pretrends(integer): if some value k>0 is specified, the command will performs a test for parallel trends, by a separate regression on nontreated observations only: of the outcome on
the dummies for 1,...,k periods before treatment, in addition to all the FE and controls. The coefficients are reported as pre1,...,prek. The Wald statistic, pvalue, and
degrees-of-freedom as reported in e(pre_chi2), e(pre_p), and e(pre_df) resp.
- Use a reasonable number of pre-trends, do not use all of the available ones unless you have a really large never-treated group. With too many pre-trend coefficients, the power
of the joint test will be lower.
- The entire sample of nontreated observations is always used for pre-trend tests, regardless of hbalance and other options that restrict the sample for post-treatment effect
estimation.
- The number of pretrend coefficients does not affect the post-treatment effect estimates, which are always computed under the assumption of parallel trends and no anticipation.
the dummies for 1,...,k periods before treatment, in addition to all the FE and controls. The coefficients are reported as pre1,...,prek. The Wald statistic, pvalue, and
degrees-of-freedom as reported in e(pre_chi2), e(pre_p), and e(pre_df) resp.
- Use a reasonable number of pre-trends, do not use all of the available ones unless you have a really large never-treated group. With too many pre-trend coefficients, the power
of the joint test will be lower.
- The entire sample of nontreated observations is always used for pre-trend tests, regardless of hbalance and other options that restrict the sample for post-treatment effect
estimation.
- The number of pretrend coefficients does not affect the post-treatment effect estimates, which are always computed under the assumption of parallel trends and no anticipation.
Code:
test (pre1=0) (pre2=0)....(prek=0)?
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