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Picking Winners: Measuring the Effectiveness of Selectively Placed Policy Interventions

Author

Listed:
  • Melinda Vigh

    (Tinbergen Institute)

  • Chris Elbers

    (Tinbergen Institute)

Abstract

In practice, social and development interventions are often targeted at groups or individuals with the largest expected benefits. In such cases, treatment effects are usually affected by selection on unobservable factors. We show that modeling the process of selective intervention placement allows us to correct for this and identify the Average Treatment Effect using observational panel data. We illustrate the estimation method using simulated data, as well as, data on a large-scale sanitation intervention in Mozambique. Our results provide a useful tool for the assessment of targeted policy interventions, and inform decisions on their continuation or replication.

Suggested Citation

  • Melinda Vigh & Chris Elbers, 2017. "Picking Winners: Measuring the Effectiveness of Selectively Placed Policy Interventions," Tinbergen Institute Discussion Papers 17-110/V, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20170110
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    File URL: https://papers.tinbergen.nl/17110.pdf
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    References listed on IDEAS

    as
    1. Tavneet Suri, 2011. "Selection and Comparative Advantage in Technology Adoption," Econometrica, Econometric Society, vol. 79(1), pages 159-209, January.
    2. Chris Elbers & Jan Willem Gunning, 2014. "Evaluation of Development Programs: Randomized Controlled Trials or Regressions?," The World Bank Economic Review, World Bank, vol. 28(3), pages 432-445.
    3. James J. Heckman & Sergio Urzua & Edward Vytlacil, 2006. "Understanding Instrumental Variables in Models with Essential Heterogeneity," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 389-432, August.
    4. Jeffrey M. Wooldridge, 2005. "Fixed-Effects and Related Estimators for Correlated Random-Coefficient and Treatment-Effect Panel Data Models," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 385-390, May.
    5. Chamberlain, Gary, 1982. "Multivariate regression models for panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 5-46, January.
    6. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Program evaluation; Selection effect; Correlated random coefficients;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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