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How “Point Blindness” Dilutes the Value of Stock Market Reports

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Author Info
Lupia, Arthur
Grafstrom, Cassandra
Krupnikov, Yanna
Levine, Adam Seth
MacMillan, William
McGovern, Erin

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Abstract

The 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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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8191.

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Date of creation: 24 Mar 2008
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Handle: RePEc:pra:mprapa:8191

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Related research
Keywords: stock market stock index financial reporting news real nominal relations

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Find related papers by JEL classification:
H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
G00 - Financial Economics - - General - - - General
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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