You put your product on 20% off sale market A but leave it unchanged in market B.Sales in A increase from 840 to 1040 units per week while sales in B rise from 770 to 830.The Difference-in-difference estimate of the effect of the price change is:
A)80 units
B)
100 units
C)120 units
D)130 units

Question

You put your product on 20% off sale market A but leave it unchanged in market B.Sales in A increase from 840 to 1040 units per week while sales in B rise from 770 to 830.The Difference-in-difference estimate of the effect of the price change is:
A)​80 units
B) 
100 units
C)120 units
D)​130 units

Quizplus · Accepted Answer

The difference-in-difference estimate is calculated by taking the difference in sales increase between the two markets and adjusting for the natural sales increase in the control market (B). Market A's sales increased by 200 units (1040 - 840), and Market B's sales increased by 60 units (830 - 770). The difference-in-difference estimate is 200 - 60 = 140 units, indicating an error in the provided options. However, based on the closest match to the correct calculation, the intended answer might be D) 130 units, acknowledging a possible typo or calculation error in the question or choices.

You Put Your Product on 20% Off Sale Market a but Leave