The estimate produced by the DiD estimator for this example is:

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The question asks about the difference-in-differences (DiD) estimate produced in the displayed chart.
First, note what DiD computes: it looks at the change over time within the treated group and the change over time within the control group, and then takes the difference between those two changes.
From the plot:
- Treated group (blue) starts around 9.5 pre-treatment and ends around 4 post-treatment, a decrease of about 5.5 units.
- Not treated group (red) starts around 12.2 pre-treatment and ends around 10.2 post-treatment, a decrease of about 2.0 units.
Therefore, the change in the treated group is more negative than the change in the control group: (-5.5) minus (-2.0) ≈ -3.5.
Interpreting the DiD estimate as the difference in these changes, you get a negative value (approximately -3.5 in the units of Y).
Now, regarding the given answer options: the prompt shows only a single answer choice, 
- Negative,
with no other options to compare. Since the calculated DiD difference is negative, this aligns with the numerical result described above.
If alternative options were present (Positive, Zero, Negative), you would compare the sign and magnitude of the DiD estimate as above to determine which best matches the data. The key misconception to avoid would be assuming the DiD equals either a simple post-treatment difference or a pre-treatment difference alone; the DiD specifically reflects the differential change between groups over time.

FA25_QTM_110_1 Quiz #8: Difference in Differences

The estimate produced by the DiD estimator for this example is:

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Similar Questions

位置6的问题 Difference-in-differences is only valid when treated and untreated units have identical values for observable pre-treatment features.TrueFalseDon't Know清除选择

Select all of the statements that are true about Difference-In-Differences research designs:

The estimate produced by the DiD estimator in this example is:

For these two units, the parallel trends assumption is met.

Simply comparing the treated unit to the untreated unit in the post-treatment period would underestimate the true treatment effect.

Assuming there are no unequal shocks post-treatment, the DiD estimator is unbiased for the true treatment effect for the treated unit.

For these two units, the parallel trends assumption is met.

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