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How close is close enough? Evaluating propensity score matching using data from a class size reduction experiment

  • Elizabeth Ty Wilde

    (Princeton University)

  • Robinson Hollister

    (Swarthmore College)

In recent years, propensity score matching (PSM) has gained attention as a potential method for estimating the impact of public policy programs in the absence of experimental evaluations. In this study, we evaluate the usefulness of PSM for estimating the impact of a program change in an educational context (Tennessee's Student Teacher Achievement Ratio Project [Project STAR]). Because Tennessee's Project STAR experiment involved an effective random assignment procedure, the experimental results from this policy intervention can be used as a benchmark, to which we compare the impact estimates produced using propensity score matching methods. We use several different methods to assess these nonexperimental estimates of the impact of the program. We try to determine “how close is close enough,” putting greatest emphasis on the question: Would the nonexperimental estimate have led to the wrong decision when compared to the experimental estimate of the program? We find that propensity score methods perform poorly with respect to measuring the impact of a reduction in class size on achievement test scores. We conclude that further research is needed before policymakers rely on PSM as an evaluation tool. © 2007 by the Association for Public Policy Analysis and Management

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File URL: http://hdl.handle.net/10.1002/pam.20262
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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

Volume (Year): 26 (2007)
Issue (Month): 3 ()
Pages: 455-477

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Handle: RePEc:wly:jpamgt:v:26:y:2007:i:3:p:455-477
Contact details of provider: Web page: http://www3.interscience.wiley.com/journal/34787/home

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  1. Alberto Abadie & Guido W. Imbens, 2006. "On the Failure of the Bootstrap for Matching Estimators," NBER Technical Working Papers 0325, National Bureau of Economic Research, Inc.
  2. James J. Heckman, 1989. "Choosing Among Alternative Nonexperimental Methods for Estimating the Impact of Social Programs: The Case of Manpower Training," NBER Working Papers 2861, National Bureau of Economic Research, Inc.
  3. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
  4. 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.
  5. 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.
  6. Alan B. Krueger, 1997. "Experimental Estimates of Education Production Functions," NBER Working Papers 6051, National Bureau of Economic Research, Inc.
  7. Alberto Abadie & David Drukker & Jane Leber Herr & Guido W. Imbens, 2004. "Implementing matching estimators for average treatment effects in Stata," Stata Journal, StataCorp LP, vol. 4(3), pages 290-311, September.
  8. 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.
  9. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
  10. Dehejia, R.H. & Wahba, S., 1998. "Propensity Score Matching Methods for Non-Experimental Causal Studies," Discussion Papers 1998_02, Columbia University, Department of Economics.
  11. Friedlander, Daniel & Robins, Philip K, 1995. "Evaluating Program Evaluations: New Evidence on Commonly Used Nonexperimental Methods," American Economic Review, American Economic Association, vol. 85(4), pages 923-37, September.
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