A Linear Panel Model with Heterogeneous Coefficients and Variation in Exposure

Autor/inn/en	Sun, Liyang; Shapiro, Jesse M.
Titel	A Linear Panel Model with Heterogeneous Coefficients and Variation in Exposure
Quelle	(2022), (23 Seiten) PDF als Volltext Verfügbarkeit
Zusatzinformation	Weitere Informationen
Sprache	englisch
Dokumenttyp	gedruckt; online; Monographie
Schlagwörter	Statistical Analysis; Computation; Research Design; Economics; Policy; Heuristics; Mathematical Formulas + Suchen Sie Ihr Suchwort? Statistische Analyse; Forschungsdesign; Volkswirtschaftslehre; Politik; Heuristik; Mathematische Formel
Abstract	Linear panel models featuring unit and time fixed effects appear in many areas of empirical economics. An active literature studies the interpretation of the ordinary least squares estimator of the model, commonly called the two-way fixed effects (TWFE) estimator, in the presence of unmodeled coefficient heterogeneity. We illustrate some implications for the case where the research design takes advantage of variation across units (say, US states) in exposure to some treatment (say, a policy change). In this case, the TWFE can fail to estimate the average (or even a weighted average) of the units' coefficients. Under some conditions, there exists "no" estimator that is guaranteed to estimate even a weighted average. Building on the literature, we note that when there is a unit totally unaffected by treatment, it is possible to estimate an average effect by replacing the TWFE with an average of difference-in-differences estimators. [This paper was published in "Journal of Economic Perspectives" v36 n4 Fall 2022.] (As Provided).
Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2024/1/01