Authors
Andrew C Baker, David F Larcker, Charles CY Wang
Publication date
2022/5/1
Journal
Journal of Financial Economics
Volume
144
Issue
2
Pages
370-395
Publisher
North-Holland
Description
We explain when and how staggered difference-in-differences regression estimators, commonly applied to assess the impact of policy changes, are biased. These biases are likely to be relevant for a large portion of research settings in finance, accounting, and law that rely on staggered treatment timing, and can result in Type-I and Type-II errors. We summarize three alternative estimators developed in the econometrics and applied literature for addressing these biases, including their differences and tradeoffs. We apply these estimators to re-examine prior published results and show, in many cases, the alternative causal estimates or inferences differ substantially from prior papers.
Total citations
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