When researchers develop new econometric methods it is common practice to compare the performance of the new methods to those of existing methods in Monte Carlo studies. The credibility of such Monte Carlo studies is often limited because of the freedom the researcher has in choosing the design....

This paper develops an alternative approach to the widely used Difference-In-Difference (DID) method for evaluating the effects of policy changes. In contrast to the standard approach, we introduce a nonlinear model that permits changes over time in the effect of unobservables (e.g., there may...