Although prior research has documented a decline in earnings relevance for equity investors through time, precise evidence has not been collected on why the decline has occurred. Possible reasons for changes in earnings relevance identified in the literature include changes in persistence,...

Accounting researchers (and potentially others) generally select rather simple, lower-order, time-series models to develop proxies for earnings persistence. However, measures of persistence produced by such models are not related to characteristics of the firm?s economic environment that are...