Regression-based estimators in difference-in-differences with time-varying covariates
This study proposes a regression-based estimation method in difference-in-differences settings in the presence of time-varying covariates – a scenario commonly encountered in applications. We impose only a conditional parallel trends assumption with time-varying covariates and plausible assumptions...
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| Format: | Article |
| Language: | English |
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KeAi Communications Co., Ltd.
2025-09-01
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| Series: | Journal of Management Science and Engineering |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2096232025000265 |
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| author | Lihua Lin Xiaofeng Li |
| author_facet | Lihua Lin Xiaofeng Li |
| author_sort | Lihua Lin |
| collection | DOAJ |
| description | This study proposes a regression-based estimation method in difference-in-differences settings in the presence of time-varying covariates – a scenario commonly encountered in applications. We impose only a conditional parallel trends assumption with time-varying covariates and plausible assumptions on the conditional expectation functions. We show that a family of causal effect parameters is exactly the coefficient estimators from our proposed regressions even in the presence of staggered treatment timing and treatment effect heterogeneity across cohorts, time periods, and covariates. These parameters can be further aggregated to the dynamic treatment effects and the overall effect of being treated. We establish the corresponding asymptotic properties. Simulation studies suggest that our proposed regression-based estimators successfully outperform in estimating the causal parameters. Finally, we apply this method to evaluate the effect of intrastate bank deregulation on income inequality in the United States in the setting of Beck et al. (2010). We find substantially different results based on our proposed method. |
| format | Article |
| id | doaj-art-a935cc77ea9542d9875a55204e6bdeea |
| institution | Kabale University |
| issn | 2096-2320 |
| language | English |
| publishDate | 2025-09-01 |
| publisher | KeAi Communications Co., Ltd. |
| record_format | Article |
| series | Journal of Management Science and Engineering |
| spelling | doaj-art-a935cc77ea9542d9875a55204e6bdeea2025-08-20T03:51:53ZengKeAi Communications Co., Ltd.Journal of Management Science and Engineering2096-23202025-09-0110336641310.1016/j.jmse.2025.05.004Regression-based estimators in difference-in-differences with time-varying covariatesLihua Lin0Xiaofeng Li1School of Economics, Jiangxi University of Finance and Economics, Nanchang, 330013, ChinaPaula and Gregory Chow Institute for Studies in Economics, Xiamen University, Xiamen, 361005, China; School of Economics, Xiamen University, Xiamen, 361005, China; Corresponding author. Paula and Gregory Chow Institute for Studies in Economics, Xiamen University, Xiamen, 360015, Fujina, China.This study proposes a regression-based estimation method in difference-in-differences settings in the presence of time-varying covariates – a scenario commonly encountered in applications. We impose only a conditional parallel trends assumption with time-varying covariates and plausible assumptions on the conditional expectation functions. We show that a family of causal effect parameters is exactly the coefficient estimators from our proposed regressions even in the presence of staggered treatment timing and treatment effect heterogeneity across cohorts, time periods, and covariates. These parameters can be further aggregated to the dynamic treatment effects and the overall effect of being treated. We establish the corresponding asymptotic properties. Simulation studies suggest that our proposed regression-based estimators successfully outperform in estimating the causal parameters. Finally, we apply this method to evaluate the effect of intrastate bank deregulation on income inequality in the United States in the setting of Beck et al. (2010). We find substantially different results based on our proposed method.http://www.sciencedirect.com/science/article/pii/S2096232025000265C13C23C33 |
| spellingShingle | Lihua Lin Xiaofeng Li Regression-based estimators in difference-in-differences with time-varying covariates Journal of Management Science and Engineering C13 C23 C33 |
| title | Regression-based estimators in difference-in-differences with time-varying covariates |
| title_full | Regression-based estimators in difference-in-differences with time-varying covariates |
| title_fullStr | Regression-based estimators in difference-in-differences with time-varying covariates |
| title_full_unstemmed | Regression-based estimators in difference-in-differences with time-varying covariates |
| title_short | Regression-based estimators in difference-in-differences with time-varying covariates |
| title_sort | regression based estimators in difference in differences with time varying covariates |
| topic | C13 C23 C33 |
| url | http://www.sciencedirect.com/science/article/pii/S2096232025000265 |
| work_keys_str_mv | AT lihualin regressionbasedestimatorsindifferenceindifferenceswithtimevaryingcovariates AT xiaofengli regressionbasedestimatorsindifferenceindifferenceswithtimevaryingcovariates |