arXiv 23 Mar 2021 · Econometrics · 1 citations (OpenAlex)
arXiv:2103.12374 · PDF · DOI · OpenAlex · Extracted main text
This paper develops numerical and causal interpretations of two-way fixed effects (TWFE) regressions, allowing for general scalar treatments with non-staggered designs and time-varying covariates. Building on the numerical equivalence between TWFE and pooled first-difference regressions, I decompose the TWFE coefficient into a weighted average of first-difference coefficients across varying horizons, clarifying contributions of short-run versus long-run changes. Causal interpretation of the TWFE coefficient requires common trends assumptions for all time horizons, conditional on changes, not levels, of time-varying covariates. I develop diagnostic procedures to assess this assumption's plausibility across different horizons, extending beyond recent literature's focus on binary, staggered treatments.
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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 | de Chaisemartin and D'Haultfuille (2020) Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects | 0.928 | 10 | 4 | 80% |
| 2 | Borusyak, Jaravel and Spiess (2024) Revisiting Event-Study Designs: Robust and Efficient Estimation | 0.928 | 4 | 3 | 100% |
| 3 | Callaway and Sant'Anna (2021) Difference-in-differences with multiple time periods | 0.928 | 4 | 3 | 100% |
| 4 | Wooldridge (2025) Two-way fixed effects, the two-way mundlak regression, and difference-in-differences estimators: JM Wooldridre | 0.811 | 4 | 2 | 100% |
| 5 | Goodman-Bacon (2021) Difference-in-differences with variation in treatment timing | 0.773 | 13 | 4 | 46% |
| 6 | Li and Strezhnev (2024) A Guide to Dynamic Difference-in-Differences Regressions for Political Scientists | 0.737 | 4 | 3 | 50% |
| 7 | Callaway, Goodman-Bacon and Sant'Anna (2024) Difference-in-differences with a continuous treatment | 0.737 | 3 | 2 | 100% |
| 8 | Han and Lee (2017) Efficient Estimation of Linear Panel Data Models with Sample Selection and Fixed Effects | 0.644 | 2 | 2 | 100% |
| 9 | de Chaisemartin and D'Haultfuille (2024) Difference-in-differences estimators of intertemporal treatment effects | 0.644 | 2 | 2 | 100% |
| 10 | de Chaisemartin, d'Haultfuille, Pasquier and Vazquez-Bare (2022) Difference-in-differences estimators for treatments continuously distributed at every period | 0.644 | 2 | 2 | 100% |
Showing the top 10 of 33 scored citations.