I am running some robustness checks to my diff-in-diff specification. In particular, I am trying to check if the parallel trend assumption is satisfied. I am following the suggestion reported here https://stats.stackexchange.com/ques...mon-trend-betw.

Thus, given my dataset, I am running an -xtreg, fe- where log_GON is my dependent variable and the diff-in-diff variable would be treated_decr*post_decr, i.e. the interaction between the dummy of being in the treated group and being post the date of implementation of the policy I am interested in. The year of implementation is 1995. Thus following the suggestion in the link I am running a diff-in-diff model with leads and lags for the diff-in-diff term and I am planning to test if the two pre-treatment terms, i.e. the ones in 1994 and 1993 are jointly non significant.

The code and the outcomes are the following


Code:
xtreg log_GON treated_decr#1994.year treated_decr#1993.year treated_decr#1996.year ///
treated_decr#1997.year treated_decr#1998.year c.year c.year#i.state ///
if (state == 2|state == 5|state == 6|state == 8) & year >= 1985, cluster(state) fe basel
Code:
Fixed-effects (within) regression               Number of obs     =        128
Group variable: state                           Number of groups  =          4

R-sq:                                           Obs per group:
     within  = 0.3827                                         min =         32
     between = 0.1068                                         avg =       32.0
     overall = 0.0748                                         max =         32

                                                F(3,3)            =          .
corr(u_i, Xb)  = -0.9994                        Prob > F          =          .

                                       (Std. Err. adjusted for 4 clusters in state)
-----------------------------------------------------------------------------------
                  |               Robust
          log_GON |      Coef.   Std. Err.      t    P>|t|     [95% Conf. Interval]
------------------+----------------------------------------------------------------
treated_decr#year |
          0 1993  |          0  (base)
          0 1994  |  -.4768764   .1315696    -3.62   0.036    -.8955894   -.0581633
          0 1996  |  -.4627052   .4205494    -1.10   0.352    -1.801081    .8756705
          0 1997  |  -.0429162   .4332989    -0.10   0.927    -1.421867    1.336034
          0 1998  |  -.0507665   .2062129    -0.25   0.821    -.7070279    .6054949
          1 1993  |  -.7470444   3.39e-08 -2.2e+07   0.000    -.7470445   -.7470443
          1 1994  |  -.8624563   2.99e-08 -2.9e+07   0.000    -.8624564   -.8624562
          1 1996  |  -.6488787   2.18e-08 -3.0e+07   0.000    -.6488787   -.6488786
          1 1997  |  -.5308411   1.78e-08 -3.0e+07   0.000    -.5308412   -.5308411
          1 1998  |  -.1217581   1.38e-08 -8.8e+06   0.000    -.1217582   -.1217581
                  |
             year |   .0501079   4.00e-09  1.3e+07   0.000     .0501078    .0501079
                  |
     state#c.year |
              SA  |  -.0288139   .0015684   -18.37   0.000    -.0338051   -.0238227
             Tas  |  -.0237483   .0015684   -15.14   0.001    -.0287395    -.018757
              WA  |  -.0365106   .0015684   -23.28   0.000    -.0415019   -.0315194
                  |
            _cons |  -52.61188   2.378725   -22.12   0.000    -60.18204   -45.04172
------------------+----------------------------------------------------------------
          sigma_u |  31.831812
          sigma_e |  .47882443
              rho |  .99977378   (fraction of variance due to u_i)
-----------------------------------------------------------------------------------
and then the test gives me

Code:
test 1.treated_decr#1993b.year 1.treated_decr#1994.year
Code:
( 1)  1.treated_decr#1993b.year = 0
 ( 2)  1.treated_decr#1994.year = 0
       Constraint 2 dropped

       F(  1,     3) = 4.9e+14
            Prob > F =    0.0000
My main doubt is about the specification. It makes sense to me but I am not 100% sure about it because I removed treated_decr#1992.year on purpose to keep it as a baseline but I would add treated_decr#1995.year, the real diff-in-diff coefficient of interest.

Do you have any hint?