Using Financial Data To Measure Effects of Regulation

G. William Schwert

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 291 times in the SSCI and SCOPUS through 2014
© Copyright 1981, University of Chicago
The following file contains the reprint of this paper in Acrobat's portable data format (.pdf). The file is about 5,185 KB and can only be viewed (and printed) using a copy of Acrobat Reader or Acrobat Exchange.

If you want the current version of the Adobe Acrobat Reader for other platforms, visit Adobe's web page by clicking the image below.

Click here to download this paper in PDF format.
Return to Publications Page

© Copyright 1998-2015, G. William Schwert

Last Updated on 2/26/2015