The following steps are for calculating market value loss and reputation penalty: https://violationtracker.goodjobsfirst.org/violation-tracker/ar-hawk-field-services-llc

1. select a calculation window (event-study/ search google if not already known) to calculate CAR

Cumulative Abnormal Return (CAR) example below:

We employ a standard event-study methodology to evaluate the market reaction to penalty announcements for environmental violations. We use the market model as a benchmark and define the abnormal return for firm i on day t as

ARi,t = Ri,t-i-i Rm,t ,

where Ri,t ((Pt-Pt-1)/Pt-1)is the return of firm i's common stock on day t and Rm,t is the valueweighted CRSP index return on day t. We estimate the coefficients on i and i by regressing Ri,t on Rm,t using a 100-day period that includes 160 (160) to 60 (60) days prior to the penalty announcement.

We then use the following equation to calculate the cumulative abnormal return for firm i in the window [10, +3]: CAR [-10, +3] = ARi,t 3 t = -10 ,

where abnormal return AR is defined in Equation (1).

2. penalty value: legal penalty amount/market cap/value 3. calculate the difference between CAR and penalty value. If the value from

3. is greater than 0, conclude there is reputation penalty, or otherwise no.