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Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/181543
Decoupling Synthetic Control Methods to ensure stability, accuracy and meaningfulness
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The synthetic control method (SCM) is widely used to evaluate causal effects under quasi-experimental designs. However, SCM suffers from weaknesses that compromise its accuracy, stability and meaningfulness, due to the nested optimization problem of covariate relevance and counterfactual weights. We propose a decoupling of both problems. We evaluate the economic effect of government formation deadlock in Spain-2016, and find that SCM method overestimates the effect by 0.23 pp. Furthermore, we replicate two studies and compare results from standard and decoupled SCM. Decoupled SCM offers higher accuracy and stability, while ensuring the economic meaningfulness of covariates used in building the counterfactual.
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ALBALATE, Daniel, BEL I QUERALT, Germà and MAZAIRA-FONT, Ferran. Decoupling Synthetic Control Methods to ensure stability, accuracy and meaningfulness. SERIEs. Journal of the Spanish Economic Association. 2021. Vol. 12, num. 4, pags. 549-584. ISSN 1869-4187. [consulted: 16 of June of 2026]. Available at: https://hdl.handle.net/2445/181543