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!