Applied Econometrics: Difference-in-Difference (DiD) in EViews #econometrics

Difference-in-Difference (DiD) is a causal inference method estimating a treatment's impact by comparing outcome changes between treatment and control groups over time. In EViews, DiD requires panel data and utilizes the common two-way fixed-effects (TWFE) approach. To perform this, select Quick/Estimate Equation and choose DiD - Difference-in-Difference from the Method dropdown. Enter your dependent and independent variables in the Equation specification field and specify the binary indicator in the Treatment Variable box. The estimation output displays the treatment coefficient, cluster-robust standard errors, and a parallel trends assumption test. Advanced diagnostics like the Goodman-Bacon decomposition and Callaway-Sant’Anna estimators are available via the Difference-in-Difference Diagnostics menu to address multiple-timing biases.