Difference‐in‐differences when the treatment status is observed in only one period

Irene Botosaru, Federico Gutierrez

Research output: Contribution to journalArticle (Academic Journal)peer-review

Abstract

This paper considers the difference‐in‐differences (DID) method when the data come from repeated cross‐sections and the treatment status is observed either before or after the implementation of a program. We propose a new method that point‐identifies the average treatment effect on the treated (ATT) via a DID method when there is at least one proxy variable for the latent treatment. Key assumptions are the stationarity of the propensity score conditional on the proxy and an exclusion restriction that the proxy must satisfy with respect to the change in average outcomes over time conditional on the true treatment status. We propose a generalized method of moments estimator for the ATT and we show that the associated overidentification test can be used to test our key assumptions. The method is used to evaluate JUNTOS, a Peruvian conditional cash transfer program. We find that the program significantly increased the demand for health inputs among children and women of reproductive age.
Original languageEnglish
Pages (from-to)73-90
Number of pages18
JournalJournal of Applied Econometrics
Volume33
Issue number1
Early online date5 Jul 2017
DOIs
Publication statusPublished - 21 Feb 2018

Structured keywords

  • ECON Econometrics
  • ECON CEPS Data

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