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The Evaluation of Community-Based Interventions: A Monte Carlo Study

Author

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  • Augurzky, Boris

    () (RWI)

  • Schmidt, Christoph M.

    () (RWI)

Abstract

The evaluation of interventions such as active labor market policies or medical programs by means of a randomized controlled trial is often considered the gold standard. However, randomized experiments might face severe shortcomings especially if performed at the group level. One such problem is caused by small sample size which might prevent the experiment from developing its fundamental virtue in balancing all relevant covariates. This paper investigates the potential and limits of experimental and non-experimental approaches to the evaluation problem, in particular the use of instrumental variables, in a numerical simulation study, against the particular background of community-based interventions. In our simulations, we emphasize the trade-off between bias and precision by imposing a smaller number of communities whenever we model a randomized experiment, and by allowing for a correspondingly larger number of communities in all cases where selection into the program is not controlled completely by the analyst.

Suggested Citation

  • Augurzky, Boris & Schmidt, Christoph M., 2001. "The Evaluation of Community-Based Interventions: A Monte Carlo Study," IZA Discussion Papers 270, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp270
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    Cited by:

    1. Angrist, Joshua & Lavy, Victor, 2002. "The Effect of High School Matriculation Awards: Evidence from Randomized Trials," CEPR Discussion Papers 3827, C.E.P.R. Discussion Papers.
    2. Christoph M. Schmidt, 2000. "Arbeitsmarktpolitische Massnahmen und ihre Evaluierung: eine Bestandsaufnahme," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 69(3), pages 425-437.
    3. Peters, Jörg, 2009. "Evaluating Rural Electrification Projects - Methodological Approaches," Ruhr Economic Papers 136, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    5. Kohns, Stephan, 2001. "Testing for Asymmetry in British, German and US Unemployment Data," IZA Discussion Papers 341, Institute for the Study of Labor (IZA).
    6. Joshua Angrist & Victor Lavy, 2003. "Achievement awards for high school matriculation: Evidence from randomized trials," Natural Field Experiments 00202, The Field Experiments Website.

    More about this item

    Keywords

    Grouped data; observational study; randomized experiment; simulation study;

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

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