On Feasibility Studies: Research Quality Is Subjective And Not Commoditized

``Irrationality as a real economic attribute is not only the pith of behavioral finance; it is the next frontier for all market research.”-Woody Dorsey

At a recent social function, a colleague opined that some professors at post-graduate universities ‘moonlight’ by selling feasibility studies through consultancy services. Yet these feasibility studies were adduced to have been consigned to the students, from which the professors consolidate, package and deliver to clients as their own. The negative connotation is that professors monetize on these by “using” their students to do their work. Hence, the conclusion was, instead of contracting consultancy services from such professors, it would be better off simply hiring students to conduct such feasibility requirements at much cheaper rate.

Nonetheless while there are merits to the allegation of delegating some work to students (which I say would be mostly be data gathering), the hasty generalization is that feasibility studies are homogeneous or monolithic. Unfortunately, they are not.

Feasibility studies, while constituting basic components, are highly subjective and greatly dependent on the reference points, data set or data coverage, methodology, interpretation and importantly the author’s biases.

This may somewhat be seen analogous to market reports, where similar data sets would induce different interpretations which ultimately arrives at different conclusions for these observers. That because researchers, like anybody else, have different marginal utilities or set of values or priorities.

For instance, while conventional market reports focuses mainly on micro (e.g. PE ratio, national GDP) or macro fundamentals (e.g. current account balances) or technical charting theme, my methodology would flow from the monetary and behavioral aspects, to inflation dynamics to prospective political directions. Hence my conclusions or projections are frequently seen as unorthodox or “contrarian”.

The point is, research quality is highly subjective and variable and can’t be “commoditized” or seen as a “one-size-fits-all” template.

Applied to business strategies, contracting “cheap” feasibility studies would only amplify business risk. This isn’t your school requirement, where you rush to C.M. Recto to ‘buy’ a stereotyped report (a road in Manila reputed for “outsourcing or for hire school reports researchers” and “fake” legal documents), and where the stake is only choice between “passing” or “failing” grade; business strategies involve long term capital allocation, where wrong decision/s from haphazard analysis subjects investors to financial losses.