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Quasi-experimental Methods in Empirical Regional Science and Policy Analysis – Is there a Scope for Application?

Author

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  • Mitze, Timo
  • Paloyo, Alfredo R.
  • Alecke, Björn

Abstract

Applied econometrics has recently emphasized the identification of causal parameters for policy analysis. This revolution has yet to fully propagate to the field of regional science. We examine the scope for application of the matching approach - part of the modern applied econometrics toolkit - in regional science and highlight special features of regional data that make such an application difficult. In particular, our analysis of the effect of regional subsidies on labor-productivity growth in Germany indicates that such policies are effective, but only up to a certain maximum treatment intensity. Although the matching approach is very appealing due to its methodological rigor and didactical clarity, we faced difficulties in balancing the set of covariates for our regional data given that the regions differ strongly with respect to the underlying structural characteristics. Thus, results have to be interpreted with some caution. The matching approach nevertheless can be of great value for regional policy analysis and should be the subject of future research efforts in the field of empirical regional science.

Suggested Citation

  • Mitze, Timo & Paloyo, Alfredo R. & Alecke, Björn, 2012. "Quasi-experimental Methods in Empirical Regional Science and Policy Analysis – Is there a Scope for Application?," Ruhr Economic Papers 367, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:367
    DOI: 10.4419/86788422
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    Citations

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    Cited by:

    1. Riccardo Crescenzi & Mara Giua, 2018. "One or Many Cohesion Policies of the European Union? On the Diverging Impacts of Cohesion Policy across Member States," SERC Discussion Papers 0230, Centre for Economic Performance, LSE.
    2. Riccardo Crescenzi & Mara Giua, 2020. "One or many Cohesion Policies of the European Union? On the differential economic impacts of Cohesion Policy across member states," Regional Studies, Taylor & Francis Journals, vol. 54(1), pages 10-20, January.
    3. Kölling Arnd, 2016. "Developing Eastern Germany: The Effects of Economics Promotion in the Eastern German States after Reunification," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 275-295, March.

    More about this item

    Keywords

    generalized propensity score; nearest neighbor matching; labor productivity growth; regional policy;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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