Propensity Score Matching and Policy Impact Analysis : A Demonstration in EViews

Effective development policymaking creates a need for reliable methods of assessing effectiveness. There should be, therefore, an intimate relationship between effective policymaking and impact analysis. The goal of a development intervention defines the metric by which to assess its impact, while i...

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Main Author:	Essama-Nssah, B.
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ALGORITHMS COMPARISON GROUPS COMPUTATION COUNTERFACTUAL DESCRIPTIVE STATISTICS DUMMY VARIABLES ECONOMIC GROWTH ESTIMATORS EVALUATION METHODS IMPACT ANALYSIS IMPACT EVALUATION IMPACT INDICATORS INCOME INCOME GAINS INEQUALITY INSTRUMENTAL VARIABLES INTERVENTION INTERVENTIONS MATCHING METHODS MAXIMUM LIKELIHOOD ESTIMATION MISSING DATA NONLINEARITY ORTHOGONALITY POVERTY REDUCTION PROBABILITY PROGRAM EFFECTIVENESS PROGRAMS PROPENSITY SCORE MATCHING RANDOMIZATION RATE OF CHANGE REGRESSION ANALYSIS RESEARCH WORKING PAPERS SAMPLE SELECTION SAMPLE SIZE SELECTION BIAS SOCIAL EXPERIMENTS STANDARD DEVIATION TREATMENT EFFECTS EVIEWS DOUBLE DIFFERENCE KERNEL FUNCTION MATCHING PROPENSITY SCORE
Online Access:	http://documents.worldbank.org/curated/en/2006/04/6708043/propensity-score-matching-policy-impact-analysis-demonstration-eviews http://hdl.handle.net/10986/8730

id	okr-10986-8730
recordtype	oai_dc
spelling	okr-10986-87302021-04-23T14:02:40Z Propensity Score Matching and Policy Impact Analysis : A Demonstration in EViews Essama-Nssah, B. ALGORITHMS COMPARISON GROUPS COMPUTATION COUNTERFACTUAL DESCRIPTIVE STATISTICS DUMMY VARIABLES ECONOMIC GROWTH ESTIMATORS EVALUATION METHODS IMPACT ANALYSIS IMPACT EVALUATION IMPACT INDICATORS INCOME INCOME GAINS INEQUALITY INSTRUMENTAL VARIABLES INTERVENTION INTERVENTIONS MATCHING METHODS MAXIMUM LIKELIHOOD ESTIMATION MISSING DATA NONLINEARITY ORTHOGONALITY POVERTY REDUCTION PROBABILITY PROGRAM EFFECTIVENESS PROGRAMS PROPENSITY SCORE MATCHING RANDOMIZATION RATE OF CHANGE REGRESSION ANALYSIS RESEARCH WORKING PAPERS SAMPLE SELECTION SAMPLE SIZE SELECTION BIAS SOCIAL EXPERIMENTS STANDARD DEVIATION TREATMENT EFFECTS EVIEWS DOUBLE DIFFERENCE IMPACT ANALYSIS INSTRUMENTAL VARIABLES KERNEL FUNCTION MATCHING PROPENSITY SCORE SAMPLE SELECTION Effective development policymaking creates a need for reliable methods of assessing effectiveness. There should be, therefore, an intimate relationship between effective policymaking and impact analysis. The goal of a development intervention defines the metric by which to assess its impact, while impact evaluation can produce reliable information on which policymakers may base decisions to modify or cancel ineffective programs and thus make the most of limited resources. This paper reviews the logic of propensity score matching (PSM) and, using data on the National Support Work Demonstration, compares that approach with other evaluation methods such as double difference, instrumental variable, and Heckman's method of selection bias correction. In addition, it demonstrates how to implement nearest-neighbor and kernel-based methods, and plot program incidence curves in E-Views. In the end, the plausibility of an evaluation method hinges critically on the correctness of the socioeconomic model underlying program design and implementation, and on the quality and quantity of available data. In any case, PSM can act as an effective adjuvant to other methods. 2012-06-21T21:18:34Z 2012-06-21T21:18:34Z 2006-04 http://documents.worldbank.org/curated/en/2006/04/6708043/propensity-score-matching-policy-impact-analysis-demonstration-eviews http://hdl.handle.net/10986/8730 English Policy Research Working Paper; No. 3877 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ALGORITHMS COMPARISON GROUPS COMPUTATION COUNTERFACTUAL DESCRIPTIVE STATISTICS DUMMY VARIABLES ECONOMIC GROWTH ESTIMATORS EVALUATION METHODS IMPACT ANALYSIS IMPACT EVALUATION IMPACT INDICATORS INCOME INCOME GAINS INEQUALITY INSTRUMENTAL VARIABLES INTERVENTION INTERVENTIONS MATCHING METHODS MAXIMUM LIKELIHOOD ESTIMATION MISSING DATA NONLINEARITY ORTHOGONALITY POVERTY REDUCTION PROBABILITY PROGRAM EFFECTIVENESS PROGRAMS PROPENSITY SCORE MATCHING RANDOMIZATION RATE OF CHANGE REGRESSION ANALYSIS RESEARCH WORKING PAPERS SAMPLE SELECTION SAMPLE SIZE SELECTION BIAS SOCIAL EXPERIMENTS STANDARD DEVIATION TREATMENT EFFECTS EVIEWS DOUBLE DIFFERENCE IMPACT ANALYSIS INSTRUMENTAL VARIABLES KERNEL FUNCTION MATCHING PROPENSITY SCORE SAMPLE SELECTION
spellingShingle	ALGORITHMS COMPARISON GROUPS COMPUTATION COUNTERFACTUAL DESCRIPTIVE STATISTICS DUMMY VARIABLES ECONOMIC GROWTH ESTIMATORS EVALUATION METHODS IMPACT ANALYSIS IMPACT EVALUATION IMPACT INDICATORS INCOME INCOME GAINS INEQUALITY INSTRUMENTAL VARIABLES INTERVENTION INTERVENTIONS MATCHING METHODS MAXIMUM LIKELIHOOD ESTIMATION MISSING DATA NONLINEARITY ORTHOGONALITY POVERTY REDUCTION PROBABILITY PROGRAM EFFECTIVENESS PROGRAMS PROPENSITY SCORE MATCHING RANDOMIZATION RATE OF CHANGE REGRESSION ANALYSIS RESEARCH WORKING PAPERS SAMPLE SELECTION SAMPLE SIZE SELECTION BIAS SOCIAL EXPERIMENTS STANDARD DEVIATION TREATMENT EFFECTS EVIEWS DOUBLE DIFFERENCE IMPACT ANALYSIS INSTRUMENTAL VARIABLES KERNEL FUNCTION MATCHING PROPENSITY SCORE SAMPLE SELECTION Essama-Nssah, B. Propensity Score Matching and Policy Impact Analysis : A Demonstration in EViews
relation	Policy Research Working Paper; No. 3877
description	Effective development policymaking creates a need for reliable methods of assessing effectiveness. There should be, therefore, an intimate relationship between effective policymaking and impact analysis. The goal of a development intervention defines the metric by which to assess its impact, while impact evaluation can produce reliable information on which policymakers may base decisions to modify or cancel ineffective programs and thus make the most of limited resources. This paper reviews the logic of propensity score matching (PSM) and, using data on the National Support Work Demonstration, compares that approach with other evaluation methods such as double difference, instrumental variable, and Heckman's method of selection bias correction. In addition, it demonstrates how to implement nearest-neighbor and kernel-based methods, and plot program incidence curves in E-Views. In the end, the plausibility of an evaluation method hinges critically on the correctness of the socioeconomic model underlying program design and implementation, and on the quality and quantity of available data. In any case, PSM can act as an effective adjuvant to other methods.
format	Publications & Research :: Policy Research Working Paper
author	Essama-Nssah, B.
author_facet	Essama-Nssah, B.
author_sort	Essama-Nssah, B.
title	Propensity Score Matching and Policy Impact Analysis : A Demonstration in EViews
title_short	Propensity Score Matching and Policy Impact Analysis : A Demonstration in EViews
title_full	Propensity Score Matching and Policy Impact Analysis : A Demonstration in EViews
title_fullStr	Propensity Score Matching and Policy Impact Analysis : A Demonstration in EViews
title_full_unstemmed	Propensity Score Matching and Policy Impact Analysis : A Demonstration in EViews
title_sort	propensity score matching and policy impact analysis : a demonstration in eviews
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/04/6708043/propensity-score-matching-policy-impact-analysis-demonstration-eviews http://hdl.handle.net/10986/8730
_version_	1764405892032233472

Propensity Score Matching and Policy Impact Analysis : A Demonstration in EViews

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