Learn about how to use difference-in-differences testing for event studies.
- [Instructor] In addition to fixed effects regressions…and binary regressions, like logit and probit,…we also run into what's called…a difference-in-differences estimator.…Difference-in-differences estimator…is another way to make predictions in special circumstances.…In particular, we often run into circumstances…where we have a two-group comparison…and we're trying to make a prediction…across two points in time.…For example, perhaps we're looking…at real estate in two different cities…before and after a tax cut…that occurs in one city versus another.…
Well, in these set of circumstances,…we might be interested in understanding…how a tax cut impacts property values…in, say, City A…while City B does not have a tax cut.…In order to look at this type of analysis,…we would use a difference-in-differences estimator,…which looks at the change in property values…between the two cities before and after that tax rate hike.…Now we can also do much more complicated types of analysis,…involving many groups over many time periods.…
Professor Michael McDonald demonstrates how to harness the wealth of information available on the Internet to forecast statistics such as industry growth, GDP, and unemployment rates, as well as factors that directly affect your business, like property prices and future interest rate hikes. All you need is Microsoft Excel. Michael uses the built-in formulas, functions, and calculations to perform regression analysis, calculate confidence intervals, and stress test your results. He also covers time series exponential smoothing, fixed effects regression, and difference estimators. You'll walk away from the course able to immediately begin creating forecasts for your own business needs.
- Understanding big data and economic forecasting
- Predicting values with regressions
- Analyzing economic trends and economic cycles
- Using fixed-effects regressions and binary regressions for forecasting
- Assessing the accuracy of an economic forecast
- Using scenario analysis