Susan Athey and Guido Imbens generalized this technique to scenarios where groups can respond to differently to the same policy.
Susan Athey and Guido Imbens generalized this technique to scenarios where groups can respond to differently to the same policy. Marianne Bertrand and others examined studies that used it and found OLS estimates of the standard errors were misleadingly precise when serial correlation was an issue. It can be treated as fixed-effects estimation with aggregate data. A common problem with this technique is with bias that results from participation being based on outcomes prior to the intervention, a phenomenon known as the Ashenfelter dip. (*) Studies using it frequently rely on laws changing in some states but not others, and then comparing the change in the trends to estimate the effect of the treatment free of state- or time-omitted variable bias. For 10 points, name this econometric technique that compares the change in a treated sample over time to the change in a control sample.
Susan Athey and Guido Imbens generalized this technique to scenarios where groups can respond to differently to the same policy.
differences-in-differences [or diff-in-diff; or DID; or untreated control group design with independent prettest and posttest samples; prompt on "fixed-effects"]