Questions tagged [difference-in-difference]
It is about the difference-in-difference method which is quite popular for quasi-experimental studies
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Is Difference-in-Differences still valid when treat or control is determined by subjects?
I have a question about the difference-in-differences method. I am considering using it to evaluate a policy, the UK's Help-to-Buy (H2B) equity loan scheme. The housebuilders can choose to join the ...
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Diff in Diff: Why do we control for unit and time fixed effects instead of just treatment status and pre/post indicator?
In a multi-period DiD analysis, the usual specification is:
$$y_{it} = \alpha_i + \theta_t + \beta D_{it} + \epsilon_{it} $$
where $D_{it}$ is the interaction between ...
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Argument the coefficient of diff-in-diff after matching
I am trying to use the propensity matching score to match the control and treatment groups based on their characteristics (can be done by gmatch, psmatch2, tseffect match...)
However, after matching, ...
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Which covariates can I include in my fixed-effects regression?
I am doing a difference-in-difference analysis of an event that affected several states in the US. I am interested to understand the effects of this event on state-level unemployment rates. I have ...
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Ensuring the validity of estimates from fixed effects regression
I have some questions about interpreting the result from a two-way fixed effects regression.
I am studying the impact of a job-training program on employment. Data is at the level of US counties and ...
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Diff-in-diff with two control groups: compare parallel trends
Suppose in a diff-in-diff problem, I have two control groups, but just one can be used as comparison, so I want to check which of them provides a better comparison. My idea is to compare the parallel ...
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Short vs. long horizon event studies?
I am studying the impact of announcements by a Central Bank on a stock's returns. To measure these impacts, I employ an event study (where my event window is 10 days and my estimation window is 60 ...
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Two-way fixed effects with two treatments and interaction between both treatments
I am interested in estimating the effect of two different treatments (T1 and T2) and the interaction of the two (T1 x T2) in a two-way fixed effects event-study design. Both T1 and T2 have a "...
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Heterogeneous treatment effects with two post-treatment time and without never-treated groups
I am trying to evaluate a policy with staggered policy time (the policy was implemented in two different years), and there are no never-treated groups. The data (four-time period, highly unbalanced - ...
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Difference in Differences with panel data/repeated cross section with dummy
I have to do a public policy evaluation (on R) based on an article where the authors use a quarterly survey to study the effect of a parental leave reform in 2015(reducing the length of leave) on the ...
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Meaning of non-anticipation assumption in panel context
I am moving this discussion from this comment section to a full question.
Consider a binary policy $D_{it} \in \{0,1\}$ that is not randomly assigned to some units in period $t=\tau$. We have ...
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Discussing Difference-in-Difference Assumption of the treatment assigment
while reviewing some of the literature on DiD and Event Study designs, I come up with a general question, since DiD is by definition a quasi-experimental approach to determining causal effects when ...
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Positively correlated within subject residuals in diff-in-diff shows a deflated false positive error?
My question is regarding in the difference in difference model, I am trying to see the impact of serial correlation within subjects on the treatment effect inference.
In my simulation, I have two ...
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Heterogeneity of time invariant characteristic in event study model
I am trying to estimate the impact that the onset of a medical disease has on a number of outcomes, call them $O$. To do this, I am using an event study model with individual and time fixed effects...
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Why do we need Exogeneity of Treatment in a Diff in Diff
One of the assumptions of DiD I learnt is that the treatment must be random and unrelated to the outcome. I'm a little bit confused about why we need this assumption.
If I look at the typical picture ...
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Differences in Differences with Small Violations of Parallel Trends
I am interested (for no particular reason) in estimating a hypothetical Differences-in-Differences model with one period of treatment. However, we observe small non-linear violations of the parallel ...
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Intuition Behind Difference-in-Differences with Continuous Treatment?
It's very clear to me how a difference-in-difference model works when there is a binary treatment. If the model is $y_{i,t}=\beta_{0}+\beta_{1}P_{t}+\beta_{2}T_{i}+\beta_{3}(P_{t}*T_{t})+u_{i,t}$ ...
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Is program evaluation (DiD, RD) a structural estimation?
Consider program evaluation methods such as IV, Diff-in-Diff, and RD.
According to Haile (2021):
"Typically program evaluation requires more than descriptive analysis:
one must counterfactually ...
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Diff-in-diff parallel trends with a positive outcome
I am trying to test for parallel trends when using diff-in-diffs, where my outcome variable is nonnegative (basically a percentage -- the share of subjects with some property). I run into a simple-...
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How to define treatment & control groups properly?
I’m working on a project examining the effect of a 2016 cash transfer on fertility.
Who is eligible for the cash?
All families with:
2+ children, or
1 low-income or disabled child.
The data doesn’t ...
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Difference-in-difference robust to heterogeneous treatment effect - Gendron-Carrier et al. specification
I am trying to extend the results of Gendron-Carrier et al. (2022) article published in the American Economic Journal : Applied Economics which is about the effect of subway opening on pollution.
I ...
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Cross sectional survey - difference in difference campaign evaluation
I would like to use two cross sectional surveys to evaluate the impact of a media campaign on public opinions. The problem is how to identify the "untreated" at baseline? Technically ...
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Handling diff in diff with multiple treatments, but each treatment is applied once to differents groups
Say each year I observe the effect of a movie-level treatment on the reviews of 10 movies (1 treated movie and 9 non-treated movies) over two periods (pre and post treatment). Each year, the treatment ...
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Difference in differences with one post and two treatment variables
I want to test the following hypotheses with a difference in differences (DiD) OLS model: 1. The post grant effect on the dependent variable is stronger for patents with at least one rejection than ...
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Do anticipation effects almost always bias the DiD ATE or ATT towards a null result and increase standard errors?
I am trying to implement a difference in difference model.
Suppose that some treated units anticipate the treatment.
Then, that would mean that they respond to the treatment prior to the treatment ...
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Diff-in-diff treatment problem
I have a cuestion about a possible aplication of a diff in diff in labor economics.
I'm thinking for my master's thesis of comparing the effects of a reduction of the payroll tax in Argentina, which ...
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Difference-in differences survival models
I am in a setting where I'd like to estimate the average treatment effect on the treated (ATT) using a cox-proportional hazards model in a DID style setting. I'll adopt the setting of Mastrobuoni and ...
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DiD with 2 groups
I am thinking about a DID approach. Typical DID can be written as follows:
$$Y_i=\beta_0+\beta_1D_i+\beta_2T_i+\beta_3 T_i D_i+\epsilon_i$$
$Y_i$ is an outcome, $D_i$ is a binary treatment, and $T_i$ ...
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Testing method for the performance of R&D support program
Suppose that Government aims to initiate R&D support program to firms
The objective of the support program is to rise R&D expenditures and productivity.
I have the following data variables:
Q: ...
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Difference in difference papers that look at multiple cohorts at a point in time?
I'm trying to see if a CCT targeted at school age children can mitigate adverse impact of weather shocks faced in childhood on their wages in adulthood (at age 30 say) using a setting similar to Duflo,...
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Can I use difference in difference if some households in treatment group become part of control group?
I have data on households which can be eligible for a conditional cash transfer (CCT) if household income is below a threshold. The CCT is introduced in year t for eg. Now some households which have ...
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What should we do if we find the anticipation effect?
In the Difference-in-Differences estimator, one key assumption is the anticipation effect, meaning that the real event date maybe a couple of years before the real event year (yearly data). I am ...
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DAG for Difference in Difference Studies
I have been looking for DAGs to represent diff-in-diff research designs but did not come across any. How do you represent state/time fixed effects and time-varying effects on a DAG?
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What is the purpose of testing "additional effect" in "strict exogeneity" in Diff-in-Diff?
The strict exogeneity are different in using OLS and Difference-in-Differences (DiD) as pointed here.
From a recently published paper of Miller, 2021, in the Reviewing DID Assumption part (sorry I did ...
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What does no anticipation following Athey, 2021?
From a paper of Athey, 2021, Journal of Econometrics, I saw the assumption of no anticipation effect is Assumption 2:
For all units i, all time periods t , and for all adoption dates
$\alpha$ , such ...
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How to test anticipation effect in Diff-in-Diff following Borusyak, 2021?
In general, two most important assumptions that all Difference-in-Differences must satisfy are "no anticipation effects" and "parallel trend".
The parallel trend is tested by ...
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Should we test for an anticipation effect in difference-in-differences when a natural event occurs?
Normally, we test for anticipation effects as an assumption when using difference-in-differences. However, it seems that it is necessary for examining the impact of laws on firms' behaviour. For ...
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What does "inter alia" in "difference-indifference" testing?
today my paper get rejected due to this reason when I used the Difference-in-Difference as my methodology
In addition, it would need to address concerns about causal estimates
as there are a number ...
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How many leads we use for parallel trends testing in daily data (difference-in-differences)?
In a difference-in-differences setting, if we deal with yearly data, we normally test the parallel trends assumption for 3 or 4 years before the event dates. However, when dealing with daily data, how ...
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Are there any papers which used the event study methodology NOT in a financial market context?
I was advised to implement an event study in the context of air pollution levels after an event had happened. Now my problem is, that I can not really find any introductory literature (or papers), ...
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What are some important papers using difference-in-difference in economics?
I'm new to difference-in-difference method and wanted to familiarize myself with the literature. I'm familiar with Mostly Harmless Econometrics and the papers on DiD discussed in the book. I would ...
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In difference-in-difference method, should I code treatment exposure as 0 or missing for pre treatment rounds?
In my data, there are some pre-treatment rounds, and some post-treatment rounds. I use months of exposure to treatment in my analysis. So for post-treatment rounds, I have positive values for months ...
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How to explain the Difference-in-Difference for two groups two periods to undergraduate students?
I was asked to have a talk with some undergraduate students in an econometrics class regarding the standard Difference-in-Differences.
Even I understand what it is and I am quite familiar with it, but ...
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Missing values in difference-in-differences
To give a background of the problem: I'm performing a difference-in-differences analysis to estimate the effect of a treatment, say A. I have a panel data with 5 rounds and about 3000 observations in ...
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Reverse DiD: or using always treated as control
I would be interested also in the generalised case, but let's start with 2x2 to keep it simple.
Say you have two groups $i \in \{1,2\}$ and two time periods $t$ and $t-1$, as the classical DiD case. ...
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What shoud we do when the expected treatment overlaps control sample in DID?
In a generalized Difference-in-Differences in Dasgupta,2019 paper, he documented that
control countries did not have a leniency law introduced over 2 years
before to 5 years after the introduction of ...
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Joint significance test in a difference-in-differences setting
I ran the following difference-in-differences regression in software and have some questions about the interpretation of the resulting coefficients and their (joint) significance:
$$
P_{it} = \gamma_i ...
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Two-year difference-in-differences model design
Is there some literature about two-year difference-in-differences (DiD) models? Suppose a policy was implemented in 1982, but not strictly enforced among all people. Can I still estimate a DiD model ...
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In difference-in-differences approach, would it be possible to add a dummy variable indicating whether a data point belong to treatment group?
Since there is the possibility that there are some factors result in whether a data point belong to treatment group, I think we should add a dummy variable indicating whether a data point belong to ...
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Difference-in-Differences on State Sales Tax Rates
In an attempt to evaluate a potential U.S. National Sales tax rate, it was suggested on this forum before that I consider a difference-in-differences on state sales tax rates before and after they ...
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