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Evaluating State Programmes - “Natural Experiments” and Propensity Scores

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Author Info

  • Denis Conniffe

    (The Economic and Social Research Institute, Dublin)

  • Vanessa Gash

    (The Economic and Social Research Institute, Dublin)

  • Philip J. O'Connell

    (The Economic and Social Research Institute, Dublin)

Abstract

Evaluations of programmes — for example, labour market interventions such as employment schemes and training courses — usually involve comparison of the performance of a treatment group (recipients of the programme) with a control group (non-recipients) as regards some response (gaining employment, for example). But the ideal of randomisation of individuals to groups is rarely possible in the social sciences and there may be substantial differences between groups in the distributions of individual characteristics that can affect response. Past practice in economics has been to try to use multiple regression models to adjust away the differences in observed characteristics, while also testing for sample selection bias. The Propensity Score approach, which is widely applied in epidemiology and related fields, focuses on the idea that “matching” individuals in the groups should be compared. The appropriate matching measure is usually taken to be the prior probability of programme participation. This paper describes the key ideas of the Propensity Score method and illustrates its application by reanalysis of some Irish data on training courses.

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File URL: http://www.esr.ie/vol31_4/1Conniffe.pdf
File Function: First version, 2000
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Bibliographic Info

Article provided by Economic and Social Studies in its journal Economic and Social Review.

Volume (Year): 31 (2000)
Issue (Month): 4 ()
Pages: 283-308

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Handle: RePEc:eso:journl:v:31:y:2000:i:4:p:283-308

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Web page: http://www.esr.ie

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References

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  1. Jinyong Hahn, 1998. "On the Role of the Propensity Score in Efficient Semiparametric Estimation of Average Treatment Effects," Econometrica, Econometric Society, vol. 66(2), pages 315-332, March.
  2. Little, Roderick J A, 1985. "A Note about Models for Selectivity Bias," Econometrica, Econometric Society, vol. 53(6), pages 1469-74, November.
  3. Heckman, James J & Smith, Jeffrey, 1997. "Making the Most Out of Programme Evaluations and Social Experiments: Accounting for Heterogeneity in Programme Impacts," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 487-535, October.
  4. Joshua D. Angrist, 1995. "Conditioning on the Probability of Selection to Control Selection Bias," NBER Technical Working Papers 0181, National Bureau of Economic Research, Inc.
  5. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  6. Callan, Tim & Barry Reilly, 1992. "Unions and the wage distribution in Ireland," Discussion Papers in Economics 18/92, Department of Economics, University of Sussex.
  7. Joshua Angrist & Alan Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," Working Papers 653, Princeton University, Department of Economics, Industrial Relations Section..
  8. Imbens, Guido W & Rubin, Donald B, 1997. "Estimating Outcome Distributions for Compliers in Instrumental Variables Models," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 555-74, October.
  9. Heckman, J.J. & Hotz, V.J., 1988. "Choosing Among Alternative Nonexperimental Methods For Estimating The Impact Of Social Programs: The Case Of Manpower Training," University of Chicago - Economics Research Center 88-12, Chicago - Economics Research Center.
  10. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," NBER Working Papers 6699, National Bureau of Economic Research, Inc.
  11. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
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Citations

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Cited by:
  1. Reena Aggarwal & Isil Erel & René Stulz & Rohan Williamson, 2007. "Differences in Governance Practices between U.S. and Foreign Firms: Measurement, Causes, and Consequences," NBER Working Papers 13288, National Bureau of Economic Research, Inc.
  2. Donal O'Neill, 2000. "Evaluating Labour Market Interventions," Economics, Finance and Accounting Department Working Paper Series n990300, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  3. Anna Kovner & Chenyang Wei, 2012. "The private premium in public bonds," Staff Reports 553, Federal Reserve Bank of New York.
  4. Gerry Boyle & Rory McElligott & Jim O'Leary, 2004. "Public-Private Wage Differentials in Ireland, 1994-2001," Economics, Finance and Accounting Department Working Paper Series n1421004, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  5. Halpin, Brendan & Hill, John, 2008. "Active Labour Market Programmes and Poverty Dynamics in Ireland," MPRA Paper 10335, University Library of Munich, Germany.
  6. Hutchinson, Paul & Carton, Thomas W. & Broussard, Marsha & Brown, Lisanne & Chrestman, Sarah, 2012. "Improving adolescent health through school-based health centers in post-Katrina New Orleans," Children and Youth Services Review, Elsevier, vol. 34(2), pages 360-368.
  7. Hill, John & Halpin, Brendan, 2008. "The Role of Active Labour Market Programmes in Employment Policy," MPRA Paper 10498, University Library of Munich, Germany.
  8. James E. Helmreich & Robert M. Pruzek, . "PSAgraphics: An R Package to Support Propensity Score Analysis," Journal of Statistical Software, American Statistical Association, vol. 29(i06).
  9. Reena Aggarwal & Isil Erel & Rene M. Stulz & Rohan Williamson, 2007. "Do U.S. Firms Have the Best Corporate Governance? A Cross-Country Examination of the Relation between Corporate Governance and Shareholder Wealth," NBER Working Papers 12819, National Bureau of Economic Research, Inc.
  10. McGuinness, Seamus & O'Connell, Philip J. & Kelly, Elish, 2011. "One Dummy Won't Get it: The Impact of Training Programme Type and Duration on the Employment Chances of the Unemployed in Ireland," Papers WP410, Economic and Social Research Institute (ESRI).
  11. McGuinness, Seamus & O'Connell, Philip J. & Kelly, Elish & Walsh, John R., 2011. "Activation in Ireland: An Evaluation of the National Employment Action Plan," Research Series, Economic and Social Research Institute (ESRI), number RS20.
  12. Halpin, Brendan & Hill, John, 2007. "Active Labour Market Programmes and Poverty Dynamics in Ireland: 1994-2001," MPRA Paper 10340, University Library of Munich, Germany.
  13. McGuinness, Seamus & O'Connell, Philip J. & Kelly, Elish, 2011. "Carrots without Sticks: The Impacts of Job Search Assistance in a Regime with Minimal Monitoring and Sanctions," Papers WP409, Economic and Social Research Institute (ESRI).
  14. Steven Drucker & Manju Puri, 2004. "The Tying of Lending and Equity Underwriting," NBER Working Papers 10491, National Bureau of Economic Research, Inc.
  15. Bridget Terry Long & Michal Kurlaender, 2008. "Do Community Colleges provide a Viable Pathway to a Baccalaureate Degree?," NBER Working Papers 14367, National Bureau of Economic Research, Inc.
  16. Nolan, Anne, 2006. "Evaluating the Impact of Eligibility for Free Care on the Use of GP Services in Ireland: A Difference-in-Difference Matching Approach," Papers HRBWP25, Economic and Social Research Institute (ESRI).

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