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Simple Diagnostics for Two-Way Fixed Effects

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arxiv 2103.13229 v1 pith:56PMN2MG submitted 2021-03-24 econ.GN q-fin.EC

Pamela Jakiela This is my paper · ORCID
classification econ.GNq-fin.EC
keywords effectsdiagnosticsdifferentfixedsimpletreatmenttwo-waywhen
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Difference-in-differences estimation is a widely used method of program evaluation. When treatment is implemented in different places at different times, researchers often use two-way fixed effects to control for location-specific and period-specific shocks. Such estimates can be severely biased when treatment effects change over time within treated units. I review the sources of this bias and propose several simple diagnostics for assessing its likely severity. I illustrate these tools through a case study of free primary education in Sub-Saharan Africa.

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Cited by 1 Pith paper

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  1. Treatment Effect Estimators as Weighted Outcomes

    econ.EM 2024-11 accept novelty 7.0 of 10

    A general framework derives exact outcome weights for double machine learning and generalized random forest estimators, showing that standard implementations are only scale-normalized rather than fully-normalized.

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