- Title: "Word Power: A New Approach for Content Analysis"
Few papers explore in detail:
- How investors interpret descriptive information
- Whether investors efficiently incorporate that information into prices
Main problem:
- Difficulty in objectively quantifying such information
Solution: Content analysis
- A word list or the algorithm's lexicon where each word is categorized as positive or negative.
- How each word in the lexicon is weighted
- Determine the strength of various words in conveying negative or positive tone that is particularly suitable for finance and accounting applications