Reusing Natural Experiments
Charles A. Dice Center Working Paper No. 2019-21
68 Pages Posted: 21 Sep 2019 Last revised: 1 May 2020
Date Written: April 30, 2020
After a natural experiment is first used, other researchers often reuse the setting, examining different outcome variables. We examine the consequences of reusing an experimental setting using two extensively studied natural experiments, business combination laws and the Regulation SHO pilot. We apply multiple hypothesis corrections and our findings suggest many results in the existing literature are false positives. We provide guidelines for inference when an experiment is reused using simulation evidence for several popular empirical settings including difference-in-differences regressions, instrumental variables regressions, and regression discontinuity designs.
Keywords: False Positive, Identification, Multiple Hypothesis Testing, Natural Experiments
JEL Classification: G1, G10
Suggested Citation: Suggested Citation