Before revision: Linear regressions with time and group fixed effects are widely used to estimate the effect of a treatment on an outcome. If the effect of the treatment is constant across groups and over time, such regressions identify the treatment effect under the standard "common trends" assumption. But these regressions have not been analyzed yet allowing for treatment effect heterogeneity. We study two commonly used two-way fixed effectsregressions. We start by showing that without assuming constant treatment effects, those regressions identify weighted sums of the average treatment effects in each group and period, where some weights may be negative.
After revision: Linear regressions with time and group fixed effects are widely used to estimate treatment effects. We show that they identify weighted sums of the average treatment effects in each group and period, where some weights may be negative.