Which term is a statistical method that compares changes in outcomes over time between a treated group and a non-treated group?

• A. Causal Inference
• B. Internal Validity
• C. Difference-in-Differences
• D. Empirical Research

Answer: (C)

The idea being tested is a method that isolates how outcomes change over time for a group that receives treatment compared to a similar group that does not, by looking at the before-after change in each group and then comparing those changes.

This approach, often called difference-in-differences, is powerful because it separates the treatment effect from baseline differences between groups and from shocks that affect both groups. The core idea is to compute the change in the outcome for the treated group (after minus before) and subtract the change in the outcome for the non-treated group (after minus before). The remaining difference attributes changes to the treatment itself, under the assumption that, in the absence of treatment, both groups would have followed parallel trends over time.

For example, if a policy is implemented in some regions but not others, you’d compare how the outcome changes in the treated regions from before to after, subtract how it changes in the untreated regions over the same period. The result estimates the policy’s impact, assuming the untreated regions would have followed the same trajectory if there had been no policy.

Other terms mentioned are related but broader. Causal Inference refers to the overall field of deducing cause-effect relationships and includes many methods beyond this one. Internal Validity concerns whether a study design supports causal conclusions, not a specific technique. Empirical Research describes a broad data-driven approach, not a particular method for comparing changes over time between groups.