Synthetic Difference In Differences

Dmitry Arkhangelsky, Susan Athey, David A. Hirshberg, Guido Imbens and Stefan Wager

No 25532, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We present a new estimator for causal effects with panel data that builds on insights behind the widely used difference in differences and synthetic control methods. Relative to these methods we find, both theoretically and empirically, that this "synthetic difference in differences" estimator has desirable robustness properties, and that it performs well in settings where the conventional estimators are commonly used in practice. We study the asymptotic behavior of the estimator when the systematic part of the outcome model includes latent unit factors interacted with latent time factors, and we present conditions for consistency and asymptotic normality.

JEL-codes: C01 (search for similar items in EconPapers)
Date: 2019-02
New Economics Papers: this item is included in nep-ecm and nep-ore
Note: LS
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Citations: View citations in EconPapers (42)

Published as Dmitry Arkhangelsky & Susan Athey & David A. Hirshberg & Guido W. Imbens & Stefan Wager, 2021. "Synthetic Difference-in-Differences," American Economic Review, vol 111(12), pages 4088-4118.

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Journal Article: Synthetic Difference-in-Differences (2021)
Working Paper: Synthetic Difference in Differences (2019)
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