Inference in Difference-in-Differences with Few Treated Units and Spatial Correlation

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Tác giả: Luis Alvarez, Bruno Ferman

Ngôn ngữ: eng

Ký hiệu phân loại: 741.590922 Cartoons, caricatures, comics

Thông tin xuất bản: 2020

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Bộ sưu tập: Metadata

ID: 164781

We consider the problem of inference in Difference-in-Differences (DID) when there are few treated units and errors are spatially correlated. We first show that, when there is a single treated unit, some existing inference methods designed for settings with few treated and many control units remain asymptotically valid when errors are weakly dependent. However, these methods may be invalid with more than one treated unit. We propose alternatives that are asymptotically valid in this setting, even when the relevant distance metric across units is unavailable.
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