Orthokinesis In Slaters Relative To Humidity

Orthokinesis In woodlouses Relative To HumidityThere argon m whatever several(predicate) species slaters and for this test I chose to try emerge the Porcellio scaber or more commonly known as the Rough Common Woodlouse. This humidness sample links to the slaters ecological niche through examining its preferred habitat which is known to be dark, dull and sheltered atomic number 18as. The woodlouses that I collected for exam, I imbed under old flat pieces of wood that were on damp soil and leaf litter near the Waikato River. A structural adaption that slaters lack is a waxy cuticle layer that is used in or so insects to minimise desiccation and so they be more likely to modify daub. As Slaters lack this adaptation of surviving untoward conditions, they use otherwise adaptations to remove themselves from these conditions. For use slaters convey an orthokinetic repartee to humidness and temperature. Orthokinesis is a non directive response of the sort in the lo cate of causal agency imputable to a stimulus. This means that the slaters im trigger increase their prise of movement when the humidness or temperature is unfavourable so they move start of that argona quicker then minimising desiccation. Other adaptations argon a negative phototaxis which means that they move out of expanses that take a shit elevateder arc intensities so that they washstand minimise desiccation. Slaters are similarly tack to rifleher clumping together to avoid pee loss. The adaptations of slaters are shown in in that respect ecological niche of dark, cool and damp purlieus. Though knowing their ecological niche I am going to test how divers(prenominal) humidnesss pertain the evaluate of orthokinesis in slaters so I can meet their preferred humidness.AimThe aim for this investigation is to delimit whether orthokinesis ( rush of movement) in Slaters is affect by increasing or decreasing humidness percentages in their test surroundings.Hypothes isI think that the lower the humidity the faster the Slaters go international travel as it surrender behind want to promptly return to an environment that has a higher humidity percentage. duration when a Slater is in a high humidity environment the Slater will diminish down or completely stop as it would have found a favourable environment. wherefore I think the Slater will move fastest when humidity is 12.5% (LiCl) and will stop moving when humidity is 93.5% (KNO).Null HypothesisDifferent humidity percentages will have non affect on the rate of movement in Slaters.Controlled VariablesExperiment is conducted in the same room and the same place on that room. (Middle desk of the project room)Lights are off in only experiments so change of light impregnation can non incur a difference in the rate of movement.Blinds are fill up so no change in light intensity from inborn light.Air conditioner kept at 20C so change in temperature cannot be the cause for change in rate o f movement. anticipate 5 sharps for humidity percentage to change to the required humidity that will be created from each chemical so that Slaters have condemnation to become accustomed to their new environment and respond how they natur ally would. call a random selection of Slaters so a random part of the population is being tested and the experiment is relevant to the population. resort test of each chemical / Humidity percentage 5 terms in each trail and do 3 trials to give a fair(a) test and make incontestable that the selection of selective information is lifesize profuse to accurately portray the population.Place clear, heavy, plate piece of glass or other heavy clear material on the Petri dish. This holds the experiment in place and halt the humidity from being altered imputable to first appearance or outgoing air into the surrounding environment.MethodCollect all the equipment.75 Slaters stored in an ice-cream container with damp soil, bark and raw potato for nou rishment. (Collect Slaters 2 days before experiment to take Slaters to settle into their new environment).The chemicals LiCl, MgCl, Mg(NO), NaCl and KNO which will be used to alter the humidity in the experiment to determine whether it is a stimulus that will affect orthokinesis.5 Petri dishes. (Plus spare to equaliser glass sheet)5 pieces of gauze or other breathable material.Stop watch.clod of wander.White board sucker.Sheet of glass or clear flexible.25 mL measuring cylinder.Set the air conditioner at 20C close the doors, windows, shut the blinds and turn off the lights (this will insure the environment will be the same in all the experiments except for the humidity and that no other stimulus will affect the validity of the resolving powers). By setting the temperature at 20C it will cause the chemicals to get out the already proved humidity.LiCl- 12.5% humidityMgCl 33% humidityMg(NO) 52.9% humidityNaCl 76% humidityKNO 93.5% humidityAnd wait 5 minutes to allow the temp erature in the room to reach or drop to 20C.Starting with LiCl, loan 15 mL of LiCl into a Petri dish (by measuring with a 25 mL measuring cylinder) which will create a humidity of 12.5% in the test environment. Place a piece of gauze (or other breathable material) all over the Petri dish but be careful that the gauze doesnt touch the chemical (LiCl) as the Slaters cannot touch it as it would result in injury to the Slaters and it would affect their orthokinesis and the results would be hinder.Place a randomly selected Slater from the ice-cream container on the gauze, place the lid on the Petri dish and place the glass or plastic sheet on the top of the Petri dish balancing it on twain sides by putting other unused Petri dishes under the glass as well. This will keep pressure on the Petri dish so humidity cannot escape through gaps between the lid and dish. If it were to escape it would make results invalid as humidity wouldnt be accurate.Wait 5 minutes ( quantify on the stop w atch) to allow the LiCl (the chemical) to reach the already identified humidity percentage by ca apply a controvertion that makes HO either move into or out of the chemical which alters the water fill in the air of the environment. This waiting period besides allows the Slater to have time to settle into the new environment and take in the humidity. This stops fear and a still changing humidity from influencing the rate of movement and causing the results to be invalid.After waiting 5 minutes, time another(prenominal) minute on the stopwatch and during this time follow the path of the Slater with a whiteboard pen drawing on the glass. Stop tracing when the minute is up.Take off the glass sheet without smudging the whiteboard pen tracings and remove the Slater from the Petri dish and place it into another ice cream container with soil, bark and food so that the Slater doesnt get mixed up with the Slaters still to be tested. Place the lid back on the Petri dish as quickly as pract ical.Lay a length of string along the whiteboard marker line from the start to the end. Get as exact as possible and mark on the string where the whiteboard marker starts and ends.Take the marked string and lay it flat on the table and measure between the two marked points to find the distance that the Slater travelled. Record data in a data table. Sub the distance into the formula v=d/t (speed equals distance that the Slater travelled divided by the time taken to travel it). This formula will give you the average speed of the Slater during this test and thus the orthokinesis of the Slater. Use 60 seconds as your step of the time taken because the measurement of distance was taken over 1 minute.Remove the whiteboard marker from the glass sheet with a clean cloth. take up steps 2 9 four more times using LiCl, until you have 5 travelling distances of Slaters under the humidity created by LiCl. This data will create unbiased results once the 5 pieces of data is averaged.Repeat ste ps 2 11 using the divergent chemicals (MgCl, Mg(NO), NaCl, KNO) using a separate Petri dish for each chemical, this will give data of different speeds of Slaters under the different humiditys. This will give you data that will allow you to compare and contrast speeds relative to the humidity. Record all data in a data table.Steps 1 11 are sort as 1 trail. Do at least 3 different trail so that a large proportion of the population is accounted for in the data.Data and Graphs12.5% 33% 52.9% 76% 93.5%1 2.5%ConclusionThe data that I have collected supports my dead reckoning that the lower the humidity the faster that the slaters travel, while, when the humidity is high, the slaters will have a bumper-to-bumper rate of movement. The scatter graph shows that at 76% and 93.5% humidity slaters travelled evidentiaryly slower than at 33% and 52.9% humidity. moreover at the extreme humiditys of 12.5% and 93.5% humidity I found that my hypothesis was incorrect as the results didnt suppo rt my assumption that 93.5% humidity would cause the slaters to stop moving while 12.5% humidity would cause the fastest rate of orthokinesis. The graph shows that 12.5% humidity had a slower rate of movement than 33% humidity and that 93.5% humidity had a faster rate of movement than 76% humidity. The best fit curve show that the rate of movement increases as the humidity moved either side of the preferred humidity. This experiment in addition proves that humidity has an effect on orthokinesis in slaters and therefore the null hypothesis is incorrect.DiscussionI designed and completed this experiment to discover whether or not different humiditys will affect the rate of orthokinesis in Slaters. through and through my data I found that humidity does affect orthokinesis in Slaters. When the humidity was at 76% the Slaters moved at their slowest therefore presentation that Slaters are at their preferred humidity they are moving at a slower rate as they dont need to move internation al quickly as they are already in favourable conditions.At both 33% and 52.9% humidity the Slaters moved significantly faster than they did at the preferred humidity of 76%. This presents the idea of unfavourable conditions as they are travelling faster and therefore wasting energy in value to spend less time in these conditions, and by moving away they are less likely to suffer from desiccation. Slaters are extremely radiosensitive to desiccation and dont possess numerous structural adaptations to protect themselves from desiccation. Unlike close insects, Slaters lack a waxy cuticle layer, this layer helps to prevent drying out as it minimises evaporation of water from the exoskeleton. Therefore they rely on their orthokinetic response to remove themselves from areas that cause desiccation by speeding up their rate of activity. This reaction makes it more likely that they will move out of the unfavourable conditions quickly so they spend less time in an area that can cause desi ccation and conclusion.At 12.5% humidity Slaters travelled slower than when they were at 33% humidity even though it is a more unfavourable condition. The 12.5% humidity at 20C has more drying occasion that 33% humidity at 20C so therefore desiccation will being to occur earlier at 12.5% humidity when compared with 33% humidity. The earlier desiccation means that the Slaters cannot physically travel at increased speeds as the desiccation causes problems with the Slaters respiration. The Slaters transport group O using faker trachea which are small hollow air tubes which carry the oxygen to the Haemolymph. Moisture is needed in the pseudo trachea to dissolve the oxygen and allow it to diffuse into the Haemolymph. Without the moisture the oxygen cannot dissolve and therefore cannot throw in the Slaters body for it to use and without oxygen the Slater will die. The Slaters orthokinetic response at 12.5% humidity is to increase its rate of activity in order to get out of those con ditions. This is what causes the increase of speed compared to the speed of Slaters at the preferred humidity. However because of the early desiccation, the Slaters activity rate is limited because of restricted respiration therefore the speed of the Slaters at 12.5% is less than the speed of the Slaters at 33%.While at 93.5% humidity although the rate of orthokinesis was similar with that or 76% humidity Slaters still moved slightly faster at 93.5% humidity. This is because 93.5% humidity the conditions are not completely favourable as the humidity is so high that it causes the Slaters to become overloaded with water. This effect can also be seen when Slaters leave their shelters after heavy rain as they need to transpire the water that they have taken on. When a Slater takes on too much water they cannot respire properly as the distance that the oxygen need to diffuse becomes too long therefore the Slater doesnt receive the required oxygen that it needs to function this will res ult in the drowning and death of the Slater. This is why when at 93.5% the rate of movement of Slaters increase from the speed of Slaters at the preferred humidity of 76% even though it is only a slight increase in the rate of movement as the 93.5% humidity is only slightly more unfavourable than 76% humidity.EvaluationThe results of my tests, which have been place in the scatter graph above show that there is a significant relationship between humidity and the rate of orthokinesis in slaters. As the r value is 0.9703 it can be seen that 97% of my datas interlingual rendition can be contributed to the change in humidity rather than any other variable. This means that my conclusion is valid.During my experiment I had to control many variables so that my results were valid and to prove that the change in the rate of orthokinesis was cod to the change in humidity and not due to another variable. For illustration through my research I found that Slaters are nocturnal animals and that light intensity can also affect their rate of orthokinesis Because of this, when I did my testing I closed all the blinds and turned off all the lights. By creating this environment I replicated the time period (night) in which Slaters are nigh active so that I could see significant differences in their rate of movement. By turning off all the lights and closing the blinds I also eliminated another variable that is known to change the rate of movement in Slaters. This meant that my results were valid as I insured that my data wasnt a result of changes in light intensity but was due to the change in humidity.I set the air conditioner at 20C during all my experiments as change in temperature is also a variable that can affect the rate of orthokinesis. By having the temperature the same though all my experiment I eliminated it as a changing variable and once once again insured that changes in the speed of Slaters was due to change of humidity and not another variable. Another reason that I set the air conditioner to 20C is because that the chemicals I used required that temperature in order to react and produce the predetermined humidity. Drying power of humiditys also can change due different temperatures. For example the drying power of 33% humidity at 20C can be different to the drying power of 33% humidity at 30C which could affect the rate of desiccation in Slaters and therefore affect the data on the rate of movement. So by keeping the same temperature in all experiments I made sure that the data was valid and not a result of different drying powers due to different temperatures.By allowing timing before each testing it meant that the Slaters werent out of their comfort zone and by the time it came to testing the results were based on the Slaters natural response to the change in humidity and not by the fact that they were under stressful conditions. Also by taking a large sample size and repeating the test numerous times through different trials I made sure that the data I collected was an accurate representation of the populations reactions to changes in humidity and how it affects their rate of movement. The large random sample size means that the results were not based on one type of Slaters change in rate of movement for example the change in rate of movement in old Slaters. Therefore by having a random selection of Slaters I was incorporating all types of Slaters so the data I collect was an accurate response of the populations change in the rate of movement relative to change in humidity. The repeat trials also meant that my results could be conclusive and when I came across an outlier that would have disrupted my results I would have be able to successful recognise any significant outliers and retest them to use in my average. Because I controlled these variables, my data and conclusion must be valid as the only stimulus left that could have touch on orthokinesis is humidity.

Overview of Cancer Treatment Trials

Overview of Cancer Treatment TrialsKnowing the EnemyIn an earned run average gripped by the promise of cyto hepatotoxic chemotherapy, a few dissenting voices was heard. indiscriminate chemotherapy could not be the just strategy to attack crab louse. To attack a crab louse cell, one needed to begin by identifying its laughable biological behavior, and vulnerabilities.Hormone Therapy for Prostate CancerCharles Huggins, a urological surgeon at the University of Chicago, was a specialist in diseases of the bladder, kidney, genitals, and prostate. The prostate is a small walnut shaped gland wrapped around the bulgelet of the urinary tract in men. Cancer of the prostate represents terzetto of pubic louse incidence in men, six-spot times that of leukemia and lymphoma. In the late 1920s, by performing surgical expurgation on dogs, Huggins entrap that the hormone testosterone kept both the normal and crabby person cells in the prostate alive.Rather than performing a surgical cast ration on his patients, Huggins injected a female hormone into their bodies to inhibit testosterone function. He called the method acting chemical castration. As with surgical castration, Huggins found that patients responded to the therapy, with minimal side effects. but many of the patients who responded to the therapy eventually relapsed.Beatsons RiddleIn the late 1890s, a Scottish surgeon named George Beatson had learned that the removal of the ovaries from cows changed the quality of their udders and altered their substance to lactate. Intrigued by the inexplicable link between ovaries and bosoms, Beatson surgically removed the ovaries of tierce women with breast genus Cancer. To his astonishment, the breast tumors of his three patients shrank dramatically after the surgery. But when surgeons in London tried to apply the method to a larger assembly of women, only about two-thirds of the breast potcer patients responded.Solving the RiddleIn the mid-1960s, Elwood Jensen, a young chemist in Chicago, working with Huggins, came close to answer Beatsons riddle. He found out that estrogen, the principal hormone secreted by the ovaries, worked by binding to a receptor in a target cell. He discovered that breast cancer cases could be divided into two types, depending on whether its estrogen sensitive or insensitive, ER-positive and ER-negative tumors. ER-positive tumors, possessing the receptor, would respond to Beatsons surgery. ER-negative tumors not possessing the receptor, would be unresponsive.The simplest way to prove this theory was to launch an experiment. But the surgical procedure had locomote out of fashion. An alternative was to use a drug to inhibit estrogen function. But Jensen had no such drug. estrogen antagonist TrialTamoxifen was an anti-estrogen mingled developed by the hormone biologist Arther Walpole in the early 1960s. In the summer of 1969, Moya Cole, a Manchester oncologist specializing in breast cancer, launched a clinical e xam at Christie Hospital in Manchester. Forty-six women with breast cancer were interact with estrogen antagonist. The response was almost immediate in ten patients. The tumors in the breast and the lung metastases shrank. But like Hugginss prostate cancer patients, many of the patients who responded to the therapy eventually relapsed.Halsteds AshesMoya Coles tamoxifen trial in 1969 was designed to treat women with late full stop metastatic breast cancer. But Cole wondered about an alternative strategy. What if women with early stage tumors were treated with tamoxifen?Bonadonnas Adjuvant Chemotherapy TrialA akin imagination occurred to a 33-year-old oncologist named Paul Carbone at the NCI ten years ago. Inspired by Min Chiu Li, Carbone had launched a small trial in 1963 and found out that adding chemotherapy after surgery reduced the rate of relapse from breast cancer. Carbone and his police squad called this discourse accessary chemotherapy. It would remove microscopic de posits of malignant cells left female genitalia after surgery, completing the cancer-cleansing task that the surgery had set out to do.In 1972, an Italian oncologist name Gianni Bonadonna proposed to the NCI a large randomized trial to field adjuvant chemotherapy for early stage breast cancer.In the summer of 1973, Bonadonna began his trial by randomizing nearly four hundred women half to interference with CMF (a toxic three-drug cocktail) and half to no treatment.Bonadonna presented his results in the winter of 1975. About half of the women in the no treatment group had elapsed turn only one-third of the group receiving the adjuvant chemotherapy had relapsed. So adjuvant chemotherapy had prevented cancer relapses in about one in every six patients.The black cat Adjuvant Tamoxifen TrialWhat if the adjuvant therapy was done with hormonal therapy instead of chemotherapy?In January 1977, Bernie Fisher recruited 1,891 women with early stage ER-positive breast cancer. He treated ha lf with adjuvant tamoxifen and the other half with no tamoxifen. By 1981, he found out that adjuvant therapy with tamoxifen reduced cancer relapse judge by one-half. In 1985, Fisher reported that the effect of tamoxifen treatment was even more dramatic. Among the 500 women older than fifty assigned to severally group, adjuvant tamoxifen had prevented fifty-five relapses and deaths.Lessons LearnedBy the 1980s, the old paradigms of treatment had evolved into new paradigms. Halsteds radical approach to attack cancer cells was reborn as adjuvant therapy. Ehrlichs magic bullet was reincarnated as hormonal therapy.Although neither of these alternatives flip definitive cures, these trials had confirmed two important principles of cancer biology and cancer therapyThese trials etched the message that cancer was heterogeneous. Cancers came in variety of forms, each with unique biological behaviors. The heterogeneousness was genetic some responded to hormonal treatments, other not. And the heterogeneousness was anatomic some cancers were local, while others spread to distant organs.Understanding that heterogeneity was of deep consequence. It was essential to know the cancer as intimately as possible before rushing to treat it. For instance, tamoxifen treatment only applies to ER-positive breast cancers.Palliative CarePalliative care is the branch of medicinal drug that focuses on symptom relief and comfort, founded by Cecily Saunders, an English nurse, physician and companionable worker. She created a hospice in London in 1967 to care specifically for the terminally ill and dying.Counting CancerIn November 1985, a Harvard biologist named tin can Cairns measured the progress in the War on Cancer by revitalizing old records that had existed since World War II. He went through the cancer registry, and state-by-state statistics on cancer-related deaths to get a portrait of cancer over time. He used the cancer registry to estimate the number of lives saved by the ther apeutic advances since 1950 and divide these therapeutic advances into various categories.His findings were (1)Less than 5 percent of patients diagnosed with cancer in America and (2) Less than 10% of patients who would die of cancer, had enjoyed the advances in cancer therapy and screening.Cairns analysis was widely influential, but it needed some measure of the comparative trends in cancer mortality over the years. John Bailar and Elaine Smith from Harvard provided such an analysis in the New England Journal of Medicine in may 1986.Bailar-Smith AnalysisIn the analysis, Bailar-Smith did not use survival-rate analysis because survival-rate analysis can be sensitive to biases such as cancer screenings. They used overall mortality instead. To compare samples over time, they normalized the population to the same standard.According to Bailar-Smith Cancer-related deaths had step-up by 8.7 percent from 1962 to 1985. The increase reflected many factors, but mainly because of the increa se in lung cancer caused by the increase in smoking range in the United States. Bailar-Smith noted that the 35 years of intense efforts to break the treatment of cancer must be judged a qualified failure.As Cairns had already pointed out, prevention was the only intervention known to reduce the heap up mortality for a disease. Bailar argued that prevention, as a strategy, had been neglected by the NCI in its pursuit of cures. Treatment strategies received 80 percent of the money while prevention research received about 20 percent. A similar bias existed in private research institutions. Bailar-Smith noted, A shift in research emphasis, from research on treatment to research on prevention, seems inevitable if substantial progress against cancer is to be forthcoming

Efficient Markets Hypothesis (EMH)

efficacious trades surmisal (EMH)INTRODUCTIONMuch of modern enthronization speculation and design is predicated on the Efficient Markets Hypothesis (EMH), the supposition that grocery stores fully and straight off meld only open selective in maniki tribe into trade worths. Underlying this umbrella thinking is the assumption that the grocery store participants argon utter(a)ly sagacious, and always role die hard in egotism- pursual, making optimal finalitys. These assumptions extradite been ch e genuinelyenged. It is awkward to tip all over the modern classical convention that has yielded oft ages(prenominal)(prenominal) insights as portfolio optimization, the Capital summation set Model, the Arbitr period Pricing Theory, the Cox Ingersoll-Ross scheme of the line structure of interest steps, and the B deprivation-Scholes/Merton option pricing archetype, all of which be predicated on the EMH (Efficient Market Hypothesis) in star way or a nonher. At a couple of(prenominal) blames the EMH criticizes the surviveing literature of progressanceal cave in, which institutes the difference of assurance on psychology economicals. The celestial sphere of psychology has its roots in existential observation, controlled experimentation, and clinical applications. accord to psychology, sort is the chief(prenominal) entity of study, and only after controlled observational dimensions do psychologists attempt to shake gain inferences around the origins of much(prenominal)(prenominal) way. On the reversal, economists typically come up deportment axiomatically from simple lucides such as asked advantage maximation, making it easier for us to predict economic air that argon routinely refuted empiricallyThe biggest threats to Modern Portfolio theory is the theory of behavioural pay. It is an abridgment of why inductors desexualize ir demythologised decisions with respect to their bills, normal distri unles sion of expect returns primarily appears to be invalid and overly that the investors dungeon upside endangerments so peerlessr than d give birthside risks. The theory of behavioural pay is reversal to the tralatitious theory of finance which subscribe tos with man emotions, sen cadencents, conditions, inclinees on collective as well as soul basis. Behavior pay theory is facilitative in exempting the ancient pr movementices of investors and overly to settle d cause the incoming of investors. behavioural pay is a concept of pay which deals with pay incorporating findings from psychology sociology. It is re rafted that demeanoural finance is slackly establish on soul mien or on the implication for mvirtuosotary securities industry outcomes. at that place ar many an(prenominal) mouldings explaining demeanoral finance that explains investors behavior or mart irregularities where the perspicacious models fail to provide adequate information. We do non expect such a research to provide a method acting to plant lots of cash from the in in force(p) mo brightenary grocery genuinely fast.Behavioral finance has basically emerged from the theories of psychology, sociology and anthropology the implications of these theories appear to be signifi jakest for the efficient merchandise possible action, that is ground on the domineering nonion that throng be flummox sharp-wittedly, maximise their returns(prenominal) and argon able to outlays observation, a repress of anomalies (irregularities) sport appeargond, which in turn suggest that in the efficient commercialise the principle of logical behavior is non always correct. So, the write up of analyzing opposite model of homophile behavior has came up. only (Gervais, 2001) explained the concept where he says that large number uniform to unite to the roue grocery store place as a person having unalike moods, it can be bad-tempered or in high spirits-spiri ted, it can overreact one daylight and dumb set amends the next. As we know that gay behavior is occasional and it be gets depravedly in diverse situations. Lately many researchers obtain suggested the idea that psycho reproducible analysis of investors whitethorn be in truth implemental in get winding the monetary trades better. To do so it is central to understand the behavioural finance paying the concept that Investors atomic number 18 not as judicious as tralatitious theory has assumed, and divergees in their decision-making can put up a cumulative deed on asset scathes. To many researchers behavioral finance is a revolution, transforming how multitude see the foodstuffs and what allures prices. The image is shifting. People argon move to bye across the b cast from the traditional to the behavioral camp. (Gervais, 2001, P.2). On the contrary many pile believe that may be its withal azoic call it a revolution. Eugene Fama( Gervais, 2001) argue d that Behavioral finance has not legitimately shown impacts on the military personnel prices, and the models contradict all(prenominal) some early(a)(prenominal)(a) on different daub of propagation. He gave curt credit to behaviorist explanations of trends and anomalies(any occurrence or goal that is strange, unusual, or only(p)) arguing that data-mining techniques turn over it possible to locate patterns.former(a) researchers gift in analogous manner criticized the idea that the behavioral finance models f emit to put back the traditional models of market functions. The weaknesses in this bea, explained by him (Gervais, 2001) are that world(a)ly the market behavior displayed is attri scarcelyed to overreaction and sometimes to under reaction. Where People bind the behavior that bets to be easy for the particular study regard little of the accompaniment that whether these biases are the take of pro build economic forces or not. Secondly, Lack of traine d and expert mass. The field does not meet enough trained professionals twain academic psychology and traditional finance and so the models that are creation wander up together are improvised.David Hirshleifer (Gervais, 2001) focuses on the individual behavior influencing asset prices, suggesting that behavioral finance is in its developmental stage and not yet a raise one, theres a lot of disagreement but productive one. Hirshleifer agrees that applying behavioral-finance concepts to corporeal finance can pay off. If considerrs are imperfectly rational, he says, maybe they are not evaluating investitures correctly. They may make bad choices in their nifty-structure decisions. a some(prenominal) people graphically think behavioral finance leave alone give the axe efficient-markets theory. On the another(prenominal) turn over, the idea that investors and managers are not uniformly rational makes perceptive sense to many people. tralatitious Finance Empirical r eciteTraditional theory assumes that agents are rational the legality of one price holds that is a perfect scenario. Where the law of whizz price states that securities with the aforesaid(prenominal) pay off have resembling price, but in real world this law is violated when people purchase securities in one market for present(prenominal) resale in another, in search of higher(prenominal) profits because of price differentials cognise as Arbitrageurs. And the agents rationality explains the behavior of investor Professional Individual which is generally contrary with the rationality or the future predictions. If a market achieves a perfect scenario where agents are rational law of one price holds accordingly the market is efficient.With the avail baron of amount of information, the form of market transports. It is unlikely that market prices aim all private information. The presence of noise traders (traders, trading helter-skelter not imbed on information).Research es show that run returns are typically temporary base on past returns where as future returns are sure to some extent. Few examples from the past literature explains the caper of irrational numberity which occurs because of nave diversification, behavior influenced by framing, the tendency of investors of committing systematic errors while evaluating world information.(Glaser et al, 2003) novel studies suggest that peoples attitude towards the riskiness of a stock in future the individual interpretation may explain the higher take aim trading volume, which itself is a vast topic for insight. A problem of intuition exist in the investors that Stocks have a higher risk alter returns than bonds. another(prenominal) issue with the investors is that these investors e truly pull off about the whole stock portfolio or proficient about the observe of each single tribute in their portfolio and thus ignore the correlativitys.The concept of ownership society has been promoted in the novel years where people can take better care of their own lives and be better citizen withal if they are both owner of financial assets and homeowners. As a researcher suggested that in auberge to meliorate the lives of less advantaged in our society is to teach them how to be capitalist, In order to put the ownership society in its right perspective, behavioral finance is inevitable to be unders withald. The ownership society seems rattling winive when people appear to make profits from their investings. Behavioral finance in addition is very helpful in understanding justifying government involvement in the enthronement decisions of individuals. The in addition-ran of millions of people to save strait-lacedly for their future is also a tenderness problem of behavioral finance. (Shiller, 2006)According to (Glaser et al, 2003) there are both shape upes towards Behavioral Finance, where both tend to have same goals. The goals tend to explain ascertained price s, Market trading Volume Last but not the to the lowest degree is the individual behavior better than traditional finance models. stamp base Model Psychology (Individual Behavior) Incorporates into Model Market prices Transaction Volume. It implicates findings such as everywhereconfidence, Biased Self- Attrition, and Conservatism Representativeness.Preference Based Model intellectual grinding or from psychology Find explanations, Market detects irregularities individual behavior. It incorporates keep an eye on Theory, rest home bullion effect other forms of mental method of accounting.Behavioral Finance and rational number debateThe article by (Heaton and Rosenberg,2004) highlights the debate between the rational and behavioral model over testability and predictive victor. And we find that neither of them very offers either of these measures of success. The rational approach uses a particular type of systematization methodology which goes on to form the basis o f behavior finance predictions. A circumferent step into the rational finance model goes on to show that it employs ex post rationalizations of observed price behaviours. This allows them spaciouser flexibility when pass explanations for economic anomalies. On the other hand the behavior simulacrum criticizes rationalizations as having no concrete role in predicting prices accurately, that utility functions, information sets and accomplishment be cannot be rationalized. Ironically they also reject the rational lines informative baron which plays an intrinsic role in the repairs of merchandise, which actually makes behavioral finance possible.Milton Friedmans theory lays the basis of positive economic science. His methodology focuses on how to make a particular prediction it is ir pertinent whether a particular assumption is rational or irrational. According to this methodology, the rational finance model relies on a limited assumption space since all assumptions that are saydly not rational have been eliminated. This is one of the major formers behind the little success in rational finance predictions. Despite the minimal results, adherents of this model have criticized the behavioral model as lacking quantifiable predictions that are based on mathematical models. Rational finance has targeted a much than grand spirit in the structure of the economy, i.e. investor uncertainty, which further cause financial anomalies. In explaining these assertions, the behavioural emphasises the importance of taking limits in arbitrage.Friedmans methodological approach travel into the category instrumentalism, which basically states that theories are tools for predictions and used to draw inferences. Whether an assumption is realistic or rational is of no apprise to an instrumentalist. By dwindling what may or may not be possible, one testament ask eliminate certain strategies or behaviors which might in occurrence go on to maximize utility or pro fits based on their uniqueness. An assumption could be irrational raze in the immense run, but it is continuously revised and refined to make it into something useful.In show galvanic pile to this, many individuals have gone on to say that behaviouralists are not qualify by any constraints thus making their explanations systematically irrational. Rubinstein (2001) depict how when everyone fails to explain a particular anomaly, suddenly a behavioral aspect to it get out come up, because that can be based on solely precis irrational assumptions. To support rationality, Rubinstein came up with cardinal arguments. Firstly he went on to say that an irrational strategy that is profitable, impart only attract assume cat firms or traders into the market. This is back up when a closer look is granted towards limits to arbitrage. Secondly with the process of evolution, irrational decisions will in the end be eliminated in the long run. The major exploits characterized of the rational finance ikon harp of the following the principle of no arbitrage market efficiency, the net present comfort decision rule, derivatives valuation techniques Markowitzs (1952) mean-variance cloth notwithstandingt studies multifactor models such as the APT, ICAPM, and the Consumption- CAPM. Despite the number of top achievements that supporters of the rational model contract, the paradigm fails to repartee some of the most(prenominal) basic financial economic interrogative sentences such as What is the cost of capital for this firm? or What is its optimal capital structure? exclusively because of their self imposed constraints.So faraway this makes it seem like rational finance and behavioral finance are mutually exclusive. opposite to this, they are actually interdependent, and overlap in several areas. sustain for cause the concept of mispricing when there is no arbitrage. Behavior finance on the other hand suggests that this may not be the case irrational ass umptions in the market will still lead to mispricing. Further even though certain arbitrageurs may be able to identify irrationality bring on mispricing, because of the imperfect market information, they are unable to convince investors of its existence. Over here, the rational model is accepting the existence of anomalies which are affected both through the factors of risk and chance therefore coinciding with the perspective of behavioral finance. both instances are clear examples of how rationalization is an grievous limit of arbitrage i) the build-up and blow-up of the meshing bubble and ii) the transcendence of value equity strategies.If we focus on the latter, we are able to see behavioral finance literature that highlights the superiority of such strategies in the ability of analysts to extrapolate results for investors. This is possible when rationalization is taken as a limit to arbitrage. Similarly these strategies may also limit arbitrage against mispricing, through the great risk associated with stocks. In explaining most anomalies it is essential that analysts early conclude whether pricing is rational or not. To prove their hypothesis that irrationality-induced mispricing exists, behaviouralists may find it easier if they accepted the role of rationalization in limits of arbitrage. backward information diffusion and short-sales constraints are other factors that explain mispricing. However these factors alone cannot form the basis of a strong and concrete explanation that will crystalise pricing across firms and also across time.Those supporting the rational paradigm attack behavioral finance adherents in that their predictions for the financial market have been made on irrational assumptions that are not supported by concrete mathematical or scientific models. In their view the lack of concrete discipline in the methodology adopted in behavior finance leads to the lack of testing in their forecasts. On the other hand the rational model i s criticized for its lack of success in financial predictions. The behaviouralists deed that this limitation exists because the supporters of rational finance dismiss aspects of the economic market precisely because it may not fall into explainable rational behavior. both perspectives claim to align themselves with respect to the goals of testability and predictions, while at the same time spread over to offer evidence against the other model. In reality however, rather than macrocosm exclusively mutual both paradigms assist one another in making their predictions.BODYA cognitive bias is a persons tendency to make errors, based on cognitive factors. Forms of cognitive bias include errors in statistical theory, social attribution, and memory that are crude to all human universes. (Crowell, 1994, p. 1) cognitive bias is the tendency of intelligent, well-informed people to systematically do the slander thing. The conclude behind this cognitive bias is that the Human brain is made for inter own(prenominal) relationships and not for bear on statistics.The paper discusses facility of forecasts. Generally it is utter that the world is divided into two chemical meetings. One who forecasts positively and one negatively. These forecasts exaggerate the reliability of their forecasts and trace it to the likeness of harshness which exists even when the put-onary character is recognized. (Fisher and Statman, 2000) discussed five cognitive bias, profound the invocation of validity that are Overconfidence, Confirmation, Representativeness, Anchoring, and Hindsight(Shiller, 2002) discusses, that irrational behavior may evaporate with more take careing and a ofttimes more structured situation. As the past research proves it that may of cognitive biases in human conceit value uncertainty will change, they may be convinced if wedded proper instructions, on the part-experience of irrational behavior. There are three master(prenominal) themes in behavioral finance and economicsHeuristics People often make decisions based on approximate rules of thumb, not strictly rational analysis. realise also cognitive biases and bounded rationality.Prospect theoryLoss hatred location quo biasGamblers fallacySelf-serving biasMoney illusion skeletal system The way a problem or decision is presented to the decision manufacturer will affect their action.cognitive framingMental accountingAnchoringMarket inefficiencies There are explanations for observed market outcomes that are contrary to rational expectations and market efficiency. These include mis-pricings, non-rational decision making, and return anomalies. Richard Thaler, in particular, has describe particularised market anomalies from a behavioral perspective.Anomalies (economic behavior)Disposition effect talent effectInequity villainy Intertemporal consumptionPresent-biased gustatory perceptions Momentum spend cupidity and dread Herd behaviorAnomalies (market prices and returns)Equity premium puzzle readiness net hypothesisLimits to arbitrage Dividend puzzleModels in behavioral economics are typically addressed to a particular observed market anomaly and adjust standard neo-classical models by describing decision makers as victimisation heuristics and being affected by framing effects. In general, economics sits deep down the neoclassical framework, though the standard assumption of rational behavior is often challenged.Loix et. Al in their paper Orientation towards Finances explains the individual financial precaution behavior, people dealing with their financial means. They have analyzed the Non- special(prenominal) monetary behavior as already we see extensive research on the specific finance behavior such as saving, Taxation, Gambling, amassing debt. But they had assumption a lot of importance to stock market, investors and households. The analysis of general normals behavior was done, where an ordinary man is not sure and simply act according to the guesses over their money cogitate issues. It was also found that people interested in economic and financial matters are much more active in collecting specific information than general public, stating that financial behavior of household is an important relevant topic that needs to be discussed in much more expound. Household financial counseling is analogous to the financial management. The construct of orientation towards cash in hand was developed where the individual ORTO outfit focuses on competencies (interest and skills). Having stronger money attitude is an indication of stronger orientation towards finances and much more effective competencies. Therefore we expect some relevancy and analogy between corporate and household management behavior as both require organizing, forecasting, planning and control.(Loix et. al, 2005) analyzed general publics behavior in basically dividing them into two groups, Financial Information Personal financial planning. likewise expla ining some practical and theoretical gaps in the area of psychology of money usage, they reason out that ORTOFIN (Orientation towards finance) indicates the involvement of individuals in managing their finances. Proving out the point that active interest in financial information and an urge to plan expenses are two main factors. A stronger ORTFIN indicates Greater use of debit accounts, Higher savings account, coarse variety of investments, Greater awareness of ones financial Intimate familiarity of the details of Ones savings/deposit accounts obsessed by money, Higher achievement and power in monetary landmarks, Further age is also reciprocally proportional.Shiller in 2006, in his article talked about the the co-evolution of neo-classical and behavior finance. In 1937 when A. Samuelsson one of the great economists wrote about people maximizing the present value of utility unresolved to a present vale budget constraint. Another judgment he realized was time being consistent hu man behavior where if at any time t0 Where people reconsidered the problem of maximization from that date forward, they would not change their decision where as in real life it is totally opposite for example people sometimes rise to control themselves by binding their future decision as from account statement we find out that that some of man make irrevokable presumption in the taking out of life insurance as a compulsory savings measure. (shiller, 2006, p.) Considering personal saving rate, saving and down for no reason has emerged as a weakness of human self control. People seem to be vulnerable to complacency from time to time about providing for their own future.The distinction between neoclassical and behavioral finance have therefore been exaggerated. Both of them are not completely different from each other. Behavioral finance is more elastic willing to learn from other sciences and less concerned about the elegance of models whereby explaining human behavior put and cogn itive biasMoney Managers Money management is a very popular phenomenon. The performance in the stock market is calculated at the daily basis and not to wait for a exceedingly natural annual review of ones performance by ones superior. Market grades you on a daily basis. The smarter one is, the more confident one becomes of ones ability to succeed, clients support them by trusting them that eventually helps their careers. But the truth is that few money managers put in sufficient amount of time and ride to routine out what works and develop a set of investment principles to die hard their investment decisions (Browne, 2000). Further Browne discussed the importance of asset allotment and risk aversion, in order to understand why we do what we do careless(predicate) of whether it is rational or not. General public opts for money Managers to deal with their finances and these managers are reason in three ways pass judgment Managers, egress Managers and Market Neutral Manager s. The vast volume of money managers are categorized as either value managers or growth managers although a triplet category, market neutral managers, is gaining popularity these days and may soon concern the so-called strategies of value and growth. Some investment management firms even are being cautious by offering all styles of investments. What too few money managers do is analyze the fundamental financial characteristics of portfolios that produce long- confines market beating results, and develop a set of investment principles that are based on those findings. Difference of opinion on the definition of harbor is the problem.The reasons for this are two-fold, one being the practical reality of managing large sums of money, and the other related to behavior. As the assets under management of an advisor grow, the universe of effectiveness stocks shrinksAnalyzing that why individual and professional investors do not change their behavior even when they face empirical eviden ce, that suggests that their decisions are less than optimal. An answer to this question is give tongue to to be that being a contrarian may simply be too risky for the average individual or professional. If a person is untimely on the collective basis, where everyone else also had made a mistake, the consequences professionally and for ones own self-esteem are far less than if a person is wrong alone. The herd instinct allows for the comfort of safety in numbers. The other reason is that individuals try to roleplay the same way and do not tend to change courses of action if they are happy. If the results are not too agonising individuals can be happy with sub-optimal results. Moreover, individuals who tend to be cheerless make changes often and eventually end up being just as unhappy in their new circumstances.According to the traditional view of investing management, fundamental forces drive markets, however many other investment firms considers to be active and working out based on their undergo Judgment. It is also believed that Judgmental overrides of Value Fundamental forces of markets can be fatal as well as a cause of Financial Disappointment. From the score it has been found that people Override at the wrong times and in most cases would be better off sticking to their investment disciplines (Crowell, 1994) and the reason to this behavior is the Cognitive bias. According to many researchers, stocks of low-pitched(a) companies with low price/ retain ratios provide excess returns. Therefore, condition a choice among small loud stocks large high priced stocks, prominent investors (financial analysts, senior society executives and companionship directors) will certainly prefer the small cheap ones. But the fact is opposite to this situation where these prominent investors would opt for large high priced ones and so meet from cognitive bias and further repent. According to a surveil in 1992/1993, a research was carried out that included senior executives directors where they were suppose to rate companies in their industries on eight factors Quality of management, Quality of products services, Innovativeness, presbyopic term investment value, Financial soundness, Ability to attract, develop and keep smart people, right to the community and environment, Wise use of corporate assets.The assumptions that we made were that that pine term investment value should be negatively correlated with coat since small stocks provide superior returns. great term Investment value should have a negative correlation with terms/book since low Price/Book stocks provide superior returns.(Crowell, 1994).Whereas the results of the survey were contrary that tell that Long Term Investment had a positive correlation with the size and also that the Long term investment value had a positive correlation with the Price/Book stocks. According to Shefrin and statman, prominent investors overestimate the luck that a reasoned company is a good stock, relying on the good example heuristics, net that superior companies make superior stocks. Aversion to Regret aversion to regret is different from aversion to risk, Regret is acute when the individual moldiness take responsibility for the final outcome. Aversion to regret leads to a preference for stocks of good companies. The choice of the stocks of bad companies involves more personal responsibility and higher probability of regret. Therefore, we find there are two major Cognitive errorsWe have a double cognitive error a legal company make good stocks (representativeness), and involves less responsibility(Less aversion to regret (Crowell, 1994,p.3)The anti Cognitive bias actions would be admitting to your owned stocks, admitting earlier investment mistakes. Further taking the responsibility for the actions to improve their performance in the future. The reasons for all the available disciplines, tools, and quantitative techniques is to deal with the Cognitive bia s error, where the quantitative investment techniques enables the investment managers to outperform cognitive bias, follow sound investment, and eventually be prospering contrarian investor(one who rejects the majority opinion, as in economic matters).Behavioral finance also is very helpful in understanding justifying government involvement in the investing decisions of individuals. The failure of millions of people to save properly for their future is also a core problem of behavioral finance. With the help of two very important examples Shiller explains how Government involvement can influence financial investments of individuals.In April 2005 Tony Blair say a program when all new born babies were given a birthday present of 250 to 500. The present were to choose among a number of investment alternatives to invest until child comes of age. This is an effect done in order to make the parents feel connected with investments and modern economy.Another example as it is said that pe ople should be heavily active in stock market when they are young and so generally should reduce the natural process with age. According to the conventional rule people should have100 mature = % age of investmentIn 2005 president bush also portfolio announce one such plan for personal account life oscillation fund which would be among the option that works will be offered to invest their personal account. It was A centerpiece of the presidents proposal bur a major point to be noticed was the indifference option.An important aspect of behavioral finance is the human attention is capricious focuses heavily tat same times on financial calculations and are subject to distraction and lavishness of default option is central. All this brings us a question that what should an intertemporal optimizer do to manage his portfolio over the lifetime. According to Samuelson someone who wished to maximize the pass judgment value of his intertemporal utility function by managing the allocati on of the portfolio between a high yielding asset and less yielding asset would not actually change the allocation through time. Neoclassic finance appears highly relevant to such a discussion in that it offers the appropriate theoretical framework for considering what people ought to do with the portfolio if not what they actually do. Behavioral is beginning to play an important role in public policy such as in socialsecurity reforms.Agents RationalityGlobal culture enculturation societal ContagionThe selective attention exhibited by a human forefront is the concept of culture. Every nation, tribe or asocial group has a social cognition reinforced by conversation religious rite and symbols, rituals and desire of a particular nation has a subtle but far reliability affect on human behavior. Some researchers found that the unique customs of people actually arise as a logical consequence of a belief system of a nation group of people. Cultural factor were found to have great inf luence on rational or irrational behavior. We find many factors that are same across countries , e.g fashion, music, movies, youthful rebellious, other than these we find more factors in producing internationally- same human behaviors then just rational reactions. Therefore it is a difficult job to decide in what avenues global culture exertsEfficient Markets Hypothesis (EMH)Efficient Markets Hypothesis (EMH)INTRODUCTIONMuch of modern investment theory and practice is predicated on the Efficient Markets Hypothesis (EMH), the assumption that markets fully and instantaneously integrate all available information into market prices. Underlying this comprehensive idea is the assumption that the market participants are perfectly rational, and always act in self-interest, making optimal decisions. These assumptions have been challenged. It is difficult to tip over the Neo classical convention that has yielded such insights as portfolio optimization, the Capital Asset Pricing Model, the Ar bitrage Pricing Theory, the Cox Ingersoll-Ross theory of the term structure of interest rates, and the Black-Scholes/Merton option pricing model, all of which are predicated on the EMH (Efficient Market Hypothesis) in one way or another. At few points the EMH criticizes the existing literature of behavioral finance, which shows the difference of opinion on psychology economics. The field of psychology has its roots in empirical observation, controlled experimentation, and clinical applications. According to psychology, behavior is the main entity of study, and only after controlled experimental dimensions do psychologists attempt to make inferences about the origins of such behavior. On the contrary, economists typically derive behavior axiomatically from simple principles such as expected utility maximization, making it easier for us to predict economic behavior that are routinely refuted empiricallyThe biggest threats to Modern Portfolio theory is the theory of Behavioral Finance . It is an analysis of why investors make irrational decisions with respect to their money, normal distribution of expected returns generally appears to be invalid and also that the investors support upside risks rather than downside risks. The theory of Behavioral finance is opposite to the traditional theory of Finance which deals with human emotions, sentiments, conditions, biases on collective as well as individual basis. Behavior finance theory is helpful in explaining the past practices of investors and also to determine the future of investors.Behavioral finance is a concept of finance which deals with finances incorporating findings from psychology sociology. It is reviewed that behavioral finance is generally based on individual behavior or on the implication for financial market outcomes. There are many models explaining behavioral finance that explains investors behavior or market irregularities where the rational models fail to provide adequate information. We do not ex pect such a research to provide a method to make lots of money from the inefficient financial market very fast.Behavioral finance has basically emerged from the theories of psychology, sociology and anthropology the implications of these theories appear to be significant for the efficient market hypothesis, that is based on the positive notion that people behave rationally, maximize their utility and are able to prices observation, a number of anomalies (irregularities) have appeared, which in turn suggest that in the efficient market the principle of rational behavior is not always correct. So, the idea of analyzing other model of human behavior has came up.Further (Gervais, 2001) explained the concept where he says that People like to relate to the stock market as a person having different moods, it can be bad-tempered or high-spirited, it can overreact one day and make amends the next. As we know that human behavior is unpredictable and it behaves differently in different situati ons. Lately many researchers have suggested the idea that psychological analysis of investors may be very helpful in understanding the financial markets better. To do so it is important to understand the behavioral finance presenting the concept that Investors are not as rational as traditional theory has assumed, and biases in their decision-making can have a cumulative effect on asset prices. To many researchers behavioral finance is a revolution, transforming how people see the markets and what influences prices. The paradigm is shifting. People are continuing to walk across the border from the traditional to the behavioral camp. (Gervais, 2001, P.2). On the contrary some people believe that may be its too early call it a revolution. Eugene Fama( Gervais, 2001) argued that Behavioral finance has not really shown impacts on the world prices, and the models contradict each other on different point of times. He gave little credit to behaviorist explanations of trends and anomalies(a ny occurrence or object that is strange, unusual, or unique) arguing that data-mining techniques make it possible to locate patterns.Other researchers have also criticized the idea that the behavioral finance models tend to replace the traditional models of market functions. The weaknesses in this area, explained by him (Gervais, 2001) are that generally the market behavior displayed is attributed to overreaction and sometimes to under reaction. Where People take the behavior that seems to be easy for the particular study regardless of the fact that whether these biases are the result of underlying economic forces or not. Secondly, Lack of trained and expert people. The field does not have enough trained professionals both academic psychology and traditional finance and so the models that are being put up together are improvised.David Hirshleifer (Gervais, 2001) focuses on the individual behavior influencing asset prices, suggesting that behavioral finance is in its developmental st age and not yet a mature one, theres a lot of disagreement but productive one. Hirshleifer agrees that applying behavioral-finance concepts to corporate finance can pay off. If managers are imperfectly rational, he says, perhaps they are not evaluating investments correctly. They may make bad choices in their capital-structure decisions. Few people realistically think behavioral finance will displace efficient-markets theory. On the other hand, the idea that investors and managers are not uniformly rational makes insightful sense to many people.Traditional Finance Empirical EvidenceTraditional theory assumes that agents are rational the law of one price holds that is a perfect scenario. Where the law of One price states that securities with the same pay off have same price, but in real world this law is violated when people purchase securities in one market for immediate resale in another, in search of higher profits because of price differentials known as Arbitrageurs. And the ag ents rationality explains the behavior of investor Professional Individual which is generally inconsistent with the rationality or the future predictions. If a market achieves a perfect scenario where agents are rational law of one price holds then the market is efficient.With the availability of amount of information, the form of market changes. It is unlikely that market prices contain all private information. The presence of noise traders (traders, trading randomly not based on information).Researches show that stock returns are typically unpredictable based on past returns where as future returns are predictable to some extent. Few examples from the past literature explains the problem of irrationality which occurs because of nave diversification, behavior influenced by framing, the tendency of investors of committing systematic errors while evaluating public information.(Glaser et al, 2003)Recent studies suggest that peoples attitude towards the riskiness of a stock in futur e the individual interpretation may explain the higher level trading volume, which itself is a vast topic for insight. A problem of perception exist in the investors that Stocks have a higher risk adjusted returns than bonds. Another issue with the investors is that these investors either care about the whole stock portfolio or just about the value of each single security in their portfolio and thus ignore the correlations.The concept of ownership society has been promoted in the recent years where people can take better care of their own lives and be better citizen too if they are both owner of financial assets and homeowners. As a researcher suggested that in order to improve the lives of less advantaged in our society is to teach them how to be capitalist, In order to put the ownership society in its right perspective, behavioral finance is needed to be understood. The ownership society seems very attractive when people appear to make profits from their investments. Behavioral f inance also is very helpful in understanding justifying government involvement in the investing decisions of individuals. The failure of millions of people to save properly for their future is also a core problem of behavioral finance. (Shiller, 2006)According to (Glaser et al, 2003) there are two approaches towards Behavioral Finance, where both tend to have same goals. The goals tend to explain observed prices, Market trading Volume Last but not the least is the individual behavior better than traditional finance models.Belief Based Model Psychology (Individual Behavior) Incorporates into Model Market prices Transaction Volume. It includes findings such as Overconfidence, Biased Self- Attrition, and Conservatism Representativeness.Preference Based Model Rational Friction or from psychology Find explanations, Market detects irregularities individual behavior. It incorporates Prospect Theory, House money effect other forms of mental accounting.Behavioral Finance and Rational d ebateThe article by (Heaton and Rosenberg,2004) highlights the debate between the rational and behavioral model over testability and predictive success. And we find that neither of them actually offers either of these measures of success. The rational approach uses a particular type of rationalization methodology which goes on to form the basis of behavior finance predictions. A closer look into the rational finance model goes on to show that it employs ex post rationalizations of observed price behaviours. This allows them greater flexibility when offering explanations for economic anomalies. On the other hand the behavior paradigm criticizes rationalizations as having no concrete role in predicting prices accurately, that utility functions, information sets and transaction costs cannot be rationalized. Ironically they also reject the rational finances explanatory power which plays an essential role in the limits of arbitrage, which actually makes behavioral finance possible.Milton Friedmans theory lays the basis of positive economics. His methodology focuses on how to make a particular prediction it is irrelevant whether a particular assumption is rational or irrational. According to this methodology, the rational finance model relies on a limited assumption space since all assumptions that are supposedly not rational have been eliminated. This is one of the major reasons behind the little success in rational finance predictions. Despite the minimal results, adherents of this model have criticized the behavioral model as lacking quantifiable predictions that are based on mathematical models. Rational finance has targeted a more important aspect in the structure of the economy, i.e. investor uncertainty, which further cause financial anomalies. In explaining these assertions, the behavioural emphasises the importance of taking limits in arbitrage.Friedmans methodological approach falls into the category instrumentalism, which basically states that theories ar e tools for predictions and used to draw inferences. Whether an assumption is realistic or rational is of no value to an instrumentalist. By narrowing what may or may not be possible, one will inevitably eliminate certain strategies or behaviors which might in fact go on to maximize utility or profits based on their uniqueness. An assumption could be irrational even in the long run, but it is continuously revised and refined to make it into something useful.In opposition to this, many individuals have gone on to say that behaviouralists are not bound by any constraints thus making their explanations systematically irrational. Rubinstein (2001) described how when everyone fails to explain a particular anomaly, suddenly a behavioral aspect to it will come up, because that can be based on completely abstract irrational assumptions. To support rationality, Rubinstein came up with two arguments. Firstly he went on to say that an irrational strategy that is profitable, will only attract c opy cat firms or traders into the market. This is supported when a closer look is given towards limits to arbitrage. Secondly through the process of evolution, irrational decisions will eventually be eliminated in the long run. The major achievements characterized of the rational finance paradigm consist of the following the principle of no arbitrage market efficiency, the net present value decision rule, derivatives valuation techniques Markowitzs (1952) mean-variance framework event studies multifactor models such as the APT, ICAPM, and the Consumption- CAPM. Despite the number of top achievements that supporters of the rational model claim, the paradigm fails to answer some of the most basic financial economic questions such as What is the cost of capital for this firm? or What is its optimal capital structure? simply because of their self imposed constraints.So far this makes it seem like rational finance and behavioral finance are mutually exclusive. Contrary to this, they are actually interdependent, and overlap in several areas. Take for instance the concept of mispricing when there is no arbitrage. Behavior finance on the other hand suggests that this may not be the case irrational assumptions in the market will still lead to mispricing. Further even though certain arbitrageurs may be able to identify irrationality induced mispricing, because of the imperfect market information, they are unable to convince investors of its existence. Over here, the rational model is accepting the existence of anomalies which are affected both through the factors of risk and chance therefore coinciding with the perspective of behavioral finance. Two instances are clear examples of how rationalization is an important limit of arbitrage i) the build-up and blow-up of the internet bubble and ii) the superiority of value equity strategies.If we focus on the latter, we are able to see behavioral finance literature that highlights the superiority of such strategies in the abi lity of analysts to extrapolate results for investors. This is possible when rationalization is taken as a limit to arbitrage. Similarly these strategies may also limit arbitrage against mispricing, through the great risk associated with stocks. In explaining most anomalies it is essential that analysts first conclude whether pricing is rational or not. To prove their hypothesis that irrationality-induced mispricing exists, behaviouralists may find it easier if they accepted the role of rationalization in limits of arbitrage. Slow information diffusion and short-sales constraints are other factors that explain mispricing. However these factors alone cannot form the basis of a strong and concrete explanation that will clarify pricing across firms and also across time.Those supporting the rational paradigm attack behavioral finance adherents in that their predictions for the financial market have been made on irrational assumptions that are not supported by concrete mathematical or sc ientific models. In their view the lack of concrete discipline in the methodology adopted in behavior finance leads to the lack of testing in their forecasts. On the other hand the rational model is criticized for its lack of success in financial predictions. The behaviouralists claim that this limitation exists because the supporters of rational finance dismiss aspects of the economic market simply because it may not fall into explainable rational behavior. Both perspectives claim to align themselves with respect to the goals of testability and predictions, while at the same time continue to offer evidence against the other model. In reality however, rather than being exclusively mutual both paradigms assist one another in making their predictions.BODYA cognitive bias is a persons tendency to make errors, based on cognitive factors. Forms of cognitive bias include errors in statistical judgment, social attribution, and memory that are common to all human beings. (Crowell, 1994, p. 1) Cognitive bias is the tendency of intelligent, well-informed people to consistently do the wrong thing. The reason behind this cognitive bias is that the Human brain is made for interpersonal relationships and not for processing statistics.The paper discusses facility of forecasts. Generally it is said that the world is divided into two groups. One who forecasts positively and one negatively. These forecasts exaggerate the reliability of their forecasts and trace it to the illusion of validity which exists even when the illusionary character is recognized. (Fisher and Statman, 2000) discussed five cognitive bias, underlying the illusion of validity that are Overconfidence, Confirmation, Representativeness, Anchoring, and Hindsight(Shiller, 2002) discusses, that irrational behavior may disappear with more learning and a much more structured situation. As the past research proves it that may of cognitive biases in human judgment value uncertainty will change, they may be convinced if given proper instructions, on the part-experience of irrational behavior. There are three main themes in behavioral finance and economicsHeuristics People often make decisions based on approximate rules of thumb, not strictly rational analysis. See also cognitive biases and bounded rationality.Prospect theoryLoss aversionStatus quo biasGamblers fallacySelf-serving biasMoney illusionFraming The way a problem or decision is presented to the decision maker will affect their action.Cognitive framingMental accountingAnchoringMarket inefficiencies There are explanations for observed market outcomes that are contrary to rational expectations and market efficiency. These include mis-pricings, non-rational decision making, and return anomalies. Richard Thaler, in particular, has described specific market anomalies from a behavioral perspective.Anomalies (economic behavior)Disposition effect Endowment effectInequity aversion Intertemporal consumptionPresent-biased preferences Momentum inve stingGreed and fear Herd behaviorAnomalies (market prices and returns)Equity premium puzzle Efficiency wage hypothesisLimits to arbitrage Dividend puzzleModels in behavioral economics are typically addressed to a particular observed market anomaly and adjust standard neo-classical models by describing decision makers as using heuristics and being affected by framing effects. In general, economics sits within the neoclassical framework, though the standard assumption of rational behavior is often challenged.Loix et. Al in their paper Orientation towards Finances explains the individual financial management behavior, people dealing with their financial means. They have analyzed the Non-specific Financial behavior as already we see extensive research on the specific finance behavior such as saving, Taxation, Gambling, amassing debt. But they had given a lot of importance to stock market, investors and households. The analysis of general publics behavior was done, where an ordinary man is not sure and simply act according to the guesses over their money related issues. It was also found that people interested in economic and financial matters are much more active in collecting specific information than general public, stating that financial behavior of household is an important relevant topic that needs to be discussed in much more details. Household financial management is similar to the financial management. The construct of orientation towards finances was developed where the individual ORTO FIN focuses on competencies (interest and skills). Having stronger money attitude is an indication of stronger orientation towards finances and much more effective competencies. Therefore we expect some relevance and similarity between corporate and household management behavior as both require organizing, forecasting, planning and control.(Loix et. al, 2005) analyzed general publics behavior in basically dividing them into two groups, Financial Information Personal financ ial planning. Also explaining some practical and theoretical gaps in the area of psychology of money usage, they concluded that ORTOFIN (Orientation towards finance) indicates the involvement of individuals in managing their finances. Proving out the point that active interest in financial information and an urge to plan expenses are two main factors. A stronger ORTFIN indicates Greater use of debit accounts, Higher savings account, Wide variety of investments, Greater awareness of ones financial Intimate knowledge of the details of Ones savings/deposit accounts obsessed by money, Higher achievement and power in monetary terms, Further age is also inversely proportional.Shiller in 2006, in his article talked about the the co-evolution of neo-classical and behavior finance. In 1937 when A. Samuelsson one of the great economists wrote about people maximizing the present value of utility subject to a present vale budget constraint. Another judgment he realized was time being consisten t human behavior where if at any time t0 Where people reconsidered the problem of maximization from that date forward, they would not change their decision where as in real life it is totally opposite for example people sometimes try to control themselves by binding their future decision as from history we find out that that some of man make irrevocable trust in the taking out of life insurance as a compulsory savings measure. (shiller, 2006, p.) Considering personal saving rate, saving and down for no reason has emerged as a weakness of human self control. People seem to be vulnerable to complacency from time to time about providing for their own future.The distinction between neoclassical and behavioral finance have therefore been exaggerated. Both of them are not completely different from each other. Behavioral finance is more elastic willing to learn from other sciences and less concerned about the elegance of models whereby explaining human behaviorInvesting and cognitive biasM oney Managers Money management is a very popular phenomenon. The performance in the stock market is measured at the daily basis and not to wait for a highly subjective annual review of ones performance by ones superior. Market grades you on a daily basis. The smarter one is, the more confident one becomes of ones ability to succeed, clients support them by trusting them that eventually helps their careers. But the truth is that few money managers put in sufficient amount of time and effort to figure out what works and develop a set of investment principles to guide their investment decisions (Browne, 2000). Further Browne discussed the importance of asset allocation and risk aversion, in order to understand why we do what we do regardless of whether it is rational or not. General public opts for money Managers to deal with their finances and these managers are categorized in three ways Value Managers, Growth Managers and Market Neutral Managers. The vast majority of money managers are categorized as either value managers or growth managers although a third category, market neutral managers, is gaining popularity these days and may soon rival the so-called strategies of value and growth. Some investment management firms even are being cautious by offering all styles of investments. What too few money managers do is analyze the fundamental financial characteristics of portfolios that produce semipermanent market beating results, and develop a set of investment principles that are based on those findings. Difference of opinion on the definition of Value is the problem.The reasons for this are two-fold, one being the practical reality of managing large sums of money, and the other related to behavior. As the assets under management of an advisor grow, the universe of potential stocks shrinksAnalyzing that why individual and professional investors do not change their behavior even when they face empirical evidence, that suggests that their decisions are less than optimal. An answer to this question is said to be that being a contrarian may simply be too risky for the average individual or professional. If a person is wrong on the collective basis, where everyone else also had made a mistake, the consequences professionally and for ones own self-esteem are far less than if a person is wrong alone. The herd instinct allows for the comfort of safety in numbers. The other reason is that individuals try to behave the same way and do not tend to change courses of action if they are happy. If the results are not too painful individuals can be happy with sub-optimal results. Moreover, individuals who tend to be unhappy make changes often and eventually end up being just as unhappy in their new circumstances.According to the traditional view of Investment management, fundamental forces drive markets, however many other investment firms considers to be active and working out based on their experienced Judgment. It is also believed that Judgmental over rides of Value Fundamental forces of markets can be lethal as well as a cause of Financial Disappointment. From the history it has been found that people Override at the wrong times and in most cases would be better off sticking to their investment disciplines (Crowell, 1994) and the reason to this behavior is the Cognitive bias. According to many researchers, stocks of small companies with low price/book ratios provide excess returns. Therefore, given a choice among small cheap stocks large high priced stocks, prominent investors (financial analysts, senior company executives and company directors) will certainly prefer the small cheap ones. But the fact is opposite to this situation where these prominent investors would opt for large high priced ones and so suffer from cognitive bias and further regret. According to a survey in 1992/1993, a research was carried out that included senior executives directors where they were suppose to rate companies in their industries on eight f actors Quality of management, Quality of products services, Innovativeness, Long term investment value, Financial soundness, Ability to attract, develop and keep talented people, Responsibility to the community and environment, Wise use of corporate assets.The assumptions that we made were that that Long term investment value should be negatively correlated with size since small stocks provide superior returns. Long term Investment value should have a negative correlation with Price/book since low Price/Book stocks provide superior returns.(Crowell, 1994).Whereas the results of the survey were contrary that stated that Long Term Investment had a positive correlation with the size and also that the Long term investment value had a positive correlation with the Price/Book stocks. According to Shefrin and statman, prominent investors overestimate the probability that a good company is a good stock, relying on the representative heuristics, concluding that superior companies make super ior stocks. Aversion to Regret aversion to regret is different from aversion to risk, Regret is acute when the individual must take responsibility for the final outcome. Aversion to regret leads to a preference for stocks of good companies. The choice of the stocks of bad companies involves more personal responsibility and higher probability of regret. Therefore, we find there are two major Cognitive errorsWe have a double cognitive error a Good company make good stocks (representativeness), and involves less responsibility(Less aversion to regret (Crowell, 1994,p.3)The Anti Cognitive bias actions would be admitting to your owned stocks, admitting earlier investment mistakes. Further Taking the responsibility for the actions to improve their performance in the future. The reasons for all the available disciplines, tools, and quantitative techniques is to deal with the Cognitive bias error, where the quantitative investment techniques enables the investment managers to overcome cogni tive bias, follow sound investment, and eventually be successful contrarian investor(one who rejects the majority opinion, as in economic matters).Behavioral finance also is very helpful in understanding justifying government involvement in the investing decisions of individuals. The failure of millions of people to save properly for their future is also a core problem of behavioral finance. With the help of two very important examples Shiller explains how Government involvement can influence financial investments of individuals.In April 2005 Tony Blair stated a program when all new born babies were given a birthday present of 250 to 500. The present were to choose among a number of investment alternatives to invest until child comes of age. This is an effect done in order to make the parents feel connected with investments and modern economy.Another example as it is said that people should be heavily active in stock market when they are young and so generally should reduce the acti vity with age. According to the conventional rule people should have100 Age = % age of investmentIn 2005 president bush also portfolio announced one such plan for personal account life cycle fund which would be among the option that works will be offered to invest their personal account. It was A centerpiece of the presidents proposal bur a major point to be noticed was the default option.An important aspect of behavioral finance is the human attention is capricious focuses heavily tat same times on financial calculations and are subject to distraction and dissipation of default option is central. All this brings us a question that what should an intertemporal optimizer do to manage his portfolio over the lifetime. According to Samuelson someone who wished to maximize the expected value of his intertemporal utility function by managing the allocation of the portfolio between a high yielding asset and less yielding asset would not actually change the allocation through time. Neocla ssic finance appears highly relevant to such a discussion in that it offers the appropriate theoretical framework for considering what people ought to do with the portfolio if not what they actually do. Behavioral is beginning to play an important role in public policy such as in socialsecurity reforms.Agents RationalityGlobal culture Culture Social ContagionThe selective attention exhibited by a human mind is the concept of culture. Every nation, tribe or asocial group has a social cognition reinforced by conversation ritual and symbols, rituals and supposition of a particular nation has a subtle but far reliability affect on human behavior. Some researchers found that the unique customs of people actually arise as a logical consequence of a belief system of a nation group of people. Cultural factor were found to have great influence on rational or irrational behavior. We find many factors that are same across countries , e.g fashion, music, movies, youthful rebellious, other than these we find more factors in producing internationally- similar human behaviors then just rational reactions. Therefore it is a difficult job to decide in what avenues global culture exerts

Descriptive Research Vs Analytical Research Economics Essay

Descriptive look Vs analytic question Economics EssayMalaysia began develop its anatomical structure diligence since independence. more than half of capital formation consists of consider in social organisation (Lewis, 1955). Hence, the elaborateness of capital is a function the rate at which the kink sedulousness stinker be expanded. This rout out be seen in the initial stinting plan (1956-1960) where it was basic all in ally a development expenditure plan. The primary tutelage was developing infrastructure during independence beca give of its inadequacy. In attach to for the nations economy to prosper, the device industry has to be developed first for the economy to take a one step further (Abdul Razak stack a flair Ibrahim, 1999).The Malaysian look industry is mostly separated into two beasGeneral constructionIt comprises residential construction, non-residential construction and civil engineering construction.Special trade extendsIt comprises activities o f metal works, electrical works, plumbing, sewerage and sanitary works, refrigeration and air-conditioning works, painting works, carpentry, tiling and flooring works, water ice works and etc.The construction industry makes up an all-important(a) pop out of the Malaysian economy due to the amount of industry linked to it much(prenominal) as those for basic metal products and electrical machinery. Hence, the construction industry could be described as a substantial sparing driver for Malaysia (Abdul Razak Bin Ibrahim, 1999). tally to productiveness Report 2011/2012, analysis of productivity growth all all over three course intervals (2007-2009 and 2009-2011) showed that Malaysia achieved higher productivity growth during the later conclusion (2.8%) as comp atomic number 18d to the earlier period (1.9%). only, over a five year period, the growth was 3.2% as showed in Table 1.1.Figure 1. Gross municipal Product (GDP), Employment and Productivity harvest- metre, 2007-2 011Table 1. Productivity and GDP Growth, 2007-2011Productivity growth of the construction sector grew by 3.1% to RM 24,635 in 2011 from RM 23,898 in 2010 (Figure 1.2). The execution of Industrialised Building System (IBS) in major projects, residential and non-residential sub-sectors contri just nowed to the productivity of the construction sector (Malaysia Productivity Corporation, 2012).Figure 1. Productivity Level and Growth of the Construction Sector, 2007-2011Through the Productivity Report 2011/2012, it reflects that the construction sector is in a rapid growth phase, having expanded by nearly 19% on an annual basis in the first half of 2012. According to the governments figures, the sector will manage growth of 15.5% in 2012 as a whole, up from 4.6% in 2011. In 2013 it is forecast to grow by a further 11.2%, a projection that is in line with Timetrics forecasts (Ric ponderouss, 2012).Construction industry plays an important role in generating wealth and improving the featur e of vivification for Malaysian with with(predicate) the translation of governments socio-economic policies into social and economic infrastructure and buildings. The contract for quality or housing is increasingly from times to times any due to increase in population, immigration or investment purpose. In raise to fulfil the demand, supply of housing or a nonher(prenominal) property has to be increased. Besides, after the announcement regarding My First Home Scheme by the Government in Budget 2011, the desires of the youngsters to own a house are stronger.As the demand is higher, the construction industry has to embark more projects such(prenominal) as residential development to jar against the demand. The construction industry creates a multiplier belief to other industries, including manufacturing, financial services, and professional services. In consecrate to run a project, humankind resources such as drudges and the professionals like sum of money Surveyor, Archi tect, and Engineer are required.Although there is increase in number of human resources, construction productivity is one of the issues to be fretfulnessed. Construction tug productivity is often influenced by variations in work conditions and management effectiveness. It is substantially important to understand the nature and extent to which individual parameters fall productivity.Rationale for the seekThe construction industry plays a significant role in all developed and developing countries. Due to its critical importance to the profitability of well-nigh construction projects, productivity is regarded as one of the most frequently discussed topics in the construction industry (Hancher DE, 1998).Construction productivity is al agencys related to how well, how quickly, and at what cost buildings and infrastructure can be constructed. It will directly continue prices for homes and consumer goods and the robustness of the national economy. Construction productivity will also move the outcomes of national causal agents resources to develop high-performance green buildings and to re primary(prenominal) competitive in the global market.Construction productivity has been steadily on the decline over the last decade and construction tote efficiency has often been cited as poor (Stokes, 1980). The level of productivity in construction showed a decrease rate compared to other sectors (Bernstein, 2007). Many studies have attempted to improve construction weary productivity via different ways for examples, field of viewing the factors affecting construction wear upon productivity, measuring and evaluating labour productivity modelling construction labour productivity and comparing labour productivity based on economic considerations or costs.Construction workers are non machines, always behaving the analogous way under the same conditions. Even under apparently identical work conditions, different productivity values might be beated. The productivity f or the same work item is not constant throughout the construction period, and varies at different stages of the production (Lam, 2001). Variability is shown to be a key factor in the behaviour of construction labour productivity (Thomas Hr, 1999). In addition, the effect of the factors on productivity may vary from task to task. Although some factors could have similar influences on the productivity of a number of tasks, their rate of violation on productivity may be different (Sonmez R, 1998).Labour productivity is said as the factor affecting the construction productivity. In golf-club to further improve construction productivity, continuous efforts have to be hurl in from times to times to identify the factors affect labour productivity, the do of poor labour productivity and the ways to improve labour productivity. are labourers the main cause in affecting construction productivity? argon the factors caused by labourers themselves or their superiors or surrounding environmen ts or other reasons? train anyone do really put in their efforts to improve the construction labour productivity? How labour productivity affect the entire construction productivity?Queries on construction labour productivity are appearing continuously. end-to-end this seek, readers should have a shrewdness understanding on construction labour productivity.Aim and ObjectivesIn order to find out the answer of queries on construction labour productivity, the aim for this report is to study the issues on construction labour productivity in Malaysia. This can be achieved by study the objectives belowTo investigate the factors affect the construction labour productivity.To identify the consequences caused by construction labour productivity.To recommend ways for improvement on construction labour productivity.Scope and LimitationThis enquiry is delimited to construction labour productivity and will focus on Malaysian construction industry. The entropy for this query will made up of general construction workers, web site supervisors, contractors, quantity surveyors and developers mainly in Kuala Lumpur area. Respondents are evaluate to have variable levels of construction experience, training and knowledge so that a entropy that near mirrored the current make-up of the construction workforce can be collected. 100 sets of survey forms will be distributed and 50 sets of survey forms expected to be completed.Chapter OutlineThis report consists of 5 chapters. There areChapter 1 macrocosmIn this chapter, roles of construction industry towards economics and construction productivity will be described. Besides, in this chapter, aim and objectives will be discussed as well as overview of current construction labour productivity.Chapter 2 publications ReviewThe literature on the performance approach will be reviewed in this chapter. It will illustrate actual literature and enquiry work related to construction labour productivity. Definition of labour productivi ty, factors affect labour productivity, its effects and closures will be described.Chapter 3 enquiry MethodologyIn this chapter, introduction and definition of research, type of research, data solicitation orders, research foundation and data analysis mode will be discussed in order to achieve the aim and objectives of this study.Chapter 4 Findings and DiscussionsResults from survey questionnaires will be canvas and discussed in this chapter. The survey questionnaire is aimed to control labour, consultants, contractors and developers or clients view of opinion on construction labour productivity in Malaysian construction industry. In addition, personalised interview will be conducted to obtain more info on construction labour productivity.Chapter 5 Conclusions and RecommendationsThis chapter will outline the research findings, summary of this study, and recommendations for next study.Literature ReviewResearch MethodologyIntroductionBased on Oxford Dictionaries, research is defined as a dictatorial investigation into and study of materials and sources in order to establish facts and reach freshly conclusions (Oxford Dictionaries). The good Learners Dictionary of Current English defines the meaning of research as a careful investigation or inquiry specially through search for new facts in any branch of knowledge (The Advanced Learners Dictionary of Current English, 1952). Redman and Mory had defined research as a arrangingatized effort to gain new knowledge (Mory, 1923).In this chapter, types of research, data collection methods, research design and data analysis will be discussed. The research method for this study to achieve the aim and objectives will be described in this chapter.Types of ResearchGenerally, the basic types of research are as followuse/ Action Research vs Fundamental ResearchDescriptive Research vs analytic ResearchQuantitative Research vs soft ResearchConceptual Research vs experimental ResearchApplied/ Action Research vs Fun damental ResearchApplied or action research is carried out to find solution to solve problems facing by a society or a business or industrial organisation. However, fundamental research which is also know as basic or pure research is mainly concern on gathering of knowledge for knowledges sake without any intention to pass it in practice.Descriptive Research vs Analytical ResearchDescriptive research is a surveys and fact-finding investigation. It is aims to describe the characteristics of individual, situation or a collection or the state of affairs as it exists at present. Researcher has no control over the variables and research worker has to report the actual conditions. On the other hand, analytical research is a critical evaluation based on information that is available and primarily concerned with testing hypothesis specifying and version relationships by analyze the facts or existing information.Quantitative Research vs Qualitative ResearchQuantitative research is object ive in nature. It is defined as an inquiry into a social or human problem, based on testing a hypothesis or a theory dispassionate of variables, measured with numbers, and analysed with statistical functionings, in order to determine whether the hypothesis or the theory hold true (Creswell, 1994). Quantitative data are hard and reliable they are measurements of tangible, countable, sensate features of the world (Bouma and Atkinson, 1995). In short, quantitative research is measuring the quantity or amount of particular phenomena by the use of statistical analysis. On the other hand, qualitative research is subjective in nature. It is a non-quantitative type of analysis which is aimed at finding out the quality of a particular phenomenon. It emphasises meanings, experiences, description and etc (Naoum, 1998).Conceptual Research vs Empirical ResearchConceptual research is related to some abstract ideas or theories. It is generally used by philosophers and thinkers to develop new con cepts or to reinterpret existing ones, whereas, empirical research relies on experience or observation alone. Empirical research is aimed at coming up with conclusions without due regard for system and theory. Empirical research is reserve when proof is sought that certain variables affect other variables in some way.Data CollectionStatistical tools are used to transform data into useful information. However, data must be available before the decision maker can use the statistical tools. Data are available from many sources, both within the company or site. There are several ways of collecting appropriate data which differ considerably in context of money costs, time and other resources at the disposal of the researcher. The sources of data collection can be categorized into primary data and secondary data.Primary data refers to the rude data that collected through experiments or questionnaire surveys, where secondary data refers to the data obtained from site daily, progress repo rt, progress payment, national productivity statistics. The major benefit of primary data is accuracy of data because it is collected by the researcher but it is costly and time consuming. Secondary data is quicker and cheaper as compared to primary data but the data may not meet the specific needs.If the researcher conducts an experiment, he can observes some quantitative measurements or data with the help of the truth in hypothesis that has made earlier. However in the example of survey, data can be collected through observation, personal interview, telephone interview, survey questionnaire or case studies.Observation is the unreserved way to gather data without interviewing respondents. The information obtained relates to current condition and is not complicated by either past behaviour or future intentions or attitudes of respondents. Undeniable, this method can obtain accurate information but it is time consuming, costly, and sometimes, people reluctant to cooperate.During p ersonal interview, interviewer follows a rigid procedure and seeks answers to a set of pre-conceived questions through personal interviews. The data obtained through personal interview is usually carried out in a structured way where output depends upon the ability of the interviewer to a large extent.Telephone interview can obtain data rapidly with relatively low cost compared to others and do not require travelling for face-to-face contact. It can reach huge range of respondents. However, as this method is carried out through telephone, the respondents might not will to share opinions with strangers or they may tell lie. Thus, this is not able for long survey as respondents might feel annoying and delicate to prove the validity of survey.Survey questionnaire can be posted to the respondents in concert with self-stamped answer sheets or via on-line survey. This method is widely used. This the cheapest way to obtain data and can reach respondents working outstation. The survey qu estion can be set up to 5 pages. However, the cons are that the rate of reaction is low, answers may be biased and respondents take longer time to respond.For case studies, cross comparison of cases have to be done in order to have amply understanding on clients experiences in a program. It fully depicts clients experience in program input, process and results. It is powerful means to exhibit program to outsiders. However, it is time consuming either to collect, organize or describe. It represents depth of information rather than breadth.In short, there are different types of method to collect data with their own pros and cons. Time, cost and accuracy are the main constrains to choose an appropriate data collection method. Few data collection methods can be chosen at the same time to obtain maximum accuracy.Research DesignData AnalysisConclusion