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Difference-in-Differences for a Regional Fee Change
A delivery service introduced a small-order fee in Region A in March. Region B kept the old policy. Monthly orders per active user:
Month Jan Feb Mar Apr May
Region A 4.0 4.1 3.7 3.6 3.6
Region B 3.5 3.6 3.7 3.8 3.8
- Using Feb as the pre-period and Apr as the post-period, compute the DiD estimate of the fee's effect.
- Look at the full series. Is the key DiD assumption plausible here? Explain what you see and how it changes your conclusion.
- Suggest a design that would be more credible given this data, and a placebo test you would run.
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