Survivorship and Exchange Bias

Survivorship bias occurs when a database only includes currently-listed companies and ignores delisted companies. Exchange bias occurs when companies listed on local exchanges are ignored. Global Financial Data has collected data from all over Great Britain to make sure the UK Stocks Database does not suffer from this defect.

The London Stock Exchange was only founded in 1801 and until then, no organized exchange existed in England. The Course of the Exchange recorded the prices of stocks and bonds traded in London in the 1700s, but included primarily the English Funds. Before 1864, when The Economist began to publish The Investors Monthly Manual, the only way to get a comprehensive overview of shares that traded in England was to go to provincial newspapers which provided data on the prices of locally traded stocks.

Newspapers in Dublin began providing information on Irish stocks as early as 1784. Beginning in the 1830s, newspapers in Edinburgh, Liverpool, Manchester, Coventry, Exeter, and other cities began publishing the prices of local shares. In many cases, these share lists were published by enterprising brokers trying to drum up business for their firm.

Were it not for the willingness of stock brokers in the Midlands to provide share lists in provincial newspapers, it would be impossible to trace the gradual decline of canal stocks as railroads rose at their expense. Similarly, the history of the banking sector would be limited to London banks and would exclude many provincial banks if local newspapers had not been consulted. The behavior of Welsh mines in the 1840s and 1850s would be lost were it not for the information provided by newspapers in Exeter and Cornwall.

Global Financial Data has investigated dozens of local newspapers and magazines to collect data from every corner of Britain, not just London, to ensure its database recorded all aspects of the British economy.