• Corpus ID: 250526167

Parallel Trends and Dynamic Choices

@inproceedings{Marx2022ParallelTA,
  title={Parallel Trends and Dynamic Choices},
  author={Philip Marx and Elie Tamer and Xun Tang},
  year={2022}
}
Difference-in-differences (or DiD) is a commonly used method for estimating treatment effects, and parallel trends is its main identifying assumption: the trend in mean untreated outcomes must be independent of the observed treatment status. In observational settings, treatment is often a dynamic choice made or influenced by rational actors, such as policy-makers, firms, or individual agents. This paper relates the parallel trends assumption to economic models of dynamic choice, which allow for… 

Selection and Parallel Trends

One of the perceived advantages of difference-in-differences (DiD) methods is that they do not explicitly restrict how units select into treatment. However, when justifying DiD, researchers often argue

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