Procedures for revising management judgments forecasts

Forecast improvement is often approached by attempting to find the “best” model for a given situation. Less attention has been paid to the possibility of examining past prediction errors for patterns that may suggest forecast adjustments for the future. This empirical study involves one firm’s management judgment forecasts for product sales and the attempts made to improve their accuracy by removing certain types of bias. In three of the five series examined, error reduction averaging close to thirty percent occurs as a result of the adjustment procedure. The other two series proved to be relatively free from bias and were therefore not in need of the correction method described.     

On the generalization of Rao,Hartley and Cochran's scheme

Summary The problem considered in this paper is a generalization of the usual Rao, Hartley and Cochran (RHC) scheme. In the usual RHC scheme the population ofN units is randomly divided inton groups wheren is the size of the sample. In this paper we propose to divide the population under consideration into (n+k) random groups wherek is some positive integer. Then a sample ofn groups is selected by using simple random sampling without replacement (SRSWOR). The expressions for the unbiased estimator of population total, its variance and the unbiased estimate of variance have been obtained under the proposed sheme. The condition under which the proposed sheme is more efficient than the usual RHC scheme has also been investigated.     

What Prompts the People＇s Bank of China to Change Its Monetary Policy Stance？ Evidence from a Discrete Choice Model

In the present paper, we model the policy stance of the People＇s Bank of China （PBC） as a latent variable, and the discrete changes in the reserve requirement ratio, policy interest rates, and the scale of open market operations are taken as signals of movement of this latent variable. We run a discrete choice regression that relates these observed indicators of policy stance to major trends of macroeconomic and financial developments, which are represented by common factors extracted from a large number of variables. The predicted value of the estimated model can then be interpreted as the implicit policy stance of the PBC. In a second step, we estimate how much of the variation in the PBC＇ s implicit stance can be explained by measures of its policy objectives on inflation, growth and financial stability. We find that deviations of CPI inflation from an implicit target and deviations of broad money growth from the announced targets, but not output gaps, figure significantly in the PBC＇s policy changes.     

Dividend Omissions and Intraindustry Information Transfers

We examine potential information transfers from companies that announce dividend omissions to their industry rivals. Specifically, we examine the abnormal stock returns and abnormal earnings forecast revisions of rivals after a company makes a dividend‐omission announcement. Our results show negative and significant abnormal stock returns and negative and significant abnormal forecast revisions for rival companies in response to the announcement, and a significant and positive relation between the two. We conclude that a dividend‐omission announcement transmits unfavorable information across the announcing company's industry that affects cash flow expectations and ultimately stock prices.     

Service Competitiveness – An Anglo-US Study

This article reports on the latest in a series of international comparisons of management practices and performance outcomes of industries in various countries. Here, it is the service industries in the UK and the US which come under the microscope. Among the companies surveyed, there were more world-class performers in the US than the UK, but also more low performers. The concluding part of the article is diagnostic – the authors also suggest measures which could improve performance.