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Impact of the Density Support on the Matching Bias: A Matched-Pair Analysis Based on Business Survey Data

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  • Laurent Donzé

Abstract

Matching methods have been extensively used to evaluate economic policy. However, they are not without fault and, indeed, a selection bias may appear. In 1998, Heckman and al. (1998) have precisely characterize this bias by a decomposition in three parts which can be non parametrically estimated. These estimations depend among others on the support of the conditional density function of the covariates X used for the matching. In a study of the impact of the policy of supporting the adoption of advanced manufacturing technologies by Swiss firms, we have measured the different components of the bias. We put into evidence the extreme sensibility of the results to the measure of support density.

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  • Laurent Donzé, 2005. "Impact of the Density Support on the Matching Bias: A Matched-Pair Analysis Based on Business Survey Data," KOF Working papers 05-98, KOF Swiss Economic Institute, ETH Zurich.
  • Handle: RePEc:kof:wpskof:05-98
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    File URL: http://dx.doi.org/10.3929/ethz-a-004957353
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