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Random Recursive Partitioning: a matching method for the estimation of the average treatment effect

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  • Giuseppe Porro

    (Department of Economics and Statistics, University of Trieste, P.le Europa 1, I-34127 Trieste, Italy)

  • Stefano Maria Iacus

    (Department of Economics, Business and Statistics, University of Milan, Via Conservatorio 7, I-20122 Milano, Italy)

Abstract

In this paper we introduce the Random Recursive Partitioning (RRP) matching method. RRP generates a proximity matrix which might be useful in econometric applications like average treatment effect estimation. RRP is a Monte Carlo method that randomly generates non-empty recursive partitions of the data and evaluates the proximity between two observations as the empirical frequency they fall in a same cell of these random partitions over all Monte Carlo replications. From the proximity matrix it is possible to derive both graphical and analytical tools to evaluate the extent of the common support between data sets. The RRP method is “honest” in that it does not match observations “at any cost”: if data sets are separated, the method clearly states it. The match obtained with RRP is invariant under monotonic transformation of the data. Average treatment effect estimators derived from the proximity matrix seem to be competitive compared to more commonly used estimators. RRP method does not require a particular structure of the data and for this reason it can be applied when distances like Mahalanobis or Euclidean are not suitable, in the presence of missing data or when the estimated propensity score is too sensitive to model specifications. Copyright © 2008 John Wiley & Sons, Ltd.

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  • Giuseppe Porro & Stefano Maria Iacus, 2009. "Random Recursive Partitioning: a matching method for the estimation of the average treatment effect," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(1), pages 163-185.
    • Handle: RePEc:jae:japmet:v:24:y:2009:i:1:p:163-185
    DOI: 10.1002/jae.1026
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    1. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-620, September.
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    Cited by:

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    4. Tymon Słoczyński, 2015. "The Oaxaca–Blinder Unexplained Component as a Treatment Effects Estimator," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 77(4), pages 588-604, August.
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    7. Emilio Aguirre, 2016. "Impacto de ser becado del Programa Compromiso Educativo," Documentos de Trabajo (working papers) 1616, Department of Economics - dECON.
    8. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2011. "Multivariate Matching Methods That Are Monotonic Imbalance Bounding," Journal of the American Statistical Association, American Statistical Association, vol. 106(493), pages 345-361.
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    13. Stefano VERZILLO & Paolo BERTA & Matteo BOSSI, 2015. "%CEM: A SAS Macro to Perform Coarsened Exact Matching," Departmental Working Papers 2015-22, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    14. Matthew Blackwell & Stefano Iacus & Gary King & Giuseppe Porro, 2009. "cem: Coarsened exact matching in Stata," Stata Journal, StataCorp LP, vol. 9(4), pages 524-546, December.
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