You are managing a clothing store. Weekly sales increase from 400 units to 500 units. A competitor store has increased sales from 450 units to 470 units during the same time period.
(a) What is the diff-in-diff estimate of the impact of the show on your sales? Explain.
(b) What concerns do you have with respect to “representativeness” in this estimate? Explain.
(c) What concerns do you have with respect to “leakage” in this estimate? Explain.
(d) Propose something that you could do to improve upon this estimation strategy.