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Difference-in-differences (DiD) is one of the most popular approaches for empirical research in economics, political science, and beyond. Identification in these models is based on the conditional parallel trends assumption: In the absence…

Econometrics · Economics 2025-10-13 Philipp Bach , Sven Klaassen , Jannis Kueck , Mara Mattes , Martin Spindler

The difference-in-differences (DID) research design is a key identification strategy which allows researchers to estimate causal effects under the parallel trends assumption. While the parallel trends assumption is counterfactual and cannot…

Methodology · Statistics 2026-05-12 Jonas M. Mikhaeil , Christopher Harshaw

We consider Bayes and Empirical Bayes (EB) approaches for dealing with violations of parallel trends. In the Bayes approach, the researcher specifies a prior over both the pre-treatment violations of parallel trends $\delta_{pre}$ and the…

Econometrics · Economics 2024-04-19 Soonwoo Kwon , Jonathan Roth

Difference-in-differences (DiD) is the most popular observational causal inference method in health policy, employed to evaluate the real-world impact of policies and programs. To estimate treatment effects, DiD relies on the "parallel…

Applications · Statistics 2024-08-09 Shuo Feng , Ishani Ganguli , Youjin Lee , John Poe , Andrew Ryan , Alyssa Bilinski

Two key identifying assumptions used to justify difference-in-differences are parallel trends and no anticipation, yet both may fail in practice. I propose a class of assumptions on anticipation and derive closed-form, sharp bounds on the…

Econometrics · Economics 2026-03-03 Gianna Fenaroli

Difference-in-differences (DiD) identification relies mainly on a parallel trends assumption about untreated potential outcomes. Researchers often relax this assumption by assuming conditional parallel trends within units with the same…

Methodology · Statistics 2026-05-05 Daniela Rodrigues , Laura A. Hatfield

Difference-in-differences (DID) is popular because it can allow for unmeasured confounding when the key assumption of parallel trends holds. However, there exists little guidance on how to decide a priori whether this assumption is…

Methodology · Statistics 2025-05-07 Audrey Renson , Oliver Dukes , Zach Shahn

Recently, there has been a surge in methodological development for the difference-in-differences (DiD) approach to evaluate causal effects. Standard methods in the literature rely on the parallel trends assumption to identify the average…

Methodology · Statistics 2023-10-17 Pan Zhao , Yifan Cui

Quasi-experimental causal inference methods have become central in empirical operations management for guiding managerial decisions. Among these, empiricists utilize the Difference-in-Differences (DiD) estimator, which relies on the…

Methodology · Statistics 2026-05-13 Mingxuan Ge , Dae Woong Ham

Popular empirical strategies for policy evaluation in the panel data literature -- including difference-in-differences (DID), synthetic control (SC) methods, and their variants -- rely on key identifying assumptions that can be expressed…

Econometrics · Economics 2025-11-11 Yiqi Liu

Policymakers and researchers often seek to understand how a policy differentially affects a population and the pathways driving this heterogeneity. For example, when studying an excise tax on sweetened beverages, researchers might assess…

Methodology · Statistics 2026-01-06 Gary Hettinger , Youjin Lee , Nandita Mitra

This paper discusses a practical approach that combines synthetic control with triple difference to address violations of the parallel trends assumption. By transforming triple difference into a DID structure, we can apply synthetic control…

Econometrics · Economics 2024-09-24 Castiel Chen Zhuang

This paper considers identification and estimation of causal effect parameters from participating in a binary treatment in a difference in differences (DID) setup when the parallel trends assumption holds after conditioning on observed…

Econometrics · Economics 2024-06-25 Carolina Caetano , Brantly Callaway , Stroud Payne , Hugo Sant'Anna Rodrigues

Causal inference relies on the untestable assumption of no unmeasured confounding. Sensitivity analysis can be used to quantify the impact of unmeasured confounding on causal estimates. Among sensitivity analysis methods proposed in the…

Methodology · Statistics 2026-03-12 Yushu Zou , Liangyuan Hu , Amanda Ricciuto , Mark Deneau , Kuan Liu

Under what circumstances is it a threat to the parallel trends assumption required for Difference in Differences (DiD) studies if treatment decisions are based on past values of the outcome? We explore via simulation studies whether…

Methodology · Statistics 2022-08-02 Zach Shahn

Difference-in-differences is one of the most used identification strategies in empirical work in economics. This chapter reviews a number of important, recent developments related to difference-in-differences. First, this chapter reviews…

Econometrics · Economics 2022-08-02 Brantly Callaway

Researchers commonly use difference-in-differences (DiD) designs to evaluate public policy interventions. While methods exist for estimating effects in the context of binary interventions, policies often result in varied exposures across…

Methodology · Statistics 2025-02-07 Gary Hettinger , Youjin Lee , Nandita Mitra

Difference-in-differences is a popular method for observational health policy evaluation. It relies on a causal assumption that in the absence of intervention, treatment groups' outcomes would have evolved in parallel to those of comparison…

Methodology · Statistics 2026-02-09 Alyssa Bilinski , Laura A. Hatfield

Applied analysts often use the differences-in-differences (DID) method to estimate the causal effect of policy interventions with observational data. The method is widely used, as the required before and after comparison of a treated and…

Applications · Statistics 2019-02-04 Luke J. Keele , Dylan S. Small , Jesse Y. Hsu , Colin B. Fogarty

The common practice in difference-in-difference (DiD) designs is to check for parallel trends prior to treatment assignment, yet typical estimation and inference does not account for the fact that this test has occurred. I analyze the…

Econometrics · Economics 2018-05-03 Jonathan Roth
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