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Farrokh Alemi
Timothy P. Coffin



Authors and WSEAS

Farrokh Alemi
Timothy P. Coffin


WSEAS Transactions on Business and Economics


Print ISSN: 1109-9526
E-ISSN: 2224-2899

Volume 15, 2018

Notice: As of 2014 and for the forthcoming years, the publication frequency/periodicity of WSEAS Journals is adapted to the 'continuously updated' model. What this means is that instead of being separated into issues, new papers will be added on a continuous basis, allowing a more regular flow and shorter publication times. The papers will appear in reverse order, therefore the most recent one will be on top.


Volume 15, 2018


Causal Control Charts: Application to Assessing Impact of Trump’s Election on Insurance Stock Prices

AUTHORS: Farrokh Alemi, Timothy P. Coffin

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ABSTRACT: At its core, performance improvement requires a causal inference. The alternative causes of poor performance needs to be identified and statistically controlled so that the effect of the new intervention on performance can be assessed. Unfortunately, current control charts are not based on principles of causal inference. Objective: To provide a method of assessing causal impact of an intervention while controlling for alternative explanations. Methods: The impact of the intervention (cases) is compared to a counterfactual, simulated, control. The data are stratified by combination of alternative causes. Within each stratum cases after the intervention are compared to weighted controls, where weights are chosen so that the frequency of alternative explanations among cases and controls are the same. The methodology is applied to changes in stock prices after election of President Trump, with general trend in the economy and general trend in the healthcare stock prices being the alternative explanation. The impact of the election is examined after removing the effects of alternative explanations. Results: Impact of election on stock prices differs after we control for alternative explanations for rise of stock prices. Conclusions: Causal control charts may be useful in situations where several competing causes exists for changes in performance

KEYWORDS: Causal analysis, Causal control charts, Counterfactuals, Stratification.

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WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 15, 2018, Art. #25, pp. 259-272


Copyright © 2018 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution License 4.0