Hello,
I am running a triple differences regression comparing a treatment group (ex: mothers) and control group (ex: women of childbearing age) where I have a repeated cross section of individuals and staggered policy introduction from 1990-2011 across 50 states where 25 states have implemented a policy sometime during 1990-2011. My specification is as follows:
yit = B0 + B1Xi + B2Zj + B3(statej) + B4(yeart) + B5 (policyi) + B6(eligibilityi) + B7(policyi * eligibilityi) + ei
Xi = individual-level covariates (i.e. income, marital status, etc.)
Zj = state-level covariates (i.e. unemployment rate)
statej = state fixed effects
yeart = year fixed effects
Policyi = 1 for individuals living in a state after the introduction of the policy and = 0 otherwise
Eligibilityi = 1 for individuals in the treatment group (ex: mothers) = 0 for individuals in the control group (ex: women of child-bearing age)
and B7 on the interaction between policy*eligibility is my DDD coefficient.
This specification follows Baum (2003) (http://www.sciencedirect.com/science...2753710300037X).
I wanted to ask what does the policy variable represent in the DDD specification and would we expect it to be significant or insignificant in a DDD specification? Baum (2003) states that it represents state-specific, year-specific effects; however, he does not state whether it should be significant or insignificant or whether it does not matter so I'm a little confused on the meaning of the DD variable in the context of a DDD specification.
Thanks for any help!
Surya
I am running a triple differences regression comparing a treatment group (ex: mothers) and control group (ex: women of childbearing age) where I have a repeated cross section of individuals and staggered policy introduction from 1990-2011 across 50 states where 25 states have implemented a policy sometime during 1990-2011. My specification is as follows:
yit = B0 + B1Xi + B2Zj + B3(statej) + B4(yeart) + B5 (policyi) + B6(eligibilityi) + B7(policyi * eligibilityi) + ei
Xi = individual-level covariates (i.e. income, marital status, etc.)
Zj = state-level covariates (i.e. unemployment rate)
statej = state fixed effects
yeart = year fixed effects
Policyi = 1 for individuals living in a state after the introduction of the policy and = 0 otherwise
Eligibilityi = 1 for individuals in the treatment group (ex: mothers) = 0 for individuals in the control group (ex: women of child-bearing age)
and B7 on the interaction between policy*eligibility is my DDD coefficient.
This specification follows Baum (2003) (http://www.sciencedirect.com/science...2753710300037X).
I wanted to ask what does the policy variable represent in the DDD specification and would we expect it to be significant or insignificant in a DDD specification? Baum (2003) states that it represents state-specific, year-specific effects; however, he does not state whether it should be significant or insignificant or whether it does not matter so I'm a little confused on the meaning of the DD variable in the context of a DDD specification.
Thanks for any help!
Surya
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