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Difference-in-Differences with a Continuous Treatment

Brantly Callaway, Andrew Goodman-Bacon, Pedro H. C. Sant'Anna

arXiv 6 Jul 2021 · Econometrics · 235 citations (OpenAlex)

arXiv:2107.02637 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper analyzes difference-in-differences designs with a continuous treatment. We show that treatment effect on the treated-type parameters can be identified under a generalized parallel trends assumption that is similar to the binary treatment setup. However, interpreting differences in these parameters across different values of the treatment can be particularly challenging due to selection bias that is not ruled out by the parallel trends assumption. We discuss alternative, typically stronger, assumptions that alleviate these challenges. We also provide a variety of treatment effect decomposition results, highlighting that parameters associated with popular linear two-way fixed-effects specifications can be hard to interpret, even when there are only two time periods. We introduce alternative estimation procedures that do not suffer from these drawbacks and show in an application that they can lead to different conclusions.

Citation extraction

32
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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
1Acemoglu, Daron, Finkelstein, Amy (2008) Input and technology choices in regulated industries: Evidence from the health care sector1.00094100%
2Chen, Xiaohong, Christensen, Timothy, Kankanala, Sid (2025) Adaptive estimation and uniform confidence bands for nonparametric structural functions and elasticities0.9507486%
3D'Haultfoeuille, Xavier (2020) Two-way fixed effects estimators with heterogeneous treatment effects0.92844100%
4Fricke, Hans (2017) Identification based on difference-in-differences approaches with multiple treatments0.81142100%
5Callaway, Brantly, Sant'Anna, Pedro HC (2021) Difference-in-differences with multiple time periods self0.7375340%
6Angrist, Joshua D, Imbens, Guido W (1995) Two-stage least squares estimation of average causal effects in models with variable treatment intensity0.73732100%
7Ai, Chunrong, Chen, Xiaohong (2007) Estimation of possibly misspecified semiparametric conditional moment restriction models with different conditioning variables0.64422100%
8Angrist, Joshua D, Pischke, Jorn-Steffen (2008) Mostly Harmless Econometrics: An Empiricist's Companion0.64422100%
9Blandhol, Christine, Bonney, John, Mogstad, Magne, Torgovitsky, Alex… (2025) When is TSLS actually LATE?0.64422100%
10Goodman-Bacon, Andrew (2021) Difference-in-differences with variation in treatment timing self0.64422100%

Showing the top 10 of 32 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
1Continuous difference-in-differences with double/debiased machine learning1.000113
22cmDoes regional variation in wage levels identify the effects of a national minimum wage?1.00053
3The causal interpretation of panel vector autoregressions0.87452
4Control VAR: a counterfactual based approach to inference in macroeconomics0.84333
5What Do We Get from Two-Way Fixed Effects Regressions? Implications from Numerical Equivalence0.73732
6Triple Difference Designs with Heterogeneous Treatment Effects0.73732
7Difference-in-Differences Estimators When No Unit Remains Untreated0.69351
8Difference-in-Differences Designs: A Practitioner's Guide0.69351
9Two-Way Fixed Effects and Differences-in-Differences with Heterogeneous Treatment Effects: A Survey0.64422
10Difference-in-Differences for Continuous Treatments and Instruments with Stayers0.58531