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<p>The objective of this thesis is to develop an Annualized Cost of Leaving (ACOL) model to predict Naval aviator separation decisions in response to changes in aviation bonus pays, specifically Aviation Continuation Pay (ACP) and Aviation Career Incentive Pay (ACIP). The ACOL approach models an individual's decision to stay or leave the military based on the monetary differences between alternative career choices. The individual's 'taste' or preference for military versus civilian life are incorporated into the decision modeling process. The model assumes that individuals will stay in the military if the positive difference between expected military pay and expected civilian pay (the cost-of-leaving) exceeds the distaste for the military lifestyle. Officer Master File (OMF) data from the Defense Manpower Data Center (DMDC) and data developed by Turner (NPS 1995) were used to determine individual characteristics and to compute the present value of the expected military pay stream. Census Bureau data were used to estimate future expected civilians earnings. A logit regression model was developed to simulate the retention of Naval aviators in response to changes in the ACOL due to increases in ACIP or ACP. The results indicate that the proposed increases in either ACIP or ACP are cost effective ways of increasing the retention of Naval aviators.
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<br>Subjects:</div>
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Riebel, David.</div>
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