Reusing Natural Experiments

Davidson Heath, Matthew Ringgenberg, Mehrdad Samadi and Ingrid M. Werner
Additional contact information
Davidson Heath: University of Utah David Eccles School of Business
Mehrdad Samadi: Southern Methodist University (SMU) - Finance Department
Ingrid M. Werner: The Ohio State University - Fisher College of Business

Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics

Abstract: Natural experiments are used in empirical research to make causal inferences. After a natural experiment is first used, other researchers often reuse the setting, examining different outcomes based on causal chain arguments. Using simulation evidence combined with two extensively studied natural experiments, business combination laws and the Regulation SHO pilot, we show that the repeated use of a natural experiment significantly increases the likelihood of false discoveries. To correct this, we propose multiple testing methods which account for dependence across tests and we show evidence of their efficacy.

JEL-codes: G1 G10 (search for similar items in EconPapers)
Date: 2019-09
New Economics Papers: this item is included in nep-ecm, nep-exp and nep-ore
References: Add references at CitEc
Citations: View citations in EconPapers (9)

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http://ssrn.com/abstract=3457525

Related works:
Working Paper: Reusing Natural Experiments (2022)
Working Paper: Reusing Natural Experiments (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:ohidic:2019-21

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