Publication:
Treatment effect identification using alternative parallel assumptions

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dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorMora, Ricardo
dc.contributor.authorReggio, Iliana
dc.contributor.editorUniversidad Carlos III de Madrid. Departamento de Economía
dc.date.accessioned2013-04-04T14:24:23Z
dc.date.available2013-04-04T14:24:23Z
dc.date.issued2012-12
dc.date.modified2013-04-04
dc.description.abstractThe core assumption to identify the treatment effect in difference-in-differences estimators is the so-called Parallel Paths assumption, namely that the average change in outcome for the treated in the absence of treatment equals the average change in outcome for the non-treated. We define a family of alternative Parallel assumptions and show for a number of frequently used empirical specifications which parameters of the model identify the treatment effect under the alternative Parallel assumptions. We further propose a fully flexible model which has two desirable features not present in the usual econometric specifications implemented in applied research. First, it allows for flexible dynamics and for testing restrictions on these dynamics. Second, it does not impose equivalence between alternative Parallel assumptions. We illustrate the usefulness of our approach by revising the results of several recent papers in which the difference-in-differences technique has been applied.The core assumption to identify the treatment effect in difference-in-differences estimators is the so-called Parallel Paths assumption, namely that the average change in outcome for the treated in the absence of treatment equals the average change in outcome for the non-treated. We define a family of alternative Parallel assumptions and show for a number of frequently used empirical specifications which parameters of the model identify the treatment effect under the alternative Parallel assumptions. We further propose a fully flexible model which has two desirable features not present in the usual econometric specifications implemented in applied research. First, it allows for flexible dynamics and for testing restrictions on these dynamics. Second, it does not impose equivalence between alternative Parallel assumptions. We illustrate the usefulness of our approach by revising the results of several recent papers in which the difference-in-differences technique has been applied
dc.description.sponsorshipBoth authors acknowledge financial help from the Spanish government through grant ECO2012-31358
dc.format.mimetypeapplication/pdf
dc.format.mimetypetext/plain
dc.identifier.issn2340-5031
dc.identifier.repecwe1233
dc.identifier.urihttps://hdl.handle.net/10016/16065
dc.identifier.uxxiDT/0000000820
dc.language.isoeng
dc.relation.ispartofseriesUC3M Working papers. Economics
dc.relation.ispartofseries12-33
dc.relation.projectIDGobierno de España. ECO2012-31358
dc.rightsAtribución-NoComercial-SinDerivadas 3.0 España
dc.rights.accessRightsopen access
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.ecienciaEconomía
dc.subject.otherDifference-in-differences
dc.subject.otherParallel paths
dc.subject.otherTreatment effect
dc.titleTreatment effect identification using alternative parallel assumptions
dc.typeworking paper*
dc.type.hasVersionSMUR*
dspace.entity.typePublication
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