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Propensity Score Matching Methods for Non-experimental Causal Studies

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  • Rajeev H. Dehejia
  • Sadek Wahba

Abstract

This paper considers causal inference and sample selection bias in non-experimental settings in which: (i) few units in the non-experimental comparison group are comparable to the treatment units, and (ii) selecting a subset of comparison units similar to the treatment units is difficult because units must be compared across a high-dimensional set of pre-treatment characteristics. We propose the use of propensity score matching methods and implement them using data from the NSW experiment. Following Lalonde (1986), we pair the experimental treated units with non-experimental comparison units from the CPS and PSID and compare the estimates of the treatment effect obtained using our methods to the benchmark results from the experiment. We show that the methods succeed in focusing attention on the small subset of the comparison units comparable to the treated units and, hence, in alleviating the bias due to systematic differences between the treated and comparison units.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6829.

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Date of creation: Dec 1998
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Publication status: published as Dehejia, Rajeev H. and Sadek Wahba. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," Review of Economics and Statistics, 2002, v84(1,Feb), 151-161.
Handle: RePEc:nbr:nberwo:6829

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  1. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  2. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-20, September.
  3. Orley Ashenfelter & David Card, 1984. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," Working Papers 554, Princeton University, Department of Economics, Industrial Relations Section..
  4. Czajka, John L, et al, 1992. "Projecting from Advance Data Using Propensity Modeling: An Application to Income and Tax Statistics," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(2), pages 117-31, April.
  5. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
  6. Daniel Friedlander & David H. Greenberg & Philip K. Robins, 1997. "Evaluating Government Training Programs for the Economically Disadvantaged," Journal of Economic Literature, American Economic Association, vol. 35(4), pages 1809-1855, December.
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  1. HowTo: Propensity Score Matching
    by zooeygoethe in Economic Objectorvism on 2007-06-12 23:43:04
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