16 Questions
What is needed to test the common trend assumption in Double Differences (DD)?
At least two pre-treatment periods
In a formal test for Common Trend in DD, what does Ygt represent?
Treatment group
Which variable is included in the formal test for Common Trend to capture the interaction between treatment and time post-treatment?
DD
What does the F-test in Common Trend testing aim to assess?
Whether pre-treatment trends are parallel
Which of the following is a requirement for a formal test of Common Trend in Double Differences analysis?
At least two time periods before treatment
What is the difference estimator used in Double Differences (DD)?
Ȳ t - Ȳ c
What is the main purpose of Double Differences (DD) analysis?
To estimate the change in the treatment group assuming no treatment was given
Why is it important for Double Differences (DD) to assume common trends between treatment and control groups?
To avoid bias in the estimation of treatment effects
What happens if a factor affects the treated and control group differently across time periods in a Double Differences (DD) analysis?
It violates the common trend assumption
What assumption is violated if ugt is correlated with T reatg × P ostt in a Double Differences (DD) analysis?
Common trend assumption
What are omitted variables in the context of natural experiments?
Events that occur between pre-intervention and post-intervention observations that can explain the results
Which assumption is commonly made in natural experiment designs to exclude omitted interactions?
Common trends assumption
What does 'mismeasurement' refer to in the context of natural experiments?
Changes in definitions or survey methods leading to inaccurate outcomes
How does selection impact the validity of a natural experiment?
It leads to a correlation between assignment and outcomes without treatment
What is attrition in the context of natural experiments?
Differential loss of respondents from treatment and comparison groups
How can the validity of a natural experiment be improved according to further evidence on comparability?
By examining the comparability of treatment and comparison groups
Test your knowledge on the common trend assumption in Asai–Koustas–Wright DD framework. Learn about the importance of having at least two pre-treatment periods to visually check for common trends.
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