Using Financial Data To Measure Effects of Regulation
University of Rochester, Rochester, NY 14627
and National Bureau of Economic Research
Journal of Law and Economics, 24 (April 1981) 121-158
This paper argues that the wealth effects of unanticipated changes in regulation
can often be measured from security returns, although the effects of existing
or anticipated regulation cannot be measured from returns. In contrast,
under some circumstances it may be possible to measure the wealth effects
of regulation from the level of the security prices of affected firms. If
there are specialized resources linked to regulation, such as taxicab
medallions or stock exchange seats, the value of these assets can be used
to measure some of the effects of regulation. Many examples from the
empirical literature on regulation are discussed.
Key words: Efficient markets, Event study, Regulation
JEL Classifications: G14, G18, G34, L22
Cited 164 times in the SSCI through April 1996
© Copyright 1981, University of Chicago Press
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