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27 changes: 19 additions & 8 deletions docs/tutorials/14_continuous_did.ipynb
Original file line number Diff line number Diff line change
Expand Up @@ -301,8 +301,8 @@
"source": [
"### Interpreting the dose-response curves\n",
"\n",
"- **Left panel (ATT):** The total effect of training rises roughly linearly with dose, closely tracking the true curve (dashed). A worker with 3 hours of training gains about $7 in earnings; a worker with 5 hours gains about $11.\n",
"- **Right panel (ACRT):** The marginal return to one additional hour is approximately constant at $2, matching the true DGP. The confidence band is wider at extreme doses where fewer workers are observed.\n",
"- **Left panel (ATT):** The total effect of training rises roughly linearly with dose, closely tracking the true curve (dashed). A worker with 3 hours of training gains about \\$7 in earnings; a worker with 5 hours gains about \\$11.\n",
"- **Right panel (ACRT):** The marginal return to one additional hour is approximately constant at \\$2, matching the true DGP. The confidence band is wider at extreme doses where fewer workers are observed.\n",
"\n",
"These curves require the **strong parallel trends** assumption. Under standard PT only, the overall binarized effect is identified — this is ATT_loc (the local average across dose groups). The dose-response curve and ACRT_glob are not identified under standard PT because they involve cross-dose comparisons and counterfactual dose-response derivatives. The ATT_glob reported by the estimator is mechanically the binarized DiD: under standard PT it equals ATT_loc, while under strong PT it additionally equals the global average ATT_glob."
]
Expand Down Expand Up @@ -563,7 +563,13 @@
"cell_type": "markdown",
"id": "a5230e69",
"metadata": {},
"source": "## 7. Comparison to Binary DiD\n\nWhat if we ignore dose entirely and just run a standard binary Callaway-Sant'Anna estimator? Both approaches should give a similar **binarized ATT** (treated vs. untreated), but the binary approach discards all dose information — no dose-response curve, no marginal effects.\n\nNote: both estimators compute the binarized ATT by aggregating group-time effects, so the values should be very close. Under standard PT this identifies ATT_loc (the local average); under strong PT it additionally equals ATT_glob. Any small differences arise from weighting or aggregation choices, control group or base period settings, or finite-sample variation — not from spline smoothing. The continuous approach provides the full dose-response curve on top of the binarized effect."
"source": [
"## 7. Comparison to Binary DiD\n",
"\n",
"What if we ignore dose entirely and just run a standard binary Callaway-Sant'Anna estimator? Both approaches should give a similar **binarized ATT** (treated vs. untreated), but the binary approach discards all dose information — no dose-response curve, no marginal effects.\n",
"\n",
"Note: both estimators compute the binarized ATT by aggregating group-time effects, so the values should be very close. Under standard PT this identifies ATT_loc (the local average); under strong PT it additionally equals ATT_glob. Any small differences arise from weighting or aggregation choices, control group or base period settings, or finite-sample variation — not from spline smoothing. The continuous approach provides the full dose-response curve on top of the binarized effect."
]
},
{
"cell_type": "code",
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" ax.legend()\n",
"\n",
" plt.tight_layout()\n",
" plt.show()\n",
"\n",
" print(\"The red dashed line (binary DiD) collapses the entire dose-response curve\")\n",
" print(\"into a single number, losing the relationship between dose and effect.\")"
" plt.show()"
]
},
{
"cell_type": "markdown",
"id": "s8qmrof6v0f",
"metadata": {},
"source": [
"The red dashed line (binary DiD) collapses the entire dose-response curve into a single number, losing the relationship between dose and effect."
]
},
{
Expand Down Expand Up @@ -704,4 +715,4 @@
},
"nbformat": 4,
"nbformat_minor": 5
}
}