How do you utilize event studies in policy research?
It sounds like you are really looking at differences in differences, not event studies.
Diff in diff compares outcomes before/after a policy intervention (as does an event study) (the first diff) and between treated and untreated units (the second diff).
The underlying assumption is that, in the absence of the policy, treated and untreated units (here: states) would have experienced the same changes over time.
A good reference is Ch 5 of Mastering Metrics (by Angrist and Pischke), but the previously suggested &quot;Harmless Econometrics&quot; by the same authors is also very good.