A Joint Analysis of Sensitivity to Anticipation and Parallel Trends Violations

Gianna Fenaroli

Papers from arXiv.org

Abstract: Two key identifying assumptions used to justify difference-in-differences are parallel trends and no anticipation, yet both may fail in practice. I propose a class of assumptions on anticipation and derive closed-form, sharp bounds on the average treatment effect on the treated while simultaneously relaxing parallel trends. Deviations from both assumptions are jointly disciplined using observed pre-trends. When some anticipation is imposed, the identified set under joint deviations can be shorter than under parallel trends violations alone. These bounds inform a sensitivity analysis assessing the robustness of qualitative conclusions to anticipation and parallel trends violations. I illustrate with an empirical application.

Date: 2026-02
New Economics Papers: this item is included in nep-ecm
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