Two Periods With two periods and strict exogeneity △yt=yay1=8+(x2-X1)β+u Consider a treatment" that takes place between time 1 and time 2 for some of the individuals Ay=δ。+(△x》β+8T+u T=the treatment dummy This is a classical regression model. If there are no regressors, A1=△y| treatment-△ y control difference in differences" estimator Average change in yi for the treatedTwo Periods With two periods and strict exogeneity, This is a classical regression model. If there are no regressors, it i2 i,1 0 i2 i1 i i 0 i i i y = y -y = + ( - ) + u Consider a "treatment" that takes place between time 1 and time 2 for some of the individuals y = + ( ) + T + u T = the "treatment dummy"          i x x β x β 1 0 i ˆ y | treatment - y | control = "difference in differences" estimator. ˆ Average change in y for the "treated"  =    =