The Differential Bankruptcy Predictive Ability of Specific Price Level Adjustments: Some Empirical Evidence.

This paper evaluates the usefulness of specific price-level adjusted (SPL) data for bankruptcy prediction using data from the 'seventies. Bankruptcy prediction models are derived from a matched-pair sample using multiple discriminant analysis and logit analysis and are tested on a holdout sample from a later period. The findings indicate that SPL data do not greatly improve bankruptcy prediction.