Analysis of Diff-in-Diff Data - Carrefour Rome

Published

December 10, 2024

Instructions

Please submit your assignment as html file to me via email. Please call your assignment: “yourname_assignment5.html”. For example, I would submit something called “popescu_assignment5.html”. Please make sure that it is all in lower case.

To match the appearance of this template, ensure that your assignment preamble or YAML is set up as follows

---
title: "Assignment 5"
author: "Your Name"
date: "December 10, 2024"
format:
  html:
    toc: true
    number-sections: true
    colorlinks: true
    smooth-scroll: true
    embed-resources: true
---

Important: Headers like “Question” should be marked with a # (for example, # Question). This will format the text as a bold, larger header when the document is rendered, and it will also appear in the Table of Contents. For regular text, simply write it on the line below the header.

Please answer all the questions below.

1 Introduction

In this hypothetical situation (the data is made up, i.e. does not exist), Carrefour Rome is evaluating the effectiveness of a coupon program designed to increase revenue by providing discount coupons for purchases over 40 euros. So they chose all the Carrefour Ipers and provided coupons from August until December.

2 Loading the Data

You can download the data from:

Diff-in-Diff Data
Spatial Data on roads from the Rome Area

So, we want to calculate \(\beta_3\) from:

\[ Y_{it} = \beta_0 + \beta_1 \text{Group}_i + \beta_2 \text{Time}_t +\beta_3 (\text{Group}_i \times \text{Time}_t) + \epsilon_{it} \]

Question 1

Write the relevant equation for the problem and explain what the different terms represent.

Question 2

Create a DAG that maps out the variables that we care about.

Question 3

Create a static map for the area of interest and depict the different types of Carrerfour in different colors.

Question 4

Create a summary statistics table for the data and comment on the skewness or normality of the following variables: variety of products, store size, traffic, and revenue.

Question 5

What is the number of stores where the coupon program got implemented?

Question 6

What is the duration of the coupon program?

Question 7

Calculate \(\beta_3 (\text{Group}_i \times \text{Time}_t)\) from:

\[ Y_{it} = \beta_0 + \beta_1 \text{Group}_i + \beta_2 \text{Time}_t + \beta_3 (\text{Group}_i \times \text{Time}_t) + \epsilon_{it} \]

Question 8

Interpret the coefficients from the table.

Question 9

Create an event-study plot.

Question 10

Does the parallel trends assumption hold?

Question 11

What do you tell the Carrefour manager? Do the coupons work? Should Carrefour expand the coupon system?