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DiD_handout_2perpage - Econ 1002 Applied Economics Matthew...

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Unformatted text preview: Econ 1002: Applied Economics Matthew Wakefield University College London and Institute for Fiscal Studies m.wakefield (at) ucl.ac.uk Jan - Mar 2009 Office Hour: Tues 3-3.55, Room 209, Drayton www.ucl.ac.uk/economics/degree-courses/undergraduate/course-list/courses/econ1002 coursepage or link from: www.ucl.ac.uk/economics/degree-courses/undergraduate/course-list/courses/applied-economics Thanks to the previous two lecturers, Professors Ian Preston and James Banks, for much of the content of this course. Econ 1002 Matthew Wakefield background Outline Problem Example Differences 1st diff Groups Difference-in- differences Terminology The Idea DiD Regression interaction example How Summary advantages Issues Accepting treatment Data source Reflections VI: Difference-in-Differences Policy Evaluation Matthew Wakefield (UCL/IFS) Econ 1002 Jan - Mar 2009 2 / 37 Econ 1002 Matthew Wakefield background Outline Problem Example Differences 1st diff Groups Difference-in- differences Terminology The Idea DiD Regression interaction example How Summary advantages Issues Accepting treatment Data source Reflections background Policy Evaluation: Introduce a (tax) policy intended to have certain effects Empirical question as to how big any effects are Interesting for economists and policy makers and commentators Consider one common technique: difference-in differences Somewhat different from rest of course. Matthew Wakefield (UCL/IFS) Econ 1002 Jan - Mar 2009 3 / 37 Econ 1002 Matthew Wakefield background Outline Problem Example Differences 1st diff Groups Difference-in- differences Terminology The Idea DiD Regression interaction example How Summary advantages Issues Accepting treatment Data source Reflections Outline VI: Difference-in-Differences Policy Evaluation 1 Problem Example 2 Differences First Difference Groups 3 Difference-in-differences Terminology The Idea Difference-in-differences 4 Implementation using Regression interaction example How it works Summary of Implementing diff-in-diffs through regression advantages 5 Issues Accepting treatment Data source Matthew Wakefield (UCL/IFS) Econ 1002 Jan - Mar 2009 4 / 37 Econ 1002 Matthew Wakefield background Outline Problem Example Differences 1st diff Groups Difference-in- differences Terminology The Idea DiD Regression interaction example How Summary advantages Issues Accepting treatment Data source Reflections Problem Example Suppose Government wants to increase hours of work of women with children aged 11 and under Offers subsidized childcare to women who work Want to know how many extra hours affected women work, on average, after the reform compared to if the reform had not been introduced Problem: the comparison is of actual labour supply to the counterfactual of labour supply if the policy had not been introduced The counterfactual is NOT observed This is the general problem of policy evaluation Matthew Wakefield (UCL/IFS) Econ 1002 Jan - Mar 2009 5 / 37 Econ 1002 Matthew Wakefield background Outline Problem...
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DiD_handout_2perpage - Econ 1002 Applied Economics Matthew...

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