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How to interpret T=-1 coefficient on event study plot? #33

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zhizhongpu opened this issue Oct 6, 2023 · 1 comment
Open

How to interpret T=-1 coefficient on event study plot? #33

zhizhongpu opened this issue Oct 6, 2023 · 1 comment

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@zhizhongpu
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In most existing ES estimators, period-specific coefficients are normalized such that the coefficient at T=-1 equals 0. However, this seems not the case using your method (see figure). My collaborator and I are not sure about how to interpret this non-0 coefficient.

I am guessing that the coefficient reflects the absolute gap between treated units' factual and imputed counterfactual, and thus one can't just shift the coefficients so that $\delta_{T=-1}$ equals 0. My collaborator is instead guessing, however, based on Borusyak Jaravel and Spiess (2021), that you still use some pre-treatment period to normalize all coefficients.

Could you explain the non-0 $\delta_{T=-1}$?

image

@xuyiqing
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xuyiqing commented Oct 6, 2023 via email

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