Placebo Tests for Synthetic Controls

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Pre-Event Trends in the Panel Event-Study Design (2019, methodology): “Intuitively, as synthetic control methods rely on using pre-event observable data to construct a counterfactual trend in the absence of the policy, conditions for valid inference tend to involve a form of exogeneity of treatment conditional on the observables used to construct the counterfactual (e.”
Revisiting the synthetic control estimator (2016, methodology): “We consider first a model in which the J +1 units are divided into K groups, where for each j we have that: yjt(0) = δt + λ k t + εjt (13) 29Monte Carlo simulations using this model was also studied in detail in Ferman et al. (2017) and in Ferman and Pinto (2017). for some k = 1, ...,K.”