Template-Type: ReDIF-Paper 1.0 Author-Name: Akanksha Negi Author-Name-First: Akanksha Author-Name-Last: Negi Author-Email: akanksha.negi@monash.edu Author-Workplace-Name: Monash University Author-Name: Digvijay S. Negi Author-Name-First: Digvijay S. Author-Name-Last: Negi Author-Email: digvijay.negi@ashoka.edu.in Author-Workplace-Name: Ashoka University Title: Difference-in-Differences with a Misclassified Treatment Abstract: This paper studies identification and estimation of the average treatment effect of a latent treated subpopulation in difference-in-difference designs when the observed treatment is differentially (or endogenously) mismeasured for the truth. Common examples include misreporting and mistargeting. We propose a twostep estimator which corrects for the empirically common phenomenon of onesided misclassification in the treatment status. The solution uses a single exclusion restriction embedded in a partial observability probit to point-identify the latent parameter. We demonstrate the method by revisiting two large-scale national programs in India; one where pension benefits are under-reported and second where the program is mistargeted. length: 48 Creation-Date: 20240829 Revision-Date: Publication-Status: File-URL:/www/wwwashokaeduin_628/public/dp/RePEc/ash/wpaper/paper121_0.pdf File-Format: Application/pdf Number: 121 Keywords: Difference-in-differences Keywords: Heterogeneous treatment effects Keywords: Misclassification Keywords: Panel data Keywords: Repeated cross-sections Handle: RePEc:ash:wpaper:121