The Korean Economic Review
Review on Difference in Differences
Myoung-jae Lee (Korea University) and Yasuyuki Sawada (Asian Development Bank)Year 2020Vol. 36No. 1
Difference in differences (DD) is one of the most popular approaches in economics and other disciplines of social sciences. This paper provides a review on the basics and recent advances in DD from a personal perspective. Details on DD identification and estimation using panel data and repeated cross-sections are provided for various DD cases such as constant/time-varying effect or constant/time-varying treatment timing. Following these basics on DD, topics such as ‘DD in reverse’, fuzzy DD, synthetic control, and triple and generalized differences are examined. Many empirical examples in various areas of economics are provided for illustration.