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variances in the regression framework. More convincing analysis sometimes available by refining the definition of treatment and control groups. Example: change in state health care policy aimed at elderly. Could use data only on people in the state with the policy change, both before and after the change, with the control group being people 55 to 65 (say) and and the treatment group being people over 65. This DD analysis assumes that the paths of health outcomes for the younger and older groups would not be systematically different in the absense of intervention. Instead, might use the over-65 population from another state as an additional control. Let dE be a dummy equal to one for someone over 65.

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