11.4 Estimation & Basics 1

• Note: Due to the transformations the content of both the treatment variable D and the outcome variable Y change!
• Both estimators (FE and FD) should be equivalent for \(T = 2\) (e.g., see here)
  
• Which one should we use?
  • Then one we understand better (maybe FD)
  • In practice FD logic is easier to implement
  • Stick to that logic!