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A Primer for Applying Propensity-Score Matching

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  • Carolyn Heinrich

    ()

  • Alessandro Maffioli

    ()

  • Gonzalo Vázquez

    ()

Abstract

The use of microeconometric techniques to estimate the effects of development policies has become a common approach not only for scholars, but also for policy-makers engaged in designing, implementing and evaluating projects in different fields. Among these techniques, Propensity-Score Matching (PSM) is increasingly applied in the policy evaluation community. This technical note provides a guide to the key aspects of implementing PSM methodology for an audience of practitioners interested in understanding its applicability to specific evaluation problems. The note summarizes the basic conditions under which PSM can be used to estimate the impact of a program and the data required. It explains how the Conditional Independence Assumption, combined with the Overlap Condition, reduces selection bias when participation in a program is determined by observable characteristics. It also describes different matching algorithms and some tests to assess the quality of the matching. Case studies are used throughout to illustrate important concepts in impact evaluation and PSM. In the annexes, the note provides an outline of the main technical aspects and a list of statistical and econometric software for implementing PSM.

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Bibliographic Info

Paper provided by Inter-American Development Bank, Office of Strategic Planning and Development Effectiveness (SPD) in its series SPD Working Papers with number 1005.

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Date of creation: Aug 2010
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Handle: RePEc:idb:spdwps:1005

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Keywords: Policy Evaluation; Microeconometrics; Propensity-Score Matching; Average Treatment Effect on the Treated; Development Effectiveness;

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Cited by:
  1. Stijn Broecke, 2013. "Tackling graduate unemployment in North Africa through employment subsidies: A look at the SIVP programme in Tunisia," IZA Journal of Labor Policy, Springer, vol. 2(1), pages 1-19, December.
  2. Forbes, Kristin & Fratzscher, Marcel & Straub, Roland, 2014. "Capital Controls and Macroprudential Measures: What Are They Good For?," CEPR Discussion Papers 9798, C.E.P.R. Discussion Papers.
  3. Maria S. Floro & Javier Bronfman, 2012. "How Well have Social Protection Schemes in Chile Reduced Household Vulnerability?," Working Papers 2012-03, American University, Department of Economics.
  4. M. Filippini & L. Ortiz & G. Masiero, 2013. "Assessing the impact of national antibiotic campaigns in Europe," The European Journal of Health Economics, Springer, vol. 14(4), pages 587-599, August.
  5. Omar Zambrano & Marcos Robles & Denisse Laos, 2014. "Global boom, local impacts: Mining revenues and subnational outcomes in Peru 2007-2011," IDB Publications 85133, Inter-American Development Bank.
  6. Jerrett Jones, 2013. "Examining the Relationship between Paternal Incarceration, Maternal Stress, and Harsh Parenting Behaviors," Working Papers 1444, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Research on Child Wellbeing..
  7. Diana Warren & John P. Haisken-DeNew, 2013. "Early Bird Catches the Worm: The Causal Impact of Pre-school Participation and Teacher Qualifications on Year 3 National NAPLAN Cognitive Tests," Melbourne Institute Working Paper Series wp2013n34, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  8. Rodrigo García Ayala & Andrés Estrugo, 2014. "Assessing the Effects of Climate and Socioeconomic Factors on Vulnerability to Vector-Borne Diseases in Latin America," IDB Publications 85875, Inter-American Development Bank.
  9. Liverpool-Tasie, Lenis Saweda, 2012. "Did using input vouchers improve the distribution of subsidized fertilizer in Nigeria?: The case of Kano and Taraba states," IFPRI discussion papers 1231, International Food Policy Research Institute (IFPRI).
  10. Solomon Asfaw & Silvio Daidone & Benjamin Davis & Josh Dewbre & Alessandro Romeo & Paul Winters & Katia Covarrubias & Habiba Djebbari, 2012. "Analytical Framework for Evaluating the Productive Impact of Cash Transfer Programmes on Household Behaviour ? Methodological Guidelines for the From Protection to Production Project," Working Papers 101, International Policy Centre for Inclusive Growth.
  11. Thomas J. Cooke, 2013. "All tied up: Tied staying and tied migration within the United States, 1997 to 2007," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 29(30), pages 817-836, October.
  12. Gustavo A. Crespi & Alessandro Maffioli & Pierre Mohnen & Gonzalo Vázquez, 2011. "Evaluating the Impact of Science, Technology and Innovation Programs: a Methodological Toolkit," SPD Working Papers 1104, Inter-American Development Bank, Office of Strategic Planning and Development Effectiveness (SPD).

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