David Johnstone

David Johnstone is an Honorary Professor in the Discipline of Finance at the University of Sydney Business School. He held the position of National Australia Bank Professor of Finance at the University from 2007 to 2017, prior to his retirement from full-time duties. Johnstone commenced his academic career at the University of Sydney as a Tutor in the Accounting Department in 1981 and was appointed Lecturer in Accounting in 1980. He obtained his PhD from the University of Sydney in 1985 as one of Ray Chambers' last doctoral students, with training in the philosophy of science. Throughout his tenure, he contributed significantly to the fields of accounting theory, history, philosophy, and statistical inference within the University of Sydney's academic environment.

Johnstone's research specializations include finance, Bayesian decision theory, the cost of capital, corporate bankruptcy prediction, credit ratings changes, trading behavior in futures markets, market liquidity, probability scoring rules, and statistical tests in financial contexts. His key publications encompass 'Predicting corporate bankruptcy: An evaluation of alternative statistical frameworks' with S. Jones and R. Wilson (Journal of Business Finance & Accounting, 2017), 'An empirical evaluation of the performance of binary classifiers in the prediction of credit ratings changes' (Journal of Banking & Finance, 2015), 'The effect of information on uncertainty and the cost of capital' (Contemporary Accounting Research, 2016), 'The propensity for local traders in futures markets to ride losses: Evidence of irrational or rational behavior?' with A. Frino and H. Zheng (Journal of Banking & Finance, 2004), 'Mean-variance and expected utility: The Borch paradox' with D. Lindley (Statistical Science, 2013), and 'Tailored scoring rules for probabilities' with V. R. R. Jose and R. L. Winkler (Decision Analysis, 2011). These works have received hundreds of citations and advanced understanding in financial decision-making and risk assessment. Johnstone has also undertaken consulting for various Australian regulatory agencies and served on the Australian Energy Regulator’s Panel of Experts for reviews of electricity pricing and rate of return guidelines. His academic influence extends through editorial contributions and participation in expert panels shaping regulatory policy in finance.

Professional Email: david.johnstone@sydney.edu.au