First used by John Snow on London's cholera (On the Mode of Communication of Cholera, 1855), given its modern form by Orley Ashenfelter and David Card (1985), made famous by Card and Alan B. Krueger (1994), and set out in standard form by Joshua D. Angrist and Jörn-Steffen Pischke (Mostly Harmless Econometrics, 2009).
Estimates the effect of a change by comparing the before and after shift in a group that got it with the shift in a similar group that did not.
When to reach for it
When a policy, price, or program reached some units and not others at a known time, and its effect has to be measured without a randomized trial.
How it runs
- Identify the treated units, comparison units, and change date.
- Measure the before and after change for the treated group.
- Measure the same change for the comparison group.
- Subtract the second change from the first.
- Check that both groups moved together before the change.
Where it sits in SOLVE eX
Go to the source
- On the Mode of Communication of Cholera, second edition, 1855
- Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs, Review of Economics and Statistics 67, no. 4, 1985
- Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania, American Economic Review, 1994
- Mostly Harmless Econometrics, 2009