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Evaluating Nonexperimental Estimators for Multiple Treatments: Evidence from Experimental Data

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  • Carlos A. Flores

    ()
    (Department of Economics, University of Miami)

  • Oscar A. Mitnik

    ()
    (Department of Economics, University of Miami and IZA)

Abstract

This paper assesses the e¤ectiveness of unconfoundedness-based estimators of mean e¤ects for multiple or multivalued treatments in eliminating biases arising from nonrandom treatment assignment. We evaluate these multiple treatment estimators by simultaneously equalizing average outcomes among several control groups from a randomized experiment. We study linear regression estimators as well as partial mean and weighting estimators based on the generalized propensity score (GPS). We also study the use of the GPS in assessing the comparability of individuals among the di¤erent treatment groups, and propose a strategy to determine the overlap or common support region that is less stringent than those previously used in the literature. Our results show that in the multiple treatment setting there may be treatment groups for which it is extremely di¢ cult to ?nd valid comparison groups, and that the GPS plays a signi?cant role in identifying those groups. In such situations, the estimators we consider perform poorly. However, their performance improves considerably once attention is restricted to those treatment groups with adequate overlap quality, with di¤erence-in-di¤erence estimators performing the best. Our results suggest that unconfoundedness-based estimators are a valuable econometric tool for evaluating multiple treatments, as long as the overlap quality is satisfactory.

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File URL: http://moya.bus.miami.edu/~omitnik/PDF_Documents/Evaluating_Mult_Treatments.pdf
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Bibliographic Info

Paper provided by University of Miami, Department of Economics in its series Working Papers with number 2010-10.

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Length: 51 pages
Date of creation: Sep 2009
Date of revision:
Publication status: Published
Handle: RePEc:mia:wpaper:2010-10

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References

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Cited by:
  1. UCHINO Taisuke & UESUGI Iichiro, 2012. "The Effects of a Megabank Merger on Firm-Bank Relationships and Borrowing Costs," Discussion papers 12022, Research Institute of Economy, Trade and Industry (RIETI).
  2. Olivier Bertrand & Marie-Ann Betschinger, 2011. "Performance of domestic and cross-border acquisitions: empirical evidence from Russian acquirers," Working Papers 129, European Bank for Reconstruction and Development, Office of the Chief Economist.
  3. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2010. "How to Control for Many Covariates? Reliable Estimators Based on the Propensity Score," IZA Discussion Papers 5268, Institute for the Study of Labor (IZA).
  4. Rafael Perez Ribas & Fabio Veras Soares & Clarissa Gondim Teixeira & Elydia Silva & Guilherme Issamu Hirata, 2010. "Beyond Cash: Assessing Externality and Behaviour Effects of Non-Experimental Cash Transfers," Working Papers 65, International Policy Centre for Inclusive Growth.
  5. Rodney J. Andrews & Jing Li & Michael F. Lovenheim, 2012. "Quantile Treatment Effects of College Quality on Earnings: Evidence from Administrative Data in Texas," NBER Working Papers 18068, National Bureau of Economic Research, Inc.
  6. FLORES-LAGUNES Alfonso & CHOE Chung & LEE Sang-Jun, 2011. "Do Dropouts Benefit from Training Programs? Korean Evidence Employing Methods for Continuous Treatments," CEPS/INSTEAD Working Paper Series 2011-34, CEPS/INSTEAD.
  7. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2013. "The performance of estimators based on the propensity score," Journal of Econometrics, Elsevier, vol. 175(1), pages 1-21.

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