CausalML Book Ch16: Causal Inference with Difference-in-Differences and DML

This episode introduces and explains the Difference-in-Differences (DiD) framework, a widely used method in social sciences for estimating causal effects in situations with treatment and control groups over multiple time periods. It elaborates on the core assumption of "parallel trends" and discusses how Debiased Machine Learning (DML) methods can be used to incorporate high-dimensional control variables, enhancing the robustness of DiD analysis. The text illustrates these concepts with a practical example applying DML to study the impact of minimum wage changes on teen employment, analyzing different machine learning models and assessing their performance. The authors also briefly touch on more advanced DiD settings, such as those involving repeated cross-sections, and provide exercises for further study.DisclosureThe CausalML Book: Chernozhukov, V. & Hansen, C. & Kallus, N. & Spindler, M., & Syrgkanis, V. (2024): Applied Causal Inference Powered by ML and AI. CausalML-book.org; arXiv:2403.02467. Audio summary is generated by Google NotebookLM https://notebooklm.google/The episode art is generated by OpenAI ChatGPT

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