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Balancing, Regression, Difference-In-Differences and Synthetic Control Methods: A Synthesis
Open accessAbstract
In a seminal paper Abadie et al (2010) develop the synthetic control procedure for estimating the effect of a treatment, in the presence of a single treated unit and a number of control units, with pre-treatment outcomes observed for all units.The method constructs a set of weights such that covariates and pre-treatment outcomes of the treated unit are approximately matched by a weighted average of control units.The weights are restricted to be nonnegative and sum to one, which allows the procedure to obtain the weights even when the number of lagged outcomes is modest relative to the number of control units, a setting that is not uncommon in applications.In the current paper we propose a more general class of synthetic control estimators that allows researchers to relax some of the restrictions in the ADH method.We allow the weights to be negative, do not necessarily restrict the sum of the weights, and allow for a permanent additive difference between the treated unit and the controls, similar to difference-in-difference procedures.The weights directly minimize the distance between the lagged outcomes for the treated and the control units, using regularization methods to deal with a potentially large number of possible control units.
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“Recent work has begun to try to combine insights from the two literatures (e.g., Arkhangelsky, Athey, Hirshberg, Imbens and Wager, 2021; Ben-Michael, Feller and Rothstein, 2021, 2022; Doudchenko and Imbens, 2016).”
From What's trending in difference-in-differences? A synthesis of the recent econometrics literature (2023) · cites this paper as Doudchenko and Imbens, 2016
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Self-citationLarge sample properties of matching estimators for average treatment effects
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Metadata
- Authors
- Doudchenko, N., & Imbens, G.
- Affiliations
- National Bureau of Economic Research (US)
- Stanford University (US)
- ORCID
- Imbens, Guido
- Venue
- National Bureau of Economic Research
- Publisher
- National Bureau of Economic Research
- Published
- 2016-10
- OpenAlex
- W2540009304
- Cited by
- 410
- References
- 22
- Citations by year
- 2026: 32 · 2025: 54 · 2024: 51 · 2023: 44 · 2022: 44 · 2021: 72 · 2020: 41 · 2019: 34 · 2018: 23 · 2017: 11 · 2016: 3
- Type
- report
- Language
- en
- Open access
- green
- doi.org
- Locations
- National Bureau of Economic Research (publishedVersion)
- arXiv (Cornell University) (submittedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- SSRN Electronic Journal (submittedVersion)
- National Bureau of Economic Research (submittedVersion)
- arXiv (Cornell University)
- Topics
- Physical Sciences › Mathematics › Statistics and Probability › Advanced Causal Inference Techniques
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Spatial and Panel Data Analysis
- Social Sciences › Public Administration › Evaluation and Performance Assessment
- Keywords
- synthetic control method, treatment effect estimation, regularization, difference-in-differences, regression discontinuity design
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