Bad Data Can Make Us Smarter

Scientific research is filled with false positives, which is a good thing because it forces researcher and scientists to continue conducting tests.
False, positive or both?

At the Western Finance Association meeting this summer, I heard a presentation of an interesting paper titled "...and the Cross-Section of Expected Returns," by Campbell Harvey, Yan Liu and Heqing Zhu. The paper is sort of a finance version of the famous 2005 paper by John Ioannidis, "Why Most Published Research Findings are False."

To continue reading this article you must be a Bloomberg Professional Service Subscriber.