# The data is adapted from the dataset in Card and Krueger (1994), which estimates 
# the causal effect of an increase in the state minimum wage on the employment.  
#
# On April 1, 1992, New Jersey raised the state minimum wage from $4.25 to $5.05 
# while the minimum wage in Pennsylvania stays the same at $4.25.  
#
# Data about the employment in the fast food restaurants in NJ (0) and PA (1) were 
# collected in February 1992 and in November 1992.  
#
# Total 384 restaurants after removing null values.
#
# Card and Krueger (1994) Minimum Wages and Employment: A Case Study of the 
# Fast-Food Industry in New Jersey and Pennsylvania, The American Economic Review,
# 84(4), 772-793. https://davidcard.berkeley.edu/papers/njmin-aer.pdf
#
# time=0 : February 1992 
# time=1 : November 1992
#
# treatment=1 : NJ raised the state minimum wage from $4.25 to %5.05
# treatment=0 : PA minimum wage stays the same at $4.25
#

data = read.table("https://hedibert.org/wp-content/uploads/2024/10/card-krueger.txt",header=TRUE)

attach(data)

pretreatment.untreated  = mean(outcome[time==0 & treatment==0])
pretreatment.treated    = mean(outcome[time==0 & treatment==1])
posttreatment.untreated = mean(outcome[time==1 & treatment==0])
posttreatment.treated   = mean(outcome[time==1 & treatment==1])

A = posttreatment.treated   - pretreatment.treated
B = posttreatment.untreated - pretreatment.untreated
effect = A-B
c(A,B,effect)

interaction = time*treatment

summary(lm(outcome~time+treatment+interaction))


plot(c(0,0),xlim=c(0,3),ylim=c(19.5,23.5),col=0,axes=FALSE,xlab="",ylab="Employment growth")
box();axis(2)
abline(v=1.5)
text(1,pretreatment.untreated,round(pretreatment.untreated,2),col=2)
text(2,posttreatment.untreated,round(posttreatment.untreated,2),col=2)
text(1,pretreatment.treated,round(pretreatment.treated,2),col=4)
text(2,posttreatment.treated,round(posttreatment.treated,2),col=4)
text(1,19.5,"Pre-treatment")
text(2,19.5,"Post-treatment")
legend("topright",legend=c("Control Group","Treated Group"),col=c(2,4),pch=16,bty="n")