Difference-in-Differences (DID) Analysis is a statistical technique used to estimate causal relationships. It is often used in observational studies to evaluate the effect of a treatment or intervention by comparing the changes in outcomes over time between a treatment group and a control group.
To perform a DID analysis, we need:
- Treatment Group: A group that receives the intervention or treatment.
- Control Group: A group that does not receive the intervention.
- Pre-Treatment Period: Time period before the intervention.
- Post-Treatment Period: Time period after the intervention.
Steps to Perform DID Analysis:
- Identify the treatment and control groups in your data.
- Define the pre-treatment and post-treatment periods.
- Calculate the average outcome for each group in both periods.
- Compute the DID estimator as:
DID=(Yˉpost, treatment−Yˉpre, treatment)−(Yˉpost, control−Yˉpre, control)
Assumptions:
- Parallel Trends: The treatment and control groups would have followed the same trend over time in the absence of treatment.
- No Spillover Effects: The treatment does not affect the control group.
Please provide information on how the treatment and control groups are defined in your dataset, as well as the time periods for pre-treatment and post-treatment. This will allow us to proceed with the DID analysis.