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

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Listed:
  • Lupia, Arthur
  • Grafstrom, Cassandra
  • Krupnikov, Yanna
  • Levine, Adam Seth
  • MacMillan, William
  • McGovern, Erin

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.

Suggested Citation

  • Lupia, Arthur & Grafstrom, Cassandra & Krupnikov, Yanna & Levine, Adam Seth & MacMillan, William & McGovern, Erin, 2008. "How “Point Blindness” Dilutes the Value of Stock Market Reports," MPRA Paper 8191, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:8191
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    References listed on IDEAS

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    More about this item

    Keywords

    stock market; stock index; financial reporting; news; real nominal relations;
    All these keywords.

    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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