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Title: Ensuring Stability, Accuracy and Meaningfulness in Synthetic Control Methods: The Regularized SHAP-Distance Method
Author: Albalate, Daniel, 1980-
Bel i Queralt, Germà, 1963-
Mazaira-Font, Ferran
Keywords: Models economètrics
Control de gestió
Econometric models
Management audit
Issue Date: 2020
Publisher: Universitat de Barcelona. Facultat d'Economia i Empresa
Series/Report no: [WP E-IR20/05]
Abstract: The synthetic control method (SCM) has been increasingly adopted to evaluate causal effects under quasi-experimental designs. However, SCM suffers from sound weaknesses that compromise its accuracy, stability and meaningfulness. The Regularized SHAP-distance synthetic control method (RSD-SCM) is proposed as solution. We evaluate the economic effect of the government formation deadlock in Spain, 2016. The deadlock did not negatively affect economic growth, as the economy grew 1.58% more without full government; standard SCM method overestimates the effect by 0.23 pp. We show that RSD-SCM offers higher accuracy and stability, while ensuring the economic meaningfulness of covariates used in building the counterfactual.
Note: Reproducció del document publicat a:
It is part of: IREA – Working Papers, 2020, IR20/05
Appears in Collections:Documents de treball (Institut de Recerca en Economia Aplicada Regional i Pública (IREA))

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