Tests the identifying assumption of the shocks route — that shocks are
as-good-as-randomly assigned — by regressing the shocks on pre-determined
shock-level characteristics, weighted by exposure (Borusyak, Hull & Jaravel
2022). Coefficients near zero and a non-significant joint test support shock
exogeneity.
Usage
ssb_shock_balance(design, shock_covariates, weight = TRUE)
Arguments
- design
An [ssb_design()] object.
- shock_covariates
A `data.frame` keyed by `sector` (and `time` for
panels) holding the shock-level characteristics to test.
- weight
If `TRUE` (default) weight by exposure \(s_n\); else unweighted.
Value
A list (class `ssb_shock_balance`) with a coefficient table and the
joint Wald test that the characteristics are unrelated to the shocks.