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| Natura: | Preprint |
| Pubblicazione: |
2024
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| Soggetti: | |
| Accesso online: | https://arxiv.org/abs/2401.12309 |
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| _version_ | 1866914259457277952 |
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| author | Roth, Jonathan |
| author_facet | Roth, Jonathan |
| contents | This note discusses the interpretation of event-study plots produced by recent difference-in-differences methods. I show that even when specialized to the case of non-staggered treatment timing, the default plots produced by software for several of the most popular recent methods do not match those of traditional two-way fixed effects (TWFE) event-studies. The plots produced by the new methods may show a kink or jump at the time of treatment even when the TWFE event-study shows a straight line. This difference stems from the fact that the new methods construct the pre-treatment coefficients asymmetrically from the post-treatment coefficients. As a result, visual heuristics for evaluating violations of parallel trends using TWFE event-study plots should not be immediately applied to those from these methods. I conclude with practical recommendations for constructing and interpreting event-study plots when using these methods. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2401_12309 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Interpreting Event-Studies from Recent Difference-in-Differences Methods Roth, Jonathan Econometrics Methodology This note discusses the interpretation of event-study plots produced by recent difference-in-differences methods. I show that even when specialized to the case of non-staggered treatment timing, the default plots produced by software for several of the most popular recent methods do not match those of traditional two-way fixed effects (TWFE) event-studies. The plots produced by the new methods may show a kink or jump at the time of treatment even when the TWFE event-study shows a straight line. This difference stems from the fact that the new methods construct the pre-treatment coefficients asymmetrically from the post-treatment coefficients. As a result, visual heuristics for evaluating violations of parallel trends using TWFE event-study plots should not be immediately applied to those from these methods. I conclude with practical recommendations for constructing and interpreting event-study plots when using these methods. |
| title | Interpreting Event-Studies from Recent Difference-in-Differences Methods |
| topic | Econometrics Methodology |
| url | https://arxiv.org/abs/2401.12309 |