Continuous Interacted DiD (Difference-in-Differences)

The true value of Swarna-Sub1 (the STRV seed) is measured when districts flood. Let’s interact the continuous seed treatment with the flood index c.bin_max_60_611.

• Run a regression of evi_med against the interaction of our two continuous variables c.seed##c.bin_max_60_611 using fully specified Two-Way Fixed Effects (i.e., xtreg with , fe and i.year).
• Cluster your standard errors at the district_id level.
• Save the results using eststo and call it did3.

1. Adapt the table code from Exercise 1 to add one more column (for did3) and place the table into Overleaf:
2. In the relevant section/subsection of your Overleaf file, evaluate the coefficient of the interaction term c.seed#c.bin_max_60_611. What does a positive or negative sign tell us about how the seed mediates the impact of floods on yield?

---