Two-Way Fixed Effects and Differences-in-Differences with Heterogeneous Treatment Effects: A Survey

32 Pages Posted: 15 Dec 2021 Last revised: 21 Jun 2022

See all articles by Clément de Chaisemartin

Clément de Chaisemartin

SciencesPo - Sciences Po - Department of Economics

Xavier D'Haultfœuille

Center for Research in Economics and Statistics (CREST)

Date Written: December 8, 2021

Abstract

Linear regressions with period and group fixed effects are widely used to estimate policies' effects: 26 of the 100 most cited papers published by the American Economic Review from 2015 to 2019 estimate such regressions. It has recently been shown that those regressions may produce misleading estimates, if the policy's effect is heterogeneous between groups or over time, as is often the case. This survey reviews a fast-growing literature that documents this issue, and that proposes alternative estimators robust to heterogeneous effects. We use those alternative estimators to revisit Wolfers (2006).

Suggested Citation

de Chaisemartin, Clément and d'Haultfoeuille, Xavier, Two-Way Fixed Effects and Differences-in-Differences with Heterogeneous Treatment Effects: A Survey (December 8, 2021). Available at SSRN: https://ssrn.com/abstract=3980758 or http://dx.doi.org/10.2139/ssrn.3980758

Clément De Chaisemartin (Contact Author)

SciencesPo - Sciences Po - Department of Economics ( email )

28, rue des Saints-Pères
Paris, Paris 75007
France

Xavier D'Haultfoeuille

Center for Research in Economics and Statistics (CREST) ( email )

5 avenue Henry le Chatelier
Palaiseau, 91120
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
5,962
Abstract Views
13,903
rank
1,829
PlumX Metrics