You are given three equal-length arrays describing observations from a panel-like dataset:
-
period[i]
∈ {0,1}: 0 = pre period, 1 = post period
-
treat[i]
∈ {0,1}: 1 = treated group, 0 = control group
-
y[i]
(float): outcome
Tasks:
A) Compute the difference-in-differences (DID) estimate of the treatment effect:
DID=(yˉpost,treated−yˉpre,treated)−(yˉpost,control−yˉpre,control)
B) Compute a simple pretrend flag:
-
Let
dpre=yˉpre,treated−yˉpre,control
.
-
Given a scalar
threshold
≥ 0, return
pretrend=True
if
∣dpre∣>threshold
, else
False
.
Assumptions/requirements:
-
Use simple means over the subsets implied by (
period
,
treat
).
-
Describe how you would handle missing cells (e.g., no treated observations in pre period).