In 2017 my Website was migrated to
the clouds and reduced in size.
Hence some links below are broken.
One thing to try if a “www” link is broken is to substitute “faculty” for “www”
For example a broken link
http://www.trinity.edu/rjensen/Pictures.htm
can be changed to corrected link
http://faculty.trinity.edu/rjensen/Pictures.htm
However in some cases files had to be removed to reduce the size of my Website
Contact me at rjensen@trinity.edu if
you really need to file that is missing
574 Shields Against Validity Challenges in
Plato's Cave
An Appeal for Replication and Other Commentaries/Dialogs in an
Electronic Journal Supplemental Commentaries and Replication Abstracts
Bob Jensen
at Trinity University
With a Rejoinder from the 2010 Senior Editor of The Accounting Review
(TAR), Steven J. Kachelmeier
Accountics is the mathematical science of values.
Charles Sprague [1887] as quoted by McMillan [1998, p. 1]
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm#_msocom_1
Excellent, Cross-Disciplinary Overview of Scientific
Reproducibility in the Stanford Encyclopedia of Philosophy ---
https://replicationnetwork.com/2018/12/15/excellent-cross-disciplinary-overview-of-scientific-reproducibility-in-the-stanford-encyclopedia-of-philosophy/
[Researchers] are rewarded for
being productive rather than being right, for building ever upward instead of
checking the foundations.---
Decades of early research on the genetics of depression were built on
nonexistent foundations. How did that happen?
https://www.theatlantic.com/science/archive/2019/05/waste-1000-studies/589684/?utm_source=newsletter&utm_medium=email&utm_campaign=atlantic-daily-newsletter&utm_content=20191022&silverid-ref=NTk4MzY1OTg0MzY5S0
On the Past and Present of Reproducibility and Replicability in Economics ---
https://replicationnetwork.com/2021/01/25/on-the-past-and-present-of-reproducibility-and-replicability-in-economics/
The Atlantic:
Scientific Publishing Is a Joke ---
https://www.theatlantic.com/science/archive/2021/05/xkcd-science-paper-meme-nails-academic-publishing/618810/
Publication metrics have become a sad stand-in for quality in academia, but
maybe there’s a lesson in the fact that even a webcomic can arouse so much
passion and collaboration across the scientific community. Surely there’s a
better way to cultivate knowledge than today’s endless grid of
black-and-white papers.
Bob Jensen: My take on research validation or lack
thereof is at
See below
Three Interesting (albeit
negative) Sites on Peer Review (I highly recommend them even though one is my
own)
The Guardian:
Retracted (peer reviewed) studies may have damaged public trust in science, top
researchers fear ---
https://www.theguardian.com/science/2020/jun/06/retracted-studies-may-have-damaged-public-trust-in-science-top-researchers-fear
Those
who think that peer review is inherently fair and accurate are wrong. Those who
think that peer review necessarily suppresses their brilliant new ideas are
wrong. It is much more than those two simple opposing tendencies ---
http://rodneybrooks.com/peer-review/
The comments are especially interesting
Bob Jensen: 574
Shields Against Validity Challenges in Plato's Cave ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Prestigious accounting research journals claim they encourage replication. They
just don't encourage replication because
replication studies in academic accounting research are blocked by the peer
review process.
Jensen Comment
This is why I spend such a large part of every day reading blogs. Blog modules
are not formally refereed but in a way they are subjected to widespread peer
review among the entire population of readers of the blog as long as the blogger
publishes their replies to to his or her blog modules.
This is why I think blogs and listservs
are less suppressive of new ideas.
One of the stupid unmentioned results of
peer review in our most prestigious academic accounting research journals is
that they rarely publish articles without equations. Go figure!
Introduction
Why Do Accountics Scientists Get Along So Well?
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Why Pick on TAR and the Cargo Cult?
Real-Science Versus Pseudo
Science
Why the “Maximizing Shareholder Value”
Theory of Corporate Governance is Bogus
Purpose of Theory:
Prediction Versus Explanation
TAR versus AMR and AMJ and Footnotes of the
American Sociology Association
Introduction to Replication Commentaries
A May 2012 Commentary in TAR
Over Reliance on Public Databases and Failure
to Error Check
Consensus Seeking in Real Science Versus
Accountics Science
Are accountics scientists more honest and ethical than
real scientists?
TAR Versus JEC
Robustness Issues
Accounting Research Versus Social Science Research
The Cult of Statistical Significance: How Standard Error Costs Us Jobs,
Justice, and Lives ---
http://www.cs.trinity.edu/~rjensen/temp/DeirdreMcCloskey/StatisticalSignificance01.htm
Mathematical Analytics in Plato's Cave
TAR Researchers Playing by Themselves in an Isolated Dark Cave That the Sunlight
Cannot Reach
Thank You Dana Hermanson for Putting Accounting Horizons
Back on Track
Increasing Complexity of the World and Its
Mathematical Models
Is Anecdotal Evidence Irrelevant?
Statistical Inference vs Substantive
Inference
High Hopes Dashed for a Change in Policy of TAR Regarding Commentaries on
Previously Published Research
Low Hopes for Less Inbreeding in the Stable of TAR
Referees
Rejoinder from the Current Senior Editor of TAR,
Steven J. Kachelmeier
Do financial incentives improve manuscript quality and
manuscript reviews?
Case Research in Accounting
The Sad State of Accounting Doctoral Programs
in North America
Simpson's Paradox
and Cross-Validation
What
happened to cross-validation in accountics science research?
Citation Fraud: Why are accountics science
journal articles cited in other accountics science research papers so often?
Accountics is the mathematical science of values.
Charles Sprague [1887] as quoted by McMillan [1998, p. 1]
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm#_msocom_1
Tom Lehrer on Mathematical Models and Statistics ---
http://www.youtube.com/watch?v=gfZWyUXn3So
You must watch this to the ending to appreciate it.
Strategies to Avoid Data Collection Drudgery and
Responsibilities for Errors in the Data
Obsession With R-Squared
Drawing Inferences From Very Large Data-Sets
The Insignificance of Testing the Null
Zero Testing for Beta Error
Scientific Irreproducibility
Can You Really Test for Multicollinearity?
Models That aren't Robust
Simpson's Paradox and Cross-Validation
Reverse Regression
David Giles' Top Five Econometrics Blog Postings
for 2013
David Giles Blog
A Cautionary Bedtime Story
574 Shields Against Validity Challenges in Plato's Cave ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Real Science versus Pseudo Science ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Pseudo-Science
How Accountics Scientists Should Change:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting
Review I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to change this
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
"How Non-Scientific Granulation Can Improve Scientific
Accountics"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsGranulationCurrentDraft.pdf
Gaming for Tenure as an Accounting Professor ---
http://faculty.trinity.edu/rjensen/TheoryTenure.htm
(with a reply about tenure publication point systems from Linda Kidwell)
The AAA's Pathways Commission Accounting Education
Initiatives Make National News
Accountics Scientists Should Especially Note the First Recommendation
Conclusion and Recommendation for a
Journal Named
Supplemental Commentaries and Replication Abstracts
Appendix 1: Business Firms and Business School
Teachers Largely Ignore TAR Research Articles
Appendix 2: Integrating Academic Research
Into Undergraduate Accounting Courses
Appendix 3: Audit Pricing in the Real World
Appendix 4: Replies from Jagdish Gangolly and
Paul Williams
Appendix 5: Steve Supports My
Idea and Then Douses it in Cold Water
Appendix 6: And to Captain John Harry Evans III, I
salute and say “Welcome Aboard.”
Appendix 7: Science Warriors' Ego Trips
Appendix 8: Publish Poop or Perish
We Must Stop the Avalanche of Low-Quality Research
Appendix 9: Econtics: How Scientists
Helped Cause Financial Crises (across 800 years)
Appendix 10: Academic Worlds (TAR) vs.
Practitioner Worlds (AH)
Appendix 11: Insignificance of Testing the Null
Appendis 12: The BYU Study of Accounting Programs
Ranked by Research Publications
Appendix 13:
What is "the" major difference between medical research and accounting research
published in top research journals?
Appendix 14:
What are two of the most Freakonomish and Simkinish processes in
accounting research and practice?
Appsendix 15: Essays on the
State of Accounting Scholarship
Appendix 16:
Gasp! How could an accountics scientist question such things? This is sacrilege!
Appendix 17:
A Scrapbook on What's Wrong with the Past, Present and Future of Accountics
Science
Acceptance Speech for the August 15, 2002 American
Accounting Association's Outstanding Educator Award --- http://faculty.trinity.edu/rjensen/000aaa/AAAaward_files/AAAaward02.htm
Real Science versus Pseudo Science ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Pseudo-Science
How Accountics Scientists Should
Change:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to change this
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Essays on the State of Accounting Scholarship
---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Essays
The Sad State of Economic Theory and Research ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#EconomicResearch
The Cult of Statistical Significance: How Standard Error Costs Us
Jobs, Justice, and Lives, by Stephen T. Ziliak and Deirdre N. McCloskey
(Ann Arbor:
University of Michigan Press, ISBN-13: 978-472-05007-9, 2007)
http://www.cs.trinity.edu/~rjensen/temp/DeirdreMcCloskey/StatisticalSignificance01.htm
Page 206
Like scientists today in medical and economic and other
sizeless sciences, Pearson mistook a large sample size for the definite,
substantive significance---evidence s Hayek put it, of "wholes." But it was
as Hayek said "just an illusion." Pearson's columns of sparkling asterisks,
though quantitative in appearance and as appealing a is the simple truth of
the sky, signified nothing.
In Accountics Science R2
= 0.0004 = (-.02)(-.02) Can Be Deemed a Statistically Significant Linear
Relationship ---
http://www.cs.trinity.edu/~rjensen/temp/DeirdreMcCloskey/StatisticalSignificance01.htm
"So you want to get a Ph.D.?" by David Wood, BYU ---
http://www.byuaccounting.net/mediawiki/index.php?title=So_you_want_to_get_a_Ph.D.%3F
Do You Want to Teach? ---
http://financialexecutives.blogspot.com/2009/05/do-you-want-to-teach.html
Jensen Comment
Here are some added positives and negatives to consider, especially if you are
currently a practicing accountant considering becoming a professor.
Accountancy Doctoral Program Information from Jim Hasselback ---
http://www.jrhasselback.com/AtgDoctInfo.html
Why must all accounting doctoral programs be social science (particularly
econometrics) "accountics" doctoral programs?
http://faculty.trinity.edu/rjensen/theory01.htm#DoctoralPrograms
What went wrong in accounting/accountics research?
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
Bob Jensen's Codec Saga: How I Lost a Big Part of My Life's
Work
Until My Friend Rick Lillie Solved My Problem
http://www.cs.trinity.edu/~rjensen/video/VideoCodecProblems.htm
One of the most popular Excel spreadsheets that Bob Jensen ever provided to his
students ---
www.cs.trinity.edu/~rjensen/Excel/wtdcase2a.xls
John Arnold Made a Fortune at Enron. Now He’s Declared War on Bad Science
---
https://www.wired.com/2017/01/john-arnold-waging-war-on-bad-science/
Tom Lehrer on Mathematical Models and Statistics ---
http://www.youtube.com/watch?v=gfZWyUXn3So
You must watch this to the ending to appreciate it.
Carl Sagan Presents His “Baloney Detection Kit”: 8 Tools for Skeptical
Thinking ---
http://www.openculture.com/2016/04/carl-sagan-presents-his-baloney-detection-kit-8-tools-for-skeptical-thinking.html
"David Ginsberg, chief data scientist at SAP,
said communication skills are critically important in the field, and that a key
player on his big-data team is a “guy who can translate Ph.D. to English. Those
are the hardest people to find.”
James Willhite
The second is the comment that Joan Robinson made
about American Keynsians: that their theories were so flimsy that they had to
put math into them. In accounting academia, the shortest path to respectability
seems to be to use math (and statistics), whether meaningful or not.
Professor Jagdish Gangolly, SUNY
Albany
The methodology does not generate the results’:
Journal corrects accounting study with flawed
methods ---
https://retractionwatch.com/2019/11/13/the-methodology-does-not-generate-the-results-journal-corrects-accounting-study-with-flawed-methods/
What a difference a Yi,t=β0+β1IOˆi,t+β2Xi,t+ωt+εi,t.Yi,t=β0+β1IO^i,t+β2Xi,t+ωt+εi,t.
makes.
The authors of a 2016 paper
on institutional investing have corrected their article — to include the
equation above — in the wake of persistent questions about their
methodology. The move follows the protracted retraction earlier
this year of a similar article in The
Accounting Review by
the duo, Andrew
Bird and Stephen
Karolyi, of
Carnegie Mellon University in Pittsburgh, for related problems.
The bottom line, it seems,
is that Bird and Karolyi appear to be unable adequately to explain their
research methods in ways that stand up to scrutiny.
The
correction involves a paper published in The
Review of Financial Studies,
from Oxford University Press, titled “Do institutional investors demand
public disclosure. According to the statement (the
meat of which is behind a paywall):
. . .
Alex Young,
an accounting researcher at Hofstra University in Hempstead, NY, who raised
questions about Karolyi and Bird’s retracted article and ultimately failed
to replicate it,
was not one of the readers who raised concerns about the other article. But,
he told us:
I would be very interested to see the
authors’ data and code that generate the results presented
in the paper.
Jensen Comment
Because accounting researchers rarely conduct replications and the few
replications that are attempted are almost never published, it's refreshing to
see that Professor Young attempted this replication.
Bob Jensen's threads on professors who cheat ---
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize
University of Pennsylvania's Wharton School: Is There a Replication
Crisis in Research?
http://knowledge.wharton.upenn.edu/article/research-replication-crisis/
Recommendations for Change on the American
Accounting Association's
Notable Contributions to Accounting Literature Award
http://faculty.trinity.edu/rjensen/TheoryNotable.htm
Richard Feynman Creates a Simple Method for Telling Science From
Pseudoscience (1966) ---
http://www.openculture.com/2016/04/richard-feynman-creates-a-simple-method-for-telling-science-from-pseudoscience-1966.html
By Feynman's standard standard accountics science is pseudoscience
David Johnstone asked me to write a paper on the following:
"A Scrapbook on What's Wrong with the Past, Present and Future of Accountics
Science"
Bob Jensen
February 19, 2014
SSRN Download:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2398296
Abstract
For operational convenience I define accountics science as
research that features equations and/or statistical inference. Historically,
there was a heated debate in the 1920s as to whether the main research
journal of academic accounting, The Accounting Review (TAR) that
commenced in 1926, should be an accountics journal with articles that mostly
featured equations. Practitioners and teachers of college accounting won
that debate.
TAR articles and accountancy doctoral dissertations prior to
the 1970s seldom had equations. For reasons summarized below, doctoral
programs and TAR evolved to where in the 1990s there where having equations
became virtually a necessary condition for a doctoral dissertation and
acceptance of a TAR article. Qualitative normative and case method
methodologies disappeared from doctoral programs.
What’s really meant by “featured
equations” in doctoral programs is merely symbolic of the fact that North
American accounting doctoral programs pushed out most of the accounting to
make way for econometrics and statistics that are now keys to the kingdom
for promotion and tenure in accounting schools ---
http://faculty.trinity.edu/rjensen/Theory01.htm#DoctoralPrograms
The purpose of this paper is to make a case that the accountics science
monopoly of our doctoral programs and published research is seriously
flawed, especially its lack of concern about replication and focus on
simplified artificial worlds that differ too much from reality to creatively
discover findings of greater relevance to teachers of accounting and
practitioners of accounting. Accountics scientists themselves became a Cargo
Cult.
Why Economics is Having a Replication Crisis ---
https://www.bloomberg.com/view/articles/2018-09-17/economics-gets-it-wrong-because-research-is-hard-to-replicate
Replication and Validity Testing: How are things going in political
science? ---
https://replicationnetwork.com/2018/09/12/and-how-are-things-going-in-political-science/
Replication and Validity Testing: How are things going in
psychology? ---
https://replicationnetwork.com/2018/09/14/in-the-news-the-chronicle-of-higher-education-september-11-2018/
Replication and Validity Testing: How are things going in
accountancy?
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Philosophy of Science Meets the Statistics Wars ---
https://replicationnetwork.com/2018/09/10/philosophy-of-science-meets-the-statistics-wars/
Significant Effects From Low-Powered Studies Will Be Overestimates ---
https://replicationnetwork.com/2018/09/08/significant-effects-from-low-powered-studies-will-be-overestimates/
80% Power? Really?
https://replicationnetwork.com/2018/09/01/80-power-really/
Responsible Research Results: What can universities do?
https://replicationnetwork.com/2018/09/07/what-can-universities-do/
Reproducibility and Replicability in Science ---
www.nap.edu/catalog/25303/reproducibility-and-replicability-in-science
Contributors
National
Academies of Sciences, Engineering, and Medicine;
Division of Behavioral and Social Sciences and
Education;
Division on Earth and Life Studies;
Division on Engineering and Physical Sciences;
Policy and Global Affairs;
Committee on National Statistics;
Board on Behavioral, Cognitive, and Sensory
Sciences;
Nuclear and Radiation Studies Board;
Committee on Applied and Theoretical Statistics;
Board on Mathematical Sciences and Analytics;
Committee on Science, Engineering, Medicine, and
Public Policy;
Board on Research Data and Information;
Committee on Reproducibility and Replicability
in Science
Description
One of the pathways by which the scientific community confirms the validity
of a new scientific discovery is by repeating the research that produced it.
When a scientific effort fails to independently confirm the computations or
results of a previous study, some fear that it may be a symptom of a lack of
rigor in science, while others argue that such an observed inconsistency can
be an important precursor to new discovery.
[read full description]
Topics
Suggested Citation
National Academies of Sciences, Engineering, and Medicine. 2019.
Reproducibility and Replicability in Science. Washington, DC: The
National Academies Press. https://doi.org/10.17226/25303.
Pottery Barn Rule ---
https://en.wikipedia.org/wiki/Pottery_Barn_rule
A Pottery Barn Rule for Scientific Journals ---
https://thehardestscience.com/2012/09/27/a-pottery-barn-rule-for-scientific-journals/
Proposed: Once a journal has published a study, it
becomes responsible for publishing direct replications of that study.
Publication is subject to editorial review of technical merit but is not
dependent on outcome. Replications shall be published as brief reports in an
online supplement, linked from the electronic version of the original.
Another Journal Adopts the “Pottery Barn Rule” ---
https://replicationnetwork.com/2019/05/04/another-journal-adopts-the-pottery-barn-rule/
I suspect the AAA has not even considered a pottery barn rule for journals
like The Accounting Review.
Ten universities that have officially joined a UK network set up to tackle
the issue of reproducibility in research ---
https://www.timeshighereducation.com/news/ten-uk-universities-create-reproducibility-focused-senior-roles#survey-answer
Each university has created a role that will
feature a senior academic leading on practical steps the institution is
taking to bolster research quality, such as better training, open data
practices and assessing the criteria used in recruitment and promotion
decisions
Jensen Comment
Leading academic accounting journals publish neither commentaries on their
articles nor replications of research. It's almost rare for academic accounting
research to be independently reproduced or otherwise verified. It's not
that accounting researchers are more accurate and honest than scientists. It's
more of a problem with lack of relevance of the research in the profession of
accountancy ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
It's doubtful that the UK network mentioned above will affect schools of
business in general.
Creating Relevance of
Accounting Research (ROAR) Scores to Evaluate the Relevance of
Accounting Research to Practice
SSRN
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3501871
49 Pages
Posted: 17 Dec 2019
Brigham Young University -
School of Accountancy
Brigham Young University -
School of Accountancy
Brigham Young University
Brigham Young University -
School of Accountancy
Date Written: December 10, 2019
Keywords: Research Relevance,
Accounting
Rankings, Practice-Oriented Research, Journal Rankings
JEL Classification: M40, M41, M49, M00
Abstract
The relevance of
accounting
academic research to practice has been frequently discussed in the
accounting
academy; yet, very little data has been put forth in these discussions.
We create relevance of
accounting
research (ROAR) scores by having practitioners read and evaluate the
abstract of every article published in 12 leading
accounting
journals for the past three years. The ROAR scores allow for a more
evidence-based evaluation and discussion of how academic
accounting
research is relevant to practitioners. Through these scores, we identify
the articles, authors, journals, and
accounting
topic areas and methodologies that are producing practice-relevant
scholarship. By continuing to produce these scores in perpetuity, we
expect this data to help academics and practitioners better identify and
utilize practice-relevant scholarship.
V. CONCLUSIONS
This research provides empirical data
about the contribution accounting academics are making to practice.
Specifically, we had nearly 1,000 professionals read the abstract of
academic accounting articles and rate how relevant the articles are to
practice. We then present the data to rank journals, universities, and
individual scholars. Overall, we interpret the results to suggest that
some of the research that is currently produced and published in 12
accounting journals is relevant to practice, but at the same time, there
is room to improve. Our hope is that by producing these rankings, it
will encourage journals, institutions, and authors to produce and
publish more relevant research, thus helping to fulfill the Pathways
charge “to build a learned profession.”
We now take the liberty to provide some
normative comments about our research findings in relation to the goal
of producing a learned profession.
One of the key findings in this study is
that the traditional top 3 and top 6 journals are not producing the most
or the greatest average amount of practice relevant research, especially
for the distinct accounting topic areas.
Prior research shows that the collection of a small group of 3/6
journals is not representative of the breadth of accounting scholarship
(Merchant 2010; Summers and Wood 2017; Barrick, et al. 2019). Given the
empirical research on this topic, we question why institutions and
individual scholars continue to have a myopic focus on a small set of
journals. The idea that these 3/6 journals publish “the best” research
is not empirically substantiated. While many scholars argue that the
focus is necessary for promotion and tenure decisions, this seems like a
poor excuse (see Kaplan 2019). Benchmarking production in a larger set
of journals would not be hard, and indeed has been done (Glover, Prawitt,
and Wood 2006; Glover, Prawitt, Summers, and Wood 2019). Furthermore, as
trained scholars, we could read and opine on article quality without
outsourcing that decision to simple counts of publications in “accepted”
journals. We call on the 18 We recognize that only looking at 12
journals also limits the scope unnecessarily. The primary reason for the
limitation in this paper is the challenge of collecting data for a
greater number of journals. Thus, we view 12 journals as a start, but
not the ideal. academy to be much more open to considering research in
all venues and to push evaluation committees to do the same.
A second important finding is that
contribution should be a much larger construct than is previously
considered in the academy. In our experience, reviewers, editors, and
authors narrowly define the contribution an article makes and are too
often unwilling to consider a broad view of contribution. The current
practice of contribution too often requires authors to “look like
everyone else” and rarely, if ever, allows for a contribution that is
focused exclusively on a practice audience. We encourage the AACSB, AAA,
and other stakeholders to make a more concerted effort to increase the
focus on practice-relevant research. This may entail journals rewriting
mission statements, editors taking a more pro-active approach, and
training of reviewers to allow articles to be published that focus
exclusively on “practical contributions.” This paper has important
limitations. First, we only examine 12 journals. Ideally, we would like
to examine a much more expansive set of journals but access to
professionals makes this challenging at this time. Second, measuring
relevance is difficult. We do not believe this paper “solves” all of the
issues and we agree that we have not perfectly measured relevance.
However, we believe this represents a reasonable first attempt in this
regard and moves the literature forward. Third, the ROAR scores are only
as good as the professionals’ opinions. Again, we limited the scores to
5 professionals hoping to get robust opinions, but realize that some
articles (and thus authors and universities) are not likely rated
“correctly.” Furthermore, articles may make a contribution to practice
in time and those contributions may not be readily apparent by
professionals at the time of publication. Future research can improve
upon what we have done in this regard.
We are hopeful that shining a light on
the journals, institutions, and authors that are excelling at producing
research relevant to practice will encourage increased emphasis in this
area.
Jensen Question
Is accounting research stuck in a rut of repetitiveness and irrelevancy?
"Accounting
Craftspeople versus Accounting Seers: Exploring the Relevance and
Innovation Gaps in Academic Accounting Research," by William E.
McCarthy, Accounting
Horizons, December 2012, Vol. 26, No. 4, pp. 833-843 ---
http://aaajournals.org/doi/full/10.2308/acch-10313
Is accounting research stuck in a rut of
repetitiveness and irrelevancy?
I (Professor
McCarthy) would
answer yes, and I would even predict that both its gap in relevancy and
its gap in innovation are going to continue to get worse if the people
and the attitudes that govern inquiry in the American academy remain the
same. From my perspective in
accounting information systems, mainstream accounting research topics
have changed very little in 30 years, except for the fact that their
scope now seems much more narrow and crowded. More and more people seem
to be studying the same topics in financial reporting and managerial
control in the same ways, over and over and over. My suggestions to get
out of this rut are simple. First, the profession should allow itself to
think a little bit normatively, so we can actually target practice
improvement as a real goal. And second, we need to allow new scholars a
wider berth in research topics and methods, so we can actually give the
kind of creativity and innovation that occurs naturally with young
people a chance to blossom.
Since the
2008 financial crisis, colleges and universities have faced
increased pressure to identify essential disciplines, and cut the
rest. In 2009, Washington State University announced it would
eliminate the department of theatre and dance, the department of
community and rural sociology, and the German major – the same year
that the University of Louisiana at Lafayette ended its philosophy
major. In 2012, Emory University in Atlanta did away with the visual
arts department and its journalism programme. The cutbacks aren’t
restricted to the humanities: in 2011, the state of Texas announced
it would eliminate nearly half of its public undergraduate physics
programmes. Even when there’s no downsizing, faculty salaries have
been frozen and departmental budgets have shrunk.
But despite the funding crunch, it’s a bull
market for academic economists. According to a 2015 sociological study in
the Journal
of Economic Perspectives, the median salary of economics
teachers in 2012 increased to $103,000 – nearly $30,000 more than
sociologists. For the top 10 per cent of economists, that figure
jumps to $160,000, higher than the next most lucrative academic
discipline – engineering. These figures, stress the study’s authors,
do not include other sources of income such as consulting fees for
banks and hedge funds, which, as many learned from the documentary Inside
Job (2010),
are often substantial. (Ben Bernanke, a former academic economist
and ex-chairman of the Federal Reserve, earns $200,000-$400,000 for
a single appearance.)
Unlike
engineers and chemists, economists cannot point to concrete objects
– cell phones, plastic – to justify the high valuation of their
discipline. Nor, in the case of financial economics and
macroeconomics, can they point to the predictive power of their
theories. Hedge funds employ cutting-edge economists who command
princely fees, but routinely underperform index funds. Eight years
ago, Warren Buffet made a 10-year, $1 million bet that a portfolio
of hedge funds would lose to the S&P 500, and it looks like he’s
going to collect. In 1998, a fund that boasted two Nobel Laureates
as advisors collapsed, nearly causing a global financial crisis.
The failure of the field to predict the 2008
crisis has also been well-documented. In 2003, for example, only
five years before the Great Recession, the Nobel Laureate Robert E
Lucas Jr told the
American Economic Association that ‘macroeconomics […] has
succeeded: its central problem of depression prevention has been
solved’. Short-term predictions fair little better – in April 2014,
for instance, a
survey of
67 economists yielded 100 per cent consensus: interest rates would
rise over the next six months. Instead, they fell. A lot.
Nonetheless, surveys
indicate that
economists see their discipline as ‘the most scientific of the
social sciences’. What is the basis of this collective faith, shared
by universities, presidents and billionaires? Shouldn’t successful
and powerful people be the first to spot the exaggerated worth of a
discipline, and the least likely to pay for it?
In the
hypothetical worlds of rational markets, where much of economic
theory is set, perhaps. But real-world history tells a different
story, of mathematical models masquerading as science and a public
eager to buy them, mistaking elegant equations for empirical
accuracy.
Real Science versus Pseudo Science ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Pseudo-Science
Jensen Comment
Academic accounting (accountics) scientists took economic astrology a
step further when their leading journals stopped encouraging and
publishing commentaries and replications of published articles ---
How Accountics Scientists Should Change:
"Frankly, Scarlett, after I get a hit for my resume in The
Accounting Review I just
don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Times are changing in social science research
(including economics) where misleading p-values are no longer the Holy
Grail. Change among accountics scientist will lag behind change in
social science research but some day leading academic accounting
research journals may publish articles without equations and/or articles
of interest to some accounting practitioner somewhere in the world ---
See below
Academic accounting researchers sheilded themselves from validity
challenges by refusing to publish commentaries and refusing to accept
replication studies for publication ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Scientific Method in Accounting Has Not Been a Method for Generating New
Theories
The following is a quote from the 1993 President’s
Message of Gary Sundem, President’s
Message. Accounting Education News 21 (3). 3.
Although empirical scientific
method has made many positive contributions to accounting research, it
is not the method that is likely to generate new theories, though it
will be useful in testing them. For example, Einstein’s theories were
not developed empirically, but they relied on understanding the
empirical evidence and they were tested empirically. Both the
development and testing of theories should be recognized as acceptable
accounting research.
Message from Bob Jensen to
Steve Kachelmeier in 2015
Hi Steve,
As usual, these AECM threads between you, me, and Paul Williams resolve
nothing to date. TAR still has zero articles without equations unless
such articles are forced upon editors like the Kaplan article was forced
upon you as Senior Editor. TAR still has no commentaries about the
papers it publishes and the authors make no attempt to communicate and
have dialog about their research on the AECM or the AAA Commons.
I do hope that our AECM threads will continue and lead one day to when
the top academic research journals do more to both encourage (1)
validation (usually by speedy replication), (2) alternate methodologies,
(3) more innovative research, and (4) more interactive commentaries.
I remind you that Professor Basu's essay is only one of four essays
bundled together in Accounting Horizons on the topic of how to make
accounting research, especially the so-called Accounting Sciience or
Accountics Science or Cargo Cult science, more innovative.
The four essays in this bundle are summarized and extensively quoted at http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Essays
- "Framing the Issue of Research Quality in a Context of Research
Diversity," by Christopher S. Chapman ---
- "Accounting Craftspeople versus Accounting Seers: Exploring the
Relevance and Innovation Gaps in Academic Accounting Research," by
William E. McCarthy ---
- "Is Accounting Research Stagnant?" by Donald V. Moser ---
- Cargo Cult Science "How Can Accounting Researchers Become More
Innovative? by Sudipta Basu ---
I will try to keep drawing attention to these important essays and spend
the rest of my professional life trying to bring accounting research
closer to the accounting profession.
I also want to dispel the myth that accountics research is harder than
making research discoveries without equations. The hardest research I
can imagine (and where I failed) is to make a discovery that has a
noteworthy impact on the accounting profession. I always look but never
find such discoveries reported in TAR.
The easiest research is to purchase a database and beat it with an
econometric stick until something falls out of the clouds. I've searched
for years and find very little that has a noteworthy impact on the
accounting profession. Quite often there is a noteworthy impact on other
members of the Cargo Cult and doctoral students seeking to beat the same
data with their sticks. But try to find a practitioner with an interest
in these academic accounting discoveries?
Our latest thread leads me to such questions as:
- Is accounting research of inferior quality relative to other
disciplines like engineering and finance?
- Are there serious innovation gaps in academic accounting
research?
- Is accounting research stagnant?
- How can accounting researchers be more innovative?
- Is there an "absence of dissent" in academic accounting
research?
- Is there an absence of diversity in our top academic accounting
research journals and doctoral programs?
- Is there a serious disinterest (except among the Cargo Cult) and
lack of validation in findings reported in our academic accounting
research journals, especially TAR?
- Is there a huge communications gap between academic accounting
researchers and those who toil teaching accounting and practicing
accounting?
- Why do our accountics scientists virtually ignore the AECM and
the AAA Commons and the Pathways Commission Report?
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One fall out of this thread is that I've been privately
asked to write a paper about such matters. I hope that others will
compete with me in thinking and writing about these serious challenges
to academic accounting research that never seem to get resolved.
Thank you Steve for sometimes responding in my threads on
such issues in the AECM.
Respectfully,
Bob Jensen
Sadly Steve like all other
accountics scientists (with one sort of exception) no longer contributes
to the AECM
April 22, 2012 reply from Bob Jensen
Steve Kachelmeier wrote:
"I am very proud to have accepted and published
the Magilke, Mayhew, and Pike experiment, and I think it is excellent
research, blending both psychology and economic insights to examine
issues of clear importance to accounting and auditing. In fact, the
hypocrisy somewhat amazes me that, amidst all the complaining about a
perceived excess of financial empirical-archival (or what you so fondly
call "accountics" studies), even those studies that are quite different
in style also provoke wrath."
July 8, 2009 reply from Dennis Beresford [dberesfo@TERRY.UGA.EDU]
Bob,
I read the first 25
or so pages of the paper. As an actual audit committee member, I
feel comfortable in saying that the assumptions going into the
experiment design make no sense whatsoever. And using students to
"compete to be hired" as audit committee members is preposterous.
I have served on five
audit committees of large public companies, all as chairman. My
compensation has included cash, stock options, restricted stock, and
unrestricted stock. The value of those options has gone from zero to
seven figures and back to zero and there have been similar
fluctuations in the value of the stock. In no case did I ever sell a
share or exercise an option prior to leaving a board. And in every
case my *only *objective as an audit committee member was to do my
best to insure that the company followed GAAP to the best of its
abilities and that the auditors did the very best audit possible.
No system is perfect
and not all audit committee members are perfect (certainly not me!).
But I believe that the vast majority of directors want to do the
right thing. Audit committee members take their responsibilities
extremely seriously as evidenced by the very large number of
seminars, newsletters, etc. to keep us up to date. It's too bad that
accounting researchers can't find ways to actually measure what is
going on in practice rather than revert to silly exercises like this
paper. To have it published in the leading accounting journal shows
how out of touch the academy truly is, I'm afraid.
Denny Beresford
Bob Jensen's Reply
Thanks Steve, but if if the Maglke, Mayhew, and Pike experiment was such
excellent research, why did no independent accountics science
researchers or practitioners find it worthy of being validated?
The least likely accountics science research
studies to be replicated are accountics behavioral experiments that are
usually quite similar to psychology experiments and commonly use student
surrogates for real life professionals? Why is that these studies are so
very, very rarely replicated by independent researchers using either
other student surrogates or real world professionals?
Why are these accountics behavioral experiments
virtually never worthy of replication?
Years ago I was hired, along with
another accounting professor, by the FASB to evaluate research proposals
on investigating the impact of FAS 13. The FASB reported to us that they
were interested in capital markets studies and case studies. The one
thing they explicitly stated, however, was that they were not interested
in behavioral experiments. Wonder why?
Bob Jensen's
threads on what went wrong with academic accounting research
?
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
The Bottom Line
As with so many disciplines academic research ceased being
relevant to the outside world --- like Political Science
Chronicle of Higher Education: How
Political Science Became Irrelevant
The field turned its back on the Beltway
https://www.chronicle.com/article/How-Political-Science-Became/245777?utm_source=cr&utm_medium=en&cid=cr
In a 2008
speech to the Association of American Universities, the former Texas A&M
University president and then-Secretary of Defense Robert M. Gates
declared that "we must again embrace eggheads and ideas." He went on to
recall the role of universities as "vital centers of new research"
during the Cold War. The late Thomas Schelling would have agreed. The
Harvard economist and Nobel laureate once described "a wholly
unprecedented ‘demand’ for the results of theoretical work. … Unlike any
other country … the United States had a government permeable not only by
academic ideas but by academic people."
Gates’s
efforts to bridge the gap between Beltway and ivory tower came at a time
when it was growing wider, and indeed, that gap has continued to grow in
the years since. According to a Teaching, Research & International
Policy Project
survey,
a regular poll of international-relations scholars, very few believe
they should not contribute to policy making in some way. Yet a majority
also recognize that the state-of-the-art approaches of academic social
science are precisely those approaches that policy makers find least
helpful. A related poll of senior national-security decision-makers
confirmed that, for the most part, academic social science is not giving
them what they want.
The problem,
in a nutshell, is that scholars increasingly privilege rigor over
relevance. That has become strikingly apparent in the subfield of
international security (the part of political science that once most
successfully balanced those tensions), and has now fully permeated
political science as a whole. This skewed set of intellectual priorities
— and the field’s transition into a cult of the irrelevant — is the
unintended result of disciplinary professionalization.
The
decreasing relevance of political science flies in the face of a
widespread and longstanding optimism about the compatibility of rigorous
social science and policy relevance that goes back to the Progressive
Era and the very dawn of modern American social science. One of the most
important figures in the early development of political science, the
University of Chicago’s Charles Merriam, epitomized the ambivalence
among political scientists as to whether what they did was "social
science as activism or technique," as the American-studies scholar Mark
C. Smith put it. Later, the growing tension between rigor and relevance
would lead to what David M. Ricci
termed
the "tragedy of political science": As the discipline sought to become
more scientific, in part to better address society’s ills, it became
less practically relevant.
When
political scientists seek rigor, they increasingly conflate it with the
use of particular methods such as statistics or formal modeling. The
sociologist Leslie A. White
captured
that ethos as early as 1943:
We may thus
gauge the ‘scientific-ness’ of a study by observing the extent to which
it employs mathematics — the more mathematics the more scientific the
study. Physics is the most mature of the sciences, and it is also the
most mathematical. Sociology is the least mature of the sciences and
uses very little mathematics. To make sociology scientific, therefore,
we should make it mathematical.
Relevance, in
contrast, is gauged by whether scholarship contributes to the making of
policy decisions.
That
increasing tendency to embrace methods and models for their own sake
rather than because they can help us answer substantively important
questions is, I believe, a misstep for the field. This trend is in part
the result of the otherwise normal and productive workings of science,
but it is also reinforced by less legitimate motives, particularly
organizational self-interest and the particularities of our intellectual
culture.
While
the use of statistics and formal models is not by definition irrelevant,
their edging out of qualitative approaches has over time made the
discipline less relevant to policy makers. Many pressing policy
questions are not readily amenable to the preferred methodological tools
of political scientists. Qualitative case studies most often produce the
research that policy makers need, and yet the field is moving away from
them.
Continued in article
Jensen Comment
This sounds so, so familiar. The same type of practitioner irrelevancy
commenced in the 1960s when when academic accounting became "accountics
science" --- About the time when The Accounting
Review stopped publishing submissions that did not have equations and
practicing accountants dropped out of the American Accounting Association
and stopped subscribing to academic accounting research journals.
An Analysis of the Contributions of The Accounting
Review Across 80 Years: 1926-2005 --- http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm
Co-authored with Jean Heck and forthcoming in the December 2007 edition
of the Accounting Historians Journal.
Unlike engineering, academic accounting research is no
longer a focal point of practicing accountants. If we gave a prize for
academic research discovery that changed the lives of the practicing
profession who would practitioners choose to honor for the findings?
The silence is deafening!
Dismal Science Cartel: Economists and its main association face
criticism that the field's power centers are a small number of top departments.
Grad students, meanwhile, push for standards of conduct. ---
Click Here
Jensen Comment
Unlike business disciplines like accounting, economists are at long last
promoting and publishing research replications ---
https://www.bloomberg.com/opinion/articles/2018-09-17/economics-gets-it-wrong-because-research-is-hard-to-replicate
Also see
https://davegiles.blogspot.com/2018/10/the-refereeing-process-in-economics.html
Why so little replication in accounting research?
Allegedly accounting researchers are always truthful and painstakingly accurate
there's no need for replication and validity research ---
In truth the reason is that there are so few readers of accounting research who
care about validity.
I think a PhD seminar should focus on the dogged tradition
in other disciplines to replicate original research findings. We usually think
of the physical sciences for replication examples, although the social science
research journals are getting more and more concerned about replication and
validity. Interestingly, some areas of the humanities are dogged about
replication, particularly historians. Much of historical research is devoted to
validating historical claims. For example, see
http://hnn.us/articles/568.html
The Cult of Statistical Significance: How Standard Error Costs Us
Jobs, Justice, and Lives, by Stephen T. Ziliak and Deirdre N. McCloskey
(Ann Arbor: University of Michigan Press, ISBN-13: 978-472-05007-9, 2007)
http://www.cs.trinity.edu/~rjensen/temp/DeirdreMcCloskey/StatisticalSignificance01.htm
Page 206
Like scientists today in medical and economic and other
sizeless sciences, Pearson mistook a large sample size for the definite,
substantive significance---evidence s Hayek put it, of "wholes." But it was
as Hayek said "just an illusion." Pearson's columns of sparkling asterisks,
though quantitative in appearance and as appealing a is the simple truth of
the sky, signified nothing.
In Accountics Science R2
= 0.0004 = (-.02)(-.02) Can Be Deemed a Statistically Significant Linear
Relationship ---
http://www.cs.trinity.edu/~rjensen/temp/DeirdreMcCloskey/StatisticalSignificance01.htm
How Accountics Scientists Should Change:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to change this
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
"The Absence of Dissent," by Joni J. Young,
Accounting and the Public Interest 9 (1), 1 (2009); doi:
10.2308/api.2009.9.1.1 ---
Click Here
ABSTRACT:
The persistent malaise in accounting research continues to resist remedy.
Hopwood (2007) argues that revitalizing academic accounting cannot be
accomplished by simply working more diligently within current paradigms.
Based on an analysis of articles published in Auditing: A Journal of
Practice & Theory, I show that this paradigm block is not confined to
financial accounting research but extends beyond the work appearing in the
so-called premier U.S. journals. Based on this demonstration I argue that
accounting academics must tolerate (and even encourage) dissent for
accounting to enjoy a vital research academy. ©2009 American Accounting
Association
June 15, 2010 reply from Paul Williams
[Paul_Williams@NCSU.EDU]
Bob,
Thank you advertising the availability of this paper in API, the on line
journal of the AAA Public Interest Section (which I just stepped down
from editing after my 3+ years stint). Joni is one of the most
(incisively) thoughtful people in our discipline (her paper in AOS,
"Making Up Users" is a must read). The absence of dissent is evident
from even casual perusal of the so-called premier journals. Every paper
is erected on the same premises -- assumptions about human decision
making (i.e., rational decision theory), "free markets," economic
naturalism, etc. There is a metronomic repetition of the same
meta-narrative about the "way the world is" buttressed by exercises in
statistical causal analysis (the method of agricultural research, but
without any of the controls). There is a growing body of evidence that
these premises are myths -- the so-called rigorous research valorized in
the "top" journals is built on an ideological foundation of sand.
Paul Williams
paul_williams@ncsu.edu
(919)515-4436
A Must Read Document
The Pathways Commission Implementing
Recommendations for the Future of Accounting Education: The First Year Update
American Accounting Association
August 2013
http://commons.aaahq.org/files/3026eae0b3/Pathways_Update_FIN.pdf
Draft: August 3, 2010
http://commons.aaahq.org/files/8273566240/Overview_8_03_10.pdf
I hope
some creative AECM and CPA-L threads emerge on this topic. In particular, I hope
this document stimulates academic accounting research that is more focused on
the needs of the business world and the profession (which was the main theme of
Bob Kaplan’s outstanding plenary session on August 4 in San Francisco).
Note that to watch the entire Kaplan video ---
http://commons.aaahq.org/hives/531d5280c3/posts?postTypeName=session+video
I think the video is only available to AAA members.
Also note the AAA’s new Issues and Resources page ---
http://aaahq.org/resources.cfm
September 9, 2011 reply from Paul Williams
Bob,
I have avoided chiming in on this thread; have gone down this same road and
it is a cul-de-sac. But I want to say that this line of argument is a
clever one. The answer to your rhetorical question is, No, they aren't
more ethical than other "scientists." As you tout the Kaplan
speech I would add the caution that before he raised the issue of practice,
he still had to praise the accomplishments of "accountics" research by
claiming numerous times that this research has led us to greater
understanding about analysts, markets, info. content, contracting, etc.
However, none of that is actually true. As a panelist at the AAA
meeting I juxtaposed Kaplan's praise for what accountics research has taught
us with Paul Krugman's observations about Larry Summer's 1999 observation
that GAAP is what makes US capital markets so stable and efficient. Of
course, as Krugman noted, none of that turned out to be true. And if
that isn't true, then Kaplan's assessment of accountics research isn't
credible, either. If we actually did understand what he claimed we now
understand much better than we did before, the financial crisis of 2008
(still ongoing) would not have happened. The title of my talk was (the
panel was organized by Cheryl McWatters) "The Epistemology of
Ignorance." An obsessive preoccupation with method could be a choice not to
understand certain things-- a choice to rigorously understand things as you
already think they are or want so desperately to continue to believe for
reasons other than scientific ones.
Paul
"Social Media Lure Academics Frustrated by Journals," by Jennifer
Howard, Chronicle of Higher Education, February 22, 2011 ---
http://chronicle.com/article/Social-Media-Lure-Academics/126426/
Social media have become serious academic tools for
many scholars, who use them for collaborative writing, conferencing, sharing
images, and other research-related activities. So says a study just posted
online called "Social
Media and Research Workflow." Among its findings:
Social scientists are now more likely to use social-media tools in their
research than are their counterparts in the biological sciences. And
researchers prefer popular applications like Twitter to those made for
academic users.
The survey, conducted late last year, is the work
of Ciber, as the Centre for Information Behaviour and the Evaluation of
Research is known. Ciber is an interdisciplinary research center based in
University College London's department of information studies. It takes on
research projects for various clients. This one was paid for by the Emerald
Publishing Group Ltd. The idea for the survey came from the Charleston
Observatory, the research arm of the annual Charleston Conference of
librarians, publishers, and vendors.
An online questionnaire went to researchers and
editors as well as publishers, administrators, and librarians on
cross-disciplinary e-mail lists maintained by five participating
publishers—Cambridge University Press; Emerald; Kluwer; Taylor & Francis;
and Wiley. Responses came from 2,414 researchers in 215 countries and "every
discipline under the sun," according to David Nicholas, one of the lead
researchers on the study. He directs the department of information studies
at University College London.
Continued in article
Bob Jensen's threads on social networking are at
http://faculty.trinity.edu/rjensen/ListservRoles.htm
The videos of the three plenary speakers at the 2010 Annual Meetings in San
Francisco are now linked at
http://commons.aaahq.org/hives/1f77f8e656/summary
Although all three speakers
provided inspirational presentations, Steve Zeff and I both concluded that Bob
Kaplan’s presentation was possibly the best that we had ever viewed among all
past AAA plenary sessions. And we’ve seen a lot of plenary sessions in our long
professional careers.
Now that Kaplan’s video is
available I cannot overstress the importance that accounting educators and
researchers watch the video of Bob Kaplan's August 4, 2010 plenary presentation
Note that to watch the entire Kaplan video ---
http://commons.aaahq.org/hives/531d5280c3/posts?postTypeName=session+video
I think the video is only available to AAA members.
Also see (slow loading)
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
Trivia Questions
1. Why did Bob wish he’d worn a different color suit?
2. What does JAE stand for
besides the Journal of Accounting and Economics?
September 9, 2011 reply from Paul Williams
Bob,
I have avoided chiming in on this thread; have gone down this same road and
it is a cul-de-sac. But I want to say that this line of argument is a
clever one. The answer to your rhetorical question is, No, they aren't
more ethical than other "scientists." As you tout the Kaplan
speech I would add the caution that before he raised the issue of practice,
he still had to praise the accomplishments of "accountics" research by
claiming numerous times that this research has led us to greater
understanding about analysts, markets, info. content, contracting, etc.
However, none of that is actually true. As a panelist at the AAA
meeting I juxtaposed Kaplan's praise for what accountics research has taught
us with Paul Krugman's observations about Larry Summer's 1999 observation
that GAAP is what makes US capital markets so stable and efficient. Of
course, as Krugman noted, none of that turned out to be true. And if
that isn't true, then Kaplan's assessment of accountics research isn't
credible, either. If we actually did understand what he claimed we now
understand much better than we did before, the financial crisis of 2008
(still ongoing) would not have happened. The title of my talk was (the
panel was organized by Cheryl McWatters) "The Epistemology of
Ignorance." An obsessive preoccupation with method could be a choice not to
understand certain things-- a choice to rigorously understand things as you
already think they are or want so desperately to continue to believe for
reasons other than scientific ones.
Paul
TAR versus AMR and AMJ and Footnotes of the American Sociology Association
Introduction
Accountics Scientists Seeking Truth:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to change this
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Hi Roger,
Although I agree with you regarding how the AAA journals do not have a means of
publishing "short research articles quickly," Accounting Horizons
(certainly not TAR) for publishing now has a Commentaries section. I don't know
if the time between submission and publication of an AH Commentary is faster on
average than mainline AH research articles, but my priors are that it is quicker
to get AH Commentaries published on a more timely basis.
The disappointing aspect of the published AH Commentaries to date is that they
do not directly focus on controversies of published research articles. Nor are
they a vehicle for publishing abstracts of attempted replications of published
accounting research. I don't know if this is AH policy or just the lack of
replication in accountics science. In real science journals there are generally
alternatives for publishing abstracts of replication outcomes and commentaries
on published science articles. The AH Commentaries do tend to provide literature
reviews on narrow topics.
The American Sociological Association has a journal called Footnotes ---
http://www.asanet.org/journals/footnotes.cfm
Article Submissions are limited to
1,100 words and must have journalistic value (e.g., timeliness, significant
impact, general interest) rather than be research-oriented or scholarly in
nature. Submissions are reviewed by the editorial board for possible
publication.
ASA Forum (including letters to
the editor) - 400-600-word limit.
Obituaries - 700-word limit.
Announcements - 150-word limit.
All submissions should include a contact name and
an email address. ASA reserves the right to edit for style and length all
material published.
Deadline for all materials is the
first of the month preceding publication (e.g., February 1 for March issue).
Send communications on materials, subscriptions,
and advertising to:
American Sociological Association
1430 K Street, NW - Suite 600
Washington, DC 20005-4701
The American Accounting Association Journals do not have something
comparable to Footnotes or the ASA Forum, although the AAA does
have both the AAA Commons and the AECM where non-refereed "publishing" is common
for gadflies like Bob Jensen. The Commons is still restricted to AAA members and
as such does not get covered by search crawlers like Google. The AECM is
unrestricted to AAA Members, but since it requires free subscribing it does not
get crawled over by Google, Yahoo, Bing, etc.
Hi Zane,
I, along with others, have been trying to make TAR and other AAA journals more
responsible about publishing the commentaries on previously published resear4ch
papers, including commentaries on successful or failed replication efforts.
TAR is particularly troublesome in this regard. Former TAR Senior Editor Steve
Kachelmeier insists that the problem does not lie with TAR editors. Literally
every submitted commentary, including short reports of replication efforts, has
been rejected by TAR referees for decades.
So I looked into how other research journals met their responsibilities for
publishing these commentaries. They do it in a variety of ways, but my
preferred model is the Dialogue section of The Academy of Management
Journal (AMJ) --- in part because the AMJ has been somewhat successful in
engaging practitioner commententaries. I wrote the following at
The Dialogue section of the AMJ invites reader comments challenging validity of
assumptions in theory and, where applicable, the assumptions of an analytics
paper. The AMJ takes a slightly different tack for challenging validity in what
is called an “Editors’ Forum,” examples of which are listed in the index at
http://journals.aomonline.org/amj/amj_index_2007.pdf
One index had some academic vs. practice Editors'
Forum articles that especially caught my eye as it might be extrapolated to the
schism between academic accounting research versus practitioner needs for
applied research:
Bartunek, Jean M. Editors’ forum (AMJ turns 50!
Looking back and looking ahead)—Academic-practitioner collaboration need not
require joint or relevant research: Toward a relational
Cohen, Debra J. Editors’ forum
(Research-practice gap in human resource management)—The very separate
worlds of academic and practitioner publications in human resource
management: Reasons for the divide and concrete solutions for bridging the
gap. 50(5): 1013–10
Guest, David E. Editors’ forum
(Research-practice gap in human resource management)—Don’t shoot the
messenger: A wake-up call for academics. 50(5): 1020–1026.
Hambrick, Donald C. Editors’ forum (AMJ turns
50! Looking back and looking ahead)—The field of management’s devotion to
theory: Too much of a good thing? 50(6): 1346–1352.
Latham, Gary P. Editors’ forum
(Research-practice gap in human resource management)—A speculative
perspective on the transfer of behavioral science findings to the workplace:
“The times they are a-changin’.” 50(5): 1027–1032.
Lawler, Edward E, III. Editors’ forum
(Research-practice gap in human resource management)—Why HR practices are
not evidence-based. 50(5): 1033–1036.
Markides, Costas. Editors’ forum (Research with
relevance to practice)—In search of ambidextrous professors. 50(4): 762–768.
McGahan, Anita M. Editors’ forum (Research with
relevance to practice)—Academic research that matters to managers: On
zebras, dogs, lemmings,
Rousseau, Denise M. Editors’ forum
(Research-practice gap in human resource management)—A sticky, leveraging,
and scalable strategy for high-quality connections between organizational
practice and science. 50(5): 1037–1042.
Rynes, Sara L. Editors’ forum (Research with
relevance to practice)—Editor’s foreword—Carrying Sumantra Ghoshal’s torch:
Creating more positive, relevant, and ecologically valid research. 50(4):
745–747.
Rynes, Sara L. Editors’ forum (Research-practice
gap in human resource management)—Editor’s afterword— Let’s create a tipping
point: What academics and practitioners can do, alone and together. 50(5):
1046–1054.
Rynes, Sara L., Tamara L. Giluk, and Kenneth G.
Brown. Editors’ forum (Research-practice gap in human resource
management)—The very separate worlds of academic and practitioner
periodicals in human resource management: Implications
More at
http://journals.aomonline.org/amj/amj_index_2007.pdf
Also see the index sites for earlier years ---
http://journals.aomonline.org/amj/article_index.htm
My appeal for an AMJ model as a way to meet TAR responsibilities for reporting
replications and commentaries fell on deaf ears in the AECM.
So now I'm working on another tack The AAA Commons now publishes TAR tables of
contents. But the accountics science authors have never made an effort to
explain their research on the Commons. And members of the AAA have never taken
an initiative to comment on those articles or to report successful or failed
replication efforts.
I think the problem is that a spark has to ignite both the TAR authors and the
AAA membership to commence dialogs on TAR articles as well as articles published
by other AAA journals.
To this extent I have the start of a working paper on these issues at
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
My purpose in starting the above very unfinished working paper is two fold.
Firstly, it is to show how the very best of the AAA's accountics scientists up
to now just don't give a damn about supporting the AAA Commons. My mission for
the rest my life will be to change this.
Secondly, it is to show that the AAA membership has shown no genuine interest to
discuss research published in the AAA journals. My mission in life for the rest
of my life will be to change this. Julie Smith David, bless her heart, is now
working at my behest to provide me with data regarding who has been the most
supportive of the AAA Commons over since it was formed in 2008. From this I hope
to learn more about what active contributors truly want from their Commons. To
date my own efforts have simply been to add honey-soaked tidbits to help attract
the publish to the AAA Commons. I most certainly like more active contributors
to relieve me of this chore in my life.
My impossible dream is to draw accounting teachers, students, and
practitioners into public hives of discussion of AAA journal research.
Maybe I'm just a dreamer. But at least I'm still trying after every other
initiative I've attempted to draw accountics researchers onto the Commons has
failed. I know we have some accountics scientist lurkers on the AECM, but aside
from Steve Kachelmeier they do not submit posts regarding their work in progress
or their published works.
Thank you Steve for providing value added in your AECM debates with me and some
others like Paul Williams even if that debate did boil over.
Respectfully,
Bob Jensen
Hi Marc,
Paul Williams has addressed your accountics scientists power questions much
better than me in both an AOS article and in AECM messaging ---
http://www.trinity.edu/rjensen/TheoryTAR.htm#Comments
Williams, P. F., Gregory, J. J., I. L. (2006). The Winnowing Away of Behavioral
Accounting Research in the U.S.:The Process of Anointing Academic Elites.
Accounting, Organizations and Society/Elsevier, 31, 783-818.
Williams, P.F. “Reshaping Accounting Research: Living in the World in Which We
Live,” Accounting Forum, 33, 2009: 274 – 279.
Schwartz, B., Williams, S. and Williams, P.F., “U.S. Doctoral Students
Familiarity with Accounting Journals: Insights into the Structure of the U.S.
Academy,” Critical Perspectives on Accounting, 16(2),April 2005: 327-348.
Williams, Paul F., “A Reply to the Commentaries on: Recovering Accounting as a
Worthy Endeavor,” Critical Perspectives on Accounting, 15(4/5), 2004: 551-556.
Jensen Note: This journal prints
Commentaries on previous published articles, something that TAR referees just
will not allow.
Williams, Paul and Lee, Tom, “Accounting from the Inside: Legitimizing the
Accounting Academic Elite,” Critical Perspectives on Accounting (forthcoming).
Jensen Comment
As far as accountics science power in the AAA is concerned, I think that in year
2010 we will look back at years 2011-12 as monumental shifts in power, not the
least of which is the democratization of the AAA. Changes will take time in both
the AAA and in the AACSB's accountancy doctoral programs where accountics
scientists are still firmly entrenched.
But accountics scientist political power will wane, Changes will begin with the
AAA Publications Committee and then with key editorships, notably the editorship
of TAR.
If I have any influence in any of this it will be to motivate our leading
accountics scientists to at last start making contributions to the AAA Commons.
I know that making accountics scientists feel guilty of negligence on the AAA
Commons is not the best motivator as a rule, but what other choice have I got at
this juncture?
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Respectfully,
Bob Jensen
Calvin Ball
Accountics science is defined at
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm
One of the main reasons Bob Jensen contends that accountics science is not yet a
real science is that lack of exacting replications of accountics science
findings. By exacting replications he means reproducibility as defined in the
IAPUC Gold Book ---
http://en.wikipedia.org/wiki/IUPAC_Gold_Book
The leading accountics science (an indeed the leading academic accounting
research journals) are The Accounting Review (TAR), the Journal of
Accounting Research (JAR), and the Journal of Accounting and Economics
(JAE). Publishing accountics science in these journals is a necessary condition
for nearly all accounting researchers at top R1 research universities in North
America.
On the AECM listserv, Bob Jensen and former TAR Senior Editor Steven
Kachelmeier have had an ongoing debate about accountics science relevance and
replication for well over a year in what Steve now calls a game of CalvinBall.
When Bob Jensen noted the lack of exacting replication in accountics science,
Steve's CalvinBall reply was that replication is the name of the game in
accountics science:
The answer to your question, "Do you really think
accounting researchers have the hots for replicating their own findings?" is
unequivocally YES,
though I am not sure about the word "hots." Still, replications in the sense
of replicating prior findings and then extending (or refuting) those
findings in different settings happen all the time, and they get published
regularly. I gave you four examples from one TAR issue alone (July 2011).
You seem to disqualify and ignore these kinds of replications because they
dare to also go beyond the original study. Or maybe they don't count for you
because they look at their own watches to replicate the time instead of
asking to borrow the original researcher's watch. But they count for me.
To which my CalvinBall reply to Steve is --- "WOW!" In the past four decades
of all this unequivocal replication in accountics science there's not been a
single scandal. Out of the thousands of accountics science papers published in
TAR, JAR, and JAE there's not been a single paper withdrawn after publication,
to my knowledge, because of a replication study discovery. Sure there have been
some quibbles about details in the findings and some improvements in statistical
significance by tweaking the regression models, but there's not been a
replication finding serious enough to force a publication retraction or serious
enough to force the resignation of an accountics scientist.
In real science, where more exacting replications really are the name of the
game, there have been many scandals over the past four decades. Nearly all top
science journals have retracted articles because independent researchers could
not exactly replicate the reported findings. And it's not all that rare to force
a real scientist to resign due to scandalous findings in replication efforts.
The most serious scandals entail faked data or even faked studies. These
types of scandals apparently have never been detected among thousands of
accountics science publications. The implication is that accountics
scientists are more honest as a group than real scientists. I guess that's
either good news or bad replicating.
Given the pressures brought to bear on accounting faculty to publish
accountics science articles, the accountics science scandal may be that
accountics science replications have never revealed a scandal --- to my
knowledge at least.
One of the most recent scandals arose when a very well-known psychologist
named Mark Hauser.
"Author on leave after Harvard inquiry Investigation of scientist’s work finds
evidence of misconduct, prompts retraction by journal," by Carolyn Y. Johnson,
The Boston Globe, August 10, 2010 ---
http://www.boston.com/news/education/higher/articles/2010/08/10/author_on_leave_after_harvard_inquiry/
Harvard University psychologist Marc Hauser — a
well-known scientist and author of the book “Moral Minds’’ — is taking a
year-long leave after a lengthy internal investigation found evidence of
scientific misconduct in his laboratory.
The findings have resulted in the retraction of an
influential study that he led. “MH accepts responsibility for the error,’’
says the retraction of the study on whether monkeys learn rules, which was
published in 2002 in the journal Cognition.
Two other journals say they have been notified of
concerns in papers on which Hauser is listed as one of the main authors.
It is unusual for a scientist as prominent as
Hauser — a popular professor and eloquent communicator of science whose work
has often been featured on television and in newspapers — to be named in an
investigation of scientific misconduct. His research focuses on the
evolutionary roots of the human mind.
In a letter Hauser wrote this year to some Harvard
colleagues, he described the inquiry as painful. The letter, which was shown
to the Globe, said that his lab has been under investigation for three years
by a Harvard committee, and that evidence of misconduct was found. He
alluded to unspecified mistakes and oversights that he had made, and said he
will be on leave for the upcoming academic year.
Continued in article
Update: Hauser resigned from Harvard in 2011 after the published
research in question was retracted by the journals.
Not only have there been no similar reported accountics science scandals
called to my attention, I'm not aware of any investigations of impropriety that
were discovered among all those "replications" claimed by Steve.
Below is a link to a long article about scientific misconduct and the
difficulties of investigating such misconduct. The conclusion seems to rest
mostly upon what insiders apparently knew but were unwilling to testify about in
public. Marc Hauser eventually resigned from Harvard. The most aggressive
investigator in this instance appears to be Harvard University itself.
"Disgrace: On Marc Hauser," by Mark Gross, The Nation, January
9, 2012 ---
http://www.thenation.com/article/165313/disgrace-marc-hauser?page=0,2
. . .
Although some of my knowledge of the Hauser case is
based on conversations with sources who have preferred to remain unnamed,
there seems to me to be little doubt that Hauser is guilty of scientific
misconduct, though to what extent and severity remains to be revealed.
Regardless of the final outcome of the investigation of Hauser by the
federal Office of Research Integrity, irreversible damage has been done to
the field of animal cognition, to Harvard University and most of all to Marc
Hauser.
"Dutch University Suspends Prominent Social Psychologist," Inside
Higher Ed, September 12, 2011 ---
http://www.insidehighered.com/news/2011/09/12/qt#270113
Tilburg University, in the Netherlands,
announced last week that it was suspending D.A.
Stapel from his positions as professor of cognitive social psychology and
dean of the School of Social and Behavioral Sciences because he "has
committed a serious breach of scientific integrity by using fictitious
data in his publications." The university
has convened a panel to determine which of Stapel's papers were based on
false data. Science noted that Stapel's work -- in that publication and
elsewhere -- was known for attracting attention. Science reported that
Philip Eijlander, Tilburg's rector, told a Dutch television station that
Stapel had admitted to the fabrications. Eijlander said that junior
researchers in Stapel's lab came forward with concerns about the honesty of
his data, setting off an investigation by the university.
Jensen Comment
Actually I'm being somewhat unfair here. It was not exacting replication studies
that upended Professor Stapel in this instance. There are, of course, other
means of testing internal controls in scientific research. But the most common
tool is replication of reproducible experiments.
Replication researchers did upend Marc Hauser at Harvard ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Below is a link to a long article about scientific misconduct and the
difficulties of investigating such misconduct. The conclusion seems to rest
mostly upon what insiders apparently knew but were unwilling to testify about in
public. Marc Hauser eventually resigned from Harvard. The most aggressive
investigator in this instance appears to be Harvard University itself.
"Disgrace: On Marc Hauser," by Mark Gross, The Nation, January
9, 2012 ---
http://www.thenation.com/article/165313/disgrace-marc-hauser?page=0,2
. . .
Although some of my knowledge of the Hauser case is
based on conversations with sources who have preferred to remain unnamed,
there seems to me to be little doubt that Hauser is guilty of scientific
misconduct, though to what extent and severity remains to be revealed.
Regardless of the final outcome of the investigation of Hauser by the
federal Office of Research Integrity, irreversible damage has been done to
the field of animal cognition, to Harvard University and most of all to Marc
Hauser.
Bob Jensen's threads on the lack of validity testing and investigations of
misconduct in accountics science ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
"Bad science: The psychology behind exaggerated & false research [infographic],"
Holykaw, December 21, 2011 ---
http://holykaw.alltop.com/bad-science-the-psychology-behind-exaggerated
One in three scientists admits to using shady research practices.
Bravo: Zero accountics scientists admit to using shady research practices.
One in 50 scientists admit to falsifying data outright.
Bravo: Zero accountics scientists admit to falsifying data in the history
of accountics science.
Reports of colleague misconduct are even more common.
Bravo: But not in accountics science
Misconduct rates are highest among clinical, medical, and phamacological
researchers
Bravo: Such reports are lowest (zero) among accountics scientists
Four ways to make research more honest
- Make all raw data available to other scientists
- Hold journalists accountable
- Introduce anonymous publication
- Change from real science into accountics science where research is
unlikely to be validated/replicated except on rare occasions where no errors
are ever found
"Fraud Scandal Fuels Debate Over Practices of Social Psychology:
Even legitimate researchers cut corners, some admit," by Christopher Shea,
Chronicle of Higher Education, November 13, 2011 ---
http://chronicle.com/article/As-Dutch-Research-Scandal/129746/
Jensen Comment
This leads me to wonder why in its entire history, there has never been a
reported scandal or evidence of data massaging in accountics (accounting)
science. One possible explanation is that academic accounting researchers are
more careful and honest than academic social psychologists. Another explanation
is that accountics science researchers rely less on teams of student assistants
who might blow the whistle, which is how Professor Diederik A. Stapel got caught
in social psychology.
But there's also a third possible reason there have been no scandals in the
last 40 years of accountics research. That reason is that the leading accountics
research journal referees discourage validity testing of accountics research
findings ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Yet a fifth and more probable explanation is that there's just not enough
interest in most accountics science findings to inspire replications and active
debate/commentaries in either the academic journals or the practicing
profession's journals.
There also is the Steve Kachelmeier argument that there are indirect
replications taking place that do not meet scientific standards for replications
but nevertheless point to consistencies in some of the capital markets studies
(rarely the behavioral accounting studies). This does not answer the question of
why nearly all of the indirect replications rarely point to inconsistencies.
It follows that accountics science researchers are just more accurate and honest
than their social science colleagues.
Yeah Right!
Accountics scientists "never cut corners" except where fully disclosed in their
research reports.
We just know what's most important in legitimate science.
Why can't real scientists be more like us --- ever honest and ever true?
Are the foot soldiers behind psychology’s replication crisis (reform)
saving science — or destroying it? ---
https://www.chronicle.com/article/I-Want-to-Burn-Things-to/244488?cid=at&utm_source=at&utm_medium=en&elqTrackId=927c155b3f3a433faf1edb36c7554be8&elq=16868c5647c6471fadb18cae5ca9e795&elqaid=20470&elqat=1&elqCampaignId=9626
. . .
As you’ve no doubt
heard by now, social psychology has had a rough few years. The trouble
concerns the replicability crisis, a somewhat antiseptic phrase that refers
to the growing realization that often the papers published in peer-reviewed
journals — papers with authoritative abstracts and nifty-looking charts —
can’t be reproduced. In other words, they don’t work when scientists try
them again. If you wanted to pin down the moment when the replication crisis
really began, you might decide it was in 2010, when Daryl Bem, a Cornell
psychologist, published a paper in
The Journal of Personality and Social
Psychology
that purported to prove that subjects could predict the future. Or maybe it
was in 2012, when researchers
failed to replicate
a much-heralded 1996 study by John Bargh, a Yale psychologist, that claimed
to show that reading about old people made subjects walk more slowly.
And it’s only gotten
worse. Some of the field’s most exciting and seemingly rock-solid findings
now appear sketchy at best. Entire subfields are viewed with suspicion. It’s
likely that many, perhaps most, of the studies published in the past couple
of decades are flawed. Just last month the Center for Open Science reported
that, of 21 social-behavioral-science studies published in Science
and Nature between 2010 and 2015, researchers could successfully
replicate only 13 of them. Again, that’s Science and Nature,
two of the most prestigious scientific journals around.
If you’re a human
interested in reliable information about human behavior, that news is
probably distressing. If you’re a psychologist who has built a career on
what may turn out to be a mirage, it’s genuinely terrifying. The replication
crisis often gets discussed in technical terms: p-values, sample sizes, and
so on. But for those who have devoted their lives to psychology, the
consequences are not theoretical, and the feelings run deep. In 2016, Susan
Fiske, a Princeton psychologist, used the phrase "methodological terrorism"
to describe those who dissect questionable research online, bypassing the
traditional channels of academic discourse (one researcher at SIPS, who
asked not to be identified, wore a T-shirt to the conference emblazoned with
the words "This Is What a Methodological Terrorist Looks Like"). Fiske wrote
that "unmoderated attacks" were leading psychologists to abandon the field
and discouraging students from pursuing it in the first place.
Psychologists like
Fiske argue that these data-crunching critics, like many of the attendees at
SIPS, paint far too dark a portrait of the field. Yes, there are lousy
studies that slip through the peer-review net and, sure, methods can always
be improved. Science progresses in fits and starts, with inevitable missteps
along the way. But they complain that the tactics of the reformers — or
terrorists, take your pick — can be gleefully aggressive, that they’re too
eager to, well, burn things to the ground. The handful of researchers who
make it their mission to unearth and expose examples of psychology’s
failings come in for particular scorn. As one tenured professor I spoke with
recently put it, "I think they’re human scum."
ames Heathers is a jovial, bearded Australian who loves cats. He is a
postdoc at Northeastern University with a Ph.D. in cardiac psychophysiology;
when he’s not ranting about subpar research practices on Everything
Hertz, the podcast he co-hosts, he’s hunting for connections between
emotion and heartbeat variability. He’s been working, along with his fellow
data thugs — a term Heathers coined, and one that’s usually (though not
always) employed with affection — on something called Sample Parameter
Reconstruction via Interactive Techniques, or SPRITE. Basically, SPRITE is a
computer program that can be used to see whether survey results, as reported
in a paper, appear to have been fabricated. It can do this because results
usually follow certain statistical patterns, and people who massage data
frequently fail to fake it convincingly. During a SIPS session, Heathers
explained SPRITE with typical élan: "Sometimes you push the button and it
says, ‘Here’s a forest of lunatic garbage.’ "
. . .
As Barrett sees
it, some of what the data thugs do "borders on harassment." The prime
example is that of Amy Cuddy, whose power-pose study was the basis for a TED
talk that’s been viewed more than 48 million times and led to a best-selling
book, Presence (Little, Brown & Company, 2015). The 2010 study has
failed to replicate,
and the first author, Dana Carney, a psychologist at Berkeley, no longer
believes in the effect. The power-pose study is held up as an example of
psychology at its most frivolous and unreliable. Cuddy, though, has not
renounced the research and has likened her treatment to bullying. She
recently tweeted: "People who want to destroy often do so with greater
passion and energy and time than people who want to build." Some
psychologists, including Barrett, see in the ferocity of that criticism an
element of sexism. It’s true that the data thugs tend to be, but are not
exclusively, male — though if you tick off the names of high-profile social
psychologists whose work has been put through the replication ringer, that
list has lots of men on it, too. Barrett thinks the tactics of the data
thugs aren’t creating an atmosphere for progress in the field. "It’s a hard
enough life to be a scientist," she says. "If we want our best and brightest
to be scientists, this is not the way to do it."
Richard Nisbett
agrees. Nisbett has been a major figure in psychology since the 1970s. He’s
co-director of the Culture and Cognition program at the University of
Michigan at Ann Arbor, author of books like Mindware: Tools for Smart
Thinking (Farrar, Straus, and Giroux, 2015), and a slew of influential
studies. Malcolm Gladwell called him "the most influential thinker in my
life." Nisbett has been calculating effect sizes since before most of those
in the replication movement were born.
And he’s a skeptic of
this new generation of skeptics. For starters, Nisbett doesn’t think direct
replications are efficient or sensible; instead he favors so-called
conceptual replication, which is more or less taking someone else’s
interesting result and putting your own spin on it. Too much navel-gazing,
according to Nisbett, hampers professional development. "I’m alarmed at
younger people wasting time and their careers," he says. He thinks that
Nosek’s ballyhooed finding that most psychology experiments didn’t replicate
did enormous damage to the reputation of the field, and that its leaders
were themselves guilty of methodological problems. And he’s annoyed that
it’s led to the belief that social psychology is riddled with errors. How do
they know that?, Nisbett asks, dropping in an expletive for emphasis.
Simine Vazire has
heard that argument before. Vazire, an associate professor of psychology at
the University of California at Davis, and one of the SIPS organizers,
regularly finds herself in meetings where no one shares her sense of urgency
about the replication crisis. "They think the status quo is fine, and we can
make tweaks," she says. "I’m often the only person in the room who thinks
there’s a big problem."
It’s not that the
researchers won’t acknowledge the need for improvement. Who’s against
progress? But when she pushes them on what that means, the division becomes
apparent. They push back on reforms like data transparency (sharing your
data freely with other researchers, so they can check your work) or
preregistration (saying publicly what you’re trying to discover in your
experiment before you try to discover it). That’s not the way it’s normally
been done. Psychologists tend to keep their data secret, arguing that it’s
proprietary or that revealing it would endanger subjects’ anonymity. But not
showing your work makes it easier to fudge what you found. Plus the freedom
to alter your hypothesis is what leads to so-called p-hacking, which is
shorthand for when a researcher goes searching for patterns in statistical
noise.
Continued in article
"Replication
Crisis in Psychology Research Turns Ugly and Odd," by Tom Bartlett,
Chronicle of Higher Education,
June 23, 2014
---
https://www.chronicle.com/article/Replication-Crisis-in/147301/?cid=at&utm_medium=en&utm_source=at
In a blog post published last week, Timothy D. Wilson, a professor of
psychology at the University of Virginia and the author of
The Surprising New Science of Psychological Change
"thatdeclared that "the field has become preoccupied with prevention and
error detection—negative psychology—at the expense of exploration and
discovery." The evidence that psychology is beset with false positives is
weak, according to Mr. Wilson, and he pointed instead to the danger of inept
replications that serve only to damage "the reputation of the original
researcher and the progression of science." While he called for finding
common ground, Mr. Wilson pretty firmly sided with those who fear that
psychology’s growing replication movement, which aims to challenge what some
critics see as a tsunami of suspicious science, is more destructive than
corrective.
Continued in article
The Stanford Prison Experiment lasted just six days, and it took place 47
years ago. But it has shaped our fundamental understanding of human nature. Now
many in the field are wondering: Should it have?
https://www.chronicle.com/article/How-a-Decades-Old-Experiment/244256?cid=at&utm_source=at&utm_medium=en&elqTrackId=8b283b87f55e48d281e307a3d73eb2a1&elq=16868c5647c6471fadb18cae5ca9e795&elqaid=20470&elqat=1&elqCampaignId=9626
Sometimes it takes decades for awareness of flaws in popular research studies to
come to light
Jensen Comment
In academic accountancy the editors have a policy that if the article has
equations (most often multiple regression equations) it does not need to
be replicated. Fortunately this does not matter much in the profession since
practitioners tend to ignore academic articles with equations ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Sometimes it takes decades for awareness of flaws in popular research studies to
come to light. For example, for decades accounting empiricists based their
regression models on the Capital Asset Pricing Model (CAPM) and the Efficient
Market Hypothesis (EMH) as if the underlying bases for these without truly
examining how flaws in these foundations of capital market research. In fact,
the untested assumptions heavily destroyed robustness of the research,
robustness that went unchallenged and still often goes unchallenged. Even now as
p-tests in statistical inference testing are being challenged in science our
accounting research journal editors and referees seem oblivious to the
limitations of p-test outcomes.
For example on the AECM listserv I called attention to the following discovery
in an empirical accounting research study:
"Finally, we predict and find lower EPS forecast accuracy for U.K. firms
when reporting under the full fair value model of IFRS, in which unrealized
fair value gains and losses are included in net income."
"The
Effect of Fair Value versus Historical Cost Reporting Model on Analyst
Forecast Accuracy,"
by Lihong Liang and Edward J. Riedl,
The Accounting Review (TAR),: May 2014, Vol. 89, No. 3, pp. 1151-1177
---
http://aaajournals.org/doi/full/10.2308/accr-50687 (Not Free)
Accounting Review
readers will have to accept the above finding as truth since TAR will not
encourage or publish a replication study of that finding or even publish a
commentary about that finding. This is wrong in our Academy.
What is an Exacting Replication?
I define an exacting replication as one in which the findings are reproducible
by independent researchers using the IAPUC Gold Book standards for
reproducibility. Steve makes a big deal about time extensions when making such
exacting replications almost impossible in accountics science. He states:
By "exacting replication," you appear to mean doing
exactly what the original researcher did -- no more and no less. So if one
wishes to replicate a study conducted with data from 2000 to 2008, one had
better not extend it to 2009, as that clearly would not be "exacting." Or,
to borrow a metaphor I've used earlier, if you'd like to replicate my
assertion that it is currently 8:54 a.m., ask to borrow my watch -- you
can't look at your watch because that wouldn't be an "exacting" replication.
That's CalvinBall bull since in many of these time extensions it's also
possible to conduct an exacting replication. Richard Sansing pointed out the how
he conducted an exacting replication of the findings in Dhaliwal, Li and R.
Trezevant (2003), "Is a dividend tax penalty
incorporated into the return on a firm’s common stock?," Journal of
Accounting and Economics 35: 155-178. Although Richard and his coauthor
extend the Dhaliwal findings they first conducted an exacting replication in
their paper published in The Accounting Review 85 (May
2010): 849-875.
My quibble with Richard is mostly that conducting an exacting replication of
the Dhaliwal et al. paper was not exactly a burning (hot)
issue if nobody bothered to replicate that award winning JAE paper for seven
years.
This begs the question of why there are not more frequent and timely exacting
replications conducted in accountics science if the databases themselves are
commercially available like the CRSP, Compustat, and AuditAnalytics databases.
Exacting replications from these databases are relatively easy and cheap to
conduct. My contention here is that there's no incentive to excitedly conduct
exacting replications if the accountics journals will not even publish
commentaries about published studies. Steve and I've played CalvinBall with the
commentaries issue before. He contends that TAR editors do not prevent
commentaries from being published in TAR. The barriers to validity questioning
commentaries in TAR are the 574 referees who won't accept submitted commentaries
---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#ColdWater
Exacting replications of behavioral experiments in accountics science is more
difficult and costly because the replicators must conduct their own experiments
by collecting their own data. But it seems to me that it's no more difficult in
accountics science than in performing exacting replications that are reported in
the research literature of psychology. However, psychologists often have more
incentives to conduct exacting replications for the following reasons that I
surmise:
- Practicing psychologists are more demanding of validity tests of
research findings. Practicing accountants seem to pretty much ignore
behavioral experiments published in TAR, JAR, and JAE such that there's not
as much pressure brought to bear on validity testing of accountics science
findings. One test of practitioner lack of interest is the lack of citation
of accountics science in practitioner journals.
- Psychology researchers have more incentives to replicate experiments of
others since there are more outlets for publication credits of replication
studies, especially in psychology journals that encourage commentaries on
published research ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#TARversusJEC
My opinion remains that accountics science will never be a real science until
exacting replication of research findings become the name of the game in
accountics science. This includes exacting replications of behavioral
experiments as well as analysis of public data from CRSP, Compustat,
AuditAnalytics, and other commercial databases. Note that willingness of
accountics science authors to share their private data for replication purposes
is a very good thing (I fought for this when I was on the AAA Executive
Committee), but conducting replication studies of such data does not hold up
well under the IAPUC Gold Book.
Note, however, that lack of exacting replication and other validity testing
in general are only part of the huge problems with accountics science. The
biggest problem, in my judgment, is the way accountics scientists have
established monopoly powers over accounting doctoral programs, faculty hiring
criteria, faculty performance criteria, and pay scales. Accounting researchers
using other methodologies like case and field research become second class
faculty.
IS THERE A MULTINATIONALITY EFFECT? A REPLICATION AND REEXAMINATION OF THE
MULTINATIONALITYPERFORMANCE RELATIONSHIP
by Heather Berry and Aseem Kahl
SSRN
June 2015
Abstract:
We revisit the effect of
multinationality on firm performance while
accounting for problems of
consolidation and selection. Using detailed longitudinal data from a
comprehensive sample of US manufacturing MNCs, we replicate the U-shaped
relationship found in prior studies and then show that this U-shaped
relationship results from the combination of a negative relationship
with aggregation activities and a positive relationship with adaptation
and arbitrage activities. Further, once we control for the endogeneity
of multinationality, we no longer find a significant effect of overall
multinationality on performance, although arbitrage activities, in the
form of cross-border product transfers, continue to have a positive
effect on firm performance. These findings provide fresh empirical
insight into the multinationality-performance relationship, while
highlighting the benefits from arbitrage across subsidiary networks.
. . .
Replication of prior studies
We start by trying to replicate the approach and measures used in prior
work; specifically, we try to replicate the relationships found by Lu and
Beamish (2004) in their study of Japanese multinationals. We choose to
replicate Lu and Beamish (2004) both because it is an important and highly
cited study of the multinationality-performance relationship, and because it
is the closest to our work in that it studies multinationals using panel
data. Models I-IV in Table Three show the results of our attempt to
replicate the findings of Lu and Beamish (2004) in our sample, using the
same dependent variable and predictors that they use6, as well as a similar
estimation approach..
Models I-III in Table Three
show the relationship of performance with the main, squared
and cubed terms of our consolidated multinationality index respectively,
using a fixed effects OLS regression. Model I shows a moderately significant
negative coefficient for multinationality, which becomes significant at
conventional levels in Model II once we include a squared multinationality
term, which takes a positive and significant coefficient. Model II thus
indicates a U-shaped relationship between multinationality and performance.
We do not find evidence of an S-shaped relationship (Contractor et al.,
2003; Lu and Beamish, 2004), with the coefficient for the cubed term in
Model III being insignificant. Lu and Beamish (2004) also find a positive
interaction between multinationality and parent R&D intensity when
predicting RoA. We attempt to replicate this finding in Model IV, but the
coefficient of the interaction term is insignificant.
Continued in article
Jensen Comment
Replication is not at all common in accounting research ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
To my knowledge there's never been a replication study in accounting that
alters the findings of the original research. When replication does take
place there's usually a relatively long time lag (ten years or more) such that
the intent of the replication is not to validate the original findings. Rather
the intent is to set the stage for expanding the research model to better
explain the findings of the earlier studies.
The Berry and Kahl replication and model expansion fits into this pattern.
The original studies went over ten years without being replicated.
Berry and Kahl conducted a replication that did not alter the findings of the
original studies. Berry and Kahl design a more complicated model to explain
better explain the U-shaped relationship as described above.
Since the odds of getting a case or field study published are so low, very
few of such studies are even submitted for publication in TAR in recent years.
Replication of these is a non-issue in TAR.
"Annual Report and Editorial Commentary for The Accounting Review,"
by Steven J. Kachelmeier The University of Texas at Austin, The
Accounting Review, November 2009, Page 2056.
Insert Table

There's not much hope for case, field, survey, and other non-accountics
researchers to publish in the leading research journal of the American
Accounting Association.
What went wrong with accountics research?
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
"We fervently hope that the research pendulum will soon swing back from the
narrow lines of inquiry that dominate today's leading journals to a rediscovery
of the richness of what accounting research can be. For that to occur, deans and
the current generation of academic accountants must
give it a push."
Granof and Zeff ---
http://www.trinity.edu/rjensen/TheoryTAR.htm#Appendix01
Michael H. Granof is a professor of accounting at the McCombs School of
Business at the University of Texas at Austin. Stephen A. Zeff is a
professor of accounting at the Jesse H. Jones Graduate School of Management at
Rice University.
I admit that I'm just one of those
professors heeding the Granof and Zeff call to "give it a push," but it's
hard to get accountics professors to give up their monopoly on TAR, JAR, JAE,
and in recent years Accounting Horizons. It's even harder to get them to
give up their iron monopoly clasp on North American Accountancy Doctoral
Programs ---
http://www.trinity.edu/rjensen/Theory01.htm#DoctoralPrograms
September 9, 2011 reply from Paul Williams
Bob,
I have avoided chiming in on this thread; have gone down this same road and
it is a cul-de-sac. But I want to say that this line of argument is a
clever one. The answer to your rhetorical question is, No, they aren't
more ethical than other "scientists." As you tout the Kaplan
speech I would add the caution that before he raised the issue of practice,
he still had to praise the accomplishments of "accountics" research by
claiming numerous times that this research has led us to greater
understanding about analysts, markets, info. content, contracting, etc.
However, none of that is actually true. As a panelist at the AAA
meeting I juxtaposed Kaplan's praise for what accountics research has taught
us with Paul Krugman's observations about Larry Summer's 1999 observation
that GAAP is what makes US capital markets so stable and efficient. Of
course, as Krugman noted, none of that turned out to be true. And if
that isn't true, then Kaplan's assessment of accountics research isn't
credible, either. If we actually did understand what he claimed we now
understand much better than we did before, the financial crisis of 2008
(still ongoing) would not have happened. The title of my talk was (the
panel was organized by Cheryl McWatters) "The Epistemology of
Ignorance." An obsessive preoccupation with method could be a choice not to
understand certain things-- a choice to rigorously understand things as you
already think they are or want so desperately to continue to believe for
reasons other than scientific ones.
Paul
September 10, 2011 reply from Bob Jensen (known on the AECM as Calvin of
Calvin and Hobbes)
This is a reply to Steve Kachelmeier, former Senior Editor of The Accounting
Review (TAR)
I agree Steve and will not bait you further in a game of Calvin Ball.
It is, however, strange to me that exacting replication
(reproducibility) is such a necessary condition to almost all of real
science empiricism and such a small part of accountics science empiricism.
My only answer to this is that the findings themselves in science seem to
have greater importance to both the scientists interested in the findings
and the outside worlds affected by those findings.
It seems to me that empirical findings that are not replicated with as much
exactness as possible are little more than theories that have only been
tested once but we can never be sure that the tests were not faked or
contain serious undetected errors for other reasons.
It is sad that the accountics science system really is not designed to guard
against fakers and careless researchers who in a few instances probably get
great performance evaluations for their hits in TAR, JAR, and JAE. It is
doubly sad since internal controls play such an enormous role in our
profession but not in our accoutics science.
I thank you for being a noted accountics scientist who was willing to play
Calvin Ball.with me for a while. I want to stress that this is not really a
game with me. I do want to make a difference in the maturation of accountics
science into real science. Exacting replications in accountics science would
be an enormous giant step in the real-science direction.
Allowing validity-questioning commentaries in TAR would be a smaller start
in that direction but nevertheless a start. Yes I know that it was your 574
TAR referees who blocked the few commentaries that were submitted to TAR
about validity questions. But the AAA Publications Committees and you as
Senior Editor could've done more to encourage both submissions of more
commentaries and submissions of more non-accountics research papers to TAR
--- cases, field studies, history studies, AIS studies, and (horrors)
normative research.
I would also like to bust the monopoly that accountics scientists have on
accountancy doctoral programs. But I've repeated my arguments here far to
often ---
http://www.trinity.edu/rjensen/Theory01.htm#DoctoralPrograms
In any case thanks for playing Calvin Ball with me. Paul Williams and
Jagdish Gangolly played Calvin Ball with me for a while on an entirely
different issue --- capitalism versus socialism versus bastardized versions
of both that evolve in the real world.
Hopefully there's been some value added on the AECM in my games of Calvin
Ball.
Even though my Calvin Ball opponents have walked off the field, I will
continue to invite others to play against me on the AECM.
And I'm certain this will not be the end to my saying that accountics
farmers are more interested in their tractors than their harvests. This may
one day be my epitaph.
Respectfully,
Calvin
November 22, 2011 reply from Steve Kachelmeier
First, Table 3 in the 2011 Annual Report
(submissions and acceptances by area) only includes manuscripts that went
through the regular blind reviewing process. That is, it excludes invited
presidential scholar lectures, editorials, book reviews, etc. So "other"
means "other regular submissions."
Second, you are correct Bob that "other" continues
to represent a small percentage of the total acceptances. But "other" is
also a very small percentage of the total submissions. As I state explicitly
in the report, Table 3 does not prove that TAR is sufficienty diverse. It
does, however, provide evidence that TAR acceptances by topical area (or by
method) are nearly identically proportional to TAR submissions by topical
area (or by method).
Third, for a great example of a recently published
TAR study with substantial historical content, see Madsen's analysis of the
historical development of standardization in accounting that we published in
in the September 2011 issue. I conditionally accepted Madsen's submission in
the first round, backed by favorable reports from two reviewers with
expertise in accounting history and standardization.
Take care,
Steve
November 23, 2011 reply from Bob Jensen
Hi Steve,
Thank you for the clarification.
Interestingly, Madsen's September 2011 historical study (which came out
after your report's May 2011 cutoff date) is a heavy accountics science
paper with a historical focus.
It would be interesting to whether such a paper would've been accepted by
TAR referees without the factor (actually principal components) analysis.
Personally, I doubt any history paper would be accepted without equations
and quantitative analysis. Once again I suspect that accountics science
farmers are more interested in their tractors than in their harvests.
In the case of Madsen's paper, if I were a
referee I would probably challenge the robustness of the principal
components and loadings ---
http://en.wikipedia.org/wiki/Principle_components_analysis
Actually factor analysis in general like nonlinear multiple regression and
adaptive versions thereof suffer greatly from lack of robustness. Sometimes
quantitative models gild the lily to a fault.
Bob Kaplan's Presidential Scholar historical study was published, but
this was not subjected to the usual TAR refereeing process.
The History of The Accounting Review paper written by Jean Heck and Bob
Jensen which won a best paper award from the Accounting Historians Journal
was initially flatly rejected by TAR. I was never quite certain if the main
reason was that it did not contain equations or if the main reason was that
it was critical of TAR editorship and refereeing. In any case it was flatly
rejected by TAR, including a rejection by one referee who refused to put
reasons in writing for feed\back to Jean and me.
“An Analysis of the Evolution of Research Contributions by The
Accounting Review: 1926-2005,” (with Jean Heck), Accounting
Historians Journal, Volume 34, No. 2, December 2007, pp. 109-142.
I would argue that accounting history papers, normative methods papers,
and scholarly commentary papers (like Bob Kaplan's plenary address) are not
submitted to TAR because of the general perception among the AAA membership
that such submissions do not have a snowball's chance in Hell of being
accepted unless they are also accountics science papers.
It's a waste of time and money to submit papers to TAR that are not
accountics science papers.
In spite of differences of opinion, I do thank you for the years of
blood, sweat, and tears that you gave us as Senior Editor of TAR.
And I wish you and all U.S. subscribers to the AECM a very Happy
Thanksgiving. Special thanks to Barry and Julie and the AAA staff for
keeping the AECM listserv up and running.
Respectfully,
Bob Jensen
In only one way do I want to distract from the quality and quantity of effort of
TAR Senior Editor Steve Kachelmeier. The job of TAR's Senior Editor is
overwhelming given the greatly increased number of submissions to TAR
while he's been our Senior Editor. Steve's worked long and hard assembling a
superb team of associate editors and reviewers for over 600 annual submissions.
He's had to resolve many conflicts between reviewers and deal personally with
often angry and frustrated authors. He's helped to re-write a lot of badly
written papers reporting solid research. He's also suggested countless ways to
improve the research itself. And in terms of communications with me (I can be a
pain in the butt), Steve has been willing to take time from his busy schedule to
debate with me in private email conversations.
The most discouraging aspect of Steve's editorship is, in my viewpoint, his
failure to encourage readers to submit discussions, comments, replication
abstracts, or commentaries on previously published articles in TAR. He says that
readers are free to submit most anything to him, but that if a submission does
not "extend" the research in what is essentially a new research paper, his teams
of referees are likely to reject it.
While Steve has been Senior Editor of TAR, I do not know of any submitted
discussion or comment on a previously published paper that simply raised
questions about a published paper but did not actually conduct research
needed to submit an entirely new research product. Hence, if readers want
to comment on a TAR article they should, according to Steve, submit a full research paper for review that extends that research in a significant
way or find some other outlet for commentary such as the
AECM listserv that only
reaches a relatively small subset of all accountants, accounting teachers, and accounting researchers
in the world.
Steve replied by stating that, during his term as Senior Editor, he only sent out
one comment submission that was resoundingly rejected by his referees but
was later accepted after the author conducted empirical research
and extended the original study in a significant way. However, he and I differ
with respect to what I call a "commentary" for purposes of this
document. For this document I am limiting the term "commentary" to a comment or
discussion of a previously published paper that does not extend the research in
a significant way. I consider a "commentary" here to be more like a discussant's comments when the paper is
presented at a conference. Without actually conducting additional empirical
research a discussant can criticize or praise a paper and suggest ways that the
research can be improved. The discussant does not actually have to conduct the
suggested research extensions that Steve tells me is a requisite for his
allowing TAR to publish a comment.
I also allow, in this document, the term "commentary" to include a brief
abstract of an attempt to exactly replicate the research reported in a
previously-published TAR paper. The replication report can be more of a summary
than a complete research paper. It might simply report on how a replication
succeeded or failed. I elaborate on the term "replication" below. I do not know
of a single exact replication report ever published in TAR regarding a lab
experiment. I'm hoping that someone will point out where TAR published a report
of an exact replication of a lab experiment. Of course, some empirical study
replications are more complex, and I discuss this below.
In fairness, I was wrong to have asserted that Steve will not send a
"commentary" as defined above out for review. His reply to me was as follows:
No, no, no! Once again, your characterization makes
me out to be the dictator who decides the standards of when a comment gets
in and when it doesn’t. The last sentence is especially bothersome regarding
what “Steve tells me is a requisite for his allowing TAR to publish a
comment.” I never said that, so please don’t put words in my mouth.
If I were to receive a comment of the “discussant”
variety, as you describe, I would send it out for review to two reviewers in
a manner 100% consistent with our stated policy on p. 388 of the January
2010 issue (have you read that policy?). If both reviewers or even the one
independent reviewer returned favorable assessments, I would then strongly
consider publishing it and would most likely do so. My observation, however,
which you keep wanting to personalize as “my policy,” is that most peer
reviewers, in my experience, want to see a meaningful incremental
contribution. (Sorry for all the comma delimited clauses, but I need this to
be precise.) Bottom line: Please don’t make it out to be the editor’s
“policy” if it is a broader phenomenon of what the peer community wants to
see. And the “peer community,” by the way, are regular professors from all
varieties of backgrounds. I name 574 of them in the November 2009 issue.
Steve reports that readers of TAR just do not submit the "discussant" variety
to him for consideration for publication in TAR. My retort is that, unlike the
AMR discussed below, Steve has not encouraged TAR readers to send in such
commentaries about papers published in TAR. To the contrary, in meetings and
elsewhere he's consistently stated that his referees are likely to reject any
commentaries that simply question underlying assumptions, model structures, or
data in a previously published paper. Hence, I contend
that there are 574 Shields Against Validity Challenges in Plato's Cave,
An illustration of a commentary that two of the 574 guards would resoundingly
reject is illustrated at
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#Analytics
However, I think this commentary might be of value to accounting students,
faculty, and practitioners. Students could write similar commentaries about
other selected TAR articles and then meet in chat rooms or class to search for
common themes or patterns in their commentaries.
Most papers published in TAR simply accept external validity of underlying
assumptions. Normative arguments to the contrary are not likely to be published
in TAR.
"Deductive reasoning," Phil Johnson-Laird, Wiley Interscience,
,2009 ---
http://www3.interscience.wiley.com/cgi-bin/fulltext/123228371/PDFSTART?CRETRY=1&SRETRY=0
This article begins with an account of logic,
and of how logicians formulate formal rules of inference for the sentential
calculus, which hinges on analogs of negation and the connectives if, or,
and and. It considers the various ways in which computer scientists have
written programs to prove the validity of
inferences in this and other domains. Finally,
it outlines the principal psychological theories of how human reasoners
carry out deductions. 2009 John Wiley & Sons, Ltd. WIREs Cogn Sci 2010
1 8–1
By far the most important recommendation that I make below in this message
is for the American Accounting Association to create an electronic journal for
purposes of commentaries and replication abstracts that follow up on
previously published articles in AAA research journals, particularly TAR. In that
context, my recommendation is an extension of the Dialogue section of the
Academy of Management Review.
Nearly all the articles published in TAR over the past several decades are
limited to accountics studies that, in my viewpoint, have questionable internal
and external validity due to missing variables, measurement errors, and
simplistic mathematical structures. If accountants grounded in the real world
were allowed to challenge the external validity of accountics studies it is
possible that accountics researchers would pay greater attention to
external validity ---
http://en.wikipedia.org/wiki/External_Validity
Similarly if accountants grounded in the real world were allowed to
challenge the external validity of accountics studies it is possible that
accountics researchers would pay greater attention to
internal validity ---
http://en.wikipedia.org/wiki/Internal_Validity
An illustration of a commentary that the 574 guards would refuse to put out to review
is illustrated at
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#Analytics
However, I think this commentary might be of value to accounting students,
faculty, and practitioners. Students could write similar commentaries about
other selected TAR articles and then meet in chat rooms or class to search for
common themes or patterns in their commentaries.
I should note that the above commentary is linked at the AAA Commons. Perhaps
the AAA Commons should start a special hive for commentaries about TAR articles,
including student commentaries submitted by their instructors to the Commons ---
http://commons.aaahq.org/pages/home
In the practitioner literature readers have to be a little careful on the
definition of "analytics." Practitioners often define analytics in terms of
micro-level use of data for decisions such as decisions to adopt a new product
or launch a promotion campaign..
See
Analytics at Work: Smarter Decisions, Better Results, by Tom
Davenport (Babson College) --- ISBN-13: 9781422177693, February
2010
Listen to Tom Davenport being interviewed about his book ---
http://blogs.hbr.org/ideacast/2010/01/better-decisions-through-analy.html?cm_mmc=npv-_-DAILY_ALERT-_-AWEBER-_-DATE
The book does not in general find a niche for analytics for huge decisions
such as mergers, but the above book does review an application by Chevron.
The problem with "big decisions" is that the analytical models generally
cannot mathematically model or get good data on some of the most relevant
variables. In academe, professors often simply assume the real world away and
derive elegant solutions to fantasy-land problems in Plato's Cave. This is all
well and good, but these academic researchers generally ignore validity tests of
their harvests inside Plato's Cave.
June 30, 2012
Hi again Steve and David,
I think most of the problem of relevance of academic accounting research to
the accounting profession commenced with the development of the giant commercial
databases like CRSP, Compustat, and AuditAnalytics. To a certain extent it
hurt sociology research to have giant government databases like the giant census
databases. This gave rise to accountics researchers and sociometrics researchers
who commenced to treat their campuses like historic castles with moats. The
researchers no longer mingled with the outside world due, to a great extent, to
a reduced need to collect their own data from the riff raff.
The focus of our best researchers turned toward increasing creativity of
mathematical and statistical models and reduced creativity in collecting data.
If data for certain variables cannot be found in a commercial database then our
accounting professors and doctoral students merely assume away the importance of
those variables --- retreating more and more into Plato's Cave.
I think the difference between accountics versus sociometrics researchers,
however, is that sociometrics researchers often did not get as far removed from
database building as accountics researchers. They are more inclined to field
research. One of my close sociometric
scientist friends is Mike Kearl. The reason his Website is one of the most
popular Websites in Sociology is Mike's dogged effort to make privately
collected databases available to other researchers ---
Mike Kearl's great social theory site
Go to
http://www.trinity.edu/rjensen/theory02.htm#Kearl
I cannot find a single accountics researcher counterpart to Mike Kearl.
Meanwhile in accounting research, the gap between accountics researchers in
their campus castles and the practicing profession became separated by widening
moats.
In the first 50 years of the American Accounting Association over half
the membership was made up of practitioners, and practitioners took part in
committee projects, submitted articles to TAR, and in various instances were
genuine scholarly leaders in the AAA. All this changed when accountics
researchers evolved who had less and less interest in close interactions with
the practitioner world.
“An Analysis of the Evolution of Research Contributions by The Accounting
Review: 1926-2005,” (with Jean Heck), Accounting Historians Journal,
Volume 34, No. 2, December 2007, pp. 109-142.
. . .
Practitioner membership in the AAA faded along with
their interest in journals published by the AAA [Bricker and Previts, 1990].
The exodus of practitioners became even more pronounced in the 1990s when
leadership in the large accounting firms was changing toward professional
managers overseeing global operations. Rayburn [2006, p. 4] notes that
practitioner membership is now less than 10 percent of AAA members, and many
practitioner members join more for public relations and student recruitment
reasons rather than interest in AAA research. Practitioner authorship in TAR
plunged to nearly zero over recent decades, as reflected in Figure 2.
I think that much good could come from providing serious incentives to
accountics researchers to row across the mile-wide moats. Accountics leaders
could do much to help. For example, they could commence to communicate in
English on the AAA Commons ---
How Accountics Scientists Should Change:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to change this
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Secondly, I think TAR editors and associate editors could do a great deal by
giving priority to publishing more applied research in TAR so that accountics
researchers might think more about the practicing profession. For example,
incentives might be given to accountics researchers to actually collect their
own data on the other side of the moat --- much like sociologists and medical
researchers get academic achievement rewards for collecting their own data.
Put in another way, it would be terrific if accountics researchers got off
their butts and ventured out into the professional world on the other side of
their moats.
Harvard still has some (older) case researchers like Bob Kaplan who interact
extensively on the other side of the Charles River. But Bob complains that
journals like TAR discourage rather than encourage such interactions.
Accounting Scholarship that Advances Professional
Knowledge and Practice
Robert S. Kaplan
The Accounting Review, March 2011, Volume 86, Issue 2,
Recent accounting scholarship has
used statistical analysis on asset prices, financial reports and
disclosures, laboratory experiments, and surveys of practice. The research
has studied the interface among accounting information, capital markets,
standard setters, and financial analysts and how managers make accounting
choices. But as accounting scholars have focused on understanding how
markets and users process accounting data, they have distanced themselves
from the accounting process itself. Accounting scholarship has failed to
address important measurement and valuation issues that have arisen in the
past 40 years of practice. This gap is illustrated with missed opportunities
in risk measurement and management and the estimation of the fair value of
complex financial securities. This commentary encourages accounting scholars
to devote more resources to obtaining a fundamental understanding of
contemporary and future practice and how analytic tools and contemporary
advances in accounting and related disciplines can be deployed to improve
the professional practice of accounting. ©2010 AAA
It's high time that the leaders of accountics scientists make monumental
efforts to communicate with the teachers of accounting and the practicing
professions. I have enormous optimism regarding our forthcoming fabulous
accountics scientist Mary Barth when she becomes President of the AAA.
I'm really, really hoping that Mary will commence the bridge
building across moats ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
The American Sociological Association has a journal called the American
Sociological Review (ASR) that is to the ASA much of what TAR is to the AAA.
The ASR like TAR publishes mostly statistical studies. But there are some
differences that I might note. Firstly, ASR authors are more prone to gathering
their own data off campus rather than only dealing with data they can purchase
or behavioral experimental data derived from students on campus.
Another thing I've noticed is that the ASR papers are more readable and many
have no complicated equations. For example, pick any recent TAR paper at random
and then compare it with the write up at
http://www.asanet.org/images/journals/docs/pdf/asr/Aug11ASRFeature.pdf
Then compare the randomly chosen TAR paper with a randomly chosen ASR paper at
http://www.asanet.org/journals/asr/index.cfm#articles
Hi Roger,
Although I agree with you regarding how the AAA journals do not have a means of
publishing "short research articles quickly," Accounting Horizons
(certainly not TAR) for publishing now has a Commentaries section. I don't know
if the time between submission and publication of an AH Commentary is faster on
average than mainline AH research articles, but my priors are that it is quicker
to get AH Commentaries published on a more timely basis.
The disappointing aspect of the published AH Commentaries to date is that they
do not directly focus on controversies of published research articles. Nor are
they a vehicle for publishing abstracts of attempted replications of published
accounting research. I don't know if this is AH policy or just the lack of
replication in accountics science. In real science journals there are generally
alternatives for publishing abstracts of replication outcomes and commentaries
on published science articles. The AH Commentaries do tend to provide literature
reviews on narrow topics.
The American Sociological Association has a journal called Footnotes ---
http://www.asanet.org/journals/footnotes.cfm
Article Submissions are limited to
1,100 words and must have journalistic value (e.g., timeliness, significant
impact, general interest) rather than be research-oriented or scholarly in
nature. Submissions are reviewed by the editorial board for possible
publication.
ASA Forum (including letters to
the editor) - 400-600-word limit.
Obituaries - 700-word limit.
Announcements - 150-word limit.
All submissions should include a contact name and
an email address. ASA reserves the right to edit for style and length all
material published.
Deadline for all materials is the
first of the month preceding publication (e.g., February 1 for March issue).
Send communications on materials, subscriptions,
and advertising to:
American Sociological Association
1430 K Street, NW - Suite 600
Washington, DC 20005-4701
The American Accounting Association Journals do not have something
comparable to Footnotes or the ASA Forum, although the AAA does
have both the AAA Commons and the AECM where non-refereed "publishing" is common
for gadflies like Bob Jensen. The Commons is still restricted to AAA members and
as such does not get covered by search crawlers like Google. The AECM is
unrestricted to AAA Members, but since it requires free subscribing it does not
get crawled over by Google, Yahoo, Bing, etc.
Richard Feynman Creates a Simple Method for Telling Science From Pseudoscience
(1966) ---
http://www.openculture.com/2016/04/richard-feynman-creates-a-simple-method-for-telling-science-from-pseudoscience-1966.html
By Feynman's standard standard accountics science is pseudoscience
The Refereeing Process in Economics Journals ---
https://davegiles.blogspot.com/2018/10/the-refereeing-process-in-economics.html
Thank you Tom Dyckman for the heads up
Jensen Comment
Readers might note the Dan Stone's "10 reasons why peer review, as is often
constructed, frequently fails to improve manuscripts, and often diminishes their
contribution," ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#Referees
Scroll down to "Dan Stone."
This led to the then Editor (Steve Kacheimeir) of The Accounting Review
(TAR) to present counterpoints on each of Dan
Stone's "10 reasons" quoted in the above link.
Steve goes on to blame the (then) 574 referees of TAR for the virtual lack of
commentaries in TAR, particularly commentaries on recently published papers in
TAR. Steve's contention is that as TAR Editor he does not block commentaries
from being published.
However, I think Steve is wrong on two grounds. The policy of a number of
editors that preceded Steve was to not publish
commentaries or replication studies. This led to the virtual absence of
submissions of commentaries under Steve's editorship, and if there were any
submissions of commentaries his remarks lead me to believe that they were all
rejected by the referees.
The same can be said for replication studies. Publishing of a replication
study or even mention of it is a very rare event in TAR. Replications that are
mentioned in new research submissions are usually years and years overdue.
David Giles: October 2018 Update on the A Shout-Out for The
Replication Network (in economics)
https://davegiles.blogspot.com/2018/10/a-shout-out-for-replication-network.html
Accountics Scientists Seeking Truth:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to change this
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Introduction to Replication Commentaries
In this message I will define a research "replication" as an
experiment that exactly and independently reproduces hypothesis testing of an
original scientific experiment. The replication must be done by "independent"
researchers using the same hypotheses and models that test those hypotheses such
as multivariate statistical models. Researchers must be sufficiently independent
such that the replication is not performed by the same scientists or
students/colleagues of those scientists. Experimental data sets may be identical
in original studies and replications, although if replications generate
different data sets the replications also test for errors in data collection and
recording. When identical data sets are used, replicators are mainly checking
analysis errors apart from data errors.
Presumably a successful replication "reproduces" exactly the same outcomes
and authenticates/verifies the original research. In scientific research, such
authentication is considered extremely important. The IAPUC Gold Book
makes a distinction between reproducibility and repeatability at
http://goldbook.iupac.org/
For purposes of this message, replication, reproducibility, and repeatability
will be viewed as synonyms.
It would be neat if replication clearly marked the difference between the
real sciences versus the pseudo sciences, but this demarcation is not so clear
cut since pseudo scientists sometimes (not as often) replicate research
findings. A more clear cut demarcation is the obsession with finding causes that
cannot be discovered in models from big data like census databases, financial
statement databases (e.g. Compustat and EDGAR), and economic
statistics generated by governments and the United Nations. Real scientists
slave away to go beyond discovered big data correlations in search of causality
---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsGranulationCurrentDraft.pdf
Why Economics is Having a Replication Crisis ---
https://www.bloomberg.com/view/articles/2018-09-17/economics-gets-it-wrong-because-research-is-hard-to-replicate
Replication and Validity Testing: How are things going in political
science? ---
https://replicationnetwork.com/2018/09/12/and-how-are-things-going-in-political-science/
Replication and Validity Testing: How are things going in
psychology? ---
https://replicationnetwork.com/2018/09/14/in-the-news-the-chronicle-of-higher-education-september-11-2018/
Replication and Validity Testing: How are things going in
accountancy?
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Philosophy of Science Meets the Statistics Wars ---
https://replicationnetwork.com/2018/09/10/philosophy-of-science-meets-the-statistics-wars/
Significant Effects From Low-Powered Studies Will Be Overestimates ---
https://replicationnetwork.com/2018/09/08/significant-effects-from-low-powered-studies-will-be-overestimates/
80% Power? Really?
https://replicationnetwork.com/2018/09/01/80-power-really/
Responsible Research Results: What can universities do?
https://replicationnetwork.com/2018/09/07/what-can-universities-do/
Are the foot soldiers behind psychology’s replication crisis (reform)
saving science — or destroying it? ---
https://www.chronicle.com/article/I-Want-to-Burn-Things-to/244488?cid=at&utm_source=at&utm_medium=en&elqTrackId=927c155b3f3a433faf1edb36c7554be8&elq=16868c5647c6471fadb18cae5ca9e795&elqaid=20470&elqat=1&elqCampaignId=9626
. . .
As you’ve no doubt
heard by now, social psychology has had a rough few years. The trouble
concerns the replicability crisis, a somewhat antiseptic phrase that refers
to the growing realization that often the papers published in peer-reviewed
journals — papers with authoritative abstracts and nifty-looking charts —
can’t be reproduced. In other words, they don’t work when scientists try
them again. If you wanted to pin down the moment when the replication crisis
really began, you might decide it was in 2010, when Daryl Bem, a Cornell
psychologist, published a paper in
The Journal of Personality and Social
Psychology
that purported to prove that subjects could predict the future. Or maybe it
was in 2012, when researchers
failed to replicate
a much-heralded 1996 study by John Bargh, a Yale psychologist, that claimed
to show that reading about old people made subjects walk more slowly.
And it’s only gotten
worse. Some of the field’s most exciting and seemingly rock-solid findings
now appear sketchy at best. Entire subfields are viewed with suspicion. It’s
likely that many, perhaps most, of the studies published in the past couple
of decades are flawed. Just last month the Center for Open Science reported
that, of 21 social-behavioral-science studies published in Science
and Nature between 2010 and 2015, researchers could successfully
replicate only 13 of them. Again, that’s Science and Nature,
two of the most prestigious scientific journals around.
If you’re a human
interested in reliable information about human behavior, that news is
probably distressing. If you’re a psychologist who has built a career on
what may turn out to be a mirage, it’s genuinely terrifying. The replication
crisis often gets discussed in technical terms: p-values, sample sizes, and
so on. But for those who have devoted their lives to psychology, the
consequences are not theoretical, and the feelings run deep. In 2016, Susan
Fiske, a Princeton psychologist, used the phrase "methodological terrorism"
to describe those who dissect questionable research online, bypassing the
traditional channels of academic discourse (one researcher at SIPS, who
asked not to be identified, wore a T-shirt to the conference emblazoned with
the words "This Is What a Methodological Terrorist Looks Like"). Fiske wrote
that "unmoderated attacks" were leading psychologists to abandon the field
and discouraging students from pursuing it in the first place.
Psychologists like
Fiske argue that these data-crunching critics, like many of the attendees at
SIPS, paint far too dark a portrait of the field. Yes, there are lousy
studies that slip through the peer-review net and, sure, methods can always
be improved. Science progresses in fits and starts, with inevitable missteps
along the way. But they complain that the tactics of the reformers — or
terrorists, take your pick — can be gleefully aggressive, that they’re too
eager to, well, burn things to the ground. The handful of researchers who
make it their mission to unearth and expose examples of psychology’s
failings come in for particular scorn. As one tenured professor I spoke with
recently put it, "I think they’re human scum."
ames Heathers is a jovial, bearded Australian who loves cats. He is a
postdoc at Northeastern University with a Ph.D. in cardiac psychophysiology;
when he’s not ranting about subpar research practices on Everything
Hertz, the podcast he co-hosts, he’s hunting for connections between
emotion and heartbeat variability. He’s been working, along with his fellow
data thugs — a term Heathers coined, and one that’s usually (though not
always) employed with affection — on something called Sample Parameter
Reconstruction via Interactive Techniques, or SPRITE. Basically, SPRITE is a
computer program that can be used to see whether survey results, as reported
in a paper, appear to have been fabricated. It can do this because results
usually follow certain statistical patterns, and people who massage data
frequently fail to fake it convincingly. During a SIPS session, Heathers
explained SPRITE with typical élan: "Sometimes you push the button and it
says, ‘Here’s a forest of lunatic garbage.’ "
. . .
As Barrett sees
it, some of what the data thugs do "borders on harassment." The prime
example is that of Amy Cuddy, whose power-pose study was the basis for a TED
talk that’s been viewed more than 48 million times and led to a best-selling
book, Presence (Little, Brown & Company, 2015). The 2010 study has
failed to replicate,
and the first author, Dana Carney, a psychologist at Berkeley, no longer
believes in the effect. The power-pose study is held up as an example of
psychology at its most frivolous and unreliable. Cuddy, though, has not
renounced the research and has likened her treatment to bullying. She
recently tweeted: "People who want to destroy often do so with greater
passion and energy and time than people who want to build." Some
psychologists, including Barrett, see in the ferocity of that criticism an
element of sexism. It’s true that the data thugs tend to be, but are not
exclusively, male — though if you tick off the names of high-profile social
psychologists whose work has been put through the replication ringer, that
list has lots of men on it, too. Barrett thinks the tactics of the data
thugs aren’t creating an atmosphere for progress in the field. "It’s a hard
enough life to be a scientist," she says. "If we want our best and brightest
to be scientists, this is not the way to do it."
Richard Nisbett
agrees. Nisbett has been a major figure in psychology since the 1970s. He’s
co-director of the Culture and Cognition program at the University of
Michigan at Ann Arbor, author of books like Mindware: Tools for Smart
Thinking (Farrar, Straus, and Giroux, 2015), and a slew of influential
studies. Malcolm Gladwell called him "the most influential thinker in my
life." Nisbett has been calculating effect sizes since before most of those
in the replication movement were born.
And he’s a skeptic of
this new generation of skeptics. For starters, Nisbett doesn’t think direct
replications are efficient or sensible; instead he favors so-called
conceptual replication, which is more or less taking someone else’s
interesting result and putting your own spin on it. Too much navel-gazing,
according to Nisbett, hampers professional development. "I’m alarmed at
younger people wasting time and their careers," he says. He thinks that
Nosek’s ballyhooed finding that most psychology experiments didn’t replicate
did enormous damage to the reputation of the field, and that its leaders
were themselves guilty of methodological problems. And he’s annoyed that
it’s led to the belief that social psychology is riddled with errors. How do
they know that?, Nisbett asks, dropping in an expletive for emphasis.
Simine Vazire has
heard that argument before. Vazire, an associate professor of psychology at
the University of California at Davis, and one of the SIPS organizers,
regularly finds herself in meetings where no one shares her sense of urgency
about the replication crisis. "They think the status quo is fine, and we can
make tweaks," she says. "I’m often the only person in the room who thinks
there’s a big problem."
It’s not that the
researchers won’t acknowledge the need for improvement. Who’s against
progress? But when she pushes them on what that means, the division becomes
apparent. They push back on reforms like data transparency (sharing your
data freely with other researchers, so they can check your work) or
preregistration (saying publicly what you’re trying to discover in your
experiment before you try to discover it). That’s not the way it’s normally
been done. Psychologists tend to keep their data secret, arguing that it’s
proprietary or that revealing it would endanger subjects’ anonymity. But not
showing your work makes it easier to fudge what you found. Plus the freedom
to alter your hypothesis is what leads to so-called p-hacking, which is
shorthand for when a researcher goes searching for patterns in statistical
noise.
Continued in article
"Replication
Crisis in Psychology Research Turns Ugly and Odd," by Tom Bartlett,
Chronicle of Higher Education,
June 23, 2014
---
https://www.chronicle.com/article/Replication-Crisis-in/147301/?cid=at&utm_medium=en&utm_source=at
In a blog post published last week, Timothy D. Wilson, a professor of
psychology at the University of Virginia and the author of
The Surprising New Science of Psychological Change
"thatdeclared that "the field has become preoccupied with prevention and
error detection—negative psychology—at the expense of exploration and
discovery." The evidence that psychology is beset with false positives is
weak, according to Mr. Wilson, and he pointed instead to the danger of inept
replications that serve only to damage "the reputation of the original
researcher and the progression of science." While he called for finding
common ground, Mr. Wilson pretty firmly sided with those who fear that
psychology’s growing replication movement, which aims to challenge what some
critics see as a tsunami of suspicious science, is more destructive than
corrective.
Continued in article
The Stanford Prison Experiment lasted just six days, and it took place 47
years ago. But it has shaped our fundamental understanding of human nature. Now
many in the field are wondering: Should it have?
https://www.chronicle.com/article/How-a-Decades-Old-Experiment/244256?cid=at&utm_source=at&utm_medium=en&elqTrackId=8b283b87f55e48d281e307a3d73eb2a1&elq=16868c5647c6471fadb18cae5ca9e795&elqaid=20470&elqat=1&elqCampaignId=9626
Sometimes it takes decades for awareness of flaws in popular research studies to
come to light
Jensen Comment
In academic accountancy the editors have a policy that if the article has
equations (most often multiple regression equations) it does not need to
be replicated. Fortunately this does not matter much in the profession since
practitioners tend to ignore academic articles with equations ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Sometimes it takes decades for awareness of flaws in popular research studies to
come to light. For example, for decades accounting empiricists based their
regression models on the Capital Asset Pricing Model (CAPM) and the Efficient
Market Hypothesis (EMH) as if the underlying bases for these without truly
examining how flaws in these foundations of capital market research. In fact,
the untested assumptions heavily destroyed robustness of the research,
robustness that went unchallenged and still often goes unchallenged. Even now as
p-tests in statistical inference testing are being challenged in science our
accounting research journal editors and referees seem oblivious to the
limitations of p-test outcomes.
For example on the AECM listserv I called attention to the following discovery
in an empirical accounting research study:
"Finally, we predict and find lower EPS forecast accuracy for U.K. firms
when reporting under the full fair value model of IFRS, in which unrealized
fair value gains and losses are included in net income."
"The
Effect of Fair Value versus Historical Cost Reporting Model on Analyst
Forecast Accuracy,"
by Lihong Liang and Edward J. Riedl,
The Accounting Review (TAR),: May 2014, Vol. 89, No. 3, pp. 1151-1177
---
http://aaajournals.org/doi/full/10.2308/accr-50687 (Not Free)
Accounting Review
readers will have to accept the above finding as truth since TAR will not
encourage or publish a replication study of that finding or even publish a
commentary about that finding. This is wrong in our Academy.
Lack of Research Validity/Replication Testing: The
Dismal Science Remains Dismal, Say Scientists ---
https://www.wired.com/story/econ-statbias-study/
Jensen Comment
The lack of replication and validity testing is even worse in academic
accounting research, but nobody cares ---
"How to Fix Psychology’s Replication Crisis," by Brian D. Earp and Jim
A.C. Everett, Chronicle of Higher Education, October 25, 2015 ---
http://chronicle.com/article/How-to-Fix-Psychology-s/233857?cid=cr&utm_source=cr&utm_medium=en&elqTrackId=5260de11ef714813a4003f5dc2eede4e&elq=fadcc1747dcb40cb836385262f29afe5&elqaid=9619&elqat=1&elqCampaignId=3428
Jensen Comment
Academic accounting research has a worse flaw --- replication in accounting
research is a rare event due largely to the fact that leading accounting
research journals will not publish reports of replication efforts and outcomes.
One thing we can say about hypothesis testing in accounting research is that the
first test constitutes TRUTH!
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
"The Flaw at the Heart of Psychological Research," the Chronicle of
Higher Education's Chronicle Review, June 26, 2016 ---
http://chronicle.com/article/The-Flaw-at-the-Heart-of/236916?cid=cr&utm_source=cr&utm_medium=en&elqTrackId=724bd7450b2a480cb14b37b02d872fcf&elq=fadcc1747dcb40cb836385262f29afe5&elqaid=9619&elqat=1&elqCampaignId=3428
Jensen Comment
Academic accounting research has this same flaw plus a boatload of other flaws.
What went wrong?
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
This should set accountics scientists
rethinking about their failures to replicate each other's research
"New Evidence on Linear Regression and Treatment Effect Heterogeneity." by Tymon
Słoczyński, iza, November 2015 ---
http://ftp.iza.org/dp9491.pdf
Jensen Comment
Accountics scientists seldom replicate the works of each other ---
http://faculty.trinity.edu/rjensen/theoryTar.htm
The Tymon Słoczyński's replications of two
studies published in the American Economic Review should make accountics
scientists rethink their implicit "policy" of not replicating.
It is standard practice in applied work to rely on
linear least squares regression to estimate the effect of a binary variable
(“treatment”) on some outcome of interest. In this paper I study the
interpretation of the regression estimand when treatment effects are in fact
heterogeneous. I show that the coefficient on treatment is identical to the
outcome of the following three-step procedure: first, calculate the linear
projection of treatment on the vector of other covariates (“propensity
score”); second, calculate average partial effects for both groups of
interest (“treated” and “controls”) from a regression of outcome on
treatment, the propensity score, and their interaction; third, calculate a
weighted average of these two effects, with weights being inversely related
to the unconditional probability that a unit belongs to a given group. Each
of these steps is potentially problematic, but this last property – the
reliance on implicit weights which are inversely related to the proportion
of each group – can have particularly severe consequences for applied work.
To illustrate the importance of this result, I perform Monte Carlo
simulations as well as replicate two applied
papers: Berger, Easterly, Nunn and Satyanath (2013) on the effects of
successful CIA interventions during the Cold War on imports from the US; and
Martinez-Bravo (2014) on the effects of appointed officials on village-level
electoral results in Indonesia. In both cases some of the
conclusions change dramatically after allowing for heterogeneity in effect.
Common Accountics Science and Econometric Science Statistical Mistakes ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsScienceStatisticalMistakes.htm
How Accountics Scientists Should Change:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to change this
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Real Science versus Pseudo Science ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Pseudo-Science
Having said this scientists, especially real scientists, are obsessed with
replication
Presumably a successful replication "reproduces" exactly the same outcomes
and authenticates/verifies the original research. In scientific research, such
authentication is considered extremely important. The IAPUC Gold Book
makes a distinction between reproducibility and repeatability at
http://goldbook.iupac.org/
For purposes of this message, replication, reproducibility, and repeatability
will be viewed as synonyms.
Allowance should be made for "conceptual replications" apart from "exact
replications ---
http://www.jasnh.com/pdf/Vol6-No2.pdf
Scientific Replication Woes of Psychology
Accountics scientists in accountancy avoid such woes by rarely even trying to
replicate behavioral experiements
"The Results of the Reproducibility Project Are In. They’re Not Good,"
by Tom Bartlett, Chronicle of Higher Education, August 28, 2015 ---
http://chronicle.com/article/The-Results-of-the/232695/?cid=at
A decade ago, John P.A. Ioannidis published a
provocative and much-discussed paper arguing that
most published research findings are false. It’s
starting to look like he was right.
The
results
of the
Reproducibility Project are in, and the news is
not good. The goal of the project was to attempt to replicate findings in
100 studies from three leading psychology journals published in the year
2008. The very ambitious endeavor,
led by Brian Nosek, a
professor of psychology at the University of Virginia and executive director
of the
Center for Open Science, brought together more
than 270 researchers who tried to follow the same methods as the original
researchers — in essence, double-checking their work by painstakingly
re-creating it.
Turns out, only 39 percent of the studies withstood
that scrutiny.
Even Mr. Nosek, a self-described congenital
optimist, doesn’t try to put a happy spin on that number. He’s pleased that
the replicators were able to pull off the project, which began in 2011 and
involved innumerable software issues, language differences, logistical
challenges, and other assorted headaches. Now it’s done! That’s the upside.
Continued in article
574 Shields Against Validity Testing in Accounting
Research---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
"Over half of psychology studies fail
reproducibility test." "Study delivers bleak verdict on validity of psychology
experiment results." "Psychology is a discipline in crisis."
"How to Fix Psychology’s Replication Crisis," by Brian D. Earp and Jim
A.C. Everett, Chronicle of Higher Education, October 25, 2015 ---
http://chronicle.com/article/How-to-Fix-Psychology-s/233857?cid=at&utm_source=at&utm_medium=en&elq=ffdd5e32cd6c4add86ab025b68705a00&elqCampaignId=1697&elqaid=6688&elqat=1&elqTrackId=ffd568b276aa4a30804c90824e34b8d9
These and other similar headlines
followed the results of a large-scale initiative called the
Reproducibility Project, recently
published in Science magazine,
which appeared to show that a majority of findings from a
sample of 100 psychology studies did not hold up when
independent labs attempted to replicate them. (A similar
initiative is underway
in cancer biology and other
fields: Challenges with replication are
not unique to psychology.)
Headlines tend
to run a little hot. So the media’s dramatic response to the
Science paper was not entirely surprising given the
way these stories typically go. As it stands, though, it is
not at all clear what these replications mean. What the
experiments actually yielded in most cases was a different
statistical value or a smaller effect-size estimate compared
with the original studies, rather than positive evidence
against the existence of the underlying phenomenon.
This
is an important distinction. Although it would be nice if it
were otherwise, the data points we collect in psychology
don’t just hold up signs saying, "there’s an effect here" or
"there isn’t one." Instead, we have to make inferences based
on statistical estimates, and we should expect those
estimates to vary over time. In the typical scenario, an
initial estimate turns out to be on the high end (that’s why
it
ends up getting published in the
first place — it looks impressive), and then subsequent
estimates are a bit more down to earth.
. . .
To make the point a slightly different way: While
it is in everyone’s interest that high-quality, direct replications of key
studies in the field are conducted (so that we can know what degree of
confidence to place in previous findings), it is not typically in any
particular researcher’s interest to spend her time conducting such
replications.
As Huw Green, a Ph.D. student at the City
University of New York, recently put it, the "real crisis in psychology
isn’t that studies don’t replicate, but that we usually don’t even try."
What is needed is a "structural solution" —
something that has the power to resolve collective-action problems like the
one we’re describing. In simplest terms, if everyone is forced to cooperate
(by some kind of regulation), then no single individual will be at a
disadvantage compared to her peers for doing the right thing.
There are lots of ways of pulling this off — and we
don’t claim to have a perfect solution. But here is one idea.
As we proposed in a recent paper, graduate students in
psychology should be required to conduct, write up, and submit for
publication a high-quality replication attempt
of at least one key finding from the literature (ideally focusing on the
area of their doctoral research), as a condition of receiving their Ph.D.s.
Of course, editors
would need to agree to publish these kinds of submissions, and fortunately
there are a growing number — led by journals like PLoS ONE — that are
willing to do just that.
. . .
Since our
paper
was featured several weeks ago in
Nature, we’ve begun to get some constructive
feedback. As one psychologist wrote to us in an email
(paraphrased):
Your proposed
solution would only apply to some fields of psychology. It’s
not a big deal to ask students to do cheap replication
studies involving, say, pen-and-paper surveys — as is common
in social psychology. But to replicate an experiment
involving sensitive populations (babies, for instance, or
people with clinical disorders) or fancy equipment like an
fMRI machine, you would need a dedicated lab, a team of
experimenters, and several months of hard work — not to
mention the money to pay for all of this!
That much is
undoubtedly true. Expensive, time-consuming studies with
hard-to-recruit participants would not be replicated very
much if our proposal were taken up.
But that is
exactly the way things are now — so the problem would not be
made any worse. On the other hand, there are literally
thousands of studies that can be tested relatively cheaply,
at a skill level commensurate with a graduate student’s
training, which would benefit from being replicated. In
other words, having students perform replications as part of
their graduate work is very unlikely to make the problem of
not having enough replications any worse, but it has great
potential to help make it better.
Beyond
this, there is a pedagogical benefit. As Michael C. Frank
and Rebecca Saxe
have written: In their own
courses, they have found "that replicating cutting-edge
results is exciting and fun; it gives students the
opportunity to make real scientific contributions (provided
supervision is appropriate); and it provides object lessons
about the scientific process, the importance of reporting
standards, and the value of openness."
At the end of the day,
replication is indispensable.
It is a key part of the scientific enterprise; it helps us determine how
much confidence to place in published findings; and it will advance our
knowledge in the long run.
Continued in article
Jensen Comments
Accountics is the
mathematical science of values.
Charles Sprague [1887] as quoted by McMillan [1998, p. 1]
In accountics science I'm not aware of a single exacting replication of the
type discussed above of a published behavioral accounting research study.
Whether those findings constitute "truth" really does not matter much because
the practicing profession ignores accountics science behavior studies as
irrelevant and academics are only interested in the research methodologies
rather than the findings.
For example, years ago the FASB engaged Tom Dyckman and Bob Jensen to work
with the academic FASB member Bob Sprouse in evaluating research proposals to
study (with FASB funding) the post hoc impact of FAS 13 on the practicing
profession. In doing so the FASB said that both capital markets empiricism and
analytical research papers were acceptable but that the FASB had no interest in
behavioral studies. The implication was that behavioral studies were of little
interest too the FASB for various reasons, the main reason is that the tasks in
behavioral research were too artificial and removed from decision making in
real-world settings.
Interestingly both Tom and Bob had written doctoral theses that entailed
behavioral experiments in artificial settings. Tom used students as subjects,
and Bob used financial analysts doing, admittedly, artificial tasks. However,
neither Dyckman nor Jensen had much interest in subsequently conducting
behavioral experiments when they were professors. Of course in this FAS 13
engagement Dyckman and Jensen were only screening proposals submitted by other
researchers.
Accountics science research journals to my knowledge still will not publish
replications of behavioral experiments that only replicate and do not extend the
findings. Most like The Accounting Review, will not publish replications
of any kind. Accountics scientists have never
considered replication is indispensable at
the end of the day.
A Success Case for the Inability to Replicate
in Validation of Social Science Research
"The Unraveling of Michael LaCour," by Tom Bartlett, Chronicle of Higher
Education, Chronicle of Higher Education, June 2, 2015 ---
http://chronicle.com/article/The-Unraveling-of-Michael/230587/?cid=at
By his own account, Michael J. LaCour has told big
lies. He claimed to have received $793,000 in research grants. In fact, he
admits now, there were no grants.
The researchers who attempted to replicate his
widely lauded Science paper on persuasion
instead exposed a brazen fabrication, one in which Mr. LaCour appears to
have forged an email and invented a representative for a research firm.
New York magazine’s Science of Us blog noted that Mr. LaCour claimed to
have won
a nonexistent teaching award, and then caught him
trying to cover up that fiction.
As more facts emerge from one of the strangest
research scandals in recent memory, it becomes clear that this wasn’t merely
a flawed study performed by a researcher who cut a few corners. Instead it
appears to have been an elaborate, years-long con that fooled several highly
respected, senior professors and one of the nation’s most prestigious
journals.
Commenters are doling out blame online. Who, if
anyone, was supervising Mr. LaCour’s work? Considering how perfect his
results seemed, shouldn’t colleagues have been more suspicious? Is this
episode a sign of a deeper problem in the world of university research, or
is it just an example of how a determined fabricator can manipulate those
around him?
Those questions will be asked for some time to
come. Meanwhile, though, investigators at the University of California at
Los Angeles, where Mr. LaCour is a graduate student, are still figuring out
exactly what happened.
It now appears that even after Mr. LaCour was
confronted about accusations that his research was not on the level, he
scrambled to create a digital trail that would support his rapidly crumbling
narrative, according to sources connected to UCLA who asked to speak
anonymously because of the university investigation. The picture they paint
is of a young scholar who told an ever-shifting story and whose varied
explanations repeatedly failed to add up.
An Absence of Evidence
On May 17, Mr. LaCour’s dissertation adviser, Lynn
Vavreck, sent him an email asking that he meet her the next day. During that
meeting, the sources say, Ms. Vavreck told Mr. LaCour that accusations had
been made about his work and asked whether he could show her the raw data
that underpinned his (now-retracted) paper, "When Contact Changes Minds: An
Experiment on Transmission of Support for Gay Equality." The university
needed proof that the study had actually been conducted. Surely there was
some evidence: a file on his computer. An invoice from uSamp, the company
that had supposedly provided the participants. Something.
That paper, written with Donald Green, a professor
of political science at Columbia University who is well-known for pushing
the field to become more experimental, had won an award and had been
featured in
major news
outlets and in
a segment on This American Life. It was
the kind of home run graduate students dream about, and it had helped him
secure an offer to become an assistant professor at Princeton University. It
was his ticket to an academic career, and easily one of the most
talked-about political-science papers in recent years. It was a big deal.
"What Social Science Can Learn From the LaCour Scandal," by Joseph K.
Young and Nicole Janz, Chronicle of Higher Education, June 3, 2015 ---
http://chronicle.com/article/What-Social-Science-Can-Learn/230645/?cid=cr&utm_source=cr&utm_medium=en
. . .
So why don’t more researchers replicate? Because
replication isn’t sexy. Our professional incentives are to come up with
novel ideas and data, not confirm other people’s prior work. Replication is
the yeoman’s work of social science. It is time-consuming, it is
frustrating, and it does not gain any accolades for your CV. Worse, critics
of students' doing replications state that they are amateurs, or that they
may jeopardize their reputations by starting their scientific careers as
"error hunters." The LaCour scandal shows that critics could not be more
wrong. Scientific knowledge is built on the edifice of prior work. Before we
get to a stage where we need more new ideas, we need to have a better sense
of what works given the data.
Others have argued that the LaCour incident shows
the weakness of the social sciences. Some have decided to make this some
kind of steamy academic soap opera, even dubbing it LaCourGate, with daily
revelations about fake awards and fake funding. While Americans love to
shame, this episode is not about LaCour or Green or what is or was not the
cause of the errors in the study. This is about openness, transparency, and
replication.
The important lesson, however, is that replication
works. It is a verification tool that improves science and our knowledge
base. The takeaway is that we need to provide more incentives for such work.
We need a new, highly respected journal that is just about replication. More
funding sources are needed for replications. Each current journal in all of
the social sciences should establish policies that require data, tools, and
processes to be completely open-source upon publication.
The data given to Science provided the
evidence needed to identify errors in LaCour and Green. What prevents this
from occurring more often is an incentive for others to replicate. Students
can be a crucial force, and colleges should start embedding replication in
their courses more rigorously and systematically. And instructors should
encourage students to publish their work; currently most replications done
in class are an untapped resource.
In fact, LaCour and the uproar surrounding the
scandal did supporters of replication and data transparency a big favor. The
field of political science was already undergoing changes toward more
reproducibility. Top journals — but not all journals in the field — have
started to adopt strict replication policies requiring authors to provide
their materials upon publication. The American Political Science Association
released
new guidelines on data access and research
transparency.
Those new trends toward higher-quality research
were not based on a crisis in political science itself. For example, there
were hardly any retractions, accusations of fraud, plagiarism, or
large-scale irreproducibility scandals in political science before this one.
But there were scandals in psychology, economics, and cancer research that
sparked a discussion in our discipline. In fact, political science has been
feeding off crises in other fields without bleeding itself. We’ve often
wondered: If there were more scandals in political science, could a change
toward higher research quality be more rapid, and more profound? Enter
LaCour.
Joseph K. Young is an associate professor in the School of Public
Affairs and the School of International Service at American University, and
Nicole Janz is a political scientist and research-methods associate at the
University of Cambridge.
Jensen Comment
Detection of fraud with inability to replicate is quite common in the physical
sciences. It occasionally happens in the social sciences. More commonly,
however, whistle blowers are the most common source of fraud detection, often
whistle blowers that were insiders in the research process itself such as when
insiders revealed the faked data of
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize
I know of zero instances where failure to replicate detected fraud in the
entire history of accounting research.
One reason is that exacting replication itself is a rare event in academic
accounting research ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#Replication
Academic accountants most likely consider themselves more honest than other
academic researchers to a point where journal editors do not require replication
and in most instances like The Accounting Review will not even publish
critical commentaries about published articles ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Whereas real scientists are a suspicious lot when it comes to published
research, accounting researchers tend to be a polite and unsuspecting lot ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Large-Scale Fake Data in Academe
"The Case of the Amazing Gay-Marriage Data: How a Graduate Student
Reluctantly Uncovered a Huge Scientific Fraud," by Jesse Singal, New York
Magazine, May 2015 ---
http://nymag.com/scienceofus/2015/05/how-a-grad-student-uncovered-a-huge-fraud.html
The exposure of one of the
biggest scientific frauds in recent memory didn’t start with concerns about
normally distributed data, or the test-retest reliability of feelings
thermometers, or anonymous Stata output on shady message boards, or any of
the other statistically complex details that would make it such a bizarre
and explosive scandal. Rather, it started in the most unremarkable way
possible: with a graduate student trying to figure out a money issue.
It was September of 2013,
and David Broockman (pronounced “brock-man”), then a third-year
political-science doctoral student at UC Berkeley, was blown away by some
early results published by Michael LaCour, a political-science grad student
at UCLA. On the first of the month, LaCour had invited Broockman, who is
originally from Austin, Texas, to breakfast during the American Political
Science Association’s annual meeting in Chicago. The pair met in a café
called Freshii at the Palmer House Hilton, where the conference was taking
place, and LaCour showed Broockman some early results on an iPad.
. . .
So when LaCour and
Green’s research was eventually published in December 2014 in Science,
one of the leading peer-reviewed research publications in the world, it
resonated far and wide. “When
contact changes minds: an expression of transmission of support for gay
equality” garnered
attention in the New York Times and a
segment on "This
American Life" in which a reporter tagged along
with canvassers as they told heart-wrenching stories about being gay. It
rerouted countless researchers’ agendas, inspired activists to change their
approach to voter outreach, generated shifts in grant funding, and launched
follow-up experiments.
But back in 2013, the
now-26-year-old Broockman, a self-identifying “political science nerd,” was
so impressed by LaCour’s study that he wanted to run his own version of it
with his own canvassers and his own survey sample. First, the
budget-conscious Broockman had to figure out how much such an enterprise
might cost. He did some back-of-the-envelope calculations based on what he’d
seen on LaCour’s iPad — specifically, that the survey involved about 10,000
respondents who were paid about $100 apiece — and out popped an imposing
number: $1 million. That can’t be right, he thought to himself.
There’s no way LaCour — no way any grad student, save one who’s
independently wealthy and self-funded — could possibly run a study that cost
so much. He sent out a Request for Proposal to a bunch of polling firms,
describing the survey he wanted to run and asking how much it would cost.
Most of them said that they couldn’t pull off that sort of study at all, and
definitely not for a cost that fell within a graduate researcher’s budget.
It didn’t make sense. What was LaCour’s secret?
Eventually, Broockman’s
answer to that question would take LaCour down.
June 2, 2015 reply from Patricia Walters
I'm sure many of you received the
announcement today of this new journal. I added the emphasis (bold
& purple) to the last sentence of the description that encourages (at
least, IMHO) replications. Only time will tell whether replications and
eventual publication will occur.
Pat
The Financial Accounting and Reporting Section (FARS) of the AAA
is excited to announce the official opening of submissions for
its new journal:
The Journal of Financial Reporting
The Journal
of Financial Reporting (JFR)
is open to research on a broad spectrum of financial reporting
issues related to the production, dissemination, and analysis of
information produced by a firm's financial accounting and
reporting system. JFR
welcomes research that employs empirical archival, analytical,
and experimental methods, and especially
encourages
less traditional approaches such as field studies, small sample
studies, and analysis of survey data. JFR also
especially encourages "innovative" research, defined as research
that examines a novel question or develops new theory or
evidence that challenges current paradigms, or research that
reconciles, confirms, or refutes currently mixed or questionable
results.
Editors: Mary Barth, Anne Beatty, and Rick Lambert
See the complete Editorial Advisory Board and more details about
the journal's background and submission guidelines at:
|
Added Jensen Comment
I don't think the following quotation is a whole lot different from the
current policy of The Accounting Review. The supreme test is whether there
will be evidence that The Journal of Financial Reporting lives up to
its promise where The Accounting Review failed us in recent decades ---
http://aaajournals.org/userimages/ContentEditor/1433273408490/JFR_Editorial_Policy.pdf
. . .
Replications
Replications include a partial or comprehensive repeat of an experiment
that sustains as many conditions as possible but uses a different
sample. The sample employed in the replication should be at least as
“strong” as the original sample. JFR also uses the term “Replication” to
describe an archival empirical analysis that primarily performs the same
analysis as an existing study but ad ds, for example, another control
variable or additional sensitivity analysis, or uses a slightly
different sample.
Replications are expected to be short. The
Introduction should provide a limited review of the essential features
of the analysis being replicated: the re search issue addressed, the
contribution of the original article, and the key differences between
the manuscript’s analysis and the replicated study. The remainder of the
paper need only provide a limited summary of the analysis that restates
the central theory and hypotheses or research questions addressed in the
replicated study. Authors should provide more detail about the sample,
if using a new sample is the purpose of the replication, or about any
new variables. Sufficient results should be presented to support
conclusions drawn regarding the comparison of the results of the current
paper to the replicated study.
Comments on Previously Published Papers
Authors who wish to comment on previously published articles should
first communicate directly with the author(s) of the original article to
eliminate any misunderstandings or misconceptions. If substantive issues
remain after the initial exchange of views with the author(s), the
Commentator may submit the proposed Comment to the JFR . The
correspondence between the Commentator and the author (s) of the
original article should be submitted as a supplementary file. Comments
will gene rally be reviewed by two reviewers, usually including an
author of the original article to ensure that the Comment represents th
e prior article accurately and an additional reviewer who is independent
of the original article. If a Comment is accepted for publication, the
original author will generally be invited to reply.
Continued article
Accountics scientists are not accustomed to such challenges of their
research and their research findings. Time will tell if JFR can pull off
what TAR seemingly cannot pull off.
How Accountics Scientists Should Change:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting
Review I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to change this
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
"Scientists Fail to Identify Their Tools, Study Finds, and May Hurt
Replication," by Paul Voosen, Chronicle of Higher Education,
September 5, 2013 ---
http://chronicle.com/article/Scientists-Fail-to-Identify/141389/?cid=at
Define your terms. It's one of the oldest rules of
writing. Yet when it comes to defining the exact resources used to conduct
their research, many scientists fail to do exactly that. At least that's the
conclusion of a
new study,
published on Thursday in the journal PeerJ.
Looking at 238 recently published papers, pulled
from five fields of biomedicine, a team of scientists found that they could
uniquely identify only 54 percent of the research materials, from lab mice
to antibodies, used in the work. The rest disappeared into the terse fuzz
and clipped descriptions of the methods section, the journal standard that
ostensibly allows any scientist to reproduce a study.
"Our hope would be that 100 percent of materials
would be identifiable," said Nicole A. Vasilevsky, a project manager at
Oregon Health & Science University, who led the investigation.
The group quantified a finding already well known
to scientists: No one seems to know how to write a proper methods section,
especially when different journals have such varied requirements. Those
flaws, by extension, may make reproducing a study more difficult, a problem
that has prompted, most recently, the journal Nature to impose
more rigorous standards for reporting research.
"As researchers, we don't entirely know what to put
into our methods section," said Shreejoy J. Tripathy, a doctoral student in
neurobiology at Carnegie Mellon University, whose laboratory served as a
case study for the research team. "You're supposed to write down everything
you need to do. But it's not exactly clear what we need to write down."
Ms. Vasilevsky's study offers no grand solution.
Indeed, despite its rhetoric, which centers on the hot topic of
reproducibility, it provides no direct evidence that poorly labeled
materials have hindered reproduction. That finding tends to rest on
anecdote. Stories abound of dissertations diverted for years as students
struggled to find the genetic strain or antibody used in a study they were
recreating.
A Red Herring?
Here's what the study does show: In neuroscience,
in immunology, and in developmental, molecular, and general biology, catalog
codes exist to uniquely identify research materials, and they are often not
used. (The team studied five biomedical resources in all: antibody proteins,
model organisms, cell lines, DNA constructs, and gene-silencing chemicals.)
Without such specificity, it can be difficult, for example, to distinguish
multiple antibodies from the same vendor. That finding held true across the
journals, publishers, and reporting methods surveyed—including,
surprisingly, the few journals considered to have strict reporting
requirements.
This goes back to anecdote, but the interior rigor
of the lab also wasn't reflected in its published results. Ms. Vasilevsky
found that she could identify about half of the antibodies and organisms
used by the Nathan N. Urban lab at Carnegie Mellon, where Mr. Tripathy
works. The lab's interior Excel spreadsheets were meticulous, but somewhere
along the route to publication, that information disappeared.
How deep and broad a problem is this? It's
difficult to say. Ms. Vasilevsky wouldn't be surprised to see a similar
trend in other sciences. But for every graduate student reluctant to ask
professors about their methods, for fear of sounding critical, other
scientists will give them a ring straightaway. Given the shoddy state of the
methods section, such calls will remain a staple even if 100 percent of
materials are perfectly labeled, Ms. Vasilevsky added. And that's not
necessarily a problem.
Continued in article
This message does have a very long quotation from a study by Watson et al.
(2008) that does elaborate on quasi-replication and partial-replication. That
quotation also elaborates on concepts of
external versus
internal validity
grounded in the book:
Cook, T. D., & Campbell, D. T. (1979).
Quasi-experimentation: Design & analysis
issues for field settings. Boston:
Houghton Mifflin Company.
I define an "extended study" as one which may have similar hypotheses but
uses non-similar data sets and/or non-similar models. For example, study of
female in place of male test subjects is an extended study with different data
sets. An extended study may vary the variables under investigation or change the
testing model structure such as changing to a logit model as an extension of a
more traditional regression model.
Extended studies that create knew knowledge are not replications in terms of the above definitions,
although an extended study my start with an exact replication.
Replication in Accountics Science Research or Lack Thereof
Steve Kachelmeier called my attention to this article
that can be rented for $6 at
http://onlinelibrary.wiley.com/doi/10.1111/1911-3846.12102/full
Steve wants me to stress that he's not even read the above paper in its entirety
and is not (yet) taking a position on replication.
Steve did not mention that without citation the 2014 article makes some of the
same points Steve made in July 2011.
"Introduction to a Forum on Internal Control Reporting and Corporate Debt,"
by Steven J. Kachelmeier, The Accounting Review, Vol. 86, No. 4, July
2011 pp. 1129–113 (not free online) ---
http://aaapubs.aip.org/getpdf/servlet/GetPDFServlet?filetype=pdf&id=ACRVAS000086000004001129000001&idtype=cvips&prog=normal
One of the more surprising things I
have learned from my experience as Senior Editor of The Accounting Review is
just how often a ‘‘hot topic’’ generates multiple submissions that pursue
similar research objectives. Though one might view such situations as
enhancing the credibility of research findings through the independent
efforts of multiple research teams, they often result in unfavorable
reactions from reviewers who question the incremental contribution of a
subsequent study that does not materially advance the findings already
documented in a previous study, even if the two (or more) efforts were
initiated independently and pursued more or less concurrently. I understand
the reason for a high incremental contribution standard in a top-tier
journal that faces capacity constraints and deals with about 500 new
submissions per year. Nevertheless, I must admit that I sometimes feel bad
writing a rejection letter on a good study, just because some other research
team beat the authors to press with similar conclusions documented a few
months earlier. Research, it seems, operates in a highly competitive arena.
My criticisms of lack of replication in accountics research still stand:
• Replication is not a priority in accountics science like it is
in real science. Journal editors do not encourage replications even to the
extent of encouraging and publishing commentaries where scholars can mention
they replicated the studies.
• Replications that do take place, usually when newer research
extends the original studies, are long-delayed sort of like being after thoughts
when research for extensions take place, usually years later. In other words,
there's little interest in replicating until researchers elect to conduct
extension research.
• I've not encountered failed replications in accountics science.
Many examples exist in real science where original findings are thrown into
doubt because other scientists could not independently reproduce the findings.
The Hunton and Gold paper was not withdrawn because it could not be replicated.
I was not an insider to the real reasons for the withdrawal, but I suspect it
was withdrawn because insiders commenced to suspect that Jim was fabricating
data.
• Most archival replications simply use the same purchased data
(e.g., CompuStat or AuditAnalytics) without error checking the data. In reality
errors are common in these purchased databases. But if replications are made
using the same data there is no chance of detecting errors in the data.
I really miss Steve on the AECM. He always sparked interesting debates and made
great criticisms of my tidbits critical of accountics scientists.
December 18, 2014 reply from Steve Kachelmeier
Bob Jensen wrote:
Replications in Accountics Science or Lack
Thereof
Steve Kachelmeier called my attention to this
article that can be rented for $6 at
http://onlinelibrary.wiley.com/doi/10.1111/1911-3846.12102/full
Steve wants me to stress that he's not even
read the above paper in its entirety and is not (yet) taking a position
on replication.
Kachelmeier clarifies:
The full citation is as follows: Salterio, Steven
E. "We Don't Replicate Accounting Research -- Or Do We?" Contemporary
Accounting Research, Winter 2014, pp. 1134-1142.
Bob also wrote that I wanted him to stress that I'm
"not (yet) taking a position on replication." That's not what I wrote in my
email to Bob. What I wrote to Bob is that I'm not taking a position on
Salterio's article, which I have not yet read in its entirety. Based on a
brief scanning, however, Salterio does appear to provide intriguing evidence
from a search for the word "replication" (or its derivatives) in the
accounting literature that replications in accounting are more common than
we tend to believe. If that statement provokes AECM readers' interest, I
encourage you to take a look at Salterio's article and draw your own
conclusions.
Best,
Steve K.
Bob Jensen's threads on replication or lack thereof in
accountics science are at
http://www.trinity.edu/rjensen/TheoryTAR.htm
A paper can become highly cited because it is good
science – or because it is eye-catching, provocative or wrong. Luxury-journal
editors know this, so they accept papers that will make waves because they
explore sexy subjects or make challenging claims. This influences the science
that scientists do. It builds bubbles in fashionable fields where researchers
can make the bold claims these journals want, while discouraging other
important work, such as
replication studies.
"How journals like Nature, Cell and Science are damaging science:
The incentives offered by top journals distort science, just as big bonuses
distort banking," Randy Schekman, The Guardian, December 9, 2013 ---
http://www.theguardian.com/commentisfree/2013/dec/09/how-journals-nature-science-cell-damage-science
I am a scientist. Mine is a professional world that
achieves great things for humanity. But it is disfigured by inappropriate
incentives. The prevailing structures of personal reputation and career
advancement mean the biggest rewards often follow the flashiest work, not
the best. Those of us who follow these incentives are being entirely
rational – I have followed them myself – but we do not always best serve our
profession's interests, let alone those of humanity and society.
e all know what distorting incentives have done to
finance and banking. The incentives my colleagues face are not huge bonuses,
but the professional rewards that accompany publication in prestigious
journals – chiefly
Nature,
Cell and
Science.
These luxury journals are supposed to be the
epitome of quality, publishing only the best research. Because funding and
appointment panels often use place of publication as a proxy for quality of
science, appearing in these titles often leads to grants and professorships.
But the big journals' reputations are only partly warranted. While they
publish many outstanding papers, they do not publish only
outstanding papers. Neither are they the only publishers of outstanding
research.
These journals aggressively curate their brands, in
ways more conducive to selling subscriptions than to stimulating the most
important research. Like fashion designers who create limited-edition
handbags or suits, they know scarcity stokes demand, so they artificially
restrict the number of papers they accept. The exclusive brands are then
marketed with a gimmick called "impact factor" – a score for each journal,
measuring the number of times its papers are cited by subsequent research.
Better papers, the theory goes, are cited more often, so better journals
boast higher scores. Yet it is a deeply flawed measure, pursuing which has
become an end in itself – and is as damaging to science as the bonus culture
is to banking.
It is common, and encouraged by many journals, for
research to be judged by the impact factor of the journal that publishes it.
But as a journal's score is an average, it says little about the quality of
any individual piece of research. What is more, citation is sometimes, but
not always, linked to quality. A paper can become highly cited because it is
good science – or because it is eye-catching, provocative or wrong.
Luxury-journal editors know this, so they accept papers that will make waves
because they explore sexy subjects or make challenging claims. This
influences the science that scientists do. It builds bubbles in fashionable
fields where researchers can make the bold claims these journals want,
while discouraging other important work, such as
replication studies.
In extreme cases, the lure of the luxury journal
can encourage the cutting of corners, and contribute to the escalating
number of papers that are retracted as flawed or fraudulent. Science alone
has recently
retracted high-profile papers reporting cloned human embryos,
links between littering and violence, and the genetic
profiles of centenarians. Perhaps worse, it has not retracted claims that a
microbe is able to use arsenic in its DNA instead of phosphorus, despite
overwhelming scientific criticism.
There is a better way, through the new breed of
open-access journals that are free for anybody to read, and have no
expensive subscriptions to promote. Born on the web, they can accept all
papers that meet quality standards, with no artificial caps. Many are edited
by working scientists, who can assess the worth of papers without regard for
citations. As I know from my editorship of
eLife,
an open access journal funded by the Wellcome Trust, the Howard Hughes
Medical Institute and the Max Planck Society, they are publishing
world-class science every week.
Funders and universities, too, have a role to play.
They must tell the committees that decide on grants and positions not to
judge papers by where they are published. It is the quality of the science,
not the journal's brand, that matters. Most importantly of all, we
scientists need to take action. Like many successful researchers, I have
published in the big brands, including the papers that won me the Nobel
prize for medicine, which I will be honoured to collect tomorrow.. But no
longer. I have now committed my lab to avoiding luxury journals, and I
encourage others to do likewise.
Coninued in article
Bob Jensen's threads on how prestigious journals in academic accounting
research have badly damaged academic accounting research, especially in the
accountics science takeover of doctoral programs where dissertation research no
longer is accepted unless it features equations ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Lack or Replication in Accountics Science:
574 Shields Against Validity Challenges in Plato's Cave ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
A validity testing testimony illustration about how research needs to be
replicated.
GM is also the company that bought the patent rights to the doomed Wankel Engine
---
http://en.wikipedia.org/wiki/Wankel_Engine
"The Sad Story of the Battery Breakthrough that Proved Too Good to Be
True," by Kevin Bullis, MIT's Technology Review, December 6, 2013 ---
http://www.technologyreview.com/view/522361/the-sad-story-of-the-battery-breakthrough-that-proved-too-good-to-be-true/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20131209
Two lurkers on the AECM listserv forwarded the link below:
"The Replication Myth: Shedding Light on One of Science’s Dirty Little
Secrets," by Jared Horvath, Scientific American, December 4, 2013
---
http://blogs.scientificamerican.com/guest-blog/2013/12/04/the-replication-myth-shedding-light-on-one-of-sciences-dirty-little-secrets/
In a series of recent articles published in The
Economist (Unreliable Research: Trouble at the Lab and Problems with
Scientific Research: How Science Goes Wrong), authors warned of a growing
trend in unreliable scientific research. These authors (and certainly many
scientists) view this pattern as a detrimental byproduct of the cutthroat
‘publish-or-perish’ world of contemporary science.
In actuality, unreliable research and
irreproducible data have been the status quo since the inception of modern
science. Far from being ruinous, this unique feature of research is integral
to the evolution of science.
At the turn of the 17th century, Galileo rolled a
brass ball down a wooden board and concluded that the acceleration he
observed confirmed his theory of the law of the motion of falling bodies.
Several years later, Marin Mersenne attempted the same experiment and failed
to achieve similar precision, causing him to suspect that Galileo fabricated
his experiment.
Early in the 19th century, after mixing oxygen with
nitrogen, John Dalton concluded that the combinatorial ratio of the elements
proved his theory of the law of multiple proportions. Over a century later,
J. R. Parington tried to replicate the test and concluded that “…it is
almost impossible to get these simple ratios in mixing nitric oxide and air
over water.”
At the beginning of the 20th century, Robert
Millikan suspended drops of oil in an electric field, concluding that
electrons have a single charge. Shortly afterwards, Felix Ehrenhaft
attempted the same experiment and not only failed to arrive at an identical
value, but also observed enough variability to support his own theory of
fractional charges.
Other scientific luminaries have similar stories,
including Mendel, Darwin and Einstein. Irreproducibility is not a novel
scientific reality. As noted by contemporary journalists William Broad and
Nicholas Wade, “If even history’s most successful scientists resort to
misrepresenting their findings in various ways, how extensive may have been
the deceits of those whose work is now rightly forgotten?”
There is a larger lesson to be gleaned from this
brief history. If replication were the gold standard of scientific progress,
we would still be banging our heads against our benches trying to arrive at
the precise values that Galileo reported. Clearly this isn’t the case.
The 1980’s saw a major upswing in the use of
nitrates to treat cardiovascular conditions. With prolonged use, however,
many patients develop a nitrate tolerance. With this in mind, a group of
drug developers at Pfizer set to creating Sildenafil, a pill that would
deliver similar therapeutic benefits as nitrates without declining efficacy.
Despite its early success, a number of unanticipated drug interactions and
side-effects—including penile erections—caused doctors to shelve Sildenafil.
Instead, the drug was re-trialed, re-packaged and re-named Viagra. The rest
is history.
This tale illustrates the true path by which
science evolves. Despite a failure to achieve initial success, the results
generated during Sildenafil experimentation were still wholly useful and
applicable to several different lines of scientific work. Had the initial
researchers been able to massage their data to a point where they were able
to publish results that were later found to be irreproducible, this would
not have changed the utility of a sub-set of their results for the field of
male potency.
Many are taught that science moves forward in
discreet, cumulative steps; that truth builds upon truth as the tapestry of
the universe slowly unfolds. Under this ideal, when scientific intentions
(hypotheses) fail to manifest, scientists must tinker until their work is
replicable everywhere at anytime. In other words, results that aren’t valid
are useless.
In reality, science progresses in subtle degrees,
half-truths and chance. An article that is 100 percent valid has never been
published. While direct replication may be a myth, there may be information
or bits of data that are useful among the noise. It is these bits of data
that allow science to evolve. In order for utility to emerge, we must be
okay with publishing imperfect and potentially fruitless data. If scientists
were to maintain the ideal, the small percentage of useful data would never
emerge; we’d all be waiting to achieve perfection before reporting our work.
This is why Galileo, Dalton and Millikan are held
aloft as scientific paragons, despite strong evidence that their results are
irreproducible. Each of these researchers presented novel methodologies,
ideas and theories that led to the generation of many useful questions,
concepts and hypotheses. Their work, if ultimately invalid, proved useful.
Doesn’t this state-of-affairs lead to dead ends,
misused time and wasted money? Absolutely. It is here where I believe the
majority of current frustration and anger resides. However, it is important
to remember two things: first, nowhere is it written that all science can
and must succeed. It is only through failure that the limits of utility can
be determined. And second, if the history of science has taught us anything,
it is that with enough time all scientific wells run dry. Whether due to the
achievement of absolute theoretical completion (a myth) or, more likely, the
evolution of more useful theories, all concepts will reach a scientific end.
Two reasons are typically given for not wanting to
openly discuss the true nature of scientific progress and the importance of
publishing data that may not be perfectly replicable: public faith and
funding. Perhaps these fears are justified. It is a possibility that public
faith will dwindle if it becomes common knowledge that scientists are
too-often incorrect and that science evolves through a morass of noise.
However, it is equally possible that public faith will decline each time
this little secret leaks out in the popular press. It is a possibility that
funding would dry up if, in our grant proposals, we openly acknowledge the
large chance of failure, if we replace gratuitous theories with simple
unknowns. However, it is equally possible that funding will diminish each
time a researcher fails to deliver on grandiose (and ultimately unjustified)
claims of efficacy and translatability.
Continued in article
Jensen Comment
I had to chuckle that in an article belittling the role of reproducibility in
science the author leads out with an illustration of how Marin Mersenne could
not reproduce one of Galileo's experiments led to suspicions that the experiment
was faked by Galileo. It seems to me that this illustration reinforces the
importance of reproducibility/replication in science.
I totally disagree that "unreliable research and irreproducible data have
been the status quo since the inception of modern science." If it really were
the "status quo" then all science would be pseudo science. Real scientists are
obsessed with replication to a point that modern science findings in experiments
are not considered new knowledge until they have been independently validated.
That of course does not mean that it's always easy or sometimes even possible to
validate findings in modern science. Much of the spending in real science is
devoted to validating earlier discoveries and databases to be shared with other
scientists.
Real scientists are generally required by top journals and funding sources to
maintain detailed lab books of steps performed in laboratories. Data collected
for use by other scientists (such as ocean temperature data) is generally
subjected to validation tests such that research outcomes are less likely to be
based upon flawed data. There are many examples of where reputations of
scientists were badly tarnished due to inability of other scientists to validate
findings ---
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize
Nearly all real science journals have illustrations where journal articles
are later retracted because the findings could not be validated.
What the article does point out that real scientists do not always validate
findings independently. What this is saying is that real science is often
imperfect. But this does not necessarily make validation, reproduction, and
replication of original discoveries less important. It only says that the
scientists themselves often deviate from their own standards of validation.
The article does above does not change my opinion that reproducibility is the
holy grail of real science. If findings are not validated what you have is
imperfect implementation of a scientific process rather than imperfect
standards.
Accountics science is defined at
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm
in short, an accountics science study is any accounting research study that
features equations and/or statistical inference.
One of the main reasons Bob Jensen contends that accountics science is not yet a
real science is that lack of exacting replications of accountics science
findings. By exacting replications he means reproducibility as defined in the
IAPUC Gold Book ---
http://en.wikipedia.org/wiki/IUPAC_Gold_Book
My study of the 2013 articles in The Accounting Review suggests that
over 90% of the articles rely upon public databases that are purchased, such as
the CompuStat, CRSP, Datastream, and AuditAnalytics. The reason I think
accountics scientists are not usually real scientists includes the following:
- High reliance on public databases without apparent concerns for data
errors, particularly in highly suspect databases like the AuditAnalytics
database that relies heavily on self-reporting within audit firms.
- Replication of accountics science discoveries is rare, and even when
replicated the same public databases are accepted without challenge in
the original studies and their replications. Replications that do rarely
take place are performed years away from the original studies and are
generally performed in studies that extend the original research.
Replication of the extensions is almost unheard of leaning me to doubt
the value of the original findings and the extensions.
- Has there ever been an accountics science exacting replication that
challenges the original study? Challenges that arise do not usually
challenge the original studies. Instead the challenges generally focus
on extended models that add new variables without questioning the
integrity of the original accountics science studies.
- Accountics science journals like The Accounting Review no
longer encourage publication of commentaries where other accountics
scientists comment favorably and critically on earlier studies. What's
the point if the public cannot engage the original authors in a
discussion of the published findings.
Audit Fees By Industry, As Presented By Audit Analytics ---
http://goingconcern.com/post/audit-fees-industry-presented-audit-analytics
Jensen Comment
In auditing courses, students might do some research on misleading aspects of
the above data apart from being self reported data. For example, some clients
save on audit fees by spending more in internal audit activities. Audit fees may
vary depending upon the quality of internal controls or lack thereof.
Audit fees may differ for two clients in the same industry where one client
is in great financial shape and the other client's employees are wearing waders.
There may also be differences between what different audit firms charge for
similar services. Aggregations of apples and oranges can be somewhat misleading.
Accountics scientists prefer purchased data such as data from Audit Analytics
so that the accountics scientists are not responsible for errors in the data. My
research of TAR suggests that accountics science research uses purchased
databases over 90% of the time. That way accountics scientists are not
responsible for collecting data or errors in that data. Audit Analytics is a
popular database purchased by accountics scientists even though it is probably
more prone to error than most of the other purchased databases. A huge problem
is reliance on self reporting by auditors and clients.
These and my other complaints about the lack of replications in accountics
science can be found at
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
The source of these oddities is Brian Dillon's
intriguing Curiosity: Art and the Pleasures of Knowing (Hayward
Publishing), a new volume of essays, excerpts, descriptions, and photographs
that accompanies his exhibit of the same name, touring Britain and the
Netherlands during 2013-14. But what does it mean to be curious?
"Triumph of the Strange," by James Delbourgo, Chronicle of Higher
Education, December 8, 2013 ---
http://chronicle.com/article/Triumph-of-the-Strange/143365/?cid=cr&utm_source=cr&utm_medium=en
Bob Jensen's threads on Real Science versus Pseudo Science ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Replication Research May Take Years to Resolve
Purdue University is investigating “extremely serious” concerns about the
research of Rusi Taleyarkhan, a professor of nuclear engineering who has
published articles saying that he had produced nuclear fusion in a tabletop
experiment,
The New York Times
reported. While the research was published in Science in 2002, the findings have
faced increasing skepticism because other scientists have been unable to
replicate them. Taleyarkhan did not respond to inquiries from The Times
about the investigation.
Inside Higher Ed, March 08, 2006 ---
http://www.insidehighered.com/index.php/news/2006/03/08/qt
The New York Times March 9 report is at
http://www.nytimes.com/2006/03/08/science/08fusion.html?_r=1&oref=slogin
"Climategate's Phil Jones Confesses to Climate Fraud," by Marc
Sheppard, American Thinker, February 14, 2010 ---
http://www.americanthinker.com/2010/02/climategates_phil_jones_confes.html
Interesting Video
"The Placebo Effect," by Gwen Sharp, Sociological Images,
March 10, 2011 ---
Click Here
http://thesocietypages.org/socimages/2011/03/10/the-placebo-effect/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+SociologicalImagesSeeingIsBelieving+%28Sociological+Images%3A+Seeing+Is+Believing%29
A good example of replication in econometrics is illustrated by the inability
of obscure graduate students and an economics professor at the University
of Massachusetts to to replicate the important findings of two famous Harvard
monetary economics scientists named Carmen Reinhart and Kenneth Roghoff ---
http://en.wikipedia.org/wiki/Carmen_Reinhart#Research_and_publication
In 2013, Reinhart and Rogoff were in the spotlight
after researchers discovered that their 2010 paper "Growth in a Time of
Debt" in the American Economic Review Papers and Proceedings had a
computational error. The work argued that debt above 90% of GDP was
particularly harmful to economic growth, while corrections have shown that
the negative correlation between debt and growth does not increase above
90%. A separate and previous criticism is that the negative correlation
between debt and growth need not be causal. Rogoff and Reinhardt
claimed that their fundamental conclusions were accurate, despite the
errors.
A review by
Herndon, Ash and
Pollin of [Reinhart's] widely cited paper with
Rogoff, "Growth
in a time of debt", argued that "coding errors,
selective exclusion of available data, and unconventional weighting of
summary statistics lead to serious errors that inaccurately represent the
relationship between public debt and GDP growth among 20 advanced economies
in the post-war period."
Their error detections that received worldwide attention demonstrates that
high debt countries grew at 2.2 percent, rather than the −0.1 percent figure
claimed by Reinhart and Rogoff.
I'm critical of this replication example in one respect. Why did it take over
two years? In chemistry such an important finding would've most likely been
replicated in weeks or months rather than years.
Thus we do often have a difference between the natural sciences and the
social sciences with respect to how immediate replications transpire. In the
natural sciences it is common for journals to not even publish findings before
they've been replicated. The social sciences, also known as the softer sciences,
are frequently softer with respect to timings of replications.
DATABASE BIASES AND ERRORS
My casual studies of accountics science articles suggests that over 90% of those
studies rely exclusively on one or more public database whenever the studies use
data. I find few accountics science research into bias and errors of those
databases. Here's a short listing of research into these biases and errors, some
of which were published by accountics scientists ---
This page provides references for articles that
study specific aspects of CRSP, Compustat and other popular sources of
data used by researchers at Kellogg. If you know of any additional
references, please e-mail
researchcomputing-help@kellogg.northwestern.edu.
What went wrong with accountics science?
http://faculty.trinity.edu/rjensen/Theory01.htm#WhatWentWrong
October 21, 2013 message from Dan Stone
A recent article in "The Economist" decries the
absence of replication in
science.
short url:
http://tinyurl.com/lepu6zz
http://www.economist.com/news/leaders/21588069-scientific-research-
has-changed-world-now-it-needs-change-itself-how-science-goes-wrong
October 21, 2013 reply from Bob Jensen
I read The Economist every week and usually respect it sufficiently to
quote it a lot. But sometimes articles disappoint me as an academic in
search of evidence for controversial assertions like the one you link to
about declining replication in the sciences.
Dartmouth Professor Nyhan paints a somewhat similar picture about where
some of the leading medical journals now "tend to fail to replicate."
However other journals that he mentions are requiring a replication archives
and replication audits. It seems to me that some top science journals are
becoming more concerned about validity of research findings while perhaps
others have become more lax.
"Academic reforms: A four-part proposal," by Brendon Nyhan, April 16,
2013 ---
http://www.brendan-nyhan.com/blog/2012/04/academic-reforms-a-four-part-proposal.html
The "collaborative replication" idea has become a big deal. I have a
former psychology colleague at Trinity who has a stellar reputation for
empirical brain research in memory. She tells me that she does not submit
articles any more until they have been independently replicated by other
experts.
It may well be true that natural science journals have become negligent
in requiring replication and in providing incentives to replicate. However,
perhaps, because the social science journals have a harder time being
believed, I think that some of their top journals have become more obsessed
with replication.
In any case I don't know of any science that is less concerned with lack
of replication than accountics science. TAR has a policy of not publishing
replications or replication abstracts unless the replication is only
incidental to extending the findings with new research findings. TAR also
has a recent reputation of not encouraging commentaries on the papers it
publishes.
Has TAR even published a commentary on any paper it published in recent
years?
Have you encountered any recent investigations into errors in our most
popular public databases in accountics science?
Thanks,
Bob Jensen
November 11, 2012
Before reading Sudipta's posting of a comment to one of my earlier postings
on the AAA Commons, I would like to call your attention to the following two
links:
How Accountics Scientists Should Change:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Sudipta Basu has posted a new comment in Research
Tools, on the post titled "Gaming Publications and Presentations at
Academic...".
To view the comment (and 3 other comment(s) in the
thread), or to post your own, visit:
http://commons.aaahq.org/comment/19181
posted 05:13 PM EST by
Sudipta Basu
Comment: |
You will
probably love the new issue of Perspectives on Psychological
Science (November 2012) which is entirely devoted to (lack of)
Replication and other Research (mal)Practice issues in
psychology (behavioral research). I think there is lots of
thought-provoking material with implications for accounting
research (not only of the accountics variety). The link for the
current issue is (will change once the next issue is uploaded):
http://pps.sagepub.com/content/current
One website that provides useful
documentation on errors in standard accountics databases,
differences between databases, and their implications for
previously published research is (even as I agree that many
researchers pay little attention to these documented problems):
http://www.kellogg.northwestern.edu/rc/crsp-cstat-references.htm
I note
that several accounting researchers appear as authors in the
website above, although likely fewer than desired (possible
biases in database coverage...) |
Some Comments About Accountics Science Versus Real Science
This is the lead article in the May 2013 edition of The Accounting Review
"On Estimating Conditional Conservatism
Authors
Ray Ball (The University of Chicago)
S. P. Kothari )Massachusetts Institute of Technology)
Valeri V. Nikolaev (The University of Chicago)
The Accounting Review, Volume 88, No. 3, May 2013, pp. 755-788
The concept of conditional conservatism (asymmetric
earnings timeliness) has provided new insight into financial reporting and
stimulated considerable research since Basu (1997). Patatoukas and Thomas
(2011) report bias in firm-level cross-sectional asymmetry estimates that
they attribute to scale effects. We do not agree with their advice that
researchers should avoid conditional conservatism estimates and inferences
from research based on such estimates. Our theoretical and empirical
analyses suggest the explanation is a correlated omitted variables problem
that can be addressed in a straightforward fashion, including fixed-effects
regression. Correlation between the expected components of earnings and
returns biases estimates of how earnings incorporate the information
contained in returns. Further, the correlation varies with returns, biasing
asymmetric timeliness estimates. When firm-specific effects are taken into
account, estimates do not exhibit the bias, are statistically and
economically significant, are consistent with priors, and behave as a
predictable function of book-to-market, size, and leverage.
. . .
We build on and provide a different interpretation
of the anomalous evidence reported by PT. We begin by replicating their
[Basu (1997). Patatoukas and Thomas (2011)] results. We then provide
evidence that scale-related effects are not the explanation. We control for
scale by sorting observations into relatively narrow portfolios based on
price, such that within each portfolio approximately 99 percent of the
cross-sectional variation in scale is eliminated. If scale effects explain
the anomalous evidence, then it would disappear within these portfolios, but
the estimated asymmetric timeliness remains considerable. We conclude that
the data do not support the scale-related explanation.4 It thus becomes
necessary to look for a better explanation.
Continued in article
Jensen Comment
The good news is that the earlier findings were replicated. This is not common
in accountics science research. The bad news is that such replications took 16
years and two years respectively. And the probability that TAR will publish a
one or more commentaries on these findings is virtually zero.
How does this differ from real science?
In real science most findings are replicated before or very quickly after
publication of scientific findings. And interest is in the reproducible results
without also requiring an extension of the research for publication of the
replication outcomes.
In accountics science there is little incentive to perform exact replications
since top accountics science journals neither demand such replications nor will
they publish (even in commentaries) replication outcomes. A necessary condition
to publish replication outcomes in accountics science is the extend the research
into new frontiers.
How long will it take for somebody to replicate these May 2013 findings of
Ball, Kothari, and Nikolaev? If the past is any indicator of the future the BKN
findings will never be replicated. If they are replicated it will most likely
take years before we receive notice of such replication in an extension of the
BKN research published in 2013.
Epistemologists present several challenges to Popper's arguments
"Separating the Pseudo From Science," by Michael D. Gordon, Chronicle
of Higher Education, September 17, 2012 ---
http://chronicle.com/article/Separating-the-Pseudo-From/134412/
Bridging the Gap Between Academic Accounting Research and Audit Practice
"Highlights of audit research: Studies examine auditors' industry
specialization, auditor-client negotiations, and executive confidence regarding
earnings management,". By Cynthia E. Bolt-Lee and D. Scott Showalter,
Journal of Accountancy, August 2012 ---
http://www.journalofaccountancy.com/Issues/2012/Jul/20125104.htm
Jensen Comment
This is a nice service of the AICPA in attempting to find accountics science
articles most relevant to the practitioner world and to translate (in summary
form) these articles for a practitioner readership.
Sadly, the service does not stress that research is of only limited relevance
until it is validated in some way at a minimum by encouraging critical
commentaries and at a maximum by multiple and independent replications by
scientific standards for replications ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Unlike real scientists, accountics scientists seldom replicate published
accountics science research by the exacting standards real science ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#Replication
Multicollinearity ---
http://en.wikipedia.org/wiki/Multicollinearity
Robust Statistics ---
http://en.wikipedia.org/wiki/Robust_statistics
Robust statistics are statistics with good
performance for data drawn from a wide range of probability distributions,
especially for distributions that are not normally distributed. Robust
statistical methods have been developed for many common problems, such as
estimating location, scale and regression parameters. One motivation is to
produce statistical methods that are not unduly affected by outliers.
Another motivation is to provide methods with good performance when there
are small departures from parametric distributions. For example, robust
methods work well for mixtures of two normal distributions with different
standard-deviations, for example, one and three; under this model,
non-robust methods like a t-test work badly.
Continued in article
Jensen Comment
To this might be added that models that grow adaptively by adding components in
sequencing are not robust if the mere order in which components are added
changes the outcome of the ultimate model.
David Johnstone wrote the following:
Indeed if you hold H0 the same and keep changing
the model, you will eventually (generally soon) get a significant result,
allowing “rejection of H0 at 5%”, not because H0 is necessarily false but
because you have built upon a false model (of which there are zillions,
obviously).
Jensen Comment
I spent a goodly part of two think-tank years trying in vain to invent robust
adaptive regression and clustering models where I tried to adaptively reduce
modeling error by adding missing variables and covariance components. To my
great frustration I found that adaptive regression and cluster analysis seems to
almost always suffer from lack of robustness. Different outcomes can be obtained
simply because of the order in which new components are added to the model,
i.e., ordering of inputs changes the model solutions.
Accountics scientists who declare they have "significant results" may also
have non-robust results that they fail to analyze.
When you combine issues on non-robustness with the impossibility of testing
for covariance you have a real mess in accountics science and econometrics in
general.
It's relatively uncommon for accountics scientists to criticize each
others' published works. A notable exception is as follows:
"Selection Models in Accounting Research," by Clive S. Lennox, Jere R.
Francis, and Zitian Wang, The Accounting Review, March 2012, Vol.
87, No. 2, pp. 589-616.
This study explains the challenges associated with
the Heckman (1979) procedure to control for selection bias, assesses the
quality of its application in accounting research, and offers guidance for
better implementation of selection models. A survey of 75 recent accounting
articles in leading journals reveals that many researchers implement the
technique in a mechanical way with relatively little appreciation of
important econometric issues and problems surrounding its use. Using
empirical examples motivated by prior research, we illustrate that selection
models are fragile and can yield quite literally any possible outcome in
response to fairly minor changes in model specification. We conclude with
guidance on how researchers can better implement selection models that will
provide more convincing evidence on potential selection bias, including the
need to justify model specifications and careful sensitivity analyses with
respect to robustness and multicollinearity.
. . .
CONCLUSIONS
Our review of the accounting literature indicates
that some studies have implemented the selection model in a questionable
manner. Accounting researchers often impose ad hoc exclusion restrictions or
no exclusion restrictions whatsoever. Using empirical examples and a
replication of a published study, we demonstrate that such practices can
yield results that are too fragile to be considered reliable. In our
empirical examples, a researcher could obtain quite literally any outcome by
making relatively minor and apparently innocuous changes to the set of
exclusionary variables, including choosing a null set. One set of exclusion
restrictions would lead the researcher to conclude that selection bias is a
significant problem, while an alternative set involving rather minor changes
would give the opposite conclusion. Thus, claims about the existence and
direction of selection bias can be sensitive to the researcher's set of
exclusion restrictions.
Our examples also illustrate that the selection
model is vulnerable to high levels of multicollinearity, which can
exacerbate the bias that arises when a model is misspecified (Thursby 1988).
Moreover, the potential for misspecification is high in the selection model
because inferences about the existence and direction of selection bias
depend entirely on the researcher's assumptions about the appropriate
functional form and exclusion restrictions. In addition, high
multicollinearity means that the statistical insignificance of the inverse
Mills' ratio is not a reliable guide as to the absence of selection bias.
Even when the inverse Mills' ratio is statistically insignificant,
inferences from the selection model can be different from those obtained
without the inverse Mills' ratio. In this situation, the selection model
indicates that it is legitimate to omit the inverse Mills' ratio, and yet,
omitting the inverse Mills' ratio gives different inferences for the
treatment variable because multicollinearity is then much lower.
In short, researchers are faced with the following
trade-off. On the one hand, selection models can be fragile and suffer from
multicollinearity problems, which hinder their reliability. On the other
hand, the selection model potentially provides more reliable inferences by
controlling for endogeneity bias if the researcher can find good exclusion
restrictions, and if the models are found to be robust to minor
specification changes. The importance of these advantages and disadvantages
depends on the specific empirical setting, so it would be inappropriate for
us to make a general statement about when the selection model should be
used. Instead, researchers need to critically appraise the quality of their
exclusion restrictions and assess whether there are problems of fragility
and multicollinearity in their specific empirical setting that might limit
the effectiveness of selection models relative to OLS.
Another way to control for unobservable factors
that are correlated with the endogenous regressor (D) is to use panel data.
Though it may be true that many unobservable factors impact the choice of D,
as long as those unobservable characteristics remain constant during the
period of study, they can be controlled for using a fixed effects research
design. In this case, panel data tests that control for unobserved
differences between the treatment group (D = 1) and the control group (D =
0) will eliminate the potential bias caused by endogeneity as long as the
unobserved source of the endogeneity is time-invariant (e.g., Baltagi 1995;
Meyer 1995; Bertrand et al. 2004). The advantages of such a
difference-in-differences research design are well recognized by accounting
researchers (e.g., Altamuro et al. 2005; Desai et al. 2006; Hail and Leuz
2009; Hanlon et al. 2008). As a caveat, however, we note that the
time-invariance of unobservables is a strong assumption that cannot be
empirically validated. Moreover, the standard errors in such panel data
tests need to be corrected for serial correlation because otherwise there is
a danger of over-rejecting the null hypothesis that D has no effect on Y
(Bertrand et al. 2004).10
Finally, we note that there is a recent trend in
the accounting literature to use samples that are matched based on their
propensity scores (e.g., Armstrong et al. 2010; Lawrence et al. 2011). An
advantage of propensity score matching (PSM) is that there is no MILLS
variable and so the researcher is not required to find valid Z variables
(Heckman et al. 1997; Heckman and Navarro-Lozano 2004). However, such
matching has two important limitations. First, selection is assumed to occur
only on observable characteristics. That is, the error term in the first
stage model is correlated with the independent variables in the second stage
(i.e., u is correlated with X and/or Z), but there is no selection on
unobservables (i.e., u and υ are uncorrelated). In contrast, the purpose of
the selection model is to control for endogeneity that arises from
unobservables (i.e., the correlation between u and υ). Therefore, propensity
score matching should not be viewed as a replacement for the selection model
(Tucker 2010).
A second limitation arises if the treatment
variable affects the company's matching attributes. For example, suppose
that a company's choice of auditor affects its subsequent ability to raise
external capital. This would mean that companies with higher quality
auditors would grow faster. Suppose also that the company's characteristics
at the time the auditor is first chosen cannot be observed. Instead, we
match at some stacked calendar time where some companies have been using the
same auditor for 20 years and others for not very long. Then, if we matched
on company size, we would be throwing out the companies that have become
large because they have benefited from high-quality audits. Such companies
do not look like suitable “matches,” insofar as they are much larger than
the companies in the control group that have low-quality auditors. In this
situation, propensity matching could bias toward a non-result because the
treatment variable (auditor choice) affects the company's matching
attributes (e.g., its size). It is beyond the scope of this study to provide
a more thorough assessment of the advantages and disadvantages of propensity
score matching in accounting applications, so we leave this important issue
to future research.
Jensen Comment
To this we might add that it's impossible in these linear models to test for
multicollinearity.
David Johnstone posted the
following message on the AECM Listserv on November 19, 2013:
An interesting aspect of all this is that there is
a widespread a priori or learned belief in empirical research that all and only
what you have to do to get meaningful results is to get data and run statistics
packages, and that the more advanced the stats the better. Its then just a
matter of turning the handle. Admittedly it takes a lot of effort to get very
proficient at this kind of work, but the presumption that it will naturally lead
to reliable knowledge is an act of faith, like a religious tenet. What needs to
be taken into account is that the human systems (markets, accounting reporting,
asset pricing etc.) are madly complicated and likely changing structurally
continuously. So even with the best intents and best methods, there is no
guarantee of reliable or lasting findings a priori, no matter what “rigor” has
gone in.
Part and parcel of the presumption that empirical
research methods are automatically “it” is the even stronger position that no
other type of work is research. I come across this a lot. I just had a 4th
year Hons student do his thesis, he was particularly involved in the
superannuation/pension fund industry, and he did a lot of good practical stuff,
thinking about risks that different fund allocations present, actuarial life
expectancies etc. The two young guys (late 20s) grading this thesis, both
excellent thinkers and not zealots about anything, both commented to me that the
thesis was weird and was not really a thesis like they would have assumed
necessary (electronic data bases with regressions etc.). They were still
generous in their grading, and the student did well, and it was only their
obvious astonishment that there is any kind of worthy work other than the
formulaic-empirical that astonished me. This represents a real narrowing of mind
in academe, almost like a tendency to dark age, and cannot be good for us long
term. In Australia the new push is for research “impact”, which seems to include
industry relevance, so that presents a hope for a cultural widening.
I have been doing some work with a lawyer-PhD
student on valuation in law cases/principles, and this has caused similar raised
eyebrows and genuine intrigue with young colleagues – they just have never heard
of such stuff, and only read the journals/specific papers that do what they do.
I can sense their interest, and almost envy of such freedom, as they are all
worrying about how to compete and make a long term career as an academic in the
new academic world.
"Good Old R-Squared," by David Giles, Econometrics Beat: Dave
Giles’ Blog, University of Victoria, June 24, 2013 ---
http://davegiles.blogspot.com/2013/05/good-old-r-squared.html
My students are often horrified when I
tell them, truthfully, that one of the last pieces of information that I
look at when evaluating the results of an OLS regression, is the coefficient
of determination (R2), or its "adjusted" counterpart.
Fortunately, it doesn't take long to change their perspective!
After all, we all know that with
time-series data, it's really easy to get a "high" R2 value,
because of the trend components in the data. With cross-section data, really
low R2 values are really common. For most of us, the signs,
magnitudes, and significance of the estimated parameters are of primary
interest. Then we worry about testing the assumptions underlying our
analysis. R2 is at the bottom of the list of priorities.
Continued in article
Also see
http://davegiles.blogspot.com/2013/07/the-adjusted-r-squared-again.html
Bob Jensen's threads on validity testing in accountics science ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
"Can You Actually TEST for Multicollinearity?" by David Giles, Econometrics
Beat: Dave Giles’ Blog, University of Victoria, June 24, 2013 ---
http://davegiles.blogspot.com/2013/06/can-you-actually-test-for.html
. . .
Now, let's return to the "problem" of
multicollinearity.
What do we mean by this term, anyway? This turns
out to be the key question!
Multicollinearity is a phenomenon associated with
our particular sample of data when we're trying to estimate a
regression model. Essentially, it's a situation where there is
insufficient information in the sample of data to enable us to
enable us to draw "reliable" inferences about the individual parameters
of the underlying (population) model.
I'll be elaborating more on the "informational content" aspect of this
phenomenon in a follow-up post. Yes, there are various sample measures
that we can compute and report, to help us gauge how severe this data
"problem" may be. But they're not statistical tests, in any sense
of the word
Because multicollinearity is a characteristic of the sample, and
not a characteristic of the population, you should immediately be
suspicious when someone starts talking about "testing for
multicollinearity". Right?
Apparently not everyone gets it!
There's an old paper by Farrar and Glauber (1967) which, on the face of
it might seem to take a different stance. In fact, if you were around
when this paper was published (or if you've bothered to actually read it
carefully), you'll know that this paper makes two contributions. First,
it provides a very sensible discussion of what multicollinearity is all
about. Second, the authors take some well known results from the
statistics literature (notably, by Wishart, 1928; Wilks, 1932; and
Bartlett, 1950) and use them to give "tests" of the hypothesis that the
regressor matrix, X, is orthogonal.
How can this be? Well, there's a simple explanation if you read the
Farrar and Glauber paper carefully, and note what assumptions are made
when they "borrow" the old statistics results. Specifically, there's an
explicit (and necessary) assumption that in the population the X
matrix is random, and that it follows a multivariate normal
distribution.
This assumption is, of course totally at odds with what is usually
assumed in the linear regression model! The "tests" that Farrar and
Glauber gave us aren't really tests of multicollinearity in the
sample. Unfortunately, this point wasn't fully appreciated by
everyone.
There are some sound suggestions in this paper, including looking at the
sample multiple correlations between each regressor, and all of
the other regressors. These, and other sample measures such as
variance inflation factors, are useful from a diagnostic viewpoint, but
they don't constitute tests of "zero multicollinearity".
So, why am I even mentioning the Farrar and Glauber paper now?
Well, I was intrigued to come across some STATA code (Shehata, 2012)
that allows one to implement the Farrar and Glauber "tests". I'm not
sure that this is really very helpful. Indeed, this seems to me to be a
great example of applying someone's results without understanding
(bothering to read?) the assumptions on which they're based!
Be careful out there - and be highly suspicious of strangers bearing
gifts!
References
Shehata, E. A. E., 2012. FGTEST: Stata module to compute
Farrar-Glauber Multicollinearity Chi2, F, t tests.
Wilks, S. S., 1932. Certain generalizations in the analysis of
variance. Biometrika, 24, 477-494.
Wishart, J., 1928. The generalized product moment distribution
in samples from a multivariate normal population. Biometrika,
20A, 32-52.
Bob Jensen's threads on validity testing in accountics science ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
"Statistical Significance - Again " by David Giles, Econometrics
Beat: Dave Giles’ Blog, University of Victoria, December 28, 2013 ---
http://davegiles.blogspot.com/2013/12/statistical-significance-again.html
Statistical Significance - Again
With all of this emphasis
on "Big Data", I was pleased to see
this post on the Big Data
Econometrics blog, today.
When you have a sample that runs
to the thousands (billions?), the conventional significance
levels of 10%, 5%, 1% are completely inappropriate. You need to
be thinking in terms of tiny significance levels.
I discussed this in some
detail back in April of 2011, in a post titled, "Drawing
Inferences From Very Large Data-Sets".
If you're of those (many) applied
researchers who uses large cross-sections of data, and then
sprinkles the results tables with asterisks to signal
"significance" at the 5%, 10% levels, etc., then I urge
you read that earlier post.
It's sad to encounter so many
papers and seminar presentations in which the results, in
reality, are totally insignificant!
Also see
"Drawing Inferences From Very Large Data-Sets," by David Giles,
Econometrics
Beat: Dave Giles’ Blog, University of Victoria, April 26, 2013 ---
http://davegiles.blogspot.ca/2011/04/drawing-inferences-from-very-large-data.html
. . .
Granger (1998;
2003
) has
reminded us that if the sample size is sufficiently large, then it's
virtually impossible not to reject almost any hypothesis.
So, if the sample is very large and the p-values associated with
the estimated coefficients in a regression model are of the order of, say,
0.10 or even 0.05, then this really bad news. Much,
much, smaller p-values are needed before we get all excited about
'statistically significant' results when the sample size is in the
thousands, or even bigger. So, the p-values reported above are
mostly pretty marginal, as far as significance is concerned. When you work
out the p-values for the other 6 models I mentioned, they range
from to 0.005 to 0.460. I've been generous in the models I selected.
Here's another set of results taken from a second, really nice, paper by
Ciecieriski et al. (2011) in the same issue of
Health Economics:
Continued in article
Jensen Comment
My research suggest that over 90% of the recent papers published in TAR use
purchased databases that provide enormous sample sizes in those papers. Their
accountics science authors keep reporting those meaningless levels of
statistical significance.
What is even worse is when meaningless statistical significance tests are
used to support decisions.
Bob Jensen's threads on the often way analysts, particularly accountics
scientists, often cheer for statistical significance of large sample outcomes
that praise statistical significance of insignificant results such as R2
values of .0001 ---
The Cult of Statistical Significance: How Standard Error Costs Us Jobs, Justice,
and Lives ---
http://www.cs.trinity.edu/~rjensen/temp/DeirdreMcCloskey/StatisticalSignificance01.htm
"Solution to Regression Problem," by David Giles, Econometrics
Beat: Dave Giles’ Blog, University of Victoria, December 26, 2013 ---
http://davegiles.blogspot.com/2013/12/solution-to-regression-problem.html
O.K. - you've had long enough to think about that
little regression problem I
posed the other day.
It's time to put you
out of your misery!
Here's the problem again, with a solution.
Problem:
Suppose that we estimate the following regression model by OLS:
yi = α + β xi +
εi .
The model has a single regressor, x, and the point
estimate of β turns out to be 10.0.
Now consider the "reverse regression", based on
exactly the same data:
xi = a + b yi +
ui .
What can we say about the value of the OLS point
estimate of b?
- It will be 0.1.
- It will be less than or equal to 0.1.
- It will be greater than or equal to 0.1.
- It's impossible to tell from the information
supplied.
Solution:
Continued in article
David Giles' Top Five Econometrics Blog Postings for 2013 ---
Econometrics Beat: Dave Giles’ Blog, University of Victoria, December
31, 2013 ---
http://davegiles.blogspot.com/2013/12/my-top-5-for-2013.html
Everyone seems to be doing it at this time of the year.
So, here are the five most popular new posts on this blog in 2013:
-
Econometrics and "Big Data"
-
Ten Things for Applied Econometricians to Keep in Mind
-
ARDL Models - Part II - Bounds Tests
-
The Bootstrap - A Non-Technical Introduction
-
ARDL Models - Part I
Thanks for reading, and for your comments.
Happy New Year!
Jensen Comment
I really like the way David Giles thinks and writes about econometrics. He does
not pull his punches about validity testing.Bob Jensen's threads on validity
testing in accountics science ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
The
Insignificance of Testing the Null
"Statistics: reasoning on uncertainty, and
the insignificance of testing null," by Esa Läärä
Ann. Zool. Fennici 46: 138–157
ISSN 0003-455X (print), ISSN 1797-2450 (online)
Helsinki 30 April 2009 © Finnish Zoological and Botanical Publishing Board 200
http://www.sekj.org/PDF/anz46-free/anz46-138.pdf
The practice of statistical
analysis and inference in ecology is critically reviewed. The dominant doctrine
of null hypothesis signi fi cance testing (NHST) continues to be applied
ritualistically and mindlessly. This dogma is based on superficial understanding
of elementary notions of frequentist statistics in the 1930s, and is widely
disseminated by influential textbooks targeted at biologists. It is
characterized by silly null hypotheses and mechanical dichotomous division of
results being “signi fi cant” ( P < 0.05) or not. Simple examples are given to
demonstrate how distant the prevalent NHST malpractice is from the current
mainstream practice of professional statisticians. Masses of trivial and
meaningless “results” are being reported, which are not providing adequate
quantitative information of scientific interest. The NHST dogma also retards
progress in the understanding of ecological systems and the effects of
management programmes, which may at worst contribute to damaging decisions in
conservation biology. In the beginning of this millennium, critical discussion
and debate on the problems and shortcomings of NHST has intensified in
ecological journals. Alternative approaches, like basic point and interval
estimation of effect sizes, likelihood-based and information theoretic methods,
and the Bayesian inferential paradigm, have started to receive attention. Much
is still to be done in efforts to improve statistical thinking and reasoning of
ecologists and in training them to utilize appropriately the expanded
statistical toolbox. Ecologists should finally abandon the false doctrines and
textbooks of their previous statistical gurus. Instead they should more
carefully learn what leading statisticians write and say, collaborate with
statisticians in teaching, research, and editorial work in journals.
Jensen Comment
And to think Alpha (Type 1) error is the easy part. Does anybody ever test for
the more important Beta (Type 2) error? I think some engineers test for Type 2
error with Operating Characteristic (OC) curves, but these are generally applied
where controlled experiments are super controlled such as in quality control
testing.
Beta Error ---
http://en.wikipedia.org/wiki/Beta_error#Type_II_error
The Cult of
Statistical Significance
The Cult of Statistical Significance:
How Standard Error Costs Us Jobs, Justice, and Lives, by Stephen T.
Ziliak and Deirdre N. McCloskey (Ann Arbor: University of Michigan Press,
ISBN-13: 978-472-05007-9, 2007)
http://www.cs.trinity.edu/~rjensen/temp/DeirdreMcCloskey/StatisticalSignificance01.htm
Page 206
Like scientists today in medical and economic and
other sizeless sciences, Pearson mistook a large sample size for the definite,
substantive significance---evidence s Hayek put it, of "wholes." But it was as
Hayek said "just an illusion." Pearson's columns of sparkling asterisks, though
quantitative in appearance and as appealing a is the simple truth of the sky,
signified nothing.
pp. 250-251
The textbooks are wrong. The teaching is wrong. The
seminar you just attended is wrong. The most prestigious journal in your
scientific field is wrong.
You are searching, we know,
for ways to avoid being wrong. Science, as Jeffreys said, is mainly a series of
approximations to discovering the sources of error. Science is a systematic way
of reducing wrongs or can be. Perhaps you feel frustrated by the random
epistemology of the mainstream and don't know what to do. Perhaps you've been
sedated by significance and lulled into silence. Perhaps you sense that the
power of a Roghamsted test against a plausible Dublin alternative is
statistically speaking low but you feel oppressed by the instrumental variable
one should dare not to wield. Perhaps you feel frazzled by what Morris Altman
(2004) called the "social psychology rhetoric of fear," the deeply embedded path
dependency that keeps the abuse of significance in circulation. You want to come
out of it. But perhaps you are cowed by the prestige of Fisherian dogma. Or,
worse thought, perhaps you are cynically willing to be corrupted if it will keep
a nice job
Thank you Jagdish for adding another doubt in to the validity of more than
four decades of accountics science worship.
"Weak statistical standards implicated in scientific irreproducibility:
One-quarter of studies that meet commonly used statistical cutoff may be false."
by Erika Check Hayden, Nature, November 11, 2013 ---
http://www.nature.com/news/weak-statistical-standards-implicated-in-scientific-irreproducibility-1.14131
The
plague of non-reproducibility in science may be
mostly due to scientists’ use of weak statistical tests, as shown by an
innovative method developed by statistician Valen Johnson, at Texas A&M
University in College Station.
Johnson compared the strength of two types of
tests: frequentist tests, which measure how unlikely a finding is to occur
by chance, and Bayesian tests, which measure the likelihood that a
particular hypothesis is correct given data collected in the study. The
strength of the results given by these two types of tests had not been
compared before, because they ask slightly different types of questions.
So Johnson developed a method that makes the
results given by the tests — the P value in the frequentist paradigm,
and the Bayes factor in the Bayesian paradigm — directly comparable. Unlike
frequentist tests, which use objective calculations to reject a null
hypothesis, Bayesian tests require the tester to define an alternative
hypothesis to be tested — a subjective process. But Johnson developed a
'uniformly most powerful' Bayesian test that defines the alternative
hypothesis in a standard way, so that it “maximizes the probability that the
Bayes factor in favor of the alternate hypothesis exceeds a specified
threshold,” he writes in his paper. This threshold can be chosen so that
Bayesian tests and frequentist tests will both reject the null hypothesis
for the same test results.
Johnson then used these uniformly most powerful
tests to compare P values to Bayes factors. When he did so, he found
that a P value of 0.05 or less — commonly considered evidence in
support of a hypothesis in fields such as social science, in which
non-reproducibility has become a serious issue —
corresponds to Bayes factors of between 3 and 5, which are considered weak
evidence to support a finding.
False positives
Indeed, as many as 17–25% of such findings are
probably false, Johnson calculates1.
He advocates for scientists to use more stringent P values of 0.005
or less to support their findings, and thinks that the use of the 0.05
standard might account for most of the problem of non-reproducibility in
science — even more than other issues, such as biases and scientific
misconduct.
“Very few studies that fail to replicate are based
on P values of 0.005 or smaller,” Johnson says.
Some other mathematicians said that though there
have been many calls for researchers to use more stringent tests2,
the new paper makes an important contribution by laying bare exactly how lax
the 0.05 standard is.
“It shows once more that standards of evidence that
are in common use throughout the empirical sciences are dangerously
lenient,” says mathematical psychologist Eric-Jan Wagenmakers of the
University of Amsterdam. “Previous arguments centered on ‘P-hacking’,
that is, abusing standard statistical procedures to obtain the desired
results. The Johnson paper shows that there is something wrong with the P
value itself.”
Other researchers, though, said it would be
difficult to change the mindset of scientists who have become wedded to the
0.05 cutoff. One implication of the work, for instance, is that studies will
have to include more subjects to reach these more stringent cutoffs, which
will require more time and money.
“The family of Bayesian methods has been well
developed over many decades now, but somehow we are stuck to using
frequentist approaches,” says physician John Ioannidis of Stanford
University in California, who studies the causes of non-reproducibility. “I
hope this paper has better luck in changing the world.”
574 Shields Against Validity Challenges in Plato's Cave
An Appeal for Replication and Commentaries in Accountics Science
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
April 11, 2012 reply by Steve Kachelmeier
Thank you for acknowledging this Bob. I've tried to offer other
examples of critical replications before, so it is refreshing to see you
identify one. I agree that the Lennox et al. (2012) article is a great
example of the type of thing for which you have long been calling, and
I was proud to have been the accepting editor on their article.
Steve Kachelmeier
April 11, 2011 reply by Bob Jensen
Hi Steve
I really do hate to be negative so often, but even in the excellent
Lennox et al. study I have one complaint to raise about the purpose of the
replication. In real science, the purpose of most replications is driven out
of interest in the conclusions (findings) more than the methods or
techniques. The main purpose of the Lennox et al. study was more one of
validating model robustness rather than the findings themselves which are
validated more or less incidentally to the main purpose.
Respectfully,
Bob Jensen
April 12, 2012 reply by Steve Kachelmeier
Fair enough Bob. But those other examples exist
also, and one immediately came to mind as I read your reply. Perhaps at some
point you really ought to take a look at Shaw and Zhang, "Is CEO Cash
Compensation Punished for Poor Firm Performance?" The Accounting Review,
May 2010. It's an example I've raised before. Perhaps there are not as many
of these as there should be, but they do exist, and in greater frequency
than you acknowledge.
Best,
Steve
April 12, 2011 reply by Bob Jensen
Firstly,
Firstly, I might note that in the past you and I have differed as to what
constitutes "replication research" in science. I stick by my definitions.---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#Replication
In your previous reply you drew our attention to the following article:
"Is CEO Cash Compensation Punished for Poor Firm Performance?" by Kenneth W.
Shaw and May H. Zhang, The Accounting Review, May 2010 ---
http://aaajournals.org/doi/pdf/10.2308/accr.2010.85.3.1065
ABSTRACT:
Leone et al. (2006) conclude that CEO cash
compensation is more sensitive to negative stock returns than to
positive stock returns, due to Boards of Directors enforcing an ex post
settling up on CEOs. Dechow (2006) conjectures that Leone et al.’s
2006 results might be due to the sign of stock returns misclassifying
firm performance. Using three-way performance partitions, we find no
asymmetry in CEO cash compensation for firms with low stock returns.
Further, we find that CEO cash compensation is less sensitive to poor
earnings performance than it is to better earnings performance. Thus, we
find no evidence consistent with ex post settling up for poor firm
performance, even among the very worst performing firms with strong
corporate governance. We find similar results when examining changes in
CEO bonus pay and when partitioning firm performance using
earnings-based measures. In sum, our results suggest that CEO cash
compensation is not punished for poor firm performance.
The above Shaw and Zhang study does indeed replicate an earlier study and
is critical of that earlier study. Shaw and Zhang then extend that earlier
research. As such it is a great step in the right direction since there are
so few similar replications in accountics science research.
My criticisms of TAR and accountics science, however, still are valid.
Note that it took four years before the Leone (2006) study was replicated.
In real science the replication research commences on the date studies are
published or even before. Richard Sansing provided me with his own
accountics science replication effort, but that one took seven years after
the study being replicated was published.
Secondly, replications are not even mentioned in TAR unless these
replications significantly extend or correct the original publications in
what are literally new studies being published. In real science, journals
have outlets for mentioning replication research that simply validates the
original research without having to significantly extend or correct that
research.
What TAR needs to do to encourage more replication efforts in accountics
science is to provide an outlet for commentaries on published studies,
possibly in a manner styled after the
Journal of Electroanalytical Chemistry (JEC) that publishes short
versions of replication studies.
I mention this journal because
one of its famous published studies on cold fusion in 1989 could not (at
least not yet) be replicated. The inability of any researchers
worldwide to replicate that study destroyed the stellar reputations of the
original authors
Stanley
Pons and
Martin Fleischmann.
Others who were loose with their facts:
former Harvard researcher John Darsee (faked cardiac research);
radiologist Rober Slutsky (altered data; lied); obstetrician William
McBride (changed data, ruined stellar reputation), and physicist J.
Hendrik Schon (faked breakthroughs in molecular electronics).
Discover Magazine, December 2010, Page 43
See
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#TARversusJEC
In any case, I hope you will continue to provide the AECM illustrations
of replication efforts in accountics science. Maybe one day accountics
science will grow into real science and, hopefully, also become more of
interest to the outside world.
Respectfully,
Bob Jensen
Replication Paranoia: Can you imagine anything like this happening
in accountics science?
"Is Psychology About to Come Undone?" by Tom Bartlett, Chronicle of
Higher Education, April 17, 2012 ---
Click Here
http://chronicle.com/blogs/percolator/is-psychology-about-to-come-undone/29045?sid=at&utm_source=at&utm_medium=en
If you’re a psychologist, the news has to make you
a little nervous—particularly if you’re a psychologist who published an
article in 2008 in any of these three journals: Psychological Science,
the Journal of Personality and Social Psychology, or the
Journal of Experimental Psychology: Learning, Memory, and Cognition.
Because, if you did, someone is going to check your
work. A group of researchers have already begun what they’ve dubbed
the Reproducibility Project, which aims to
replicate every study from those three journals for that one year. The
project is part of Open Science Framework, a group interested in scientific
values, and its stated mission is to “estimate the reproducibility of a
sample of studies from the scientific literature.” This is a more polite way
of saying “We want to see how much of what gets published turns out to be
bunk.”
For decades, literally, there has been talk about
whether what makes it into the pages of psychology journals—or the journals
of other disciplines, for that matter—is actually, you know, true.
Researchers anxious for novel, significant, career-making findings have an
incentive to publish their successes while neglecting to mention their
failures. It’s what the psychologist Robert Rosenthal named “the file drawer
effect.” So if an experiment is run ten times but pans out only once you
trumpet the exception rather than the rule. Or perhaps a researcher is
unconsciously biasing a study somehow. Or maybe he or she is flat-out faking
results, which is not unheard of.
Diederik Stapel, we’re looking at you.
So why not check? Well, for a lot of reasons. It’s
time-consuming and doesn’t do much for your career to replicate other
researchers’ findings. Journal editors aren’t exactly jazzed about
publishing replications. And potentially undermining someone else’s research
is not a good way to make friends.
Brian Nosek
knows all that and he’s doing it anyway. Nosek, a
professor of psychology at the University of Virginia, is one of the
coordinators of the project. He’s careful not to make it sound as if he’s
attacking his own field. “The project does not aim to single out anybody,”
he says. He notes that being unable to replicate a finding is not the same
as discovering that the finding is false. It’s not always possible to match
research methods precisely, and researchers performing replications can make
mistakes, too.
But still. If it turns out that a sizable
percentage (a quarter? half?) of the results published in these three top
psychology journals can’t be replicated, it’s not going to reflect well on
the field or on the researchers whose papers didn’t pass the test. In the
long run, coming to grips with the scope of the problem is almost certainly
beneficial for everyone. In the short run, it might get ugly.
Nosek told Science that a senior colleague
warned him not to take this on “because psychology is under threat and this
could make us look bad.” In a Google discussion group, one of the
researchers involved in the project wrote that it was important to stay “on
message” and portray the effort to the news media as “protecting our
science, not tearing it down.”
The researchers point out, fairly, that it’s not
just social psychology that has to deal with this issue. Recently, a
scientist named C. Glenn Begley attempted to replicate 53 cancer studies he
deemed landmark publications. He could only replicate six. Six! Last
December
I interviewed Christopher Chabris about his paper
titled “Most Reported Genetic Associations with General Intelligence Are
Probably False Positives.” Most!
A related new endeavour called
Psych File Drawer
allows psychologists to upload their attempts to
replicate studies. So far nine studies have been uploaded and only three of
them were successes.
Both Psych File Drawer and the Reproducibility
Project were started in part because it’s hard to get a replication
published even when a study cries out for one. For instance, Daryl J. Bem’s
2011 study that seemed to prove that extra-sensory perception is real — that
subjects could, in a limited sense, predict the future —
got no shortage of attention and seemed to turn
everything we know about the world upside-down.
Yet when Stuart Ritchie, a doctoral student in
psychology at the University of Edinburgh, and two colleagues failed to
replicate his findings, they had
a heck of a time
getting the results into print (they finally did, just recently, after
months of trying). It may not be a coincidence that the journal that
published Bem’s findings, the Journal of Personality and Social
Psychology, is one of the three selected for scrutiny.
Continued in article
Jensen Comment
Scale Risk
In accountics science such a "Reproducibility Project" would be much more
problematic except in behavioral accounting research. This is because accountics
scientists generally buy rather than generate their own data (Zoe-Vonna Palmrose
is an exception). The problem with purchased data from such as CRSP data,
Compustat data, and AuditAnalytics data is that it's virtually impossible to
generate alternate data sets, and if there are hidden serious errors in the data
it can unknowingly wipe out thousands of accountics science publications all at
one --- what we might call a "scale risk."
Assumptions Risk
A second problem in accounting and finance research is that researchers tend to
rely upon the same models over and over again. And when serious flaws were
discovered in a model like CAPM it not only raised doubts about thousands of
past studies, it made accountics and finance researchers make choices about
whether or not to change their CAPM habits in the future. Accountics researchers
that generally look for an easy way out blindly continued to use CAPM in
conspiracy with journal referees and editors who silently agreed to ignore CAPM
problems and limitations of assumptions about efficiency in capital markets---
http://faculty.trinity.edu/rjensen/Theory01.htm#EMH
We might call this an "assumptions risk."
Hence I do not anticipate that there will ever be a Reproducibility Project
in accountics science. Horrors. Accountics scientists might not continue to be
the highest paid faculty on their respected campuses and accounting doctoral
programs would not know how to proceed if they had to start focusing on
accounting rather than econometrics.
Bob Jensen's threads on replication and other forms of validity checking
---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Thomas Kuhn ---
http://en.wikipedia.org/wiki/Thomas_Kuhn
On its 50th anniversary, Thomas Kuhn’s "The
Structure of Scientific Revolutions" remains not only revolutionary but
controversial.
"Shift Happens," David Weinberger, The Chronicle Review, April 22, 2012
---
http://chronicle.com/article/Shift-Happens/131580/
April 24, 2012 reply from Jagdish Gangolly
Bob,
A more thoughtful analysis of Kuhn is at the
Stanford Encyclopedia of Philosophy. This is one of the best resources apart
from the Principia Cybernetika (
http://pespmc1.vub.ac.be/ ).
http://plato.stanford.edu/entries/thomas-kuhn/
Regards,
Jagdish
April 24, 2012
Excellent article. It omits one aspect of Kuhn's
personal life (probably because the author thought it inconsequential).
Apparently Kuhn liked to relax by riding roller coasters.In a way, that's a
neat metaphor for the impact of his work.
Thanks Bob.
Roger
Roger Collins
TRU School of Business & Economics
April 24, 2012 message from Zane Swanson
One of the unintended consequences of a paradigm shift may have meaning for
the replication discussion which has occurred on this list. Consider the
relevance of the replications when a paradigm shifts. The change permits an
examination of replications pre and post the paradigm shift of key
attributes. In accounting, one paradigm shift is arguably the change from
historical to fair value. For those looking for a replication reason of
being, it might be worthwhile to compare replication contributions before
and after the historical to fair value changes.
In other words, when the prevailing view was that “the world is flat” …
the replication “evidence” appeared to support it. But, when the paradigm
shifted to “the world is round”, the replication evidence changed also. So,
what is the value of replications and do they matter? Perhaps, the
replications have to be novel in some way to be meaningful.
Zane Swanson
www.askaref.com accounting
dictionary for mobile devices
April 25, 2012 reply from Bob Jensen
Kuhn wrote of science that "In a science, on the
other had, a paradigm is rarely an object for replication. Instead like a
judicial decision in the common law, it is an object for further
articulation and specification under new and more stringent conditions."
This is the key to Kuhn's importance in the development of law and science
for children's law. He did seek links between the two fields of knowledge
and he by this insight suggested how the fields might work together ...
Michael Edmund Donnelly, ISBN 978-0-8204-1385 ---
Click Here
http://books.google.com/books?id=rGKEN11r-9UC&pg=PA23&lpg=PA23&dq=%22Kuhn%22+AND+%22Replication%22+AND+%22Revolution%22&source=bl&ots=RDDBr9VBWt&sig=htGlcxqtX9muYqrn3D4ajnE0jF0&hl=en&sa=X&ei=F9WXT7rFGYiAgweKoLnrBg&ved=0CCoQ6AEwAg#v=onepage&q=%22Kuhn%22%20AND%20%22Replication%22%20AND%20%22Revolution%22&f=false
My question Zane is whether historical cost (HC) accounting versus fair
value (FV) accounting is truly a paradigm shift. For centuries the two
paradigms have worked in tandem for different purposes where FV is used by
the law for personal estates and non-going concerns and HC accounting has
never been a pure paradigm for any accounting in the real world. Due to
conservatism and other factors, going-concern accounting has always been a
mixed-model of historical cost modified in selected instances for fair value
as in the case of lower-of-cost-or-market (LCM) inventories.
I think Kuhn was thinking more in terms of monumental paradigm
"revolutions" like we really have not witnessed in accounting standards that
are more evolutionary than revolutionary.
My writings are at
574 Shields Against Validity Challenges in Plato's Cave ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Respectfully,
Bob Jensen
Biography of an Experiment ---
http://www.haverford.edu/kinsc/boe/
Questions
- Apart from accountics science journals are there real science journals
that refuse to publish replications?
- What are biased upward positive effects?
- What is the "decline" effect as research on a topic progresses?
- Why is scientific endeavor sometimes a victim of its own success?
- What is “statistically significant but not clinically significant”
problem.
Jensen
note:
I think this is a serious drawback of many accountics science published
papers.
In the past when invited to be a
discussant, this is the first problem I look for in the paper assigned for
me to discuss.
This is a particular problem in capital markets events studies having very,
very large sample sizes. Statistical significance is almost always assured
when sample sizes are huge even when the clinical significance of small
differences may be completely insignificant.
An example:
"Discussion of Foreign Currency Exposure of Multinational Firms:
Accounting Measures and Market Valuation," by
Robert E. Jensen, Rutgers University at Camden, Camden, New
Jersey, May 31, 1997. Research Conference on International Accounting and
Related Issues,
"The Value of Replication," by Steven Novella, Science-Based
Medicine, June 15, 2011 ---
http://www.sciencebasedmedicine.org/index.php/the-value-of-replication/
Daryl Bem is a respected psychology researcher who
decided to try his hand at parapsychology. Last year he published a series
of studies in which he
claimed evidence for precognition — for test
subjects being influenced in their choices by future events. The studies
were published in a peer-reviewed psychology journal, the Journal of
Personality and Social Psychology. This created somewhat of a
controversy,
and was deemed by some to be a failure of peer-review.
While the study designs were clever (he simply
reversed the direction of some standard psychology experiments, putting the
influencing factor after the effect it was supposed to have), and the
studies looked fine on paper, the research raised many red flags —
particularly in Bem’s conclusions.
The episode has created the opportunity to debate
some important aspects of the scientific literature. Eric-Jan Wagenmakers
and others questioned the p-value approach to statistical analysis, arguing
that it tends to over-call a positive result.
They argue for a Bayesian analysis, and in their
re-analysis of the Bem data they found the evidence for psi to be
“weak to non-existent.” This is essentially the
same approach to the data that we support as science-based medicine, and the
Bem study is a good example of why. If the standard techniques are finding
evidence for the impossible, then it is more likely that the techniques are
flawed rather than the entire body of physical science is wrong.
Now another debate has been spawned by the same Bem
research — that involving the role and value of exact replication. There
have already been several attempts to replicate Bem’s research, with
negative results:
Galak and Nelson,
Hadlaczky, and
Circee,
for example. Others, such as psychologist Richard
Wiseman, have also replicated Bem’s research with negative results, but are
running into trouble getting their studies published — and this is the crux
of the new debate.
According to Wiseman, (as
reported by The Psychologist, and
discussed by Ben Goldacre) the Journal of
Personality and Social Psychology turned down Wiseman’s submission on the
grounds that they don’t publish replications, only “theory-advancing
research.” In other words — strict replications are not of sufficient
scientific value and interest to warrant space in their journal. Meanwhile
other journals are reluctant to publish the replication because they feel
the study should go in the journal that published the original research,
which makes sense.
This episode illustrates potential problems with
the scientific literature. We often advocate at SBM that individual studies
can never be that reliable — rather, we need to look at the pattern of
research in the entire literature. That means, however, understanding how
the scientific literature operates and how that may create spurious
artifactual patterns.
For example, I recently wrote about the so-called
“decline effect” — a tendency for effect sizes to
shrink or “decline” as research on a phenomenon progresses. In fact, this
was first observed in the psi research, as the effect is very dramatic there
— so far, all psi effects have declined to non-existence. The decline effect
is likely a result of artifacts in the literature. Journals are more
inclined to publish dramatic positive studies (“theory-advancing research”),
and are less interested in boring replications, or in initially negative
research. A journal is unlikely to put out a press release that says, “We
had this idea, and it turned out to be wrong, so never-mind.” Also, as
research techniques and questions are honed, research results are likely to
become closer to actual effect sizes, which means the effect of researcher
bias will be diminished.
If the literature itself is biased toward positive
studies, and dramatic studies, then this would further tend to exaggerate
apparent phenomena — whether it is the effectiveness of a new drug or the
existence of anomalous cognition. If journals are reluctant to publish
replications, that might “hide the decline” (to borrow an inflammatory
phrase) — meaning that perhaps there is even more of a decline effect if we
consider unpublished negative replications. In medicine this would be
critical to know — are we basing some treatments on a spurious signal in the
noise of research.
There have already been proposals to create a
registry of studies, before they are even conducted (specifically for human
research), so that the totality of evidence will be transparent and known —
not just the headline-grabbing positive studies, or the ones that meet the
desires of the researchers or those funding the research. This proposal is
primarily to deal with the issue of publication bias — the tendency not to
publish negative studies.
Wiseman now makes the same call for a registry of
trials before they even begin to avoid the bias of not publishing
replications. In fact, he has taken it upon himself to create a
registry of attempted replications of Bem’s research.
While this may be a specific fix for replications
for Bem’s psi research — the bigger issues remain. Goldacre argues that
there are systemic problems with how information filters down to
professionals and the public. Reporting is highly biased toward dramatic
positive studies, while retractions, corrections, and failed replications
are quiet voices lost in the wilderness of information.
Most readers will already understand the critical
value of replication to the process of science. Individual studies are
plagued by flaws and biases. Most preliminary studies turn out to be wrong
in the long run. We can really only arrive at a confident conclusion when a
research paradigm produces reliable results in different labs with different
researchers. Replication allows for biases and systematic errors to average
out. Only if a phenomenon is real should it reliably replicate.
Further — the excuse by journals that they don’t
have the space now seems quaint and obsolete, in the age of digital
publishing. The scientific publishing industry needs a bit of an overhaul,
to fully adapt to the possibilities of the digital age and to use this as an
opportunity to fix some endemic problems. For example, journals can publish
just abstracts of certain papers with the full articles available only
online. Journals can use the extra space made available by online publishing
(whether online only or partially in print) to make dedicated room for
negative studies and for exact replications (replications that also expand
the research are easier to publish). Databases and reviews of such studies
can also make it as easy to find and access negative studies and
replications as it is the more dramatic studies that tend to grab headlines.
Conclusion
The scientific endeavor is now a victim of its own
success, in that research is producing a tsunami of information. The modern
challenge is to sort through this information in a systematic way so that we
can find the real patterns in the evidence and reach reliable conclusions on
specific questions. The present system has not fully adapted to this volume
of information, and there remain obsolete practices that produce spurious
apparent patterns in the research. These fake patterns of evidence tend to
be biased toward the false positive — falsely concluding that there is an
effect when there really isn’t — or at least in exaggerating effects.
These artifactual problems with the literature as a
whole combine with the statistical flaws in relying on the p-value, which
tends to over-call positive results as well. This problem can be fixed by
moving to a more Bayesian approach (considering prior probability).
All of this is happening at a time when prior
probability (scientific plausibility) is being given less attention than it
should, in that highly implausible notions are being seriously entertained
in the peer-reviewed literature. Bem’s psi research is an excellent example,
but we deal with many other examples frequently at SBM, such as homeopathy
and acupuncture. Current statistical methods and publication biases are not
equipped to deal with the results of research into highly implausible
claims. The result is an excess of false-positive studies in the literature
— a residue that is then used to justify still more research into highly
implausible ideas. These ideas can never quite reach the critical mass of
evidence to be generally accepted as real, but they do generate enough noise
to confuse the public and regulators, and to create an endless treadmill of
still more research.
The bright spot is that highly implausible research
has helped to highlight some of these flaws in the literature. Now all we
have to do is fix them.
Jensen Recommendation
Read all or at least some of the 58 comments following this article
daedalus2u comments:
Sorry if this sounds harsh, it is meant to be harsh. What this episode
shows is that the journal JPSP is not a serious scientific journal. It
is fluff, it is pseudoscience and entertainment, not a journal worth
publishing in, and not a journal worth reading, not a journal that has
scientific or intellectual integrity.
“Professor Eliot Smith, the editor of JPSP
(Attitudes and Social Cognition section) told us that the journal has a
long-standing policy of not publishing simple replications. ‘This policy
is not new and is not unique to this journal,’ he said. ‘The policy
applies whether the replication is successful or unsuccessful; indeed, I
have rejected a paper reporting a successful replication of Bem’s work
[as well as the negative replication by Ritchie et al].’ Smith added
that it would be impractical to suspend the journal’s long-standing
policy precisely because of the media attention that Bem’s work had
attracted. ‘We would be flooded with such manuscripts and would not have
page space for anything else,’ he said.”
Scientific journals have an obligation to the
scientific community that sends papers to them to publish to be honest
and fair brokers of science. Arbitrarily rejecting studies that
directly bear on extremely controversial prior work they have published,
simply because it is a “replication”, is an abdication of their
responsibility to be a fair broker of science and an honest record of
the scientific literature. It conveniently lets them publish crap with
poor peer review and then never allow the crap work to be responded to.
If the editor consider it impractical to
publish any work that is a replication because they would then have no
space for anything else, then they are receiving too many manuscripts.
If the editor needs to apply a mindless triage of “no replications”,
then the editor is in over his head and is overwhelmed. The journal
should either revise the policy and replace the overwhelmed editor, or
real scientists should stop considering the journal a suitable place to
publish.
. . .
Harriet Hall comments
A close relative of the “significant but trivial”
problem is the “statistically significant but not clinically
significant” problem. Vitamin B supplements lower blood homocysteine
levels by a statistically significant amount, but they don’t decrease
the incidence of heart attacks. We must ask if a statistically
significant finding actually represents a clinical benefit for patient
outcome, if it is POEMS – patient-oriented evidence that matters.
"Alternative Treatments for ADHD Alternative Treatments for ADHD: The
Scientific Status," David Rabiner, Attention Deficit Disorder Resources,
1998 ---
http://www.addresources.org/?q=node/279
Based on his review of the existing research
literature, Dr. Arnold rated the alternative treatments presented on a 0-6
scale. It is important to understand this scale before presenting the
treatments. (Note: this is one person's opinion based on the existing data;
other experts could certainly disagree.) The scale he used is presented
below:
- 0-No supporting evidence and not worth
considering further.
- 1-Based on a reasonable idea but no data
available; treatments not yet subjected to any real scientific study.
- 2-Promising pilot data but no careful trial.
This includes treatments where very preliminary work appears promising,
but where the treatment approach is in the very early stages of
investigation.
- 3-There is supporting evidence beyond the
pilot data stage but carefully controlled studies are lacking. This
would apply to treatments where only open trials, and not double-blind
controlled trials, have been done.
Let me briefly review the difference between an
open trial and a double-blind trial because this is a very important
distinction. Say you are testing the effect of a new medication on ADHD.
In an open trial, you would just give the medication to the child, and
then collect data on whether the child improved from either parents or
teachers. The child, the child's parents, and the child's teacher would
all know that the child was trying a new medication. In a double-blind
trial, the child would receive the new medicine for a period of time and
a placebo for a period of time. None of the children, parents, or
teachers would know when medication or placebo was being received. The
same type of outcome data as above would be collected during both the
medication period and the placebo period.
The latter is considered to be a much more
rigorous test of a new treatment because it enables researchers to
determine whether any reported changes are above and beyond what can be
attributed to a placebo effect. In an open trial, you cannot be certain
that any changes reported are actually the result of the treatment, as
opposed to placebo effects alone. It is also very hard for anyone to
provide objective ratings of a child's behavior when they know that a
new treatment is being used. Therefore, open trials, even if they yield
very positive results, are considered only as preliminary evidence.
- 4-One significant double-blind, controlled
trial that requires replication. (Note: replicating a favorable
double-blind study is very important. The literature is full of
initially promising reports that could not be replicated.)
- 5-There is convincing double-blind controlled
evidence, but further refinement is needed for clinical application.
This rating would be given to treatments where replicated double-blind
trials are available, but where it is not completely clear who is best
suited for the treatment. For example, a treatment may be known to help
children with ADHD, but it may be effective for only a minority of the
ADHD population and the specific subgroup it is effective for is not
clearly defined.
- 6-A well established treatment for the
appropriate subgroup. Of the numerous alternative treatments reviewed by
Dr. Arnold, no treatments received a rating of 6.
Only one treatment reviewed received a rating of 5.
Dr. Arnold concluded that there is convincing scientific evidence that some
children who display
Continued in article
"If you can write it up and get it published you're
not even thinking of reproducibility," said Ken Kaitin, director of the Tufts
Center for the Study of Drug Development. "You make an observation and move on.
There is no incentive to find out it was wrong."
April 14, 2012 reply from Richard Sansing
Inability to replicate may be a problem in other
fields as well.
http://www.vision.org/visionmedia/article.aspx?id=54180
Richard Sansing
Bob Jensen's threads on replication in accountics science ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
"The Baloney Detection Kit: A 10-Point Checklist for Science Literacy,"
by Maria Popova, Brain Pickings, March 16, 2012 ---
Click Here
http://www.brainpickings.org/index.php/2012/03/16/baloney-detection-kit/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+brainpickings%2Frss+%28Brain+Pickings%29&utm_content=Google+Reader
Video Not Included Here
The above sentiment in particular echoes this
beautiful definition of science as
“systematic wonder” driven by an osmosis of
empirical rigor and imaginative whimsy.
The complete checklist:
- How reliable is the source of the claim?
- Does the source make similar claims?
- Have the claims been verified by
somebody else?
- Does this fit with the way the world
works?
- Has anyone tried to disprove the claim?
- Where does the preponderance of evidence
point?
- Is the claimant playing by the rules of
science?
- Is the claimant providing positive
evidence?
- Does the new theory account for as many
phenomena as the old theory?
- Are personal beliefs driving the claim?
The charming animation comes from UK studio
Pew 36.
The Richard Dawkins Foundation has a free
iTunes podcast, covering topics as diverse as
theory of mind, insurance policy, and Socrates’ “unconsidered life.”
Possibly the Worst Academic Scandal in Past 100 Years: Deception
at Duke
The Loose Ethics of Co-authorship of Research in Academe
In general we don't allow faculty to have publications ghost written for
tenure and performance evaluations. However, the rules are very loose regarding
co-author division of duties. A faculty member can do all of the research but
pass along all the writing to a co-author except when co-authoring is not
allowed such as in the writing of dissertations.
In my opinion the rules are too loose regarding co-authorship. Probably the
most common abuse in the current "publish or perish" environment in academe is
the partnering of two or more researchers to share co-authorships when their
actual participation rate in the research and writing of most the manuscripts is
very small, maybe less than 10%. The typical partnering arrangement is for an
author to take the lead on one research project while playing only a small role
in the other research projects
Gaming for Tenure as an
Accounting Professor ---
http://faculty.trinity.edu/rjensen/TheoryTenure.htm
(with a reply about tenure publication point systems from Linda Kidwell)
Another common abuse, in my opinion, is where a senior faculty member with a
stellar reputation lends his/her name to an article written and researched
almost entirely by a lesser-known colleague or graduate student. The main author
may agree to this "co-authorship" when the senior co-author's name on the paper
improves the chances for publication in a prestigious book or journal.
This is what happened in a sense in what is becoming the most notorious
academic fraud in the history of the world. At Duke University a famous
cancer researcher co-authored research that was published in the most
prestigious science and medicine journals in the world. The senior faculty
member of high repute is now apologizing to the world for being a part of a
fraud where his colleague fabricated a significant portion of the data to make
it "come out right" instead of the way it actually turned out.
What is interesting is to learn about how super-knowledgeable researchers at
the Anderson Cancer Center in Houston detected this fraud and notified the Duke
University science researchers of their questions about the data. Duke appears
to have resisted coming out with the truth way to long by science ethics
standards and even continued to promise miraculous cures to 100 Stage Four
cancer patients who underwent the miraculous "Duke University" cancer cures that
turned out to not be miraculous at all. Now Duke University is exposed to quack
medicine lawsuit filed by families of the deceased cancer patients who were
promised phone 80% cure rates.
The above Duke University scandal was the headline module in the February 12,
2012 edition of CBS Sixty Minutes. What an eye-opening show about science
research standards and frauds ---
Deception at Duke (Sixty Minutes
Video) ---
http://www.cbsnews.com/8301-18560_162-57376073/deception-at-duke/
Next comes the question of whether college administrators operate under
different publishing and speaking ethics vis-à-vis their faculty
"Faking It for the Dean," by Carl Elliott, Chronicle of Higher Education,
February 7, 2012 ---
http://chronicle.com/blogs/brainstorm/says-who/43843?sid=cr&utm_source=cr&utm_medium=en
Added Jensen Comment
I've no objection to "ghost writing" of interview remarks as long as the ghost
writer is given full credit for doing the writing itself.
I also think there is a difference between speeches versus publications with
respect to citations. How awkward it would be if every commencement speaker had
to read the reference citation for each remark in the speech. On the other hand,
I think the speaker should announce at the beginning and end that some of the
points made in the speech originated from other sources and that references will
be provided in writing upon request.
Bob Jensen's threads on professors who let students cheat ---
http://faculty.trinity.edu/rjensen/Plagiarism.htm#RebeccaHoward
Bob Jensen's threads on professors who cheat
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize
Steven J. Kachelmeier's July 2011 Editorial as Departing Senior Editor of
The Accounting Review (TAR)
"Introduction to a Forum on Internal Control Reporting and Corporate Debt,"
by Steven J. Kachelmeier, The Accounting Review, Vol. 86, No. 4, July
2011 pp. 1129–113 (not free online) ---
http://aaapubs.aip.org/getpdf/servlet/GetPDFServlet?filetype=pdf&id=ACRVAS000086000004001129000001&idtype=cvips&prog=normal
One of the more surprising things I
have learned from my experience as Senior Editor of
The Accounting Review
is just how often a
‘‘hot
topic’’
generates multiple
submissions that pursue similar research objectives. Though one might view
such situations as enhancing the credibility of research findings through
the independent efforts of multiple research teams, they often result in
unfavorable reactions from reviewers who question the incremental
contribution of a subsequent study that does not materially advance the
findings already documented in a previous study, even if the two (or more)
efforts were initiated independently and pursued more or less concurrently.
I understand the reason for a high incremental contribution standard in a
top-tier journal that faces capacity constraints and deals with about 500
new submissions per year. Nevertheless, I must admit that I sometimes feel
bad writing a rejection letter on a good study, just because some other
research team beat the authors to press with similar conclusions documented
a few months earlier. Research, it seems, operates in a highly competitive
arena.
Fortunately, from time to time, we
receive related but still distinct submissions that, in combination, capture
synergies (and reviewer support) by viewing a broad research question from
different perspectives. The two articles comprising this issue’s forum are a
classic case in point. Though both studies reach the same basic conclusion
that material weaknesses in internal controls over financial reporting
result in negative repercussions for the cost of debt financing, Dhaliwal et
al. (2011) do so by examining the public market for corporate debt
instruments, whereas Kim et al. (2011) examine private debt contracting with
financial institutions. These different perspectives enable the two research
teams to pursue different secondary analyses, such as Dhaliwal et al.’s
examination of the sensitivity of the reported findings to bank monitoring
and Kim et al.’s examination of debt covenants.
Both studies also overlap with yet a
third recent effort in this arena, recently published in the
Journal of Accounting
Research by Costello and
Wittenberg-Moerman (2011). Although the overall
‘‘punch
line’’
is similar in all three studies (material
internal control weaknesses result in a higher cost of debt), I am intrigued
by a ‘‘mini-debate’’
of sorts on the different conclusions
reache by Costello and Wittenberg-Moerman (2011) and by Kim et al.
(2011) for the effect of material weaknesses on debt covenants.
Specifically, Costello and Wittenberg-Moerman (2011, 116) find that
‘‘serious,
fraud-related weaknesses result in a significant decrease in financial
covenants,’’
presumably because banks substitute more
direct protections in such instances, whereas Kim et al.
Published Online: July 2011
(2011) assert from their cross-sectional
design that company-level material weaknesses are associated with
more
financial covenants in
debt contracting.
In reconciling these conflicting
findings, Costello and Wittenberg-Moerman (2011, 116) attribute the Kim et
al. (2011) result to underlying
‘‘differences
in more fundamental firm characteristics, such as riskiness and information
opacity,’’
given that, cross-sectionally, material
weakness firms have a greater number of financial covenants than do
non-material weakness firms even
before the disclosure of the material
weakness in internal controls. Kim et al. (2011) counter that they control
for risk and opacity characteristics, and that advance leakage of internal
control problems could still result in a debt covenant effect due to
internal controls rather than underlying firm characteristics. Kim et al.
(2011) also report from a supplemental change analysis that, comparing the
pre- and post-SOX 404 periods, the number of debt covenants falls for
companies both with and without
material
weaknesses in internal controls, raising the question of whether the
Costello and Wittenberg-Moerman (2011)
finding reflects a reaction to the disclosures or simply a more general
trend of a declining number of debt covenants affecting all firms around
that time period. I urge readers to take a look at both articles, along with
Dhaliwal et al. (2011), and draw their own conclusions. Indeed, I believe
that these sorts . . .
Continued in article
Jensen Comment
Without admitting to it, I think Steve has been embarrassed, along with many
other accountics researchers, about the virtual absence of validation and
replication of accounting science (accountics) research studies over the past
five decades. For the most part, accountics articles are either ignored or
accepted as truth without validation. Behavioral and capital markets empirical
studies are rarely (ever?) replicated. Analytical studies make tremendous leaps
of faith in terms of underlying assumptions that are rarely challenged (such as
the assumption of equations depicting utility functions of corporations).
Accounting science thereby has become a pseudo
science where highly paid accountics professor referees are protecting each
others' butts ---
"574 Shields Against Validity Challenges in Plato's Cave" ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
The above link contains Steve's rejoinders on the replication debate.
In the above editorial he's telling us that there is a middle ground for
validation of accountics studies. When researchers independently come to similar
conclusions using different data sets and different quantitative analyses they
are in a sense validating each others' work without truly replicating each
others' work.
I agree with Steve on this, but I would also argue that these types of
"validation" is too little to late relative to genuine science where replication
and true validation are essential to the very definition of science. The types
independent but related research that Steve is discussing above is too
infrequent and haphazard to fall into the realm of validation and replication.
When's the last time you witnesses a TAR author criticizing the research of
another TAR author (TAR does not publish critical commentaries)?
Are TAR articles really all that above criticism?
Even though I admire Steve's scholarship, dedication,
and sacrifice, I hope future TAR editors will work harder at turning accountics
research into real science!
What Went Wrong With Accountics Research? ---
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
September 10, 2011 reply from Bob Jensen (known on the AECM as Calvin of
Calvin and Hobbes)
This is a reply to Steve Kachelmeier, former Senior Editor of The Accounting
Review (TAR)
I agree Steve and will not bait you further in a game of Calvin Ball.
It is, however, strange to me that exacting replication
(reproducibility) is such a necessary condition to almost all of real
science empiricism and such a small part of accountics science empiricism.
My only answer to this is that the findings themselves in science seem to
have greater importance to both the scientists interested in the findings
and the outside worlds affected by those findings.
It seems to me that empirical findings that are not replicated with as much
exactness as possible are little more than theories that have only been
tested once but we can never be sure that the tests were not faked or
contain serious undetected errors for other reasons.
It is sad that the accountics science system really is not designed to guard
against fakers and careless researchers who in a few instances probably get
great performance evaluations for their hits in TAR, JAR, and JAE. It is
doubly sad since internal controls play such an enormous role in our
profession but not in our accoutics science.
I thank you for being a noted accountics scientist who was willing to play
Calvin Ball.with me for a while. I want to stress that this is not really a
game with me. I do want to make a difference in the maturation of accountics
science into real science. Exacting replications in accountics science would
be an enormous giant step in the real-science direction.
Allowing validity-questioning commentaries in TAR would be a smaller start
in that direction but nevertheless a start. Yes I know that it was your 574
TAR referees who blocked the few commentaries that were submitted to TAR
about validity questions. But the AAA Publications Committees and you as
Senior Editor could've done more to encourage both submissions of more
commentaries and submissions of more non-accountics research papers to TAR
--- cases, field studies, history studies, AIS studies, and (horrors)
normative research.
I would also like to bust the monopoly that accountics scientists have on
accountancy doctoral programs. But I've repeated my arguments here far to
often ---
http://www.trinity.edu/rjensen/Theory01.htm#DoctoralPrograms
In any case thanks for playing Calvin Ball with me. Paul Williams and
Jagdish Gangolly played Calvin Ball with me for a while on an entirely
different issue --- capitalism versus socialism versus bastardized versions
of both that evolve in the real world.
Hopefully there's been some value added on the AECM in my games of Calvin
Ball.
Even though my Calvin Ball opponents have walked off the field, I will
continue to invite others to play against me on the AECM.
And I'm certain this will not be the end to my saying that accountics
farmers are more interested in their tractors than their harvests. This may
one day be my epitaph.
Respectfully,
Calvin
"574 Shields Against Validity Challenges in Plato's Cave" --- See Below
"Psychology’s Treacherous Trio: Confirmation Bias, Cognitive Dissonance,
and Motivated Reasoning," by sammcnerney, Why We Reason, September 7,
2011 ---
Click Here
http://whywereason.wordpress.com/2011/09/07/psychologys-treacherous-trio-confirmation-bias-cognitive-dissonance-and-motivated-reasoning/
Regression Towards the Mean ---
http://en.wikipedia.org/wiki/Regression_to_the_mean
"The Truth Wears Off Is there something wrong with the scientific method?"
by Johah Lehrer, The New Yorker, December 12, 2010 ---
http://www.newyorker.com/reporting/2010/12/13/101213fa_fact_lehrer
Jensen Comment
This article deals with instances where scientists honestly cannot replicate
earlier experiments including their own experiments.
"Milgram's obedience studies - not about obedience after all?"
Research Digest, February 2011 ---
Click Here
http://bps-research-digest.blogspot.com/2011/02/milgrams-obedience-studies-not-about.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BpsResearchDigest+%28BPS+Research+Digest%29
"Success Comes From Better Data, Not Better Analysis," by Daryl Morey,
Harvard Business Review Blog, August 8, 2011 ---
Click Here
http://blogs.hbr.org/cs/2011/08/success_comes_from_better_data.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date
Jensen Comment
I think accountics researchers often use purchased databases (e.g., Compustat,
AuditAnalytics, and CRSP) without questioning the possibility of data errors and
limitation. For example, we recently took a look at the accounting litigation
database of AuditAnalytics and found many serious omissions.
These databases are used by multiple accountics researchers, thereby
compounding the felony,.
Bob Jensen's threads on what went wrong with accountics research are at
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
A Mutation in the Evolution of Accountics Science Toward Real Science:
A Commentary Published in TAR in May 2012
The publication of the Moser and Martin commentary in the May
2012 edition of TAR is a mutation of progress in accountics science evolution.
We owe a big thank you to both TAR Senior Editors Steve Kachelmeier and Harry
Evans.
Accountics is the mathematical science of values.
Charles Sprague [1887] as quoted by McMillan [1998, p. 1]
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm#_msocom_1
A small step for accountics science,
A giant step for accounting
Accountics science made a giant step in its evolution toward becoming a real
science when it published a commentary in The Accounting Review (TAR) in
the May 2012 edition.
""A Broader Perspective on Corporate Social Responsibility Research in
Accounting," by Donald V. Moser and Patrick R. Martin, The Accounting
Review, Vol. 87, May 2012, pp. 797-806 ---
http://aaajournals.org/doi/full/10.2308/accr-10257
We appreciate the helpful comments of Ramji
Balakrishnan, Harry Evans, Lynn Hannan, Steve Kachelmeier, Geoff Sprinkle,
Greg Waymire, Michael Williamson, and the authors of the two Forum papers on
earlier versions of this commentary. Although we have benefited
significantly from such comments, the views expressed are our own and do not
necessarily represent the views of others who have kindly shared their
insights with us.
. . .
In this commentary we suggest that CSR research in
accounting could benefit significantly if accounting researchers were more
open to (1) the possibility that CSR activities and related disclosures are
driven by both shareholders and non-shareholder constituents, and (2) the
use of experiments to answer important CSR questions that are difficult to
answer with currently available archival data. We believe that adopting
these suggestions will help accounting researchers obtain a more complete
understanding of the motivations for corporate investments in CSR and the
increasing prevalence of related disclosures.
Our two suggestions are closely related. Viewing
CSR more broadly as being motivated by both shareholders and a broader group
of stakeholders raises new and important questions that are unlikely to be
studied by accounting researchers who maintain the traditional perspective
that firms only engage in CSR activities that maximize shareholder value. As
discussed in this commentary, one example is that if CSR activities actually
respond to the needs or demands of a broader set of stakeholders, it is more
likely that some CSR investments are made at the expense of shareholders.
Data limitations make it very difficult to address this and related issues
in archival studies. In contrast, such issues can be addressed directly and
effectively in experiments. Consequently, we believe that CSR research is an
area in which integrating the findings from archival and experimental
studies can be especially fruitful. The combination of findings from such
studies is likely to provide a more complete understanding of the drivers
and consequences of CSR activities and related disclosures. Providing such
insights will help accounting researchers become more prominent players in
CSR research. Our hope is that the current growing interest in CSR issues,
as reflected in the two papers included in this Forum, represents a renewed
effort to substantially advance CSR research in accounting.
Jensen Comment
There are still two disappointments for me in the evolution of accountics
science into real science.
It's somewhat revealing to track how this Moser and Martin commentary found its
way into TAR. You might begin by noting the reason former Senior Editor Steve
Kachelmeier gave to the absence of commentaries in TAR (since 1998). In
fairness, I was wrong to have asserted that Steve will not send a "commentary"
out to TAR referees. His reply to me was as follows ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
No, no, no! Once again, your characterization
makes me out to be the dictator who decides the standards of when a
comment gets in and when it doesn’t. The last sentence is especially
bothersome regarding what “Steve tells me is a requisite for his
allowing TAR to publish a comment.” I never said that, so please don’t
put words in my mouth.
If I were to receive a comment of the
“discussant” variety, as you describe, I would send it out for review to
two reviewers in a manner 100% consistent with our stated policy on p.
388 of the January 2010 issue (have you read that policy?). If both
reviewers or even the one independent reviewer returned favorable
assessments, I would then strongly consider publishing it and would most
likely do so. My observation, however, which you keep wanting to
personalize as “my policy,” is that most peer reviewers, in my
experience, want to see a meaningful incremental contribution. (Sorry
for all the comma delimited clauses, but I need this to be precise.)
Bottom line: Please don’t make it out to be the editor’s “policy” if it
is a broader phenomenon of what the peer community wants to see. And the
“peer community,” by the way, are regular professors from all varieties
of backgrounds. I name 574 of them in the November 2009 issue.
Thus the reason given by Steve that a commentary was not published by TAR
since 1998 is that the TAR referees rejected each and every submitted commentary
since 1998. In the back of my mind, however, I always thought the Senior and
Associate Editors of TAR could do more to encourage the publication of
commentaries in TAR.
Thus it's interesting to track the evolution of the May 2012 Moser and Martin
commentary published in TAR.
"A FORUM ON CORPORATE SOCIAL RESPONSIBILITY RESEARCH IN ACCOUNTING
Introduction," by John Harry Evans III (incoming Senior Editor of TAR), The
Accounting Review, Vol. 87, May 2012, pp. 721-722 ---
http://aaajournals.org/doi/full/10.2308/accr-10279
In July 2011, shortly after I began my term as
Senior Editor of The Accounting Review, outgoing editor Steve
Kachelmeier alerted me to an excellent opportunity. He and his co-editors
(in particular, Jim Hunton) had conditionally accepted two manuscripts on
the topic of corporate social responsibility (CSR), and the articles were
scheduled to appear in the May 2012 issue of TAR. Steve suggested
that I consider bundling the two articles as a “forum on corporate social
responsibility research in accounting,” potentially with an introductory
editorial or commentary.
Although I had never worked in the area of CSR
research, I was aware of a long history of interest in CSR research among
accounting scholars. In discussions with my colleague, Don Moser, who was
conducting experiments on CSR topics with his doctoral student, Patrick
Martin, I was struck by the potential for synergy in a forum that combined
the two archival articles with a commentary by experimentalists (Don and
Patrick). Because archival and experimental researchers face different
constraints in terms of what they can observe and control, they tend to
address different, but related, questions. The distinctive questions and
answers in each approach can then provide useful challenges to researchers
in the other, complementary camp. A commentary by Moser and Martin also
offered the very practical advantage that, with Don and Patrick down the
hall from me, it might be feasible to satisfy a very tight schedule calling
for completing the commentary and coordinating it with the authors of the
archival articles within two to three months.
The
Moser and Martin (2012) commentary offers
potential insight concerning how experiments can complement archival
research such as the two fine studies in the forum by
Dhaliwal et al. (2012) and by
Kim et al. (2012). The two forum archival studies
document that shareholders have reason to care about CSR disclosure because
of its association with lower analyst forecast errors and reduced earnings
management. These are important findings about what drives firms' CSR
activities and disclosures, and these results have natural ties to
traditional financial accounting archival research issues.
Like the two archival studies, the
Moser and Martin (2012) commentary focuses on the
positive question of what drives CSR
activities and disclosures in practice as opposed to normative or legal
questions about what should drive these decisions. However, the Moser
and Martin approach to addressing the positive question begins by taking a
broader perspective that allows for the possibility that firms may
potentially consider the demands of stakeholders other than shareholders in
making decisions about CSR activities and disclosures. They then argue that
experiments have certain advantages in understanding CSR phenomena given
this broader environment. For example, in a tightly controlled environment
in which future economic returns are known for certain and individual
reputation can play no role, would managers engage in CSR activities that do
not maximize profits and what information would they disclose about such
activities? Also, how would investors respond to such disclosures?
Jensen Comment
And thus we have a mutation in the evolution of "positive" commentaries in TAR
with the Senior TAR editor being a driving force in that mutation. However, in
accountics science we have a long way to go in terms of publishing critical
commentaries and performing replications of accountics science research ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#Replication
As Joni Young stated, there's still "an absence of dissent" in accountics
science.
We also have a long way to go in the evolution of accountics science in that
accountics scientists do very little to communicate with accounting teachers and
practitioners ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
But the publication of the Moser and Martin commentary in the
May 2012 edition of TAR is a mutation of progress in accountics science
evolution. We owe a big thank you to both TAR Senior Editors Steve Kachelmeier
and Harry Evans.
Bob Jensen's threads on Corporate Social
Responsibility research and
Triple-Bottom (Social, Environmental, Human Resource)
Reporting ---
---
http://faculty.trinity.edu/rjensen/Theory02.htm#TripleBottom
Fortunately this sort of public dispute has never happened in accountics
science where professors just don't steal each others' ideas or insultingly
review each others' work in public. Accountics science is a polite science ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
"Publicizing (Alleged) Plagiarism," by Alexandra Tilsley, Inside
Higher Ed, October 22, 2012 ---
http://www.insidehighered.com/news/2012/10/22/berkeley-launches-plagiarism-investigation-light-public-nature-complaints
The varied effects of the Internet age on the world
of academic research are
well-documented, but a website devoted solely to
highlighting one researcher’s alleged plagiarism has put a new spin on the
matter.
The University of California at Berkeley has begun
an investigation into allegations of plagiarism in professor Terrence
Deacon’s book, Incomplete Nature: How Mind Emerged from Matter,
largely in response to
the website
created about the supposed problems with Deacon’s
book. In Incomplete
Nature, Deacon, the chair of Berkeley's
anthropology department, melds science and philosophy to explain how mental
processes, the stuff that makes us human, emerged from the physical world.
The allegations are not of direct, copy-and-paste
plagiarism, but of using ideas without proper citation. In a June review in
The New York Review of Books, Colin McGinn, a professor of
philosophy at the University of Miami, writes that ideas in Deacon’s book
draw heavily on ideas in works by
Alicia Juarrero,
professor emerita of philosophy at Prince George’s Community College who
earned her Ph.D. at Miami, and Evan Thompson, a philosophy professor at the
University of Toronto, though neither scholar is cited, as Thompson also
notes in his own
review in Nature.
McGinn writes: “I have no way of knowing whether
Deacon was aware of these books when he was writing his: if he was, he
should have cited them; if he was not, a simple literature search would have
easily turned them up (both appear from prominent presses).”
That is an argument Juarrero and her colleagues
Carl Rubino and Michael Lissack have pursued forcefully and publicly. Rubino,
a classics professor at Hamilton College, published a book with Juarrero
that he claims Deacon misappropriated, and that book was published by
Lissack’s Institute for the
Study of Coherence and Emergence. Juarrero, who
declined to comment for this article because of the continuing
investigation, is also a fellow of the institute.
Continued in article
Bob Jensen's threads on professors who cheat ---
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize
Consensus Seeking in Real Science Versus Accountics Science
Question
Are there any illustrations of consensus seeking in accountics like consensus
seeking in the real sciences, e.g., consensus seeking on climate change,
consensus seeking on pollution impacts, and consensus seeking on the implosion
of the Twin Towers on 9/11 (whether the towers had to be laced with explosives
in advance to bring them down)?
For example, some scientists predicted environmental disaster when Saddam set
virtually all the oil wells ablaze near the end of the Gulf War. But there was
no consensus among the experts, and those that made dire predictions ultimately
turned out wrong.
Noam Chomsky Schools 9/11 Truther; Explains the Science of Making Credible
Claims ---
http://www.openculture.com/2013/10/noam-chomsky-derides-911-truthers.html
Jensen Comment
I can't recall any instances where high numbers of accountics scientists were
polled with respect to any of their research findings. Are there any good
illustrations that I missed?
In the real sciences consensus seeking is sometimes sought when scientists
cannot agree on the replication outcomes or where replication is impractical or
impossible based upon theory that has not yet been convincingly tested., I
suspect consensus seeking is more common in the natural sciences than in the
social sciences with economics being somewhat of an exception. Polls among
economists are somewhat common, especially regarding economic forecasts.
The closest thing to accounting consensus seeking might take place among expert
witnesses in court, but this is a poor example since consensus may only be
sought among a handful of experts. In science and engineering consensus seeking
takes place among hundreds or even thousands of experts.
Over Reliance Upon Public Databases and Failure to Error Check
DATABASE BIASES AND ERRORS
My casual studies of accountics science articles suggests that over 90% of those
studies rely exclusively on one or more public database whenever the studies use
data. I find few accountics science research into bias and errors of those
databases. Here's a short listing of research into these biases and errors, some
of which were published by accountics scientists ---
This page provides references for articles that
study specific aspects of CRSP, Compustat and other popular sources of
data used by researchers at Kellogg. If you know of any additional
references, please e-mail
researchcomputing-help@kellogg.northwestern.edu.
What went wrong with accountics science?
http://faculty.trinity.edu/rjensen/Theory01.htm#WhatWentWrong
In 2013 I scanned all six issues of The Accounting Review (TAR) published
in 2013 to detect what public databases were (usually at relatively heavy fees
for a system of databases) in the 72 articles published January-November, 2013
in TAR. The outcomes were as follows:
Many of these 72 articles used more than one public database, and when the Compustat and
CRSP joint database was used I counted one for the Compustat Database and
one for the CRSP Database. Most of the non-public databases are behavioral
experiments using students as surrogates for real-world decision makers.
My
opinion is that 2013 is a typical year where over 92% of the articles published
in TAR used putvhsdrf public databases. The good news is that most of these
public databases are enormous, thereby allowing for huge samples for which
statistical inference is probably superfluous. For very large samples even
miniscule differences are significant for hypothesis testing making statistical
inference testing superfluous:
My theory is that accountics science gained
dominance in accounting research, especially in North American accounting Ph.D.
programs, because it abdicated responsibility:
1.
Most accountics scientists buy
data, thereby avoiding the greater cost and drudgery of collecting data.
2.
By relying so heavily on purchased
data, accountics scientists abdicate responsibility for errors in the data.
3.
Since adding missing variable data
to the public database is generally not at all practical in purchased databases,
accountics scientists have an excuse for not collecting missing variable data.
The small subset of accountics scientists that do conduct behavior experiments
generally use students as surrogates for real world decision makers. In addition
the tasks are hypothetical and artificial such that making extrapolations
concerning real world behavior are dubious to say the least.
The good news is that most of these public databases are enormous, thereby
allowing for huge samples for which statistical inference is probably
superfluous. For very large samples even miniscule differences are significant
for hypothesis testing making statistical inference testing superfluous:
The Cult of Statistical Significance: How Standard Error Costs Us
Jobs, Justice, and Lives ---
http://www.cs.trinity.edu/~rjensen/temp/DeirdreMcCloskey/StatisticalSignificance01.htm
Association is Not Causation
The bad news is that the accountics scientists who rely only on public databases
are limited to what is available in those databases. It is much more common in
the real sciences for scientists to collect their own data in labs and field
studies. Accountics scientists tend to model data but not collect their own data
(with some exceptions, especially in behavioral experiments and simulation
games). As a result real scientists can often make causal inferences whereas
accountics scientists can only make correlation or other types of association
inferences leaving causal analysis to speculation.
Of course real scientists many times are forced to work with public databases
like climate and census databases. But they are more obsessed with collecting
their own data that go deeper into root causes. This also leads to more risk of
data fabrication and the need for independent replication efforts (often before
the original results are even published) ---
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize
Note the quotation below from from veteran accountics science researchers:
Title: "Fair Value Accounting for Financial Instruments: Does It Improve
the Association between Bank Leverage and Credit Risk?"
Authors: Elizabeth Blankespoor, Thomas J. Linsmeier, Kathy R. Petroni and
Catherine Shakespeare
Source: The Accounting Review, July 2013, pp. 1143-1178
http://aaajournals.org/doi/full/10.2308/accr-50419
"We test for association, not causation."
Bob Jensen discusses the inability to search
for causes in the following reference
"How Non-Scientific Granulation Can Improve Scientific Accountics"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsGranulationCurrentDraft.pdf:
Potential Database Errors
Inability to search for causes is only one of the problems of total reliance on
public databases rather than databases collected by researchers themselves. The other potentially huge
problem is failure to test for errors in the public databases. This is an
enormous problem because accountics science public databases are exceptionally large with tens of
thousands of companies from which thousands of companies are sampled by
accountics scientists. It's sometimes possible to randomly test for database
errors but doing so is tedious and not likely to end up with corrections that
are very useful for large samples.
What I note is that accountics scientists
these days overlook potential problems of errors in their databases. In the past
there were some efforts to check for errors, but I don't know of recent
attempts. This is why I'm asking AECMers to cite where accountics scientists
recently tested for errors in their public databases.
The Audit Analytics database is purportedly especially prone to errors
and biases, but I've not seen much in the way of published studies on
these potential problems. This database is critically analyzed with several
others in the following reference:
A Critical Analysis of Databases Used in Financial Misconduct Research
by Jonathan M. Karpoff , Allison Koester, D. Scott Lee, and Gerald S.
Martin
July 20, 2012
http://www.efa2012.org/papers/s1a1.pdf
Also see
http://www.fesreg.com/index.php/research/financial-misconduct/88-a-critical-analysis-of-databases-used-in-financial-misconduct-research
ERROR RATES IN CRSP AND COMPUSTAT DATA BASES AND THEIR IMPLICATIONS
Barr Rosenberg Associate Professor†, Michel Houglet Associate Professor†
The Journal of Finance
Volume 29, Issue 4, pages 1303–1310, September 1974
Higgledy piggledy bankruptcy
Douglas Wood, Jenifer Piesse
Volume 148 of Manchester business school. working paper
1987
http://books.google.com/books/about/Higgledy_piggledy_bankruptcy.html?id=bZBXAAAAMAAJ
The market reaction to 10-K and 10-Q filings and to subsequent The Wall
Street Journal earnings announcements
EK Stice -
Accounting Review, 1991
On The Operating Performance of REITs Following Seasoned Equity
Offerings: Anomaly Revisited
by
C Ghosh, S Roark, CF Sirmans
The Journal of Real Estate Finance and …, 2013
- Springer
A further examination of income shifting
through transfer pricing considering firm size and/or distress TL
Conover, NB Nichols - The International Journal of Accounting, 2000 -
Elsevier ... of information as well as the firm characteristics.
Kinney and Swanson (1993) specifically addressed COMPUSTAT errors and
omissions involving the tax fields. Since research investigating
transfer prices involves the impact ...
On Alternative Measures of Accruals
L Shi, H Zhang - Accounting Horizons, 2011 -
aaajournals.org
...
Panel B reports results on non-articulations in changes in accounts
receivable. The main
explanation for this type of non-articulation is Compustat
errors, to which five out of the six
observations can be attributed. ... All of them can be attributed
to Compustat errors. ...
Questions (actually a favor request)
Are there some current references on the data errors in public databases that
are mostly used in accountics science studies?
For example, how reliable are the Datastream databases?
I have not seen much published about Datastream errors and biases.
October 21, 2013 reply from Dan Stone
A recent article in "The Economist" decries the
absence of replication in
science.
short url:
http://tinyurl.com/lepu6zz
http://www.economist.com/news/leaders/21588069-scientific-research-
has-changed-world-now-it-needs-change-itself-how-science-goes-wrong
October 21, 2013 reply from Bob Jensen
I read The Economist every week and usually respect it sufficiently to
quote it a lot. But sometimes articles disappoint me as an academic in
search of evidence for controversial assertions like the one you link to
about declining replication in the sciences.
Dartmouth Professor Nyhan paints a somewhat similar picture about where
some of the leading medical journals now "tend to fail to replicate."
However other journals that he mentions are requiring a replication archives
and replication audits. It seems to me that some top science journals are
becoming more concerned about validity of research findings while perhaps
others have become more lax.
"Academic reforms: A four-part proposal," by Brendon Nyhan, April 16,
2013 ---
http://www.brendan-nyhan.com/blog/2012/04/academic-reforms-a-four-part-proposal.html
The "collaborative replication" idea has become a big deal. I have a
former psychology colleague at Trinity who has a stellar reputation for
empirical brain research in memory. She tells me that she does not submit
articles any more until they have been independently replicated by other
experts.
It may well be true that natural science journals have become negligent
in requiring replication and in providing incentives to replicate. However,
perhaps, because the social science journals have a harder time being
believed, I think that some of their top journals have become more obsessed
with replication.
In any case I don't know of any science that is less concerned with lack
of replication than accountics science. TAR has a policy of not publishing
replications or replication abstracts unless the replication is only
incidental to extending the findings with new research findings. TAR also
has a recent reputation of not encouraging commentaries on the papers it
publishes.
Has TAR even published a commentary on any paper it published in recent
years?
Have you encountered any recent investigations into errors in our most
popular public databases in accountics science?
Thanks,
Bob Jensen
October 22, 2013 reply from Roman Chychyla
Hello Professor Jensen,
My name is Roman Chychyla and I am a 5th year PhD
student in AIS at Rutgers business school. I have seen your post at AECM
regarding errors in accounting databases. I find this issue quite
interesting. As a matter of fact, it is a part of my dissertation. I have
recently put on SSRN a working paper that I wrote with my adviser, Alex
Kogan, that compares annual numbers in Compustat to numbers in 10-K filings
on a large-scale basis using the means of XBRL technology: http://ssrn.com/abstract=2304473
My impression from working on that paper is that
the volume of errors in Compustat is relatively low (probably by now
Compustat has decent data verification process in place). However, the
Compustat adjustments designed to standardize variables may be a serious
issue. These adjustments sometimes results in both economically and
statistically significant differences between Compustat and 10-K concepts
that change the distribution of underlying variables. This, in turn, may
affect the outcome of empirical models that rely on Compustat data.
Arguably, the adjustments may be a good thing
(although an opposite argument is that companies themselves are in the best
position to present their numbers adequately). But it may well be the case
that accounting researches are not fully aware of these adjustments and do
not take them into account. For example, a number of archival accounting
studies implicitly assume that market participants operate based on
Compustat numbers at the times of financial reports being released, while
what market participants really see are the unmodified numbers in financial
reports. Moreover, Compustat does not provide original numbers from
financial reports, and it was unknown how large the differences are. In our
paper, we study the amount and magnitude of these differences and document
them.
Hope you find this information interesting. Please
feel free to contact me any time. Thanks.
All the best,
Roman
October 22, 2013 reply from Bob Jensen
Hi Roman,
Thank you so much for your reply. I realize that Compustat and CRSP have
been around long enough to program in some error controls. However, you are
on a tack that I never thought of taking.
My interest is more with the newer Datastream database and with Audit
Analytics where I'm still not trusting.
May I share your reply with the AECM?
Thanks,
Bob
October 23, 2013 reply from Roman Chychyla
I agree, new databases are more prone to errors.
There were a lot of errors in early versions of Compustat and CRSP as
Rosenberg and Houglet showed. On the other hand, the technology now is
better and the error-verification processes should be more advanced and less
costly.
Of course, feel free to share our correspondence with the AECM.
Thanks!
Best,
Roman
October 21, 2013 reply from Dan Stone
A recent article in "The Economist" decries the
absence of replication in
science.
short url:
http://tinyurl.com/lepu6zz
http://www.economist.com/news/leaders/21588069-scientific-research-
has-changed-world-now-it-needs-change-itself-how-science-goes-wrong
October 21, 2013 reply from Bob Jensen
I read The Economist every week and usually respect it sufficiently to
quote it a lot. But sometimes articles disappoint me as an academic in
search of evidence for controversial assertions like the one you link to
about declining replication in the sciences.
Dartmouth Professor Nyhan paints a somewhat similar picture about where
some of the leading medical journals now "tend to fail to replicate."
However other journals that he mentions are requiring a replication archives
and replication audits. It seems to me that some top science journals are
becoming more concerned about validity of research findings while perhaps
others have become more lax.
"Academic reforms: A four-part proposal," by Brendon Nyhan, April 16,
2013 ---
http://www.brendan-nyhan.com/blog/2012/04/academic-reforms-a-four-part-proposal.html
The "collaborative replication" idea has become a big deal. I have a
former psychology colleague at Trinity who has a stellar reputation for
empirical brain research in memory. She tells me that she does not submit
articles any more until they have been independently replicated by other
experts.
It may well be true that natural science journals have become negligent
in requiring replication and in providing incentives to replicate. However,
perhaps, because the social science journals have a harder time being
believed, I think that some of their top journals have become more obsessed
with replication.
In any case I don't know of any science that is less concerned with lack
of replication than accountics science. TAR has a policy of not publishing
replications or replication abstracts unless the replication is only
incidental to extending the findings with new research findings. TAR also
has a recent reputation of not encouraging commentaries on the papers it
publishes.
Has TAR even published a commentary on any paper it published in recent
years?
Have you encountered any recent investigations into errors in our most
popular public databases in accountics science?
Thanks,
Bob Jensen
Are accountics scientists more honest and ethical than real scientists?
Accountics science is defined at
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm
One of the main reasons Bob Jensen contends that accountics science is not yet a
real science is that lack of exacting replications of accountics science
findings. By exacting replications he means reproducibility as defined in the
IAPUC Gold Book ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#Replication
The leading accountics science (an indeed the leading academic accounting
research journals) are The Accounting Review (TAR), the Journal of
Accounting Research (JAR), and the Journal of Accounting and Economics
(JAE). Publishing accountics science in these journals is a necessary condition
for nearly all accounting researchers at top R1 research universities in North
America.
On the AECM listserv, Bob Jensen and former TAR Senior Editor Steven
Kachelmeier have had an ongoing debate about accountics science relevance and
replication for well over a year in what Steve now calls a game of CalvinBall.
When Bob Jensen noted the lack of exacting replication in accountics science,
Steve's CalvinBall reply was that replication is the name of the game in
accountics science:
The answer to your question, "Do you really think
accounting researchers have the hots for replicating their own findings?" is
unequivocally YES,
though I am not sure about the word "hots." Still, replications in the sense
of replicating prior findings and then extending (or refuting) those
findings in different settings happen all the time, and they get published
regularly. I gave you four examples from one TAR issue alone (July 2011).
You seem to disqualify and ignore these kinds of replications because they
dare to also go beyond the original study. Or maybe they don't count for you
because they look at their own watches to replicate the time instead of
asking to borrow the original researcher's watch. But they count for me.
To which my CalvinBall reply to Steve is --- "WOW!" In the past four decades
of all this unequivocal replication in accountics science there's not been a
single scandal. Out of the thousands of accountics science papers published in
TAR, JAR, and JAE there's not been a single paper withdrawn after publication,
to my knowledge, because of a replication study discovery. Sure there have been
some quibbles about details in the findings and some improvements in statistical
significance by tweaking the regression models, but there's not been a
replication finding serious enough to force a publication retraction or serious
enough to force the resignation of an accountics scientist.
In real science, where more exacting replications really are the name of the
game, there have been many scandals over the past four decades. Nearly all top
science journals have retracted articles because independent researchers could
not exactly replicate the reported findings. And it's not all that rare to force
a real scientist to resign due to scandalous findings in replication efforts.
The most serious scandals entail faked data or even faked studies. These
types of scandals apparently have never been detected among thousands of
accountics science publications. The implication is that accountics
scientists are more honest as a group than real scientists. I guess that's
either good news or bad replicating.
Given the pressures brought to bear on accounting faculty to publish
accountics science articles, the accountics science scandal may be that
accountics science replications have never revealed a scandal --- to my
knowledge at least.
One of the most recent scandals arose when a very well-known psychologist
named Mark Hauser.
"Author on leave after Harvard inquiry Investigation of scientist’s work finds
evidence of misconduct, prompts retraction by journal," by Carolyn Y. Johnson,
The Boston Globe, August 10, 2010 ---
http://www.boston.com/news/education/higher/articles/2010/08/10/author_on_leave_after_harvard_inquiry/
Harvard University psychologist Marc Hauser — a
well-known scientist and author of the book “Moral Minds’’ — is taking a
year-long leave after a lengthy internal investigation found evidence of
scientific misconduct in his laboratory.
The findings have resulted in the retraction of an
influential study that he led. “MH accepts responsibility for the error,’’
says the retraction of the study on whether monkeys learn rules, which was
published in 2002 in the journal Cognition.
Two other journals say they have been notified of
concerns in papers on which Hauser is listed as one of the main authors.
It is unusual for a scientist as prominent as
Hauser — a popular professor and eloquent communicator of science whose work
has often been featured on television and in newspapers — to be named in an
investigation of scientific misconduct. His research focuses on the
evolutionary roots of the human mind.
In a letter Hauser wrote this year to some Harvard
colleagues, he described the inquiry as painful. The letter, which was shown
to the Globe, said that his lab has been under investigation for three years
by a Harvard committee, and that evidence of misconduct was found. He
alluded to unspecified mistakes and oversights that he had made, and said he
will be on leave for the upcoming academic year.
Continued in article
Update: Hauser resigned from Harvard in 2011 after the published
research in question was retracted by the journals.
Not only have there been no similar reported accountics science scandals
called to my attention, I'm not aware of any investigations of impropriety that
were discovered among all those "replications" claimed by Steve.
What is an Exacting Replication?
I define an exacting replication as one in which the findings are reproducible
by independent researchers using the IAPUC Gold Book standards for
reproducibility. Steve makes a big deal about time extensions when making such
exacting replications almost impossible in accountics science. He states:
By "exacting replication," you appear to mean doing
exactly what the original researcher did -- no more and no less. So if one
wishes to replicate a study conducted with data from 2000 to 2008, one had
better not extend it to 2009, as that clearly would not be "exacting." Or,
to borrow a metaphor I've used earlier, if you'd like to replicate my
assertion that it is currently 8:54 a.m., ask to borrow my watch -- you
can't look at your watch because that wouldn't be an "exacting" replication.
That's CalvinBall bull since in many of these time extensions it's also
possible to conduct an exacting replication. Richard Sansing pointed out the how
he conducted an exacting replication of the findings in Dhaliwal, Li and R.
Trezevant (2003), "Is a dividend tax penalty
incorporated into the return on a firm’s common stock?," Journal of
Accounting and Economics 35: 155-178. Although Richard and his coauthor
extend the Dhaliwal findings they first conducted an exacting replication in
their paper published in The Accounting Review 85 (May
2010): 849-875.
My quibble with Richard is mostly that conducting an exacting replication of
the Dhaliwal et al. paper was not exactly a burning (hot)
issue if nobody bothered to replicate that award winning JAE paper for seven
years.
This begs the question of why there are not more frequent and timely exacting
replications conducted in accountics science if the databases themselves are
commercially available like the CRSP, Compustat, and AuditAnalytics databases.
Exacting replications from these databases are relatively easy and cheap to
conduct. My contention here is that there's no incentive to excitedly conduct
exacting replications if the accountics journals will not even publish
commentaries about published studies. Steve and I've played CalvinBall with the
commentaries issue before. He contends that TAR editors do not prevent
commentaries from being published in TAR. The barriers to validity questioning
commentaries in TAR are the 574 referees who won't accept submitted commentaries
---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#ColdWater
Exacting replications of behavioral experiments in accountics science is more
difficult and costly because the replicators must conduct their own experiments
by collecting their own data. But it seems to me that it's no more difficult in
accountics science than in performing exacting replications that are reported in
the research literature of psychology. However, psychologists often have more
incentives to conduct exacting replications for the following reasons that I
surmise:
- Practicing psychologists are more demanding of validity tests of
research findings. Practicing accountants seem to pretty much ignore
behavioral experiments published in TAR, JAR, and JAE such that there's not
as much pressure brought to bear on validity testing of accountics science
findings. One test of practitioner lack of interest is the lack of citation
of accountics science in practitioner journals.
- Psychology researchers have more incentives to replicate experiments of
others since there are more outlets for publication credits of replication
studies, especially in psychology journals that encourage commentaries on
published research ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#TARversusJEC
My opinion remains that accountics science will never be a real science until
exacting replication of research findings become the name of the game in
accountics science. This includes exacting replications of behavioral
experiments as well as analysis of public data from CRSP, Compustat,
AuditAnalytics, and other commercial databases. Note that willingness of
accountics science authors to share their private data for replication purposes
is a very good thing (I fought for this when I was on the AAA Executive
Committee), but conducting replication studies of such data does not hold up
well under the IAPUC Gold Book.
Note, however, that lack of exacting replication and other validity testing
in general are only part of the huge problems with accountics science. The
biggest problem, in my judgment, is the way accountics scientists have
established monopoly powers over accounting doctoral programs, faculty hiring
criteria, faculty performance criteria, and pay scales. Accounting researchers
using other methodologies like case and field research become second class
faculty.
Since the odds of getting a case or field study published are so low, very
few of such studies are even submitted for publication in TAR in recent years.
Replication of these is a non-issue in TAR.
"Annual Report and Editorial Commentary for The Accounting Review,"
by Steven J. Kachelmeier The University of Texas at Austin, The
Accounting Review, November 2009, Page 2056.

There's not much hope for case, field, survey, and other non-accountics
researchers to publish in the leading research journal of the American
Accounting Association.
What went wrong with accountics research?
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
"We fervently hope that the research pendulum will soon swing back from the
narrow lines of inquiry that dominate today's leading journals to a rediscovery
of the richness of what accounting research can be. For that to occur, deans and
the current generation of academic accountants must
give it a push."
Granif and Zeff ---
http://www.trinity.edu/rjensen/TheoryTAR.htm#Appendix01
Michael H. Granof is a professor of accounting at the McCombs School of
Business at the University of Texas at Austin. Stephen A. Zeff is a
professor of accounting at the Jesse H. Jones Graduate School of Management at
Rice University.
I admit that I'm just one of those
professors heeding the Granof and Zeff call to "give it a push," but it's
hard to get accountics professors to give up their monopoly on TAR, JAR, JAE,
and in recent years Accounting Horizons. It's even harder to get them to
give up their iron monopoly clasp on North American Accountancy Doctoral
Programs ---
http://www.trinity.edu/rjensen/Theory01.htm#DoctoralPrograms
September 10, 2011 message from Bob Jensen
Hi Raza,
Please don't get me wrong. As an old accountics researcher myself, I'm
all in favor of continuing accountics research full speed ahead. The
younger mathematicians like Richard Sansing are doing it better these
days. What I'm upset about is the way the accountics science quants took
over TAR, AH, accounting faculty performance standards in R1
universities, and virtually all accounting doctoral programs in North
America.
Monopolies are not all bad --- they generally do great good they for
mankind. The problem is that monopolies shut out the competition. In the
case of accountics science, the accountics scientists have shut out
competing research methods to a point where accounting doctoral students
must write accountics science dissertations, and TAR referees will not
open the door to case studies, field studies, accounting history
studies, or commentaries critical of accountics science findings in TAR.
The sad thing is that even if we open up our doctoral programs to other
research methodologies, the students themselves may prefer accountics
science research. It's generally easier to apply regression models to
CRSP, Compustat, and Audit Analytics databases than have to go off
campus to collect data and come up with clever ideas to improve
accounting practice in ways that will amaze practitioners.
Another problem with accountics science is that this monopoly has not
created incentives for validity checking of accountics science findings.
This has prevented accountics science from being real science where
validity checking is a necessary condition for research and publication.
If TAR invited commentaries on validity testing of TAR publications, I
think there would be more replication efforts.
If TAR commenced a practitioners' forum where practitioners were
"assigned" to discuss TAR articles, perhaps there would be more
published insights into possible relevance of accountics science to the
practice of accountancy. I put "assign" in quotations since
practitioners may have to be nudged in some ways to get them to critique
accountics science articles.
There are some technical areas where practitioners have more expertise
than accountics scientists, particularly in the areas of insurance
accounting, pension accounting, goodwill impairment testing, accounting
for derivative financial instruments, hedge accounting, etc. Perhaps
these practitioner experts might even publish a "research needs" forum
in TAR such that our very bright accountics scientists would be inspired
to focus their many talents on some accountancy practice technical
problems.
My main criticism of accountics scientists is that the 600+ TAR referees
have shut down critical commentaries of their works and the recent
editors of TAR have been unimaginative when in thinking of ways to
motivate replication research, TAR article commentaries, and focus of
accountics scientists on professional practice problems.
Some ideas for improving TAR are provided at
http://www.trinity.edu/rjensen/TheoryTAR.htm
Particularly note the module on
TAR versus AMR and AMJ
Accountics Scientists Seeking Truth:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to change this
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
title:
Science Warriors' Ego Trips
(Accountics)
journal/magazine/etc.:
The Chronicle Review
publication date:
April 25, 2010
article text:
It is the
mark of an educated mind to be able to entertain a thought without
accepting it.
Aristotle"Science Warriors' Ego
Trips," by Carlin Romano, Chronicle of Higher Education's The
Chronicle Review, April 25, 2010 ---
http://chronicle.com/article/Science-Warriors-Ego-Trips/65186/
Standing up for science excites some intellectuals the way beautiful
actresses arouse Warren Beatty, or career liberals boil the blood of
Glenn Beck and Rush Limbaugh. It's visceral. The thinker of this ilk
looks in the mirror and sees Galileo bravely muttering "Eppure si
muove!" ("And yet, it moves!") while Vatican guards drag him away.
Sometimes the hero in the reflection is Voltaire sticking it to the
clerics, or Darwin triumphing against both Church and Church-going
wife. A brave champion of beleaguered science in the modern age of
pseudoscience, this Ayn Rand protagonist sarcastically derides the
benighted irrationalists and glows with a self-anointed superiority.
Who wouldn't want to feel that sense of power and rightness?
You
hear the voice regularly—along with far more sensible stuff—in the
latest of a now common genre of science patriotism, Nonsense on
Stilts: How to Tell Science From Bunk (University of Chicago Press),
by Massimo Pigliucci, a philosophy professor at the City University
of New York. Like such not-so-distant books as Idiot America, by
Charles P. Pierce (Doubleday, 2009), The Age of American Unreason,
by Susan Jacoby (Pantheon, 2008), and Denialism, by Michael Specter
(Penguin Press, 2009), it mixes eminent common sense and frequent
good reporting with a cocksure hubris utterly inappropriate to the
practice it apotheosizes.
According to Pigliucci, both Freudian psychoanalysis and Marxist
theory of history "are too broad, too flexible with regard to
observations, to actually tell us anything interesting." (That's
right—not one "interesting" thing.) The idea of intelligent design
in biology "has made no progress since its last serious articulation
by natural theologian William Paley in 1802," and the empirical
evidence for evolution is like that for "an open-and-shut murder
case."
Pigliucci offers more hero sandwiches spiced with derision and
certainty. Media coverage of science is "characterized by allegedly
serious journalists who behave like comedians." Commenting on the
highly publicized Dover, Pa., court case in which U.S. District
Judge John E. Jones III ruled that intelligent-design theory is not
science, Pigliucci labels the need for that judgment a "bizarre"
consequence of the local school board's "inane" resolution. Noting
the complaint of intelligent-design advocate William Buckingham that
an approved science textbook didn't give creationism a fair shake,
Pigliucci writes, "This is like complaining that a textbook in
astronomy is too focused on the Copernican theory of the structure
of the solar system and unfairly neglects the possibility that the
Flying Spaghetti Monster is really pulling each planet's strings,
unseen by the deluded scientists."
Is it
really? Or is it possible that the alternate view unfairly neglected
could be more like that of Harvard scientist Owen Gingerich, who
contends in God's Universe (Harvard University Press, 2006) that it
is partly statistical arguments—the extraordinary unlikelihood eons
ago of the physical conditions necessary for self-conscious
life—that support his belief in a universe "congenially designed for
the existence of intelligent, self-reflective life"? Even if we
agree that capital "I" and "D" intelligent-design of the scriptural
sort—what Gingerich himself calls "primitive scriptural
literalism"—is not scientifically credible, does that make
Gingerich's assertion, "I believe in intelligent design, lowercase i
and lowercase d," equivalent to Flying-Spaghetti-Monsterism?
Tone
matters. And sarcasm is not science.
The
problem with polemicists like Pigliucci is that a chasm has opened
up between two groups that might loosely be distinguished as
"philosophers of science" and "science warriors." Philosophers of
science, often operating under the aegis of Thomas Kuhn, recognize
that science is a diverse, social enterprise that has changed over
time, developed different methodologies in different subsciences,
and often advanced by taking putative pseudoscience seriously, as in
debunking cold fusion. The science warriors, by contrast, often
write as if our science of the moment is isomorphic with knowledge
of an objective world-in-itself—Kant be damned!—and any form of
inquiry that doesn't fit the writer's criteria of proper science
must be banished as "bunk." Pigliucci, typically, hasn't much
sympathy for radical philosophies of science. He calls the work of
Paul Feyerabend "lunacy," deems Bruno Latour "a fool," and observes
that "the great pronouncements of feminist science have fallen as
flat as the similarly empty utterances of supporters of intelligent
design."
It
doesn't have to be this way. The noble enterprise of submitting
nonscientific knowledge claims to critical scrutiny—an activity
continuous with both philosophy and science—took off in an admirable
way in the late 20th century when Paul Kurtz, of the University at
Buffalo, established the Committee for the Scientific Investigation
of Claims of the Paranormal (Csicop) in May 1976. Csicop soon after
launched the marvelous journal Skeptical Inquirer, edited for more
than 30 years by Kendrick Frazier.
Although Pigliucci himself publishes in Skeptical Inquirer, his
contributions there exhibit his signature smugness. For an antidote
to Pigliucci's overweening scientism 'tude, it's refreshing to
consult Kurtz's curtain-raising essay, "Science and the Public," in
Science Under Siege (Prometheus Books, 2009, edited by Frazier),
which gathers 30 years of the best of Skeptical Inquirer.
Kurtz's
commandment might be stated, "Don't mock or ridicule—investigate and
explain." He writes: "We attempted to make it clear that we were
interested in fair and impartial inquiry, that we were not dogmatic
or closed-minded, and that skepticism did not imply a priori
rejection of any reasonable claim. Indeed, I insisted that our
skepticism was not totalistic or nihilistic about paranormal
claims."
Kurtz
combines the ethos of both critical investigator and philosopher of
science. Describing modern science as a practice in which
"hypotheses and theories are based upon rigorous methods of
empirical investigation, experimental confirmation, and
replication," he notes: "One must be prepared to overthrow an entire
theoretical framework—and this has happened often in the history of
science ... skeptical doubt is an integral part of the method of
science, and scientists should be prepared to question received
scientific doctrines and reject them in the light of new evidence."
Considering the dodgy matters Skeptical Inquirer specializes in,
Kurtz's methodological fairness looks even more impressive. Here's
part of his own wonderful, detailed list: "Psychic claims and
predictions; parapsychology (psi, ESP, clairvoyance, telepathy,
precognition, psychokinesis); UFO visitations and abductions by
extraterrestrials (Roswell, cattle mutilations, crop circles);
monsters of the deep (the Loch Ness monster) and of the forests and
mountains (Sasquatch, or Bigfoot); mysteries of the oceans (the
Bermuda Triangle, Atlantis); cryptozoology (the search for unknown
species); ghosts, apparitions, and haunted houses (the Amityville
horror); astrology and horoscopes (Jeanne Dixon, the "Mars effect,"
the "Jupiter effect"); spoon bending (Uri Geller). ... "
Even
when investigating miracles, Kurtz explains, Csicop's intrepid
senior researcher Joe Nickell "refuses to declare a priori that any
miracle claim is false." Instead, he conducts "an on-site inquest
into the facts surrounding the case." That is, instead of declaring,
"Nonsense on stilts!" he gets cracking.
Pigliucci, alas, allows his animus against the nonscientific to pull
him away from sensitive distinctions among various sciences to
sloppy arguments one didn't see in such earlier works of science
patriotism as Carl Sagan's The Demon-Haunted World: Science as a
Candle in the Dark (Random House, 1995). Indeed, he probably sets a
world record for misuse of the word "fallacy."
To his
credit, Pigliucci at times acknowledges the nondogmatic spine of
science. He concedes that "science is characterized by a fuzzy
borderline with other types of inquiry that may or may not one day
become sciences." Science, he admits, "actually refers to a rather
heterogeneous family of activities, not to a single and universal
method." He rightly warns that some pseudoscience—for example,
denial of HIV-AIDS causation—is dangerous and terrible.
But at
other points, Pigliucci ferociously attacks opponents like the most
unreflective science fanatic, as if he belongs to some Tea Party
offshoot of the Royal Society. He dismisses Feyerabend's view that
"science is a religion" as simply "preposterous," even though he
elsewhere admits that "methodological naturalism"—the commitment of
all scientists to reject "supernatural" explanations—is itself not
an empirically verifiable principle or fact, but rather an almost
Kantian precondition of scientific knowledge. An article of faith,
some cold-eyed Feyerabend fans might say.
In an
even greater disservice, Pigliucci repeatedly suggests that
intelligent-design thinkers must want "supernatural explanations
reintroduced into science," when that's not logically required. He
writes, "ID is not a scientific theory at all because there is no
empirical observation that can possibly contradict it. Anything we
observe in nature could, in principle, be attributed to an
unspecified intelligent designer who works in mysterious ways." But
earlier in the book, he correctly argues against Karl Popper that
susceptibility to falsification cannot be the sole criterion of
science, because science also confirms. It is, in principle,
possible that an empirical observation could confirm intelligent
design—i.e., that magic moment when the ultimate UFO lands with
representatives of the intergalactic society that planted early life
here, and we accept their evidence that they did it. The point is
not that this is remotely likely. It's that the possibility is not
irrational, just as provocative science fiction is not irrational.
Pigliucci similarly derides religious explanations on logical
grounds when he should be content with rejecting such explanations
as unproven. "As long as we do not venture to make hypotheses about
who the designer is and why and how she operates," he writes, "there
are no empirical constraints on the 'theory' at all. Anything goes,
and therefore nothing holds, because a theory that 'explains'
everything really explains nothing."
Here,
Pigliucci again mixes up what's likely or provable with what's
logically possible or rational. The creation stories of traditional
religions and scriptures do, in effect, offer hypotheses, or claims,
about who the designer is—e.g., see the Bible. And believers
sometimes put forth the existence of scriptures (think of them as
"reports") and a centuries-long chain of believers in them as a form
of empirical evidence. Far from explaining nothing because it
explains everything, such an explanation explains a lot by
explaining everything. It just doesn't explain it convincingly to a
scientist with other evidentiary standards.
A
sensible person can side with scientists on what's true, but not
with Pigliucci on what's rational and possible. Pigliucci
occasionally recognizes that. Late in his book, he concedes that
"nonscientific claims may be true and still not qualify as science."
But if that's so, and we care about truth, why exalt science to the
degree he does? If there's really a heaven, and science can't (yet?)
detect it, so much the worse for science.
As an
epigram to his chapter titled "From Superstition to Natural
Philosophy," Pigliucci quotes a line from Aristotle: "It is the mark
of an educated mind to be able to entertain a thought without
accepting it." Science warriors such as Pigliucci, or Michael Ruse
in his recent clash with other philosophers in these pages, should
reflect on a related modern sense of "entertain." One does not
entertain a guest by mocking, deriding, and abusing the guest.
Similarly, one does not entertain a thought or approach to knowledge
by ridiculing it.
Long
live Skeptical Inquirer! But can we deep-six the egomania and
unearned arrogance of the science patriots? As Descartes, that
immortal hero of scientists and skeptics everywhere, pointed out,
true skepticism, like true charity, begins at home.
Carlin Romano, critic at large
for The Chronicle Review, teaches philosophy and media theory at the
University of Pennsylvania.
Jensen Comment
One way to distinguish my conceptualization of science from pseudo
science is that science relentlessly seeks to replicate and validate
purported discoveries, especially after the discoveries have been made
public in scientific journals ---
http://faculty.trinity.edu/rjensen/TheoryTar.htm
Science encourages conjecture but doggedly seeks truth about that
conjecture. Pseudo science is less concerned about validating purported
discoveries than it is about publishing new conjectures that are largely
ignored by other pseudo scientists.
Accountics Scientists Seeking
Truth:
"Frankly, Scarlett, after I get a hit for my resume in The
Accounting Review I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to
change this
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
TAR Versus JEC
Nearly all lab experiments or other empirical studies published in
the
Journal of Electroanalytical Chemistry (JEC) are replicated. I
mention this journal because one of its famous published studies on cold fusion
in 1989 could not (at least not yet) be replicated. The inability of any
researchers worldwide to replicate that study destroyed the stellar reputations
of the original authors
Stanley Pons
and
Martin Fleischmann.
Others who were loose with their facts:
former Harvard researcher John Darsee (faked cardiac research); radiologist
Rober Slutsky (altered data; lied); obstetrician William McBride (changed
data, ruined stellar reputation), and physicist J. Hendrik Schon (faked
breakthroughs in molecular electronics).
Discover Magazine, December 2010, Page 43
Question
Has an accountics researcher ever retracted a claim?
Among the thousands of published accountics studies some author must be aware,
maybe in retrospect, of a false claim?
Perhaps we'll never know!
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
It's been a bad year for Harvard University science retractions
"3 Harvard Researchers Retract a Claim on the Aging of Stem Cells," by Nicolas
Wade, The New York Times, October 14, 2010 ---
http://www.nytimes.com/2010/10/15/science/15retract.html?hpw
Harvard researchers have retracted a far-reaching
claim they made in January that the aging of stem cells might be reversible.
The retraction was published in Thursday’s issue of
Nature and is signed by the senior author, Amy J. Wagers, and two others.
They say that serious concerns, which they did not specify, have undermined
their confidence in the original report.
A fourth author, Shane R. Mayack, maintained that
the results were still valid and refused to sign the retraction. All four
scientists are affiliated with Harvard University and the Joslin Diabetes
Center, a Harvard affiliate.
The original article, published by Nature in
January, asserted that there was a rejuvenating factor in the blood of young
mice that could reverse symptoms of aging in the blood-forming stem cells of
elderly mice. The therapeutic use of such a factor would be “to extend the
youthful function of the aging blood system,” Dr. Wagers and her colleagues
wrote.
The article states that Dr. Wagers designed and
interpreted the experiments and that Dr. Mayack, a post-doctoral student,
performed and analyzed them.
Dr. Wagers issued a statement saying that she had
immediately brought the disturbing information to the attention of Nature
and the Harvard Medical School, and that she was working to repeat the
experiments. She said by e-mail that the information came to light in the
course of studies in her laboratory, prompting her to re-examine the
reported data.
Press officers at Harvard Medical School, Joslin
and the Harvard Stem Cell Institute said the matter was being reviewed but
declined to comment further. Rachel Twinn, a Nature press officer, said she
could not comment.
Dr. Wagers has expressed her doubts about a second
paper co-authored with Dr. Mayack and published in the journal Blood in
August 2008. In a statement issued today, the journal said it was posting a
“Notice of Concern” about the paper pending further review.
Continued in article
Natural scientists in general are motivated to conduct replication studies in
large measure because their commentaries or abstracts on their
research, including results of replication testing, are widely published in top
science journals. Replication publications, however may be limited to short
commentaries or published abstracts. that are refereed. In any case,
replicators get publication credits in the academy. Natural scientists deem
integrity and accuracy to be too important to play down by not providing some
sort of publication outlet.
There are virtually no published reports of replications of experiments
published in The
Accounting Review (TAR), although nearly all of TAR's articles in the
last 25 years, aside from strictly mathematics analytical papers, are lab
experiments or other empirical studies. There are occasional extensions of
capital markets (archival database) empiricism, but it's not common in those
studies to report independent replication outcomes per se. Since the odds of
getting a case or field study published are so low, very few of such studies are
even submitted for publication in TAR in recent years. Replication of these is a
non-issue in TAR.
"Annual Report and Editorial Commentary for The Accounting Review,"
by Steven J. Kachelmeier The University of Texas at Austin, The
Accounting Review, November 2009, Page 2056.

Table 4 in Heck and Jensen (2007) identifies Cornell's Mark W. Nelson as
the accounting scientist having the highest number (eight) of studies
published in TAR in the decade 1986-2005 ---
“An Analysis of the Evolution of Research Contributions by The Accounting
Review: 1926-2005,” (with Jean Heck), Accounting Historians Journal,
Volume 34, No. 2, December 2007, pp. 109-142.
Mark Nelson tends to publish excellent accountancy lab experiments, but I do
not know of any of his experiments or other TAR-reported that have ever
been independently replicated. I suspect he wishes that all of his experiments
are replicated because, like any researcher, he's fallible on occasion.
Replication would also draw greater attention to his fine work. The current TAR
editor will not publish commentaries, including abstracts reporting
successful replication studies. My contention is that accounting science
researchers have been discouraged from conducting replication studies of TAR
research because TAR will not publish commentaries/dialogs about papers
published in TAR. They may also be discouraged from replication because the
hypotheses themselves are uninspiring and uninteresting, but I will not go into
that in this message.
November 22, 2011 reply from Steve Kachelmeier
First, Table 3 in the 2011 Annual Report
(submissions and acceptances by area) only includes manuscripts that went
through the regular blind reviewing process. That is, it excludes invited
presidential scholar lectures, editorials, book reviews, etc. So "other"
means "other regular submissions."
Second, you are correct Bob that "other" continues
to represent a small percentage of the total acceptances. But "other" is
also a very small percentage of the total submissions. As I state explicitly
in the report, Table 3 does not prove that TAR is sufficienty diverse. It
does, however, provide evidence that TAR acceptances by topical area (or by
method) are nearly identically proportional to TAR submissions by topical
area (or by method).
Third, for a great example of a recently published
TAR study with substantial historical content, see Madsen's analysis of the
historical development of standardization in accounting that we published in
in the September 2011 issue. I conditionally accepted Madsen's submission in
the first round, backed by favorable reports from two reviewers with
expertise in accounting history and standardization.
Take care,
Steve
November 23, 2011 reply from Bob Jensen
Hi Steve,
Thank you for the clarification.
Interestingly, Madsen's September 2011 historical study (which came out
after your report's May 2011 cutoff date) is a heavy accountics science
paper with a historical focus.
It would be interesting to whether such a paper would've been accepted by
TAR referees without the factor (actually principal components analysis).
Personally, I doubt any history paper would be accepted without equations
and quantitative analysis. In the case of Madsen's paper, if I were a
referee I would probably challenge the robustness of the principal
components and loadings ---
http://en.wikipedia.org/wiki/Principle_components_analysis
Actually factor analysis in general like nonlinear multiple regression and
adaptive versions thereof suffer greatly from lack of robustness. Sometimes
quantitative models gild the lily to a fault.
Bob Kaplan's Presidential Scholar historical study was published, but
this was not subjected to the usual TAR refereeing process.
The History of The Accounting Review paper written by Jean Heck and Bob
Jensen which won a best paper award from the Accounting Historians Journal
was initially flatly rejected by TAR. I was never quite certain if the main
reason was that it did not contain equations or if the main reason was that
it was critical of TAR editorship and refereeing. In any case it was flatly
rejected by TAR, including a rejection by one referee who refused to put
reasons in writing for feed\back to Jean and me.
“An Analysis of the Evolution of Research Contributions by The
Accounting Review: 1926-2005,” (with Jean Heck), Accounting
Historians Journal, Volume 34, No. 2, December 2007, pp. 109-142.
I would argue that accounting history papers, normative methods papers,
and scholarly commentary papers (like Bob Kaplan's plenary address) are not
submitted to TAR because of the general perception among the AAA membership
that such submissions do not have a snowball's chance in Hell of being
accepted unless they are also accountics science papers.
It's a waste of time and money to submit papers to TAR that are not
accountics science papers.
In spite of differences of opinion, I do thank you for the years of
blood, sweat, and tears that you gave us as Senior Editor of TAR.
And I wish you and all U.S. subscribers to the AECM a very Happy
Thanksgiving. Special thanks to Barry and Julie and the AAA staff for
keeping the AECM listserv up and running.
Respectfully,
Bob Jensen
Linda Bamber is a former editor of TAR and was greatly aided in this
effort by her husband.
The BAMBERs Illustration
Years back I
was responsible for an afternoon workshop and enjoyed the privilege to sit
in on the tail end of the morning workshop on journal editing conducted by
Linda and Mike Bamber. At the time Linda was Senior Editor of The
Accounting Review.
I have great respect for both Linda and Mike, and my criticism here applies
to the editorial policies of the American Accounting Association and other
publishers of top accounting research journals. In no way am I criticizing
Linda and Mike for the huge volunteer effort that both of them are giving to
The Accounting Review (TAR).
Mike’s presentation focused upon a recent publication in TAR based upon a
behavioral experiment using 25 auditors. Mike greatly praised the research
and the article’s write up. My question afterwards was whether TAR would
accept a replication study or publish and abstract of a replication that
confirmed the outcomes published original TAR publication. The answer was
absolutely NO! One subsequent TAR
editor even told me it would be confusing of the replication contradicted
the original study.
Now think of the absurdity of the above policy on publishing at least
commentary abstracts of replications. Scientists would shake their heads and
snicker at accounting research. No scientific experiment is considered
worthy until it has been independently replicated multiple times. Science
professors thus have an advantage over accounting professors in playing the
“journal hits” game for promotion and tenure, because their top journals
will publish replications. Scientists are constantly seeking truth and
challenging whether it’s really the truth.
Thus I come to my main point that is far beyond the co-authorship issue that
stimulated this message. My main point is that in academic accounting
research publishing, we are more concerned with the cleverness of the
research than in the “truth” of the findings themselves.
Have I become too much of a cynic in my old age? Except in a limited number
of capital markets events studies, have accounting researchers published
replications due to genuine interest by the public in whether the earlier
findings hold true? Or do we hold the findings as self-evident on the basis
of one published study with as few as 25 experimental participants? Or is
there any interest in the findings themselves to the general public apart
from interest in the methods and techniques of interest to researchers
themselves?
Accounting Research Versus Social Science Research
It is more common in the social sciences, relative to natural
sciences, to publish studies that are unreplicated. However, lack of replication
is often addressed more openly the articles themselves and in and stated as a
limitation relative to business and accounting empirical research.
"New Center Hopes to Clean Up Sloppy Science and Bogus Research," by
Tom Bartlett, Chronicle of Higher Education, March 6, 2013 ---
http://chronicle.com/article/New-Center-Hopes-to-Clean-Up/137683/
Something is wrong with science, or at least with
how science is often done. Flashy research in prestigious journals later
proves to be bogus. Researchers have built careers on findings that are
dubious or even turn out to be fraudulent. Much of the conversation about
that trend has focused on flaws in social psychology, but the problem is not
confined to a single field. If you keep up with the latest retractions and
scandals, it's hard not to wonder how much research is trustworthy.
But Tuesday might just be a turning point. A new
organization, called the
Center for Open
Science, is opening its doors in an attempt to
harness and focus a growing movement to clean up science. The center's
organizers don't put it quite like that; they say the center aims to "build
tools to improve the scientific process and promote accurate, transparent
findings in scientific research." Now, anybody with an idea and some
chutzpah can start a center. But what makes this effort promising is that it
has some real money behind it: The center has been given $5.25-million by
the Laura and John Arnold Foundation to help get started.
It's also promising because a co-director of the
center is Brian Nosek, an associate professor of psychology at the
University of Virginia (the other director is a Virginia graduate student,
Jeffrey Spies). Mr. Nosek is the force behind the
Reproducibility Project, an effort to replicate
every study from three psychology journals published in 2008, in an attempt
to gauge how much published research might actually be baseless.
Mr. Nosek is one of a number of strong voices in
psychology arguing for more transparency and accountability. But up until
now there hasn't been an organization solely devoted to solving those
problems. "This gives real backing to show that this is serious and that we
can really put the resources behind it to do it right," Mr. Nosek said.
"This whole movement, if it is a movement, has gathered sufficient steam to
actually come to this."
'Rejigger Those
Incentives'
So what exactly will the center do? Some of that
grant money will go to finance the Reproducibility Project and to further
develop the
Open Science
Framework, which already allows scientists to
share and store findings and hypotheses. More openness is intended to
combat, among other things, the so-called file-drawer effect, in which
scientists publish their successful experiments while neglecting to mention
their multiple flubbed attempts, giving a false impression of a finding's
robustness.
The center hopes to encourage scientists to
"register" their hypotheses before they carry out experiments, a procedure
that should help keep them honest. And the center is working with journals,
like Perspectives on Psychological Science, to publish the results
of experiments even if they don't pan out the way the researchers hoped.
Scientists are "reinforced for publishing, not for getting it right in the
current incentives," Mr. Nosek said. "We're working to rejigger those
incentives."
Mr. Nosek and his compatriots didn't solicit funds
for the center. Foundations have been knocking on their door. The Arnold
Foundation sought out Mr. Nosek because of a concern about whether the
research that's used to make policy decisions is really reliable.
"It doesn't benefit anyone if the publications that
get out there are in any way skewed toward the sexy results that might be a
fluke, as opposed to the rigorous replication and testing of ideas," said
Stuart Buck, the foundation's director of research.
Other foundations have been calling too. With more
grants likely to be on the way, Mr. Nosek thinks the center will have
$8-million to $10-million in commitments before writing a grant proposal.
The goal is an annual budget of $3-million. "There are other possibilities
that we might be able to grow more dramatically than that," Mr. Nosek said.
"It feels like it's raining money. It's just ridiculous how much interest
there is in these issues."
Continued in article
Jensen Comment
Accountics scientists set a high bar because they replicate virtually all their
published research.
Yeah Right!
Accountics science journals like The Accounting Review have referees that
discourage replications by refusing to publish them. They won't even publish
commentaries that question the outcomes ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Accountics science researchers won't even discuss their work on the AAA
Commons ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Robustness Issues
Robust Statistics ---
http://en.wikipedia.org/wiki/Robust_statistics
"ECONOMICS AS ROBUSTNESS ANALYSIS," by Jaakko Kuorikoski, Aki Lehtinen
and Caterina Marchionn, he University of Pittsburgh, 2007 ---
http://philsci-archive.pitt.edu/3550/1/econrobu.pdf
ECONOMICS AS ROBUSTNESS ANALYSIS
Jaakko Kuorikoski, Aki Lehtinen and Caterina
Marchionni
25.9. 2007
1. Introduction
.....................................................................................................................
1
2. Making sense of
robustness............................................................................................
4
3. Robustness in
economics................................................................................................
6
4. The epistemic import of robustness
analysis.................................................................
8
5. An illustration: geographical economics models
........................................................ 13
6. Independence of
derivations.........................................................................................
18
7. Economics as a Babylonian science
............................................................................
23
8. Conclusions
...................................................................................................................
1.Introduction
Modern economic analysis consists largely in building abstract
mathematical models and deriving familiar results from ever sparser
modeling assumptions is considered as a theoretical contribution. Why do
economists spend so much time and effort in deriving same old results
from slightly different assumptions rather than trying to come up with
new and exciting hypotheses? We claim that this is because the process
of refining economic models is essentially a form of robustness
analysis. The robustness of modeling results with respect to particular
modeling assumptions, parameter values or initial conditions plays a
crucial role for modeling in economics for two reasons. First, economic
models are difficult to subject to straightforward empirical tests for
various reasons. Second, the very nature of economic phenomena provides
little hope of ever making the modeling assumptions completely
realistic. Robustness analysis is therefore a natural methodological
strategy for economists because economic models are based on various
idealizations and abstractions which make at least some of their
assumptions unrealistic (Wimsatt 1987; 1994a; 1994b; Mäki 2000; Weisberg
2006b). The importance of robustness considerations in economics
ultimately forces us to reconsider many commonly held views on the
function and logical structure of economic theory.
Given that much of economic research praxis can
be characterized as robustness analysis, it is somewhat surprising that
philosophers of economics have only recently become interested in
robustness. William Wimsatt has extensively discussed robustness
analysis, which he considers in general terms as triangulation via
independent ways of determination . According to Wimsatt, fairly varied
processes or activities count as ways of determination: measurement,
observation, experimentation, mathematical derivation etc. all qualify.
Many ostensibly different epistemic activities are thus classified as
robustness analysis. In a recent paper, James Woodward (2006)
distinguishes four notions of robustness. The first three are all
species of robustness as similarity of the result under different forms
of determination. Inferential robustness refers to the idea that there
are different degrees to which inference from some given data may depend
on various auxiliary assumptions, and derivational robustness to whether
a given theoretical result depends on the different modelling
assumptions. The difference between the two is that the former concerns
derivation from data, and the latter derivation from a set of
theoretical assumptions. Measurement robustness means triangulation of a
quantity or a value by (causally) different means of measurement.
Inferential, derivational and measurement robustness differ with respect
to the method of determination and the goals of the corresponding
robustness analysis. Causal robustness, on the other hand, is a
categorically different notion because it concerns causal dependencies
in the world, and it should not be confused with the epistemic notion of
robustness under different ways of determination.
In Woodward’s typology, the kind of theoretical
model-refinement that is so common in economics constitutes a form of
derivational robustness analysis. However, if Woodward (2006) and Nancy
Cartwright (1991) are right in claiming that derivational robustness
does not provide any epistemic credence to the conclusions, much of
theoretical model- building in economics should be regarded as
epistemically worthless. We take issue with this position by developing
Wimsatt’s (1981) account of robustness analysis as triangulation via
independent ways of determination. Obviously, derivational robustness in
economic models cannot be a matter of entirely independent ways of
derivation, because the different models used to assess robustness
usually share many assumptions. Independence of a result with respect to
modelling assumptions nonetheless carries epistemic weight by supplying
evidence that the result is not an artefact of particular idealizing
modelling assumptions. We will argue that although robustness analysis,
understood as systematic examination of derivational robustness, is not
an empirical confirmation procedure in any straightforward sense,
demonstrating that a modelling result is robust does carry epistemic
weight by guarding against error and by helping to assess the relative
importance of various parts of theoretical models (cf. Weisberg 2006b).
While we agree with Woodward (2006) that arguments presented in favour
of one kind of robustness do not automatically apply to other kinds of
robustness, we think that the epistemic gain from robustness derives
from similar considerations in many instances of different kinds of
robustness.
In contrast to physics, economic theory itself
does not tell which idealizations are truly fatal or crucial for the
modeling result and which are not. Economists often proceed on a
preliminary hypothesis or an intuitive hunch that there is some core
causal mechanism that ought to be modeled realistically. Turning such
intuitions into a tractable model requires making various unrealistic
assumptions concerning other issues. Some of these assumptions are
considered or hoped to be unimportant, again on intuitive grounds. Such
assumptions have been examined in economic methodology using various
closely related terms such as Musgrave’s (1981) heuristic assumptions,
Mäki’s (2000) early step assumptions, Hindriks’ (2006) tractability
assumptions and Alexandrova’s (2006) derivational facilitators. We will
examine the relationship between such assumptions and robustness in
economic model-building by way of discussing a case: geographical
economics. We will show that an important way in which economists try to
guard against errors in modeling is to see whether the model’s
conclusions remain the same if some auxiliary assumptions, which are
hoped not to affect those conclusions, are changed. The case also
demonstrates that although the epistemological functions of guarding
against error and securing claims concerning the relative importance of
various assumptions are somewhat different, they are often closely
intertwined in the process of analyzing the robustness of some modeling
result.
. . .
8. Conclusions
The practice of economic theorizing largely consists of building models with
slightly different assumptions yielding familiar results. We have argued
that this practice makes sense when seen as derivational robustness
analysis. Robustness analysis is a sensible epistemic strategy in situations
where we know that our assumptions and inferences are fallible, but not in
what situations and in what way. Derivational robustness analysis guards
against errors in theorizing when the problematic parts of the ways of
determination, i.e. models, are independent of each other. In economics in
particular, proving robust theorems from different models with diverse
unrealistic assumptions helps us to evaluate what results correspond to
important economic phenomena and what are merely artefacts of particular
auxiliary assumptions. We have addressed Orzack and Sober’s criticism
against robustness as an epistemically relevant feature by showing that
their formulation of the epistemic situation in which robustness analysis is
useful is misleading. We have also shown that their argument actually shows
how robustness considerations are necessary for evaluating what a given
piece of data can support. We have also responded to Cartwright’s criticism
by showing that it relies on an untenable hope of a completely true economic
model.
Viewing economic model building as robustness
analysis also helps to make sense of the role of the rationality axioms that
apparently provide the basis of the whole enterprise. Instead of the
traditional Euclidian view of the structure of economic theory, we propose
that economics should be approached as a Babylonian science, where the
epistemically secure parts are the robust theorems and the axioms only form
what Boyd and Richerson call a generalized sample theory, whose the role is
to help organize further modelling work and facilitate communication between
specialists.
Jensen Comment
As I've mentioned before I spent a goodly proportion of my time for two years in
a think tank trying to invent adaptive regression and cluster analysis models.
In every case the main reasons for my failures were lack of robustness. In
particular, if any two models feeding in predictor variables w, x, y, and z
generated different outcomes that were not robust in terms of the time ordering
of the variables feeding into the algorithms. This made the results dependent of
dynamic programming which has rarely been noted for computing practicality ---
http://en.wikipedia.org/wiki/Dynamic_programming
Appeal for a "Daisy Chain of Replication"
"Nobel laureate challenges psychologists to clean up their act:
Social-priming research needs “daisy chain” of replication," by Ed Yong,
Nature, October 3, 2012 ---
http://www.nature.com/news/nobel-laureate-challenges-psychologists-to-clean-up-their-act-1.11535
Nobel prize-winner Daniel Kahneman has issued a
strongly worded call to one group of psychologists to restore the
credibility of their field by creating a replication ring to check each
others’ results.
Kahneman, a psychologist at Princeton University in
New Jersey, addressed his
open e-mail to researchers who work on social
priming, the study of how subtle cues can unconsciously influence our
thoughts or behaviour. For example, volunteers might walk more slowly down a
corridor after seeing words related to old age1,
or fare better in general-knowledge tests after writing down the attributes
of a typical professor2.
Such tests are widely used in psychology, and
Kahneman counts himself as a “general believer” in priming effects. But in
his e-mail, seen by Nature, he writes that there is a “train wreck
looming” for the field, due to a “storm of doubt” about the robustness of
priming results.
Under fire
This scepticism has been fed by failed attempts to
replicate classic priming studies, increasing concerns about replicability
in psychology more broadly (see 'Bad
Copy'), and the exposure of fraudulent social
psychologists such as Diederik Stapel, Dirk Smeesters and Lawrence Sanna,
who used priming techniques in their work.
“For all these reasons, right or wrong, your field
is now the poster child for doubts about the integrity of psychological
research,” Kahneman writes. “I believe that you should collectively do
something about this mess.”
Kahneman’s chief concern is that graduate students
who have conducted priming research may find it difficult to get jobs after
being associated with a field that is being visibly questioned.
“Kahneman is a hard man to ignore. I suspect that
everybody who got a message from him read it immediately,” says Brian Nosek,
a social psychologist at the University of Virginia in Charlottesville.David
Funder, at the University of California, Riverside, and president-elect of
the Society for Personality and Social Psychology, worries that the debate
about priming has descended into angry defensiveness rather than a
scientific discussion about data. “I think the e-mail hits exactly the right
tone,” he says. “If this doesn’t work, I don’t know what will.”
Hal Pashler, a cognitive psychologist at the
University of California, San Diego, says that several groups, including his
own, have already tried to replicate well-known social-priming findings, but
have not been able to reproduce any of the effects. “These are quite simple
experiments and the replication attempts are well powered, so it is all very
puzzling. The field needs to get to the bottom of this, and the quicker the
better.”
Chain of replication
To address this problem, Kahneman recommends that
established social psychologists set up a “daisy chain” of replications.
Each lab would try to repeat a priming effect demonstrated by its neighbour,
supervised by someone from the replicated lab. Both parties would record
every detail of the methods, commit beforehand to publish the results, and
make all data openly available.
Kahneman thinks that such collaborations are
necessary because priming effects are subtle, and could be undermined by
small experimental changes.
Norbert Schwarz, a social psychologist at the
University of Michigan in Ann Arbor who received the e-mail, says that
priming studies attract sceptical attention because their results are often
surprising, not necessarily because they are scientifically flawed.. “There
is no empirical evidence that work in this area is more or less replicable
than work in other areas,” he says, although the “iconic status” of
individual findings has distracted from a larger body of supportive
evidence.
“You can think of this as psychology’s version of
the climate-change debate,” says Schwarz. “The consensus of the vast
majority of psychologists closely familiar with work in this area gets
drowned out by claims of a few persistent priming sceptics.”
Still, Schwarz broadly supports Kahneman’s
suggestion. “I will participate in such a daisy-chain if the field decides
that it is something that should be implemented,” says Schwarz, but not if
it is “merely directed at one single area of research”.
Continued in article
The lack of validation is an enormous problem in accountics science, but the
saving grace is that nobody much cares
574 Shields Against Validity Challenges in Plato's Cave ---
See Below
Why Even Renowned Scientists Need to Have Their Research Independently
Replicated
"Author on leave after Harvard inquiry Investigation of scientist’s work
finds evidence of misconduct, prompts retraction by journal," by Carolyn Y.
Johnson, The Boston Globe, August 10, 2010 ---
http://www.boston.com/news/education/higher/articles/2010/08/10/author_on_leave_after_harvard_inquiry/
Harvard University psychologist Marc Hauser — a
well-known scientist and author of the book “Moral Minds’’ — is taking a
year-long leave after a lengthy internal investigation found evidence of
scientific misconduct in his laboratory.
The findings have resulted in the retraction of an
influential study that he led. “MH accepts responsibility for the error,’’
says the retraction of the study on whether monkeys learn rules, which was
published in 2002 in the journal Cognition.
Two other journals say they have been notified of
concerns in papers on which Hauser is listed as one of the main authors.
It is unusual for a scientist as prominent as
Hauser — a popular professor and eloquent communicator of science whose work
has often been featured on television and in newspapers — to be named in an
investigation of scientific misconduct. His research focuses on the
evolutionary roots of the human mind.
In a letter Hauser wrote this year to some Harvard
colleagues, he described the inquiry as painful. The letter, which was shown
to the Globe, said that his lab has been under investigation for three years
by a Harvard committee, and that evidence of misconduct was found. He
alluded to unspecified mistakes and oversights that he had made, and said he
will be on leave for the upcoming academic year.
In an e-mail yesterday, Hauser, 50, referred
questions to Harvard. Harvard spokesman Jeff Neal declined to comment on
Hauser’s case, saying in an e-mail, “Reviews of faculty conduct are
considered confidential.’’
“Speaking in general,’’ he wrote, “we follow a well
defined and extensive review process. In cases where we find misconduct has
occurred, we report, as appropriate, to external agencies (e.g., government
funding agencies) and correct any affected scholarly record.’’
Much remains unclear, including why the
investigation took so long, the specifics of the misconduct, and whether
Hauser’s leave is a punishment for his actions.
The retraction, submitted by Hauser and two
co-authors, is to be published in a future issue of Cognition, according to
the editor. It says that, “An internal examination at Harvard University . .
. found that the data do not support the reported findings. We therefore are
retracting this article.’’
The paper tested cotton-top tamarin monkeys’
ability to learn generalized patterns, an ability that human infants had
been found to have, and that may be critical for learning language. The
paper found that the monkeys were able to learn patterns, suggesting that
this was not the critical cognitive building block that explains humans’
ability to learn language. In doing such experiments, researchers videotape
the animals to analyze each trial and provide a record of their raw data.
The work was funded by Harvard’s Mind, Brain, and
Behavior program, the National Science Foundation, and the National
Institutes of Health. Government spokeswomen said they could not confirm or
deny whether an investigation was underway.
The findings have resulted in the retraction of an
influential study that he led. “MH accepts responsibility for the error,’’
says the retraction of the study on whether monkeys learn rules, which was
published in 2002 in the journal Cognition.
Two other journals say they have been notified of
concerns in papers on which Hauser is listed as one of the main authors.
It is unusual for a scientist as prominent as
Hauser — a popular professor and eloquent communicator of science whose work
has often been featured on television and in newspapers — to be named in an
investigation of scientific misconduct. His research focuses on the
evolutionary roots of the human mind.
In a letter Hauser wrote this year to some Harvard
colleagues, he described the inquiry as painful. The letter, which was shown
to the Globe, said that his lab has been under investigation for three years
by a Harvard committee, and that evidence of misconduct was found. He
alluded to unspecified mistakes and oversights that he had made, and said he
will be on leave for the upcoming academic year.
In an e-mail yesterday, Hauser, 50, referred
questions to Harvard. Harvard spokesman Jeff Neal declined to comment on
Hauser’s case, saying in an e-mail, “Reviews of faculty conduct are
considered confidential.’’
“Speaking in general,’’ he wrote, “we follow a well
defined and extensive review process. In cases where we find misconduct has
occurred, we report, as appropriate, to external agencies (e.g., government
funding agencies) and correct any affected scholarly record.’’
Much remains unclear, including why the
investigation took so long, the specifics of the misconduct, and whether
Hauser’s leave is a punishment for his actions.
The retraction, submitted by Hauser and two
co-authors, is to be published in a future issue of Cognition, according to
the editor. It says that, “An internal examination at Harvard University . .
. found that the data do not support the reported findings. We therefore are
retracting this article.’’
The paper tested cotton-top tamarin monkeys’
ability to learn generalized patterns, an ability that human infants had
been found to have, and that may be critical for learning language. The
paper found that the monkeys were able to learn patterns, suggesting that
this was not the critical cognitive building block that explains humans’
ability to learn language. In doing such experiments, researchers videotape
the animals to analyze each trial and provide a record of their raw data.
The work was funded by Harvard’s Mind, Brain, and
Behavior program, the National Science Foundation, and the National
Institutes of Health. Government spokeswomen said they could not confirm or
deny whether an investigation was underway.
Gary Marcus, a psychology professor at New York
University and one of the co-authors of the paper, said he drafted the
introduction and conclusions of the paper, based on data that Hauser
collected and analyzed.
“Professor Hauser alerted me that he was concerned
about the nature of the data, and suggested that there were problems with
the videotape record of the study,’’ Marcus wrote in an e-mail. “I never
actually saw the raw data, just his summaries, so I can’t speak to the exact
nature of what went wrong.’’
The investigation also raised questions about two
other papers co-authored by Hauser. The journal Proceedings of the Royal
Society B published a correction last month to a 2007 study. The correction,
published after the British journal was notified of the Harvard
investigation, said video records and field notes of one of the co-authors
were incomplete. Hauser and a colleague redid the three main experiments and
the new findings were the same as in the original paper.
Science, a top journal, was notified of the Harvard
investigation in late June and told that questions about record-keeping had
been raised about a 2007 paper in which Hauser is the senior author,
according to Ginger Pinholster, a journal spokeswoman. She said Science has
requested Harvard’s report of its investigation and will “move with utmost
efficiency in light of the seriousness of issues of this type.’’
Colleagues of Hauser’s at Harvard and other
universities have been aware for some time that questions had been raised
about some of his research, and they say they are troubled by the
investigation and forthcoming retraction in Cognition.
“This retraction creates a quandary for those of us
in the field about whether other results are to be trusted as well,
especially since there are other papers currently being reconsidered by
other journals as well,’’ Michael Tomasello, co-director of the Max Planck
Institute for Evolutionary Anthropology in Leipzig, Germany, said in an
e-mail. “If scientists can’t trust published papers, the whole process
breaks down.’’
This isn’t the first time Hauser’s work has been
challenged.
In 1995, he was the lead author of a paper in the
Proceedings of the National Academy of Sciences that looked at whether
cotton-top tamarins are able to recognize themselves in a mirror.
Self-recognition was something that set humans and other primates, such as
chimpanzees and orangutans, apart from other animals, and no one had shown
that monkeys had this ability.
Gordon G. Gallup Jr., a professor of psychology at
State University of New York at Albany, questioned the results and requested
videotapes that Hauser had made of the experiment.
“When I played the videotapes, there was not a
thread of compelling evidence — scientific or otherwise — that any of the
tamarins had learned to correctly decipher mirrored information about
themselves,’’ Gallup said in an interview.
In 1997, he co-authored a critique of the original
paper, and Hauser and a co-author responded with a defense of the work.
In 2001, in a study in the American Journal of
Primatology, Hauser and colleagues reported that they had failed to
replicate the results of the previous study. The original paper has never
been retracted or corrected.
Continued in article
“There is a difference between breaking the
rules and breaking the most sacred of all rules,” said Jonathan Haidt, a moral
psychologist at the University of Virginia. The failure to have performed a
reported control experiment would be “a very serious and perhaps unforgivable
offense,” Dr. Haidt said.
"Harvard Researcher May Have Fabricated Data," by Nicholas Wace,
The New York Times, August 27, 2010 ---
http://www.nytimes.com/2010/08/28/science/28harvard.html?_r=1&hpw
Harvard authorities have made available information
suggesting that Marc Hauser, a star researcher who was put on leave this
month, may have fabricated data in a 2002 paper.
“Given the published design of the experiment, my
conclusion is that the control condition was fabricated,” said Gerry Altmann,
the editor of the journal Cognition, in which the experiment was published.
Dr. Hauser said he expected to have a statement
about the Cognition paper available soon. He
issued a statement last week saying he was “deeply
sorry” and acknowledged having made “significant mistakes” but did not admit
to any scientific misconduct.
Dr. Hauser is a leading expert in comparing animal
and human mental processes and recently wrote a well-received book, “Moral
Minds,” in which he explored the evolutionary basis of morality. An inquiry
into his Harvard lab was opened in 2007 after students felt they were being
pushed to reach a particular conclusion that they thought was incorrect.
Though the inquiry was completed in January this year, Harvard announced
only last week that Dr. Hauser had been required to retract the Cognition
article, and it supplied no details about the episode.
On Friday, Dr. Altmann said Michael D. Smith, dean
of the Faculty of Arts and Sciences, had given him a summary of the part of
the confidential faculty inquiry related to the 2002 experiment, a test of
whether monkeys could distinguish algebraic rules.
The summary included a description of a videotape
recording the monkeys’ reaction to a test stimulus. Standard practice is to
alternate a stimulus with a control condition, but no tests of the control
condition are present on the videotape. Dr. Altmann, a psychologist at the
University of York in England, said it seemed that the control experiments
reported in the article were not performed.
Some forms of scientific error, like poor record
keeping or even mistaken results, are forgivable, but fabrication of data,
if such a charge were to be proved against Dr. Hauser, is usually followed
by expulsion from the scientific community.
“There is a difference between breaking the rules
and breaking the most sacred of all rules,” said Jonathan Haidt, a moral
psychologist at the
University of Virginia. The failure to have
performed a reported control experiment would be “a very serious and perhaps
unforgivable offense,” Dr. Haidt said.
Dr. Hauser’s case is unusual, however, because of
his substantial contributions to the fields of animal cognition and the
basis of morality. Dr. Altmann held out the possibility of redemption. “If
he were to give a full and frank account of the errors he made, then the
process can start of repatriating him into the community in some form,” he
said.
Dr. Hauser’s fall from grace, if it occurs, could
cast a shadow over several fields of research until Harvard makes clear the
exact nature of the problems found in his lab. Last week, Dr. Smith, the
Harvard dean, wrote in a
letter to the faculty that he had found Dr. Hauser
responsible for eight counts of scientific misconduct. He described these in
general terms but did not specify fabrication. An oblique sentence in his
letter said that the Cognition paper had been retracted because “the data
produced in the published experiments did not support the published
findings.”
Scientists trying to assess Dr. Hauser’s oeuvre are
likely to take into account another issue besides the eight counts of
misconduct. In 1995, Dr. Hauser published that cotton-top tamarins, the
monkey species he worked with, could recognize themselves in a mirror. The
finding was challenged by the psychologist Gordon Gallup, who asked for the
videotapes and has said that he could see no evidence in the monkey’s
reactions for what Dr. Hauser had reported. Dr. Hauser later wrote in
another paper that he could not repeat the finding.
The small size of the field in which Dr. Hauser
worked has contributed to the uncertainty. Only a handful of laboratories
have primate colonies available for studying cognition, so few if any
researchers could check Dr. Hauser’s claims.
“Marc was the only person working on cotton-top
tamarins so far as I know,” said Alison Gopnik, a psychologist who studies
infant cognition at the
University of California, Berkeley. “It’s always a
problem in science when we have to depend on one person.”
Many of Dr. Hauser’s experiments involved taking
methods used to explore what infants are thinking and applying them to
monkeys. In general, he found that the monkeys could do many of the same
things as infants. If a substantial part of his work is challenged or
doubted, monkeys may turn out to be less smart than recently portrayed.
But his work on morality involved humans and is
therefore easier for others to repeat. And much of Dr. Hauser’s morality
research has checked out just fine, Dr. Haidt said.
“Hauser has been particularly creative in studying
moral psychology in diverse populations, including small-scale societies,
patients with brain damage, psychopaths and people with rare genetic
disorders that affect their judgments,” he said.
Criticisms of the Doubters: Missing Data is Not Necessarily Scientific
Misconduct
"Difficulties in Defining Errors in Case Against Harvard Researcher," by
Nicholas Wade, The New York Times, October 25, 2010 ---
http://www.nytimes.com/2010/10/26/science/26hauser.html?_r=1&hpw
Jensen Comment
Hauser's accusers backed off slightly. It would seem that the best scientific
evidence would be for independent researchers to collect new data and try to
replicate Hauser's claims.
We must keep in mint that Hauser himself retracted one of his own scientific
journal articles.
Why did Harvard take three years on this one?
http://chronicle.com/blogPost/HauserHarvard/26308/
Bob Jensen's threads on Professors Who Cheat are at
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize
Also see
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#SocialScience
August 21, 2010 reply from Orenstein, Edith
[eorenstein@FINANCIALEXECUTIVES.ORG]
I believe a
broad lesson arises from the tale of Professor Hauser's monkey-business:
"It
is
unusual
for a scientist as
prominent
as Hauser - a
popular
professor and
eloquent communicator of
science whose work has often been featured on television and in newspapers
- to be named in an
investigation
of scientific
misconduct."
Disclaimer: this
is my personal opinion only,
and I believe these lessons apply to all professions, but since this is an
accounting listserv, lesson 1 with respect to accounting/auditing
research is:
1.
even the most
prominent, popular, and eloquent
communicator professors'
research, including but not limited to the field of accounting, and
including for purposes of standard-setting, rule-making, et al, should not
be above third party review and questioning (that may be the layman's
term; the technical term I assume is 'replication'). Although it can be
difficult for less prominent, popular, eloquent communicators to raise such
challenges, without fear of reprisal, it is important to get as close to the
'truth' or 'truths' as may (or may not) exist. This point applies not only
to formal, refereed journals, but non-refereed published research in any
form as well.
And, from the world of accounting
& auditing practice, (or any job, really), the lesson is the same:
2.
even the most
prominent, popular, and eloquent
communicator(s) -
e.g. audit clients....should
not be above third party review and questioning; once again, it can be
difficult for less prominent, popular, and eloquent communicators (internal
or external audit staff, whether junior or senior staff) to raise challenges
in the practice of auditing in the field (which is why staffing decisions,
supervision, and backbone are so important). And we have seen examples where
such challenges were met with reprisal or challenge (e.g. Cynthia Cooper
challenging WorldCom's accounting; HealthSouth's Richard Scrushy, the Enron
- Andersen saga, etc.)
Additionally, another lesson here, (I repeat
this is my personal opinion only)
is that in
the field of standard-setting or rulemaking, testimony of 'prominent'
experts and 'eloquent communicators'
should be judged on the basis of substance
vs. form, and others
(i.e. those who may feel less 'prominent' or 'eloquent') should step up to
the plate to offer concurring or counterarguments in verbal or written form
(including comment letters) if
their experience or thought process leads them to the same conclusion as the
more 'prominent' or 'eloquent' speakers/writers - or in particular, if it
leads them to another view.
I wonder sometimes, particularly
in public hearings, if individuals testifying believe there is
implied pressure to say what one thinks the sponsor of the hearing expects
or wants to hear, vs. challenging the status quo, particular proposed
changes, etc., particularly if they may fear reprisal. Once again, it is
important to provide the facts as one sees them, and it is about substance
vs. form; sometimes difficult to achieve.
Edith Orenstein
www.financialexecutives.org/blog
"Harvard Clarifies Wrongdoing by Professor," Inside Higher Ed,
August 23, 2010 ---
http://www.insidehighered.com/news/2010/08/23/qt#236200
Harvard University announced Friday that its
investigations had found eight incidents of scientific misconduct by Marc
Hauser, a prominent psychology professor who recently started a leave,
The Boston Globe reported. The university
also indicated that sanctions had been imposed, and that Hauser would be
teaching again after a year. Since the Globe reported on Hauser's
leave and the inquiry into his work, many scientists have called for a
statement by the university on what happened, and Friday's announcement goes
much further than earlier statements. In a statement sent to colleagues on
Friday, Hauser said: "I am deeply sorry for the problems this case has
caused to my students, my colleagues, and my university. I acknowledge that
I made some significant mistakes and I am deeply disappointed that this has
led to a retraction and two corrections. I also feel terrible about the
concerns regarding the other five cases."
Why did Harvard take three years on this one?
http://chronicle.com/blogPost/HauserHarvard/26308/
Bob Jensen's threads on this cheating scandal are at
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#SocialScience
Bob Jensen's threads on Professors Who Cheat are at
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize
Fabricated Data at Least 145 times
"UConn Investigation Finds That Health Researcher Fabricated Data." by Tom
Bartlett, Inside Higher Ed, January 11, 2012 ---
http://chronicle.com/blogs/percolator/uconn-investigation-finds-that-health-researcher-fabricated-data/28291
Jensen Comment
I knew of a few instances of plagiarism, but not once has it been discovered
that an accountics scientist fabricated data. This could, however, be due to
accountics scientists shielding each other from validity testing ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
National Center for Case Study Teaching in Science ---
http://sciencecases.lib.buffalo.edu/cs/
August 10, 2010 reply from Jagdish Gangolly
[gangolly@CSC.ALBANY.EDU]
Bob,
This is a classic example that shows how difficult
it is to escape accountability in science. First, when Gordon Gallup, a
colleague in our Bio-Psychology in Albany questioned the results, at first
Hauser tried to get away with a reply because Albany is not Harvard. But
then when Hauser could not replicate the experiment he had no choice but to
confess, unless he was willing to be caught some time in the future with his
pants down.
However, in a sneaky way, the confession was sent
by Hauser to a different journal. But Hauser at least had the gumption to
confess.
The lesson I learn from this episode is to do
something like what lawyers always do in research. They call it Shepardizing.
It is important not to take any journal article at its face value, even if
the thing is in a journal as well known as PNAS and by a person from a
school as well known as Harvard. The other lesson is not to ignore a work or
criticism even if it appears in a lesser known journal and is by an author
from a lesser known school (as in Albany in this case).
Jagdish -- J
agdish Gangolly (gangolly@albany.edu)
Department of Informatics College of Computing &
Information
State University of New York at Albany 7A, Harriman Campus Road, Suite 220
Albany, NY 12206
August 10, 2010 message from Paul Williams
[Paul_Williams@NCSU.EDU]
Bob and Jagdish,
This also illustrates the necessity of keeping records of experiments. How
odd that accounting researchers cannot see the necessity of "keeping a
journal!!!"
"Document Sheds Light on Investigation at Harvard," by Tom Bartlett,
Chronicle of Higher Education, August 19, 2010 ---
http://chronicle.com/article/Document-Sheds-Light-on/123988/
Ever since word got out that a prominent Harvard
University researcher was on leave after an investigation into academic
wrongdoing, a key question has remained unanswered: What, exactly, did he
do?
The researcher himself, Marc D. Hauser, isn't
talking. The usually quotable Mr. Hauser, a psychology professor and
director of Harvard's Cognitive Evolution Laboratory, is the author of Moral
Minds: How Nature Designed Our Universal Sense of Right and Wrong (Ecco,
2006) and is at work on a forthcoming book titled "Evilicious: Why We
Evolved a Taste for Being Bad." He has been voted one of the university's
most popular professors.
Harvard has also been taciturn. The public-affairs
office did issue a brief written statement last week saying that the
university "has taken steps to ensure that the scientific record is
corrected in relation to three articles co-authored by Dr. Hauser." So far,
Harvard officials haven't provided details about the problems with those
papers. Were they merely errors or something worse?
An internal document, however, sheds light on what
was going on in Mr. Hauser's lab. It tells the story of how research
assistants became convinced that the professor was reporting bogus data and
how he aggressively pushed back against those who questioned his findings or
asked for verification.
A copy of the document was provided to The
Chronicle by a former research assistant in the lab who has since left
psychology. The document is the statement he gave to Harvard investigators
in 2007.
The former research assistant, who provided the
document on condition of anonymity, said his motivation in coming forward
was to make it clear that it was solely Mr. Hauser who was responsible for
the problems he observed. The former research assistant also hoped that more
information might help other researchers make sense of the allegations.
It was one experiment in particular that led
members of Mr. Hauser's lab to become suspicious of his research and, in the
end, to report their concerns about the professor to Harvard administrators.
The experiment tested the ability of rhesus monkeys
to recognize sound patterns. Researchers played a series of three tones (in
a pattern like A-B-A) over a sound system. After establishing the pattern,
they would vary it (for instance, A-B-B) and see whether the monkeys were
aware of the change. If a monkey looked at the speaker, this was taken as an
indication that a difference was noticed.
The method has been used in experiments on primates
and human infants. Mr. Hauser has long worked on studies that seemed to show
that primates, like rhesus monkeys or cotton-top tamarins, can recognize
patterns as well as human infants do. Such pattern recognition is thought to
be a component of language acquisition.
Researchers watched videotapes of the experiments
and "coded" the results, meaning that they wrote down how the monkeys
reacted. As was common practice, two researchers independently coded the
results so that their findings could later be compared to eliminate errors
or bias.
According to the document that was provided to The
Chronicle, the experiment in question was coded by Mr. Hauser and a research
assistant in his laboratory. A second research assistant was asked by Mr.
Hauser to analyze the results. When the second research assistant analyzed
the first research assistant's codes, he found that the monkeys didn't seem
to notice the change in pattern. In fact, they looked at the speaker more
often when the pattern was the same. In other words, the experiment was a
bust.
But Mr. Hauser's coding showed something else
entirely: He found that the monkeys did notice the change in pattern—and,
according to his numbers, the results were statistically significant. If his
coding was right, the experiment was a big success.
The second research assistant was bothered by the
discrepancy. How could two researchers watching the same videotapes arrive
at such different conclusions? He suggested to Mr. Hauser that a third
researcher should code the results. In an e-mail message to Mr. Hauser, a
copy of which was provided to The Chronicle, the research assistant who
analyzed the numbers explained his concern. "I don't feel comfortable
analyzing results/publishing data with that kind of skew until we can verify
that with a third coder," he wrote.
A graduate student agreed with the research
assistant and joined him in pressing Mr. Hauser to allow the results to be
checked, the document given to The Chronicle indicates. But Mr. Hauser
resisted, repeatedly arguing against having a third researcher code the
videotapes and writing that they should simply go with the data as he had
already coded it. After several back-and-forths, it became plain that the
professor was annoyed.
"i am getting a bit pissed here," Mr. Hauser wrote
in an e-mail to one research assistant. "there were no inconsistencies! let
me repeat what happened. i coded everything. then [a research assistant]
coded all the trials highlighted in yellow. we only had one trial that
didn't agree. i then mistakenly told [another research assistant] to look at
column B when he should have looked at column D. ... we need to resolve this
because i am not sure why we are going in circles."
The research assistant who analyzed the data and
the graduate student decided to review the tapes themselves, without Mr.
Hauser's permission, the document says. They each coded the results
independently. Their findings concurred with the conclusion that the
experiment had failed: The monkeys didn't appear to react to the change in
patterns.
They then reviewed Mr. Hauser's coding and,
according to the research assistant's statement, discovered that what he had
written down bore little relation to what they had actually observed on the
videotapes. He would, for instance, mark that a monkey had turned its head
when the monkey didn't so much as flinch. It wasn't simply a case of
differing interpretations, they believed: His data were just completely
wrong.
As word of the problem with the experiment spread,
several other lab members revealed they had had similar run-ins with Mr.
Hauser, the former research assistant says. This wasn't the first time
something like this had happened. There was, several researchers in the lab
believed, a pattern in which Mr. Hauser reported false data and then
insisted that it be used.
They brought their evidence to the university's
ombudsman and, later, to the dean's office. This set in motion an
investigation that would lead to Mr. Hauser's lab being raided by the
university in the fall of 2007 to collect evidence. It wasn't until this
year, however, that the investigation was completed. It found problems with
at least three papers. Because Mr. Hauser has received federal grant money,
the report has most likely been turned over to the Office of Research
Integrity at the U.S. Department of Health and Human Services.
The research that was the catalyst for the inquiry
ended up being tabled, but only after additional problems were found with
the data. In a statement to Harvard officials in 2007, the research
assistant who instigated what became a revolt among junior members of the
lab, outlined his larger concerns: "The most disconcerting part of the whole
experience to me was the feeling that Marc was using his position of
authority to force us to accept sloppy (at best) science."
Also see
http://chronicle.com/blogPost/Harvard-Confirms-Hausergate/26198/
The Insignificance of Testing the Null
October 1, 2010 message from Amy Dunbar
Nick Cox posted a link to a statistics paper on
statalist:
2009. Statistics: reasoning on uncertainty, and the
insignificance of testing null. Annales Zoologici Fennici 46: 138-157.
http://www.sekj.org/PDF/anz46-free/anz46-138.pdf
Cox commented that the paper touches provocatively
on several topics often aired on statalist including the uselessness of
dynamite or detonator plots, displays for comparing group means and
especially the over-use of null hypothesis testing. The main target audience
is ecologists but most of the issues cut across statistical science.
Dunbar comment: The paper would be a great addition
to any PhD research seminar. The author also has some suggestions for
journal editors. I included some responses to Nick's original post below.
"Statistics: reasoning on uncertainty, and the insignificance of testing
null," by Esa Läärä
Ann. Zool. Fennici 46: 138–157
ISSN 0003-455X (print), ISSN 1797-2450 (online)
Helsinki 30 April 2009 © Finnish Zoological and Botanical Publishing Board 200
http://www.sekj.org/PDF/anz46-free/anz46-138.pdf
The practice of statistical analysis and inference
in ecology is critically reviewed. The dominant doctrine of null hypothesis
signi fi cance testing (NHST) continues to be applied ritualistically and
mindlessly. This dogma is based on superficial understanding of elementary
notions of frequentist statistics in the 1930s, and is widely disseminated
by influential textbooks targeted at biologists. It is characterized by
silly null hypotheses and mechanical dichotomous division of results being
“signi fi cant” ( P < 0.05) or not. Simple examples are given to demonstrate
how distant the prevalent NHST malpractice is from the current mainstream
practice of professional statisticians. Masses of trivial and meaningless
“results” are being reported, which are not providing adequate quantitative
information of scientific interest. The NHST dogma also retards progress in
the understanding of ecological systems and the effects of management
programmes, which may at worst contribute to damaging decisions in
conservation biology. In the beginning of this millennium, critical
discussion and debate on the problems and shortcomings of NHST has
intensified in ecological journals. Alternative approaches, like basic point
and interval estimation of effect sizes, likelihood-based and information
theoretic methods, and the Bayesian inferential paradigm, have started to
receive attention. Much is still to be done in efforts to improve
statistical thinking and reasoning of ecologists and in training them to
utilize appropriately the expanded statistical toolbox. Ecologists should
finally abandon the false doctrines and textbooks of their previous
statistical gurus. Instead they should more carefully learn what leading
statisticians write and say, collaborate with statisticians in teaching,
research, and editorial work in journals.
Jensen Comment
And to think Alpha (Type 1) error is the easy part. Does anybody ever test for
the more important Beta (Type 2) error? I think some engineers test for Type 2
error with Operating Characteristic (OC) curves, but these are generally applied
where controlled experiments are super controlled such as in quality control
testing.
Beta Error ---
http://en.wikipedia.org/wiki/Beta_error#Type_II_error
THE GENERAL SOCIAL SURVEY ---
http://www.sociology.ohio-state.edu/dbd/Weakley.html
The creator of the General Social Survey (GSS), the
National Opinion Research Center (NORC) was established in 1941. It serves
as the oldest national research facility in the nation that is neither for
profit nor university affiliated. The NORC uses a national probability
sample by using government census information. The GSS was first
administered in 1972, and uses personal interview information of US
households. As stated on the GSS webpage, "The mission of the GSS is to make
timely, high-quality, scientifically relevant data available to the social
science research community" (Internet, 2000)
The NORC prides itself on the GSS’s broad coverage,
its use of replication, its cross-national perspective, and its
attention to data quality. The survey is, as its name explicitly states,
general. The multitude of topics and interests make the GSS a fine tool for
the diversity of contemporary social science research. Replication is an
important component of the GSS. With the repetition of items and item
sequences over time, research can be accomplished that analyzes changes or
stability over time. Since 1982, NORC has had international collaborations
with other research groups. Through the insight of leading specialists and a
"rotating committee of distinguished social scientists," the GSS attempts to
follow the highest survey standards in design, sampling, interviewing,
processing, and documentation
Continued in article
"Using Replication to Help Inform Decisions about Scale-up: Three
Quasi-experiments on a Middle School Unit on Motion and Forces," by Bill
Watson, Curtis Pyke, Sharon Lynch, and Rob Ochsendorf, The George
Washington University, 2008 ---
http://www.gwu.edu/~scale-up/documents/NARST 2007 - Using Replication to Inform
Decisions about S..pdf
Research programs that include
experiments are becoming increasingly important in science education as a
means through which to develop a sound and convincing empirical basis for
understanding the effects of interventions and making evidence-based
decisions about their scale-up of in diverse settings. True experiments,
which are characterized by the random assignment of members of a population
to a treatment or a control group, are considered the “gold standard” in
education research because they reduce the differences between groups to
only random variation and the presence (or absence) of the treatment (Subotnik
& Walberg, 2006)
For researchers, these conditions
increase the likelihood that two samples drawn from the same population are
comparable to each other and to the population, thereby increasing
confidence in causal inferences about effectiveness (Cook & Campbell, 1979).
For practitioners, those making decisions about curriculum and instruction
in schools, the Institute for Educational Sciences at the US Department of
Education (USDOE) suggests that only studies with randomization be
considered as “strong evidence” or “possible evidence” of an intervention’s
effectiveness (Institute for Educational Sciences, 2006).
Quasi-experiments are also a practical
and valid means for the evaluation of interventions when a true experiment
is impractical due to the presence of natural groups, such as classes and
schools, within which students are clustered (Subotnik & Walberg, 2006). In
these circumstances, a Quasi-experiment that includes careful sampling
(e.g., random selection of schools),
a priori
assignment of matched pairs
to a treatment or control group and/or a pretest used to control for any
remaining group differences can often come close to providing the rigor of
true experiment (Subotnik & Walberg, 2006). However, there are inherent
threats to
internal validity in Quasi-experimental designs that the research
must take care to address with supplemental data. Systematic variation
introduced through the clustering of subjects that occurs in
Quasi-experiments can compete with the intervention studied as a cause of
differences observed.
Replications of quasi-experiments can
provide opportunities to adjust procedures to address some threats to the
internal validity of Quasi-experiments and can study new samples to address
external validity concerns. Replications can take many forms and serve a
multitude of purposes (e.g., Hendrick, 1990; Kline, 2003). Intuitively, a
thoughtful choice of replication of a quasi-experimental design can produce
new and improved result or increase the confidence researchers have in the
presence of a treatment effect found in an initial study. Therefore,
replication can be important in establishing the effectiveness of an
intervention when it fosters a sense of robustness in results or enhances
the generalizability of findings from stand-alone
studies (Cohen, 1994; Robinson &
Levin, 1997).
This paper presents data to show the
utility in combining a high quality quasiexperimental design with multiple
replications in school-based scale-up research. Scale-up research is
research charged with producing evidence to inform scale-up decisions;
decisions regarding which innovations can be expected to be effective for
all students in a range of school contexts and settings – “what works best,
for whom, and under what conditions” (Brown, McDonald, & Schneider, 2006, p.
1). Scaling-up by definition is the introduction of interventions whose
efficacy has been established in one context into new settings, with the
goal of producing similarly positive impacts in larger, frequently more
diverse, populations (Brown et al., 2006).
Using Replication
Our work shows that a good first step in scaling-up an intervention is a
series of experiments or quasi-experiments at small scale. Replication in
Educational Research Quasi-experiments are often the most practical research
design for an educational field study, including scale-up studies used to
evaluate whether or not an intervention is worth taking to scale. However,
because they are not true experiments and therefore do not achieve true
randomization, the possibility for systematic error to occur is always
present, and, with it, the risk of threats to internal and external validity
of the study. For the purposes of this discussion, we consider internal
validity to be “the validity with which statements can be made about whether
there is a causal relationship from one variable to another in the form in
which the variables were manipulated or measured” (Cook & Campbell, 1979, p.
38).
External validity refers to “the
approximate validity with which conclusions are drawn about the
generalizability of a causal relationship to and across populations of
persons, settings, and times” (Cook & Campbell, 1979). Unlike replications
with experimental designs, which almost always add to the efficacy of a
sound result, the replication of a quasi-experiment may not have an inherent
value if the potential threats to validity found in the initial study are
not addressed.
Replication: Frameworks
In social
science research, replication of research has traditionally been understood
to be a process in which different researchers repeat a study’s methods
independently with different subjects in different sites and at different
times with the goal of achieving the same results and increasing the
generalizability of findings (Meline & Paradiso, 2003; Thompson, 1996).
However, the process of replication in
social science research in field settings is considerably more nuanced than
this definition might suggest. In field settings, both the intervention and
experimental procedures can be influenced by the local context and sample in
ways that change the nature of the intervention or the experiment, or both
from one experiment to another. Before conducting a replication, an astute
researcher must therefore ask: In what context, with what kinds of subjects,
and by which researchers will the replication be conducted? (Rosenthal,
1990).
The purpose of the replication must
also be considered: Is the researcher interested in making adjustments to
the study procedures or intervention to increase the internal validity of
findings or will the sampling be adjusted to enhance the external validity
of initial results?
A broader view of replication of
field-based quasi-experiments might enable classification of different types
according the multiple purposes for replication when conducting research in
schools. Hendrick (1990) proposed four kinds of replication that take into
account the procedural variables associated with a study and contextual
variables (e.g., subject characteristics, physical setting). Hendrick’s
taxonomy proposes that an
exact replication
adheres as closely
as possible to the original variables and processes in order to replicate
results.
A
partial replication
varies some aspects of either the contextual or
procedural variables, and a
conceptual replication radically
departs from one or more of the procedural variables. Hendrick argued for a
fourth type of replication,
systematic replication,
which includes first a strict replication and then either a partial or
conceptual replication to isolate the original effect and explore the
intervention when new variables are considered.
Rosenthal (1990) referred to such a
succession of replications as a
replication battery:
"The simplest form of replication battery requires two replications of the
original study: one of these replications is as similar as we can make it to
the original study, the other is at least
Using Replication
Moderately dissimilar to the original study" (p. 6). Rosenthal (1990) argued
that if the same results were obtained with similar but not exact
Quasi-experimental procedures, internal validity would be increased because
differences between groups could more likely be attributed to the
intervention of interest and not to experimental procedures. Further, even
if one of the replications is of poorer quality than the others, Rosenthal
argued for its consideration in determining the overall effect of the
intervention, albeit with less weight than more rigorous (presumably
internally valid) replications. More recently, Kline (2003) also
distinguished among several types of replication according to the different
research purposes they address. For example, Kline’s
operational
replications are like Hendrick’s
(1990) exact replication: the sampling and experimental methods of the
original study are repeated to test whether results can be duplicated.
Balanced replications
are akin to
partial and conceptual replications in that they appear to address the
limitations of quasi-experiments by manipulating additional variables to
rule out competing explanations for results.
In a recent call for replication of
studies in educational research, Schneider (2004) also suggested a degree of
flexibility in replication, describing the process as "conducting an
investigation repeatedly with comparable subjects and conditions" (p. 1473)
while also suggesting that it might include making "controllable changes" to
an intervention as part of its replication. Schneider’s (2004) notion of
controllable changes, Kline’s (2003) description of balanced replication,
Hendrick’s (1990) systematic replication, and Rosenthal’s (1990) argument in
favor of the replication battery all suggest that a series of replications
taken together can provide important information about an intervention’s
effectiveness beyond a single Quasiexperiment.
Replication: Addressing Threats to
Internal Validity
When
multiple quasi-experiments (i.e., replications) are conducted with
adjustments, the threats to internal validity inherent in
quasi-experimentation might be more fully addressed (Cook & Campbell, 1979).
Although changing quasi-experiments in the process of replicating them might
decrease confidence in the external validity of an initial study finding,
when a replication battery is considered, a
set
of studies might provide
externally valid data to contribute to decision making within and beyond a
particular school district. The particular threats to internal validity
germane to the studies reported in this paper are those associated with the
untreated control group design with pretest and posttest (Cook & Campbell,
1979). This classic and widely implemented quasi-experimental design
features an observation of participants in two non-randomly assigned groups
before and after one of the groups receives treatment with an intervention
of interest.
The internal validity of a study or
set of studies ultimately depends on the confidence that the researcher has
that differences between groups are caused by the intervention of interest
(Cook & Campbell, 1979). Cook and Campbell (1979) provided considerable
detail about threats to internal validity in quasi-experimentation that
could reduce confidence in claims of causality (p. 37-94). However, they
concluded that the untreated control group design with pretest and posttest
usually controls for all but four threats to internal validity:
selection-maturation, instrumentation, differential regression to the mean,
and local history. Table 1 briefly describes each of these threats. In
addition, they are not mutually exclusive. In a study of the effectiveness
of curriculum materials, for example, the extent to which the researchers
are confident differential regression to the mean is not a threat relies
upon their confidence that sampling methods have produced two samples
similar on performance and demographic variables
Using Replication
(selection-maturation) and that the assessment instrument has similar
characteristics for all subjects (instrumentation). Cook and Campbell (1979)
suggest that replication plays a role in establishing external validity by
presenting the simplest case: An exact replication (Hendrick, 1990) of a
quasiexperiment in which results are corroborated and confidence in internal
validity is high.
However, we argue that the
relationship between replication and validity is more complex, given the
multiple combinations of outcomes that are possible when different kinds of
replications are conducted. Two dimensions of replication seem particularly
important. The first is the consistency of results across replication. The
second is whether a replication addresses internal validity threats that
were not addressed in a previous study (i.e., it
improves upon
the study) or informs the interpretation
of the presence or absence of threats in a prior study (i.e., it
enhances interpretation of
the study).
In an exact replication, results can
either be the same as or different from results in the original
quasi-experiment. If results are different, it seems reasonable to suggest
that some element of the local history - perhaps schools, teachers, or a
cohort of students - could have an effect on the outcomes, in addition to
(or instead of) the effect of an intervention. A partial replication
therefore seems warranted to adjust the quasi-experimental procedures to
address the threats. A partial replication would also be appropriate if the
results are the same, but the researchers do not have confidence that
threats to internal validity have been adequately addressed. Indeed,
conducting partial replications in either of these scenarios is consistent
with the recommendation of Hendrick (1990) to consider results from a
set
of replications when
attempting to determine the effectiveness of an intervention.
Addressing threats to validity with
partial replication, is, in turn, not a straightforward process. What if
results of a partial replication of a quasi-experiment are not the same as
those found in either the original quasi-experiment or its exact
replication? If the partial replication addresses a threat to internal
validity where the original quasi-experiment or its exact replication did
not, then the partial replication improves upon the study, and its results
might be considered the most robust. If threats to internal validity are
still not adequately addressed in the partial replication, the researcher
must explore relationships between all combinations of the quasiexperiments.
Alternatively, if the partial
replication provides data that help to address threats to the internal
validity of the original quasi-experiment or its exact replication, then the
partial replication enhances interpretation of the original study, and its
results might be considered
with
the results of the previous
study.
Figure 1 provides a possible decision
tree for researchers faced with data from a quasiexperiment and an exact
replication. Because multiple replications of quasi-experiments in
educational research are rare, Figure 1 is more an exercise in logic than a
decision matrix supported by data produced in a series of actual replication
batteries. However, the procedures and results described in this paper will
provide data generated from a series of quasi-experiments with practical
consequences for the scale-up of a set of curriculum materials in a large,
suburban school district. We hope to support the logic of Figure 1 by
applying it to the example to which we now turn.
Continued in article
"Internal and External Validity in Economics Research: Tradeoffs between
Experiments, Field Experiments, Natural Experiments and Field Data," by
Brian E. Roe and David R. Just, 2009 Proceedings Issue, American Journal
of Agricultural Economics ---
http://aede.osu.edu/people/roe.30/Roe_Just_AJAE09.pdf
Abstract: In the realm of empirical research,
investigators are first and foremost concerned with the validity of
their results, but validity is a multi-dimensional ideal. In this
article we discuss two key dimensions of validity – internal and
external validity – and underscore the natural tension that arises in
choosing a research approach to maximize both types of validity. We
propose that the most common approaches to empirical research – the use
of naturally-occurring field/market data and the use of laboratory
experiments – fall on the ends of a spectrum of research approaches, and
that the interior of this spectrum includes intermediary approaches such
as field experiments and natural experiments. Furthermore, we argue that
choosing between lab experiments and field data usually requires a
tradeoff between the pursuit of internal and external validity.
Movements toward the interior of the spectrum can often ease the tension
between internal and external validity but are also accompanied by other
important limitations, such as less control over subject matter or topic
areas and a reduced ability for others to replicate research. Finally,
we highlight recent attempts to modify and mix research approaches in a
way that eases the natural conflict between internal and external
validity and discuss if employing multiple methods leads to economies of
scope in research costs.
"What is the value of replicating other studies?" Park, C. L.,
Evaluation Research,13, 3, 2004. 189-195 ---
http://auspace.athabascau.ca:8080/dspace/handle/2149/1327
In response to a question on the value of
replication in social science research, the author undertook a search of the
literature for expert advise on the value of such an activity. Using the
information gleaned and the personal experience of attempting to replicate
the research of a colleague, the conclusion was drawn that replication has
great value but little ‘real life’ application in the true sense. The
activity itself, regardless of the degree of precision of the replication,
can have great merit in extending understanding about a method or a concept.
URI:
http://hdl.handle.net/2149/1327
Sometimes experimental outcomes impounded for years in textbooks become
viewed as "laws" by students, professors, and consultants. One example, is the
Hawthorne Effect impounded into psychology and management textbooks for the for
more than 50 years ---
http://en.wikipedia.org/wiki/Hawthorne_Effect
But Steven Levitt and John List, two economists
at the University of Chicago, discovered that the data had survived the decades
in two archives in Milwaukee and Boston, and decided to subject them to
econometric analysis. The Hawthorne experiments had another surprise in store
for them. Contrary to the descriptions in the literature, they found no
systematic evidence that levels of productivity in the factory rose whenever
changes in lighting were implemented.
"Light work," The Economist, June 4, 2009, Page 74 ---
http://www.economist.com/finance/displaystory.cfm?story_id=13788427
Revisiting a Research Study After 70 Years
"Thurstone's Crime Scale Re-Visited." by Mark H. Stone, Popular Measurement,
Spring 2000 ---
http://www.rasch.org/pm/pm3-53.pdf
A new one from my old behavioral accounting friend Jake
"Is Neuroaccounting Waiting in the Wings?" Jacob G. Birnberg and Ananda
R. Ganguly, SSRN, February 10 ,2011 ---
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1759460
Abstract:
This paper reviews a recently published handbook on neuroeconomics (Glimcher
et al. 2009H) and extends the discussion to reasons why this newly emerging
discipline should be of interest to behavioral accounting researchers. We
evaluate the achieved and potential contribution of neuroeconomics to the
study of human economic behavior, and examine what behavioral accountants
can learn from neuroeconomics and whether we should expect to see a similar
sub-field emerge within behavioral accounting in the near future. We
conclude that while a separate sub-field within behavioral accounting is not
likely in the near future due mostly to practical reasons, the behavioral
accounting researcher would do well to follow this discipline closely, and
behavioral accountants are likely to collaborate with neuroeconomists when
feasible to examine questions of mutual interest.
Keywords: Neuroeconomics, Neuroaccounting, Behavioral Accounting
Jensen Comment
This ties in somewhat with the work of John Dickhaut ---
http://www.neuroeconomics.org/dickhaut-memorial/in-memory-of-john-dickhaut
The lead article in the November 2009 issue of The Accounting Review
is like a blue plate special that differs greatly from the usual accountics
offerings on the TAR menu over the past four decades. TAR does not usually
publish case studies, field studies, or theory papers or commentaries or
conjectures that do not qualify as research on testable hypotheses or analytical
mathematics. But the November 2009 lead article by John Dickhout is an
exception.
Before reading the TAR tidbit below you
should perhaps read a bit about John Dichaut at the University of Minnesota,
apart from the fact that he's an old guy of my vintage with new ideas that
somehow leapt out of the accountics publishing shackles that typically restrain
creative ideas and "search" apart from "research."
"Gambling on Trust: John Dickhaut uses "neuroeconomics" to study how people
make decisions," OVPR, University of Minnesota ---
On the surface, it's obvious that trust
makes the economic world go round. A worker trusts that he or she will get
paid at the end of the week. Investors trust that earnings reports are based
on fact, not fiction. Back in the mid-1700s, Adam Smith-the father of
economics-built portions of his theories on this principle, which he termed
"sympathy." In the years since then, economists and other thinkers have
developed hundreds of further insights into the ways that people and
economies function. But what if Adam Smith was wrong about sympathy?
Professor John Dickhaut of the Carlson
School of Management's accounting department is one of a growing number of
researchers who uses verifiable laboratory techniques to put principles like
this one to the test. "I'm interested in how people make choices and how
these choices affect the economy," says Dickhaut. A decade ago, he and his
colleagues developed the trust game, an experiment that tracks trust levels
in financial situations between strangers. "The trust game mimics real-world
situations," he says.
Luckily for modern economics-and for
anyone planning an investment-Dickhaut's modern-day scientific methods
verify Adam Smith's insight. People tend to err on the side of trust than
mistrust-are more likely to be a little generous than a little bit stingy.
In fact, a basic tendency to be trusting and to reward trustworthy behavior
may be a norm of human behavior, upon which the laws of society are built.
And that's just the beginning of what the trust game and the field of
experimental economics can teach us.
Trust around the world
Since Dickhaut and his co-authors first
published the results of their research, the trust game has traveled from
the Carlson School at the University of Minnesota all the way to Russia,
China, and France. It's tested gender differences and other variations.
"It's an experiment that bred a cottage
industry," says Dickhaut. Because the trust game has proved so reliable,
researchers now use it to explore new areas. George Mason University's
Vernon Smith, 2002 Nobel Laureate for his work in experimental economics,
used the trust game in some of his path-breaking work. University of
Minnesota researcher and Dickhaut co-author Aldo Rustichini is discovering
that people's moods can be altered in the trust games so that participants
become increasingly organized in their behavior, as if this can impact the
outcome. This happens after the participants are repeatedly put in
situations where their trust has been violated.
Although it's too soon to be certain, such
research could reveal why people respond to troubled times by tightening up
regulations or imposing new ones, such as Sarbanes-Oxley. This new research
suggests that calls for tighter rules may reveal more about the brain than
reduce chaos in the world of finance.
Researchers who study the brain during
economic transactions, or neuroeconomists, scanned the brains of trust game
players in labs across the country to discover the parts of the brain that
"light up" during decision-making. Already, neuroeconomists have discovered
that the section of the brain investors use when making a risky investment,
like in the New York Stock Exchange, is different than the one used when
they invest in a less risky alternative, like a U.S. Treasury bill.
"People don't lay out a complete decision
tree every time they make a choice," Dickhaut says. Understanding the part
of the brain accessed during various situations may help to uncover the
regulatory structures that would be most effective-since people think of
different types of investments so differently, they might react to rules in
different ways as well. Such knowledge might also point to why behaviors
differ when faced with long- or short-term gains.
Dickhaut's original paper, "Trust,
Reciprocity, and Social History," is still a hit. Despite an original
publication date of 1995, the paper recently ranked first in ScienceDirect's
top 25 downloads from the journal Games and Economic Behavior.
Risky business
Dickhaut hasn't spent the past 10 years
resting on his laurels. Instead, he's challenged long-held beliefs with
startling new data. In his latest research, Dickhaut and his coauthors
create lab tests that mimic E-Bay style auctions, bidding contests for major
public works projects, and others types of auctions. The results may be
surprising.
"People don't appear to take risks based
on some general assessment of whether they're risk-seeking or risk-averse,"
says Dickhaut. In other words, it's easy to make faulty assumptions about
how a person will respond to risk. Even people who test as risk-averse might
be willing to make a risky gamble in a certain type of auction.
This research could turn the evaluation of
risk aversion upside down. Insurance company questionnaires are meant to
evaluate how risky a prospective client's behavior might be. In fact, the
questionnaires could simply reveal how a person answers a certain kind of
question, not how he or she would behave when faced with a risky
proposition.
Bubble and bust, laboratory style
In related research, Dickhaut and his
students seek that most elusive of explanations: what produces a
stock-market collapse? His students have successfully created models that
explain market crash situations in the lab. In these crashes, brokers try to
hold off selling until the last possible moment, hoping that they'll get out
at the peak. Buyers try to wait until the prices are the lowest they're
going to get. It's a complicated setting that happens every day-and
infrequently leads to a bubble and a crash.
"It must be more than price alone," says
Dickhaut. "Traditional economics tells us that people are price takers who
don't see that their actions influence prices. Stock buyers don't expect
their purchases to impact a stock's prices. Instead, they think of
themselves as taking advantages of outcomes."
He urges thinkers to take into account
that people are always trying to manipulate the market. "This is almost
always going to happen," he says. "One person will always think he knows
more than the other."
Transparency-giving a buyer all of the
information about a company-is often suggested as the answer to avoiding
inflated prices that can lead to a crash. Common sense says that the more
knowledge a buyer has, the less likely he or she is to pay more than a stock
is worth. Surprisingly, Dickhaut's findings refute this seemingly logical
answer. His lab tests prove that transparency can cause worse outcomes than
in a market with poorer information. In other words, transparent doesn't
equal clearly understood. "People fail to coordinate understanding,"
explains Dickhaut. "They don't communicate their expectations, and they
might think that they understand more than they do about a company."
Do stock prices balloon and crash because
of genuine misunderstandings? Can better communication about a stock's value
really be the key to avoiding future market crashes? "I wish you could say
for sure," says Dickhaut. "That's one of the things we want to find out."
Experimental economics is still a young
discipline, and it seems to raise new questions even as it answers old ones.
Even so, the contributions are real. In 2005 John Dickhaut was awarded the
Carlson School's first career research award, a signal that his research has
been of significant value in his field. "It's fun," he says with a grin.
"There's a lot out there to learn."
Reprinted with permission from the July 2005 edition of
Insights@Carlson School, a publication of the Carlson School of Management.
"The Brain as the Original Accounting Institution"
John Dickhaut
The Accounting Review 84(6), 1703 (2009) (10 pages)
TAR is not a free online journal, although articles can be purchased ---
http://aaahq.org/pubs.cfm
ABSTRACT:
The evolved brain neuronally processed information on human interaction long
before the development of formal accounting institutions. Could the neuronal
processes represent the underpinnings of the accounting principles that
exist today? This question is pursued several ways: first as an examination
of parallel structures that exist between the brain and accounting
principles, second as an explanation of why such parallels might exist, and
third as an explicit description of a paradigm that shows how the benefits
of an accounting procedure can emerge in an experiment.
The following are noteworthy in terms of this being a blue plate special
apart from the usual accountics fare at the TAR Restaurant:
- There are no equations that amount to anything beyond a seventh grade
algebra equation.
- There are no statistical inference tests, although much of the
discussion is based upon prior experimental models and tests.
- The paper is largely descriptive conjecture by brain analogy.
- I view this paper as a commentary even though the former Editor of TAR
declared he will not publish commentaries.
- The paper goes far back in history with the brain analogy.
- To date the TAR Editor has not been fired by the AAA Accountics Tribunal
for accepting and publishing this commentary that is neither empirical nor
advanced mathematical analysis. However, you must remember that it's a
November 2009 edition of TAR, and I'm writing this tidbit in late November.
Thunder and lightning from above could still wipe out Sarasota before the
year end.
- The paper is far out in the conjectural ether. I think John is lifting
the brain metaphor to where the air is thin and a bit too hot for me, but
perhaps I'm an aging luddite with a failing brain. I reached my limit of the
brain analogy in my metacognitive learning paper (which is also brain
conjecture by analogy) ---
http://faculty.trinity.edu/rjensen/265wp.htm
Professor Dickhaut presents a much wider discussion of all parts of the
brain. My research never went beyond the tiny hippocampus
part of the brain.
John was saved from the wrath of the AAA Accountics Tribunal by also having
an accountics paper (with complicated equations) published in the same November
2009 edition of TAR.
"Market Efficiencies and Drift: A Computational Model"
John Dickhaut and
Baohua Xin
The Accounting Review 84(6), 1805 (2009) (27 pages)
Whew!
Good work John!
John died in April 2010 at the age of 68.
The day Arthur Andersen loses the
public's trust is the day we are out of business.
Steve Samek, Country Managing Partner, United States, on Andersen's
Independence and Ethical Standards CD-Rom, 1999
Math Works Great—Until You Try to Map It Onto the World ---
http://www.wired.com/2015/07/math-works-great-try-map-onto-world/
In 1900, the great mathematician David Hilbert
presented a list of 23 unsolved problems worth investigating in the new
century. The list became a road map for the field, guiding mathematicians
through unexplored regions of the mathematical universe as they ticked off
problems one by one. But one of the problems was not like the others. It
required connecting the mathematical universe to the real one. Quanta
Magazine
Continued in article
Bob Jensen's threads on Mathematical Analytics in Plato's Cave
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#Analytics
Mathematical Analytics in Plato's Cave
TAR Researchers Playing by Themselves in Isolated Dark Caves That the Sunlight
Cannot Reach
"In Plato's Cave: Mathematical models are a
powerful way of predicting financial markets. But they are fallible" The
Economist, January 24, 2009, pp. 10-14 ---
http://faculty.trinity.edu/rjensen/2008Bailout.htm#Bailout
Plato's Allegory of the Cave ---
http://en.wikipedia.org/wiki/Allegory_of_the_Cave
Mathematical analytics should not be immune from validity tests even though
replication is different from replication of experiments. Mathematical models
published in TAR all require underlying assumptions such that the robustness of the
analytics are generally only as good as the assumptions. Critical analyses of
such results thereby usually focus on the realism and validity of the assumptions regarding
such things as utility functions and decision behavior of persons assumed in the
models. For example, it's extremely common in TAR analytics to assume that
business firms are operating in a steady state equilibrium when in the real
world such assumed conditions rarely, if ever, apply. And the studies themselves
rarely, if ever, test the sensitivity of the conclusions to departures from
steady state equilibrium.
Until the giant leap from the analytical conclusions to reality can be
demonstrated, it does not take a rocket scientist to figure out why business
firms and most accounting teachers simply ignore the gaming going on in TAR
analytics. It's amazing to me how such analytics researchers perform such
talented and sophisticated mathematical analysis and then lightly brush over
their assumptions as "being reasonable" without any test of reasonableness.
Without validation of the enormous assumptions, we should not simply agree on
faith that these assumptions are indeed "reasonable."
At a minimum it would help greatly if TAR accepted commentaries where
scholars could debate the "reasonableness" of assumptions in the analytics.
Perhaps authors fear this might happen if the TAR editor
invited commentarie
In most instances the defense of underlying assumptions is based upon
assumptions passed down from previous analytical studies rather than empirical
or even case study evidence. An example is the following conclusion:
We find that audit quality and audit fees both
increase with the auditor’s expected litigation losses from audit failures.
However, when considering the auditor’s acceptance decision, we show that it
is important to carefully identify the component of the litigation
environment that is being investigated. We decompose the liability
environment into three components: (1) the strictness of the legal regime,
defined as the probability that the auditor is sued and found liable in case
of an audit failure, (2) potential damage payments from the auditor to
investors and (3) other litigation costs incurred by the auditor, labeled
litigation frictions, such as attorneys’ fees or loss of reputation. We show
that, in equilibrium,
an increase in the potential damage payment actually leads to a reduction in
the client rejection rate. This effect arises because the resulting higher
audit quality increases the value of the entrepreneur’s investment
opportunity, which makes it optimal for the entrepreneur to increase the
audit fee by an amount that is larger than the increase in the auditor’s
expected damage payment. However, for this result to hold, it is crucial
that damage payments be fully recovered by the investors. We show that an
increase in litigation frictions leads to the opposite result—client
rejection rates increase. Finally, since a shift in the strength of the
legal regime affects both the expected damage payments to investors as well
as litigation frictions, the relationship between the legal regime and
rejection rates is nonmonotonic. Specifically, we show that the relationship
is U-shaped, which implies that for both weak and strong legal liability
regimes, rejection rates are higher than those characterizing more moderate
legal liability regimes.
Volker Laux and D. Paul Newman, "Auditor Liability and Client
Acceptance Decisions," The Accounting Review, Vol. 85, No. 1, 2010
pp. 261–285
This analytical conclusion rests upon crucial underlying assumptions that are
mostly justified by reference to previous analytical studies that made similar
simplifying assumptions. For example, "the assumption that 'the entrepreneur has
no private information' is common in the auditing literature; see, for example,
Dye (1993, 1995), Schwartz (1997), Chan and Pae (1998), and Chan and Wong
(2002)." This assumption is crucial and highly dubious in many real-world
settings. Further reading of footnotes piles assumption upon assumption.
Laux and Newman contend their underlying assumptions are "reasonable." I will
argue that they are overly simplistic and thereby unreasonable. I instead
contend that risky clients must instead be pooled and that decisions regarding
fees and acceptances of risky clients must be made dynamically over time with
respect to the entire pool. In addition the current reputation losses have to be
factored in on a continuing basis.
Laux and Newman assume away the pooled and varying and interactive
externality costs of adverse publicity of litigation when clients fail. Such
costs are not as independent as assumed in the Laux and Newman audit pricing
model for a single risky client. Their model ignores the interactive covariances.
Even if the audit firm conducts a good audit, it usually finds itself drawn
into litigation as a deep pockets participant in the affairs of a failed client.
If the audit firms have had recent embarrassments for bad audits, the firm might
decide to drop a risky client no matter what the client might pay for an audit
fee. I contend the friction costs are disjointed and do not fit the Laux and
Newman model in a reasonable way. For example, after Deloitte, KMPG, and Ernst &
Young had their hands slapped by the PCAOB for some bad auditing, it becomes
even more imperative for these firms to reconsider their risky client pool that
could result in further damage to their reputations. Laux and Newman vaguely
bundle the reputation loss among what they call "frictions" but then assume that
the audit fee of a pending risky client can be adjusted to overcome such
"frictions." I would instead contend that the adverse publicity costs are
interdependent upon the entire subset of an audit firm's risky clients. Audit
firms must instead base audit pricing based upon an analysis of their entire
risk pool and seriously consider dropping some current clients irrespective of
audit fees. Also the friction cost of Client A is likely to be impacted by
a decision to drop Clients B, C, and D. Hence, friction costs are in reality
joint costs, and managers that make independent product pricing decisions amidst
joint products does so at great peril.
Laux and Newman assume possible reputation losses and other frictions can be
measured on a ratio scale. I consider this assumption entirely unrealistic. The
decision to take on a risky client depends greatly on the publicity losses that
have recently transpired combined with the potential losses due to adverse
publicity in the entire existing pool of risky clients. Andersen did not fail
because of Enron. Enron was merely the straw that broke the camel's back.
More importantly, it was found in the case of Andersen that accepting or
keeping risky Client A may impact on the cost of capital of Clients B, C, D, E,
etc.
Loss of Reputation was the Kiss of
Death for Andersen
Andersen Audits Increased Clients' Cost of Capital Relative to Clients of Other
Auditing Firms
"The Demise of Arthur Andersen," by
Clifford F. Thies, Ludwig Von Mises Institute, April 12, 2002 ---
http://www.mises.org/fullstory.asp?control=932&FS=The+Demise+of+Arthur+Andersen
From Yahoo.com,
Andrew and I downloaded the daily adjusted closing prices of the stocks of
these companies (the adjustment taking into account splits and dividends). I
then constructed portfolios based on an equal dollar investment in the
stocks of each of the companies and tracked the performance of the two
portfolios from August 1, 2001, to March 1, 2002. Indexes of the values of
these portfolios are juxtaposed in Figure 1.
From August 1,
2001, to November 30, 2001, the values of the two portfolios are very highly
correlated. In particular, the values of the two portfolios fell following
the September 11 terrorist attack on our country and then quickly recovered.
You would expect a very high correlation in the values of truly matched
portfolios. Then, two deviations stand out.
In early December
2001, a wedge temporarily opened up between the values of the two
portfolios. This followed the SEC subpoena. Then, in early February, a
second and persistent wedge opened. This followed the news of the coming DOJ
indictment. It appears that an Andersen signature (relative to a "Final
Four" signature) costs a company 6 percent of its market capitalization. No
wonder corporate clients--including several of the companies that were in
the Andersen-audited portfolio Andrew and I constructed--are leaving
Andersen.
Prior to the demise
of Arthur Andersen, the Big 5 firms seemed to have a "lock" on reputation.
It is possible that these firms may have felt free to trade on their names
in search of additional sources of revenue. If that is what happened at
Andersen, it was a big mistake. In a free market, nobody has a lock on
anything. Every day that you don’t earn your reputation afresh by serving
your customers well is a day you risk losing your reputation. And, in a
service-oriented economy, losing your reputation is the kiss of death.
Mathematics has been called the language of the
universe. Scientists and engineers often speak of the elegance of
mathematics when describing physical reality, citing examples such as π,
E=mc2, and even something as simple as using abstract integers to count
real-world objects. Yet while these examples demonstrate how useful math can
be for us, does it mean that the physical world naturally follows the rules
of mathematics as its "mother tongue," and that this mathematics has its own
existence that is out there waiting to be discovered? This point of view on
the nature of the relationship between mathematics and the physical world is
called Platonism, but not everyone agrees with it.
Derek Abbott, Professor of Electrical and
Electronics Engineering at The University of Adelaide in Australia, has
written a perspective piece to be published in the Proceedings of the IEEE
in which he argues that mathematical Platonism is an inaccurate view of
reality. Instead, he argues for the opposing viewpoint, the non-Platonist
notion that mathematics is a product of the human imagination that we tailor
to describe reality.
This argument is not new. In fact, Abbott estimates
(through his own experiences, in an admittedly non-scientific survey) that
while 80% of mathematicians lean toward a Platonist view, engineers by and
large are non-Platonist. Physicists tend to be "closeted non-Platonists," he
says, meaning they often appear Platonist in public. But when pressed in
private, he says he can "often extract a non-Platonist confession."
So if mathematicians, engineers, and physicists can
all manage to perform their work despite differences in opinion on this
philosophical subject, why does the true nature of mathematics in its
relation to the physical world really matter?
The reason, Abbott says, is that because when you
recognize that math is just a mental construct—just an approximation of
reality that has its frailties and limitations and that will break down at
some point because perfect mathematical forms do not exist in the physical
universe—then you can see how ineffective math is.
And that is Abbott's main point (and most
controversial one): that mathematics is not exceptionally good at describing
reality, and definitely not the "miracle" that some scientists have marveled
at. Einstein, a mathematical non-Platonist, was one scientist who marveled
at the power of mathematics. He asked, "How can it be that mathematics,
being after all a product of human thought which is independent of
experience, is so admirably appropriate to the objects of reality?"
In 1959, the physicist and mathematician Eugene
Wigner described this problem as "the unreasonable effectiveness of
mathematics." In response, Abbott's paper is called "The Reasonable
Ineffectiveness of Mathematics." Both viewpoints are based on the
non-Platonist idea that math is a human invention. But whereas Wigner and
Einstein might be considered mathematical optimists who noticed all the ways
that mathematics closely describes reality, Abbott pessimistically points
out that these mathematical models almost always fall short.
What exactly does "effective mathematics" look
like? Abbott explains that effective mathematics provides compact, idealized
representations of the inherently noisy physical world.
"Analytical mathematical expressions are a way
making compact descriptions of our observations," he told Phys.org. "As
humans, we search for this 'compression' that math gives us because we have
limited brain power. Maths is effective when it delivers simple, compact
expressions that we can apply with regularity to many situations. It is
ineffective when it fails to deliver that elegant compactness. It is that
compactness that makes it useful/practical ... if we can get that
compression without sacrificing too much precision.
"I argue that there are many more cases where math
is ineffective (non-compact) than when it is effective (compact). Math only
has the illusion of being effective when we focus on the successful
examples. But our successful examples perhaps only apply to a tiny portion
of all the possible questions we could ask about the universe."
Some of the arguments in Abbott's paper are based
on the ideas of the mathematician Richard W. Hamming, who in 1980 identified
four reasons why mathematics should not be as effective as it seems.
Although Hamming resigned himself to the idea that mathematics is
unreasonably effective, Abbott shows that Hamming's reasons actually support
non-Platonism given a reduced level of mathematical effectiveness.
Here are a few of Abbott's reasons for why
mathematics is reasonably ineffective, which are largely based on the
non-Platonist viewpoint that math is a human invention:
• Mathematics appears to be successful because we
cherry-pick the problems for which we have found a way to apply mathematics.
There have likely been millions of failed mathematical models, but nobody
pays attention to them. ("A genius," Abbott writes, "is merely one who has a
great idea, but has the common sense to keep quiet about his other thousand
insane thoughts.")
• Our application of mathematics changes at
different scales. For example, in the 1970s when transistor lengths were on
the order of micrometers, engineers could describe transistor behavior using
elegant equations. Today's submicrometer transistors involve complicated
effects that the earlier models neglected, so engineers have turned to
computer simulation software to model smaller transistors. A more effective
formula would describe transistors at all scales, but such a compact formula
does not exist.
• Although our models appear to apply to all
timescales, we perhaps create descriptions biased by the length of our human
lifespans. For example, we see the Sun as an energy source for our planet,
but if the human lifespan were as long as the universe, perhaps the Sun
would appear to be a short-lived fluctuation that rapidly brings our planet
into thermal equilibrium with itself as it "blasts" into a red giant. From
this perspective, the Earth is not extracting useful net energy from the
Sun.
• Even counting has its limits. When counting
bananas, for example, at some point the number of bananas will be so large
that the gravitational pull of all the bananas draws them into a black hole.
At some point, we can no longer rely on numbers to count.
• And what about the concept of integers in the
first place? That is, where does one banana end and the next begin? While we
think we know visually, we do not have a formal mathematical definition. To
take this to its logical extreme, if humans were not solid but gaseous and
lived in the clouds, counting discrete objects would not be so obvious. Thus
axioms based on the notion of simple counting are not innate to our
universe, but are a human construct. There is then no guarantee that the
mathematical descriptions we create will be universally applicable.
For Abbott, these points and many others that he
makes in his paper show that mathematics is not a miraculous discovery that
fits reality with incomprehensible regularity. In the end, mathematics is a
human invention that is useful, limited, and works about as well as
expected.
Continued in article
574 Shields Against Validity Challenges in Plato's Cave ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Real Science versus Pseudo Science ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Pseudo-Science
How Accountics Scientists Should Change:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to change this
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
"How Non-Scientific Granulation Can Improve Scientific
Accountics"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsGranulationCurrentDraft.pdf
A Mathematical Way To Think About Biology ---
http://qbio.lookatphysics.com/
"Do Biologists Avoid Math-Heavy Papers?" Inside Higher Ed, June
27, 2012 ---
http://www.insidehighered.com/quicktakes/2012/06/27/do-biologists-avoid-math-heavy-papers
New research by professors at the University of
Bristol suggests that biologists may be avoiding scientific papers that have
extensive mathematical detail,
Times Higher Education reported. The
Bristol researchers studied the number of citations to 600 evolutionary
biology papers published in 1998. They found that the most "maths-heavy"
papers were cited by others half as much as other papers. Each additional
math equation appears to reduce the odds of a paper being cited. Tim
Fawcett, a co-author of the paper, told Times Higher Education, "I think
this is potentially something that could be a problem for all areas of
science where there is a tight link between the theoretical mathematical
models and experiment."
"Maths-heavy papers put biologists off," by Elizabeth Gibney,
Times
Higher Education, June 26, 2012 ---
http://www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=420388&c=1
The study, published in the Proceedings of the
National Academy of Sciences USA, suggests that scientists pay less
attention to theories that are dense with mathematical detail.
Researchers in Bristol’s School of Biological
Sciences compared citation data with the number of equations per page in
more than 600 evolutionary biology papers in 1998.
They found that most maths-heavy articles were
referenced 50 per cent less often than those with little or no maths. Each
additional equation per page reduced a paper’s citation success by 28 per
cent.
The size of the effect was striking, Tim Fawcett,
research fellow and the paper’s co-author, told Times Higher Education.
“I think this is potentially something that could
be a problem for all areas of science where there is a tight link between
the theoretical mathematical models and experiment,” he said.
The research stemmed from a suspicion that papers
full of equations and technical detail could be putting off researchers who
do not necessarily have much mathematical training, said Dr Fawcett.
“Even Steven Hawking worried that each equation he
added to A Brief History of Time would reduce sales. So this idea has been
out there for a while, but no one’s really looked at it until we did this
study,” he added.
Andrew Higginson, Dr Fawcett’s co-author and a
research associate in the School of Biological Sciences, said that
scientists need to think more carefully about how they present the
mathematical details of their work.
“The ideal solution is not to hide the maths away,
but to add more explanatory text to take the reader carefully through the
assumptions and implications of the theory,” he said.
But the authors say they fear that this approach
will be resisted by some journals that favour concise papers and where space
is in short supply.
An alternative solution is to put much of the
mathematical details in an appendix, which tends to be published online.
“Our analysis seems to show that for equations put
in an appendix there isn’t such an effect,” said Dr Fawcett.
“But there’s a big
risk that in doing that you are potentially hiding the maths away, so it's
important to state clearly the assumptions and implications in the main text
for everyone to see.”
Although the issue is likely to extend beyond
evolutionary biology, it may not be such a problem in other branches of
science where students and researchers tend to be trained in maths to a
greater degree, he added.
Continued in article
Jensen Comment
The causes of this asserted avoidance are no doubt very complicated and vary in
among individual instances. Some biologists might avoid biology quant papers
because they themselves are not sufficiently quant to comprehend the
mathematics. It would seem, however, that even quant biology papers have some
non-mathematics summaries that might be of interest to the non-quant biologists.
I would be inclined to believer that biologists avoid quant papers for other
reasons, especially some reasons that accounting teachers and practitioners most
often avoid accountics research studies (that are quant by definition). I think
the main reason for this avoidance is that biology and academic quants typically
do their research in Plato's Cave with "convenient"
assumptions that are too removed from the real and much more complicated world.
For example, the real world is seldom in a state of equilibrium or a "steady
state" needed to greatly simplify the mathematical derivations.
Bob Jensen's threads and illustrations of simplifying assumptions are at
Mathematical Analytics in Plato's Cave --- See Below
An Excellent Presentation on the Flaws of Finance, Particularly the Flaws
of Financial Theorists
A recent topic on the AECM listserv concerns the limitations of accounting
standard setters and researchers when it comes to understanding investors. One
point that was not raised in the thread to date is that a lot can be learned
about investors from the top financial analysts of the world --- their writings
and their conferences.
A Plenary Session Speech at a Chartered Financial Analysts Conference
Video: James Montier’s 2012 Chicago CFA Speech The
Flaws of Finance ---
http://cfapodcast.smartpros.com/web/live_events/Annual/Montier/index.html
Note that it takes over 15 minutes before James Montier begins
Major Themes
- The difference between physics versus finance models is that physicists
know the limitations of their models.
- Another difference is that components (e.g., atoms) of a physics model
are not trying to game the system.
- The more complicated the model in finance the more the analyst is trying
to substitute theory for experience.
- There's a lot wrong with Value at Risk (VaR) models that regulators
ignored.
- The assumption of market efficiency among regulators (such as Alan
Greenspan) was a huge mistake that led to excessively low interest rates and
bad behavior by banks and credit rating agencies.
- Auditors succumbed to self-serving biases of favoring their clients over
public investors.
- Banks were making huge gambles on other peoples' money.
- Investors themselves ignored risk such as poisoned CDO risks when they
should've known better. I love his analogy of black swans on a turkey farm.
- Why don't we see surprises coming (five
excellent reasons given here)?
- The only group of people who view the world realistically are the
clinically depressed.
- Model builders should stop substituting
elegance for reality.
- All financial theorists should be forced to
interact with practitioners.
- Practitioners need to abandon the myth of optimality before the fact.
Jensen Note
This also applies to abandoning the myth that we can set optimal accounting
standards.
- In the long term fundamentals matter.
- Don't get too bogged down in details at the expense of the big picture.
- Max Plank said science advances one funeral at a time.
- The speaker then entertains questions from the audience (some are very
good).
James Montier is a very good speaker from England!
Mr. Montier is a member of GMO’s asset allocation
team. Prior to joining GMO in 2009, he was co-head of Global Strategy at
Société Générale. Mr. Montier is the author of several books including
Behavioural Investing: A Practitioner’s Guide to Applying Behavioural
Finance; Value Investing: Tools and Techniques for Intelligent Investment;
and The Little Book of Behavioural Investing. Mr. Montier is a visiting
fellow at the University of Durham and a fellow of the Royal Society of
Arts. He holds a B.A. in Economics from Portsmouth University and an M.Sc.
in Economics from Warwick University
http://www.gmo.com/america/about/people/_departments/assetallocation.htm
There's a lot of useful information in this talk for accountics scientists.
Bob Jensen's threads on what went wrong with accountics research are at
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
How will World War III be fought to bring down the USA?
Target Breach Malware Partly Written in Russian
From the CFO Journal's Morning Ledger on January 17, 2014
Target
breach was part of broad attack
The holiday data
breach at Target appears to be part of a broad and
sophisticated international hacking campaign against multiple retailers,
the WSJ’s Danny Yadron reports.
Parts of the malicious computer code used against
Target’s credit-card readers had been on the Internet’s black market since
last spring and were partly written in
Russian. Both details suggest the attack
may have ties to organized crime in the former Soviet Union.
"Economics has met the enemy, and it is economics," by Ira Basen,
Globe and Mail, October 15, 2011 ---
http://www.theglobeandmail.com/news/politics/economics-has-met-the-enemy-and-it-is-economics/article2202027/page1/
Thank you Jerry Trites for the heads up.
After Thomas Sargent learned on Monday morning that
he and colleague Christopher Sims had been awarded the Nobel Prize in
Economics for 2011, the 68-year-old New York University professor struck an
aw-shucks tone with an interviewer from the official Nobel website: “We're
just bookish types that look at numbers and try to figure out what's going
on.”
But no one who'd followed Prof. Sargent's long,
distinguished career would have been fooled by his attempt at modesty. He'd
won for his part in developing one of economists' main models of cause and
effect: How can we expect people to respond to changes in prices, for
example, or interest rates? According to the laureates' theories, they'll do
whatever's most beneficial to them, and they'll do it every time. They don't
need governments to instruct them; they figure it out for themselves.
Economists call this the “rational expectations” model. And it's not just an
abstraction: Bankers and policy-makers apply these formulae in the real
world, so bad models lead to bad policy.
Which is perhaps why, by the end of that interview
on Monday, Prof. Sargent was adopting a more realistic tone: “We experiment
with our models,” he explained, “before we wreck the world.”
Rational-expectations theory and its corollary, the
efficient-market hypothesis, have been central to mainstream economics for
more than 40 years. And while they may not have “wrecked the world,” some
critics argue these models have blinded economists to reality: Certain the
universe was unfolding as it should, they failed both to anticipate the
financial crisis of 2008 and to chart an effective path to recovery.
The economic crisis has produced a crisis in the
study of economics – a growing realization that if the field is going to
offer meaningful solutions, greater attention must be paid to what is
happening in university lecture halls and seminar rooms.
While the protesters occupying Wall Street are not
carrying signs denouncing rational-expectations and efficient-market
modelling, perhaps they should be.
They wouldn't be the first young dissenters to call
economics to account. In June of 2000, a small group of elite graduate
students at some of France's most prestigious universities declared war on
the economic establishment. This was an unlikely group of student radicals,
whose degrees could be expected to lead them to lucrative careers in
finance, business or government if they didn't rock the boat. Instead, they
protested – not about tuition or workloads, but that too much of what they
studied bore no relation to what was happening outside the classroom walls.
They launched an online petition demanding greater
realism in economics teaching, less reliance on mathematics “as an end in
itself” and more space for approaches beyond the dominant neoclassical
model, including input from other disciplines, such as psychology, history
and sociology. Their conclusion was that economics had become an “autistic
science,” lost in “imaginary worlds.” They called their movement
Autisme-economie.
The students' timing is notable: It was the spring
of 2000, when the world was still basking in the glow of “the Great
Moderation,” when for most of a decade Western economies had been enjoying a
prolonged period of moderate but fairly steady growth.
Some economists were daring to think the
unthinkable – that their understanding of how advanced capitalist economies
worked had become so sophisticated that they might finally have succeeded in
smoothing out the destructive gyrations of capitalism's boom-and-bust cycle.
(“The central problem of depression prevention has been solved,” declared
another Nobel laureate, Robert Lucas of the University of Chicago, in 2003 –
five years before the greatest economic collapse in more than half a
century.)
The students' petition sparked a lively debate. The
French minister of education established a committee on economic education.
Economics students across Europe and North America began meeting and
circulating petitions of their own, even as defenders of the status quo
denounced the movement as a Trotskyite conspiracy. By September, the first
issue of the Post-Autistic Economic Newsletter was published in Britain.
As The Independent summarized the students'
message: “If there is a daily prayer for the global economy, it should be,
‘Deliver us from abstraction.'”
It seems that entreaty went unheard through most of
the discipline before the economic crisis, not to mention in the offices of
hedge funds and the Stockholm Nobel selection committee. But is it ringing
louder now? And how did economics become so abstract in the first place?
The great classical economists of the late 18th and
early 19th centuries had no problem connecting to the real world – the
Industrial Revolution had unleashed profound social and economic changes,
and they were trying to make sense of what they were seeing. Yet Adam Smith,
who is considered the founding father of modern economics, would have had
trouble understanding the meaning of the word “economist.”
What is today known as economics arose out of two
larger intellectual traditions that have since been largely abandoned. One
is political economy, which is based on the simple idea that economic
outcomes are often determined largely by political factors (as well as vice
versa). But when political-economy courses first started appearing in
Canadian universities in the 1870s, it was still viewed as a small offshoot
of a far more important topic: moral philosophy.
In The Wealth of Nations (1776), Adam Smith
famously argued that the pursuit of enlightened self-interest by individuals
and companies could benefit society as a whole. His notion of the market's
“invisible hand” laid the groundwork for much of modern neoclassical and
neo-liberal, laissez-faire economics. But unlike today's free marketers,
Smith didn't believe that the morality of the market was appropriate for
society at large. Honesty, discipline, thrift and co-operation, not
consumption and unbridled self-interest, were the keys to happiness and
social cohesion. Smith's vision was a capitalist economy in a society
governed by non-capitalist morality.
But by the end of the 19th century, the new field
of economics no longer concerned itself with moral philosophy, and less and
less with political economy. What was coming to dominate was a conviction
that markets could be trusted to produce the most efficient allocation of
scarce resources, that individuals would always seek to maximize their
utility in an economically rational way, and that all of this would
ultimately lead to some kind of overall equilibrium of prices, wages, supply
and demand.
Political economy was less vital because government
intervention disrupted the path to equilibrium and should therefore be
avoided except in exceptional circumstances. And as for morality, economics
would concern itself with the behaviour of rational, self-interested,
utility-maximizing Homo economicus. What he did outside the confines of the
marketplace would be someone else's field of study.
As those notions took hold, a new idea emerged that
would have surprised and probably horrified Adam Smith – that economics,
divorced from the study of morality and politics, could be considered a
science. By the beginning of the 20th century, economists were looking for
theorems and models that could help to explain the universe. One historian
described them as suffering from “physics envy.” Although they were dealing
with the behaviour of humans, not atoms and particles, they came to believe
they could accurately predict the trajectory of human decision-making in the
marketplace.
In their desire to have their field be recognized
as a science, economists increasingly decided to speak the language of
science. From Smith's innovations through John Maynard Keynes's work in the
1930s, economics was argued in words. Now, it would go by the numbers.
Continued in a long article
On July 14, 2006, Greg Wilson inquired about what the implications of poor
auditing are to investors and clients?
July 14, 2006 reply from Bob Jensen
Empirical evidence suggests that when an auditing firm begins to get a
reputation for incompetence and/or lack of independence its clients’ cost of
capital rises. This in fact was the case for the Arthur Andersen firm even
before it imploded. The firm’s reputation for bad audits and lack of
independence from Andersen Consulting, especially after the Waste Management
auditing scandal, was becoming so well known that some of its major clients
had already changed to another auditing firm in order to lower their cost of
capital.
Bob Jensen
July 14, 2006 reply from Ed Scribner
[escribne@NMSU.EDU]
I think the conventional wisdom is that poor audits
reduce the ability of information to reduce uncertainty, so investors charge
companies for this in the form of lower security prices.
In a footnote on p. 276 of the Watts and Zimmerman
"Market for Excuses" paper in the April 79 Accounting Review, WZ asserted
the following:
***
Share prices are unbiased estimates of the extent to which the auditor
monitors management and reduces agency costs... . The larger the
reduction in agency costs effected by an auditor (net of the auditor's
fees), the higher the value of the corporation's shares and bonds and,
ceteris paribus, the greater the demand for that auditor's services. If
the market observes the auditor failing to monitor management, it will
adjust downwards the share price of all firms who engage this auditor...
.
***
Sometime in the 1980s, Mike Kennelley tested this
assertion on the then-recent SEC censure of Peat Marwick. (I think his
article appeared in the Journal of Accounting and Economics, but I can't
find it at the moment.) The Watts/Zimmerman footnote suggests a negative
effect on all of Peat Marwick's client stock prices, but Mike, as I recall,
found a small positive effect.
Because agency theory seems to permit arguing any
side of any argument, a possible explanation was that the market interpreted
this adverse publicity as a wakeup call for Peat Marwick, causing it to
clean up its act so that its audits would be impeccable.
A couple of other examples of the empirical
research:
(1) Journal of Empirical Legal Studies Volume 1
Page 263 - July 2004 doi:10.1111/j.1740-1461.2004.00008.x Volume 1 Issue 2
Was Arthur Andersen Different? An Empirical
Examination of Major Accounting Firm Audits of Large Clients Theodore
Eisenberg1 and Jonathan R. Macey2
Enron and other corporate financial scandals
focused attention on the accounting industry in general and on Arthur
Andersen in particular. Part of the policy response to Enron, the
criminal prosecution of Andersen eliminated one of the few major audit
firms capable of auditing many large public corporations. This article
explores whether Andersen's performance, as measured by frequency of
financial restatements, measurably differed from that of other large
auditors. Financial restatements trigger significant negative market
reactions and their frequency can be viewed as a measure of accounting
performance. We analyze the financial restatement activity of
approximately 1,000 large public firms from 1997 through 2001. After
controlling for client size, region, time, and industry, we find no
evidence that Andersen's performance significantly differed from that of
other large accounting firms.
... Hiring an auditor, at least in theory,
allows the client company to "rent" the reputation of the accounting
firm, which rents its reputation for care, honesty, and integrity to its
clients.
... From the perspective of audit firms'
clients, good audits are good investments because they reduce the cost
of capital and increase shareholder wealth. Good audits also increase
management's credibility among the investment community. In theory, the
capital markets audit the auditors.
------------------------------------
(2) Journal of Accounting Research Volume 40 Page 1221 - September 2002
doi:10.1111/1475-679X.00087 Volume 40 Issue 4
Corporate Financial Reporting and the Market
for Independent Auditing: Contemporary Research Shredded Reputation: The
Cost of Audit Failure Paul K. Chaney & Kirk L. Philipich
In this article
we investigate the impact of the Enron audit failure on auditor
reputation. Specifically, we examine Arthur Andersen's clients' stock
market impact surrounding various dates on which Andersen's audit
procedures and independence were under severe scrutiny. On the three
days following Andersen's admission that a significant number of
documents had been shredded, we find that Andersen's other clients
experienced a statistically negative market reaction, suggesting that
investors downgraded the quality of the audits performed by Andersen. We
also find that audits performed by Andersen's Houston office suffered a
more severe decline in abnormal returns on this date. We are not able to
show that Andersen's independence was questioned by the amount of
non-audit fees charged to its clients.
Ed Scribner
New Mexico State University, USA
Bob Jensen's threads on fraudulent and incompetent auditing are at
http://faculty.trinity.edu/rjensen/fraud001.htm
Why smart people can be so stupid Or Rationality, Intelligence, and Levels
of Analysis in Cognitive Science:
Is Dysrationalia Possible?
The sure-thing principle is not the only rule of
rational thinking that humans have been shown to violate. A substantial research
literature–one comprising literally hundreds of empirical studies conducted over
nearly four decades–has firmly established that people’s responses often deviate
from the performance considered normative on many reasoning tasks. For example,
people assess probabilities incorrectly, they display confirmation bias, they
test hypotheses inefficiently, they violate the axioms of utility theory, they
do not properly calibrate degrees of belief, they overproject their own opinions
onto others, they display illogical framing effects, they uneconomically honor
sunk costs, they allow prior knowledge to become implicated in deductive
reasoning, and they display numerous other information processing biases.
Keith E. Stanovich, In R. J. Sternberg (Ed.), Why smart people can be
so stupid (pp. 124-158). New Haven, CT: Yale University Press,
ISBN-13: 9780300101706, September 2009
Jensen Comment
And all of these real-world complications are usually brushed aside by
analytical accountics researchers, because real people mess up the mathematics.
Volker Laux and D. Paul Newman, "Auditor Liability and Client
Acceptance Decisions," The Accounting Review, Vol. 85, No. 1, 2010
pp. 261–285
One of the dubious assumptions of the entire Laux and Newman analysis is
equilibrium of an audit firm's litigation payout for a particular client that
has a higher likelihood to fail. If a client has a higher than average
likelihood to fail then it most likely is not in an equilibrium state.
Another leap of faith is continuity in the payout and risk functions to a
point where second derivatives can be calculated of such firms. In reality such
functions are likely to be highly non-continuous and subject to serious break
points. It is not clear how such a model could ever be applied to a real world
audit client.
Another assumption is that the audit firm's ex ante utility function
and a client firm's utility function are respectively as follows:
.
Yeah right. Have these utility functions ever been validated for any real
world client and auditor? As a matter of fact, what is the utility function of
any corporation that according to agency theory is a
nexus of contracts? My feeble mind cannot even imagine what a realistic
utility function looks like for a nexus of contracts.
I would instead contend that there is no audit firm utility function apart
from the interactions of the utilities of the major players in client
acceptance/retention decision and audit pricing decisions. For example, before
David Duncan was fired by Andersen, the decision to keep Enron as a client was
depended upon the interactive utility functions of David Duncan versus Carl Bass
versus Joseph Berardino. None of them
worked from a simplistic Andersen utility function such as the one shown in
Equation 20 above. Each worked interactively with each other in a very
complicated way that had Bass being released from the Enron audit and Berardino
buring his head in the sands of Lake Michigan.
The audit firm utility function, if it exists,
is based on the nexus of people rather than the nexus of contracts that we call
a "corporation."
The Laux and Newman paper also fails to include
the role of outside players in some decisions regarding risky players. A huge
outside player is the SEC that is often brought into the arena. Currently the
SEC is playing a role in the "merry-go-round of auditors" for a corporation
called Overstock.com that is currently working with the SEC to find an auditor.
See "Auditor Merry Go Round at Overstock.com," Big Four Blog, January 8,
2010 ---
http://www.bigfouralumni.blogspot.com/
Another leap of faith in the Laux and Newman paper is that auditor "liability environment" can be
decomposed into "three
components: (1) the strictness of the legal regime, defined as the probability
that the auditor is sued and found liable in case of an audit failure, (2)
potential damage payments from the auditor to investors and (3) other litigation
costs incurred by the auditor, labeled litigation frictions, such as attorneys’
fees or loss of reputation." It would seem that these three
components cannot be decomposed in real life without also accounting for the
nonlinear and possibly huge covariances.
A possible test of of this study might be reference to one case illustration
demonstrating that in at least one real world instance "an
increase in the potential damage payment actually leads to a reduction in the
client rejection rate." In the absence of such real world partial validation of
the analytical results, we are asked to accept a huge amount on unsupported
faith in untested assumptions inside Plato's Cave.
In finance mathematical analytics, a model derivation is on occasion put to
the test. A real world example of where assumptions break down is the
mathematical analytical model that is suspected of having contributed greatly to
the present economic crisis.
Can the 2008 investment banking failure be traced to a math error?
Recipe for Disaster: The Formula That Killed Wall Street ---
http://www.wired.com/techbiz/it/magazine/17-03/wp_quant?currentPage=all
Link forwarded by Jim Mahar ---
http://financeprofessorblog.blogspot.com/2009/03/recipe-for-disaster-formula-that-killed.html
Some highlights:
"For five years, Li's formula, known as a
Gaussian copula function, looked like an unambiguously positive
breakthrough, a piece of financial technology that allowed hugely
complex risks to be modeled with more ease and accuracy than ever
before. With his brilliant spark of mathematical legerdemain, Li made it
possible for traders to sell vast quantities of new securities,
expanding financial markets to unimaginable levels.
His method was adopted by everybody from bond
investors and Wall Street banks to ratings agencies and regulators. And
it became so deeply entrenched—and was making people so much money—that
warnings about its limitations were largely ignored.
Then the model fell apart." The article goes on to show that correlations
are at the heart of the problem.
"The reason that ratings agencies and investors
felt so safe with the triple-A tranches was that they believed there was
no way hundreds of homeowners would all default on their loans at the
same time. One person might lose his job, another might fall ill. But
those are individual calamities that don't affect the mortgage pool much
as a whole: Everybody else is still making their payments on time.
But not all calamities are individual, and
tranching still hadn't solved all the problems of mortgage-pool risk.
Some things, like falling house prices, affect a large number of people
at once. If home values in your neighborhood decline and you lose some
of your equity, there's a good chance your neighbors will lose theirs as
well. If, as a result, you default on your mortgage, there's a higher
probability they will default, too. That's called correlation—the degree
to which one variable moves in line with another—and measuring it is an
important part of determining how risky mortgage bonds are."
I would highly recommend reading the entire thing that gets much more
involved with the
actual formula etc.
The
“math error” might truly be have been an error or it might have simply been a
gamble with what was perceived as miniscule odds of total market failure.
Something similar happened in the case of the trillion-dollar disastrous 1993
collapse of Long Term Capital Management formed by Nobel Prize winning
economists and their doctoral students who took similar gambles that ignored the
“miniscule odds” of world market collapse -- -
http://faculty.trinity.edu/rjensen/FraudRotten.htm#LTCM
The rhetorical question is whether the failure is ignorance in model building or
risk taking using the model?
Also see
"In Plato's Cave: Mathematical models are a
powerful way of predicting financial markets. But they are fallible" The
Economist, January 24, 2009, pp. 10-14 ---
http://faculty.trinity.edu/rjensen/2008Bailout.htm#Bailout
Wall Street’s Math Wizards Forgot a Few Variables
What wasn’t recognized was the importance of a
different species of risk — liquidity risk,” Stephen Figlewski, a professor of
finance at the Leonard N. Stern School of Business at New York University, told
The Times. “When trust in counterparties is lost, and markets freeze up so there
are no prices,” he said, it “really showed how different the real world was from
our models.
DealBook, The New York Times, September 14, 2009 ---
http://dealbook.blogs.nytimes.com/2009/09/14/wall-streets-math-wizards-forgot-a-few-variables/
Bottom Line
My conclusion is that the mathematical analytics papers in general in TAR are
not adequately put to the test if the Senior Editor refuses to put commentaries
on published papers out to review. This policy discourages independent
researchers from even bothering to write commentaries on the published papers.
"Deductive reasoning," Phil Johnson-Laird, Wiley Interscience,
,2009 ---
http://www3.interscience.wiley.com/cgi-bin/fulltext/123228371/PDFSTART?CRETRY=1&SRETRY=0
This article begins with an account of logic,
and of how logicians formulate formal rules of inference for the sentential
calculus, which hinges on analogs of negation and the connectives if, or,
and and. It considers the various ways in which computer scientists have
written programs to prove the validity of
inferences in this and other domains. Finally,
it outlines the principal psychological theories of how human reasoners
carry out deductions. 2009 John Wiley & Sons, Ltd. WIREs Cogn Sci 2010
1 8–1
Audit Pricing in the Real World ---
See Appendix 3
Warnings from a Theoretical Physicist With an Interest in Economics and
Finance
"Beware of Economists (and accoutnics scientists) Peddling Elegant Models,"
by Mark Buchanan, Bloomberg, April 7, 2013 ---
http://www.bloomberg.com/news/2013-04-07/beware-of-economists-peddling-elegant-models.html
. . .
In one very practical and consequential area,
though, the allure of elegance has exercised a perverse and lasting
influence. For several decades, economists have sought to express the way
millions of people and companies interact in a handful of pretty equations.
The resulting mathematical structures, known as
dynamic stochastic general equilibrium models, seek to reflect our messy
reality without making too much actual contact with it. They assume that
economic trends emerge from the decisions of only a few “representative”
agents -- one for households, one for firms, and so on. The agents are
supposed to plan and act in a rational way, considering the probabilities of
all possible futures and responding in an optimal way to unexpected shocks.
Surreal Models
Surreal as such models might seem, they have played
a significant role in informing policy at the world’s largest central banks.
Unfortunately, they don’t work very well, and they proved spectacularly
incapable of accommodating the way markets and the economy acted before,
during and after the recent crisis.
Now, some economists are beginning to pursue a
rather obvious, but uglier, alternative. Recognizing that an economy
consists of the actions of millions of individuals and firms thinking,
planning and perceiving things differently, they are trying to model all
this messy behavior in considerable detail. Known as agent-based
computational economics, the approach is showing promise.
Take, for example, a 2012 (and still somewhat
preliminary)
study by a group of
economists, social scientists, mathematicians and physicists examining the
causes of the housing boom and subsequent collapse from 2000 to 2006.
Starting with data for the Washington D.C. area, the study’s authors built
up a computational model mimicking the behavior of more than two million
potential homeowners over more than a decade. The model included detail on
each individual at the level of race, income, wealth, age and marital
status, and on how these characteristics correlate with home buying
behavior.
Led by further empirical data, the model makes some
simple, yet plausible, assumptions about the way people behave. For example,
homebuyers try to spend about a third of their annual income on housing, and
treat any expected house-price appreciation as income. Within those
constraints, they borrow as much money as lenders’ credit standards allow,
and bid on the highest-value houses they can. Sellers put their houses on
the market at about 10 percent above fair market value, and reduce the price
gradually until they find a buyer.
The model captures things that dynamic stochastic
general equilibrium models do not, such as how rising prices and the
possibility of refinancing entice some people to speculate, buying
more-expensive houses than they otherwise would. The model accurately fits
data on the housing market over the period from 1997 to 2010 (not
surprisingly, as it was designed to do so). More interesting, it can be used
to probe the deeper causes of what happened.
Consider, for example, the assertion of some
prominent economists, such as
Stanford University’s
John Taylor, that the
low-interest-rate policies of the
Federal Reserve were
to blame for the housing bubble. Some dynamic stochastic general equilibrium
models can be used to support this view. The agent- based model, however,
suggests that
interest rates
weren’t the primary driver: If you keep rates at higher levels, the boom and
bust do become smaller, but only marginally.
Leverage Boom
A much more important driver might have been
leverage -- that is, the amount of money a homebuyer could borrow for a
given down payment. In the heady days of the housing boom, people were able
to borrow as much as 100 percent of the value of a house -- a form of easy
credit that had a big effect on housing demand. In the model, freezing
leverage at historically normal levels completely eliminates both the
housing boom and the subsequent bust.
Does this mean leverage was the culprit behind the
subprime debacle and the related global financial crisis? Not necessarily.
The model is only a start and might turn out to be wrong in important ways.
That said, it makes the most convincing case to date (see my
blog for more
detail), and it seems likely that any stronger case will have to be based on
an even deeper plunge into the messy details of how people behaved. It will
entail more data, more agents, more computation and less elegance.
If economists jettisoned elegance and got to work
developing more realistic models, we might gain a better understanding of
how crises happen, and learn how to anticipate similarly unstable episodes
in the future. The theories won’t be pretty, and probably won’t show off any
clever mathematics. But we ought to prefer ugly realism to beautiful
fantasy.
(Mark Buchanan, a theoretical physicist and the author of “The Social
Atom: Why the Rich Get Richer, Cheaters Get Caught and Your Neighbor Usually
Looks Like You,” is a Bloomberg View columnist. The opinions expressed are
his own.)
Jensen Comment
Bob Jensen's threads on the mathematical formula that probably led to the
economic collapse after mortgage lenders peddled all those poisoned mortgages
---
"What use is game theory?" by Steve Hsu, Information Processing,
May 4, 2011 ---
http://infoproc.blogspot.com/2011/05/what-use-is-game-theory.html
Fantastic
interview with game theorist Ariel Rubinstein on
Econtalk. I agree with Rubinstein that game theory has little predictive
power in the real world, despite the pretty mathematics. Experiments at RAND
(see, e.g., Mirowski's
Machine Dreams) showed early game theorists,
including Nash, that people don't conform to the idealizations in their
models. But this wasn't emphasized (Mirowski would claim it was deliberately
hushed up) until more and more experiments showed similar results. (Who
woulda thought -- people are "irrational"! :-)
Perhaps the most useful thing about game theory is that it requires you to
think carefully about decision problems. The discipline of this kind of
analysis is valuable, even if the models have limited applicability to real
situations.
Rubinstein discusses a number of topics, including raw intelligence vs
psychological insight and its importance in economics (see also
here). He has, in my opinion, a very developed and
mature view of what social scientists actually do, as opposed to what they
claim to do.
Continued in article
The problem is when the model created to represent
reality takes on a life of its own completely detached from the reality that it
is supposed to model that nonsense can easily ensue.
Was it Mark Twain who wrote: "The criterion of
understanding is a simple explanation."?
As quoted by Martin Weiss in a comment to the article below.
But a lie gets halfway around the world while the
truth is still tying its shoes
Mark Twain as quoted by PKB (in Mankato, MN) in a comment to the article below.
"US Net Investment Income," by Paul Krugman, The New York Times,
December 31, 2011 ---
http://krugman.blogs.nytimes.com/2011/12/31/us-net-investment-income/
Especially note the cute picture.
December 31, 2011 Comment by Wendell Murray
http://krugman.blogs.nytimes.com/2011/12/31/i-like-math/#postComment
Mathematics, like word-oriented languages, uses
symbols to represent concepts, so it is essentially the same as
word-oriented languages that everyone is comfortable with.
Because mathematics is much more precise and in most ways much simpler than
word-oriented languages, it is useful for modeling (abstraction from) of the
messiness of the real world.
The problem, as Prof. Krugman notes, is when the model created to represent
reality takes on a life of its own completely detached from the reality that
it is supposed to model that nonsense can easily ensue.
This is what has happened in the absurd conclusions often reached by those
who blindly believe in the infallibility of hypotheses such as the rational
expectations theory or even worse the completely peripheral concept of
so-called Ricardian equivalence. These abstractions from reality have value
only to the extent that they capture the key features of reality. Otherwise
they are worse than useless.
I think some academics and/or knowledgeless distorters of academic theories
in fact just like to use terms such as "Ricardian equivalence theorem"
because that term, for example, sounds so esoteric whereas the theorem
itself is not much of anything.
Ricardian Equivalence ---
http://en.wikipedia.org/wiki/Ricardian_equivalence
Jensen Comment
One of the saddest flaws of accountics science archival studies is the repeated
acceptance of the CAPM mathematics allowing the CAPM to "represent reality on a
life of its own" when in fact the CAPM is a seriously flawed representation of
investing reality ---
http://faculty.trinity.edu/rjensen/theory01.htm#AccentuateTheObvious
At the same time one of the things I dislike about the exceedingly left-wing
biased, albeit brilliant, Paul Krugman is his playing down of trillion dollar
deficit spending and his flippant lack of concern about $80 trillion in unfunded
entitlements. He just turns a blind eye toward risks of Zimbabwe-like inflation.
As noted below, he has a Nobel Prize in Economics but
"doesn't command respect in the profession".
Put another way, he's more of a liberal preacher than an economics teacher.
Paul Krugman ---
http://en.wikipedia.org/wiki/Paul_Krugman
Economics and policy recommendations
Economist and former
United States Secretary of the Treasury
Larry Summers has stated Krugman has a tendency to
favor more extreme policy recommendations because "it’s much more
interesting than agreement when you’re involved in commenting on rather than
making policy."
According to Harvard professor of economics
Robert Barro, Krugman "has never done any work in
Keynesian macroeconomics" and makes arguments that are politically
convenient for him.Nobel laureate
Edward Prescott has charged that Krugman "doesn't
command respect in the profession", as "no
respectable macroeconomist" believes that
economic stimulus works, though the number of
economists who support such stimulus is "probably a majority".
Bob Jensen's critique of analytical models in accountics science (Plato's
Cave) can be found at
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#Analytics
Why Do Accountics Scientists Get Along So Well?
To a fault I've argued that accountics scientists do not challenge each other
or do replications and other validity tests of their published research ---
See below.
By comparison the real science game is much more a hard ball game of
replication, critical commentary, and other validity checking. Accountics
scientists have a long way to go in their quest to become more like real
scientists.
"Casualty of the Math Wars," by Scott Jaschik, Inside Higher Ed,
October 15, 2012 ---
http://www.insidehighered.com/news/2012/10/15/stanford-professor-goes-public-attacks-over-her-math-education-research
. . .
The
"math wars" have raged since the 1990s. A series
of reform efforts (of which Boaler's work is a part) have won support from
many scholars and a growing number of school districts. But a traditionalist
school (of which Milgram and Bishop are part) has pushed back, arguing that
rigor and standards are being sacrificed. Both sides accuse the other of
oversimplifying the other's arguments, and studies and op-eds from
proponents of the various positions appear regularly in education journals
and the popular press. Several mathematics education experts interviewed for
this article who are supportive of Boaler and her views stressed that they
did not view all, or even most, criticism from the "traditionalist" camp as
irresponsible.
The essay Boaler published Friday night noted that
there has been "spirited academic debate" about her ideas and those of
others in mathematics education, and she says that there is nothing wrong
with that.
"Milgram and Bishop have gone beyond the bounds of
reasoned discourse in a campaign to systematically suppress empirical
evidence that contradicts their stance," Boaler wrote. "Academic
disagreement is an inevitable consequence of academic freedom, and I welcome
it. However, responsible disagreement and academic bullying are not the same
thing. Milgram and Bishop have engaged in a range of tactics to discredit me
and damage my work which I have now decided to make public."
Some experts who have been watching the debate say
that the reason this dispute is important is because Boaler's work is not
based simply on a critique of traditional methods of teaching math, but
because she has data to back up her views.
Keith Devlin, director of the Human Sciences and
Technologies Advanced Research Institute at Stanford, said that he has
"enormous respect" for Boaler, although he characterized himself as someone
who doesn't know her well, but has read her work and is sympathetic to it.
He said that he shares her views, but that he does so "based on my own
experience and from reading the work of others," not from his own research.
So he said that while he has also faced "unprofessional" attacks when he has
expressed those views, he hasn't attracted the same level of criticism as
has Boaler.
Of her critics, Devlin said that "I suspect they
fear her because she brings hard data that threatens their view of how
children should be taught mathematics." He said that the criticisms of
Boaler reach "the point of character assassination."
Debating the Data
The Milgram/Bishop essay that Boaler said has
unfairly damaged her reputation is called
"A Close Examination of Jo Boaler's Railside Report,"
and appears on Milgram's Stanford website. ("Railside"
refers to one of the schools Boaler studied.) The piece says that Boaler's
claims are "grossly exaggerated," and yet expresses fear that they could be
influential and so need to be rebutted. Under federal privacy protection
requirements for work involving schoolchildren, Boaler agreed to keep
confidential the schools she studied and, by extension, information about
teachers and students. The Milgram/Bishop essay claims to have identified
some of those schools and says this is why they were able to challenge her
data.
Boaler said -- in her essay and in an interview --
that this puts her in a bind. She cannot reveal more about the schools
without violating confidentiality pledges, even though she is being accused
of distorting data. While the essay by Milgram and Bishop looks like a
journal article, Boaler notes that it has in fact never been published, in
contrast to her work, which has been subjected to peer review in multiple
journals and by various funding agencies.
Further, she notes that Milgram's and Bishop's
accusations were investigated by Stanford when Milgram in 2006 made a formal
charge of research misconduct against her, questioning the validity of her
data collection. She notes in her new essay that the charges "could have
destroyed my career." Boaler said that her final copy of the initial
investigation was deemed confidential by the university, but she provided a
copy of the conclusions, which rejected the idea that there had been any
misconduct.
Here is the conclusion of that report: "We
understand that there is a currently ongoing (and apparently passionate)
debate in the mathematics education field concerning the best approaches and
methods to be applied in teaching mathematics. It is not our task under
Stanford's policy to determine who is 'right' and who is 'wrong' in this
academic debate. We do note that Dr. Boaler's responses to the questions put
to her related to her report were thorough, thoughtful, and offered her
scientific rationale for each of the questions underlying the allegations.
We found no evidence of scientific misconduct or fraudulent behavior related
to the content of the report in question. In short, we find that the
allegations (such as they are) of scientific misconduct do not have
substance."
Even though the only body to examine the
accusations made by Milgram rejected them, and even though the Milgram/Bishop
essay has never been published beyond Milgram's website, the accusations in
the essay have followed Boaler all over as supporters of Milgram and Bishop
cite the essay to question Boaler's ethics. For example, an article she and
a co-author wrote about her research that was published in a leading journal
in education research, Teachers College Record, attracted
a comment that said the findings were
"imaginative" and asked if they were "a prime example of data cooking." The
only evidence offered: a link to the Milgram/Bishop essay.
In an interview, Boaler said that, for many years,
she has simply tried to ignore what she considers to be unprofessional,
unfair criticism. But she said she was prompted to speak out after thinking
about the fallout from an experience this year when Irish educational
authorities brought her in to consult on math education. When she wrote
an op-ed in The Irish Times, a commenter
suggested that her ideas be treated with "great skepticism" because they had
been challenged by prominent professors, including one at her own
university. Again, the evidence offered was a link to the Stanford URL of
the Milgram/Bishop essay.
"This guy Milgram has this on a webpage. He has it
on a Stanford site. They have a campaign that everywhere I publish, somebody
puts up a link to that saying 'she makes up data,' " Boaler said. "They are
stopping me from being able to do my job."
She said one reason she decided to go public is
that doing so gives her a link she can use whenever she sees a link to the
essay attacking her work.
Bishop did not respond to e-mail messages
requesting comment about Boaler's essay. Milgram via e-mail answered a few
questions about Boaler's essay. He said she inaccurately characterized a
meeting they had after she arrived at Stanford. (She said he discouraged her
from writing about math education.) Milgram denied engaging in "academic
bullying."
He said via e-mail that the essay was prepared for
publication in a journal and was scheduled to be published, but "the HR
person at Stanford has some reservations because it turned out that it was
too easy to do a Google search on some of the quotes in the paper and
thereby identify the schools involved. At that point I had so many other
things that I had to attend to that I didn't bother to make the
corrections." He also said that he has heard more from the school since he
wrote the essay, and that these additional discussions confirm his criticism
of Boaler's work.
In an interview Sunday afternoon, Milgram said that
by "HR" in the above quote, he meant "human research," referring to the
office at Stanford that works to protect human subjects in research. He also
said that since it was only those issues that prevented publication, his
critique was in fact peer-reviewed, just not published.
Further, he said that Stanford's investigation of
Boaler was not handled well, and that those on the committee considered the
issue "too delicate and too hot a potato." He said he stood behind
everything in the paper. As to Boaler's overall criticism of him, he said
that he would "have discussions with legal people, and I'll see if there is
an appropriate action to be taken, but my own inclination is to ignore it."
Milgram also rejected the idea that it was not
appropriate for him to speak out on these issues as he has. He said he first
got involved in raising questions about research on math education as the
request of an assistant in the office of Rod Paige, who held the job of U.S.
education secretary during the first term of President George W. Bush.
Ze'ev Wurman, a supporter of Milgram and Bishop,
and one who has posted the link to their article elsewhere, said he wasn't
bothered by its never having been published. "She is basically using the
fact that it was not published to undermine its worth rather than argue the
specific charges leveled there by serious academics," he said.
Critiques 'Without Merit'
E-mail requests for comment from several leading
figures in mathematics education resulted in strong endorsements of Boaler's
work and frustration at how she has been treated over the years.
Jeremy Kilpatrick, a professor of mathematics
education at the University of Georgia who has chaired commissions on the
subject for the National Research Council and the Rand Corporation, said
that "I have long had great respect for Jo Boaler and her work, and I have
been very disturbed that it has been attacked as faulty or disingenuous. I
have been receiving multiple e-mails from people who are disconcerted at the
way she has been treated by Wayne Bishop and Jim Milgram. The critiques by
Bishop and Milgram of her work are totally without merit and unprofessional.
I'm pleased that she has come forward at last to give her side of the story,
and I hope that others will see and understand how badly she has been
treated."
Alan H. Schoenfeld is the Elizabeth and Edward
Conner Professor of Education at the University of California at Berkeley,
and a past president of the American Educational Research Association and
past vice president of the National Academy of Education. He was reached in
Sweden, where he said his e-mail has been full of commentary about Boaler's
Friday post. "Boaler is a very solid researcher. You don't get to be a
professor at Stanford, or the Marie Curie Professor of Mathematics Education
at the University of Sussex [the position she held previously], unless you
do consistently high quality, peer-reviewed research."
Schoenfeld said that the discussion of Boaler's
work "fits into the context of the math wars, which have sometimes been
argued on principle, but in the hands of a few partisans, been vicious and
vitriolic." He said that he is on a number of informal mathematics education
networks, and that the response to Boaler's essay "has been swift and, most
generally, one of shock and support for Boaler." One question being asked,
he said, is why Boaler was investigated and no university has investigated
the way Milgram and Bishop have treated her.
A spokeswoman for Stanford said the following via
e-mail: "Dr. Boaler is a nationally respected scholar in the field of math
education. Since her arrival more than a decade ago, Stanford has provided
extensive support for Dr. Boaler as she has engaged in scholarship in this
field, which is one in which there is wide-ranging academic opinion. At the
same time, Stanford has carefully respected the fundamental principle of
academic freedom: the merits of a position are to be determined by scholarly
debate, rather than by having the university arbitrate or interfere in the
academic discourse."
Boaler in Her Own Words
Here is a YouTube video of Boaler discussing and
demonstrating her ideas about math education with a group of high school
students in Britain.
Continued in article
How Accountics Scientists Should Change:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One more mission in what's left of my life will be to try to change this so that
we don't get along so well
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Wikipedia is Fantastic Except in Accountancy
"Wikipedia, a Professor's Best Friend," by Dariusz Jemielniak,
Chronicle of Higher Education, October 13, 2014 ---
http://chronicle.com/article/Wikipedia-a-Professors-Best/149337/?cid=wc&utm_source=wc&utm_medium=en
Jensen Comment
I am a cheerleader for Wikipedia. However, one of my criticisms is that coverage
across academic disciplines is highly variable. For example, coverage of
economics and finance is fantastic. Coverage of accountancy can best be
described as lousy. It's a Pogo thing. When I look for the enemy I discover that
"He is us."
Disciplines covered extensively are generally strong in both theory and
academic debate, particularly philosophy and science. Accountancy is weak in
theory and the top academic research journals in
accounting will not publish replications or even commentaries. This
greatly limits anything interesting that can be posted to Wikipedia ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Academic leaders in philosophy and science are nearly all covered extensively
in Wikipedia. Academic leaders in accountancy are rarely mentioned, and when
they are mentioned their Wikipedia modules are puny and boring.
What academic accounting leader has an extensive Wikipedia module? I've never
found a single one.
When I look up academic economists I not only find frequent Wikipedia
modules, virtually all of those modules contain summaries of their research and
summaries of controversies surrounding their research. I've never found a
Wikipedia article about an academic accounting researcher that contains
summaries of the controversies surrounding that professor's research.
Accounting research won't have much respect in the world until its leading
researchers are in Wikipedia, including summaries of controversies of their
research findings. The enemy is us.
Bob Jensen's threads on Wikipedia are at
http://faculty.trinity.edu/rjensen/Searchh.htm
Why Pick on The Accounting Review (TAR)?
The Accounting Review (TAR) since 1926 ---
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm
Jensen Comment
Occasionally I receive messages questioning why I pick on TAR when in fact my
complaints are really with accountics scientists and accountics science in
general.
Accountics is the mathematical science of values.
Charles Sprague [1887] as quoted by McMillan [1998, p. 1]
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm
Academic psychology and medical testing are both dogged by unreliability.
The reason is clear: we got probability wrong ---
https://aeon.co/essays/it-s-time-for-science-to-abandon-the-term-statistically-significant?utm_source=Aeon+Newsletter&utm_campaign=b8fc3425d2-Weekly_Newsletter_14_October_201610_14_2016&utm_medium=email&utm_term=0_411a82e59d-b8fc3425d2-68951505
Jensen Comment
In accountics science we got probability wrong as well, but who cares about
accountics science. The goal is to get research papers published. Nobody cares
about the reliability of the findings, because nobody in the real world cares
about the findings
How Accountics Scientists Should Change:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
How Well Do Anomalies in Finance and Accounting Replicate ---
https://replicationnetwork.com/2017/05/19/how-well-do-anomalies-in-finance-and-accounting-replicate/
“The anomalies literature is infested with
widespread p-hacking. We replicate the entire anomalies literature in
finance and accounting by compiling a largest-to-date data library that
contains 447 anomaly variables. With microcaps alleviated via New York Stock
Exchange breakpoints and value-weighted returns, 286 anomalies (64%)
including 95 out of 102 liquidity variables (93%) are insignificant at the
conventional 5% level. Imposing the cutoff t-value of three raises the
number of insignificance to 380 (85%). Even for the 161 significant
anomalies, their magnitudes are often much lower than originally reported.
Out of the 161, the q-factor model leaves 115 alphas insignificant (150 with
t < 3). In all, capital markets are more efficient than previously
recognized.”
How Accountics Scientists Should Change:
"Frankly, Scarlett, after I get a hit for my resume in The
Accounting Review I
just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Bob Jensen's threads on the very sorry state of replicated research in
accountancy --- Scroll up to the table of contents of
this document
Validity of research outcomes is not a priority test of academic accountants
seeking mostly to add hit lines to resumes. Top journal editors (think The
Accounting Review) don't even want to publish readers comments on articles. If
TAR referees accept an article for publication it becomes truth ipso facto.
Elsevier and the 5 Diseases of Academic Research ---
https://www.elsevier.com/connect/5-diseases-ailing-research-and-how-to-cure-them
This article summarizes the “diseases” ailing
scientific research as identified in the article
“On
doing better science: From thrill of discovery to policy implications”
by John Antonakis, recently published in The Leadership Quarterly.
Various Elsevier associates then discuss how
they see these problems being addressed. Given the huge role that Elsevier
plays in academic publishing, their view of the problems of scientific
research/publishing, and their ideas regarding potential solutions, should
be of interest.
David Johnstone asked me to write a paper on the following:
"A Scrapbook on What's Wrong with the Past, Present and Future of Accountics
Science"
Bob Jensen
February 19, 2014
SSRN Download:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2398296
Abstract
For operational convenience I define accountics science as
research that features equations and/or statistical inference. Historically,
there was a heated debate in the 1920s as to whether the main research
journal of academic accounting, The Accounting Review (TAR) that
commenced in 1926, should be an accountics journal with articles that mostly
featured equations. Practitioners and teachers of college accounting won
that debate.
TAR articles and accountancy doctoral dissertations prior to
the 1970s seldom had equations. For reasons summarized below, doctoral
programs and TAR evolved to where in the 1990s there where having equations
became virtually a necessary condition for a doctoral dissertation and
acceptance of a TAR article. Qualitative normative and case method
methodologies disappeared from doctoral programs.
What’s really meant by “featured
equations” in doctoral programs is merely symbolic of the fact that North
American accounting doctoral programs pushed out most of the accounting to
make way for econometrics and statistics that are now keys to the kingdom
for promotion and tenure in accounting schools ---
http://faculty.trinity.edu/rjensen/Theory01.htm#DoctoralPrograms
The purpose of this paper is to make a case that the accountics science
monopoly of our doctoral programs and published research is seriously
flawed, especially its lack of concern about replication and focus on
simplified artificial worlds that differ too much from reality to creatively
discover findings of greater relevance to teachers of accounting and
practitioners of accounting. Accountics scientists themselves became a Cargo
Cult.
June 5, 2013 reply to a long
thread by Bob Jensen
Hi Steve,
As usual, these AECM threads between you, me, and Paul Williams resolve
nothing to date. TAR still has zero articles without equations unless such
articles are forced upon editors like the Kaplan article was forced upon you
as Senior Editor. TAR still has no commentaries about the papers it
publishes and the authors make no attempt to communicate and have dialog
about their research on the AECM or the AAA Commons.
I do hope that our AECM threads will continue and lead one day to when
the top academic research journals do more to both encourage (1) validation
(usually by speedy replication), (2) alternate methodologies, (3) more
innovative research, and (4) more interactive commentaries.
I remind you that Professor Basu's essay is only one of four essays
bundled together in Accounting Horizons on the topic of how to make
accounting research, especially the so-called Accounting Sciience or
Accountics Science or Cargo Cult science, more innovative.
The four essays in this bundle are summarized and extensively quoted at
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Essays
- "Framing the Issue of Research Quality in a Context of Research
Diversity," by Christopher S. Chapman ---
- "Accounting Craftspeople versus Accounting Seers: Exploring the
Relevance and Innovation Gaps in Academic Accounting Research," by
William E. McCarthy ---
- "Is Accounting Research Stagnant?" by Donald V. Moser ---
- Cargo Cult Science "How Can Accounting Researchers Become More
Innovative? by Sudipta Basu ---
I will try to keep drawing attention to these important essays and spend
the rest of my professional life trying to bring accounting research closer
to the accounting profession.
I also want to dispel the myth that accountics research is harder than
making research discoveries without equations. The hardest research I can
imagine (and where I failed) is to make a discovery that has a noteworthy
impact on the accounting profession. I always look but never find such
discoveries reported in TAR.
The easiest research is to purchase a database and beat it with an
econometric stick until something falls out of the clouds. I've searched for
years and find very little that has a noteworthy impact on the accounting
profession. Quite often there is a noteworthy impact on other members of the
Cargo Cult and doctoral students seeking to beat the same data with their
sticks. But try to find a practitioner with an interest in these academic
accounting discoveries?
Our latest thread leads me to such questions as:
- Is accounting research of inferior quality relative to other
disciplines like engineering and finance?
- Are there serious innovation gaps in academic accounting research?
- Is accounting research stagnant?
- How can accounting researchers be more innovative?
- Is there an "absence of dissent" in academic accounting research?
- Is there an absence of diversity in our top academic accounting
research journals and doctoral programs?
- Is there a serious disinterest (except among the Cargo Cult) and
lack of validation in findings reported in our academic accounting
research journals, especially TAR?
- Is there a huge communications gap between academic accounting
researchers and those who toil teaching accounting and practicing
accounting?
- Why do our accountics scientists virtually ignore the AECM and the
AAA Commons and the Pathways Commission Report?
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One fall out of this thread is that I've been privately asked to write a
paper about such matters. I hope that others will compete with me in
thinking and writing about these serious challenges to academic accounting
research that never seem to get resolved.
Thank you Steve for sometimes responding in my threads on such issues in
the AECM.
Respectfully,
Bob Jensen
Rise in Research Cheating
"A Sharp Rise in Retractions Prompts Calls for Reform," by Carl Zimmer,
The New York Times, April 16, 2012 ---
http://www.nytimes.com/2012/04/17/science/rise-in-scientific-journal-retractions-prompts-calls-for-reform.html?_r=2&
In the fall of 2010, Dr. Ferric C. Fang made an
unsettling discovery. Dr. Fang, who is editor in chief of the journal
Infection and Immunity, found that one of his authors had doctored several
papers.
It was a new experience for him. “Prior to that
time,” he said in an interview, “Infection and Immunity had only retracted
nine articles over a 40-year period.”
The journal wound up retracting six of the papers
from the author, Naoki Mori of the University of the Ryukyus in Japan. And
it soon became clear that Infection and Immunity was hardly the only victim
of Dr. Mori’s misconduct. Since then, other scientific journals have
retracted two dozen of his papers, according to the watchdog blog Retraction
Watch.
“Nobody had noticed the whole thing was rotten,”
said Dr. Fang, who is a professor at the University of Washington School of
Medicine.
Dr. Fang became curious how far the rot extended.
To find out, he teamed up with a fellow editor at the journal, Dr. Arturo
Casadevall of the Albert Einstein College of Medicine in New York. And
before long they reached a troubling conclusion: not only that retractions
were rising at an alarming rate, but that retractions were just a
manifestation of a much more profound problem — “a symptom of a
dysfunctional scientific climate,” as Dr. Fang put it.
Dr. Casadevall, now editor in chief of the journal
mBio, said he feared that science had turned into a winner-take-all game
with perverse incentives that lead scientists to cut corners and, in some
cases, commit acts of misconduct.
“This is a tremendous threat,” he said.
Last month, in a pair of editorials in Infection
and Immunity, the two editors issued a plea for fundamental reforms. They
also presented their concerns at the March 27 meeting of the National
Academies of Sciences committee on science, technology and the law.
Members of the committee agreed with their
assessment. “I think this is really coming to a head,” said Dr. Roberta B.
Ness, dean of the University of Texas School of Public Health. And Dr. David
Korn of Harvard Medical School agreed that “there are problems all through
the system.”
No one claims that science was ever free of
misconduct or bad research. Indeed, the scientific method itself is intended
to overcome mistakes and misdeeds. When scientists make a new discovery,
others review the research skeptically before it is published. And once it
is, the scientific community can try to replicate the results to see if they
hold up.
But critics like Dr. Fang and Dr. Casadevall argue
that science has changed in some worrying ways in recent decades —
especially biomedical research, which consumes a larger and larger share of
government science spending.
In October 2011, for example, the journal Nature
reported that published retractions had increased tenfold over the past
decade, while the number of published papers had increased by just 44
percent. In 2010 The Journal of Medical Ethics published a study finding the
new raft of recent retractions was a mix of misconduct and honest scientific
mistakes.
Several factors are at play here, scientists say.
One may be that because journals are now online, bad papers are simply
reaching a wider audience, making it more likely that errors will be
spotted. “You can sit at your laptop and pull a lot of different papers
together,” Dr. Fang said.
But other forces are more pernicious. To survive
professionally, scientists feel the need to publish as many papers as
possible, and to get them into high-profile journals. And sometimes they cut
corners or even commit misconduct to get there.
To measure this claim, Dr. Fang and Dr. Casadevall
looked at the rate of retractions in 17 journals from 2001 to 2010 and
compared it with the journals’ “impact factor,” a score based on how often
their papers are cited by scientists. The higher a journal’s impact factor,
the two editors found, the higher its retraction rate.
The highest “retraction index” in the study went to
one of the world’s leading medical journals, The New England Journal of
Medicine. In a statement for this article, it questioned the study’s
methodology, noting that it considered only papers with abstracts, which are
included in a small fraction of studies published in each issue. “Because
our denominator was low, the index was high,” the statement said.
Continued in article
Bob Jensen's threads on cheating by faculty are at
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize
August 14, 2013 reply from Dennis Huber
Hmmmm. I wonder. Does accounting research culture
also need to be reformed?
August 14, 2013 reply from Bob Jensen
Hi Dennis,
Academics have debated the need for reform in academic accounting
research for decades. There are five primary areas of recommended reform,
but those areas overlap a great deal.
One area of suggested reform is to make it less easy to cheat and commit
undetected errors in academic accounting research by forcing/encouraging
replication, which is part and parcel to quality control in real science ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
A second area of improvement would turn accountics science from a pseudo
science into a real science. Real science does not stop inferring causality
from correlation when the causality data needed is not contained in the
databases studied empirically with econometric models.
Real scientists granulate deeper and deeper for causal factors to test
whether correlations are spurious. Accountics scientists seldom granulate
beyond their purchased databases ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsGranulationCurrentDraft.pdf
A third area of improvement would arise if accountics scientists were
forced to communicate their research findings better with accounting
teachers and practitioners. Accountics scientists just do not care about
such communications and should be forced to communicate in other venues such
as having publication in a Tech Corner of the AAA Commons ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Commons
A fourth area of improvement would be expand research methods of
accountics science to take on more interesting topics that are not so
amenable to traditional quantitative and statistical modeling. See Cargo
Cult mentality criticisms of accountics scients at
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Essays
It might be argued that accountics scientists don't replicate their findings
because nobody gives a damn about their findings ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#CargoCult
That's taking the criticisms too far. I find lots of accountics science
findings interesting. It's just that accountics scientists ignore topics
that I find more interesting --- particularly topics of interest to
accounting practitioners.
A fifth and related problem is that academic accounting inventors are
rare in comparison with academic inventors in science and engineering ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Inventors
I summarize how academic accounting researchers should change at
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Shame on you Richard. You claimed a totally incorrect reason for
not having any interest in the Pathways Commission Report. It is totally
incorrect to assume that the PC Report resolutions apply only to the CPA
profession.
Did you ever read the PC Report?
http://commons.aaahq.org/files/0b14318188/Pathways_Commission_Final_Report_Complete.pdf
Perhaps you just never read as far as Page 109 of the PC Report
quoted below:
Accounting Profession
1. The need to enhance the bilateral
relationship between the practice community and academe.
From the perspective of the
profession, one impediment to change has been the lack of a consistent
relationship between a broadly defined profession (i.e.,
public, private, government) and a broadly defined academy—large
and small public and private institutions. This impediment can be broken
down into three subparts. First, the Commission recommends the organizations
and individuals in the practice community work with accounting educators to
provide access to their internal training seminars, so faculty can remain
current with the workings of the profession. These organizations also need
to develop internship-type opportunities for interested faculty. Second, the
practice community and regulators need to reduce the barriers academics have
in obtaining research data. All stakeholders must work together to determine
how to overcome the privacy, confidentiality, and regulatory issues that
impede a greater number of researchers from obtaining robust data needed for
many of these research projects. Having access to this data could be
instrumental in helping the academy provide timely answers to the profession
on the impact of policy decisions on business practice. Third, the
profession and the academy need to share pedagogy best practices and
resources, especially with respect to rapidly changing educational delivery
models as both are essential segments of the lifelong educational pathway of
accounting professionals.
Conversely, academia is not without
fault in the development of this relationship. The Commission recommends
that more institutions, possibly through new accreditation standards, engage
more practitioners as executives in residence in the classroom. These
individuals can provide a different perspective on various topics and thus
might better explain what they do, how they do it, and why they do it.
Additionally, the Commission recommends institutions utilize accounting
professionals through department advisory boards that can assist the
department in the development of its curriculum.
Jensen Comment
I contend that you are simply another accountics scientist member of the Cargo
Cult looking for feeble luddite excuses to run for cover from the Pathways
Commission resolutions, especially resolutions to conduct more clinical research
and add diversity to the curricula of accounting doctoral programs.
Thank you for this honesty. But have you ever looked at the Pathways Commission
Report?
Have you ever looked at the the varied professionals who generated this report
and support its resolutions? In addition to CPA firms and universities, many
of the Commissioners come from major employers of Tuck School graduates
including large and small corporations and consulting firms.
The Report is located at
http://commons.aaahq.org/files/0b14318188/Pathways_Commission_Final_Report_Complete.pdf
The Pathways Commission was made up of representatives of all segments of
accounting academe, industrial accounting, and not-for-profit accounting. This
Commission never intended its resolutions to apply only to only public
accounting, which by the way includes tax accounting where you do most of your
research. You're grasping at straws here Richard!
Most accountics Cargo Cult scientists are silent and smug with respect to the
Pathways Commission Report, especially it's advocacy of clinical research and
research methods extending beyond GLM data mining of commercial databases that
the AAA leadership itself is admitting has grown stale and lacks innovation ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Essays
This is a perfect opportunity for me to recall the cargo plane scene from a
movie called Mondo Cane ---
http://en.wikipedia.org/wiki/Mondo_cane
Sudipta Basu picked up on the Cargo Cult analogy to stagnation of
accountics science research over the past few decades.
"How Can Accounting Researchers Become
More Innovative? by Sudipta Basu, Accounting Horizons, December 2012,
Vol. 26, No. 4, pp. 851-87 ---
http://aaajournals.org/doi/full/10.2308/acch-10311
We fervently hope that the
research pendulum will soon swing back from the narrow lines of
inquiry that dominate today's leading journals to a rediscovery
of the richness of what accounting research can be. For that to
occur, deans and the current generation of academic accountants
must give it a push.�
Michael H. Granof and Stephen A. Zeff (2008)
Rather than clinging to the
projects of the past, it is time to explore questions and engage
with ideas that transgress the current accounting research
boundaries. Allow your values to guide the formation of your
research agenda. The passion will inevitably follow �
Joni J. Young (2009)
. . .
Is Academic Accounting a “Cargo Cult Science”?
In a commencement address at Caltech titled “Cargo
Cult Science,” Richard Feynman (1974) discussed “science, pseudoscience, and
learning how not to fool yourself.” He argued that despite great efforts at
scientific research, little progress was apparent in school education.
Reading and mathematics scores kept declining, despite schools adopting the
recommendations of experts. Feynman (1974, 11) dubbed fields like these
“Cargo Cult Sciences,” explaining the term as follows:
In the South Seas there is a Cargo Cult of people.
During the war they saw airplanes land with lots of good materials, and they
want the same things to happen now. So they've arranged to make things like
runways, to put fires along the sides of the runways, to make a wooden hut
for a man to sit in, with two wooden pieces on his head like headphones and
bars of bamboo sticking out like antennas—he's the controller—and they wait
for the airplanes to land. They're doing everything right. The form is
perfect. It looks exactly the way it looked before. But it doesn't work.
No airplanes land. So I call
these things Cargo Cult Science, because they follow all the apparent
precepts and forms of scientific investigation, but they're missing
something essential, because the planes don't land.
Feynman (1974) argued that the key distinction
between a science and a Cargo Cult Science is scientific integrity: “[T]he
idea is to give all of the information to help others judge the value of
your contribution; not just the information that leads to judgment in one
particular direction or another.” In other words, papers should not be
written to provide evidence for one's hypothesis, but rather to “report
everything that you think might make it invalid.” Furthermore, “you should
not fool the layman when you're talking as a scientist.”
Even though more and more detailed rules are
constantly being written by the SEC, FASB, IASB, PCAOB, AICPA, and other
accounting experts (e.g., Benston et al. 2006), the number and severity of
accounting scandals are not declining, which is Feynman's (1969) hallmark of
a pseudoscience. Because accounting standards often reflect
standard-setters' ideology more than research into the effectiveness of
different alternatives, it is hardly surprising that accounting quality has
not improved. Even preliminary research findings can be transformed
journalistically into irrefutable scientific results by the political
process of accounting standard-setting. For example, the working paper
results of Frankel et al. (2002) were used to justify the SEC's longstanding
desire to ban non-audit services in the Sarbanes-Oxley Act of 2002, even
though the majority of contemporary and subsequent studies found different
results (Romano 2005). Unfortunately, the ability to bestow status by
invitation to select conferences and citation in official documents (e.g.,
White 2005) may let standard-setters set our research and teaching agendas
(Zeff 1989). Academic Accounting and the “Cult of Statistical Significance”
Ziliak and McCloskey (2008) argue that, in trying
to mimic physicists, many biologists and social scientists have become
devotees of statistical significance, even though most articles in physics
journals do not report statistical significance. They argue that statistical
tests are typically used to infer whether a particular effect exists, rather
than to measure the magnitude of the effect, which usually has more
practical import. While early empirical accounting researchers such as Ball
and Brown (1968) and Beaver (1968) went to great lengths to estimate how
much extra information reached the stock market in the earnings announcement
month or week, subsequent researchers limited themselves to answering
whether other factors moderated these effects. Because accounting theories
rarely provide quantitative predictions (e.g., Kinney 1986), accounting
researchers perform nil hypothesis significance testing rituals, i.e., test
unrealistic and atheoretical null hypotheses that a particular coefficient
is exactly zero.15 While physicists devise experiments to measure the mass
of an electron to the accuracy of tens of decimal places, accounting
researchers are still testing the equivalent of whether electrons have mass.
Indeed, McCloskey (2002) argues that the “secret sins of economics” are that
economics researchers use quantitative methods to produce qualitative
research outcomes such as (non-)existence theorems and statistically
significant signs, rather than to predict and measure quantitative (how
much) outcomes.
Practitioners are more interested in magnitudes
than existence proofs, because the former are more relevant in decision
making. Paradoxically, accounting research became less useful in the real
world by trying to become more scientific (Granof and Zeff 2008). Although
every empirical article in accounting journals touts the statistical
significance of the results, practical significance is rarely considered or
discussed (e.g., Lev 1989). Empirical articles do not often discuss the
meaning of a regression coefficient with respect to real-world decision
variables and their outcomes. Thus, accounting research results rarely have
practical implications, and this tendency is likely worst in fields with the
strongest reliance on statistical significance such as financial reporting
research.
Ziliak and McCloskey (2008) highlight a deeper
concern about over-reliance on statistical significance—that it does not
even provide evidence about whether a hypothesis is true or false. Carver
(1978) provides a memorable example of drawing the wrong inference from
statistical significance:
What is the probability of obtaining a dead person
(label this part D) given that the person was hanged (label this part H);
this is, in symbol form, what is P(D|H)? Obviously, it will be very high,
perhaps 0.97 or higher. Now, let us reverse the question. What is the
probability that a person has been hanged (H), given that the person is dead
(D); that is, what is P(H|D)? This time the probability will undoubtedly be
very low, perhaps 0.01 or lower. No one would be likely to make the mistake
of substituting the first estimate (0.97) for the second (0.01); that is, to
accept 0.97 as the probability that a person has been hanged given that the
person is dead. Even though this seems to be an unlikely mistake, it is
exactly the kind of mistake that is made with interpretations of statistical
significance testing—by analogy, calculated estimates of P(D|H) are
interpreted as if they were estimates of P(H|D), when they clearly are not
the same.
As Cohen (1994) succinctly explains, statistical
tests assess the probability of observing a sample moment as extreme as
observed conditional on the null hypothesis being true, or P(D|H0), where D
represents data and H0 represents the null hypothesis. However, researchers
want to know whether the null hypothesis is true, conditional on the sample,
or P(H0|D). We can calculate P(H0|D) from P(D|H0) by applying Bayes'
theorem, but that requires knowledge of P(H0), which is what researchers
want to discover in the first place. Although Ziliak and McCloskey (2008)
quote many eminent statisticians who have repeatedly pointed out this basic
logic, the essential point has not entered the published accounting
literature.
In my view, restoring relevance to mathematically
guided accounting research requires changing our role model from applied
science to engineering (Colander 2011).16 While science aims at finding
truth through application of institutionalized best practices with little
regard for time or cost, engineering seeks to solve a specific problem using
available resources, and the engineering method is “the strategy for causing
the best change in a poorly understood or uncertain situation within the
available resources” (Koen 2003). We should move to an experimental approach
that simulates real-world applications or field tests new accounting methods
in particular countries or industries, as would likely happen by default if
accounting were not monopolized by the IASB (Dye and Sunder 2001). The
inductive approach to standard-setting advocated by Littleton (1953) is
likely to provide workable solutions to existing problems and be more useful
than an axiomatic approach that starts from overly simplistic first
principles.
To reduce the gap between academe and practice and
stimulate new inquiry, AAA should partner with the FEI or Business
Roundtable to create summer, semester, or annual research internships for
accounting professors and Ph.D. students at corporations and audit firms.17
Accounting professors who have served as visiting scholars at the SEC and
FASB have reported positively about their experience (e.g., Jorgensen et al.
2007), and I believe that such practice internships would provide
opportunities for valuable fieldwork that supplements our experimental and
archival analyses. Practice internships could be an especially fruitful way
for accounting researchers to spend their sabbaticals.
Another useful initiative would be to revive the
tradition of The Accounting Review publishing papers that do not rely on
statistical significance or mathematical notation, such as case studies,
field studies, and historical studies, similar to the Journal of Financial
Economics (Jensen et al. 1989).18 A separate editor, similar to the book
reviews editor, could ensure that appropriate criteria are used to evaluate
qualitative research submissions (Chapman 2012). A co-editor from practice
could help ensure that the topics covered are current and relevant, and help
reverse the steep decline in AAA professional membership. Encouraging
diversity in research methods and topics is more likely to attract new
scholars who are passionate and intrinsically care about their research,
rather than attracting only those who imitate current research fads for
purely instrumental career reasons.
The relevance of accounting journals can be
enhanced by inviting accomplished guest authors from outside accounting. The
excellent April 1983 issue of The Accounting Review contains a section
entitled “Research Perspectives from Related Disciplines,” which includes
essays by Robert Wilson (Decision Sciences), Michael Jensen and Stephen Ross
(Finance and Economics), and Karl Weick (Organizational Behavior) that were
based on invited presentations at the 1982 AAA Annual Meeting. The
thought-provoking essays were discussed by prominent accounting academics
(Robert Kaplan, Joel Demski, Robert Libby, and Nils Hakansson); I still use
Jensen (1983) to start each of my Ph.D. courses. Academic outsiders bring
new perspectives to familiar problems and can often reframe them in ways
that enable solutions (Tullock 1966).
I still lament that no accounting journal editor
invited the plenary speakers—Joe Henrich, Denise Schmandt-Besserat, Michael
Hechter, Eric Posner, Robert Lucas, and Vernon Smith—at the 2007 AAA Annual
Meeting to write up their presentations for publication in accounting
journals. It is rare that Nobel Laureates and U.S. Presidential Early Career
Award winners address AAA annual meetings.20 I strongly urge that AAA annual
meetings institute a named lecture given by a distinguished researcher from
a different discipline, with the address published in The Accounting Review.
This would enable cross-fertilization of ideas between accounting and other
disciplines. Several highly cited papers published in the Journal of
Accounting and Economics were written by economists (Watts 1998), so this
initiative could increase citation flows from accounting journals to other
disciplines.
HOW CAN WE MAKE U.S. ACCOUNTING JOURNALS MORE
READABLE AND INTERESTING?
Even the greatest discovery will have little impact
if other people cannot understand it or are unwilling to make the effort.
Zeff (1978) says, “Scholarly writing need not be abstruse. It can and should
be vital and relevant. Research can succeed in illuminating the dark areas
of knowledge and facilitating the resolution of vexing problems—but only if
the report of research findings is communicated to those who can carry the
findings further and, in the end, initiate change.” If our journals put off
readers, then our research will not stimulate our students or induce change
in practice (Dyckman 1989).
Michael Jensen (1983, 333–334) addressed the 1982
AAA Annual Meeting saying:
Unfortunately, there exists in the profession an
unwarranted bias toward the use of mathematics even in situations where it
is unproductive or useless. One manifestation of this is the common use of
the terms “rigorous” or “analytical” or even “theoretical” as identical with
‘‘mathematical.” None of these links is, of course, correct. Mathematical is
not the same as rigorous, nor is it the same as analytical or theoretical.
Propositions can be logically rigorous without being mathematical, and
analysis does not have to take the form of symbols and equations. The
English sentence and paragraph will do quite well for many analytical
purposes. In addition, the use of mathematics does not prevent the
commission of errors—even egregious ones.
Unfortunately, the top accounting journals
demonstrate an increased “tyranny of formalism” that “develops when
mathematically inclined scholars take the attitude that if the analytical
language is not mathematics, it is not rigorous, and if a problem cannot be
solved with the use of mathematics, the effort should be abandoned” (Jensen
1983, 335). Sorter (1979) acidly described the transition from normative to
quantitative research: “the golden age of empty blindness gave way in the
sixties to bloated blindness calculated to cause indigestion. In the
sixties, the wonders of methodology burst upon the minds of accounting
researchers. We entered what Maslow described as a mean-oriented age.
Accountants felt it was their absolute duty to regress, regress and
regress.” Accounting research increasingly relies on mathematical and
statistical models with highly stylized and unrealistic assumptions. As
Young (2006) demonstrates, the financial statement “user” in accounting
research and regulation bears little resemblance to flesh-and-blood
individuals, and hence our research outputs often have little relevance to
the real world.
Figure 1 compares how frequently accountants and
members of ten other professions are cited in The New York Times in the late
1990s (Ellenberg 2000). These data are juxtaposed with the numbers employed
in each profession during 1996 using U.S. census data. Accountants are cited
less frequently relative to their numbers than any profession except
computer programmers. One possibility is that journalists cannot detect
anything interesting in accounting journals. Another possibility is that
university public relations staffs are consistently unable to find an
interesting angle in published accounting papers that they can pitch to
reporters. I have little doubt that the obscurantist tendencies in
accounting papers make it harder for most outsiders to understand what
accounting researchers are saying or find interesting.
Accounting articles have also become much longer
over time, and I am regularly asked to review articles with introductions
that are six to eight pages long, with many of the paragraphs cut-and-pasted
from later sections. In contrast, it took Watson and Crick (1953) just one
journal page to report the double-helix structure of DNA. Einstein (1905)
took only three journal pages to derive his iconic equation E = mc2. Since
even the best accounting papers are far less important than these classics
of 20th century science, readers waste time wading through academic bloat
(Sorter 1979). Because the top general science journals like Science and
Nature place strict word limits on articles that differ by the expected
incremental contribution, longer scientific papers signal better quality.21
Unfortunately, accounting journals do not restrict length, which encourages
bloated papers. Another driver of length is the aforementioned trend toward
greater rigor in the review process (Ellison 2002).
My first suggestion for making published accounting
articles less tedious and boring is to impose strict word limits and to
revive the “Notes” sections for shorter contributions. Word limits force
authors to think much harder about how to communicate their essential ideas
succinctly and greatly improve writing. Similarly, I would encourage
accounting journals to follow Nature and provide guidelines for informative
abstracts.22 A related suggestion is to follow the science journals, and
more recently, The American Economic Review, by introducing online-only
appendices to report the lengthy robustness sections that are demanded by
persnickety reviewers.23 In addition, I strongly encourage AAA journals to
require authors to post online with each journal article the data sets and
working computer code used to produce all tables as a condition for
publication, so that other independent researchers can validate and
replicate their studies (Bernanke 2004; McCullough and McKitrick 2009).24
This is important because recent surveys of science and management
researchers reveal that data fabrication, data falsification, and other
violations in published studies is far from rare (Martinson et al. 2005;
Bedeian et al. 2010).
I also urge that authors report results graphically
rather than in tables, as recommended by numerous statistical experts (e.g.,
Tukey 1977; Chambers et al. 1983; Wainer 2009). For example, Figure 2 shows
how the data in Figure 1 can be displayed more effectively without taking up
more page space (Gelman et al. 2002). Scientific papers routinely display
results in figures with confidence intervals rather than tables with
standard errors and p-values, and accounting journals should adopt these
practices to improve understandability. Soyer and Hogarth (2012) show
experimentally that even well-trained econometricians forecast more slowly
and inaccurately when given tables of statistical results than when given
equivalent scatter plots. Most accounting researchers cannot recognize the
main tables of Ball and Brown (1968) or Beaver (1968) on sight, but their
iconic figures are etched in our memories. The figures in Burgstahler and
Dichev (1997) convey their results far more effectively than tables would.
Indeed, the finance professoriate was convinced that financial markets are
efficient by the graphs in Fama et al. (1969), a highly influential paper
that does not contain a single statistical test! Easton (1999) argues that
the 1990s non-linear earnings-return relation literature would likely have
been developed much earlier if accounting researchers routinely plotted
their data. Since it is not always straightforward to convert tables into
graphs (Gelman et al. 2002), I recommend that AAA pay for new editors of AAA
journals to take courses in graphical presentation.
I would also recommend that AAA award an annual
prize for the best figure or graphic in an accounting journal each year. In
addition to making research articles easier to follow, figures ease the
introduction of new ideas into accounting textbooks. Economics is routinely
taught with diagrams and figures to aid intuition—demand and supply curves,
IS-LM analysis, Edgeworth boxes, etc. (Blaug and Lloyd 2010). Accounting
teachers would benefit if accounting researchers produced similar education
tools. Good figures could also be used to adorn the cover pages of our
journals similar to the best science journals; in many disciplines, authors
of lead articles are invited to provide an illustration for the cover page.
JAMA (Journal of the American Medical Association) reproduces paintings
depicting doctors on its cover (Southgate 1996); AAA could print paintings
of accountants and accounting on the cover of The Accounting Review, perhaps
starting with those collected in Yamey (1989). If color printing costs are
prohibitive, we could imitate the Journal of Political Economy back cover
and print passages from literature where accounting and accountants play an
important role, or even start a new format by reproducing cartoons
illustrating accounting issues. The key point is to induce accountants to
pick up each issue of the journal, irrespective of the research content.
I think that we need an accounting journal to “fill
a gap between the general-interest press and most other academic journals,”
similar to the Journal of Economics Perspectives (JEP).25 Unlike other
economics journals, JEP editors and associate editors solicit articles from
experts with the goal of conveying state-of-the-art economic thinking to
non-specialists, including students, the lay public, and economists from
other specialties.26 The journal explicitly eschews mathematical notation or
regression results and requires that results be presented either graphically
or as a table of means. In response to the question “List the three
economics journals (broadly defined) that you read most avidly when a new
issue appears,” a recent survey of U.S. economics professors found that
Journal of Economics Perspectives was their second favorite economics
journal (Davis et al. 2011), which suggests that an unclaimed niche exists
in accounting. Although Accounting Horizons could be restructured along
these lines to better reach practitioners, it might make sense to start a
new association-wide journal under the AAA aegis.
CONCLUSION
I believe that accounting is one of the most
important human innovations. The invention of accounting records was likely
indispensable to the emergence of agriculture, and ultimately, civilization
(e.g., Basu and Waymire 2006). Many eminent historians view double-entry
bookkeeping as indispensable for the Renaissance and the emergence of
capitalism (e.g., Sombart 1919; Mises 1949; Weber 1927), possibly via
stimulating the development of algebra (Heeffer 2011). Sadly, accounting
textbooks and the top U.S. accounting journals seem uninterested in whether
and how accounting innovations changed history, or indeed in understanding
the history of our current practices (Zeff 1989).
In short, the accounting academy embodies a
“tragedy of the commons” (Hardin 1968) where strong extrinsic incentives to
publish in “top” journals have led to misdirected research efforts. As Zeff
(1983) explains, “When modeling problems, researchers seem to be more
affected by technical developments in the literature than by their potential
to explain phenomena. So often it seems that manuscripts are the result of
methods in search of questions rather than questions in search of methods.”
Solving common problems requires strong collective action by the social
network of accounting researchers using self-governing mechanisms (e.g.,
Ostrom 1990, 2005). Such initiatives should occur at multiple levels (e.g.,
school, association, section, region, and individual) to have any chance of
success.
While accounting research has made advances in
recent decades, our collective progress seems slow, relative to the hard
work put in by so many talented researchers. Instead of letting financial
economics and psychology researchers and accounting standard-setters choose
our research methods and questions, we should return our focus to addressing
fundamental issues in accounting. As important, junior researchers should be
encouraged to take risks and question conventional academic wisdom, rather
than blindly conform to the party line. For example, the current FASB–IASB
conceptual framework “remains irreparably flawed” (Demski 2007), and
accounting researchers should take the lead in developing alternative
conceptual frameworks that better fit what accounting does (e.g., Ijiri
1983; Ball 1989; Dickhaut et al. 2010). This will entail deep historical and
cross-cultural analyses rather than regression analyses on machine-readable
data. Deliberately attacking the “fundamental and frequently asked
questions” in accounting will require innovations in research outlooks and
methods, as well as training in the history of accounting thought. It is
shameful that we still cannot answer basic questions like “Why did anyone
invent recordkeeping?” or “Why is double-entry bookkeeping beautiful?”
Bravo to Professor Basu for having the guts address the Cargo
Cult in this manner!
Respectfully,
Bob Jenesen
Major problems in accountics science:
Problem 1 --- Control Over Research Methods Allowed in Doctoral
Programs and Leading
Academic Accounting Research Journals
Accountics scientists control the leading accounting research journals and
only allow archival (data mining), experimental, and analytical research
methods into those journals. Their referees shun other methods like case
method research, field studies, accounting history studies, commentaries,
and criticisms of accountics science.
This is the major theme of Anthony Hopwood, Paul Williams, Bob Sterling, Bob
Kaplan, Steve Zeff, Dan Stone, and others ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm#Appendix01
Since there are so many other accounting research journals in academe and
in the practitioner profession, why single out TAR and the other very "top"
journals because they refuse to publish any articles without equations
and/or statistical inference tables. Accounting researchers have hundreds of
other alternatives for publishing their research.
I'm critical of TAR referees because they're symbolic of today's many
problems with the way the accountics scientists have taken over the research
arm of accounting higher education. Over the past five decades they've taken
over all AACSB doctoral programs with a philosophy that "it's our way or
the highway" for students seeking PhD or DBA degrees ---
http://faculty.trinity.edu/rjensen/Theory01.htm#DoctoralPrograms
In
the United States, following the Gordon/Howell and Pierson reports in the
1950s, our accounting doctoral programs and leading academic journals bet
the farm on the social sciences without taking the due cautions of realizing
why the social sciences are called "soft sciences." They're soft because
"not everything that can be counted, counts. And not everything that counts
can be counted."
Be Careful What You
Wish For
Academic accountants wanted to become more respectable on their campuses by
creating accountics scientists in literally all North American accounting
doctoral programs. Accountics scientists virtually all that our PhD and DBA
programs graduated over the ensuing decades and they took on an elitist
attitude that it really did not matter if their research became ignored by
practitioners and those professors who merely taught accounting.
One of my complaints
with accountics scientists is that they appear to be unconcerned that they
are not not real scientists. In real science the primary concern in
validity, especially validation by replication. In accountics science
validation and replication are seldom of concern. Real scientists react to
their critics. Accountics scientists ignore their critics.
Another complaint is
that accountics scientists only take on research that they can model. The
ignore the many problems, particularly problems faced by the accountancy
profession, that they cannot attack with equations and statistical
inference.
"Research
on Accounting Should Learn From the Past" by Michael H. Granof and
Stephen A. Zeff, Chronicle of Higher Education, March 21, 2008
The
unintended consequence has been that interesting and researchable
questions in accounting are essentially being ignored.
By confining the major thrust in research to phenomena that can be
mathematically modeled or derived from electronic databases, academic
accountants have failed to advance the profession in ways that are
expected of them and of which they are capable.
Academic research has unquestionably broadened the views of standards
setters as to the role of accounting information and how it affects the
decisions of individual investors as well as the capital markets.
Nevertheless, it has had scant influence on the standards themselves.
Continued in
article
Problem 2 --- Paranoia Regarding Validity Testing and Commentaries on
their Research
This is the major theme of Bob Jensen, Paul Williams, Joni Young and
others
574 Shields Against Validity Challenges in Plato's Cave ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Problem 3 --- Lack of Concern over Being Ignored by Accountancy Teachers and Practitioners
Accountics scientists only communicate through their research journals that
are virtually ignored by most accountancy teachers and practitioners. Thus
they are mostly gaming in Plato's Cave and having little impact on the
outside world, which is a major criticism raised by then AAA President Judy
Rayburn and Roger Hermanson and others
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm
Also see
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
Some accountics scientists have even
warned against doing research for the practicing profession as a
"vocational virus."
Joel
Demski steers us away from the clinical side of the accountancy
profession by saying we should avoid that pesky “vocational virus.”
(See below).
The (Random House) dictionary defines
"academic" as "pertaining to areas of study that are not primarily
vocational or applied , as the humanities or pure mathematics."
Clearly, the short answer to the question is no, accounting is not
an academic discipline.
Joel Demski, "Is Accounting an Academic Discipline?"
Accounting Horizons, June 2007, pp. 153-157
Statistically there are a few youngsters
who came to academia for the joy of learning, who are yet relatively
untainted by the vocational virus.
I urge you to nurture your taste for learning, to follow your joy.
That is the path of scholarship, and it is the only one with any
possibility of turning us back toward the academy.
Joel Demski, "Is Accounting an Academic Discipline?
American Accounting Association Plenary Session" August 9, 2006 ---
http://faculty.trinity.edu/rjensen//theory/00overview/theory01.htm
Too
many accountancy doctoral programs have immunized themselves against
the “vocational virus.” The problem lies not in requiring doctoral
degrees in our leading colleges and universities. The problem is
that we’ve been neglecting the clinical needs of our profession.
Perhaps the real underlying reason is that our clinical problems are
so immense that academic accountants quake in fear of having to make
contributions to the clinical side of accountancy as opposed to the
clinical side of finance, economics, and psychology.
Problem 4 --- Ignoring Critics: The Accountics Science Wall of Silence
Leading scholars critical of accountics science included Bob Anthony,
Charles Christiensen, Anthony Hopwood, Paul Williams Roger Hermanson, Bob
Sterling, Jane Mutchler, Judy Rayburn, Bob Kaplan, Steve Zeff, Joni Young,
Bob Sterling, Dan Stone, Bob Jensen, and many others. The most frustrating
thing for these critics is that accountics scientists are content with being
the highest paid faculty on their campuses and their monopoly control of
accounting PhD programs (limiting outputs of graduates)
to a point where they literally ignore they critics and rarely, if ever,
respond to criticisms.
See
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm
"Frankly, Scarlett, after I get a hit for my resume in The
Accounting Review I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Hi David,
Separately and independently, both
Steve Kachelmeier (Texas) and Bob Kaplan (Harvard) singled out
the Hunton and Gold (2010) TAR article as being an excellent
paradigm shift model in the sense that the data supposedly was
captured by practitioners with the intent of jointly working
with academic experts in collecting and analyzing the data
---
If that data had subsequently not been
challenged for integrity (by whom is secret) that Hunton and Gold
(2010) research us the type of thing we definitely would like to see
more of in accountics research.
Unfortunately, this excellent example may
have been a bit like Lance Armstrong being such a winner because he did
not playing within the rules.
For Jim Hunton maybe the world did
end on December 21, 2012
"Following Retraction, Bentley
Professor Resigns," Inside Higher Ed, December 21, 2012 ---
http://www.insidehighered.com/quicktakes/2012/12/21/following-retraction-bentley-professor-resigns
James E. Hunton, a
prominent accounting professor at Bentley University, has resigned
amid an investigation of the retraction of an article of which he
was the co-author, The Boston Globe reported. A spokeswoman cited
"family and health reasons" for the departure, but it follows the
retraction of an article he co-wrote in the journal Accounting
Review. The university is investigating the circumstances that led
to the journal's decision to retract the piece.
An Accounting Review Article
is Retracted
One of the
article that Dan mentions has been retracted, according to
http://aaajournals.org/doi/abs/10.2308/accr-10326?af=R
Retraction: A Field
Experiment Comparing the Outcomes of Three Fraud Brainstorming
Procedures: Nominal Group, Round Robin, and Open Discussion
James E. Hunton,
Anna Gold Bentley University and Erasmus University Erasmus
University This article was originally published in 2010 in The
Accounting Review 85 (3) 911–935; DOI:
10/2308/accr.2010.85.3.911
The authors
confirmed a misstatement in the article and were unable to provide
supporting information requested by the editor and publisher.
Accordingly, the article has been retracted.
Jensen Comment
The TAR article retraction in no way detracts from this study being a
model to shoot for in order to get accountics researchers more involved
with the accounting profession and using their comparative advantages to
analyze real world data that is more granulated that the usual practice
of beating purchased databases like Compustat with econometric sticks
and settling for correlations rather than causes.
Respectfully,
Bob Jensen
Some Comments About Accountics Science Versus Real Science
This is the lead article in the May 2013 edition of The Accounting Review
"On Estimating Conditional Conservatism
Authors
Ray Ball (The University of Chicago)
S. P. Kothari )Massachusetts Institute of Technology)
Valeri V. Nikolaev (The University of Chicago)
The Accounting Review, Volume 88, No. 3, May 2013, pp. 755-788
The concept of conditional conservatism (asymmetric
earnings timeliness) has provided new insight into financial reporting and
stimulated considerable research since Basu (1997). Patatoukas and Thomas
(2011) report bias in firm-level cross-sectional asymmetry estimates that
they attribute to scale effects. We do not agree with their advice that
researchers should avoid conditional conservatism estimates and inferences
from research based on such estimates. Our theoretical and empirical
analyses suggest the explanation is a correlated omitted variables problem
that can be addressed in a straightforward fashion, including fixed-effects
regression. Correlation between the expected components of earnings and
returns biases estimates of how earnings incorporate the information
contained in returns. Further, the correlation varies with returns, biasing
asymmetric timeliness estimates. When firm-specific effects are taken into
account, estimates do not exhibit the bias, are statistically and
economically significant, are consistent with priors, and behave as a
predictable function of book-to-market, size, and leverage.
. . .
We build on and provide a different interpretation
of the anomalous evidence reported by PT. We begin by replicating their
[Basu (1997). Patatoukas and Thomas (2011)] results. We then provide
evidence that scale-related effects are not the explanation. We control for
scale by sorting observations into relatively narrow portfolios based on
price, such that within each portfolio approximately 99 percent of the
cross-sectional variation in scale is eliminated. If scale effects explain
the anomalous evidence, then it would disappear within these portfolios, but
the estimated asymmetric timeliness remains considerable. We conclude that
the data do not support the scale-related explanation.4 It thus becomes
necessary to look for a better explanation.
Continued in article
Jensen Comment
The good news is that the earlier findings were replicated. This is not common
in accountics science research. The bad news is that such replications took 16
years and two years respectively. And the probability that TAR will publish a
one or more commentaries on these findings is virtually zero.
How does this differ from real science?
In real science most findings are replicated before or very quickly after
publication of scientific findings. And interest is in the reproducible results
without also requiring an extension of the research for publication of the
replication outcomes.
In accountics science there is little incentive to perform exact replications
since top accountics science journals neither demand such replications nor will
they publish (even in commentaries) replication outcomes. A necessary condition
to publish replication outcomes in accountics science is the extend the research
into new frontiers.
How long will it take for somebody to replicate these May 2013 findings of
Ball, Kothari, and Nikolaev? If the past is any indicator of the future the BKN
findings will never be replicated. If they are replicated it will most likely
take years before we receive notice of such replication in an extension of the
BKN research published in 2013.
CONCLUSION from
http://faculty.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm
In the first 40 years of
TAR, an accounting “scholar” was first and foremost an expert on accounting.
After 1960, following the Gordon and Howell Report, the perception of what
it took to be a “scholar” changed to quantitative modeling. It became
advantageous for an “accounting” researcher to have a degree in mathematics,
management science, mathematical economics, psychometrics, or econometrics.
Being a mere accountant no longer was sufficient credentials to be deemed a
scholarly researcher. Many doctoral programs stripped much of the accounting
content out of the curriculum and sent students to mathematics and social
science departments for courses. Scholarship on accounting standards became
too much of a time diversion for faculty who were “leading scholars.”
Particularly relevant in this regard is Dennis Beresford’s address to the
AAA membership at the 2005 Annual AAA Meetings in San Francisco:
In my eight years in teaching I’ve concluded that way too many of
us don’t stay relatively up to date on professional issues. Most of
us have some experience as an auditor, corporate accountant, or in some
similar type of work. That’s great, but things change quickly these days.
Beresford [2005]
Jane Mutchler made a similar appeal for accounting professors
to become more involved in the accounting profession when she was President
of the AAA [Mutchler, 2004, p. 3].
In the last 40 years, TAR’s
publication preferences shifted toward problems amenable to scientific
research, with esoteric models requiring accountics skills in place of
accounting expertise. When Professor Beresford attempted to publish his
remarks, an Accounting Horizons referee’s report to him contained the
following revealing reply about “leading scholars” in accounting research:
1. The paper provides specific recommendations for things that
accounting academics should be doing to make the accounting profession
better. However (unless the author believes that academics' time is a free
good) this would presumably take academics' time away from what they are
currently doing. While following the author's advice might make the
accounting profession better, what is being made worse? In other words,
suppose I stop reading current academic research and start reading news
about current developments in accounting standards. Who is made better off
and who is made worse off by this reallocation of my time? Presumably my
students are marginally better off, because I can tell them some new stuff
in class about current accounting standards, and this might possibly have
some limited benefit on their careers. But haven't I made my colleagues in
my department worse off if they depend on me for research advice, and
haven't I made my university worse off if its academic reputation suffers
because I'm no longer considered a leading scholar? Why does making
the accounting profession better take precedence over everything else an
academic does with their time?
As quoted in Jensen [2006a]
The above quotation illustrates the consequences of editorial
policies of TAR and several other leading accounting research journals. To
be considered a “leading scholar” in accountancy, one’s research must employ
mathematically-based economic/behavioral theory and quantitative modeling.
Most TAR articles published in the past two decades support this contention.
But according to AAA President Judy Rayburn and other recent AAA presidents,
this scientific focus may not be in the best interests of accountancy
academicians or the accountancy profession.
In terms of citations, TAR
fails on two accounts. Citation rates are low in practitioner journals
because the scientific paradigm is too narrow, thereby discouraging
researchers from focusing on problems of great interest to practitioners
that seemingly just do not fit the scientific paradigm due to lack of
quality data, too many missing variables, and suspected non-stationarities.
TAR editors are loath to open TAR up to non-scientific methods so that
really interesting accounting problems are neglected in TAR. Those
non-scientific methods include case method studies, traditional historical
method investigations, and normative deductions.
In the other account, TAR
citation rates are low in academic journals outside accounting because the
methods and techniques being used (like CAPM and options pricing models)
were discovered elsewhere and accounting researchers are not sought out for
discoveries of scientific methods and models. The intersection of models and
topics that do appear in TAR seemingly are borrowed models and uninteresting
topics outside the academic discipline of accounting.
We close with a quotation
from Scott McLemee demonstrating that what happened among accountancy
academics over the past four decades is not unlike what happened in other
academic disciplines that developed “internal dynamics of esoteric
disciplines,” communicating among themselves in loops detached from their
underlying professions. McLemee’s [2006] article stems from Bender [1993].
“Knowledge and competence increasingly developed out of the
internal dynamics of esoteric disciplines rather than within the context of
shared perceptions of public needs,” writes Bender. “This is not to say that
professionalized disciplines or the modern service professions that imitated
them became socially irresponsible. But their contributions to society began
to flow from their own self-definitions rather than from a reciprocal
engagement with general public discourse.”
Now, there is a definite note of sadness in Bender’s narrative –
as there always tends to be in accounts
of the
shift from Gemeinschaft to Gesellschaft.
Yet it is also clear that the transformation from
civic to disciplinary professionalism was necessary.
“The new disciplines offered relatively precise subject matter and
procedures,” Bender concedes, “at a time when both were greatly confused.
The new professionalism also promised guarantees of competence —
certification — in an era when criteria of intellectual authority were vague
and professional performance was unreliable.”
But in the epilogue to Intellect and Public Life,
Bender suggests that the process eventually went too far. “The risk now is
precisely the opposite,” he writes. “Academe is threatened by the twin
dangers of fossilization and scholasticism (of three types: tedium, high
tech, and radical chic). The agenda for the next decade, at least as I see
it, ought to be the opening up of the disciplines, the ventilating of
professional communities that have come to share too much and that have
become too self-referential.”
For the good of the AAA membership and
the profession of accountancy in general, one hopes that the changes in
publication and editorial policies at TAR proposed by President Rayburn
[2005, p. 4] will result in the “opening up” of topics and research methods
produced by “leading scholars.”
The purpose of this document is to focus on Problem 2 above. Picking on TAR
is merely symbolic of my concerns with the larger problem of the what I view are
much larger problems caused by the take over of the research arm of academic
accountancy.
Epistemologists present several challenges to Popper's arguments
"Separating the Pseudo From Science," by Michael D. Gordon, Chronicle
of Higher Education, September 17, 2012 ---
http://chronicle.com/article/Separating-the-Pseudo-From/134412/
Hi Pat,
Certainly expertise and dedication to students rather than any college degree is
what's important in teaching.
However, I would not go so far as to detract from the research (discovery of new
knowledge) mission of the university by taking all differential pay incentives
away from researchers who, in addition to teaching, are taking on the drudge
work and stress of research and refereed publication.
Having said that, I'm no longer in favor of the tenure system since in most
instances it's more dysfunctional than functional for long-term research and
teaching dedication. In fact, it's become more of an exclusive club that gets
away with most anything short of murder.
My concern with accounting and business is how we define "research,"
Empirical and analytical research that has zero to say about causality is given
too much priority in pay, release time, and back slapping.
"How Non-Scientific Granulation Can Improve Scientific Accountics"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsGranulationCurrentDraft.pdf
By Bob Jensen
This essay takes off from the following quotation:
A recent accountics science study suggests
that audit firm scandal with respect to someone else's audit may be a reason
for changing auditors.
"Audit Quality and Auditor Reputation: Evidence from Japan," by Douglas J.
Skinner and Suraj Srinivasan, The Accounting Review, September 2012,
Vol. 87, No. 5, pp. 1737-1765.
Our conclusions are subject
to two caveats. First, we find that clients switched away from ChuoAoyama in
large numbers in Spring 2006, just after Japanese regulators announced the
two-month suspension and PwC formed Aarata. While we interpret these events
as being a clear and undeniable signal of audit-quality problems at
ChuoAoyama, we cannot know for sure what drove these switches
(emphasis added). It
is possible that the suspension caused firms to switch auditors for reasons
unrelated to audit quality. Second, our analysis presumes that audit quality
is important to Japanese companies. While we believe this to be the case,
especially over the past two decades as Japanese capital markets have
evolved to be more like their Western counterparts, it is possible that
audit quality is, in general, less important in Japan
(emphasis added)
.
Richard Feynman Creates a Simple Method for Telling Science From
Pseudoscience (1966) ---
http://www.openculture.com/2016/04/richard-feynman-creates-a-simple-method-for-telling-science-from-pseudoscience-1966.html
By Feynman's standard standard accountics science is pseudoscience --
We Should Not Accept Scientific Results That Have Not
Been Repeated ---
http://nautil.us/blog/-we-should-not-accept-scientific-results-that-have-not-been-repeated
Jensen Comment
Accountics researchers get a pass since they're not really scientists and
virtually nobody is interested in replicating academic accounting research
findings published in leading academic accounting research journals that
discourage both commentaries and replication studies ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
Having said this I often cite accountics research findings
myself as if they were truth. Sometimes they're all I've got. Sigh!
Econometrics: Is it Time for a Journal of Insignificant Results ---
http://davegiles.blogspot.com/2017/03/a-journal-of-insignificant-economic.html
P-Value --- https://en.wikipedia.org/wiki/P-value
ASA = American Statistical Association
The ASA's statement on p-values: context, process, and purpose ---
http://amstat.tandfonline.com/doi/abs/10.1080/00031305.2016.1154108
Learn to p-Hack Like the Pros! ---
https://replicationnetwork.com/2016/10/19/schonbrodt-p-hacking-for-pros/
"Lies, Damn Lies, and Financial Statistics," by Peter Coy, Bloomberg,
April 10, 2017 ---
https://www.bloomberg.com/news/articles/2017-04-06/lies-damn-lies-and-financial-statistics
Early in January in a Chicago hotel, Campbell Harvey
gave a rip-Harvey’s term for torturing the
data until it confesses is “p-hacking,” a reference to the p-value,
a measure of statistical significance. P-hacking
is also known as overfitting, data-mining—or data-snooping, the coinage of
Andrew Lo, director of MIT’s Laboratory of Financial Engineering. Says Lo:
“The more you search over the past, the more likely it is you are going to
find exotic patterns that you happen to like or focus on. Those patterns are
least likely to repeat.”snorting presidential address to the American
Finance Association, the world’s leading society for research on financial
economics. To get published in journals, he said, there’s a powerful
temptation to torture the data until it confesses—that is, to conduct round
after round of tests in search of a finding that can be claimed to be
statistically significant. Said Harvey, a professor at Duke University’s
Fuqua School of Business: “Unfortunately, our standard testing methods are
often ill-equipped to answer the questions that we pose.” He exhorted the
group: “We are not salespeople. We are scientists!”
The problems Harvey
identified in academia are as bad or worse in the investing world.
Mass-market products such as exchange-traded funds are being concocted using
the same flawed statistical techniques you find in scholarly journals. Most
of the empirical research in finance is likely false, Harvey wrote in a
paper with a Duke colleague, Yan Liu, in 2014. “This implies that half the
financial products (promising outperformance) that companies are selling to
clients are false.”
. . .
In the wrong hands, though, backtesting can go
horribly wrong. It once found that the best predictor of the S&P 500, out of
all the series in a batch of United Nations data, was butter production in
Bangladesh. The nerd webcomic xkcd by Randall Munroe captures the
ethos perfectly: It features a woman claiming jelly beans cause acne. When a
statistical test shows no evidence of an effect, she revises her claim—it
must depend on the flavor of jelly bean. So the statistician tests 20
flavors. Nineteen show nothing. By chance there’s a high correlation between
jelly bean consumption and acne breakouts for one flavor. The final panel of
the cartoon is the front page of a newspaper: “Green Jelly Beans Linked to
Acne! 95% Confidence. Only 5% Chance of Coincidence!”
It’s worse for financial data because researchers
have more knobs to twist in search of a prized “anomaly”—a subtle pattern in
the data that looks like it could be a moneymaker. They can vary the period,
the set of securities under consideration, or even the statistical method.
Negative findings go in a file drawer; positive ones get submitted to a
journal (tenure!) or made into an ETF whose performance we rely on for
retirement. Testing out-of-sample data to keep yourself honest helps, but it
doesn’t cure the problem. With enough tests, eventually by chance even your
safety check will show the effect you want.
Continued in article
Bob Jensen's threads on p-values ---
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
Few things are as dangerous as economists with physics envy
---
https://aeon.co/ideas/few-things-are-as-dangerous-as-economists-with-physics-envy?utm_source=Aeon+Newsletter&utm_campaign=a541f10483-EMAIL_CAMPAIGN_2018_02_05&utm_medium=email&utm_term=0_411a82e59d-a541f10483-68951505
Journal of Accounting Research: Publication by
Research Design Rather than Research Results
by Colleen Flaherty
Inside Higher Ed
February 8, 2018
https://www.insidehighered.com/news/2018/02/08/two-journals-experiment-registered-reports-agreeing-publish-articles-based-their
Accountants aren’t known for taking risks. So a new
experiment from Journal of Accounting Research stands out: an
upcoming
conference issue
will include only papers that were accepted
before the authors knew what their results would be. That’s very different
from the traditional academic publication process, in which papers are
published -- or not -- based largely on their results.
The new
approach, known as “registered reports,” has developed a following in the
sciences in light of the so-called
reproducibility crisis.
But JAR is the first accounting journal to try it.
At the same time, The Review of Financial Studies is breaking similar
ground in business.
“This is what good accountants do -- we make reports trusted and worthy of
that trust,” said Robert Bloomfield, Nicholas H. Noyes Professor of
Management at Cornell University and guest editor of JAR’s registered
reports-based issue.
Beyond registered reports, JAR will publish a paper -- led by
Bloomfield -- about the process. The article’s name, “No System Is Perfect:
Understanding How Registration-Based Editorial Processes Affect
Reproducibility and Investment in Research Quality,” gives away its central
finding: that registered reports have their virtues but aren’t a panacea for
research-quality issues.
“Registration is a different system that has its benefits, but one of the
costs,” Bloomfield said, “is that the quality of the research article does
improve with what we call follow-up investment -- or all the stuff people do
after they’ve seen their results.”
In the life
sciences and some social science fields, concerns about the reproducibility
of results have yielded calls for increased data transparency. There are
also calls to rethink the editorial practices and academic incentives that
might encourage questionable research practices. QRPs, as such practices are
known, include rounding up P values to the
arguably arbitrary “P<0.05” threshold suggesting
statistical significance and publishing results that don't support a flashy
hypothesis in the trash (the “file drawer effect").
Some of those
calls have yielded results. The American Journal of Political Science,
for example, has a
Replication & Verification Policy
incorporating reproducibility and data sharing into the academic publication
process. Science established Transparency and Openness Promotion
guidelines
regarding data availability and more, to which hundreds of journals have
signed on. And the Center for Open Science continues to do important work in
this area. Some 91 journals use the registered reports publishing format
either as a regular submission option or as part of a single special
issue, according to
information
from the center. Other journals offer some features of the format.
Bloomfield said he’d been following such developments for years and talked
to pre-registration proponents in the sciences before launching his project
at JAR, where he is a member of the editorial board. To begin, he
put out a call for papers explaining the registration-based editorial
process, or REP. Rather than submitting finished articles, authors submitted
proposals to gather and analyze data. Eight of the most well-designed
proposals asking important questions, out of 71 total, were accepted
and guaranteed publication -- regardless of whether the results supported
their hypotheses, and as long as authors followed their plans.
Bloomfield and his co-authors also held a conference on the process and
surveyed authors who had published both registered papers and traditional
papers. They found that the registered-paper authors significantly increased
their up-front “investment” in planning, data gathering and analysis, such
as by proposing challenging experimental settings and bigger data sets. Yet,
as Bloomfield pointed out, registration tended to reduce follow-up work on
data once results were known. That is, a lot of potentially valuable data
that would have been explored further in a traditional paper may have been
left on the table here.
In all, the editorial process shift makes individual results more
reproducible, the paper says, but leaves articles “less thorough and
refined.” Bloomfield and his co-authors suggest that pre-registration could
be improved by encouraging certain forms of follow-up investment in papers
without risking “overstatement” of significance.
Feedback from individual authors is instructive.
“The stakes of the proposal process motivated a greater degree of front-end
collaboration for the author team,” wrote one conference participant whose
registered paper was accepted by JAR. “The public nature made us more
comfortable presenting a widely-attended proposal workshop. Finally, the
proposal submission process provided valuable referee feedback.
Collectively, this created a very tight theoretical design. In short, the
challenges motivated idealized behavior.”
Asked about how pre-registration compares to traditional publication, the
participant said, “A greater degree of struggle to concisely communicate our
final study.” Pilot testing everything but the main theory would have been a
good idea, in retrospect, the respondent said, since “in our effort to
follow the registered report process, I now believe we were overly
conservative.”
Bloomfield also asked respondents how researchers choose which measures and
analysis to report and highlight, and what effect it has on
traditional published research. Over, participants said this kind of
"discretion" was a good thing, in that it was exercised to make more
readable of coherent research.. But some suggested the pressure to publish
was at work.
“This is a huge problem,” said one respondent. “What does it give the
co-author team to provide no-results tests, for example, in the publishing
process?” Another said, “Only significant results tend to get published.
Potentially meaningful non-results may be overlooked.” Similarly, one
participant said, “I find it amazing how just about every study in the top
tier has like a 100 hypothesis support rate -- not healthy.” Yet another
said that “experiments are costly. I think people use this discretion to get
something publishable from all of the time and effort that goes into an
experiment.”
Bloomfield’s paper poses but doesn’t answer certain logistical questions
about what might happen if pre-registration spreads further. Should editors
be more willing to publish short papers that flesh out results left on the
table under REP, for example, it asks. What about replications of papers
whose reproducibility was potentially undermined by traditional publishing?
And how should authors be “credited” for publishing under REP, such as when
their carefully designed studies don’t lead to positive results?
Over all, the paper says, editors could improve both the registered and
traditional editorial processes by identifying studies that are “better
suited to each process, allowing slightly more discretion under REP and
slightly less under [the traditional process], clarifying standards under
REP, and demanding more transparency" in traditional processes.
The Review of Financial Studies
has organized two upcoming issues to include registered reports on certain
themes: financial technology in 2018 and climate finance in 2019. Financial
technology authors will present at Cornell next month.
Andrew Karolyi, associate dean for academic affairs at Cornell’s Samuel
Curtis Johnson Graduate School of Management and the journal’s executive
editor, has described the registration process as one that transfers
academic risk from the researcher to the journal.
Asked if he thought registration would gain a foothold in business, Karolyi
said via email that other journals in his field are following RFS’s
experiments.
“There is more work curating these initiatives, but I had a great passion
for it so I think less about the work than the outcome,” he said. “I want to
believe I and my editorial team did our homework and that we designed the
experiments well. Time will tell, of course.”
Continued in article
Jensen Comment
Academic (accountics) accounting research results are no longer of much interest
as evidenced by the lack of interest of the practicing profession in the
esoteric accounting research journals and the lack of interest of the editors of
those journals in encouraging either commentaries or replications ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
How Accountics "Scientists" Should
Change:
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
This new initiative in academic accounting research is a a
good thing, but as Woodrow Wilson said years ago"
"It's easier to move a cemetary than to change a university curriculum (or
accounting research journals) or simple (unrealistic) experiments using students
as surrogates of real-life decision makers."
What went wrong with accountics research ---
http://faculty.trinity.edu/rjensen/theory01.htm#WhatWentWrong
Academic accounting researchers just don't like to leave the
campus to collect research data. They prefer to analyze data that purchase and
cannot control at collection points. They worship at the alters of p-values
generated by regression software.
"In Japan, Research Scandal Prompts Questions," by David McNeill,
Chronicle of Higher Education, June 30, 2014 ---
http://chronicle.com/article/In-Japan-Research-Scandal/147417/?cid=at&utm_source=at&utm_medium=en
. . .
Ms. Obokata’s actions "lead us to the conclusion
that she sorely lacks, not only a sense of research ethics, but also
integrity and humility as a scientific researcher,"
a
damning report concluded. The release of the
report sent Ms. Obokata, who admits mistakes but not ill intent, to the
hospital in shock for a week. Riken has dismissed all her appeals, clearing
the way for disciplinary action, which she has pledged to fight.
In June the embattled researcher
agreed to retract both Nature
papers—under duress, said her lawyer. On July 2,
Nature released a statement from her and
the other authors officially retracting the papers.
The seismic waves from Ms. Obokata’s rise and
vertiginous fall continue to reverberate. Japan’s top universities are
rushing to install antiplagiarism software and are combing through old
doctoral theses amid accusations that they are honeycombed with similar
problems.
The affair has sucked in some of Japan’s most
revered professors, including Riken’s president, Ryoji Noyori, a Nobel
laureate, and Shinya Yamanaka, credited with creating induced pluripotent
stem cells. Mr. Yamanaka, a professor at Kyoto University who is also a
Nobel laureate, in April denied claims that he too had manipulated images in
a 2000 research paper on embryonic mouse stem cells, but he was forced to
admit that, like Ms. Obokata, he could not find lab notes to support his
denial.
The scandal has triggered questions about the
quality of science in a country that still punches below its international
weight in cutting-edge research. Critics say Japan’s best universities have
churned out hundreds of poor-quality Ph.D.’s. Young researchers are not
taught how to keep detailed lab notes, properly cite data, or question
assumptions, said Sukeyasu Yamamoto, a former physicist at the University of
Massachusetts at Amherst and now an adviser to Riken. "The problems we see
in this episode are all too common," he said.
Hung Out to Dry?
Ironically, Riken was known as a positive
discriminator in a country where just one in seven university researchers
are women—the lowest share in the developed world. The organization was
striving to push young women into positions of responsibility, say other
professors there. "The flip side is that they overreacted and maybe went a
little too fast," said Kathleen S. Rockland, a neurobiologist who once
worked at Riken’s Brain Science Institute. "That’s a pity because they were
doing a very good job."
Many professors, however, accuse the institute of
hanging Ms. Obokata out to dry since the problems in her papers were
exposed. Riken was under intense pressure to justify its budget with
high-profile results. Japan’s news media have focused on the role of Yoshiki
Sasai, deputy director of the Riken Center and Ms. Obokata’s supervisor, who
initially promoted her, then insisted he had no knowledge of the details of
her research once the problems were exposed.
Critics noted that even the head of the inquiry
into Ms. Obokata’s alleged misconduct was forced to admit in April that he
had posted "problematic" images in a 2007 paper published in Oncogene.
Shunsuke Ishii, a molecular geneticist, quit the investigative committee.
Continued in article
Bob Jensen's threads on professors who cheat ---
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize
"Over half of psychology studies fail
reproducibility test." "Study delivers bleak verdict on validity of psychology
experiment results." "Psychology is a discipline in crisis."
"How to Fix Psychology’s Replication Crisis," by Brian D. Earp and Jim
A.C. Everett, Chronicle of Higher Education, October 25, 2015 ---
http://chronicle.com/article/How-to-Fix-Psychology-s/233857?cid=at&utm_source=at&utm_medium=en&elq=ffdd5e32cd6c4add86ab025b68705a00&elqCampaignId=1697&elqaid=6688&elqat=1&elqTrackId=ffd568b276aa4a30804c90824e34b8d9
These and other similar headlines
followed the results of a large-scale initiative called the
Reproducibility Project, recently
published in Science magazine,
which appeared to show that a majority of findings from a
sample of 100 psychology studies did not hold up when
independent labs attempted to replicate them. (A similar
initiative is underway
in cancer biology and other
fields: Challenges with replication are
not unique to psychology.)
Headlines tend
to run a little hot. So the media’s dramatic response to the
Science paper was not entirely surprising given the
way these stories typically go. As it stands, though, it is
not at all clear what these replications mean. What the
experiments actually yielded in most cases was a different
statistical value or a smaller effect-size estimate compared
with the original studies, rather than positive evidence
against the existence of the underlying phenomenon.
This
is an important distinction. Although it would be nice if it
were otherwise, the data points we collect in psychology
don’t just hold up signs saying, "there’s an effect here" or
"there isn’t one." Instead, we have to make inferences based
on statistical estimates, and we should expect those
estimates to vary over time. In the typical scenario, an
initial estimate turns out to be on the high end (that’s why
it
ends up getting published in the
first place — it looks impressive), and then subsequent
estimates are a bit more down to earth.
. . .
To make the point a slightly different way: While
it is in everyone’s interest that high-quality, direct replications of key
studies in the field are conducted (so that we can know what degree of
confidence to place in previous findings), it is not typically in any
particular researcher’s interest to spend her time conducting such
replications.
As Huw Green, a Ph.D. student at the City
University of New York, recently put it, the "real crisis in psychology
isn’t that studies don’t replicate, but that we usually don’t even try."
What is needed is a "structural solution" —
something that has the power to resolve collective-action problems like the
one we’re describing. In simplest terms, if everyone is forced to cooperate
(by some kind of regulation), then no single individual will be at a
disadvantage compared to her peers for doing the right thing.
There are lots of ways of pulling this off — and we
don’t claim to have a perfect solution. But here is one idea.
As we proposed in a recent paper, graduate students in
psychology should be required to conduct, write up, and submit for
publication a high-quality replication attempt
of at least one key finding from the literature (ideally focusing on the
area of their doctoral research), as a condition of receiving their Ph.D.s.
Of course, editors
would need to agree to publish these kinds of submissions, and fortunately
there are a growing number — led by journals like PLoS ONE — that are
willing to do just that.
. . .
Since our
paper
was featured several weeks ago in
Nature, we’ve begun to get some constructive
feedback. As one psychologist wrote to us in an email
(paraphrased):
Your proposed
solution would only apply to some fields of psychology. It’s
not a big deal to ask students to do cheap replication
studies involving, say, pen-and-paper surveys — as is common
in social psychology. But to replicate an experiment
involving sensitive populations (babies, for instance, or
people with clinical disorders) or fancy equipment like an
fMRI machine, you would need a dedicated lab, a team of
experimenters, and several months of hard work — not to
mention the money to pay for all of this!
That much is
undoubtedly true. Expensive, time-consuming studies with
hard-to-recruit participants would not be replicated very
much if our proposal were taken up.
But that is
exactly the way things are now — so the problem would not be
made any worse. On the other hand, there are literally
thousands of studies that can be tested relatively cheaply,
at a skill level commensurate with a graduate student’s
training, which would benefit from being replicated. In
other words, having students perform replications as part of
their graduate work is very unlikely to make the problem of
not having enough replications any worse, but it has great
potential to help make it better.
Beyond
this, there is a pedagogical benefit. As Michael C. Frank
and Rebecca Saxe
have written: In their own
courses, they have found "that replicating cutting-edge
results is exciting and fun; it gives students the
opportunity to make real scientific contributions (provided
supervision is appropriate); and it provides object lessons
about the scientific process, the importance of reporting
standards, and the value of openness."
At the end of the day,
replication is indispensable.
It is a key part of the scientific enterprise; it helps us determine how
much confidence to place in published findings; and it will advance our
knowledge in the long run.
Continued in article
Jensen Comments
Accountics is the
mathematical science of values.
Charles Sprague [1887] as quoted by McMillan [1998, p. 1]
In accountics science I'm not aware of a single exacting replication of the
type discussed above of a published behavioral accounting research study.
Whether those findings constitute "truth" really does not matter much because
the practicing profession ignores accountics science behavior studies as
irrelevant and academics are only interested in the research methodologies
rather than the findings.
For example, years ago the FASB engaged Tom Dyckman and Bob Jensen to work
with the academic FASB member Bob Sprouse in evaluating research proposals to
study (with FASB funding) the post hoc impact of FAS 13 on the practicing
profession. In doing so the FASB said that both capital markets empiricism and
analytical research papers were acceptable but that the FASB had no interest in
behavioral studies. The implication was that behavioral studies were of little
interest too the FASB for various reasons, the main reason is that the tasks in
behavioral research were too artificial and removed from decision making in
real-world settings.
Interestingly both Tom and Bob had written doctoral theses that entailed
behavioral experiments in artificial settings. Tom used students as subjects,
and Bob used financial analysts doing, admittedly, artificial tasks. However,
neither Dyckman nor Jensen had much interest in subsequently conducting
behavioral experiments when they were professors. Of course in this FAS 13
engagement Dyckman and Jensen were only screening proposals submitted by other
researchers.
Accountics science research journals to my knowledge still will not publish
replications of behavioral experiments that only replicate and do not extend the
findings. Most like The Accounting Review, will not publish replications
of any kind. Accountics scientists have never
considered replication is indispensable at
the end of the day.
Bob Jensen's threads on the lack of replication in accountics science in
general ---
http://faculty.trinity.edu/rjensen/TheoryTar.htm
A Blast posted to SSRN on August 21, 2015
"Is There Any Scientific Basis for Accounting? Implications for Practice,
Research and Education,"
SSRN, August 21, 2015
Authors
Sudipta Basu, Temple University
- Department of Accounting
Link
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2649263
Abstract:
This essay is based on a keynote speech at the 2014
Journal of International Accounting Research (JIAR) Conference. That talk
was built upon a 2009 American Accounting Association (AAA) annual meeting
panel presentation titled “Is there any scientific legitimacy to what we
teach in Accounting 101?” I evaluate whether accounting practice,
regulation, research and teaching have a strong underlying scientific basis.
I argue that recent accounting research, regulation and teaching are often
based on unscientific ideology but that evolved accounting practice embeds
scientific laws even if accountants are largely unaware of them. Accounting
researchers have an opportunity to expand scientific inquiry in accounting
by improving their research designs and exploring uses of accounting outside
formal capital markets using field studies and experiments.
Related literature, including an earlier essay by Sudipta Basu ---
Scroll down at
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Essays
"Introduction for Essays on the State of
Accounting Scholarship," Gregory B. Waymire, Accounting Horizons,
December 2012, Vol. 26, No. 4, pp. 817-819 ---
"Framing the Issue of Research Quality in
a Context of Research Diversity," by Christopher S. Chapman,
Accounting Horizons, December 2012, Vol. 26, No. 4, pp. 821-831
"Accounting Craftspeople versus
Accounting Seers: Exploring the Relevance and Innovation Gaps in Academic
Accounting Research," by William E. McCarthy, Accounting Horizons,
December 2012, Vol. 26, No. 4, pp. 833-843
"Is Accounting Research Stagnant?" by
Donald V. Moser, Accounting Horizons, December 2012, Vol. 26, No. 4,
pp. 845-850
"How Can Accounting Researchers Become
More Innovative? by Sudipta Basu,
Accounting Horizons, December 2012, Vol. 26, No. 4, pp. 851-87
A Blast from the Past from 1997
"A Comparison of Dividend, Cash Flow, and Earnings Approaches to Equity
Valuation,"
SSRN, March 31, 1997
Authors
Stephen H. Penman, Columbia Business School - Department of Accounting
Theodore Sougiannis, University of Illinois at Urbana-Champaign - Department
of Accountancy
Abstract:
Standard formulas for valuing the equity of going
concerns require prediction of payoffs "to infinity" but practical analysis
requires that they be predicted over finite horizons. This truncation
inevitably involves (often troublesome) "terminal value" calculations. This
paper contrasts dividend discount techniques, discounted cash flow analysis,
and techniques based on accrual earnings when applied to a finite-horizon
valuation. Valuations based on average ex-post payoffs over various
horizons, with and without terminal value calculations, are compared with
(ex-ante) market prices to give an indication of the error introduced by
each technique in truncating the horizon. Comparisons of these errors show
that accrual earnings techniques dominate free cash flow and dividend
discounting approaches. Further, the relevant accounting features of
techniques that make them less than ideal for finite horizon analysis are
discovered. Conditions where a given technique requires particularly long
forecasting horizons are identified and the performance of the alternative
techniques under those conditions is examined.
Link
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=15043
Jensen Comment
It's good to teach accounting and finance students at all levels some of the
prize-winning literature (accountics scientists are always giving themselves
awards) in this type of valuation along with the reasons why these accountics
science models deriving equity valuation estimates from financial statements
have very little validity.
The main reason of course is that so many variables contributing to equity
valuation are not quantified in the financial statements, particularly
intangibles and contingencies.
"Don’t Over-Rely on Historical Data to Forecast Future Returns," by
Charles Rotblut and William Sharpe, AAII Journal, October 2014 ---
http://www.aaii.com/journal/article/dont-over-rely-on-historical-data-to-forecast-future-returns?adv=yes
Jensen Comment
The same applies to not over-relying on historical data in valuation. My
favorite case study that I used for this in
teaching is the following:
Questrom vs. Federated Department Stores, Inc.: A Question of Equity Value," by
University of Alabama faculty members by Gary Taylor, William Sampson,
and Benton Gup, May 2001 edition of Issues in Accounting Education ---
http://faculty.trinity.edu/rjensen/roi.htm
Jensen Comment
I want to especially thank David Stout,
Editor of the May 2001 edition of Issues in Accounting Education.
There has been something special in all the editions edited by David, but
the May edition is very special to me. All the articles in that edition are
helpful, but I want to call attention to three articles that I will use
intently in my graduate Accounting Theory course.
- "Questrom vs. Federated Department Stores, Inc.: A Question of
Equity Value," by University of Alabama faculty members Gary Taylor,
William Sampson, and Benton Gup, pp. 223-256.
This is perhaps the best short case that I've ever read. It will
undoubtedly help my students better understand weighted average cost of
capital, free cash flow valuation, and the residual income model. The
three student handouts are outstanding. Bravo to Taylor, Sampson, and
Gup.
- "Using the Residual-Income Stock Price Valuation Model to Teach and
Learn Ratio Analysis," by Robert Halsey, pp. 257-276.
What a follow-up case to the Questrom case mentioned above! I have long
used the Dupont Formula in courses and nearly always use the excellent
paper entitled "Disaggregating the ROE: A
New Approach," by T.I. Selling and C.P. Stickney,
Accounting Horizons, December 1990, pp. 9-17. Halsey's paper guides
students through the swamp of stock price valuation using the residual
income model (which by the way is one of the few academic accounting
models that has had a major impact on accounting practice, especially
consulting practice in equity valuation by CPA firms).
- "Developing Risk Skills: An Investigation of Business Risks and
Controls at Prudential Insurance Company of America," by Paul Walker,
Bill Shenkir, and Stephen Hunn, pp. 291
I will use this case to vividly illustrate the "tone-at-the-top"
importance of business ethics and risk analysis. This is case is easy
to read and highly informative.
"There Are Many Stock Market
Valuation Models, And Most Of Them Stink," by Ed Yardeni, Dr. Ed's Blog
via Business Insider, December 4, 2014 ---
http://www.businessinsider.com/low-rates-high-valuation-2014-12
Does low inflation justify higher valuation
multiples? There are many valuation models for stocks. They mostly don’t
work very well, or at least not consistently well. Over the years, I’ve come
to conclude that valuation, like beauty, is in the eye of the beholder.
For many investors, stocks look increasingly
attractive the lower that inflation and interest rates go. However, when
they go too low, that suggests that the economy is weak, which wouldn’t be
good for profits. Widespread deflation would almost certainly be bad for
profits. It would also pose a risk to corporations with lots of debt, even
if they could refinance it at lower interest rates. Let’s review some of the
current valuation metrics, which we monitor in our Stock
Market Valuation Metrics & Models:
(1) Reversion to the mean. On Tuesday, the
forward P/E of the S&P 500 was 16.1. That’s above its historical average of
13.7 since 1978.
(2) Rule of 20. One rule of thumb is that the forward P/E of the
S&P 500 should be close to 20 minus the y/y CPI inflation rate. On this
basis, the rule’s P/E was 18.3 during October.
(3) Misery Index. There has been an inverse relationship between
the S&P 500’s forward P/E and the Misery Index, which is just the sum of the
inflation rate and the unemployment rate. The index fell to 7.4% during
October. That’s the lowest reading since April 2008, and arguably justifies
the market’s current lofty multiple.
(4) Market-cap ratios. The ratio of the S&P 500 market cap to
revenues rose to 1.7 during Q3, the highest since Q1-2002. That’s identical
to the reading for the ratio of the market cap of all US equities to nominal
GDP.
Today's Morning Briefing: Inflating
Inflation. (1) Dudley expects Fed to hit inflation target next
year. (2) It all depends on resource utilization. (3) What if demand-side
models are flawed? (4) Supply-side models explain persistence of
deflationary pressures. (5) Inflationary expectations falling in TIPS
market. (6) Bond market has gone global. (7) Valuation and beauty contests.
(8) Rule of 20 says stocks still cheap. (9) Other valuation models find no
bargains. (10) Cheaper stocks abroad, but for lots of good reasons. (11) US
economy humming along. (More
for subscribers.)
Accountics Scientists Failing to Communicate on the AAA Commons
"Frankly, Scarlett, after I get a hit for my resume in The Accounting Review
I just don't give a damn ."
www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
Instead of p-values, the journal will require
“strong descriptive statistics, including effect size.
"Science Isn’t Broken: It’s just a hell of a lot harder than we give it
credit for." by Christie Aschwanden, Nate Silver's 5:38 Blog, August
19, 2015 ---
http://fivethirtyeight.com/features/science-isnt-broken/
If you follow the headlines, your confidence in
science may have taken a hit lately.
. . .
Taken together, headlines like these might suggest
that science is a shady enterprise that spits out a bunch of dressed-up
nonsense. But I’ve spent months investigating the problems hounding science,
and I’ve learned that the headline-grabbing cases of misconduct and fraud
are mere distractions. The state of our science is strong, but it’s plagued
by a universal problem: Science is hard — really fucking hard.
If we’re going to rely on science as a means for
reaching the truth — and it’s still the best tool we have — it’s important
that we understand and respect just how difficult it is to get a rigorous
result. I could pontificate about all the reasons why science is arduous,
but instead I’m going to let you experience one of them for yourself.
Welcome to the wild world of p-hacking.
. . .
f you tweaked the
variables until you proved that Democrats are good for the economy,
congrats; go vote for Hillary Clinton with a sense of purpose. But don’t go
bragging about that to your friends. You could have proved the same for
Republicans.
The data in our
interactive tool can be narrowed and expanded (p-hacked) to make either
hypothesis appear correct. That’s
because answering even a simple scientific question — which party is
correlated with economic success — requires lots of choices that can shape
the results. This doesn’t mean that science is unreliable. It just means
that it’s more challenging than we sometimes give it credit for.
Which political
party is best for the economy seems like a pretty straightforward question.
But as you saw, it’s much easier to get a
result
than it is to get an answer.
The variables in
the data sets you used to test your hypothesis had 1,800 possible
combinations. Of these, 1,078 yielded a publishable p-value,
but that doesn’t mean they showed that
which party was in office had a strong effect on the economy. Most of them
didn’t.
The p-value reveals
almost nothing about the strength of the evidence, yet a p-value of 0.05 has
become the ticket to get into many journals. “The dominant method used [to
evaluate evidence] is the p-value,” said Michael Evans, a statistician at
the University of Toronto, “and the p-value is well known not to work very
well.”
Scientists’
overreliance on p-values has led at least one journal to decide it has had
enough of them. In February, Basic and Applied Social Psychology announced
that it will no longer publish p-values. “We believe that the p < .05 bar is
too easy to pass and sometimes serves as an excuse for lower quality
research,”
the editors wrote in their announcement.
Instead of p-values,
the journal will require “strong descriptive statistics, including effect
sizes.”
Continued in article
Bob Jensen's threads on statistical mistakes ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsScienceStatisticalMistakes.htm
Bob Jensen's threads on replication and critical commentary ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm
The limits of mathematical and statistical analysis
From the CFO Journal's Morning Ledger on April 18, 2014
The limits of social engineering
Writing in MIT
Technology Review, tech reporter Nicholas
Carr pulls from a new
book by one of MIT’s noted data scientists to explain why he thinks Big Data
has its limits, especially when applied to understanding society. Alex
‘Sandy’ Pentland, in his book “Social Physics: How Good Ideas Spread – The
Lessons from a New Science,” sees a mathematical modeling of society made
possible by new technologies and sensors and Big Data processing power. Once
data measurement confirms “the innate tractability of human beings,”
scientists may be able to develop models to predict a person’s behavior. Mr.
Carr sees overreach on the part of Mr. Pentland. “Politics is messy because
society is messy, not the other way around,” Mr. Carr writes, and any
statistical model likely to come from such research would ignore the
history, politics, class and messy parts associated with humanity. “What big
data can’t account for is what’s most unpredictable, and most interesting,
about us,” he concludes.
Jensen Comment
The sad state of accountancy and many doctoral programs in the 21st Century is
that virtually all of them in North America only teach the methodology and
technique of analyzing enormous archived databases with statistical tools or the analytical
modeling of artificial worlds based on dubious assumptions to simplify reality
---
http://faculty.trinity.edu/rjensen/Theory01.htm#DoctoralPrograms
The Pathways Commission sponsored by the American Accounting Association
strongly proposes adding non-quantitative alternatives to doctoral programs but
I see zero evidence of any progress in that direction.
The main problem is that it's just much easier to avoid
having to collect data by beating purchased databases with econometric sticks
until something, usually an irrelevant something, falls out of the big data
piñata.
"A Scrapbook on What's Wrong with the Past, Present and Future of
Accountics Science"
Bob Jensen Jensen
February 19, 2014
SSRN Download:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2398296
From the Stanford University Encyclopedia of Philosophy
Science and Pseudo-Science ---
http://plato.stanford.edu/entries/pseudo-science/
The demarcation between science and pseudoscience
is part of the larger task to determine which beliefs are epistemically
warranted. The entry clarifies the specific nature of pseudoscience in
relation to other forms of non-scientific doctrines and practices. The major
proposed demarcation criteria are discussed and some of their weaknesses are
pointed out. In conclusion, it is emphasized that there is much more
agreement in particular issues of demarcation than on the general criteria
that such judgments should be based upon. This is an indication that there
is still much important philosophical work to be done on the demarcation
between science and pseudoscience.
1. The purpose of demarcations
2. The “science” of pseudoscience
3. The “pseudo” of pseudoscience
3.1 Non-, un-, and pseudoscience
3.2 Non-science posing as science
3.3 The doctrinal component
3.4 A wider sense of pseudoscience
3.5 The objects of demarcation 3.6 A time-bound demarcation
4. Alternative demarcation criteria
4.1 The logical positivists
4.2 Falsificationism
4.3 The criterion of puzzle-solving
4.4 Criteria based on scientific progress
4.5 Epistemic norms 4.6 Multi-criterial approaches
5. Unity in diversity Bibliography
Bibliography of philosophically informed
literature on pseudosciences and contested doctrines
Other Internet resources Related Entries
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Paul Feyerabend ---
http://plato.stanford.edu/entries/feyerabend/
William Thomas Ziemba ---
http://www.williamtziemba.com/WilliamZiemba-ShortCV.pdf
Thomas M. Cover ---
http://en.wikipedia.org/wiki/Thomas_M._Cover
On June 15, 2013 David Johnstone wrote the following:
Dear all,
I worked on the logic and philosophy of hypothesis tests in the early 1980s
and discovered a very large literature critical of standard forms of
testing, a little of which was written by philosophers of science (see the
more recent book by Howson and Urbach) and much of which was written by
statisticians. At this point philosophy of science was warming up on
significance tests and much has been written since. Something I have
mentioned to a few philosophers however is how far behind the pace
philosophy of science is in regard to all the new finance and decision
theory developed in finance (e.g. options logic, mean-variance as an
expression of expected utility). I think that philosophers would get a rude
shock on just how clever and rigorous all this thinking work in “business”
fields is. There is also wonderfully insightful work on betting-like
decisions done by mathematicians, such as Ziemba and Cover, that has I think
rarely if ever surfaced in the philosophy of science (“Kelly betting” is a
good example). So although I believe modern accounting researchers should
have far more time and respect for ideas from the philosophy of science, the
argument runs both ways.
Jensen Comment
Note that in the above "cited works" there are no cited references in statistics
such as Ziemba and Cover or the better known statistical theory and statistical
science references.
This suggests somewhat the divergence of statistical theory from philosophy
theory with respect to probability and hypothesis testing. Of course probability
and hypothesis testing are part and parcel to both science and pseudo-science.
Statistical theory may accordingly be a subject that divides pseudo-science and
real science.
Etymology provides us with an obvious
starting-point for clarifying what characteristics pseudoscience has in
addition to being merely non- or un-scientific. “Pseudo-” (ψευδο-) means
false. In accordance with this, the Oxford English Dictionary (OED) defines
pseudoscience as follows:
“A pretended or spurious science; a collection of
related beliefs about the world mistakenly regarded as being based on
scientific method or as having the status that scientific truths now
have.”
June 16, 2013 reply from Marc
Dupree
Let me try again, better organized this time.
You (Bob) have referenced sources that include
falsification and demarcation. A good idea. Also, AECM participants discuss
hypothesis testing and Phi-Sci topics from time to time.
I didn't make my purpose clear. My purpose is to
offer that falsification and demarcation are still relevant to empirical
research, any empirical research.
So,
What is falsification in mathematical form?
Why does falsification not demarcate science from
non-science?
And for fun: Did Popper know falsification didn't
demarcate science from non-science?
Marc
June 17, 2013 reply form Bob
Jensen
Hi Marc,
Falsification in science generally requires
explanation. You really have not falsified a theory
or proven a theory if all you can do is demonstrate
an unexplained correlation. In pseudo-science
empiricism a huge problem is that virtually all our
databases are not granulated sufficiently to
possibly explain the discovered correlations or
discovered predictability that cannot be explained
---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsGranulationCurrentDraft.pdf
Mathematics is
beautiful in many instances because theories are
formulated in a way where finding a counter example
ipso facto destroys the theory. This is not
generally the case in the empirical sciences where
exceptions (often outliers) arise even when causal
mechanisms have been discovered. In genetics those
exceptions are often mutations that infrequently but
persistently arise in nature.
The key difference between
pseudo-science and real-science, as I pointed out
earlier in this thread, lies in explanation versus
prediction (the F-twist) or causation versus
correlation. When a research study concludes there
is a correlation that cannot be explained we are
departing from a scientific discovery. For an
example, see
Researchers pinpoint how smoking
causes osteoporosis ---
http://medicalxpress.com/news/2013-06-osteoporosis.html
Data mining research in
particular suffers from inability to find causes if the
granulation needed for discovery of causation just is not
contained in the databases. I've hammered on this one with a
Japanese research data mining accountics research
illustration (from TAR) ----
"How Non-Scientific Granulation Can Improve Scientific
Accountics"
http://www.cs.trinity.edu/~rjensen/temp/AccounticsGranulationCurrentDraft.pdf
Another huge problem in accountics
science and empirical finance is statistical significance testing of
correlation coefficients with enormous data mining samples. For
example R-squared coefficients of 0.001 are deemed statistically
significant if the sample sizes are large enough :
My threads on Deidre McCloskey (the Cult of Statistical
Significance) and my own talk are at
http://www.cs.trinity.edu/~rjensen/temp/DeirdreMcCloskey/StatisticalSignificance01.htm
A problem with real-science is that there's
a distinction between the evolution of a theory and the ultimate
discovery of the causal mechanisms. In the evolution of a theory there
may be unexplained correlations or explanations that have not yet been
validated (usually by replication). But genuine scientific discoveries
entail explanation of phenomena. We like to think of physics and
chemistry are real-sciences. In fact they deal a lot with unexplained
correlations before theories can finally be explained.
Perhaps a difference between a pseudo-science
(like accountics science) versus chemistry (a real-science) is that real
scientists are never satisfied until they can explain causality to the
satisfaction of their peers.
Accountics scientists are generally satisfied with correlations and
statistical inference tests that cannot explain root causes:
http://www.cs.trinity.edu/~rjensen/temp/AccounticsGranulationCurrentDraft.pdf
Of course science is replete with
examples of causal explanations that are later falsified or
demonstrated to be incomplete. But the focus is on the causal
mechanisms and not mere correlations.
In Search of the Theory of Everything
"Physics’s pangolin: Trying to resolve the stubborn
paradoxes of their field, physicists craft ever more
mind-boggling visions of reality," by Margaret Wertheim,
AEON Magazine, June 2013 ---
http://www.aeonmagazine.com/world-views/margaret-wertheim-the-limits-of-physics/
Of course social scientists complain
that the problem in social science research is that the physicists
stole all the easy problems.
Respectfully,
Bob Jensen
"Is Economics a Science," by Robert Shiller, QFinance, November
8, 2013 --- Click
Here
http://www.qfinance.com/blogs/robert-j.
shiller/2013/11/08/nobel-is-economics-a-science?utm_source=November+2013+email&utm_medium=Email&utm_content=Blog2&utm_campaign=EmailNov13
NEW HAVEN – I am one of the winners of this year’s
Nobel Memorial Prize in Economic Sciences, which
makes me acutely aware of criticism of the prize by those who claim that
economics – unlike chemistry, physics, or medicine, for which
Nobel Prizes are also
awarded – is not a science. Are they right?
One problem with economics is that it is
necessarily focused on policy, rather than discovery of fundamentals. Nobody
really cares much about economic data except as a guide to policy: economic
phenomena do not have the same intrinsic fascination for us as the internal
resonances of the atom or the functioning of the vesicles and other
organelles of a living cell. We judge economics by what it can produce. As
such, economics is rather more like engineering than physics, more practical
than spiritual.
There is no Nobel Prize for engineering, though
there should be. True,
the chemistry prize this year looks a bit like an
engineering prize, because it was given to three researchers – Martin
Karplus, Michael Levitt, and Arieh Warshel – “for the development of
multiscale models of complex chemical systems” that underlie the computer
programs that make nuclear magnetic resonance hardware work. But the Nobel
Foundation is forced to look at much more such practical, applied material
when it considers the economics prize.
The problem is that, once we focus on economic
policy, much that is not science comes into play.
Politics becomes involved, and political posturing
is amply rewarded by public attention. The Nobel Prize is designed to reward
those who do not play tricks for attention, and who, in their sincere
pursuit of the truth, might otherwise be slighted.
The pursuit of truth
Why is it called a prize in “economic sciences”, rather than just
“economics”? The other prizes are not awarded in the “chemical sciences” or
the “physical sciences”.
Fields of endeavor that use “science” in their
titles tend to be those that get masses of people emotionally involved and
in which crackpots seem to have some purchase on public opinion. These
fields have “science” in their names to distinguish them from their
disreputable cousins.
The term political science first became popular in
the late eighteenth century to distinguish it from all the partisan tracts
whose purpose was to gain votes and influence rather than pursue the truth.
Astronomical science was a common term in the late nineteenth century, to
distinguish it from astrology and the study of ancient myths about the
constellations. Hypnotic science was also used in the nineteenth century to
distinguish the scientific study of hypnotism from witchcraft or religious
transcendentalism.
Crackpot counterparts
There was a need for such terms back then, because their crackpot
counterparts held much greater sway in general discourse. Scientists had to
announce themselves as scientists.
In fact, even the
term chemical science enjoyed some popularity in the nineteenth century – a
time when the field sought to distinguish itself from alchemy and the
promotion of quack nostrums. But the need to use that term to distinguish
true science from the practice of impostors was already fading by the time
the
Nobel Prizes were launched in 1901.
Similarly, the terms astronomical science and
hypnotic science mostly died out as the twentieth century progressed,
perhaps because belief in the occult waned in respectable society. Yes,
horoscopes still persist in popular newspapers, but they are there only for
the severely scientifically challenged, or for entertainment; the idea that
the stars determine our fate has lost all intellectual currency. Hence there
is no longer any need for the term “astronomical science.”
Pseudoscience?
Critics of “economic sciences” sometimes refer to the development of a
“pseudoscience” of economics, arguing that it uses the trappings of science,
like dense mathematics, but only for show. For example, in his 2004 book, Fooled
by Randomness, Nassim Nicholas Taleb said of
economic sciences:
“You can disguise charlatanism under the weight of
equations, and nobody can catch you since there is no such thing as a
controlled experiment.”
But physics is not without such critics, too. In his 2004 book,
The Trouble with Physics: The Rise of String Theory, The Fall of a Science,
and What Comes Next, Lee Smolin reproached
the physics profession for being seduced by beautiful and elegant theories
(notably string theory) rather than those that can be tested by
experimentation. Similarly, in his 2007 book,
Not Even Wrong: The Failure of String Theory and the Search for Unity in
Physical Law, Peter Woit accused physicists
of much the same sin as mathematical economists are said to commit.
Exposing the charlatans
My belief is that
economics is somewhat more vulnerable than the
physical sciences to models whose validity will never be clear, because the
necessity for approximation is much stronger than in the physical sciences,
especially given that the
models describe people rather than magnetic resonances
or fundamental particles. People can just change their
minds and behave completely differently. They even have neuroses and
identity problems -
complex phenomena that the field of behavioral economics is finding relevant
to understand economic outcomes.
But all the mathematics in economics is not, as
Taleb suggests, charlatanism.
Economics has an important quantitative side,
which cannot be escaped. The challenge has been to combine its mathematical
insights with the kinds of adjustments that are needed to make its models
fit the economy’s irreducibly human element.
The advance of behavioral economics is not
fundamentally in conflict with mathematical economics, as some seem to
think, though it may well be in conflict with some currently fashionable
mathematical economic models. And, while economics presents its own
methodological problems, the basic challenges facing researchers are not
fundamentally different from those faced by researchers in other fields. As
economics develops, it will broaden its repertory of methods and sources of
evidence, the science will become stronger, and the charlatans will be
exposed.
Bob Jensen's threads on Real Science versus Pseudo Science ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
"A Pragmatist Defence of Classical Financial Accounting Research," by
Brian A. Rutherford, Abacus, Volume 49, Issue 2, pages 197–218, June 2013
---
http://onlinelibrary.wiley.com/doi/10.1111/abac.12003/abstract
The reason for the disdain in which classical
financial accounting research has come to held by many in the scholarly
community is its allegedly insufficiently scientific nature. While many have
defended classical research or provided critiques of post-classical
paradigms, the motivation for this paper is different. It offers an
epistemologically robust underpinning for the approaches and methods of
classical financial accounting research that restores its claim to
legitimacy as a rigorous, systematic and empirically grounded means of
acquiring knowledge. This underpinning is derived from classical
philosophical pragmatism and, principally, from the writings of John Dewey.
The objective is to show that classical approaches are capable of yielding
serviceable, theoretically based solutions to problems in accounting
practice.
Jensen Comment
When it comes to "insufficient scientific nature" of classical accounting
research I should note yet once again that accountics science never attained the
status of real science where the main criteria are scientific searches for
causes and an obsession with replication (reproducibility) of findings.
Accountics science is overrated because it only achieved the status of a
psuedo science ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Pseudo-Science
"Research
on Accounting Should Learn From the Past" by Michael H. Granof and Stephen
A. Zeff, Chronicle of Higher Education, March 21, 2008
The unintended consequence has been that interesting and researchable questions
in accounting are essentially being ignored.
By confining the major thrust in research to phenomena that can be
mathematically modeled or derived from electronic databases, academic
accountants have failed to advance the profession in ways that are expected of
them and of which they are capable.
Academic research has unquestionably broadened the views of standards setters as
to the role of accounting information and how it affects the decisions of
individual investors as well as the capital markets. Nevertheless, it has had
scant influence on the standards themselves.
Continued
in article
"Research on Accounting Should Learn From the Past,"
by Michael H. Granof and
Stephen A. Zeff, Chronicle of Higher Education, March 21, 2008
. . .
The narrow focus of today's research has also resulted in a disconnect between
research and teaching. Because of the difficulty of conducting publishable
research in certain areas — such as taxation, managerial accounting, government
accounting, and auditing — Ph.D. candidates avoid choosing them as specialties.
Thus, even though those areas are central to any degree program in accounting,
there is a shortage of faculty members sufficiently knowledgeable to teach them.
To be sure, some accounting research, particularly that pertaining to the
efficiency of capital markets, has found its way into both the classroom and
textbooks — but mainly in select M.B.A. programs and the textbooks used in those
courses. There is little evidence that the research has had more than a marginal
influence on what is taught in mainstream accounting courses.
What needs to be done? First, and most significantly, journal editors,
department chairs, business-school deans, and promotion-and-tenure committees
need to rethink the criteria for what constitutes appropriate accounting
research. That is not to suggest that they should diminish the importance of the
currently accepted modes or that they should lower their standards. But they
need to expand the set of research methods to encompass those that, in other
disciplines, are respected for their scientific standing. The methods include
historical and field studies, policy analysis, surveys, and international
comparisons when, as with empirical and analytical research, they otherwise meet
the tests of sound scholarship.
Second, chairmen, deans, and promotion and merit-review committees must expand
the criteria they use in assessing the research component of faculty
performance. They must have the courage to establish criteria for what
constitutes meritorious research that are consistent with their own
institutions' unique characters and comparative advantages, rather than
imitating the norms believed to be used in schools ranked higher in magazine and
newspaper polls. In this regard, they must acknowledge that accounting
departments, unlike other business disciplines such as finance and marketing,
are associated with a well-defined and recognized profession. Accounting
faculties, therefore, have a special obligation to conduct research that is of
interest and relevance to the profession. The current accounting model was
designed mainly for the industrial era, when property, plant, and equipment were
companies' major assets. Today, intangibles such as brand values and
intellectual capital are of overwhelming importance as assets, yet they are
largely absent from company balance sheets. Academics must play a role in
reforming the accounting model to fit the new postindustrial environment.
Third, Ph.D. programs must ensure that young accounting researchers are
conversant with the fundamental issues that have arisen in the accounting
discipline and with a broad range of research methodologies. The accounting
literature did not begin in the second half of the 1960s. The books and articles
written by accounting scholars from the 1920s through the 1960s can help to
frame and put into perspective the questions that researchers are now studying.
Continued in article
How accountics scientists should change ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
June 5, 2013 reply to a long
thread by Bob Jensen
Hi Steve,
As usual, these AECM threads between you, me, and Paul Williams resolve
nothing to date. TAR still has zero articles without equations unless such
articles are forced upon editors like the Kaplan article was forced upon you
as Senior Editor. TAR still has no commentaries about the papers it
publishes and the authors make no attempt to communicate and have dialog
about their research on the AECM or the AAA Commons.
I do hope that our AECM threads will continue and lead one day to when
the top academic research journals do more to both encourage (1) validation
(usually by speedy replication), (2) alternate methodologies, (3) more
innovative research, and (4) more interactive commentaries.
I remind you that Professor Basu's essay is only one of four essays
bundled together in Accounting Horizons on the topic of how to make
accounting research, especially the so-called Accounting Sciience or
Accountics Science or Cargo Cult science, more innovative.
The four essays in this bundle are summarized and extensively quoted at
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Essays
- "Framing the Issue of Research Quality in a Context of Research
Diversity," by Christopher S. Chapman ---
- "Accounting Craftspeople versus Accounting Seers: Exploring the
Relevance and Innovation Gaps in Academic Accounting Research," by
William E. McCarthy ---
- "Is Accounting Research Stagnant?" by Donald V. Moser ---
- Cargo Cult Science "How Can Accounting Researchers Become More
Innovative? by Sudipta Basu ---
I will try to keep drawing attention to these important essays and spend
the rest of my professional life trying to bring accounting research closer
to the accounting profession.
I also want to dispel the myth that accountics research is harder than
making research discoveries without equations. The hardest research I can
imagine (and where I failed) is to make a discovery that has a noteworthy
impact on the accounting profession. I always look but never find such
discoveries reported in TAR.
The easiest research is to purchase a database and beat it with an
econometric stick until something falls out of the clouds. I've searched for
years and find very little that has a noteworthy impact on the accounting
profession. Quite often there is a noteworthy impact on other members of the
Cargo Cult and doctoral students seeking to beat the same data with their
sticks. But try to find a practitioner with an interest in these academic
accounting discoveries?
Our latest thread leads me to such questions as:
- Is accounting research of inferior quality relative to other
disciplines like engineering and finance?
- Are there serious innovation gaps in academic accounting research?
- Is accounting research stagnant?
- How can accounting researchers be more innovative?
- Is there an "absence of dissent" in academic accounting research?
- Is there an absence of diversity in our top academic accounting
research journals and doctoral programs?
- Is there a serious disinterest (except among the Cargo Cult) and
lack of validation in findings reported in our academic accounting
research journals, especially TAR?
- Is there a huge communications gap between academic accounting
researchers and those who toil teaching accounting and practicing
accounting?
- Why do our accountics scientists virtually ignore the AECM and the
AAA Commons and the Pathways Commission Report?
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
One fall out of this thread is that I've been privately asked to write a
paper about such matters. I hope that others will compete with me in
thinking and writing about these serious challenges to academic accounting
research that never seem to get resolved.
Thank you Steve for sometimes responding in my threads on such issues in
the AECM.
Respectfully,
Bob Jensen
June 16, 2013 message from Bob
Jensen
Hi Marc,
The mathematics of falsification is essentially the same as
the mathematics of proof negation.
If mathematics is a science it's
largely a science of counter examples.
Regarding real-real science versus
pseudo-science, one criterion is that of explanation (not just
prediction) that satisfies a community of scholars. One of the best
examples of this are the exchanges between two Nobel economists ---
Milton Friedman versus Herb Simon.
From
http://www.cs.trinity.edu/~rjensen/temp/DeirdreMcCloskey/StatisticalSignificance01.htm
Jensen Comment
Interestingly, two Nobel economists slugged out the very essence
of theory some years back. Herb Simon insisted that the purpose
of theory was to explain. Milton Friedman went off on the
F-Twist tangent saying that it was enough if a theory merely
predicted. I lost some (certainly not all) respect for Friedman
over this. Deidre, who knew Milton, claims that deep in his
heart, Milton did not ultimately believe this to the degree that
it is attributed to him. Of course Deidre herself is not a great
admirer of Neyman, Savage, or Fisher.
Friedman's essay "The
Methodology of Positive Economics"
(1953) provided the
epistemological pattern for his
own subsequent research and to a degree that of the Chicago
School. There he argued that economics as science
should be free of value judgments for it to be objective.
Moreover, a useful economic theory should be judged not by
its descriptive realism but by its simplicity and
fruitfulness as an engine of prediction. That is, students
should measure the accuracy of its predictions, rather than
the 'soundness of its assumptions'. His argument was part of
an ongoing debate among such statisticians as
Jerzy Neyman,
Leonard Savage, and
Ronald Fisher.
Stanley Wong, 1973. "The 'F-Twist'
and the Methodology of Paul Samuelson," American Economic Review,
63(3) pp. 312-325. Reprinted in J.C. Wood & R.N. Woods, ed., 1990,
Milton Friedman: Critical Assessments, v. II, pp. 224- 43.
http://www.jstor.org/discover/10.2307/1914363?uid=3739712&uid=2129&uid=2&uid=70&uid=4&uid=3739256&sid=21102409988857
Respectfully,
Bob Jensen
June 18, 2013 reply to David Johnstone by Jagdish Gangolly
David,
Your call for a dialogue between statistics and
philosophy of science is very timely, and extremely important considering
the importance that statistics, both in its probabilistic and
non-probabilistic incarnations, has gained ever since the computational
advances of the past three decades or so. Let me share a few of my
conjectures regarding the cause of this schism between statistics and
philosophy, and consider a few areas where they can share in mutual
reflection. However, reflection in statistics, like in accounting of late
and unlike in philosophy, has been on short order for quite a while. And it
is always easier to pick the low hanging fruit. Albert Einstein once
remarked, ""I have little patience with scientists who take a board of wood,
look for the thinnest part and drill a great number of holes where drilling
is easy".
1.
Early statisticians were practitioners of the art,
most serving as consultants of sorts. Gosset worked for Guiness, GEP Box did
most of his early work for Imperial Chemical Industries (ICI), Fisher worked
at Rothamsted Experimental Station, Loeve was an actuary at University of
Lyon... As practitioners, statisticians almost always had their feet in one
of the domains in science: Fisher was a biologist, Gossett was a chemist,
Box was a chemist, ... Their research was down to earth, and while
statistics was always regarded the turf of mathematicians, their status
within mathematics was the same as that of accountants in liberal arts
colleges today, slightly above that of athletics. Of course, the individuals
with stature were expected to be mathematicians in their own right.
All that changed with the work of Kolmogorov (1933,
Moscow State, http://www.socsci.uci.edu/~bskyrms/bio/readings/kolmogorov_theory_of_probability_small.pdf),
Loeve (1960, Berkeley), Doob(1953, Illinois), and Dynkin(1963, Moscow State
and Cornell). They provided mathematical foundations for earlier work of
practitioners, and especially Kolmogorov provided axiomatic foundations for
probability theory. In the process, their work unified statistics into a
coherent mass of knowledge. (Perhaps there is a lesson here for us
accountants). A collateral effect was the schism in the field between the
theoreticians and the practitioners (of which we accountants must be wary)
that has continued to this date. We can see a parallel between accounting
and statistics here too.
2.
Early controversies in statistics had to do with
embedding statistical methods in decision theory (Fisher was against, Neyman
and Pearson were for it), and whether the foundations for statistics had to
be deductive or inductive (frequentists were for the former, Bayesians were
for the latter). These debates were not just technical, and had
underpinnings in philosophy, especially philosophy of mathematics (after
all, the early contributors to the field were mathematicians: Gauss, Fermat,
Pascal, Laplace, deMoivre, ...). For example, when the Fisher-Neyman/Pearson
debates had ranged, Neyman was invited by the philosopher Jakko Hintikka to
write a paper for the journal Synthese ( "Frequentist probability and
Frequentist statistics", 1977).
3.
Since the earl