Donald P. Cram
Assistant Professor, Accounting

MIT Sloan School of Management
50 Memorial Drive, E52-343a
Cambridge, MA 02142
phone: (617) 253-4310
fax: (617)253-0603

Welcome to my web page!  I joined the Sloan faculty in 1997.  My primary research interest is to help corporate management accountants, usually known as financial analysts, to support decision-making through statistical analysis of cost and budget system data.  I have taught Introduction to Financial and Managerial Accounting for undergraduates and non-MBA students (15.501/.516), the managerial half of Introduction to Financial and Managerial Accounting (15.515) for MBAs, and a follow-up elective course for MBAs, Managerial Accounting and Control (15.521), which I am teaching again in Spring 2000. I enjoy both my teaching and research activities.   I am especially interested in incorporating information systems applications to better inform study of managerial accounting.

I have several research projects and publications in progress, which are listed within this Web site.  For a somewhat dated overview of my background and current work, see my resume in .pdf format  (You can download a free Acrobat Reader application to read .pdf format files here if you don't already have it.)

ResearchPublicationsDissertationTechnical Reports and CasesTeachingPersonal


 Research Projects:

Managerial Accounting:
“Implicit Price Estimation: Measuring the Impact of Nonfinancial Factors in Environmental Management Decision-Making.” See dissertation, below.

“Multivariate Pareto Analysis for TQM and Environmental Decision-Making.” How can one get 80% of the benefits--in each of many benefit dimensions--for just 20% of the costs, from a set of investment proposals?

Financial Accounting:
“Accruals and the Prediction of Cash Flows,” with Mary E. Barth and Karen K. Nelson. Why do accruals serve better than cash flows, in predicting future cash flows? (available by search at SSRN

“Earnings Announcements' Value Relevance:  An Historical Perspective,” with Elizabeth Demers and Aili Li.  Has the impact of earnings announcements on stock prices been reduced by alternative information releases?

Methodological and Other:

The Environmental and Financial Performance Literature Webpage.”  We review the literature relating earnings and stock price movements to news of environmental performance changes.

The Event Study Webpage.”  This is  a  current bibliography of working papers and other resources on the methodology of event studies. “ARToolkit: An Accounting Research Toolkit.”  Monograph that provides a library of freeware SAS macro programs to perform common tasks in accounting, economics, and finance research, which are not otherwise easily accomplished in SAS.  Tools offered will extract CRSP, Compustat, IBES data, perform various statistical analyses, and perform commonly required data manipulations.  Includes replication of two published event studies.

The CRSP Data Access and Analysis Web page.”  A compendium of resources for using Center for Research in Security Prices (CRSP) data.

“Symmetric Stable Binary Regressions.”  Consider heavy-tailed alternatives to probit and logit regressions.  Does relaxing the defining assumption of normal- or extreme value-distributed errors improve our ability to explain binary outcomes?

“Simulation on the Efficacy of Likelihood Ratio vs. Wald-based Testing for Probit and Logit Binary Regression Models.” In small samples, LR statistics usually are more accurate, but one can run simulations for any given situation.

“Matched Sample Logit and Probit Analysis in Accounting Research.”  What is the appropriate statistical treatment to control for matches in multivariate analysis?

With MIT Undergraduate Research Opportunities Program (UROP) students:
“An Event Study Using the ARToolkit,” by Donald P. Cram and Linda Y. Huang.  What is the simplest event study?

“Comparison of Econometric Methods Applied in SAS, Stata, TSP, and Other Statistical Software Packages,” by Donald P. Cram and Steven S. Yang.  How can one run 2SLS in each package?

“Financial and Operating Ratios for Compustat Firms,” by Donald P. Cram and Fito J. Louis. How much do ratios vary?

Back to menu barBack to menu bar


“Measurement of Political Effects in the United States Economy:  A Study of the 1992 Presidential Election,” with Michael C. Herron, James Lavin, and Jay Silver,  Economics & Politics, March 1999.  Which industries would have benefited from Bush, Clinton, vs. Perot being elected?
Back to menu barBack to menu bar


 “Implicit Price Estimation:  Measuring the Impact of Nonfinancial Factors in Environmental Management Decision-Making.”

This dissertation examines how management accountants may support the firm’s strategic project decision-making processes through statistical analysis of budget decisions taken.  The selection of projects to meet one large firm’s environmental goals is examined in detail.  Nonfinancial factors, chiefly the pollution which proposed projects may abate, are the primary drivers along with investment cost in explaining project acceptance.  I apply logit and probit models to explain the investment go-ahead/no-go decisions; the tradeoff between investment costs and quantified-but-nonfinancial impacts yields implicit prices.

Back to menu barBack to menu bar

Technical Reports and Cases:

“Phenix Federal Credit Union,” with Elizabeth Keating.

“CRSP Data Retrieval and Analysis in SAS Software for Users and Administrators,” Stanford University, Graduate School of Business, Technical Report Series, No. 80, March 1996.

“Teaching Note to Accompany Raychem Corporation, Thermofit Division (A) - (C),” with J. Michael Harrison, Stanford University, Graduate School of Business, September 1993.

Raychem Excel File Instructions and the actual Excel files in MAC and PC/Windows formats here.
Back to menu barBack to menu bar


Massachusetts Institute of Technology

Summer 1999    15.515 LFM    Financial and Managerial Accounting

Spring 1999      15.521            Managerial Accounting and Control

Spring 1998       15.501/516     Introduction to Financial and Managerial Accounting

Back to menu barback to menu bar

-    Squash at Cambridge Racquet and Fitness Club.
-    Sailing at Community Boating, Inc.

-    Playing Ultimate Frisbee at pick-up games organized by BUDA, especially at Ultimate on the Esplanade.

-   Meet my wife, Aimee Drolet!

Back to menu barback to menu bar

Thanks for stopping by.  For questions, comments, or further information concerning my teaching, research, or anything else on this Web page, please email me.

back to top of page

this Web page designed by