bacondecomp

bacondecomp is a package with tools to perform the Goodman-Bacon decomposition for differences-in-differences with variation in treatment timing. The decomposition can be done with and without time-varying covariates.

Installation

You can install bacondecomp 0.1.1 from CRAN:

install.packages("bacondecomp")

You can install the development version of bacondecomp from GitHub:

library(devtools)
install_github("evanjflack/bacondecomp")

Functions

• bacon(): calculates all 2x2 differences-in-differences estimates and weights for the Bacon-Goodman decomposition.

Data

• math_refom: Aggregated data from Goodman (2019, JOLE)
• castle: Data from Cheng and Hoekstra (2013, JHR)
• divorce: Data from Stevenson and Wolfers (2006, QJE)

Example

This is a basic example which shows you how to use the bacon() function to decompose the two-way fixed effects estimate of the effect of an education reform on future earnings following Goodman (2019, JOLE).

library(bacondecomp)
#> Loading required package: fixest#> fixest 0.9.0, BREAKING changes! (Permanently remove this message with fixest_startup_msg(FALSE).) #> - In i():#> + the first two arguments have been swapped! Now it's i(factor_var, continuous_var) for interactions. #> + argument 'drop' has been removed (put everything in 'ref' now).#> - In feglm(): #> + the default family becomes 'gaussian' to be in line with glm(). Hence, for Poisson estimations, please use fepois() instead.df_bacon<- bacon(incearn_ln~reform_math,
data=bacondecomp::math_reform,
id_var="state",
time_var="class")
# All 2x2 Comparisons
head(df_bacon)
#> treated untreated estimate weight type#> 2 1987 1985 0.04575585 0.031655309 Later vs Earlier Treated#> 4 1986 1985 0.11390411 0.001978457 Later vs Earlier Treated#> 5 1984 1985 0.12012908 0.001978457 Earlier vs Later Treated#> 6 1985 1987 0.01021379 0.039569136 Earlier vs Later Treated#> 9 1986 1987 -0.09374495 0.005440756 Earlier vs Later Treated#> 10 1984 1987 0.09784857 0.013354583 Earlier vs Later Treated# Summary of Early vs. Later, Later vs. Earlier, and Treated vs. Untreated
bacon_summary(df_bacon)
#> type weight avg_est#> 1 Earlier vs Later Treated 0.06353 0.02868#> 2 Later vs Earlier Treated 0.05265 0.03375#> 3 Treated vs Untreated 0.88382 -0.00129

library(ggplot2)
ggplot(df_bacon) +
aes(x=weight, y=estimate, shape=factor(type)) +
geom_point() +
geom_hline(yintercept=0) + theme_minimal() +
labs(x="Weight", y="Estimate", shape="Type")

References

Goodman-Bacon, Andrew. 2018. “Difference-in-Differences with Variation in Treatment Timing.” National Bureau of Economic Research Working Paper Series No. 25018. doi: 10.3386/w25018.

Paper Link