Difference-in-Differences · Policy Evaluation
Goodman-Bacon’s Forbidden Comparisons
A two-way fixed-effects estimate with staggered adoption can combine several 2×2 comparisons, including comparisons that are hard to interpret.
Page 1 of 7 · Big Picture
The big picture: Goodman-Bacon’s Forbidden Comparisons
What comparisons does a TWFE coefficient combine?
Why a policy analyst should care
A TWFE coefficient can combine clean and contaminated two-group comparisons, so its weights and timing comparisons determine whether the average has a defensible meaning.
Follow the idea from the opening question to a practical decision. These are the conceptual moves this module will develop:
1 Question What comparisons does a TWFE coefficient combine?
2 Explore Early and late adopters can be controls
3 Formalize Weighted 2×2 components
4 Transfer Audit the comparison weights
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