How Prediction Markets Can Save Event Studies
25 Pages Posted: 29 Jan 2009
There are 5 versions of this paper
How Prediction Markets Can Save Event Studies
How Prediction Markets Can Save Event Studies
How Prediction Markets Can Save Event Studies
How Prediction Markets Can Save Event Studies
How Prediction Markets Can Save Event Studies
Date Written: October 14, 2008
Abstract
Event studies have been used to address a variety of political questions|from the economic effects of party control of government to the importance of complex rules in congressional committees. However, the results of event studies are notoriously sensitive to both choices made by researchers and external events. Specifically, event studies will generally produce different results depending on three interrelated things: which event window is chosen, the prior probability assigned to an event at the beginning of the event window, and the presence or absence of other events during the event window. In this paper we show how each of these may bias the results of event studies, and how prediction markets can mitigate these biases.
JEL Classification: C10, G12, H50
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
By Justin Wolfers and Eric Zitzewitz
-
By Justin Wolfers and Eric Zitzewitz
-
What Do Financial Markets Think of War in Iraq?
By Andrew Leigh, Justin Wolfers, ...
-
What Do Financial Markets Think of War in Iraq?
By Andrew Leigh, Justin Wolfers, ...
-
Interpreting Prediction Market Prices as Probabilities
By Justin Wolfers and Eric Zitzewitz
-
Interpreting Prediction Market Prices as Probabilities
By Justin Wolfers and Eric Zitzewitz
-
Interpreting Prediction Market Prices as Probabilities
By Justin Wolfers and Eric Zitzewitz
-
Did Steve Forbes Scare the Municipal Bond Market?
By Joel B. Slemrod and Timothy Greimel
-
Partisan Impacts on the Economy: Evidence from Prediction Markets and Close Elections
By Erik C. Snowberg, Justin Wolfers, ...