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Synthetic difference-in-differences estimation with staggered treatment timing

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  • Porreca, Zachary

Abstract

This note formalizes the synthetic difference-in-differences estimator for staggered treatment adoption settings, as briefly described in Arkhangelsky et al. (2021). To illustrate the importance of this estimator, I use replication data from Abrams (2012). I compare the estimators obtained using SynthDiD, TWFE, the group time average treatment effect estimator of Callaway and Sant’Anna (2021), and the partially pooled synthetic control method estimator of Ben-Michael et al. (2021) in a staggered treatment adoption setting. I find that in this staggered treatment setting, SynthDiD provides a numerically different estimate of the average treatment effect. Simulation results show that these differences may be attributable to the underlying data generating process more closely mirroring that of the latent factor model assumed for SynthDiD than that of additive fixed effects assumed under traditional difference-in-differences frameworks.

Suggested Citation

  • Porreca, Zachary, 2022. "Synthetic difference-in-differences estimation with staggered treatment timing," Economics Letters, Elsevier, vol. 220(C).
    • Handle: RePEc:eee:ecolet:v:220:y:2022:i:c:s0165176522003482
    DOI: 10.1016/j.econlet.2022.110874
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    1. Eli Ben‐Michael & Avi Feller & Jesse Rothstein, 2022. "Synthetic controls with staggered adoption," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 84(2), pages 351-381, April.
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    6. David S. Abrams, 2012. "Estimating the Deterrent Effect of Incarceration Using Sentencing Enhancements," American Economic Journal: Applied Economics, American Economic Association, vol. 4(4), pages 32-56, October.
    7. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
    8. Dmitry Arkhangelsky & Susan Athey & David A. Hirshberg & Guido W. Imbens & Stefan Wager, 2021. "Synthetic Difference-in-Differences," American Economic Review, American Economic Association, vol. 111(12), pages 4088-4118, December.
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