Talk the Walk: A New Measurement of Pricing Power Using Top Management Team’s Language
With Niels Holtrop, Joost M.E. Pennings, Thomas Post, and Hauke Wetzel
Pricing power is a fundamental driver of long-term value, yet investors lack timely tools to assess it. We construct a continuous, firm-level measure from earnings call transcripts using dependency parsing, negation handling, and tense-based decomposition across prepared remarks and Q&A. Applied to 55,652 firm-quarter observations (3,138 unique U.S. firms, 2018–2024), the measure reveals systematic gaps between forward- and backward-looking discourse and between presentation and Q&A sections.