MEASURING EFFECTS ON STOCK RETURNS OF SENTIMENT INDEXES CREATED FROM STOCK MESSAGE BOARDS

Various techniques and sources of information exist to aid investors in predicting future stock returns. However, no effective proxy for retail investors, such as stock message board users, has been established. This study provides guidelines for creating an effective proxy. The heart of such proxies is sentiment indexes, and in the past the indexes have had low predictive power. Introducing four methodological improvements for applying text classifiers and two probability measurements, we contrast eight widely applied text classifiers to stock message board data. Based on the classifier results and incorporating our new methods, the new sentiment index proves to be a significant “same‐day positive but next‐day negative” directional indicator.     

Fair and Fast Convergence on Islands of Agreement in Multicriteria Group Decision Making by Logical Navigation

Reasoning on multiple criteria is a key issue in group decision to take into account the multidimensional nature of real-world decision-making problems. In order to reduce the induced information overload, in multicriteria decision analysis, criteria are in general aggregated, in many cases by a simple discriminant function of the form of a weighted sum. It requires to, a priori and completely, elicit preferences of decision makers. That can be quite arbitrary. In everyday life, to reduce information overload people often use a heuristic, called “Take-the-best”: they take criteria in a predefined order, the first criterion which discriminates the alternatives at stake is used to make the decision. Although useful, the heuristic can be biased. This article proposes the Logical Multicriteria Sort process to support multicriteria sorting within islands of agreement. It therefore does not require a complete and consistent a priori set of preferences, but rather supports groups to quickly identify the criteria for which an agreement exists. The process can be seen as a generalization of Take-the-best. It also proposes to consider one criterion at a time but once a criterion has been found discriminating it is recorded, the process is iterated and relevant criteria are logically combined. Hence, the biases of Take-the-best are reduced. The process is supported by a GDSS, based on Logical Information Systems, which gives instantaneous feedbacks of each small decision and keeps tracks of all of the decisions taken so far. The process is incremental, each step involves low information load. It guarantees some fairness because all considered alternatives are systematically analyzed along the selected criteria. A successful case study is reported.     

Relevance and advantages of using the item response theory

The item response theory (IRT) also known as latent trait theory, is used for the development, evaluation and administration of standardized measurements; it is widely used in the areas of psychology and education. This theory was developed and expanded for over 50 years and has contributed to the development of measurement scales of latent traits. This paper presents the basic and fundamental concepts of this IRT and a practical example of the construction of scales is proposed to illustrate the feasibility, advantages and validity of IRT through a known measurement, the height. The results obtained with the practical application of IRT confirm its effectiveness in the evaluation of latent traits.     

Spatial Economic Analysis in Data‐Rich Environments

Controlling for spatial effects in micro‐level studies of consumer and producer behaviour necessitates a range of analytical modifications. These range from modest changes in data collection and the definition of variables to dramatic changes in the modelling of consumer and producer decision‐making. This paper discusses conceptual, empirical and data issues involved in modelling the spatial aspects of economic behaviour in data‐rich environments. Attention is given to established and emerging agricultural economic applications of spatial data and spatial econometric methods at the micro‐scale. Recent applications of individual and household data are featured, including models of land‐use change at the urban–rural interface, agricultural land values, and technological change and technology adoption.     

Effects of Concentrated Ownership and Owner Management on Small Business Debt Financing*

Using unique data and a new powerful Monte Carlo-based statistical tool, we examine the effects of concentrated ownership and owner–management (CO-OM) on the creditor–shareholder agency conflicts in small firms. A significant CO-OM effect from the small business owner's view, but insignificant from the commercial lenders' perspective, is found. Special features of informational asymmetry problems in small firms with CO-OM are also highlighted. Theoretical and empirical contributions are made to the small business management and corporate governance literature. Findings obtained from this research have important implications for small business practitioners as well as researchers, and this study can serve as a reference for policymakers and institutional lenders to assist small firms in successfully raising money through debt financing. In addition, a new powerful methodology is introduced to deal with various potential statistical biases and can be further applied to this line of research.     

EDUCATIONAL PRODUCTION IN INDEPENDENT SECONDARY SCHOOLS

This article contributes to an established and growing literature in which a production function is estimated for educational institutions in order to investigate the relationship between school characteristics and performance.
Existing studies in this area have generally met with only limited success. The present study, through its application of a statistical model to comprehensive data drawn from the UK private sector of education identifies a wide range of school characteristics which significantly influence performance.
The article offers meaningful results and guidelines for further development of techniques in the investigation of a topic which is relevant to both producers and consumers of education.     

An Analysis of Materiality and Reasonable Assurance: Professional Mystification and Paternalism in Auditing

Critical analyses of the audit profession have become more common in recent years. Many of these analyses focus on the entire audit profession in developing their criticisms and concerns. In this paper, the scope of analysis is narrowed to examine in depth the auditing profession's use of the concepts of reasonable assurance and materiality in audit performance and audit communications. Reasonable assurance and materiality are the terms that auditors use to describe the scope of their responsibility to the public. Similarly, reasonable assurance and materiality are the key determinants of audit effort. An overview of official guidance, practitioner reports, and academic research reveals that these two key concepts are not well specified nor are they consistently applied in audit practice. These findings are evaluated from two competing perspectives on professions – the traditional, functionalist perspective and the critical theorists' perspective. Evaluation from the latter perspective leads to a conclusion that the profession's use of these key terms to guide practice and communication leaves the profession open to charges of mystification and unjustified paternalism.     

The Use of Narrative Interview in Teaching Principles of Macroeconomics

The author describes the design and implementation of one experiential learning assignment used in a principles of macroeconomics course. The learning exercise provides an active role for students and results in a relational experience that provides traditional undergraduate students with a frame of reference with which to interpret the impact of macroeconomic events and policy on their daily lives.