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An Assessment of Propensity Score Matching as a Nonexperimental Impact Estimator: Evidence from Mexico’s PROGRESA Program

  • Juan Jose Diaz
  • Sudhanshu Handa

Not all policy questions can be addressed by social experiments. Nonexperimental evaluation methods provide an alternative to experimental designs but their results depend on untestable assumptions. This paper presents evidence on the reliability of propensity score matching (PSM), which estimates treatment effects under the assumption of selection on observables, using a social experiment designed to evaluate the PROGRESA program in Mexico. We find that PSM performs well for outcomes that are measured comparably across survey instruments and when a rich set of control variables is available. However, even small differences in the way outcomes are measured can lead to bias in the technique.

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File URL: http://jhr.uwpress.org/cgi/reprint/XLI/2/319
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Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 41 (2006)
Issue (Month): 2 ()
Pages:

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Handle: RePEc:uwp:jhriss:v:41:y:2006:i:2:p319-345
Contact details of provider: Web page: http://jhr.uwpress.org/

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  1. Roberto Agodini & Mark Dynarski, 2004. "Are Experiments the Only Option? A Look at Dropout Prevention Programs," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 180-194, February.
  2. David I. Levine & Gary Painter, 2003. "The Schooling Costs of Teenage Out-of-Wedlock Childbearing: Analysis with a Within-School Propensity-Score-Matching Estimator," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 884-900, November.
  3. Charles Michalopoulos & Howard S. Bloom & Carolyn J. Hill, 2004. "Can Propensity-Score Methods Match the Findings from a Random Assignment Evaluation of Mandatory Welfare-to-Work Programs?," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 156-179, February.
  4. James J. Heckman & Jeffrey A. Smith, 1995. "Assessing the Case for Social Experiments," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 85-110, Spring.
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