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Difference-in-Differences

This entry provides a brief overview of one common program evaluation method: difference-indifferences (DID). This technique can be used when the analyst has information on treated and untreated units (i.e., schools and students) both before and after a program was implemented. Using this information, the analyst can identify a program effect by comparing the difference in results between treated and untreated units after the program, and subtracting the difference in outcomes before the program was implemented, assuming that the treated units would have followed the same outcome trend as the untreated units in the absence of the program. This entry describes the basic DID specification and DID’s key assumptions, then discusses some criticisms and extensions to the DID model. It concludes with a discussion of ...

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