Building on an idea in Abadie and Gardeazabal (2003), this article investigates the application of synthetic control methods to comparative case studies. We discuss the advantages of these methods and apply them to study the effects of Proposition 99, a large-scale tobacco control program that California implemented in 1988. We demonstrate that following Proposition 99 tobacco consumption fell markedly in California relative to a comparable synthetic control region. We estimate that by the year 2000 annual per-capita cigarette sales in California were about 26 packs lower than what they would have been in the absence of Proposition 99. Given that many policy interventions and events of interest in social sciences take place at an aggregate level (countries, regions, cities, etc.) and affect a small number of aggregate units, the potential applicability of synthetic control methods to comparative case studies is very large, especially in situations where traditional regression methods are not appropriate. The methods proposed in this article produce informative inference regardless of the number of available comparison units, the number of available time periods, and whether the data are individual (micro) or aggregate (macro). Software to compute the estimators proposed in this article is available at the authors' web-pages.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Technical Working Papers with number
0335.
Length: Date of creation: Jan 2007 Date of revision: Handle: RePEc:nbr:nberte:0335
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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 C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Health, Education, and Welfare I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
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