Analysing Rankings, with an Application to the Financing of Small Entrepreneurial Firms

This paper examines statistical methods for handling economic data that are expressible as sequences of actions, given a contingent circumstance (e.g., given a fall in demand, which of several courses of action--such as lowering price, increasing stocks, or increasing sales effort--will be taken by a small firm, and in what order). This may be handled as a problem of m incomplete rankings. M. Friedman's (1937) two-way analysis of variance by ranks is shown to compare favorably with techniques due to A. Benard and P. Van Elteren (1953) and M. J. Prentice (1979). This is illustrated by reference to a study of the financing of small, entrepreneurial firms.