Which method compares outcomes over time between treated and untreated groups?

• A. Causal Inference
• B. External Validity
• C. Hypothesis
• D. Difference-in-Differences

Answer: (D)

Difference-in-Differences compares outcomes over time between treated and untreated groups. It looks at how the outcome changes from before to after the treatment in the group that received the treatment and contrasts that with the change in the group that did not receive the treatment. The effect is the difference between those two changes. This approach helps account for fixed differences between groups and for shocks that affect both groups, assuming both would have followed similar trends if the treatment hadn’t occurred. The other terms are broader: causal inference is the overall aim of identifying cause-and-effect, external validity concerns whether findings generalize, and a hypothesis is a testable statement rather than a method for comparing time-based outcomes.