How “Point Blindness” Dilutes the Value of Stock Market Reports
AbstractThe stock index “point” is a focal component of financial news reports. Though many reports draw attention to point changes in major indices, few people realize that the value of a stock index “point” changes frequently. We call this perceptual phenomenon “point blindness.” We examine causes of point blindness and then propose alternate ways of reporting stock market information to counter it. The alternatives are easy to implement and can help citizens draw important inferences about stock values. An experiment shows that alternate modes of presentation have significant effects on public perceptions of the stock market.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 8191.
Date of creation: 24 Mar 2008
Date of revision:
stock market; stock index; financial reporting; news; real nominal relations;
Other versions of this item:
- Lupia, Arthur & Krupnikov, Yanna & Levine, Adam Seth & Grafstrom, Cassandra & MacMillan, William & McGovern, Erin, 2008. "How “Point Blindness” Dilutes the Value of Stock Market Reports," MPRA Paper 9612, University Library of Munich, Germany.
- Lupia, Arthur & Krupnikov, Yanna & Levine, Adam Seth & Grafstrom, Cassandra & MacMillan, William & McGovern, Erin, 2008. "How “Point Blindness” Dilutes the Value of Stock Market Reports," MPRA Paper 9604, University Library of Munich, Germany.
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- G00 - Financial Economics - - General - - - General
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-15 (All new papers)
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