Fixed Effects Model for Panel Data

DiD analysis is a way of observing and doing statistics on natural experiments. It’s called difference-in-difference because we’re comparing the differences in the change between the control and treatment groups. The model is:

where and each is a dummy variable. The regression will look something like this: illustrated when there is no difference-in-difference. illustrates when there is a difference-in-difference. , the coefficient that measures additional effect when there is treatment and is after treatment is the important coefficient.