Question: 3. [15 points] Difference-in-differences. Consider the below graph with estimates from a dynamic difference-in-differences model for a treatment that occurs between periods 4 and 5,

3. [15 points] Difference-in-differences. Consider the below graph with estimates from a dynamic difference-in-differences model for a treatment that occurs between periods 4 and 5, with 95% confidence intervals shown. Ay 2 1 - A. What about this graph might make us concerned about our identification assumptions? B. Ignoring any concerns we have, what would we say is the effect of treatment on Y in this case? (note the height of the line in period 5 is about 3, in period 6 is about 1, and in period 7 is about 0.5)

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