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I went with synthetic control over DiD because Miami is kind of a weird market and finding a single clean parallel-trend city felt like wishful thinking.
Start by framing the problem as a causal inference question where randomization is absent, so you need a quasi-experimental design. Propose a difference-in-differences (DiD) approach with a carefully selected control geography, and then discuss how a linear mixed-effects model can account for repeated measures and clustering. Walk through the assumptions, mechanics, and how you'd validate the parallel trends assumption.
Pro tip: Emphasize the importance of pre-period data to test parallel trends and consider using synthetic control if a single control geography is insufficient. Also, mention that you'd check for spillover effects (e.g., customers in control areas ordering to Miami) and adjust for them if necessary.
Clarify the treatment (ultrafast delivery in Miami) and outcome (order volume). Identify potential confounders like seasonality, local events, and marketing campaigns that could bias the estimate.
Choose a control city that is similar to Miami in demographics, baseline order volume, and trends, but did not receive the treatment. Use matching or synthetic control methods to construct a comparable counterfactual.
Propose difference-in-differences (DiD) to compare pre-post changes in Miami vs. control. Discuss assumptions (parallel trends) and how to test them. If using a linear mixed-effects model, specify fixed and random effects.
For a linear mixed-effects model: fixed effects include treatment group, time period, and their interaction (DiD estimator), plus covariates like day-of-week, promotions, and weather. Random effects include geography-level intercepts and possibly time slopes to account for repeated measures.
Check model assumptions, conduct placebo tests, and assess sensitivity to control choice. Interpret the treatment effect size and confidence intervals, and discuss limitations.
AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.