Interpreting Event-Studies from Recent Difference-in-Differences Methods

This note discusses the interpretation of event-study plots produced by recent difference-in-differences methods. I show that even when specialized to the case of non-staggered treatment timing, the default plots produced by software for three of the most popular recent methods (de Chaisemartin and D'Haultfoeuille, 2020; Callaway and SantAnna, 2021; Borusyak, Jaravel and Spiess, 2024) do not match those of traditional two-way fixed effects (TWFE) event-studies: the new methods may show a kink or jump at the time of treatment even when the TWFE event-study shows a straight line. This difference stems from the fact that the new methods construct the pre-treatment coefficients asymmetrically from the post-treatment coefficients. As a result, visual heuristics for analyzing TWFE event-study plots should not be immediately applied to those from these methods. I conclude with practical recommendations for constructing and interpreting event-study plots when using these methods.