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Mediation Analysis Synthetic Control

Author

Listed:
  • Giovanni Mellace

    (University of Southern Denmark)

  • Alessandra Pasquini

    (Bank of Italy)

Abstract

The synthetic control method (SCM) allows estimating the causal effect of an intervention in settings where panel data on a small number of treated and control units are available. We show that the existing SCM, as well as its extensions, can be easily modified to estimate how much of the "total" effect goes through observed causal channels. Our new mediation analysis synthetic control (MASC) method requires additional assumptions that are arguably mild in many settings. We illustrate the implementation of MASC in an empirical application estimating the direct and indirect effects of an anti-smoking intervention (California's Proposition 99).

Suggested Citation

  • Giovanni Mellace & Alessandra Pasquini, 2022. "Mediation Analysis Synthetic Control," Temi di discussione (Economic working papers) 1389, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_1389_22
    as

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    File URL: https://www.bancaditalia.it/pubblicazioni/temi-discussione/2022/2022-1389/en_tema_1389.pdf
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    References listed on IDEAS

    as
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    6. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
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    8. Florian Gunsilius, 2020. "Distributional synthetic controls," Papers 2001.06118, arXiv.org, revised Dec 2021.
    9. Stefan Klößner & Ashok Kaul & Gregor Pfeifer & Manuel Schieler, 2018. "Comparative politics and the synthetic control method revisited: a note on Abadie et al. (2015)," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 154(1), pages 1-11, December.
    10. Bibek Adhikari, 2015. "When Does Introducing a Value-Added Tax Increase Economic Efficiency? Evidence from the Synthetic Control Method," Working Papers 1524, Tulane University, Department of Economics, revised Nov 2015.
    11. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
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    More about this item

    Keywords

    Synthetic Control Method; mediation analysis; causal mechanisms; direct and indirect effects;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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