Plausibly Exogenous [1154] - Bond Ratings (03/31/2023)
LHS Variable
Bond prices
RHS Variable
Ratings
Source of Exogenous Variation
Average yields of the other bonds issued by the same railroad as an instrument for whether a bond got rated (based on Moody’s rating procedure)
- Bernstein, Frydman, and Hilt (2023), “The Value of Ratings: Evidence from their Introduction in Securities Markets”