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Panel data approach vs synthetic control method

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Listed:
  • Wan, Shui-Ki
  • Xie, Yimeng
  • Hsiao, Cheng

Abstract

We explore the pros and cons of two counterfactual analysis methodologies — the panel data approach (PDA) and the synthetic control method (SCM) through a discussion of the differences in their underlying assumptions and a series of simulations.

Suggested Citation

  • Wan, Shui-Ki & Xie, Yimeng & Hsiao, Cheng, 2018. "Panel data approach vs synthetic control method," Economics Letters, Elsevier, vol. 164(C), pages 121-123.
    • Handle: RePEc:eee:ecolet:v:164:y:2018:i:c:p:121-123
    DOI: 10.1016/j.econlet.2018.01.019
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    References listed on IDEAS

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    1. Li, Kathleen T. & Bell, David R., 2017. "Estimation of average treatment effects with panel data: Asymptotic theory and implementation," Journal of Econometrics, Elsevier, vol. 197(1), pages 65-75.
    2. Cheng Hsiao & H. Steve Ching & Shui Ki Wan, 2012. "A Panel Data Approach For Program Evaluation: Measuring The Benefits Of Political And Economic Integration Of Hong Kong With Mainland China," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 27(5), pages 705-740, August.
    3. James J. Heckman & Vytlacil, Edward J., 2007. "Econometric Evaluation of Social Programs, Part I: Causal Models, Structural Models and Econometric Policy Evaluation," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 70, Elsevier.
    4. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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