Incorporating Research Design and Estimation Tools in the Finance Curriculum

To test for the effectiveness of instruction in research design and estimation in business curricula, a classroom exercise was developed that required students to estimate sales revenue for a small business. The exercise was administered to (a) marketing research students and (b) intermediate corporate finance students. By using a revenue estimation tool called the Buying Power Index, the marketing research students estimated revenue significantly better than the intermediate corporate finance students did. The findings indicate that additional instruction in research design and estimation would significantly enhance the ability of finance graduates to make value-maximizing decisions.