October 2021
Intermediate to advanced
296 pages
10h 42m
English
Content preview from Panel Methods for Finance
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7 Estimating average treatment effects
A substantial part of the empirical literature attempts to identify causal effects, and the topic of causal inference has been receiving increasing amounts of attention in recent years. Much of this literature is framed as the estimation of treatment effects (or as “programme evaluation”). A treatment effect refers to the causal impact of a certain treatment (policy, event, decision) upon a given outcome. Because the effect of a treatment may differ across firms and selection into treatment may be nonrandom, the estimation of treatment effects is nontrivial. In the simplest case, the treatment effect is simply the coefficient for a treatment indicator in a linear regression model. Because we are interested ...
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