percent lower, although there is sufficient uncertainty around this estimate that this decline might merely be due to chance. It is a cruel fact that the waiting lists for public housing vouchers can mean that the families wanting to move when their children are young enough to benefit will get that opportunity only several years later when the benefits are small or nonexistent.
The girls raised in better neighborhoods are also more likely to grow up to marry, and when they have children, are more likely to maintain a relationship with the father. They are also more likely to live in better neighborhoods as adults. This suggests that the next generation — the grandchildren of the winners of this lottery — are more likely to be raised by two parents, to enjoy higher family incomes and to spend their entire childhood in better neighborhoods. That is, the gains from this policy experiment are likely to persist over several generations.
All told, this re-analysis transforms what was previously seen as influential evidence that neighborhoods are unimportant into the more nuanced finding that moving while young can be tremendously beneficial. Indeed, the net present value of the extra earnings that will eventually accrue to a child who moved at age 8 is $99,000, meaning that for a family with two children, the program yields $198,000 in extra earnings.
The extra tax that these two children will eventually pay is probably $22,000, more than enough to offset the extra cost of the voucher program, relative to the alternative of public housing.
It is rare to see social science overturn old beliefs so drastically. It happened because these scholars returned to an old experiment with a fresh perspective, based on the idea that what matters is how long children are exposed to good or bad neighborhoods. But is this the right perspective?
Here’s where the second study is critical. While the conclusions of the Moving to Opportunity project are based on following only a few thousand families, Mr. Chetty and Mr. Hendren use earnings records to effectively track the careers and neighborhoods of five million people over 17 years.
Instead of contrasting the outcomes of families in different areas — which may simply reflect different families choosing to live in different areas — they can track what happens to families when they move. In fact, their analysis is based on more fine-grained comparisons. In particular, they can track families that moved from, say, Cincinnati to Pittsburgh when their children were young and compare them with families that made the same move, but when their children were a few years older.
Their findings are clear: The earlier a family moved to a good neighborhood, the better the children’s long-run outcomes. The effects are symmetric, too, with each extra year in a worse neighborhood leading to worse long-run outcomes. Most important, they find that each extra year of childhood exposure yields roughly the same change in longer-run outcomes, but that beyond age 23, further exposure has no effect. That is, what matters is not just the quality of your neighborhood, but also the number of childhood years that you are exposed to it.
The Best and Worst Places to Grow Up: How Your Area Compares
A crucial advantage of this analysis is that it follows the children through to early adulthood. This matters because a number of recent studies have shown that interventions have effects that might be hard to discern in test scores or behavioral problems, but that become evident in adulthood. The same pattern of years of exposure to good neighborhoods shaping outcomes is also apparent for college attendance, teenage births, teenage employment and marriage.
These findings replicate many of the key insights from the Moving to Opportunity experiment with far greater statistical resolution, which means there is effectively no chance that are simply due to luck.
Mr. Chetty and Mr. Hendren also subject their analyses to more demanding tests. For instance, rather than making comparisons between families that move at different times, they can also make comparisons within the same family, comparing the results for older and younger siblings after a move. And indeed, when a family moves to a better city, the younger sibling — who will experience more years of exposure to a good neighborhood than an older brother or sister — enjoys better long-run outcomes. Again, the younger sibling enjoys a better future in proportion to the extra years of exposure he or she has.
Similar effects are also seen when they analyze what happens when whole communities are displaced after a shock like Hurricane Katrina or the closing of a large plant. If those communities tend to move to better areas, their children’s futures tend to improve.
They also pay special attention to cities that are improving (or declining), and their findings reflect the state of the neighborhood in the years in which the children are actually present, rather than the previous years when parents may have been deciding where to move.
They also explore what happens in those cities where boys tend to do particularly poorly — typically those with more crime, inequality and segregation. When families with a son and a daughter move to these cities, the son’s outcomes worsen relative to his sister. This gap is larger the longer they both spend in that neighborhood.
Each of these analyses is quite persuasive, but none, taken alone, is a slam dunk. It’s a virtual truism that for any interesting empirical finding, there’s some way for an imaginative social scientist to explain it away. But while you may doubt one piece or other of it, it is virtually impossible to dismiss it all.
Sociologists have typically been quicker than economists to embrace the idea that neighborhoods are important. But the relentless accumulation of evidence is now so compelling that I believe it will sustain a new consensus. That consensus, simply stated, is that place matters. This puts the issue of fixing our failing neighborhoods squarely on the political agenda.
In addition to Mr. Chetty and Mr. Hendren, Augustin Bergeron, Nikolaus Hildebrand, Jamie Fogel and Benjamin Scuderi also helped conduct the research.
Justin Wolfers is a senior fellow at the Peterson Institute for International Economics and professor of economics and public policy at the University of Michigan. Follow him on Twitter at @justinwolfers
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MOVING AWAY
The Polk Family’s Quest for a Better Life
Latonya Polk fixes her hair as her daughter Briana, 18, brushes her teeth at home in the Chicago suburb of Wood Dale on Friday.Credit…Alyssa Schukar for The New York Times
By Dave McKinney
WOOD DALE, Ill. — Latonya Polk knew by the early summer of 2012 that she and her family had to leave their home in one of Illinois’s most violence-prone suburbs, outside Chicago.
Less than a year earlier, her husband, Kalem Polk, had been killed while he sat on the front porch of the family’s Bellwood, Ill., apartment with a cousin and a mutual friend, she said. A gunman appeared suddenly from the passageway between the next building and theirs. He started shooting, striking Mr. Polk five times in the chest, before escaping on foot and leaving his motivations a mystery, Mrs. Polk said.
After the killing, she quit using her home’s front door near where her husband had been shot. As soon as she could get out of her lease, Mrs. Polk sought out a safer place. She was also losing faith in the local schools and worrying about the friends her son was making. And she was unemployed, having been laid off from a clerical job in Chicago’s public school system.
“I was ready to leave behind everything, just to get out of there,” Mrs. Polk said.
Not far to the west of Bellwood was one of the most affluent places in America: DuPage County. It’s a land of shopping malls, palatial homes, golf courses and good public schools. Among the nation’s 100 largest counties, it is also the one where low-income children have the best odds of growing up to escape poverty, according to a large new academic study that tracked several million families in recent decades.
On moving day, Mrs. Polk pointed her car to DuPage.
“I knew absolutely it would mean better possibilities for my kids,” she said. “I knew the schools were better. I wanted to have some sanity, knowing that my kids and I were safe. Sometimes, you have to go on a direction that’s leading you. You never know what the path is.”
Eventually, after a three-month stay in a friend’s suburban apartment, Mrs. Polk and her two children found the refuge they were looking for in a $1,025-a-month, one-bedroom apartment in Wood Dale, Ill., where rows of homes with manicured lawns sit beneath one of the main flight patterns for nearby O’Hare Airport.
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Jovan Nicholson, 19, was happy to move with his mother and sister from Bellwood, where his stepfather was fatally shot, to nearby but more placid DuPage County.Credit…Alyssa Schukar for The New York Times
She managed to string together two part-time jobs after the move from Bellwood. She has also received help from a program the county government runs for families with children — about $2,000 a year since 2012, to help with things like utilities and car repairs, as well as advice from a counselor.
Mrs. Polk, 39, has since gotten a job as a customs brokerage analyst at a freight-forwarding company. She helps clear shipments coming into the United States, earning about $40,000 a year, still well below the $78,487 median household income in DuPage, according to census data. But it’s enough to support her and her two children and to fuel hope they might now be on the pathway to a better life.
Dan Cronin, the chairman of the DuPage County Board, which oversees the low-income, subsidy program the Polk family is using, said he thought the county offered both opportunities and support.
“You can find a modest home in some of the communities here,” Mr. Cronin said. “If you want to and are determined to avoid the distractions and gangs, I think you have a better chance of pulling yourself out of poverty with the kind of support systems there are in our communities and neighborhoods.”
Half a mile from the Polk family’s neatly kept, 990-square-foot home, there is a public golf course and a forest preserve with wooded trails, amenities unavailable in their previous hometown.
Their apartment is tight, with Mrs. Polk and her daughter, Briana Nicholson, 18, sharing its lone bedroom, while her son, Jovan Nicholson, 19, sleeps in a tiny room intended as a den or office.
At 6-foot-6, he played football at his new school, Fenton High School in neighboring Bensenville, Ill., where he graduated last year.
Latonya Polk holds a photograph of herself with her late husband, Kalem. His shooting remains unsolved.Credit…Alyssa Schukar for The New York Times
“That was such a huge gift for me because not too many African-American guys get the chance to walk across that stage,” Mrs. Polk said in an interview. “I was so honored.”
She said, “Kids get caught up in their environment, and sometimes, they become a product of their environment.”
Jovan said he had little difficulty adapting to his new surroundings, which he described as “drama-free.”
In a town where 8 out of every 10 residents are white, according to the most recent census data, he says he has made a diverse set of friends, some coming from opulent houses and others from apartments smaller than his family’s.
“In Bellwood, there’s a lot of violence, a lot of gangbanging, fighting and drugs,” he said. “In Bellwood, if you try to get on with your life, there’ll always be that one person who tries to pull you down, tries to fight you, tries to put you in danger.”
Mrs. Polk added: “Sometimes, when you’re in a better environment, you see people doing better, and you might want to do better, too. I think my son has seen that.”
The only challenges Mrs. Polk said she had in her new environs were not knowing her neighbors well, a problem common to many apartment dwellers, and some concern that her son’s football-player-size frame may make him stand out in potentially worrisome ways.
The Best and Worst Places to Grow Up: How Your Area Compares
“Some times, I’m scared for my son with the police because he’s such a huge guy — especially with so much police violence going on these days, I tell him to please be careful,” she said. She emphasized that her son has had no brushes with the law, unlike some of his old acquaintances in Bellwood.
One question facing the two children is whether they will be able to navigate college. Many lower-income children enroll but leave without graduating — and then struggle to find well-paying work as adults.
Jovan is now working two part-time jobs, one at a Big Lots discount store and the other at a Taco Bell, both within walking distance of home. He’s doing those jobs, his mother said, “because “he’s having some tuition issues, and they have to fix his federal financial aid.”
He intends to enroll at College of DuPage, a local community college, later this year and to study hospitality management.
Briana is getting ready for her senior prom and graduation this spring from Fenton High School. After moving, Briana initially had her sights on going away to college but now is thinking about staying closer to home and also attending the College of DuPage.
“She said she wanted to stay home another year, get herself together and get a little more independent,” Mrs. Polk says.
Any concerns the family has about the move are far outweighed by the benefits, Mrs. Polk said: She has seen their way of life transformed.
“There are a lot of people wanting a safer place for their kids and a better quality of life,” she said. “They just want to escape the madness out there.”
The Upshot provides news, analysis and graphics about politics, policy and everyday life. Follow us on Facebook and Twitter. Sign up for our weekly newsletter.
IMPORTANCE OF PLACE
An Atlas of Upward Mobility Shows Paths Out of Poverty
By David Leonhardt, Amanda Cox and Claire Cain Miller
In the wake of the Los Angeles riots more than 20 years ago, Congress created an anti-poverty experiment called Moving to Opportunity. It gave vouchers to help poor families move to better neighborhoods and awarded them on a random basis, so researchers could study the effects.
The results were deeply disappointing. Parents who received the vouchers did not seem to earn more in later years than otherwise similar adults, and children did not seem to do better in school. The program’s apparent failure has haunted social scientists and policy makers, making poverty seem all the more intractable.
Now, however, a large new study is about to overturn the findings of Moving to Opportunity. Based on the earnings records of millions of families that moved with children, it finds that poor children who grow up in some cities and towns have sharply better odds of escaping poverty than similar poor children elsewhere.
The feelings heard across Baltimore’s recent protests — of being trapped in poverty — seem to be backed up by the new data. Among the nation’s 100 largest jurisdictions, the one where children face the worst odds of escaping poverty is the city of Baltimore, the study found.
The city is especially harsh for boys: Low-income boys who grew up there in recent decades make roughly 25 percent less as adults than similar low-income boys who were born in the city and moved as small children to an average place.
Beyond Baltimore, economists say the study offers perhaps the most detailed portrait yet of upward mobility — and the lack of it. The findings suggest that geography does not merely separate rich from poor but also plays a large role in determining which poor children achieve the so-called American dream.
The Best and Worst Places to Grow Up: How Your Area Compares
How neighborhoods affect children “has been a quandary with which social science has been grappling for decades,” said David B. Grusky, director of the Center on Poverty and Inequality at Stanford University, who was not involved in the research. “This delivers the most compelling evidence yet that neighborhoods matter in a really big way.”
Raj Chetty, one of the study’s authors, has presented the findings to members of the Obama administration, as well as to Hillary Rodham Clinton and Jeb Bush, both of whom have signaled that mobility will be central themes of their 2016 presidential campaigns. After more than 15 years of mostly mediocre economic growth and rising income inequality, many families say they are frustrated and anxious about trying to get ahead.
“The data shows we can do something about upward mobility,” said Mr. Chetty, a Harvard professor, who conducted the main study along with Nathaniel Hendren, also a Harvard economist. “Every extra year of childhood spent in a better neighborhood seems to matter.”
The places where poor children face the worst odds include some — but not all — of the nation’s largest urban areas, like Atlanta; Chicago; Los Angeles; Milwaukee; Orlando, West Palm Beach and Tampa in Florida; Austin, Tex.; the Bronx; and the parts of Manhattan with low-income neighborhoods.
All else equal, low-income boys who grow up in such areas earn about 35 percent less on average than otherwise similar low-income children who grow up in the best areas for mobility. For girls, the gap is closer to 25 percent.
Many of these places have large African-American populations, and the findings suggest that race plays an enormous but complex role in upward mobility. The nation’s legacy of racial inequality appears to affect all low-income children who live in heavily black areas: Both black and white children seem to have longer odds of reaching the middle class, and both seem to benefit from moving to better neighborhoods.
The places most conducive to upward mobility include large cities — San Francisco, San Diego, Salt Lake City, Las Vegas and Providence, R.I. — and major suburban counties, such as Fairfax, Va.; Bergen, N.J.; Bucks, Pa.; Macomb, Mich.; Worcester, Mass.; and Contra Costa, Calif.
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The former home of the Polk family in Bellwood, Ill. The fatal shooting of Latonya Polk’s husband there prompted her to move away with her two children in search of a safer place.Credit…Alyssa Schukar for The New York Times
These places tend to share several traits, Mr. Hendren said. They have elementary schools with higher test scores, a higher share of two-parent families, greater levels of involvement in civic and religious groups and more residential integration of affluent, middle-class and poor families.
For low-income families, a home in places with these characteristics is often a financial stretch. Rachelle Hawkins, a 32-year-old single mother in California, rented an apartment in Contra Costa late last year with help from a Contra Costa nonprofit called Shelter, Inc., which paid her first month’s rent. She moved from a gritty neighborhood near Oakland and was homeless for a time. She makes about $29,000 as a customer-service agent in online banking and faces an annual rent bill of almost $17,000.
But she thinks the burden is worth it for her children, who are 4 and 6. “I don’t think my kids are going to remember what we went through,” Ms. Hawkins said. “They are absolutely better off, just because of the environment.”
In addition to studying the outcomes of more than five million children who moved, Mr. Chetty and Mr. Hendren also revisited the subjects of the Moving to Opportunity experiment. Working with Lawrence Katz, one of the original researchers to study the program, they analyzed more recent, richer data — and concluded that children who moved before they were teenagers did indeed benefit economically. (The original study had found health benefits for both younger and older children.)
In both studies, the younger children were when they moved, the better they did. Children were less likely to become single parents when they grew up, were more likely to go to college and to earn more. The original research had not been able to follow the economic outcomes of younger children, because not enough time had passed, Mr. Katz said.
Still, the more extensive nationwide data on moving found that older children were also affected by their neighborhood. The effect was what statisticians call linear: Each additional year in a different place had roughly the same average effect on a child’s adult earnings. A teenager’s year in a better neighborhood mattered as much as a 9-year-old’s year — but 9-year olds still had their teenage years in front of them.
Some economists who have seen the new study say that it argues for a new approach to housing policy. Current policy often forces the parents of young children onto waiting lists for housing vouchers. It also gives tax incentives to developers who build in poor neighborhoods, rather than rewarding those who build affordable housing in areas that seem to offer better environments.
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The Polk family’s new apartment, in Wood Dale, Ill., is small, but Mrs. Polk and her two teenage children are pleased with the calmer setting.Credit…Alyssa Schukar for The New York Times
In an interview Friday, Julián Castro, the secretary of Housing and Urban Development, said he was excited by the new data. Mr. Castro said his department had been planning to reallocate funding, so that some people moving to more expensive neighborhoods would receive larger vouchers. Currently, the value of vouchers tends to be constant across a metropolitan area.
The large county on the other end of the spectrum from Baltimore, with the best odds of escaping poverty, is DuPage County, Ill., west of Chicago. It contains suburbs where the schools are considered better and where housing costs more than in Chicago and some close-in suburbs.
In 2012, Latonya Polk decided to move there with her son and daughter, then 16 and 15. Her husband had been fatally shot on the front lawn of their apartment outside Chicago in 2011, in a crime that remains unsolved, she said.
Briana, her daughter, was hesitant about leaving her friends, but Mrs. Polk insisted, saying they could still visit them. “I knew absolutely it would mean better possibilities for my kids,” she said.
Mrs. Polk earns about $40,000 a year at a company that helps clear goods through customs. She has been able to afford the move by living in a cramped $1,025-a-month, one-bedroom apartment — and with help from a county program that gives them about $2,000 a year toward living expenses.
Her son, Jovan, graduated from high school last year and is now working, while Briana will graduate this spring. Both plan to enroll in community college in the next year.
Although most places with better odds of escaping poverty have higher rent, the researchers did identify some counties as “upward-mobility bargains.” These include Putnam County, N.Y.; parts of the Pittsburgh and Altoona areas in Pennsylvania; and, if only relative to surrounding areas, Contra Costa.
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Mrs. Polk, center, with her son Jovan Nicholson and daughter Briana Nicholson at home in Wood Dale.Credit…Alyssa Schukar for The New York Times
The study defined low income as the 25th percentile of the income distribution — a household earning less than three-quarters of other households nationally, or about $30,000 a year for families with children. But the analysis covered the full income distribution, and the geographic patterns at the 25th percentile were very similar to those for poorer and somewhat less poor households.
The main innovation of the new paper — part of the Equality of Opportunity Project, involving multiple researchers — is its focus on children who moved. Doing so allows the economists to ask whether the places themselves actually affect outcomes. The alternative is that, say, Baltimore happens to be home to a large number of children who would struggle no matter where they grew up.
The data suggests otherwise. The easiest way to understand the pattern may be the different effects on siblings, who have so much in common. Younger siblings who moved from a bad area to a better one earned more as adults than their older siblings who were part of the same move. The particular environment of a city really does seem to affect its residents.
The data does not answer the question of whether the factors that distinguish higher-mobility places, like better schools and less economic segregation, are causing the differences — or are themselves knock-on effects of other, underlying causes. “We still need clarity on that,” Mr. Grusky, the Stanford professor, said.
From her perspective, Ms. Hawkins, the Contra Costa resident, said that the mixing of people from different social classes did make a difference.
“It’s all spread out here,” she said. In her old home in San Leandro, Calif., entire neighborhoods had high unemployment and crime, which led some people who did have jobs to flee, causing a downward spiral. “You don’t want to put your kid in harm’s way. That’s just extra stress.”
For all the benefits that moves can bring, they are not a solution to poverty, said people who have seen the new paper as well as the researchers themselves. Finding ways to improve those neighborhoods, for people who cannot or do not want to move, is also important, researchers and policy makers said.
“We can’t walk away from them,” Mr. Castro, the housing secretary, said. “We need a two-pronged approach.”
For more on this subject:
■ Look up your county: how your area compares.
■ Why the new research on income mobility matters.
■ A move makes a difference — one family’s quest for a better life.
David Leonhardt reported from Washington, Amanda Cox from New York, and Claire Cain Miller from San Francisco. Dave McKinney contributed reporting from Wood Dale, Ill.
The Upshot provides news, analysis and graphics about politics, policy and everyday life. Follow us on Facebook and Twitter. Sign up for our weekly newsletter.
A version of this article appears in print on May 4, 2015, Section A, Page 1 of the New York edition with the headline: Change of Address Offers a Pathway Out of Poverty. Order Reprints | Today’s Paper | Subscribe
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Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
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