The difference-in-difference method: Assessing the selection bias in the effects of neighborhood environment on health

•We discuss self-selection bias in neighborhoods and health research literature.•We use difference-in-difference estimation technique examine the self selection bias.•Conventional estimates underestimate the effect of economic environment on health.

This paper uses the difference-in-difference estimation approach to explore the self-selection bias in estimating the effect of neighborhood economic environment on self-assessed health among older adults. The results indicate that there is evidence of downward bias in the conventional estimates of the effect of neighborhood economic disadvantage on self-reported health, representing a lower bound of the true effect.