Spatial Synthetic Difference-in-Differences

Renan Serenini () and Frantisek Masek ()
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Renan Serenini: University of Rome
Frantisek Masek: National Bank of Slovakia

No WP 11/2025, Working and Discussion Papers from Research Department, National Bank of Slovakia

Abstract: We propose a spatial extension of the Synthetic Difference-in-Differences (Sy- DiD) estimator developed by Arkhangelsky et al. (2021). Our estimator addresses violations of the StableUnit TreatmentValue Assumption (SUTVA) that arisewhen treatment effects spill over to other units. Spillovers to units in the donor pool can lead to biased and inconsistent estimates of the Average Treatment Effect on the Treated (ATT), while spillovers outside the donor pool leave the ATT identi- fiable but prevent identification of the Average Treatment Effect (ATE). Building on the framework of the Spatial Difference-in-Differences estimator introduced by Delgado and Florax (2015), we develop a method that decomposes the ATE into direct (ATT) and indirect treatment effects. We demonstrate that our esti- mator improves the identification of the indirect effect relative to the standard Spatial Difference-in-Differences approach, while retaining the robustness and favorable properties of the Synthetic Difference-in-Differences method for esti- mating the direct effect.

JEL-codes: C21 C23 D62 I18 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2025-08
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Persistent link: https://EconPapers.repec.org/RePEc:svk:wpaper:1126

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