How 'Point Blindness' Dilutes the Value of Stock Market Reports

38 Pages Posted: 2 Jul 2008

See all articles by Arthur Lupia

Arthur Lupia

University of Michigan at Ann Arbor - Department of Political Science

Cassandra Grafstrom

affiliation not provided to SSRN

Yanna Krupnikov

Indiana University

Adam Levine

Stetson University - College of Law

William D. MacMillan

affiliation not provided to SSRN

Erin McGovern

Independent

Date Written: March 24, 2008

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 and Grafstrom, Cassandra and Krupnikov, Yanna and Levine, Adam S. and MacMillan, William D. and McGovern, Erin, How 'Point Blindness' Dilutes the Value of Stock Market Reports (March 24, 2008). Available at SSRN: https://ssrn.com/abstract=1154610 or http://dx.doi.org/10.2139/ssrn.1154610

Arthur Lupia (Contact Author)

University of Michigan at Ann Arbor - Department of Political Science ( email )

Ann Arbor, MI 48109
United States
734-647-7549 (Phone)
734-764-3341 (Fax)

HOME PAGE: www.umich.edu/~lupia

Cassandra Grafstrom

affiliation not provided to SSRN ( email )

Yanna Krupnikov

Indiana University ( email )

Bloomington, IN
United States

Adam S. Levine

Stetson University - College of Law ( email )

William D. MacMillan

affiliation not provided to SSRN ( email )

Erin McGovern

Independent

No Address Available

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