Project Similarity Bias and Variance Neglect in Forecast Metric Evaluation

Business executives often have to allocate resources across very dissimilar projects. They use financial measures, such as Net Present Value (NPV) that simplify this difficult comparison because they aim to be equally applicable to any kind of project, but these measures vary in their reliability. Psychological research suggests that comparing alignable objects will be easier than comparing non-alignable objects (Markman & Gentner, 1993; Markman & Medin, 1995). However, it is unclear how alignment might moderate people’s use of financial measure such as NPV. We found that laypeople accommodate their use of a financial measure (NPV) based on its reliability (as explicitly described in the introduction to the task) when allocating resources to a set of alignable projects, but use it regardless of reliability when allocating to a set of non-alignable projects. However, when NPV reliability information was presented numerically using ranges, participants’ allocation did not depend on the ranges—participants used NPV even when they had an opportunity to use the intrinsic features of the project. Overall, however, participants relied on NPV more when projects were low in alignment than when they were high in alignment. The result with numerical reliability was replicated with Masters of Management students. Our results demonstrate that considering dissimilar choices may hinder people’s ability to evaluate their importance, and that people might not be using useful variance information in their decisions.

Zakat as an Alternative Method of Economic Growth : The Muslim Community of West Bengal

Poverty is a curse in today’s society. Most of the Muslim community in West Bengal is plagued by this curse. Poverty is a major obstacle to the education and social progress of the Muslim community in the district. The purpose of this article is to determine the need for Zakat as a financial measure to assess economic growth. Review the framework of Islamic economic concepts to propose alternative models aimed at serving nations. This article considers Zakat to be one of the most accurate methods of measuring economic growth, which means that when people pay Zakat, the level of economic development will be higher and vice versa. In other words, besides redistributing wealth among Muslims, there is a promise to pay Zakat to Muslims in order to reduce the gap between rich and poor in society and achieve self-reliance. This article mainly discusses the issue of self-reliance of the backward Muslim community through the grant of Zakat to assess economic growth.

A RETROSPECTIVE LOOK AT “THE HAYEK STORY”: ROUNDABOUTNESS, STICKY CONSUMPTION, AND SEQUESTERED CAPITAL

Friedrich Hayek’s business cycle theory withered throughout the 1930s as he admitted that its underlying model of Böhm-Bawerkian roundaboutness was incomplete and inadequate. In 1934, Hayek started a two-volume book on capital theory, completing only one volume in 1941. Curiously, Hayek ([1941] 2009) cites John Hicks’s (1939) Value and Capital but not the financial measure of roundaboutness that Hicks suggested as a substitute for Böhm-Bawerkian roundaboutness. In 1967, in “The Hayek Story,” Hicks criticized the inexplicable lags. Hayek maintained his view that consumption was sticky and responded to Hicks with a mound-of-honey analogy. Nevertheless, Hayek maintained that his business cycle theory was fundamentally correct and continued to hope that others might someday discover a capital structure theory to undergird it. Toward fulfilling Hayek’s hope, we suggest augmenting the canonical stages of production with a sequestered-capital stage where products are invented, productized, and inventoried prior to launch, uncoordinated by observable prices.

A Retrospective Look at The Hayek Story: Roundaboutness, Sticky Consumption, and Sequestered Capital

Friedrich Hayek’s business cycle theory, withered throughout the 1930s as he admitted that its underlying model of Böhm-Bawerkian roundaboutness was incomplete and inadequate. In 1934, Hayek started a two-volume book on capital theory, completing only one volume in 1941. Curiously, Hayek (1941) cites Hicks’ (1939) Value and Capital but not the financial measure of roundaboutness that Hicks suggested as a substitute for Böhm-Bawerkian roundaboutness. In 1967, Hicks criticized the inexplicable lags in The Hayek Story. Hayek maintained his view that consumption was sticky and responded to Hicks with a mound-of-honey analogy. Nevertheless, Hayek maintained that his business cycle theory was fundamentally correct and continued to hope that others might someday discover a capital structure theory to undergird it. Toward fulfilling Hayek’s hope, we suggest augmenting the canonical stages of production with a sequestered-capital stage where products are invented, productized, and inventoried prior to launch, uncoordinated by observable prices.

Alternative Performance Measures and ESMA Guidelines: Improving Stakeholders’ Communication

In a world more interconnected and globalized, the Entities periodically communicate to stakeholders, and in general to market, their performances and results. The Entities use, in their financial communication, Alternative Performance Indicators (APM) that are not required by accounting principles. APM are increasingly used by Entities to help provide insights on performance. These indicators are a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework. This study aims to analyse the spread of APM, investigating the financial communications of Listed Italian Industrial Entities on FTSE-MIB index 40. As APM have become more widespread, their reporting has turned out to be an hot topic around the world for prepares, stakeholders, auditors and regulators. The European Securities and Markets Authority issued new guidelines that aim to improve the usefulness and transparency of Alternative Performance Measures. In the second part, the study aims to analyse how the Entities expects to apply these new guidelines and the impacts on financial communication.

The Influence of Economic Value Added and Return on Assets on Created Shareholders Value: A Comparative Study in Jordanian Public Industrial Firms

This study has two main objectives. The first one is to address the relationship between Economic Value Added (EVA) and Created Shareholders Value (CSV) in Jordanian public industrial firms (JPIF), comparing to the Return on Assets (ROA) over the period 2011-2015. The second objective is to address the possible superiority of EVA to ROA by explaining the changes in CSV for JPIF. In this study, CSV is measured using two models; Fernandez model and market value added model. Multiple and simple regressions were used in the study. These analyses have shown, generally, that the superiority of EVA in predicting and evaluating the CSV could be put into a conclusive and positive light compared to ROA. However, the results suggested that one financial measure cannot be enough to measure neither CSV nor firms’ performance. Therefore, this study highly recommends that JPIF use a combination of different measure in assessing and evaluating their value and performance, especially modern indicators.

Training in Superstition? Monasteries and Popular Religion in Late Medieval and Reformation England

The monasteries of late medieval England are regularly viewed as marginal to the religious lives of the laity, and have been largely omitted from the revisionist depiction of the pre-Reformation Church. Similarly the Dissolution has often been seen primarily as a financial measure, with limited religious motivations or consequences. This article seeks to challenge both these conclusions by drawing attention to the role played by religious houses of all sizes as centres of national and local pilgrimage. It is argued that monasteries exerted a strong and enduring influence over popular piety through their saints' cults, and as a result attracted the hostility of both Erasmian and evangelical reformers in Henrician England. This hostility should be seen as an important ingredient in the Dissolution.

The characteristics of risks of major disasters

The quantification of risk requires measures of consequences and of frequency. Serious personal consequences are expressed as a ‘disaster profile’ giving the numbers of early deaths, late deaths, serious incapacity, forced permanent evacuation and serious birth defects. Profiles from the disasters at Bhopal and Chernobyl are quite different. In addition, there is a financial measure of harm that can include the personal measure if a value is assigned to a human life or adverse health effect. Timescales of disasters from earthquakes to long-term pollution are discussed; if they are long enough, the risk can be transferred from one of death or injury to one of evacuation and cost. This applies to most nuclear risks, which are better quantified by cost measures rather than by the unobservable hypothetical number of late cancer deaths. Measured by evacuation or cost, nuclear risks increase more than linearly with the size of the radioactive source term. Factors leading to risks are examined, and that of knowledge and its transmission is emphasized. The causes of only a few disasters, e. g. hurricanes, are wholly stochastic in nature; for others, their frequency can be reduced, possibly at some expense. Statistics is inferior to probabilistic safety analysis as a predictor of risk where knowledge is involved. Several recent disasters are listed, together with some others that have a high probability of occurrence in the near future. Those from long-term large-scale pollution, e. g. climatic change induced by the greenhouse effect, may pose the largest risk.