HOME HELP FEEDBACK SUBSCRIPTIONS ARCHIVE SEARCH TABLE OF CONTENTS		QUICK SEARCH:   [advanced] Author: Keyword(s): Year:  Vol:  Page:

This Article Abstract Full Text (PDF) Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Download to citation manager Citing Articles Citing Articles via Google Scholar Google Scholar Articles by Blundell, R. Articles by Dias, M. C. Search for Related Content

Alternative Approaches to Evaluation in Empirical Microeconomics

	Abstract

TOP Abstract References

 
This paper reviews some of the most popular policy evaluation methods in empirical microeconomics: social experiments, natural experiments, matching, instrumental variables, discontinuity design, and control functions. It discusses identification of traditionally used average parameters and more complex distributional parameters. The adequacy, assumptions, and data requirements of each approach are discussed, drawing on empirical evidence from the education and employment policy evaluation literature. A workhorse simulation model of education and earnings is used throughout the paper to discuss and illustrate each approach. The full set of STATA data sets and do-files are available free online and can be used to reproduce all estimation results.

	References

TOP Abstract References

 

Abadie, Alberto, Joshua Angrist, and Guido Imbens. 2002. "Instrumental Variables Estimates of the Effect of Subsidized Training on the Quantiles of Trainee Earnings." Econometrica 70(1):91–117.

Abbring, Jaap, and Gerard van den Berg. 2003. "The Nonparametric Identification of Treatment Effects in Duration Models." Econometrica 71(5):1491–1517.

Ahn, Hyungtaik, and James Powell. 1993. "Semiparametric Estimation of Censored Selection Models with a Nonparametric Selection Mechanism." Journal of Econometrics 58(1):3–29.

Andrews, Donald, and Marcia Schafgans. 1998. "Semiparametric Estimation of the Intercept of a Sample Selection Model." Review of Economic Studies 65(3):497–517.

Ashenfelter, Orley. 1978. "Estimating the Effect of Training Programs on Earnings." Review of Economics and Statistics 60(1):47–57.

Ashenfelter, Orley, and David Card. 1985. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs." Review of Economics and Statistics 67(4):648–60.

Athey, Susan, and Guido Imbens. 2006. "Identification and Inference in Nonlinear Difference-In-Differences Models." Econometrica 74(2):431–97.

Attanasio, Orazio, Costas Meghir, and Ana Santiago. 2005. "Education Choices in Mexico: Using a Structural Model and a Randomised experiment to evaluate Progresa." IFS working paper EWP05/01.

Bassi, Laurie. 1983. "The Effect of CETA on the Post-Program Earnings of Participants." Journal of Human Resources 18(4):539–56.

Bassi, Laurie. 1984. "Estimating the Effects of Training Programs with Nonrandom Selection." Review of Economics and Statistics 66(1):36–43.

Battistin, Eric, and Enrico Rettore. 2008. "Ineligibles and Eligible Non-Participants as a Double Comparison Group in Regression Discontinuity Designs." Journal of Econometric. Forthcoming.

Becker, Sascha, and Andrea Ichino. 2002. "Estimation of Average Treatment Effects Based on Propensity Scores." Stata Journal 2(4):358–77.

Bell, Brian, Richard Blundell, and John Van Reenen. 1999. "Getting the Unemployed Back to Work: An Evaluation of the New Deal Proposals." International Tax and Public Finance 6(3):339–60.

Bjorklund, Anders, and Robert Moffitt. 1987. "The Estimation of Wage Gains and Welfare Gains in Self-Selection Models." Review of Economics and Statistics 69(1):42–49.

Blundell, Richard, and Monica Costa Dias. 2000. "Evaluation Methods for Non-Experimental Data." Fiscal Studies 21(4):427–68.

Blundell, Richard, Monica Costa Dias, Costas Meghir, and John Van Reenen. 2004. "Evaluating the Employment Impact of a Mandatory Job Search Assistance Program." Journal of the European Economics Association 2(4):596–606.

Blundell, Richard, Lorraine Dearden, and Barbara Sianesi. 2005. "Evaluating the Impact of Education on Earnings: Models, Methods and Results from the NCDS." Journal of the Royal Statistical Society Series A, 168(3):473–512.

Blundell, Richard, and Thomas MaCurdy. 1999. "Labor Supply: A Review of Alternative Approaches." In Handbook of Labour Economics , ed. Orley Ashenfelter and David Card, Volume 3: 1559–1695. Amsterdam: Elsevier Science.

Blundell, Richard, and James Powell. 2003. "Endogeneity in Nonparametric and Semiparametric Regression Models." In Advances in Economics and Econometrics , ed. Mathias Dewatripont, Lars Hansen, and Stephen Turnsovsky, 294–311. Cambridge: Cambridge University Press.

Blundell, Richard, and James Powell. 2004. "Endogeneity in Semiparametric Binary Response Models." Review of Economic Studies 71(3):581–913.

Card, David, and P Philip Robins. 1998. "Do Financial Incentives Encourage Welfare Recipients To Work?." Research in Labor Economics 17(1):1–56.

Card, David, and Lara ShoreSheppard. 2004. "Using Discontinuous Eligibility Rules to Identify the Effects of the Federal Medicaid Expansions on Low-Income Children." Review of Economics and Statistics 86(3):752–66.

Carneiro, Pedro, Karsten Hansen, and James Heckman. 2001. "Removing the Veil of Ignorance in Assessing the Distributional Impacts of Social Policy." Swedish Economic Policy Review 8(2):273–301.

Carneiro, Pedro, Karsten Hansen, and James Heckman. 2003. "Estimating Distributions of Counterfactuals with an Application to the Returns to Schooling and Measurement of the Effect of Uncertainty on Schooling Choice." International Economic Review 44(2):361–422.

Carneiro, Pedro, James Heckman, and Edward Vytlacil. 2005. "Understanding What Instrumental Variables Estimate: Estimating the Average and Marginal Return to Schooling." University of Chicago. Unpublished.

Carneiro, Pedro, and Simon Lee. 2007. "Changes in College Enrollment and Wage Inequality: Distinguishing Price and Composition." University College London. Unpublished.

Cochrane, William, and Donald Rubin. 1973. "Controlling Bias in Observational Studies." Sankyha Ser. A 35:417–46.

Das, Mitali, Whitney Newey, and Francis Vella. 2003. "Nonparametric Estimation of Sample Selection Models." Review of Economic Studies 70(1):33–58.

De Giorgi, Giacomo. 2005. "The New Deal for Young People Five Years On." Fiscal Studies 26(3):371–83.

Feenberg, Daniel, and James Poterba. 1993. "Income Inequality and the Incomes of Very High Income Taxpayers: Evidence from Tax Returns." In Tax Policy and the Economy , ed. James Poterba, Volume 7:145–77. Cambridge: MIT Press.

Feldstein, Martin. 1995. "The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act." Journal of Political Economy 103(3):551–72.

Fisher, Ronald. 1951. The Design of Experiments , 6th edition. London: Oliver and Boyd.

Florens, Jean-Pierre, James Heckman, Costas Meghir, and Edward Vytlacil. 2008. "Identification of Treatment Effects Using Control Functions in Models with Continuous Endogenous Treatment and Heterogeneous Effects." Econometrica 76(5):1191–1206.

Markus, Frölich. 2006. "A Note on Parametric and Nonparametric Regression in the Presence of Endogenous Control Variables." IZA Discussion Paper 2126. Institute for the Study of Labor.

Goolsbee, Austan. 2000. "What Happens When You Tax the Rich? Evidence from Executive Compensation." Journal of Political Economy 108(2):352–78.

Hahn, Jinyong. 1998. "On the Role of the Propensity Score in Efficient Semiparametric Estimation of Average Treatment Effects." Econometrica 66(2):315–31.

Hahn, Jinyong, Petra Todd, and Wilbert Van der Klaauw. 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design." Econometrica 69(1):201–209.

Hausman, Jerry and David Wise, eds. 1985. Social Experimentation . Chicago: University of Chicago Press.

Heckman, James. 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables, and a Simple Estimator for Such Methods." Annals of Economic and Social Measurement 5:475–92.

Heckman, James. 1979. "Sample Selection Bias as a Specification Error." Econometrica 47(1): 153–611.

Heckman, James. 1997. "Instrumental Variables: A Study of the Implicit Assumptions underlying one Widely used Estimator for Program Evaluations." Journal of Human Resources 32(3):441–62.

Heckman, James, Hideniko Ichimura, and Petra Todd. 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Program." Review of Economic Studies 64(4):605–54.

Heckman, James, Hideniko Ichimura, and Petra Todd. 1998. "Matching as an Econometric Evaluation Estimator." Review of Economic Studies 65(2):261–94.

Heckman, James, Hideniko Ichimura, Jeffrey Smith, and Petra Todd. 1998. "Characterising Selection Bias Using Experimental Data." Econometrica 66(5):1017–98.

Heckman, James, Robert LaLonde, and Jeffrey Smith. 1999. "The Economics and Econometrics of Active Labour Market Programs." In Handbook of Labour Economics , ed. Orley Ashenfelter and David Card, Volume 3A: 1865–2097. Amsterdam: Elsevier Science.

Heckman, James, and Salvador Navarro. 2004. "Using Matching, Instrumental Variables and Control Functions to Estimate Economic Choice Models." Review of Economics and Statistics 86(1):30–57.

Heckman, James, and Richard Robb. 1985. "Alternative Methods for Evaluating the Impact of Interventions." In Longitudinal Analysis of Labour Market Data , ed. James Heckman and Burton Singer, 156–246. New York: Wiley.

Heckman, James, and Richard Robb. 1986. "Alternative Methods for Solving the Problem of Selection Bias in Evaluating the Impact of Treatments on Outcomes." In Drawing Inferences from Self-Selected Samples , ed. Howard Wainer, 63–107. Berlin: Springer Verlag.

Heckman, James, and Jeffrey Smith. 1999. "The PreProgram Earnings Dip and the Determinants of Participation in a Social Program: Implications for Simple Program Evaluation Strategies." Economic Journal 109(457):313–48.

Heckman, James, Jeffrey Smith, and Nancy Clements. 1997. "Making the Most out of Program Evaluations and Social Experiments: Accounting for Heterogeneity in program Impacts." Review of Economic Studies 64(4):487–536.

Heckman, James, and Edward Vytlacil. 1998. "Instrumental Variables Methods for the Correlated Random Coefficient Model: Estimating the Average Rate of Return to Schooling When the Return is Correlated with Schooling." Journal of Human Resources 33(4):974–87.

Heckman, James, and Edward Vytlacil. 1999. "Local Instrumental Variables and Latent Variable Models for Identifying the Bounding Treatment Effects." Proceedings of the National Academy of Sciences 96(8):4730–34.[Abstract/Free Full Text]

Heckman, James, and Edward Vytlacil. 2001. "Local Instrumental Variables." In Nonlinear Statistical Modeling: Essays in Honor of Takeshi Amemiya , ed. Cheng Hsiao, Kimio Morimune, and James Powell, 1–46. New York: Cambridge University Press.

Heckman, James, and Edward Vytlacil. 2005. "Structural Equations, Treatment Effects, and Econometric Policy Evaluation." Econometrica 73(3):669–738.

Heckman, James, and Edward Vytlacil. 2006. "Econometric Evaluation of Social Programs, Part II." In Handbook of Econometrics , ed. James Heckman and Edward Leamer, Volume 6: 4875–5134, Amsterdam: Elsevier.

Horowitz, Joel. 2001. "The Bootstrap." In Handbook of Econometrics , ed. James Heckman and Edward Leamer, Volume 5: 3159–3228. Amsterdam: Elsevier.

Imbens, Guido, and Joshua Angrist. 1994. "Identification and Estimation of Local Average Treatment Effects." Econometrica 62(2):467–75.

Imbens, Guido, and Thomas Lemieux. 2007. "Regression Discontinuity Designs: A Guide to Practice." Journal of Econometrics. Forthcoming.

Klaauw, Wilbert. 2008. "Regression-Discontinuity Analysis: A Survey of Recent Developments in Economics." Review of Labour Economics and Industrial Relations 22 (2):219–45.

LaLonde, Robert. 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data." American Economic Review 76(4):604–20.

Larsson, Laura. 2003. "Evaluation of Swedish Youth Labor Market Programs." Journal of Human Resources 38(4):891–927.[Abstract/Free Full Text]

Lee, David. 2008. "Randomized Experiments from Nonrandom Selection in U.S. House Elections." Journal of Econometrics 142(2):675–97.

Leuven, Edwin, and Barbara Sianesi. 2003. PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing . Statistical Software Components S432001, Boston College Department of Economics.

Lindsey, Lawrence. 1987. "Individual Taxpayer Response to Tax Cuts: 1982–1984, With Implications for the Revenue Maximizing Tax Rate." Journal of Public Economics 33(1):173–206.

Moffitt, Robert. 2007. "Estimating Marginal Treatment Effects in Heterogeneous Populations." NBER Working Paper 13534.

Newey, Whitney, James Powell, and Francis Vella. 1999. "Nonparametric Estimation of Triangular Simultaneous Equations Models." Econometrica 67(3):565–603.

Nickell, Stephen. 1981. "Biases in Dynamic Models with Fixed Effects." Econometrica 49(6):1417–26.

Powell, James. 1994. "Estimation of Semiparametric Models." In Handbook of Econometrics , ed. Robert Engle and Daniel McFadden, Volume 4: 2443–2521. Amsterdam: North Holland.

Rosenbaum, Paul, and Donald Rubin. 1983. "The Central Role of the Propensity Score in Observational Studies for Causal Effects." Biometrika 70(1):41–55.[Abstract/Free Full Text]

Rosenbaum, Paul, and Donald Rubin. 1984. "Reducing Bias in Observational Studies Using Subclassification on the Propensity Score." Journal of the American Statistical Association 79(387):516–24.

Rosenbaum, Paul, and Donald Rubin. 1985. "Constructing a Control Group Using Multivariate Matched Sampling Methods that Incorporate the Propensity Score." American Statistician 39(1):33–38.

Rubin, Donald. 1979. "Using Multivariate Matched Sampling and regression Adjustment to Control Bias in Observational Studies." Journal of the American Statistical Association 74(366):318–29.

Ten Have, Thomas, Michael Elliott, Marshall Joffe, Elaine Zanutto, and Catherine Datto. 2004. "Causal Models for Randomized Physician Encouragement Trials in Treating Primary Care Depression." Journal of the American Statistical Association 99(1):16–25.

Todd, Petra, and Kenneth Wolpin. 2006. "Assessing the Impact of a School Subsidy Program in Mexico: Using a Social Experiment to Validate a Dynamic Behavioral Model of Child Schooling and Fertility." The American Economic Review 96(5):1384–1417.

Vytlacil, Edward. 2002. "Independence, Monotonicity, and Latent Index Models: An Equivalence Result." Econometrica 70(1):331–41.

This Article Abstract Full Text (PDF) Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Download to citation manager Citing Articles Citing Articles via Google Scholar Google Scholar Articles by Blundell, R. Articles by Dias, M. C. Search for Related Content