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Semiparametric Difference-in-Differences with Potentially Many Control Variables

Neng-Chieh Chang

arXiv 27 Dec 2018 · General Economics

arXiv:1812.10846 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper discusses difference-in-differences (DID) estimation when there exist many control variables, potentially more than the sample size. In this case, traditional estimation methods, which require a limited number of variables, do not work. One may consider using statistical or machine learning (ML) methods. However, by the well-known theory of inference of ML methods proposed in Chernozhukov et al. (2018), directly applying ML methods to the conventional semiparametric DID estimators will cause significant bias and make these DID estimators fail to be sqrt{N}-consistent. This article proposes three new DID estimators for three different data structures, which are able to shrink the bias and achieve sqrt{N}-consistency and asymptotic normality with mean zero when applying ML methods. This leads to straightforward inferential procedures. In addition, I show that these new estimators have the small bias property (SBP), meaning that their bias will converge to zero faster than the pointwise bias of the nonparametric estimator on which it is based.

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1abadie2005semiparametric APACrefauthors Abadie, A. APACrefauthors \ (2005) 20051.000205100%
2chernozhukov2018double APACrefauthors Chernozhukov, V. , Chetverikov… (2018) 20181.000155100%
3belloni2012sparse APACrefauthors Belloni, A. , Chen, D. , Chernozhuk… (2012) 20121.00053100%
4newey1994large APACrefauthors Newey, W K. \ McFadden, D. APACrefauth… (1994) 19941.00053100%
5sequeira2016corruption APACrefauthors Sequeira, S. APACrefauthors \ (2016) 20160.874132100%
6newey2004twicing APACrefauthors Newey, W K. , Hsieh, F. \ Robins, J… (2004) 20040.73732100%
7newey1998undersmoothing APACrefauthors Newey, W K. , Hsieh, F. \ Rob… (1998) 19980.64422100%
8van2008high APACrefauthors Van de Geer, S. APACrefauthors \ (2008) 20080.64422100%
9chernozhukov2016locally APACrefauthors Chernozhukov, V. , Escanciano… 20160.51121100%
10Belloni14restud APACrefauthors Belloni, A. , Chernozhukov, V. \ Hans… (2014) 20140.40511100%

Showing the top 10 of 25 scored citations.