Producing a difference in difference graph

[Ataullah Khan]

Hi,

I intend to produce a difference in difference graph of my data such as the graph give below;

My data is here;

* Example generated by -dataex-. To install: ssc install dataex
clear
input int year byte(time treatment) float percentage
2018 0 0 .28
2020 1 0 .44
2018 0 1 .27
2020 1 1 .51
end

I have produced the following graph using the code below, but it is not the one that I want to present, and it does not have the dotted line.

Code:

reshape wide percentage, i(time) j(treatment)
graph twoway line percentage0 percentage1 year, ytitle(%) xtitle(year end) xline(2018.3) sort

Could you guys help me out producing the graph with the dotted line above.
Thanks

[Wouter Wakker]

Here is how you would generate the dashed line:

* Example generated by -dataex-. To install: ssc install dataex
clear
input int year byte(time treatment) float percentage
2018 0 0 .28
2020 1 0 .44
2018 0 1 .27
2020 1 1 .51
end

gen id = ceil(_n / 2)
separate percentage, by(id)

// counterfactual = starting value of treated in year 2018, + change of untreated in 2020)
gen counterfactual = percentage if id == 2 & year == 2018
replace counterfactual = .27 + (.44 - .28) if id == 2 & year == 2020

line percentage? counterfactual year, xlabel(2018 2020) lpattern(solid solid dash)

It doesn't look so great yet, it is a bit unfortunate that the lines cross each other, but it is what it is. I didn't do any formatting so you can still do that to make it look better.

I don't see a need for a vertical line as you have only two periods.

[Ataullah Khan]

Thank you. This is a good start.