The crucial assumption here is that quasi-experimental groups differ only by observable covariates. This condition eliminates any bias. Typically, the difference-in-differences model is estimated using simple regression analysis, w'hen any characteristic one wants to control for could be entered into the equation and made to interact with time and treatment (Meyer 1995, Gruber 1994). Another approach is to balance covariates across groups to make them more comparable, which can be achieved through matching methods (Rosenbaum and Rubin 1983, Heckman, Ichimura and Todd 1998).