Differences-in-differences estimation
7 important questions on Differences-in-differences estimation
Formula ATET when flexible OLS
Observed outcome in case flexible OLS:
Where does the differences-in-differences estimator look at?
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Formula DiD's estimator:
How can you test the parallel trend assumption?
- When many years are available, it is useful to plot the series of average outcomes for treatment and control groups and see whether trends are parallel and whether there is a sudden change just after reform for treatment group.
- If we have at least 3 observations over time, we can add state specific time trends.
What can also be a source of bias for the DiD's estimator?
How to check for compositional changes?
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