Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science

Abstract: Triple difference has become a widely used estimator in empirical work. A close reading of articles in top economics journals reveals that the use of the estimator to a large extent rests on intuition. The identifying assumptions are neither formally derived nor generally agreed on. We give a complete presentation of the triple difference estimator, and show that even though the estimator can be computed as the difference between two difference-in-differences estimators, it does not require two parallel trend assumptions to have a causal interpretation. The reason is that the difference between two biased difference-in-differences estimators will be unbiased as long as the bias is the same in both estimators. This requires only one parallel trend assumption to hold.

Keywords: Triple difference; difference-in-difference-in-differences; difference-in-differences; DID; DiDiD; parallel trend assumption

JEL-codes: C10; C18; C21

24 pages, April 22, 2020

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