Treatment-effect identification without parallel paths: An illustration in the case of Objective 1-Hainaut/Belgium, 1994-2006

Vincent Vandenberghe

No 2017-23, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Imagine an impoverished region that becomes eligible for a generous transfer programme (the treatment). Imagine difference-in-differences analysis (DiD)-a before-and-after comparison of the income-level handicap-shows that the handicap has risen. Most observers would conclude to the policy's inefficiency. The point made in this paper is that second thoughts are needed, because DiD rests heavily on the validity of a key assumption: parallel paths in the absence of treatment. What is more, when several pre-treatment periods are available in the data, it can easily be assessed and, if necessary, abandoned in favour of more relevant ones.

Keywords: treatment-effect analysis; difference-in-differences models; EU convergence policy (search for similar items in EconPapers)
JEL-codes: C21 O52 R11 R15 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-dcm and nep-geo
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http://www.economics-ejournal.org/economics/discussionpapers/2017-23
https://www.econstor.eu/bitstream/10419/158565/1/888184972.pdf (application/pdf)

Related works:
Working Paper: Treatment-Effect Identification Without Parallel paths An illustration in the case of Objective 1-Hainaut/Belgium, 1994-2006 (2018)
Working Paper: Treatment-Effect Identification Without Parallel paths An illustration in the case of Objective 1- Hainaut/Belgium, 1994-2006 (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201723

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