arXiv 6 May 2026 · Econometrics
arXiv:2605.05056 · PDF · DOI · OpenAlex · Extracted main text
This paper develops a difference-in-differences (DiD) estimation method that selects the optimal length of pre-trends by minimizing the mean squared error (MSE). Conventional DiD regression models, such as the two-way fixed effects model or the event study model, may suffer from accuracy and validity concerns. If the sample size is small, the estimator may have a larger variance. Also, pre-tests often lack power to detect violations of the parallel trends assumption as Roth (2022) highlights. By focusing on the bias and variance tradeoff, the proposed method derives the MSE-optimal estimator from the optimal length of pre-trends. Simulation results and an empirical application demonstrate the practical applicability of the proposed method.
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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 | Roth, J (2022) Pretest with caution: Event-study estimates after testing for parallel trends | 0.928 | 4 | 3 | 100% |
| 2 | Fitzpatrick, M. D. and Lovenheim, M. F (2014) Early retirement incentives and student achievement | 0.511 | 2 | 1 | 100% |
| * | unmatched citation key * | 0.405 | 1 | 1 | 100% |
| 4 | Baker, A. C. and Larcker, D. F. and Wang, C. C (2022) How much should we trust staggered difference-in-differences estimates? | 0.405 | 1 | 1 | 100% |
| 5 | Baker, A. C. and Callaway, B. and Cunningham, S. and Goodman-Bacon,… Difference-in-Differences Designs: A Practitioner's Guide | 0.405 | 1 | 1 | 100% |
| 6 | Butts, K (2023) Difference-in-Differences Estimation with Spatial Spillovers | 0.405 | 1 | 1 | 100% |
| 7 | Callaway, B. and Sant'Anna, P. H (2021) Difference-in-differences with multiple time periods | 0.405 | 1 | 1 | 100% |
| 8 | Calonico, S. and Cattaneo, M. D. and Titiunik, R (2014) Robust Nonparametric Confidence Intervals for Regression-Discontinuity Designs | 0.405 | 1 | 1 | 100% |
| 9 | Card, D. and Krueger, A. B (1994) Minimum wages and employment: A case study of the fast-food industry in New Jersey and Pennsylvania | 0.405 | 1 | 1 | 100% |
| 10 | Egami, N. and Yamauchi, S (2023) Using multiple pretreatment periods to improve difference-in-differences and staggered adoption designs | 0.405 | 1 | 1 | 100% |
Showing the top 10 of 19 scored citations. 1 of these could not be matched to a bibliography entry, so only the citation key is shown.