Confounding and regression adjustment in difference-in-differences studies.

Confounding in difference-in-differences is more complicated than in cross-sectional settings, from which techniques and intuition to address observed confounding cannot be imported wholesale. Instead, analysts should begin by postulating a causal model that relates covariates, both time-varying and those with time-varying effects on the outcome, to treatment. This causal model will then guide the specification of an appropriate analytical model (eg, using regression or matching) that can produce unbiased treatment effect estimates. We emphasize the importance of thoughtful incorporation of covariates to address confounding bias in difference-in-difference studies.