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Program Evaluation and Spillover Effects

  • Manuela Angelucci


  • Vincenzo Di Maro


This note defines what spillover effects are, why it is important to measure them, and how to design a field experiment that will enable researchers to measure the average effects of the treatment in the presence of spillover effects on subjects both eligible and ineligible for the program. In addition, it discusses how to use nonexperimental methods for estimating spillover effects when the experimental design is not a viable option. Several practical examples are provided to show how spillover effects can be estimated. Evaluations that account for spillover effects should be designed in such a way that they explain both the cause of these effects and who is affected by them. Failure to have such an evaluation design can result in wrong policy recommendations and in the neglect of important mechanisms through which the program operates. To estimate the direct and indirect effect of a program, one has to use control groups that are not affected by the program either directly or indirectly. This often means selecting the control groups from different geographic units (e.g. the village or school). In order to understand the mechanisms that cause spillover effects one has to think about competing explanations and collect data on relevant outcomes. In many cases, unveiling the mechanisms behind the spillover effects results in a better understanding of how the program works in general.

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Paper provided by Inter-American Development Bank, Office of Strategic Planning and Development Effectiveness (SPD) in its series SPD Working Papers with number 1003.

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Date of creation: May 2010
Date of revision:
Handle: RePEc:idb:spdwps:1003
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  1. Dubois, P. & Jullien, B. & Magnac, T., 2006. "Formal and informal risk sharing in LDCs : theory and empirical evidence," Economics Working Paper Archive (Toulouse) 200608, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
  2. Bruno Crépon & Esther Duflo & Marc Gurgand & Roland Rathelot & Philippe Zamora, 2013. "Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 128(2), pages 531-580.
  3. Townsend, R.M., 1991. "Risk and Insurance in Village India," University of Chicago - Economics Research Center 91-3, Chicago - Economics Research Center.
  4. Sarah Baird & J. Aislinn Bohren & Craig McIntosh & Berk Ozler, 2014. "Designing Experiments to Measure Spillover Effects," PIER Working Paper Archive 14-006, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  5. Dean Yang, 2008. "Can Enforcement Backfire? Crime Displacement in the Context of Customs Reform in the Philippines," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 1-14, February.
  6. David S. Lee & Thomas Lemieux, 2009. "Regression Discontinuity Designs in Economics," NBER Working Papers 14723, National Bureau of Economic Research, Inc.
  7. Rafael Di Tella & Ernesto Schargrodsky, 2004. "Do Police Reduce Crime? Estimates Using the Allocation of Police Forces After a Terrorist Attack," American Economic Review, American Economic Association, vol. 94(1), pages 115-133, March.
  8. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
  9. repec:inr:wpaper:25314 is not listed on IDEAS
  10. Edward Miguel & Michael Kremer, 2004. "Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities," Econometrica, Econometric Society, vol. 72(1), pages 159-217, 01.
  11. Ciro Avitabile, 2011. "Spillover Effects in Healthcare Programs: Evidence on Social Norms and Information Sharing," CSEF Working Papers 271, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 14 Mar 2011.
  12. Gustavo J. Bobonis & Frederico Finan, 2009. "Neighborhood Peer Effects in Secondary School Enrollment Decisions," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 695-716, November.
  13. Hirano, Keisuke & Hahn, Jinyong, 2010. "Design of randomized experiments to measure social interaction effects," Economics Letters, Elsevier, vol. 106(1), pages 51-53, January.
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