using exogenous but non-random events for DiD

I have a quick question regarding whether the following event might pose any issues for my study.

I am interested in exploring perceptions of climate change. In the early 1970s, former dictator Park of South Korea selected nine regions in Korea and established heavy chemical factories in them, subsidizing their development. Now, I am interested in investigating whether individuals who resided in those regions during that time, and who directly or indirectly benefited from this initiative (as these regions experienced rapid growth compared to others), exhibit greater tolerance towards climate change.

However, the challenge lies in the fact that these regions were likely not chosen randomly (although I am not 100% sure). I am encountering difficulty in gathering evidence on the allocation process, which could have involved strategic decisions or political connections.

If I were to compare these nine regions with similar ones, would that introduce any problems? Typically, it would. However, for my purposes, I don't believe there are endogeneity issues, as it is improbable that regions more tolerant of pollution were intentionally selected due to the dictator's regime. The main concern is that individuals tolerant of pollution may not be so due to economic benefits, but rather because the targeted regions were chosen based on political affiliations. Loyalty to the dictator, stemming from political connections, might influence respondents to exhibit greater tolerance of pollution (though I consider this scenario unlikely. I would also control for political affiliation).

Would the non-random selection process of these regions pose a problem for my study?

Possibly if the parallel trends assumption looks okay, you can argue that the endogeneity is not an issue.

This topic was automatically closed 42 days after the last reply. New replies are no longer allowed.

If you have a query related to it or one of the replies, start a new topic and refer back with a link.