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DIFFERENCE-IN-DIFFERENCES ESTIMATION Jeff Wooldridge ...

DIFFERENCE-IN-DIFFERENCES ESTIMATIONJeff WooldridgeMichigan State UniversityLABOUR Lectures, EIEFO ctober 18-19, 20111. The Basic Methodology2. How Should We View Uncertainty in DD Settings?3. ESTIMATION with a Small Number of Groups4. Multiple Groups and Time Periods5. Individual-Level Panel Data6. Semiparametric and Nonparametric Basic Methodology In the basic setting, outcomes are observed for two groups for twotime periods. One of the groups is exposed to a treatment in the secondperiod but not in the first period. The second group is not exposed tothe treatment during either period.

difference-in-difference-in-differences (DDD) estimate. ∙Can add covariates to either the DD or DDD analysis to (hopefully) control for compositional changes. Even if the intervention is independent of observed covariates, adding those covariates may improve precision of the DD or DDD estimate. 6

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