The treatment indicatorvariable is allowed to switch ‘on’ and ‘off’ throughout the panel. Put differently, the binary indicator may switch back and forth between 0 and 1 multiple times over time within a unit(s). This is often the case in policy analysis, where some units can have multiple treatment histories. For example, a new law was enacted in a subset of U.S. states at the beginning of 2013, only to be repealed at the conclusion of 2016. Later, legislators in a subset of U.S. states where the law was nullified decide to reintroduce the legislation again in 2018 where it remains in effect. In practice, your treatment dummy should be coded to reflect this reality. However, this could become problematic if policymakers decide to introduce or remove laws/policies based upon past outcomes of the response variable. Review pages 4 through 7 of Lecture 10 for a more in-depth discussion of this.
Thomas Bilach
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Thomas Bilach
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Thomas Bilach
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Thomas Bilach
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Thomas Bilach
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