MEANING
An assumption that, without treatment, treated and comparison groups would have followed similar outcome trends over time.
Use it for
State the key counterfactual trend condition behind difference-in-differences.Use when explaining or checking the main counterfactual trend condition in a difference-in-differences study.
Words that belong together
- parallel trends assumption in difference-in-differences
- assess pre-trends
- violation of parallel trends
On the page
The event study offered evidence for—but could not prove—the parallel trends assumption.
Nearby words
Word forms
- Base
- parallel trends assumption
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Usage notes
A key difference-in-differences assumption: it concerns counterfactual trends, not identical outcome levels or perfectly matched groups.
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