We extend the Synthetic Control Method (SCM) of Abadie et al. (2010) for policy evaluation through a flexible nonparametric construction of the weights for estimating the synthetic (or counterfactual) time pattern of a treated unit. We present a comparison of both methods to assess the effects of adopting the Euro as national currency on Italian exports. Results show that both methods provide a small pre-treatment prediction error. However, when departing from the beginning of the pre-treatment period, the nonparametric SCM slightly outperforms the parametric one. (C) 2019 Elsevier B.V. All rights reserved.
A flexible Synthetic Control Method for modeling policy evaluation
Cerulli;Giovanni
2019
Abstract
We extend the Synthetic Control Method (SCM) of Abadie et al. (2010) for policy evaluation through a flexible nonparametric construction of the weights for estimating the synthetic (or counterfactual) time pattern of a treated unit. We present a comparison of both methods to assess the effects of adopting the Euro as national currency on Italian exports. Results show that both methods provide a small pre-treatment prediction error. However, when departing from the beginning of the pre-treatment period, the nonparametric SCM slightly outperforms the parametric one. (C) 2019 Elsevier B.V. All rights reserved.File in questo prodotto:
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