Comparing Two-way Fixed Effects and New Estimators for Difference-in-Differences: A Simulation Study and Empirical Example.

ABSTRACT:

Background

Two-way fixed effects methods have been used to estimate effects of policies adopted in different places over time, but they can provide misleading results when effects are heterogeneous or dynamic, and alternate methods have been proposed.

Methods

We compared methods for estimating the average treatment effect on the treated (ATT) under staggered adoption of policies, including two-way fixed effects, group-time ATT, cohort ATT, and target-trial approaches. We applied each method to assess the impact of Medicaid expansion on preterm birth using the National Center for Health Statistics' birth records. We compared each estimator's performance in a simulation parameterized to mimic the empirical example. We generated constant, heterogeneous, and dynamic effects and

SUBMITTER: Goin DE 

PROVIDER: S-EPMC10771800 | biostudies-literature | 2023 Jul

REPOSITORIES: biostudies-literature