What’s in a name?

Posted by adi on Oct 19, 2008 in The world of the web

I came across a couple of studies this week that looked into the importance of names for a variety of things.  The first one was conducted by a chap called Brett Pelham.  He looked into whether our names can affect some big decisions in our life, and surprisingly came to an affirmative conclusion.  Let me explain.

Apparently it is the case that we often choose careers (for instance) that have a similarity to our name, be they in the tone of the word or even the first letter.  They tested this by analysing dentists in America to determine whether more Dennis’ were dentists than should be the case under the law of averages.  Lo and behold there were nearly twice as many dentists called Dennis as there were dentists called Walter and Jerry (before and after Dennis in the list of most popular American names).  Likewise he found that George is more likely to work in geographical fields and so on.

I still wasn’t particularly convinced so read on to his study into where people choose to live.  The links here seem a little more tenuous, but people also tend to live in states that resemble their names (Louise in Louisiana etc.), and also streets and even partners.  Who’d have thunk it?

Study 2 – Company naming

Anyway, that was the first study, the second looked into stock performance and the ease with which people could pronounce both the company name and the stock ticker.  This study was done by two Princeton scientists called Adam Alter and Daniel Oppenheimer.  Initially they asked for perceptions of a range of ficticious companies based purely on the names of them.  The study concluded that the easier to pronounce companies were perceived to be better by the survey group.

They then tested this in the markets themselves.  They picked out 89 companies from the New York Stock Exchange that had floated between 1990 and 2004, and analysed their performance a period after flotation.  They found that if $1,000 had been invested in the most fluent sounding companies that they would have outperformed the less fluent sounding companies by around 35% over the year.

So there you go.  It seems that picking the right name is more important than many people realise.

Tags: names, New York Stock Exchange, princeton, psychology, Stocks and Bonds