Subject The article discusses behavioral valuation tools and focuses on the creation of the behavioral valuation methodology. Objectives The study reveals mechanisms for setting behavioral valuation indicators. Methods I prove it is reasonable to apply the classical theory of valuation to set behavioral valuation tools. The article presents elements and formulae of the classical valuation theory and provides mechanisms for setting respective tools. Results Mood measurement in news is the backbone of analytical tools described in the article. As part of the mood measurement in news, researchers process all news relating to analyzable companies and measure it by seven-grade scale. I articulated the behavioral beta measurement theory in accordance with the behavioral pricing theory of Hersh Shefrin and Meyer Statman. The article unveils the possible effect of using analytical materials, which complement the decision-making process concerning an investment strategy in the most distant retrospect. I showcase how the fundamental analysis and valuation may help you record a quotation per each day while catching what opinion an analyst had about the quotation at the same point of time, what emotional environment surrounded the pricing process within the analyzable period of time. Conclusions and Relevance The article presents the method to set behavioral valuation tools, being a step towards pricing based on behavioral valuation. The article showcases the relationship of behavioral valuation tools and classical valuation tools and new valuation models. I devised the framework for practical computations. The findings apply to valuation, corporate finance, public and municipal finance, tax issues, stock exchanges. It is especially important to use behavioral valuation tools during the instability and crisis, change in the market paradigm, market shifts, changes in the return and volatility of financial instruments. Behavioral valuation tools supplements and extends the conventional tools used in traditional finance, makes cost management decisions more informed.
Shiller R.J. Narrative Economics. The American Economic Review, 2017, vol. 107, iss. 4, pp. 967–1004. URL: Link
Fedorova E.A., Ledyaeva S.V., Fedorov F.Yu. et al. [The influence of the level of optimism and the level of narcissism of the CEO on Companies’ Capital Structure]. Korporativnye finansy, 2019, vol. 13, no. 1, pp. 60–75. (In Russ.) URL: Link
Zhukova V.S., Zhuravleva I.A. [Tax accounting system: Analysis and challenges]. Uchet i kontrol' = Accounting and Control, 2019, no. 10, pp. 9–16. (In Russ.)
Shefrin H., Statman M. Behavioral Capital Asset Pricing Theory. Journal of Financial and Quantitative Analysis, 1994, vol. 29, no. 3, pp. 323–349. URL: Link
Athey S., Bayati M., Imbens G., Qu Z. Ensemble Methods for Causal Effects in Panel Data Settings. AEA Papers and Proceedings, American Economic Association, 2019, vol. 109, pp. 65–70. URL: Link
Varian H.R. Big Data: New Tricks for Econometrics. Journal of Economic Perspectives, 2014, vol. 28, iss. 2, pp. 3–28. URL: Link
Athey S., Eckles D., Imbens G.W. Exact p-Values for Network Interference. Journal of the American Statistical Association, 2018, vol. 113, iss. 521, pp. 230–240. URL: Link
Bogatyrev S.Yu. [Valuation analysis of shares in Bloomberg services]. Voprosy ocenki, 2014, no. 1, pp. 12–38. (In Russ.)
Bogatyrev S.Yu. [Analysis of manipulations when applying the income approach method to valuation]. Finansovaya analitika: problemy i resheniya = Financial Analytics: Science and Experience, 2019, vol. 12, no. 3, pp. 338–351. (In Russ.) URL: Link
Mikhailets V.B. [Some more words about the discount rate in valuation and methods of the income approach]. Voprosy ocenki, 2005, no. 1, pp. 2–14. (In Russ.)
Grigor'ev V.V. [Specifics of the discount rate calculation in the business valuation]. Ekonomika. Nalogi. Pravo = Economics, Taxes & Law, 2018, vol. 11, no. 3, pp. 83–88. URL: Link (In Russ.)
Fedotova M.A., Grigor'ev V.V. Garmonizatsiya stoimostnykh standartov stran Evraziiskogo ekonomicheskogo soyuza [Harmonizing the pricing standards in the EEU countries]. Moscow, RuScience Publ., 2018, 182 p.
Raeva I.V. [Management of cash flows of the company on the example of the operator in the market of services of rail transportation]. Ekonomika i predprinimatel'stvo = Journal of Economy and Entrepreneurship, 2017, no. 12-2, pp. 1078–1084. (In Russ.)
Taylor R. Common Mistakes in Valuation Reports. Financial Valuation and Litigation Expert Journal, 2018, no. 75, pp. 78–82. URL: Link
Matschke M.J., Brösel G., Matschke X. Fundamentals of Functional Business Valuation. Journal of Business Valuation and Economic Loss Analysis, 2010, vol. 5, iss. 1, pp. 1–39. URL: Link
Hausman J. Contingent Valuation: From Dubious to Hopeless. Journal of Economic Perspectives, 2012, vol. 26, no. 4, pp. 43–56. URL: Link
Li D. Expertise versus Bias in Evaluation: Evidence from the NIH. American Economic Journal: Applied Economics, 2017, vol. 9, no. 2, pp. 60–92. URL: Link
Michaletz V.B., Artemenkov A.I. The Transactional Assets Pricing Approach: Its Application in Professional Business Valuation and Fair Value Theories. The Valuation Journal, 2017, vol. 12, iss. 2, pp. 52–99.
Sorin S.V. The Economic Postulates of Asset Valuation Practice. The Valuation Journal, 2014, vol. 9, iss. 1, pp. 4–33.
