IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/31184.html
   My bibliography  Save this paper

A Local Projections Approach to Difference-in-Differences

Author

Listed:
  • Arindrajit Dube
  • Daniele Girardi
  • Òscar Jordà
  • Alan M. Taylor

Abstract

We propose a local projection (LP) based difference-in-differences approach that subsumes many of the recent solutions proposed in the literature to address possible biases arising from negative weighting. We combine LPs with a flexible ‘clean control’ condition to define appropriate sets of treated and control units. Our proposed LP-DiD estimator can be implemented with various weighting and normalization schemes for different target estimands, can be extended to include covariates or accommodate non-absorbing treatment, and is simple and fast to implement. A simulation and two empirical applications demonstrate that the LP-DiD estimator performs well in common applied settings.

Suggested Citation

  • Arindrajit Dube & Daniele Girardi & Òscar Jordà & Alan M. Taylor, 2023. "A Local Projections Approach to Difference-in-Differences," NBER Working Papers 31184, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31184
    Note: EFG IFM LS ME POL
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w31184.pdf
    Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Todd Morris & Benoit Dostie, 2023. "Graying and staying on the job: The welfare implications of employment protection for older workers," Cahiers de recherche / Working Papers 15, Institut sur la retraite et l'épargne / Retirement and Savings Institute.
    2. Juanma Castro-Vincenzi & Gaurav Khanna & Nicolas Morales & Nitya Pandalai-Nayar, 2024. "Weathering the Storm: Supply Chains and Climate Risk," NBER Working Papers 32218, National Bureau of Economic Research, Inc.
    3. Jordà, Òscar & Nechio, Fernanda, 2023. "Inflation and wage growth since the pandemic," European Economic Review, Elsevier, vol. 156(C).
    4. Britto, Diogo & Rocha, Roberto Hsu & Pinotti, Paolo & Sampaio, Breno, 2024. "Small Children, Big Problems: Childbirth and Crime," IZA Discussion Papers 16910, Institute of Labor Economics (IZA).
    5. Jingyi Tian & Jun Nagayasu, 2023. "Financial Systemic Risk behind Artificial Intelligence:Evidence from China," TUPD Discussion Papers 44, Graduate School of Economics and Management, Tohoku University.
    6. Cheick Camara, 2023. "Gender Budgeting and Health Spending Efficiency in Indian States: A Staggered Difference-in-Differences Analysis," CERDI Working papers hal-04294262, HAL.
    7. João Pedro Vieira & Ricardo Dahis & Juliano Assunção, 2023. "The Role of Sanctions and Spillovers in Forest Conservation," Monash Economics Working Papers 2023-16, Monash University, Department of Economics.
    8. Natalia Emanuel & Emma Harrington, 2023. "Working Remotely? Selection, Treatment, and the Market for Remote Work," Staff Reports 1061, Federal Reserve Bank of New York.
    9. Griller, Stefan & Huber, Florian & Pfarrhofer, Michael, 2024. "Financial markets and legal challenges to unconventional monetary policy," European Economic Review, Elsevier, vol. 163(C).
    10. Alexander Rodnyansky & Yannick Timmer & Naoki Yago, 2023. "Intervening against the Fed," CESifo Working Paper Series 10575, CESifo.
    11. Rodnyansky, A. & Timmer, Y. & Yago, N., 2023. "Intervening against the Fed," Cambridge Working Papers in Economics 2357, Faculty of Economics, University of Cambridge.
    12. Mark Kattenberg & Bas Scheer & Jurre Thiel, 2023. "Causal forests with fixed effects for treatment effect heterogeneity in difference-in-differences," CPB Discussion Paper 452, CPB Netherlands Bureau for Economic Policy Analysis.
    13. Amorim, Guilherme & Britto, Diogo & Fonseca, Alexandre & Sampaio, Breno, 2024. "Job Loss, Unemployment Insurance, and Health: Evidence from Brazil," IZA Discussion Papers 16790, Institute of Labor Economics (IZA).
    14. Jean-Baptiste Bonnier, 2024. "A Split-Treatment Design," Working Papers 2024-11, CRESE.
    15. Matthew Staiger & Giordano Palloni & John Voorheis, 2024. "Neighborhood Revitalization and Residential Sorting," Working Papers 24-12, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:31184. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.