“A Local Projections Approach to Difference‐in‐Differences” (2025), by Arindrajit Dubé et al. Mathematics research paper. Original abstract below, unchanged. No free PDF was found.

A Local Projections Approach to Difference‐in‐Differences

Arindrajit Dubé, Daniele Girardi, Òscar Jordà et al. · July 19, 2025 · Mathematics

Abstract

We propose a local projections (LPs)‐based difference‐in‐differences (DiD) approach that subsumes many of the recent solutions proposed in the literature to address possible biases arising from negative weighting. We combine LPs with a flexible “clean control” condition to define appropriate sets of treated and control units. Our proposed LP‐DiD estimator can be implemented with various weighting and normalization schemes for different target estimands, can be extended to include covariates or accommodate nonabsorbing treatment, and is simple and fast to implement. A simulation and two empirical applications demonstrate that the LP‐DiD estimator performs well in common applied settings.

Source page DOI: 10.1002/jae.70000