ConceptParallel Trends Assumption
Parallel Trends Assumption
The central statistical assumption underlying the difference-in-differences method. It requires that, in the absence of intervention, the outcome variables of the treatment and control groups change at the same rate over time. Violations of this assumption lead to systematic bias in DiD estimates.
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Oct 7
The parallel trends assumption is the core prerequisite for the difference-in-differences method to hold; once violated, the DiD estimate misattributes pre-existing trend differences as treatment contributions, producing systematic bias.
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