Advancing Applicability Of Difference-In-Difference Methods Applicability In Non-Experimental Settings: An empirical analysis of karaoke's impact on hospitality venues’ return on assets in the UK

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School of Business | Bachelor's thesis
Electronic archive copy is available locally at the Harald Herlin Learning Centre. The staff of Aalto University has access to the electronic bachelor's theses by logging into Aaltodoc with their personal Aalto user ID. Read more about the availability of the bachelor's theses.

Date

2023

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Mcode

Degree programme

Bachelor’s programme in Economics

Language

en

Pages

21 + 6

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Abstract

This thesis aims to bridge the gap between theory and practice in employing the Difference-in-Differences (DiD) method within non-experimental settings.The first part of the thesis systematically explores DiD mechanisms, encompassing basic principles, assumptions, and recent advancements. Challenges such as (i) treatment timing variation, (ii) treatment effect heterogeneity, and (iii) potentially violated unconditional parallel assumptions are also addressed using the new CS estimator introduced by Callaway and Sant’Anna (2021). In the second part of the thesis, the author demonstrates the application of the CS estimator in an analysis of the impact of Karaoke rooms on hospitality venues' financial performance, offering a clear pathway for practitioners to employ and interpret DiD methodologies in their research endeavors effectively.

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Thesis advisor

Stryjan, Miri

Keywords

difference-in-difference, staggered treatment adoptions, parallel trend assumption, treatment effect heterogeneity

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