Group-Heterogeneous Changes-in-Changes and Distributional Synthetic Controls

Abstract

We develop new changes-in-changes (CIC) and distributional synthetic controls (DSC) types of methods when there exists group-level heterogeneity. For CIC, we allow individuals to belong to heterogeneous groups, extending Athey and Imbens (2006) by finding appropriate control groups that share similar group-level unobserved characteristics to the treatment groups. For DSC, we show that the synthetic control units are not necessarily from the same period as in Gunsilius (2023); they may come from different periods in which they have comparable group-level heterogeneity to the treatment group. Implementation of these new methods is briefly discussed.