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Difference-in-Differences Estimation with Spatial Spillovers

Kyle Butts

arXiv 8 May 2021 · Econometrics · 47 citations (OpenAlex)

arXiv:2105.03737 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Empirical work often uses treatment assigned following geographic boundaries. When the effects of treatment cross over borders, classical difference-in-differences estimation produces biased estimates for the average treatment effect. In this paper, I introduce a potential outcomes framework to model spillover effects and decompose the estimate's bias in two parts: (1) the control group no longer identifies the counterfactual trend because their outcomes are affected by treatment and (2) changes in treated units' outcomes reflect the effect of their own treatment status and the effect from the treatment status of 'close' units. I propose conditions for non-parametric identification that can remove both sources of bias and semi-parametrically estimate the spillover effects themselves including in settings with staggered treatment timing. To highlight the importance of spillover effects, I revisit analyses of three place-based interventions.

Citation extraction

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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
1Butts (2021) Difference-in-Differences with Geocoded Microdata self1.00053100%
2Gardner (2021) Two-Stage Difference-in-Differences0.9507386%
3Borusyak, Jaravel, and Spiess (2021) Revisiting Event Study Designs: Robust and Efficient Estimation0.92843100%
4Kline and Moretti (2014) Local Economic Development, Agglomeration Economies, and the Big Push: 100 Years of Evidence from the Tennessee Valley Authority0.87482100%
5Sävje, Aronow, and Hudgens (2021) Average treatment effects in the presence of unknown interference0.81142100%
6Vazquez-Bare (2022) Identification and estimation of spillover effects in randomized experiments0.81142100%
7Bailey and Goodman-Bacon (2015) The War on Poverty's Experiment in Public Medicine: Community Health Centers and the Mortality of Older Americans0.7375340%
8Neumark and Kolko (2010) Do enterprise zones create jobs? Evidence from California’s enterprise zone program0.73732100%
9Busso, Gregory, and Kline (2013) Assessing the Incidence and Efficiency of a Prominent Place Based Policy0.64422100%
10Clarke (2017) Estimating Difference-in-Differences in the Presence of Spillovers0.64422100%

Showing the top 10 of 41 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1A Unified Framework for Spatial and Temporal Treatment Effect Boundaries: Theory and Identification0.64422
2Difference-in-Differences in the Presence of Unknown Interference0.64422
3Three’s a crowd: Identification challenges in the triple difference model with spillover effects0.64422
4Difference-in-Differences with Geocoded Microdata0.51121
5The causal interpretation of panel vector autoregressions0.51121
6Environmental Policy and Firm Performance in Europe: A Difference-in-Differences Approach with Spillovers0.51121
7What's Trending in Difference-in-Differences? A Synthesis of the Recent Econometrics Literature0.40511
8Regression Discontinuity Design with Spillovers0.40511
9Causal Identification under Interference: The Role of Treatment Assignment Independence0.40511
10MSE-Optimal Difference-in-Differences Estimator0.40511