Self-Selection Bias and the Economic Consequences of Accounting Regulation: An Application of Two-Stage Switching Regression to SFAS No. 2.

Abstract Addresses the issue of self-selection bias in the analysis of economic consequences of mandatory accounting changes. Use of the case of Statement of Financial Accounting Standard (SFAS) No. 2 to illustrate the effects of selection bias on studying the economic consequences of accounting regulation; Result of the switching regression analysis; Sources of selection bias.