Total Points: 7
- (2 Points): Provided below is an event study analyzing the impact of some treatment provided in time 0 on an outcome. At event time 0, the difference between treatment and control was 0.50 units of Y. Use the image and your understanding of event studies to answer the following questions:
1.1) What assumption of Difference-in-Difference is an event study relevant to?
a) The treatment and control groups are balanced along covariates.
b) The treatment and control groups evolved in the same way prior to treatment.
c) The treatment was randomized.
d) The treatment and control groups were exactly the same prior to treatment.
(b)
1.2) What was the difference between treatment and control at event time 1 on the graph?
a) 0.10
b) 0.15
c) 0.51
d) 0.60
(d)
2) (4 pts) Select all statements which are TRUE:
2.1) Before treatment, areas that later received the treatment had lower outcomes compared to areas that never received treatment (T/F)
False
2.2) Before treatment, areas that later received the treatment had exactly the same outcome levels as areas that never received treatment. (T/F)
False
2.3) Before treatment, areas that later received treatment were generally 0.50 units above areas that would never receive treatment.
True
2.4) This graph presents evidence in favor of the parallel trends assumption.
True
3) (1 pt) What is the conclusion you can derive from this event study about the effect of treatment on an outcome of interest?
a) Areas that received treatment saw increased in outcome units compared to areas that did not receive treatment.
b) Areas that received treatment saw a decrease in outcome units compared to areas that did not receive treatment.
c) The treatment had no effect on the outcome of interest.
d) The treatment has temporary effects, as opposed to sustained effects.
(a)