René Stulz gave the following advice to the Ph.D. students last week at a class meeting:
” When you public a paper on SSRN, also email all the [important] references and say, ‘Here is a new paper on SSRN that cites your work. I want to be sure I cited you correctly, and also to give you a chance to make any comments.'”
René said he has contacted references (and potential future referees) for every one of his papers since he began his career in the early 1980s.
He also suggested waiting to post a paper on SSRN until it is very polished. Often, referees will base their judgment not on the most recent draft they’re looking at, but at the original SSRN draft that they remember.
René Stulz holds a seminar for Ph.D. in their third-or-higher year of studies, in which students present their research to one another and give/receive feedback. In our first meeting of the 2016-17 year, he gave the following counsel:
- By November of year 5, you should have several papers ready to share, with one of them polished to a very high level. But never write bad papers just to increase your count.
- When you go on the job market, people want to see:
- enthusiasm for your paper and for the profession – show that your interest goes beyond your job market paper
- at least two solo-authored papers
- at least one co-authored paper
- Counsel for third-year students:
- You don’t need a perfect idea to start a paper, otherwise you’d never do anything.
- Start with an idea, and improve the idea as you work.
- That being said, read a lot. “The worst thing you can do is to go and start writing a paper tomorrow.” You need to know how your idea fits into the literature and makes a meaningful contribution.
- Stay up to speed on material from your previous classes, especially the finance classes.
Shai Bernstein from Stanford visited OSU last semester, and offered some advice in his meeting with the Ph.D. students.
- Carefully document the questions you are asked during your presentations, and the success of your answers.
- People don’t want to hear a lot of details and motivation in your job interview – they want to hear a simple, clear overview of 2-3 points that you want them to remember. Your career will succeed along similar lines. The papers that are remembered are clear, powerful, and memorable. Other papers float around and eventually fall through the cracks.
Zahi gave us a paper to read for his seminar today, and asked us to read it very carefully and come prepared to talk about it. The paper was very well written, displayed an impressive use of data, and exploited an interesting variation in real estate regulation. A few of us in the class had objections to the use of data, or alternative stories that might drive the results. Zahi discussed this paper at NBER a few months ago, and his critique turned out to be far more substantial, and more fundamental, than ours.
The paper used a difference-in-differences identification technique. Diff-in-diff requires a treatment and a control group, whose varying behavior before treatment must be predictable functions of the same set of variables. This means, while the treatment and control groups don’t have to be identical, the researcher should fully understand what causes the difference. Strictly speaking, the treatment should also be applied randomly so there is no “selection bias,” or ability of the data points to choose whether they are in the treatment or control group.
In the paper we discussed, Zahi argued, the treatment and control groups were not the same, and were not functions of the same variables. They were subject to completely different market forces, so the paper’s conclusions reduce to a simple and rather meaningless observation. In addition, the treatment was not assigned randomly. He argued that self-selection is a big problem for this paper.
How to Read an Empirical Paper
- Find the author’s identification technique.
- Go back to basics and ask what a textbook application of the technique would require.
- Think carefully about whether the paper meets the textbook requirements. Consider
- the author’s selection and use of data,
- the stated and implicit assumptions required to make the findings valid,
- the paper’s internal vs. external validity.
- Consider whether deviations from the ideal can be (and are) successfully defended.
- Ask where this paper fits into the literature, and what it’s impact is likely to be.
Most real-estate professors are pure real-estate researchers, not real-estate finance researchers. There is an arbitrage opportunity for people to bring the rigor of finance to real estate studies, and to bridge the two fields. Zahi’s career is built on using rich and sometimes unique real-estate data to test standard finance hypotheses in creative ways.
Traditional real estate journals are lower quality, and most universities separate their finance department from their real estate department. The real estate researchers end up doing publishing papers with many interesting ideas, but that are not up to the standard of the finance journals, and that don’t focus on finance implications. It’s possible to find interesting ideas that have already been published with poor execution, and repurpose them into publications in top finance/econ journals.
Advice on hiding faults: If your paper has weaknesses, don’t try to hide them. Revealing shortcomings shows maturity and can actually help you win over your audience and improve your credibility. Fama’s and French’s 1996 paper is arguably the most influential asset pricing paper of the last 20 years, even though they frequently reject their own three-factor model in statistical tests. They admit such and have a ready explanation.
Dissertation advice: Choose a topic about which you are passionate, and for which you have the required skills. Invest not just enough to write a job-market paper, but enough to write a whole series of work.
Job-talk advice: You need to convince senior people in your area of your contributions. You don’t need everybody else to buy into your methods and technical prowess. You need to convince senior people not in your area that will be a nice colleague.
I was back at BYU over the summer and went to lunch with several of the Finance faculty. Hal Heaton, one of the early graduates of Stanford’s Finance Ph.D. and one of my personal favorite MBA teachers, gave me some dissertation advice.
The more obvious part of the secret to a successful dissertation is to choose a topic that excites you. You will spend at least one year of your life (and probably 2-3) on this paper. This topic will go a long way toward defining your early years as an academic, and you may be asked to referee papers on this topic, teach this topic to graduate students, etc. Don’t pick something you’ll want to change in six months.
A less obvious part of the secret, and the part Professor Heaton was talking about, is to choose a topic that interests your advisor. He or she is very busy and has many things to do other than helping you graduate. Hal told me a story of a student who was working on a topic on which his advisor was not thrilled. The student sent the paper to the advisor for comments, and it sat there for weeks and months. Finally, the advisor felt that after all this time he had better make some critiques, so he read over it and recommended that the student essentially rewrite the entire paper. He didn’t tell me whether or not the student finally graduated, but in either case this is not the ideal way to spend you fifth year in the program.
To be fair to the unknown advisor, in the absence of any other information about any of the parties involved, my thoughts suggest that perhaps there are some topics that an advisor may find somewhat interesting, but with which he or she is not familiar enough to be of real help.
- Choose a topic that interests you, and that is broad enough for you to spend the first few years of your career mastering.
- Choose a topic that interests your advisor. Pick something as least related to their line of current work.
- Make sure your advisor and your dissertation area are a good match. You don’t want an advisor with great name recognition (in another area of finance) that can’t help you make your paper great.