Journal
ECONOMETRICA
Volume 74, Issue 2, Pages 431-497Publisher
WILEY
DOI: 10.1111/j.1468-0262.2006.00668.x
Keywords
difference-in-differences; identification; nonlinear models; heterogenous treatment effects; nonparametric estimation
Ask authors/readers for more resources
This paper develops a generalization of the widely used difference-in-differences method for evaluating the effects of policy changes. We propose a model that allows the control and treatment groups to have different average benefits from the treatment. The assumptions of the proposed model are invariant to the scaling of the Outcome. We provide conditions under which the model is nonparametrically identified and propose an estimator that can be applied using either repeated cross section or panel data. Our approach provides an estimate of the entire counterfactual distribution of outcomes that would have been experienced by the treatment group in the absence of the treatment and likewise for the untreated group in the presence of the treatment. Thus, it enables the evaluation of policy interventions according to criteria such as a mean-variance trade-off. We also propose methods for inference, showing that our estimator for the average treatment effect is root-N consistent and asymptotically normal. We consider extensions to allow for covariates, discrete dependent variables, and multiple groups and time periods.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available