The "before and after" specification, binary variable specification, and "entity-demeaned" specification produce identical OLS estimates
A)as long as there are observations for more than two time periods.
B)if you use the heteroskedasticity-robust option in your regression program.
C)for the case of more than 100 observations.
D)as long as T = 2 and the intercept is excluded from the "before and after" specification.

Question

Quizplus · Accepted Answer

These specifications produce identical OLS estimates under the condition that there are exactly two time periods (T = 2) and the intercept is excluded from the "before and after" specification. This is because, under these conditions, all three methods effectively control for unobserved, time-invariant differences in the same way.

The "Before and After" Specification, Binary Variable Specification, and "Entity-Demeaned