TY  - RPRT
        AU  - Brewer, Mike
AU  - Crossley, Thomas F.
AU  - Joyce, Robert
        TI  - Inference with Difference-in-Differences Revisited
        PY  - 2013/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 7742
        UR  - https://www.iza.org/index.php/publications/dp7742
        AB  - A growing literature on inference in difference-in-differences (DiD) designs with grouped errors has been pessimistic about obtaining hypothesis tests of the correct size, particularly with few groups. We provide Monte Carlo evidence for three points: (i) it is possible to obtain tests of the correct size even with few groups, and in many settings very straightforward methods will achieve this; (ii) the main problem in DiD designs with grouped errors is instead low power to detect real effects; and (iii) feasible GLS estimation combined with robust inference can increase power considerably whilst maintaining correct test size – again, even with few groups.
        KW  - difference in differences
KW  - hypothesis test
KW  - power
KW  - cluster robust
KW  - feasible GLS
        ER  -