Public Choice

, Volume 103, Issue 1, pp 139-161

First online:

Risk and the National Industrial Recovery Act: An Empirical Evaluation

  • William L. AndersonAffiliated withDepartment of Economics, Auburn University

Rent the article at a discount

Rent now

* Final gross prices may vary according to local VAT.

Get Access


This paper examines the National Industrial Recovery Act of 1933 to see if the law helped “stabilize” the U.S. economy during the Great Depression. The test measures sample variances of the rates of return in stock price indices for six major U.S. industries as well as the overall stock market and compares those variances across five time periods. The statistics reveal that the NIRA did not reduce risks faced by these firms. Stocks for NIRA-regulated industries did not significantly decline in risk during the NIRA period, as compared with sample variance changes elsewhere during the Great Depression. The paper then interprets the results from a public choice point of view.