In the rest of this paper, we drop individual argument i for simplicity. A crucial assumption in this model is that a difference between transitory shocks in time /=0 and t= 1 is mean independent of the treatment (see Abadie 2005, Heckman, Ichimura and Todd 1998). That means that without the treatment, the average outcome for the treated would change in the same way as the average outcome for the controls, or untreated. This assumption could be challenged if groups differ in important characteristics.