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AI/LLM Research & Development | Causal Inference & Development Economics Expert. Founder of Machine Learning X Doing & Development Economics X | Former UC Berkeley & Cornell Tech | Featured in The Economist & World Bank

Using gganimate in R (one can also do this in Python) to show what causal inference methods actually do to data: Evidence from Differences-in-Differences: Differences-in-Differences (DiD) Method: A Quick Overview for the GIF below The Differences-in-Differences (DiD) method is a powerful statistical technique used to estimate the causal effect of a treatment or intervention. It compares the changes in outcomes over time between a group that is exposed to the treatment and a group that is not. Here’s a simple breakdown: Two Groups: Identify a treatment group (exposed to the intervention) and a control group (not exposed). Two Time Periods: Measure outcomes for both groups before and after the intervention. Difference Calculation: Calculate the difference in outcomes for each group over time. Comparison: The key insight comes from comparing these differences between the two groups. This helps isolate the effect of the intervention from other factors that may just correlate with but not actually cause the difference. That's basically why it's called "the difference-in-the-difference." (DiD). Why Use DiD? Causal Inference: Helps determine if changes in outcomes can be attributed to the intervention. Control for Trends: Accounts for trends that affect both groups equally, improving accuracy. Example: Imagine a nonprofit or university implements a new training program to boost donations. By comparing donations growth before and after the program for both trained and untrained employees, DiD can help assess the program’s true impact.

Sylvia Agyemang Annor

Graduate Teaching Assistant | Master's in Agricultural Economics

5 个月

This is very helpful. Thank you Dr. I also have a question. In situations where one is not able to measure outcomes before the intervention, is the PSM okay and if yes, what sample size is best if it is for my thesis and not a bigger project.

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