A Primer on Structural Estimation in Accounting Research
Stanford University Graduate School of Business Research Paper No. 4336916
Olin Business School Center for Finance & Accounting Research Paper No. Forthcoming
137 Pages Posted: 26 Jan 2023
Date Written: January 24, 2023
Abstract
This primer offers a hands-on accessible guide to writing and estimating structural models. We review commonly-used methodologies, including dynamic programming, maximum likelihood, generalized and simulated method of moments, conditional choice probabilities as well as tools to compute standard errors and common diagnostics and tests of economic hypotheses. Special attention is devoted to the bootstrap as a convenient toolbox to estimate complex economic interactions. The methods are illustrated with recent developments in earnings management, auditing, investment, conservatism, and disclosure theory. Intuition and applications are emphasized over formalism.
Keywords: Estimation, structural, accounting
JEL Classification: C1, C5, C6, G3, M4
Suggested Citation: Suggested Citation