arXiv 4 Sep 2019 · Econometrics · publishedJournal of Applied Econometrics (2023) · 15 citations (OpenAlex)
arXiv:1909.01782 · PDF · DOI · OpenAlex · Extracted main text
We analyze the challenges for inference in difference-in-differences (DID) when there is spatial correlation. We present novel theoretical insights and empirical evidence on the settings in which ignoring spatial correlation should lead to more or less distortions in DID applications. We show that details such as the time frame used in the estimation, the choice of the treated and control groups, and the choice of the estimator, are key determinants of distortions due to spatial correlation. We also analyze the feasibility and trade-offs involved in a series of alternatives to take spatial correlation into account. Given that, we provide relevant recommendations for applied researchers on how to mitigate and assess the possibility of inference distortions due to spatial correlation.
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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.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Barrios, T., Diamond, R., Imbens, G. W., and Kolesar, M (2012) Clustering, spatial correlations, and randomization inference | 0.843 | 4 | 3 | 75% |
| 2 | Bertrand, M., Duflo, E., and Mullainathan, S (2004) How much should we trust differences-in-differences estimates? | 0.843 | 3 | 3 | 100% |
| 3 | Pesaran, M. H (2006) Estimation and inference in large heterogeneous panels with a multifactor error structure | 0.737 | 5 | 3 | 40% |
| 4 | Müller, U. K. and Watson, M. W (2021) Spatial Correlation Robust Inference | 0.644 | 5 | 2 | 40% |
| 5 | Abadie, A., Athey, S., Imbens, G. W., and Wooldridge, J (2017) When should you adjust standard errors for clustering? | 0.644 | 5 | 2 | 40% |
| 6 | de Chaisemartin, C. and D'Haultfoeuille, X (2018) Two-way fixed effects estimators with heterogeneous treatment effects | 0.644 | 3 | 2 | 67% |
| 7 | Conley, T. G. and Taber, C. R (2011) Inference with Difference in Differences with a Small Number of Policy Changes | 0.644 | 2 | 2 | 100% |
| 8 | Ferman, B. and Pinto, C (2019) Inference in differences-in-differences with few treated groups and heteroskedasticity self | 0.644 | 2 | 2 | 100% |
| 9 | Roth, J (2022) Pre-test with caution: Event-study estimates after testing for parallel trends | 0.585 | 10 | 2 | 30% |
| 10 | Müller, U. K. and Watson, M. W (2022) Spatial Correlation Robust Inference in Linear Regression and Panel Models | 0.575 | 7 | 2 | 29% |
Showing the top 10 of 53 scored citations.
arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.
| Citing paper | Intensity | Mentions | Sections | |
|---|---|---|---|---|
| 1 | Inference in Difference-in-Differences with Few Treated Units and Spatial Correlation | 0.737 | 3 | 3 |
| 2 | ASSESSING INFERENCE METHODS | 0.405 | 1 | 1 |
| 3 | Imputation of Counterfactual Outcomes when the Errors are Predictable | 0.405 | 1 | 1 |
| 4 | ON THE USE OF DESIGN-BASED SIMULATIONS | 0.405 | 1 | 1 |