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Differences in differences and panel data

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Frame of Image ctice). The content of this presentation reflects the views of the authors and not necessarily those of the World Bank.
D
Structure of this session
1 When do we use Differences-inDifferences? (Diff-in-Diff or DD) 2 Estimation strategy: 3 ways to look at DD
3 Examples: o Extension of education services (Indonesia) o Water for life (Argentina)
1
When do we use DD?
We can’t always randomize
E.g. Estimating the impact of a “past” program
As always, we need to identify
o o which is the group affected by the policy change (“treatment”), and which is the group that is not affected (“comparison”)
We can try to find a “natural experiment” that allows us to identify the impact of a policy
o o o E.g. An unexpected change in policy E.g. A policy that only affects 16 year-olds but not 15 year-olds In general, exploit variation of policies in time and space
The quality of the comparison group determines the quality of the evaluation.
2
3 ways to looks at DD
In a “Box” Graphically
In a Regression
The “box”
Group affected by the policy change (treatment)
Group that is not affected by the policy change (comparison)
After the program start Before the program start
Y1 | Di=1 Y0 | Di=1 (Y̅ 1|D=1)-(Y̅0|D=1)
Y1 | Di=0 Y0 | Di=0 (Y̅ 1|D=0)-(Y̅0|D=0)
Difference
DD=[(Y̅ 1|D=1)-(Y̅0|D=1)] - [(Y̅ 1|D=0)-(Y̅0|D=0)]
Graphically
Outcome Variable
Comparison group
Y0 | Di=0
Treatment group
Y1 | Di=0 Y1 | Di=1
Estimated ATE
Y0 | Di=1
t=0
t=1
Time
DD=[(Y̅ 1|D=1)-(Y̅0|D=1)] - [(Y̅ 1|D=0)-(Y̅0|D=0)]
Regression


Full Text
Title Differences in differences and panel data
Similar Titles
Material Type Proceedings
Author(English)

Beath, Andrew; Trias, Julieta

Publisher

[Washington, DC]:The World Bank

Date 2012
Event

The Regional Impact Evaluation Workshop

Series Title; No Technical Track Session
Pages 47
Language English
File Type Documents
Original Format pdf
Subject Official Aid < Others
Holding KDI; KDI School

Resources

  • Icon of pdf  Causal inference Beath, Andrew; Trias, Julieta / 2012 / [Washington, DC] : The World Bank

  • Icon of pdf  Randomized trials Beath, Andrew; Trias, Julieta / 2012 / [Washington, DC] : The World Bank

  • Icon of pdf  Regression discontinuity Beath, Andrew; Trias, Julieta / 2012 / [Washington, DC] : The World Bank

  • Icon of pdf  Matching techniques Beath, Andrew; Trias, Julieta / 2012 / [Washington, DC] : The World Bank