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  • Difference and Difference Design Model Specification

    Hey everyone,

    I have a question concerning a model specification for a Difference and Difference Design. I have cross sectional data over 7 time periods in one country. Treatment kicks in at round 5, 6 and 7. Treatment is definined on the individual level. I am running the following estimation controlling for leads and lags:


    y_igt = delta_g + alpha_t + Treatement_igt * T + X_igt * sigma + u_igt


    i= individual i living in distrcit g at time t.
    Delta and alpha are district and time fixed effect
    Treatment is defined on the individual level taken the value 1 if i was treated, o otherwise. Treatment is multiplied with a survey dummy t, taken the value 1 for round 2,3,4,5,6,7. This allows me to control for lead and lags taking round 1 as a baseline.
    X are individual co variates and u clustered standard errors.

    Is this model specification correct? Do I also need to include the interaction effect for round 1?

    All the best,

    Simeon



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