Instrumental Variable Network Difference-in-Differences (IV-NDID) Estimator: Model and Application

Sandy Dall’erba (), André Chagas, William Ridley, Yilan Xu () and Lilin Yuan
Additional contact information
Sandy Dall’erba: Dept. of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign
Yilan Xu: Dept. of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign
Lilin Yuan: School of Economics, Nankai University, China
Authors registered in the RePEc Author Service: Sandy Dall'erba ()

No 5-2021, TD NEREUS from Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS)

Abstract: The difference-in-difference (DID) framework is now a well-accepted method in quasi-experimental research. However, DID does not consider treatment-induced changes to a network linking treated and control units. Our instrumental variable network DID methodology controls first for the endogeneity of the network to the treatment and, second, for the direct and indirect role of the treatment on any network member. Monte Carlo simulations and an estimation of the drought impact on global wheat trade and production demonstrate the performance of our new estimator. Results show that DID disregarding the network and its changes leads to significant underestimates of overall treatment effects.

Keywords: International Trade; Climate Change; Crop Yield. (search for similar items in EconPapers)
JEL-codes: C21 F14 Q54 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2021-07-02
New Economics Papers: this item is included in nep-ecm, nep-env, nep-int, nep-net and nep-ore
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.usp.br/nereus/wp-content/uploads/TD_Nereus_05_2021.pdf Full text (application/pdf)
ris

Related works:
Working Paper: Instrumental Variable Network Difference-in-Differences (IV-NDID) estimator: model and application (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:nereus:2021_005

Access Statistics for this paper

More papers in TD NEREUS from Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS) Contact information at EDIRC.
Bibliographic data for series maintained by Eduardo Amaral Haddad ().