Research
Working Papers
Consumer Sentiment Inequality and the Relative Performance of Firms
With Amir Rubin
- Best Paper Award in Asset Pricing, Investment, and Financial Technology-The 8th Vietnam International Conference in Finance (VICIF 2024)
This study demonstrates that changes in sentiment inequality (SI), defined as the difference in consumer sentiment between high- and low-income groups, can predict the performance of high-end versus low-end product firms. We illustrate this with a case study of how variations in SI can predict the comparative performance of casual dining versus fast-food companies. Across the economy, our hypothesis and evidence suggest that cyclical firms serving higher-income groups outperform or underperform non-cyclical firms following SI increases or decreases, respectively. Additionally, an increase in SI indicates a rise in market return, reinforcing SI's predictive value for macroeconomic dynamics.
Gender Diversity and Consensus Forecast Accuracy
With Alexander Vedrashko
- Beedie Fall 2024 Research Colloquium, Southwestern Finance Conference 2025, and FMA Annual Meeting 2025 (scheduled)
We analyze the benefits of gender diversity among sell-side analysts. Consensus forecast accuracy is higher for firms followed by more diverse analysts, as measured by the number and fraction of female analysts, after controlling for analyst quality. Similarly, increases in gender diversity are followed by reductions in consensus forecast errors. Consensus forecast accuracy improves more when there is a greater disagreement between male and female analysts, indicating that the wisdom of the crowds mechanism underlies the impact of gender diversity on consensus forecast accuracy. Additionally, we find that gender diversity enhances individual analysts’ forecast accuracy, which further improves the accuracy of the consensus forecast. Investors do not appear to recognize the greater accuracy of consensus forecasts produced by more diverse analysts, as they do not react more strongly to earnings surprises associated with these forecasts.