Finance - Comparisons of methods of causal inference - Difference-in-differences
10 important questions on Finance - Comparisons of methods of causal inference - Difference-in-differences
What is the difference in difference analysis?
When do you use difference-in-difference?
- Pre and post-event data is available
What is the Golden experiment?
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How does difference in difference work?
What is the parallel trend assumption?
The changes should not start before the treatment begins (post)
What is the parallel trend assumption for?
What is the regression of the parallel-trend assumption?
Y= B0+B1*2004*treat+B2*treat*2005 etc
What are fixed effect regressions?
We can control for time-invariant characteristics (keep things constant)
Solves omitted variables that are time sensitive
What is Beta 1+ Beta 2
What is Beta1 + Beta 3
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