Econ3951 Major Project Seminar

Text: Stock & Watson, "Introduction to Econometrics

2. You hope to determine the effectiveness of mask mandates on covid case numbers through a difference-in-differences setup. You notice that Minnesota imposed a mask mandate in July 2020, while South Dakota never implemented a mask mandate at all.

a) Write the equation for this regression. Make sure your equation has fixed effects, subscripts and an error term. You can call your variables whatever you want as long as I know what they are.

b) What is the treatment group here? What is the control group?

c) Why is it important to check pre-trends in coronavirus cases for the two states?

d) You're worried that there might be political/cultural differences between the two states that explain the differences in mask mandate policy as well as the difference in covid cases. Do you need to control for this separately, or will fixed effects take care of it? Explain.