You increase the advertising intensity for your product in market A but not in market B.Sales in A rise from 1140 to 1180 units per week while sales in B fall from 1270 to 1230.The Difference-in-difference estimate of the effect of the increased advertising is:
A)0 units
B)80 units
C)100 units
D)120 units

Question

You increase the advertising intensity for your product in market A but not in market B.Sales in A rise from 1140 to 1180 units per week while sales in B fall from 1270 to 1230.The Difference-in-difference estimate of the effect of the increased advertising is:
A)​0 units
B)80 units
C)100 units
D)​120 units

Quizplus · Accepted Answer

The difference-in-difference estimate is calculated by comparing the change in sales in market A to the change in sales in market B. Market A's sales increased by 40 units (1180 - 1140), while market B's sales decreased by 40 units (1230 - 1270). The difference-in-difference is 40 - (-40) = 80 units.

You Increase the Advertising Intensity for Your Product in Market