Anticipated versus Realized Benefits: Can Event Studies Be Used To Predict the Impact of New Regulations?
AbstractEconomists often use event study methodology to evaluate the impact of new regulations on firms before there is enough data to empirically estimate the effects. This research investigates the degree to which event study methodology can provide useful information in this regard by studying how accurately markets predict the actual benefits associated with a new law. Utilizing a unique change in U.S. trade law, I compare the benefits predicted by event study methodology with the actual benefits accruing to individual firms. The results indicate that estimates from event study methodology are poor predictors of the true effect of new policies.
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Bibliographic InfoPaper provided by EconWPA in its series International Trade with number 0512005.
Length: 14 pages
Date of creation: 05 Dec 2005
Date of revision:
Note: Type of Document - pdf; pages: 14
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event studies; Byrd Amendment; antidumping;
Other versions of this item:
- Kara M. Reynolds, 2006. "Anticipated versus Realized Benefits: Can Event Studies be Used to Predict the Impact of New Regulations?," Working Papers 2006-02, American University, Department of Economics.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-14 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Benjamin Liebman & Kara M. Olson, 2004.
"The Returns from Rent-Seeking: Campaign Contributions, Firm Subsidies, and the Byrd Amendment,"
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- Haji Ali Beigi, Maryam & Budzinski, Oliver, 2012. "On the use of event studies to evaluate economic policy decisions: A note of caution," Ilmenau Economics Discussion Papers 80, Ilmenau University of Technology, Institute of Economics.
- Budzinski, Oliver, 2012. "Impact evaluation of merger control decisions," Ilmenau Economics Discussion Papers 75, Ilmenau University of Technology, Institute of Economics.
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