Area-of-effect placebo tests

The emergence of GIS data offers a plethora of analytical approaches to investigate societal phenomena or policies in a spatial context. However, not all policies are implemented on the level of clearly delineated administrative areas. Some interventions might be active in imprecisely specified or only partially known geographic sectors. As a direct consequence, the resulting uncertainty regarding the area-of-effect (AOE) impacts on estimates of the effectiveness of a related policy. In this research, I present a new Stata tool to investigate the robustness of area-specific effectiveness estimates when the observed area might suffer from unknown degrees of misspecification relative to the actual AOE of a policy. In this regard, there are several dimensions of uncertainty regarding the observed AOE that relate to a potential misspecification of the observed intervention area in three dimensions—its position, orientation, and scale. The impact of these forms of area misspecification can be assessed in the aoeplacebo program, either by generating a number of AOE placebo test diagnostics or conducting AOE permutation simulations.