Difference-in-Differences e Say random assignment to treatment and control groups, like in a medical experiment o One can then simply compare the change in outcomes across the treatment and control groups to estimate the treatment effect o For time 1, 2, groups A, B(y2B-y2A) (yLB-yLA, or equivalently (y2B-yLB 72A-yLA, is the difference-in-differences Economics 20- Prof anderson 4Economics 20 - Prof. Anderson 4 Difference-in-Differences Say random assignment to treatment and control groups, like in a medical experiment One can then simply compare the change in outcomes across the treatment and control groups to estimate the treatment effect For time 1,2, groups A, B (y2,B – y2,A) - (y1,B – y1,A), or equivalently (y2,B – y1,B) - (y2,A – y1,A), is the difference-in-differences