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Treatment Effects in Interactive Fixed Effects Models with a Small Number of Time Periods

Brantly Callaway, Sonia Karami

arXiv 29 Jun 2020 · Econometrics · publishedJournal of Econometrics (2022) · 31 citations (OpenAlex)

arXiv:2006.15780 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper considers identifying and estimating the Average Treatment Effect on the Treated (ATT) when untreated potential outcomes are generated by an interactive fixed effects model. That is, in addition to time-period and individual fixed effects, we consider the case where there is an unobserved time invariant variable whose effect on untreated potential outcomes may change over time and which can therefore cause outcomes (in the absence of participating in the treatment) to follow different paths for the treated group relative to the untreated group. The models that we consider in this paper generalize many commonly used models in the treatment effects literature including difference in differences and individual-specific linear trend models. Unlike the majority of the literature on interactive fixed effects models, we do not require the number of time periods to go to infinity to consistently estimate the ATT. Our main identification result relies on having the effect of some time invariant covariate (e.g., race or sex) not vary over time. Using our approach, we show that the ATT can be identified with as few as three time periods and with panel or repeated cross sections data.

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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
1Callaway, Brantly, Sant'Anna, Pedro HC (2021) Difference-in-differences with multiple time periods self1.00063100%
2Ahn, Seung C, Lee, Young H, Schmidt, Peter (2013) Panel data models with multiple time-varying individual effects0.92843100%
3Abadie, Alberto (2005) Semiparametric difference-in-differences estimators0.73732100%
4Arkhangelsky, Dmitry, Athey, Susan, Hirshberg, David A, Imbens, Guid… (2021) Synthetic difference-in-differences0.64422100%
5Gardner, John (2020) Identification and estimation of average causal effects when treatment status is ignorable within unobserved strata0.64422100%
6Gobillon, Laurent, Magnac, Thierry (2016) Regional policy evaluation: Interactive fixed effects and synthetic controls0.64422100%
7Goodman-Bacon, Andrew (2021) Difference-in-differences with variation in treatment timing0.64422100%
8Heckman, James, Hotz, V Joseph (1989) Choosing among alternative nonexperimental methods for estimating the impact of social programs: The case of manpower training0.64422100%
9Holtz-Eakin, Douglas, Newey, Whitney, Rosen, Harvey S (1988) Estimating vector autoregressions with panel data0.64422100%
10Juodis, Vasilis (2020) A linear estimator for factor-augmented fixed-T panels with endogenous regressors0.64422100%

Showing the top 10 of 66 scored citations.

Cited by, within the corpus

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1Treatment Effects in Staggered Adoption Designs with Non-Parallel Trends1.000213
2Identification and estimation of treatment effects in a linear factor model with fixed number of time periods0.81142
3Specification testing with grouped fixed effects0.64422
4Finitely Heterogeneous Treatment Effect in Event-study0.51121
5Causal Inference Using Factor Models0.51121
6A Consistent ICM-based $^2$ Specification Test0.40511
7Difference-in-differences with as few as two cross-sectional units – A new perspective to the democracy–growth debate0.40511
8Difference-in-Differences Designs: A Practitioner's Guide0.40511
9Estimating Treatment Effects in Panel Data Without Parallel Trends0.40511