Discussion on "Instrumented difference-in-differences" by Ye, Ertefaie, Flory, Hennessy, Small

Area of Science:

• Econometrics
• Causal Inference
• Epidemiology

Background:

• Unmeasured confounding poses a significant challenge in establishing causal relationships.
• Traditional methods like instrumental variable (IV) and difference-in-differences (DID) have limitations in addressing unmeasured confounding.
• The instrumented difference-in-differences (YEFHS) method offers a novel approach to this problem.

Purpose of the Study:

• To systematically compare the assumptions and identification strategies of IV, DID, and the YEFHS method.
• To derive novel identification results for causal inference under unmeasured confounding.
• To explore covariate adjustment strategies within the YEFHS framework.

Main Methods:

• Comparative analysis of causal inference methodologies.
• Theoretical derivation of identification conditions.
• Exploration of extensions for covariate adjustment.

Main Results:

• The study clarifies the relationships between IV, DID, and YEFHS assumptions.
• New identification results are presented, enhancing the YEFHS framework.
• Guidance is provided on incorporating covariates into the YEFHS method.

Conclusions:

• The YEFHS method provides a valuable alternative for addressing unmeasured confounding.
• Understanding the connections between IV, DID, and YEFHS aids in selecting appropriate causal inference tools.
• Further research can build upon these identification results for robust causal effect estimation.