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Trading Scope for Credibility in Difference-in-Differences

Parush Arora, Abhishek Chand

arXiv 17 Aug 2026 · Econometrics

arXiv:2608.16867 · PDF · Extracted main text

Abstract

When parallel trends fails for some treated cohorts but not others, the average treatment effect on the treated (ATT), an average over all of them, is exactly the target that becomes hard to recover. We propose changing the estimand rather than defending it. The credible-subpopulation local ATT (LATT) is the effect for the subpopulation of cohorts whose parallel trends is credible, and it is point-identified under parallel trends for the selected cohorts alone, a weaker requirement that can hold when the ATT's fails. It is estimated by reweighting standard group-time effects toward those cohorts, and paired with honest sensitivity bounds on the residual violation that a pre-trend screen cannot rule out. The method's advantage grows with how informative pre-trends are about post-treatment violations, as simulations confirm. In an application, a significantly positive pooled estimate of the shale boom's effect on local house prices proves to rest on cohorts already trending before onset, and the credible subpopulation reveals no effect.

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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 and Sant'Anna, Pedro H. C (2021) Difference-in-Differences with Multiple Time Periods1.00053100%
2Rambachan, Ashesh and Roth, Jonathan (2023) A More Credible Approach to Parallel Trends0.87482100%
3Roth, Jonathan (2022) Pretest with Caution: Event-Study Estimates after Testing for Parallel Trends0.73732100%
4Bilinski, Alyssa and Hatfield, Laura A (2020) Nothing to See Here? Non-inferiority Approaches to Parallel Trends and Other Model Assumptions0.64422100%
5Leeb, Hannes and Pötscher, Benedikt M (2005) Model Selection and Inference: Facts and Fiction0.64422100%
6Manski, Charles F. and Pepper, John V (2018) How Do Right-to-Carry Laws Affect Crime Rates? Coping with Ambiguity Using Bounded-Variation Assumptions0.64422100%
7Armstrong, Timothy B. and Kolesár, Michal (2018) Optimal Inference in a Class of Regression Models0.51121100%
8Kahn-Lang, Ariella and Lang, Kevin (2020) The Promise and Pitfalls of Differences-in-Differences: Reflections on 16 and Pregnant and Other Applications0.51121100%
9Bogin, Alexander N. and Doerner, William M. and Larson, William D (2019) Local House Price Dynamics: New Indices and Stylized Facts0.40511100%
10Borusyak, Kirill and Jaravel, Xavier and Spiess, Jann (2024) Revisiting Event-Study Designs: Robust and Efficient Estimation0.40511100%

Showing the top 10 of 24 scored citations.