A Comment on Second-Order Polynomial Regression Models

In a recent article, Chatterjee and Greenwood [1] addressed the problem of multicollinearity in polynomial regression models. They noted that there is a high correlation between X and X²; therefore, a second-order polynomial model suffers the consequences of collinearity. Chatterjee and Greenwood [1] suggested a method they believe will overcome the problem. The contention of the present comment is that the suggested method accomplishes nothing and, indeed, has the potential to lead the unwary researcher to the wrong inference and misinterpretation of his results.     

On Sampling Error in Market Share Estimates*

The relative error in the usual estimator of a brand's market share is reformulated in terms of marketing parameters. Such error is shown to be influenced in an important way by market penetration, as well as by variation in brand and product category volume. Of particular interest is the result that the relative error does not depend on the actual share level. Using data from a marketing research firm that supplies share estimates to the health products industry, we find that the relative error may be substantial even when a large sample is available. An upper bound on this relative error is obtained using marketing parameters that can frequently be measured using industry data and a company's internal records, thus reducing the level of judgmental input required in the planning of sample surveys.     

Will the ASA's Efforts to Improve Statistical Practice be Successful? Some Evidence to the Contrary

ABSTRACT

Recent efforts by the American Statistical Association to improve statistical practice, especially in countering the misuse and abuse of null hypothesis significance testing (NHST) and p-values, are to be welcomed. But will they be successful? The present study offers compelling evidence that this will be an extraordinarily difficult task. Dramatic citation-count data on 25 articles and books severely critical of NHST's negative impact on good science, underlining that this issue was/is well known, did nothing to stem its usage over the period 1960–2007. On the contrary, employment of NHST increased during this time. To be successful in this endeavor, as well as restoring the relevance of the statistics profession to the scientific community in the 21st century, the ASA must be prepared to dispense detailed advice. This includes specifying those situations, if they can be identified, in which the p-value plays a clearly valuable role in data analysis and interpretation. The ASA might also consider a statement that recommends abandoning the use of p-values.     

A TIME-SERIES APPROACH FOR CONSTRUCTING EXPECTATIONS MODELS*

This article presents an efficient way of dealing with adaptive expectations models—a way that makes use of all the information available in the data. The procedure is based on multiple-input transfer functions (MITFs): by calculating lead and lag cross correlations between innovations associated with the variables in the model, it is possible to determine which periods have the greatest effects on the dependent variable. If information about k periods ahead is required, fitted values for the expectation variables are used to generate k-period-ahead forecasts. These in turn can be used in the estimation of the transfer function equation, which not only contains the usual lagged variables but also allows for incorporation of lead-fitted values for the expectation variables. The MITF identification and estimation procedures used are based on the corner method. The method is contrasted with the Almon distributed-lag approach using a model relating stock market prices to interest rates and expected corporate profits.     

ASSESSING ENVIRONMENTAL SCANNING AT THE SUBUNIT LEVEL: A MULTITRAIT-MULTIMETHOD ANALYSIS*

Environmental scanning activities of over 400 top management subunits in 108 European manufacturing firms provided the data base for this research. Four traits (constructs) of scanning using three methods (interest, frequency, and time) were examined. A confirmatory factor analysis approach to multitrait-multimethod (MTMM) data was employed. Verification of the reliability as well as convergent and discriminant validity of the scanning scales are reported and discussed. The viability of confirmatory factor analysis in providing a precise analysis of partitioning variance according to trait, method, and error is demonstrated.     

A NOTE ON THE USE OF SELECTED NONFINANCIAL RATIO VARIABLES TO PREDICT SMALL-BUSINESS LOAN PERFORMANCE*

Small business loan applications have not been evaluated successfully by traditional methods. This paper explores the possibility of using three types of nonfinancial ratio variables (owner, firm, and loan characteristics) to predict whether a small business will pay off or default its loan. The owner and loan variables were better predictors of loan success than the firm variables.     

A MINIMUM-COST AUDIT SAMPLING METHODOLOGY UNDER CONDITIONS OF PREDETERMINED BETA RISK

This paper presents a minimum-cost methodology for determining a statistical sampling plan in substantive audit tests. In this model, the auditor specifies β, the risk of accepting an account balance as correct when it is not, according to audit evidence requirements. Using β as a constraint, the auditor then selects a sampling plan to optimize the trade-off between sampling costs and the costs of follow-up audit procedures. Tables to aid in this process and an illustration are provided.     

论课程实施基本取向与教学设计的转变

课程实施的三种基本取向--忠实取向、相互适应取向、课程创生取向--实际上体现了不同的教育价值现与课程价值观.因此,在不同的课程实施取向的视野中,教学设计具有迥然不同的旨趣与方略.新课程视野下的教学设计转型,试图以课程理念发展为背景参照,以促进学习者发展为宗旨,凝聚和整合教学设计理论相关知识,解决传统教学设计范型与促进学习者发展之间的冲突,寻求对传统教学设计范型的某种超越和制衡,是教学设计研究与实践自觉适应社会和教育发展走势嬗变的一种尝试,我们需要关注教学设计转变.     

Lowering Inventory Systems Costs by Using Regression-Derived Estimators of Demand Variability*

Scientific techniques for inventory management typically are applied to systems containing many items. Such techniques require an estimation of the demand variance (and mean) of each item from historical data. This research demonstrates a significant potential for improvement in system cost performance from using least-squares regression fits of a variance-to-mean functional relation instead of the standard statistical variance estimate. Even when there is a moderate degree of heterogeneity among items and when the form of the variance-to-mean relation is misspecified, substantial cost savings may be realized. The cost of statistical uncertainty may be reduced by half. The research also provides evidence that system cost is fairly insensitive to the number of items used to fit the regression. This paper provides the underlying reason why a regression-derived variance estimator yields lower cost: it is less variable than the usual individual item variance estimator.     

Integrating Analysis and Communication Skills into the Decision Science Curriculum*

The teaching of decision sciences presupposes that careful attention is directed toward improving students' critical thinking and analytical skills. This paper presents an approach to teaching quantitative methods classes that focuses on developing student skills in the areas of analytical and critical thinking through written and oral communication. The approach requires very little additional instructor preparation time and does not require the instructor to make major changes in either the content or organization of the course. While the instructor's investment is minimal, the benefits to the students appear to be substantial.