Dif-in-dif estimators of multiplicative treatment effects

Arbeitspapier

We consider a difference-in-differences setting with a continuous outcome, such as wages or expenditure. The standard practice is to take its logarithm and then interpret the results as an approximation of the multiplicative treat- ment effect on the original outcome. We argue that a researcher should rather focus on the non-transformed outcome when discussing causal inference. Fur- thermore, it is preferable to use a non-linear estimator, because running OLS on the log-linearised model might confound distributional and mean changes. We illustrate the argument with an original empirical analysis of the impact of the UK Educational Maintenance Allowance on households expenditure, and with a simulation exercise.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Working Paper Series ; No. 2014-14

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions ; Model Construction and Estimation ; Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
• Subject: difference-in-differences ; log-linearisation ; Poisson Pseudo Maximum Likelihood

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ciani, Emanuele ; Fisher, Paul
• Event: Veröffentlichung
• (who): University of Essex, Institute for Social and Economic Research (ISER)
• (where): Colchester
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/95673
• Last update: 10.03.2025, 11:43 AM CET