Using a Bayesian model for bankruptcy prediction : a comparative approach

The purpose of this study is to examine the impact of the choice of cut-off points, sampling procedures, and the business cycle on the accuracy of bankruptcy prediction models. Misclassification can result in erroneous predictions leading to prohibitive costs to firms, investors and the economy. To test the impact of the choice of cut-off points and sampling procedures, three bankruptcy prediction models are assessed- Bayesian, Hazard and Mixed Logit. A salient feature of the study is that the analysis includes both parametric and nonparametric bankruptcy prediction models. A sample of firms from Lynn M. LoPucki Bankruptcy Research Database in the U. S. was used to evaluate the relative performance of the three models. The choice of a cut-off point and sampling procedures were found to affect the rankings of the various models. In general, the results indicate that the empirical cut-off point estimated from the training sample resulted in the lowest misclassification costs for all three models. Although the Hazard and Mixed Logit models resulted in lower costs of misclassification in the randomly selected samples, the Mixed Logit model did not perform as well across varying business-cycles. In general, the Hazard model has the highest predictive power. However, the higher predictive power of the Bayesian model, when the ratio of the cost of Type I errors to the cost of Type II errors is high, is relatively consistent across all sampling methods. Such an advantage of the Bayesian model may make it more attractive in the current economic environment. This study extends recent research comparing the performance of bankruptcy prediction models by identifying under what conditions a model performs better. It also allays a range of user groups, including auditors, shareholders, employees, suppliers, rating agencies, and creditors' concerns with respect to assessing failure risk.

Cognitive Behavior Therapy for Obsessive-Compulsive Behavior in Children with Autism Spectrum Disorder: A Comparison of Hierarchical Linear Modelling and Visual Analysis

Behavioral researchers commonly use single subject designs to evaluate the effects of a given treatment. Several different methods of data analysis are used, each with their own set of methodological strengths and limitations. Visual inspection is commonly used as a method of analyzing data which assesses the variability, level, and trend both within and between conditions (Cooper, Heron, & Heward, 2007). In an attempt to quantify treatment outcomes, researchers developed two methods for analysing data called Percentage of Non-overlapping Data Points (PND) and Percentage of Data Points Exceeding the Median (PEM). The purpose of the present study is to compare and contrast the use of Hierarchical Linear Modelling (HLM), PND and PEM in single subject research. The present study used 39 behaviours, across 17 participants to compare treatment outcomes of a group cognitive behavioural therapy program, using PND, PEM, and HLM on three response classes of Obsessive Compulsive Behaviour in children with Autism Spectrum Disorder. Findings suggest that PEM and HLM complement each other and both add invaluable information to the overall treatment results. Future research should consider using both PEM and HLM when analysing single subject designs, specifically grouped data with variability.