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Rather than requiring exact equality, the approach imposes restrictions linking post-treatment deviations from parallel trends to differences inferred from pre-treatment “pre-trends.” Under these restrictions, the causal parameter is partially identified and two methods deliver uniformly valid inference, including power guarantees. Economic knowledge is used to guide restrictions and interpret sensitivity analyses.",{"@graph":69,"@context":121},[70,84,104],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/a-more-credible-approach-to-parallel-trends/617839/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":98,"encodingFormat":97,"isAccessibleForFree":99,"interactionStatistic":100},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/a-more-credible-approach-to-parallel-trends/617839.png","ImageObject",300,407,{"name":92,"@type":93},"Hazel","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-19",true,{"@type":101,"interactionType":102,"userInteractionCount":4},"InteractionCounter",{"@type":103},"ViewAction",{"@type":105,"mainEntity":106},"FAQPage",[107,113,117],{"name":108,"@type":109,"acceptedAnswer":110},"What problem does the paper address in difference-in-differences and event-study designs?","Question",{"text":111,"@type":112},"It addresses cases where the parallel trends assumption needed for point identification may fail, making researchers uncertain about the validity of identifying assumptions.","Answer",{"name":114,"@type":109,"acceptedAnswer":115},"How does the paper modify the usual parallel trends requirement?",{"text":116,"@type":112},"It does not require parallel trends to hold exactly; instead, it restricts how different the post-treatment violations can be relative to the pre-treatment trend differences (“pre-trends”).",{"name":118,"@type":109,"acceptedAnswer":119},"What do the proposed methods enable researchers to do?",{"text":120,"@type":112},"They provide uniformly valid inference under the imposed restrictions and support sensitivity analyses to determine what causal conclusions remain credible under different possible parallel-trends violations.","https://schema.org",{"og:url":83,"og:type":123,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":125,"canonical":83},"index,follow",{"doc_id":127,"site_id":62},617839,1792444678,{"code":4,"msg":5,"data":130},{"doc_id":127,"user_id":131,"nickname":92,"user_avatar":132,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":133,"file_id":134,"file_url":135,"file_type":136,"file_size":137,"view_count":4,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":138,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":128,"read_time":143},137441390410,"https://ap-avatar.wpscdn.com/avatar/2000252f4ab5702993?_k=1776741390130283984","Review of Economic Studies (2023) 90, 2555–2591 doi:10 . 1093/restud/rdad018  \n© The Author(s) 2023 . Published by Oxford University Press on behalf of The Review of Economic Studies Limited. Advance access publication 15 February 2023  \nA More Credible Approach to Parallel Trends  \nASHESH RAMBACHAN  \nMicrosoft Research New England and MIT  \nand  \nJONATHAN ROTH  \nBrown University  \nFirst version received July 2021 ; Editorial decision October 2022; Accepted January 2023 (Eds.)  \nThis paper proposes tools for robust inference in difference-in-differences and event-study designs where the parallel trends assumption may be violated. Instead of requiring that parallel trends holds exactly, we impose restrictions on how different the post-treatment violations of parallel trends can be from the pre-treatment differences in trends (“pre-trends”) . The causal parameter of interest is partially identified under these restrictions. We introduce two approaches that guarantee uniformly valid inference under the imposed restrictions, and we derive novel results showing that they have desirable power properties in our context. We illustrate how economic knowledge can inform the restrictions on the possible violations of parallel trends in two economic applications. We also highlight how our approach can be used to conduct sensitivity analyses showing what causal conclusions can be drawn under various restrictions on the possible violations of the parallel trends assumption.  \nKey words: Difference-in-differences, Event-study, Parallel trends, Robust inference, Sensitivity analysis, Partial identification  \nJEL codes: C1  \n1. INTRODUCTION  \nResearchers using difference-in-differences (DiD) and related methods are often unsure about the validity of the parallel trends assumption needed for point identification of the causal parameter of interest. It has therefore become common practice to assess the plausibility of the parallel trends assumption by testing for pre-treatment differences in trends (“pre-trends”) . Although pre-trends tests are intuitive, recent research has shown that they may suffer from low power (Freyaldenhoven et al., 2019 ; Bilinski and Hatfield, 2020; Kahn-Lang and Lang, 2020; Roth, 2022), and that conditioning the analysis on passing pre-trends tests introduces statistical issues related to pre-testing (Roth, 2022) . How then should researchers proceed when they are unsure about the validity of the parallel trends assumption?  \nThis paper proposes methods for robust inference and sensitivity analysis in empirical settings where the parallel trends assumption may not hold. Building on work by Manski and Pepper (2018), we show that the causal parameter of interest can be (partially) identified under  \nThe editor in charge of this paper was Francesca Molinari.  \n2556 REVIEW OF ECONOMIC STUDIES  \na large class of restrictions that impose that the post-treatment violations of parallel trends cannot be “too different” from the pre-trends. We then introduce methods that yield uniformly valid inference for the treatment effect under the imposed restrictions. Intuitively, our inference methods account for both statistical uncertainty (we can only noisily estimate the true pre-trend) as well as “identification uncertainty”(even if the true pre-trend were known, we may not know exactly how to extrapolate it) . Our approach thus formalizes the intuition motivating pre-trends testing while avoiding the statistical issues described above.  \nMore concretely, we consider a setting in which the researcher estimates a vector of “eventstudy” coefficients ˆβ = (ˆβ􀀂pre , ˆβ􀀂post )􀀂 ∈ R+, where ˆβpre and ˆβpost respectively correspond wcoith ensisimant ferstfoherrpueed-t-rfeotmem pt peramodtersβa,hphoscatn-trbeeatdent pecompoiodsed a.sWe assume that ˆβ is  \nβ = 􀀂 τ0post 􀀃 + 􀀂δδpproest 􀀃 , (1)  \n􀀄 􀀇 􀀄 􀀇  \n􀀅􀀆 􀀅􀀆  \n=:τ =:δ  \nwhere τ is a causal parameter of interest that is assumed to be 0 in the pre-treatment period and δ is a bias from a difference i","cbCain0znszE3wP0","https://ap.wps.com/l/cbCain0znszE3wP0","pdf",861168,37,"English","# Introduction\n## Robust inference and sensitivity analysis with violations of parallel trends\n## Partial identification under pre-trend–linked restrictions","[{\"question\":\"What problem does the paper address in difference-in-differences and event-study designs?\",\"answer\":\"It addresses cases where the parallel trends assumption needed for point identification may fail, making researchers uncertain about the validity of identifying assumptions.\"},{\"question\":\"How does the paper modify the usual parallel trends requirement?\",\"answer\":\"It does not require parallel trends to hold exactly; instead, it restricts how different the post-treatment violations can be relative to the pre-treatment trend differences (“pre-trends”).\"},{\"question\":\"What do the proposed methods enable researchers to do?\",\"answer\":\"They provide uniformly valid inference under the imposed restrictions and support sensitivity analyses to determine what causal conclusions remain credible under different possible parallel-trends violations.\"}]","A More Credible Approach to Parallel Trends | PDF",93]