Difference-in-Differences: No Anticipation with Parallel Trends (with a simulation and equations)

In a Mixtape Mailbag recently, I talked through what happens if you have parallel trends and SUTVA but not “no anticipation”. What is “no anticipation”? No anticipation simply means that the baseline period is equal to Y(0) not Y(1). In other words, the baseline is not treated.

A reader had written about that, and it was nice because I had actually n…