Discussion Paper

No. 2017-23 | May 09, 2017
Treatment-effect identification without parallel paths: an illustration in the case of Objective 1–Hainaut/Belgium, 1994–2006

Abstract

Imagine an impoverished region that becomes eligible for a generous transfer programme (the treatment). Imagine difference-in-differences analysis (DiD)—a before-and-after comparison of the income-level handicap—shows that the handicap has risen. Most observers would conclude to the policy's inefficiency. The point made in this paper is that second thoughts are needed, because DiD rests heavily on the validity of a key assumption: parallel paths in the absence of treatment. What is more, when several pre-treatment periods are available in the data, it can easily be assessed and, if necessary, abandoned in favour of more relevant ones.

Data Set

JEL Classification:

C21, R11, R15, O52

Assessment

  • Downloads: 97

Links

Cite As

Vincent Vandenberghe (2017). Treatment-effect identification without parallel paths: an illustration in the case of Objective 1–Hainaut/Belgium, 1994–2006. Economics Discussion Papers, No 2017-23, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2017-23


Comments and Questions