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Statistics

The hidden assumption that makes diff-in-diff work

difference-in-differencesparallel-trendscausal-inference

A colleague estimates the effect of a new policy with difference-in-differences: they compare the before-to-after change in a treated group against the change in a control group. The arithmetic is easy, but you want to stress-test the logic.

State the key assumption difference-in-differences relies on, explain in plain terms why the method fails without it, and describe how you would check it.

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