The Journal of finance available information, even large transactions costs that inhibit the flow of transactions do not in themselves imply that when transactions do take place prices will not "fully reflect "available information. Similarly(and speaking as above, somewhat loosely), the market may be efficient if "sufficient num- bers"of investors have ready access to available information. and disagree ment among investors about the implications of given information does not in itself imply market inefficiency unless there are investors who can consistently make better evaluations of available information than are implicit in market But though transactions costs, information that is not freely available to all investors, and disagreement among investors about the implications of given information are not necessarily sources of market inefficiency, they are poten tial sources. And all three exist to some extent in real world markets. Measur- ing their effects on the process of price formation is, of course, the major goal of empirical work in this area II. THE EVIDENCE All the empirical research on the theory of efficient ts has been con cerned with whether prices fully reflect" particular subsets of available information. Historically, the empirical work evolved more or less as follows The initial studies were concerned with what we call weak form tests in which the information subset of interest is just past price (or return) histories. Most of the results here come from the random walk literature. When extensive tests seemed to support the efficiency hypothesis at this level, attention was turned to semi-strong form tests in which the concern is the speed of price adjustment to other obviously publicly available information (e. g, announcements of stock splits, annual reports, new security issues, etc). Finally, strong form tests in which the concern is whether any investor or groups (e.g, manage- ments of mutual funds) have monopolistic access to any information relevant for the formation of prices have recently appeared. We review the empirical esearch in more or less this historical sequence First, however, we should note that what we have called the efficient markets model in the discussions of earlier sections is the hypothesis that security prices at any point in time"fully reflect"all available information Though we shall argue that the model stands up rather well to the data, it is obviously an extreme null hypothesis, And, like any other extreme null hy posthesis, we do not expect it to be literally true. The categorization of the tests into weak, semi-strong, and strong form will serve the useful purpose of allowing us to pinpoint the level of information at which the hypothesis breaks down. And we shall contend that there is no important evidence against the hypothesis in the weak and semi-strong form tests (i.e prices seem to effi ciently adjust to obviously publicly available information), and only limited evidence against the hypothesis in the strong form tests(i. e, monopolistic access to information about prices does not seem to be a prevalent phenomenon in the investment community)