Difference-in-Differences for Continuous Treatments and Instruments with Stayers

Clément de Chaisemartin, Xavier D'Haultfoeuille, Félix Pasquier, Doulo Sow and Gonzalo Vazquez-Bare
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Félix Pasquier: CREST-INSEE - Centre de Recherche en Economie et en Statistique - INSEE - Institut national de la statistique et des études économiques (INSEE)
Doulo Sow: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique
Gonzalo Vazquez-Bare: UC Santa Barbara - University of California [Santa Barbara] - UC - University of California

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Abstract: We propose difference-in-differences estimators in designs where the treatment is continuously distributed at every period, as is often the case when one studies the effects of taxes, tariffs, or prices. We assume that between consecutive periods, the treatment of some units, the switchers, changes, while the treatment of other units remains constant. We show that under a placebo-testable parallel-trends assumption, averages of the slopes of switchers' potential outcomes can be nonparametrically estimated. We generalize our estimators to the instrumental-variable case. We use our estimators to estimate the price-elasticity of gasoline consumption.

Keywords: Differences-in-differences; Continuous treatment; Two-way fixed effects regressions; Heterogeneous treatment effects; Panel data; Policy evaluation; Instrumental variable (search for similar items in EconPapers)
Date: 2025-01-10
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03873926v2
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Citations: View citations in EconPapers (15)

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Working Paper: Difference-in-Differences for Continuous Treatments and Instruments with Stayers (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-03873926

DOI: 10.2139/ssrn.4011782

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