Bankruptcy classification errors in the 1980s: An empirical analysis of Altman's and Ohlson's models

Empirical accounting researchers often use Altman's (1968) and Ohlson's (1980) bankruptcy prediction models as indicators of financial distress. While these models performed relatively well when they were estimated, we show that they do not perform as well in more recent periods (in particular, the 1980s), even when the coefficients are re-estimated. When we compare the performance of Ohlson's original model to our re-estimated version of his model and to that of Altman's original and re-estimated models, we find that Ohlson's original model displays the strongest overall performance. Given that Ohlson's original model is frequently used in academic research as an indicator of financial distress, its strong performance in this study supports its use as a preferred model.     

Massimo Montanari. Food is Culture

To understand food is to understand the human condition in allits complexity; it offers a key to various types of social organization,uses of technology, expressions of a market economy, and patternsof daily life. For decades, ethnographers and anthropologistshave focused on preindustrial food systems as a way to discusshow a given people-group organizes and gives meaning to theworld it creates and inhabits—that food is part of a culturalsystem. In the past twenty years, studies of food productionand     

The Evolution of Social and Economic Networks

We examine the dynamic formation and stochastic evolution of networks connecting individuals. The payoff to an individual from an economic or social activity depends on the network of connections among individuals. Over time individuals form and sever links connecting themselves to other individuals based on the improvement that the resulting network offers them relative to the current network. In addition to intended changes in the network there is a small probability of unintended changes or errors. Predictions can be made regarding the likelihood that the stochastic process will lead to any given network at some time, where the stochastic process selects from among the statically stable networks and cycles. We apply these results to examples including the Gale-Shapley marriage problem. Thus the paper achieves two goals. First, it outlines a dynamic solution concept for networks. Second, it applies this concept to matching problems. Journal of Economic Literature Classification Numbers: A14, D20, J00.