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On the Specification of Propensity Scores: with Applications to the Analysis of Trade Policies

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Author Info
Daniel Millimet () (Southern Methodist University)
Rusty Tchernis () (Indiana University Bloomington)

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Abstract

The use of propensity score models for program evaluation with non-experimental data typically requires the propensity score be estimated, often with a model whose specification is unknown. While theoretical results suggest that estimators utilizing more flexible propensity score specifications perform better, this has not filtered into applied research. Here, we provide Monte Carlo evidence indicating benefits of over-specifying the propensity score that are robust across a number of different covariate structures and estimators. We illustrate these results with two applications, one assessing the environmental effects of GATT/WTO membership and the other assessing the impact of euro adoption on bilateral trade.

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File URL: http://www.iub.edu/~caepr/RePEc/PDF/2006/CAEPR2006-013_Updated.pdf
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Publisher Info
Paper provided by Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington in its series Caepr Working Papers with number 2006-013_Updated.

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Length: 48 pages
Date of creation: Jan 2008
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Handle: RePEc:inu:caeprp:2006013_updated

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Related research
Keywords: Treatment Effects; Program Evaluation; WTO; Environment; Currency Union;

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Find related papers by JEL classification:
C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation and Testing
F18 - International Economics - - Trade - - - Trade and Environment

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  1. Millimet, Daniel L. & Tchernis, Rusty, 2008. "Minimizing Bias in Selection on Observables Estimators When Unconfoundness Fails," IZA Discussion Papers 3632, Institute for the Study of Labor (IZA). [Downloadable!]
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  2. Millimet, Daniel L. & Tchernis, Rusty & Husain, Muna, 2008. "School Nutrition Programs and the Incidence of Childhood Obesity," IZA Discussion Papers 3664, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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