Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/58700 
Authors: 
Year of Publication: 
2011
Series/Report no.: 
IZA Discussion Papers No. 6237
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
We present a theorem helpful in estimating the mean and variance of a linear function with arbitrary multivariate randomness in its coefficients and variables. We derive a generalized decomposition result from two random linear functions in which the result can be applied to most models using event study analysis. Taking the 1989 minimum wage hike as an example, we found that the apparent lack of an effect is a consequence of two off-setting forces: 1) a negative effect arising from firm-specific traits and 2) a positive effect arising from market performance. In sum, we bring to the analysis a method that helps provide additional insights and can be applied to much of the work using event study.
Subjects: 
excess returns
minimum wage
decomposition
event study
JEL: 
G14
J31
J38
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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