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Dif-in-dif estimators of multiplicative treatment effects

Ciani, E and Fisher, P (2013) Dif-in-dif estimators of multiplicative treatment effects. UNSPECIFIED. University of Essex, Department of Economics, Economics Discussion Papers, Colchester.

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Abstract

We consider a difference-in-differences setting with a continuous outcome, such as wages or expenditure. The standard practice is to take its logarithm and then interpret the results as an approximation of the multiplicative treatment effect on the original outcome. We argue that a researcher should rather focus on the non-transformed outcome when discussing causal inference. Furthermore, it is preferable to use a non-linear estimator, because running OLS on the log-linearized model might confound distributional and mean changes. We illustrate the argument with an original empirical analysis of the impact of the UK Educational Maintenance Allowance on households' expenditure.

Item Type: Monograph (UNSPECIFIED)
Uncontrolled Keywords: difference-in-differences, log-linearisation, Poisson Pseudo Maximum Likelihood
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Institute for Social and Economic Research
Depositing User: Users 161 not found.
Date Deposited: 28 Aug 2014 09:37
Last Modified: 17 Aug 2017 17:53
URI: http://repository.essex.ac.uk/id/eprint/8973

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