revacc-methods

Research Design & Identification (revacc-methods)

When to trigger

• Your treatment (a disclosure, a standard adoption, an audit/tax regime) may be endogenous
• Adoption is staggered across firms/years and you need a defensible DiD
• You have an association and a referee will ask "is this causal or just correlation?"
• You are designing an experiment to isolate a channel archival data cannot separate
• You are building an analytical model and must fix primitives, timing, and the equilibrium concept

Identification for archival accounting at RAST

Accounting treatments — disclosure choices, conservatism, auditor selection, tax positions, standard adoption — are rarely random, so RAST referees expect a credible identification strategy, not kitchen-sink controls. Pick the design that breaks the endogeneity for your accounting setting.

| Identification threat / setting | Design |

|---------------------------------|--------|

| Regulation / standard adoption with a clean date (e.g., a reporting mandate) | Difference-in-differences; event study around the adoption date |

| Staggered adoption across firms/states/countries | Staggered DiD with modern estimators (avoid naive TWFE bias) |

| Endogenous accounting/auditor/tax choice | Instrumental variables / 2SLS with a defensible exclusion |

| A threshold rule (covenant, index inclusion, size or regulatory cutoff) | Regression discontinuity |

| Selection on observables | Matching (PSM/entropy) as a complement, not the main claim |

| A plausibly exogenous shock to the information environment | Natural experiment; pre-trends shown |

| Information content of an accounting signal | Short-window event study with a clean benchmark and confound check |

State the estimating equation, the unit and level, the fixed effects (firm, year, industry-year), and the identifying variation explicitly. The design section must make a skeptic believe the variation is as-good-as-random conditional on controls. RAST's first-round-decision culture means a weak design is more likely to draw a reject than a "fix it in revision."

Measurement design is part of identification

For contested accounting constructs (discretionary accruals, earnings quality, disclosure indices, audit quality, information asymmetry), the proxy choice is a design decision. Pre-commit a primary measure with precedent and plan the alternative proxies you will use to show the result is not proxy-driven (carried out in revacc-data-analysis). A clean design on a fragile proxy still fails.

If the lane is analytical

• Fix the information structure, players, timing, and payoffs before solving; state the equilibrium concept (PBE, sequential, etc.).
• Show the model is the minimal structure that generates the accounting result; defend each assumption as load-bearing.
• Plan the comparative statics that become testable or normative accounting implications.

If the lane is experimental

• Manipulate the focal accounting construct with realistic stimuli and a fit-for-purpose pool (investors, auditors, managers); IRB documentation is expected.
• Pre-register where feasible; include manipulation and attention checks; power the design for the interaction, not just the main effect.

Design hygiene

• Show parallel pre-trends for any DiD and report dynamic (event-time) effects.
• Defend the exclusion restriction for any IV in words — relevance alone is not enough.
• Pre-commit the main specification; relegate alternatives to robustness.
• Plan the data provenance trail now (Compustat/CRSP/I/B/E/S/audit-data vintages and screens).

Execution bridge (StatsPAI / Stata MCP)

For the empirical / causal lane, estimate and audit rather than only specify. Full

map: [execution-with-mcp](../../../shared-resources/empirical-methods/execution-with-mcp.md). RAST is empirical accounting; emphasize identification of disclosure / governance effects and the multiple-testing haircut for mined associations.

• detect_design → recommend → fit with as_handle=true → audit_result to

enumerate the checks the design owes.

• Panel / staggered DiD: callaway_santanna / sun_abraham + bacon_decomposition
• honest_did_from_result. IV: effective_f_test + anderson_rubin_ci. RDD:

rdrobust + mccrary_test.

• Experiments: randomization-based inference and romano_wolf for the many-outcome

family-wise correction reviewers expect.

Match the toolchain to the reviewer pool, and report the effect size the venue

wants. A run end-to-end (synthetic data, real returns) is in the

[JF execution walkthrough](../../../Journal-of-Finance-Skills/resources/worked-examples/02-execution-walkthrough.md).

Checklist

• [ ] The identifying variation (shock/setting/threshold) is named and defended
• [ ] Estimating equation, unit, level, fixed effects, and clustering plan are stated
• [ ] DiD shows pre-trends and dynamic effects; staggered designs use a modern estimator
• [ ] IV exclusion restriction is argued, not asserted; matching is a complement, not the claim
• [ ] Primary construct proxy pre-committed; alternative proxies planned
• [ ] Analytical models fix primitives/timing and the solution concept before solving
• [ ] Experiments have IRB, realistic stimuli, manipulation/attention checks, adequate power

Anti-patterns

• Kitchen-sink controls standing in for identification ("we control for everything").
• TWFE on staggered adoption without addressing heterogeneous-treatment-effect bias.
• IV by convenience: an instrument correlated with the outcome directly.
• Matching as causal proof when selection is on unobservables.
• Proxy fragility: a single contested construct measure with no alternative planned.
• Non-minimal model: primitives a referee can strip without losing the result.

Output format

【Lane】archival / analytical / experimental
【Setting & identifying variation】...
【Design】DiD / staggered-DiD / IV / RDD / event study / experiment / model
【Spec】equation; unit/level; fixed effects; clustering plan
【Construct】primary proxy + alternatives planned
【Identification defense】pre-trends / exclusion / discontinuity / randomization ...
【Data provenance】sources + vintages + screens noted
【Next skill】revacc-data-analysis