Difference-in-Differences with a Continuous Treatment

Brantly Callaway VI, Andrew Goodman-Bacon and Pedro Sant'Anna ()

Papers from arXiv.org

Abstract: This paper analyzes difference-in-differences designs with a continuous treatment. We show that treatment-on-the-treated-type parameters are identified under a parallel trends assumption analogous to the binary treatment case. However, comparing these parameters across treatments is challenging because parallel trends does not rule out selection bias. We discuss alternative, typically stronger, assumptions that eliminate selection bias. We further show that popular two-way fixed effects estimands admit multiple interpretations, depending on the underlying causal building block, all having important limitations as meaningful summaries of treatment effects. Finally, we introduce alternative estimation procedures that avoid these drawbacks and demonstrate them in an empirical application.

Date: 2021-07, Revised 2025-12
New Economics Papers: this item is included in nep-ecm
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Citations: View citations in EconPapers (189)

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http://arxiv.org/pdf/2107.02637 Latest version (application/pdf)

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Working Paper: Difference-in-differences with a Continuous Treatment (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2107.02637

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