17.5 How it’s used with regressions
- estimate one regression of the outcome on the time period before the event
- estimate outcome on the time period after the event
- check difference
- doesn’t have to be linear
Outcome=β0+β1t+β2After+β3t×After+ϵ
- more precise estimate of time trend than going day by day
- but limited by shape
- but need to be careful about significance testing (autocorrelation)
- use HAC standard errors