Visualization, Identification, and stimation in the Linear Panel Event-Study Design

RePEc Short ID: ppe453
ORCID iD: 0000-0002-1182-7869

Freyaldenhoven, Simon; Hansen, Christian; Perez Perez, Jorge; Shapiro, Jesse

doi:10.21799/frbp.wp.2021.44

Working Paper

Visualization, Identification, and stimation in the Linear Panel Event-Study Design

Abstract: Linear panel models, and the “event-study plots” that often accompany them, are popular tools for learning about policy effects. We discuss the construction of event-study plots and suggest ways to make them more informative. We examine the economic content of different possible identifying assumptions. We explore the performance of the corresponding estimators in simulations, highlighting that a given estimator can perform well or poorly depending on the economic environment. An accompanying Stata package, xtevent, facilitates adoption of our suggestions.

Keywords: linear panel data models; difference-in-differences; staggered adoption; pre-trends; event study;

JEL Classification: C23; C52;

https://doi.org/10.21799/frbp.wp.2021.44