Formulating an investment plan requires choosing among alternative projects with different time-streams of costs and benefits. Planners have to define a decision criterion that reduces the stream of cost and benefit flows at different points in time to an index. This index can then be used to determine a project's admissibility and to select among admissible projects. Net present value, or cost-benefit analysis, is regarded as the most rational one for that purpose. However, application of cost-benefit analysis in a developing country involves many difficulties. A major one is estimation of the social rate of discount. This study is intended to develop a practical approach for measuring the social rate of discount under conditions in Iraq in order to improve the selection process for development projects. The study holds that any applicable methodology to determine this variable should be sensitive to the principal characteristics of the particular economy and to the underlying meanings of available data. Accordingly, it was shown that the supply of savings is not appropriate for that purpose, since neither the individual nor the social time preferences are adequately reflected in its information. Likewise, the alternative of calculating the social rate of discount by observing the pre-tax rates of return on investment will yield misleading results due to serious distortions in different markets. Based on the fact that more than 98 percent of investment funding is provided by revenues from crude oil exports, the study recommends the need for solvable models of optimal path with exhaustible resources. These models should maximize the social welfare of both current and future generations. Meanwhile, optimal growth calculations would yield the required rate of discount as a by-product of the maximization process. In the absence of such calculations, two methods were recommended to estimate the discount rate within the second best context. The first is to derive it from consumption information. The other way is to estimate the opportunity cost of investable funds by observing the long-term rate of interest prevailing in international capital markets.

This thesis includes two essays on equity analysts’ agent role and one essay on investors’ inattention to good news. From a broader economic perspective, equity analysts are essentially agents acting on behalf of multiple principals including their employers, investors and issuers (Fisch & Sale, 2003). Classic agency theory predicts that analysts selectively provide coverage and report their expectations. In the first essay, I examine empirically if incremental investment value can be uncovered from analysts’ choices between silence and speech, measured as the level of analyst reporting not explained by size or turnover. I find that “silence” negatively, and “speech” positively predicts future stock returns. More importantly, as “speech is silver, silence is golden”, the observed price shift is mainly driven by silence, providing evidence that analysts’ inaction can impede price discovery process. This is consistent with the claims that analysts’ expectations are based on valid information, that analyst self-selection is pervasive due to the principal-agent conflicts, and that the loss of information with analyst silence has resulted in some mis-valuation which can be viewed as a form of classic agency cost. The second essay tests if analysts are systematically less forthcoming in reporting bad earnings news when the principal-agent conflicts are exacerbated. I find that analysts’ downward consensus earnings forecast revisions are less informative than their upward revisions; that less is more when analysts report bad news - extreme downward revisions contain little incremental information beyond momentum compared with moderate downward revisions; and that the differential richness of information in good and bad news revisions is more pronounced among bigger, more heavily covered stocks and stocks with higher institutional holdings, namely, stocks that are typically more prone to the analyst agency problem. Thus the loss of information in bad news revisions and extreme bad news revisions’ lagging behind price action can be viewed as another form of agency cost. In the third essay, I investigate how negativity bias in information processing affects the positive-negative-asymmetry in the stock price continuation phenomenon. Psychology literature document that negative stimuli elicit more attention and negative information is generally processed more thoroughly and is weighed more heavily in impression formation, memory, learning and decision making than positive information (Baumeister, Bratslavsky, Finkenauer, & Vohs, 2001; Rozin & Royzman, 2001). Insofar as people are cognitive misers, all else being equal, investors tend to pay less attention to good news than to bad news. Using earnings announcement as the information shock, I document evidences that investors incorporate bad earnings news to fuller extent than they do with good earnings news. Furthermore, given that psychological biases are typically increased when there is more uncertainty (Hirshleifer, 2001) and ambiguity or uncertainty is often associated with higher risk and the possibility of hostile manipulation, I also find more pronounced asymmetry in post announcement drift when information uncertainty is greater. / published_or_final_version / Business / Doctoral / Doctor of Philosophy

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Thesis (DBusinessAdministration)--University of South Australia, 2003.

Thesis (M.S.)--Ohio University, March, 1989. / Title from PDF t.p.

Project (M.B.A.) - Simon Fraser University, 2004. / Theses (Faculty of Business Administration) / Simon Fraser University. MBA-GAWM Program. Senior supervisor: Dr. Robert R. Grauer.

Thesis (Ph. D.)--University of Chicago Graduate School of Business, June 1999. / Includes bibliographical references. Also available on the Internet.

Thesis (M.Sc.(Actuarial Science)) -- University of Pretoria, 2005. / Includes bibliographical references.

Thesis (Ph. D.)--West Virginia University, 2000. / Title from document title page. Document formatted into pages; contains vii, 160 p. : ill. (some col.) Includes abstract. Includes bibliographical references (p. 154-160).

Thesis (Ph. D.)--Ohio State University, 2005. / Title from first page of PDF file. Document formatted into pages; contains xi, 119 p.; also includes graphics (some col.) Includes bibliographical references (p. 112-119). Available online via OhioLINK's ETD Center