Waiting for Event Studies: A Play in Three Acts

Sun and Abraham (2020) Explainer

Prologue

Goodman-Bacon (2021, forthcoming) is a decomposition of the coefficient from a panel fixed effects estimate with time dummies (“twoway fixed effects” or TWFE) of a static treatment parameter into average causal effects and bias terms under differential timing. His decomposition revealed that TWFE needs parallel trends as always thought but also…