Journal ArticleDOI
Revisiting Event Study Designs
Kirill Borusyak,Xavier Jaravel +1 more
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TLDR
In this paper, the authors show that in the presence of unit and time fixed effects, it is impossible to identify the linear component of the path of pre-trends and dynamic treatment effects.Abstract:
A broad empirical literature uses "event study" research designs for treatment effect estimation, a setting in which all units in the panel receive treatment but at random times. We make four novel points about identification and estimation of causal effects in this setting and show their practical relevance. First, we show that in the presence of unit and time fixed effects, it is impossible to identify the linear component of the path of pre-trends and dynamic treatment effects. Second, we propose graphical and statistical tests for pre-trends. Third, we consider commonly-used "static" regressions, with a treatment dummy instead of a full set of leads and lags around the treatment event, and we show that OLS does not recover a weighted average of the treatment effects: long-term effects are weighted negatively, and we introduce a different estimator that is robust to this issue. Fourth, we show that equivalent problems of under-identification and negative weighting arise in difference-in-differences settings when the control group is allowed to be on a different time trend or in the presence of unit-specific time trends. Finally, we show the practical relevance of these issues in a series of examples from the existing literature, with a focus on the estimation of the marginal propensity to consume out of tax rebates.read more
Citations
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Difference-in-Differences with multiple time periods
TL;DR: It is shown that a family of causal effect parameters are identified in staggered DiD setups, even if differences in observed characteristics create non-parallel outcome dynamics between groups, and the asymptotic properties of the proposed estimators are established.
Posted Content
Estimating Dynamic Treatment Effects in Event Studies with Heterogeneous Treatment Effects
Sarah Abraham,Liyang Sun +1 more
TL;DR: In this article, the authors proposed an alternative estimator that is free of contamination, and illustrate the relative shortcomings of two-way fixed effects regressions with leads and lags through an empirical application.
Journal ArticleDOI
How Much Should We Trust Staggered Difference-In-Differences Estimates?
TL;DR: The authors found that correcting for the bias induced by the staggered nature of policy adoption frequently impacts the estimated effect from standard difference-in-difference studies, in many cases, the reported effects in prior research become indistinguishable from zero.
Journal ArticleDOI
On the Use of Two-Way Fixed Effects Regression Models for Causal Inference with Panel Data
Kosuke Imai,In Song Kim +1 more
TL;DR: It is proved that the multi-period difference-in-differences estimator is equivalent to the weighted 2FE estimator with some observations having negative weights, implying that in contrast to the popular belief, the 2FE estimation does not represent a design-based, nonparametric estimation strategy for causal inference.
Journal ArticleDOI
Estimating worldwide effects of non-pharmaceutical interventions on COVID-19 incidence and population mobility patterns using a multiple-event study.
TL;DR: In this article, the average dynamic effect of each intervention on the incidence of COVID-19 and on people's whereabouts was estimated by developing a statistical model that accounts for the contemporaneous adoption of multiple interventions.
References
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Journal ArticleDOI
Comparative Politics and the Synthetic Control Method
TL;DR: In this paper, the authors discuss the use of the synthetic control method (Abadie and Gardeazabal, 2003; Abadie, Diamond, and Hainmueller, 2010) as a way to bridge the quantitative/qualitative divide in comparative politics.
Journal ArticleDOI
Comparative Politics and the Synthetic Control Method
TL;DR: In this paper, the authors discuss the use of the synthetic control method as a way to bridge the quantitative/qualitative divide in comparative politics, and illustrate the main ideas behind the Synthetic Control method by estimating the economic impact of the 1990 German reunification on West Germany.
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Consumer Spending and the Economic Stimulus Payments of 2008
TL;DR: The authors measured the change in household spending caused by receipt of the economic stimulus payments of 2008, using questions added to the Consumer Expenditure Survey and variation from the ran-time survey.
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Long Run Impacts of Childhood Access to the Safety Net
TL;DR: In this article, the authors examined the impact of a positive and policy-driven change in economic resources available in utero and during childhood, and found that access to food stamps in childhood leads to a significant reduction in the incidence of "metabolic syndrome" (obesity, high blood pressure, and diabetes) and an increase in economic selfsufficiency.
ReportDOI
Estimating the labor market impact of voluntary military service using social security data on military applicants
TL;DR: The authors used matching methods and regression to reduce selection bias in estimates of the effects of militaiy service on the earnings of veterans and found that military service is associated with higher employment rates for veterans after service.