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Dynamic models for policy evaluation

Author

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  • Costas Meghir

    (Institute for Fiscal Studies and Yale University)

Abstract

The evaluation of interventions has become a commonly used policy tool, which is frequently adopted to improve the transparency and effectiveness of public policy. However, evaluation methods based on comparing treatment and control groups in small scale trials are not capable of providing a complete picture of the likely effects of a policy and do not provide a framework which allows issues relating to the design of the programme to be addressed. The longer term effects relate to decisions by individuals to change aspects of their life-cycle behavior not directly targeted by the intervention, so as to best take into account of its presence. They also relate to possible changes in prices that may change or even reverse the incentives designed by the programme. In this paper we show how experimental data from field trials can be used to enhance the evaluation of interventions and we also illustrate the potential importance of allowing for longer term incentive and General Equilibrium effects.

Suggested Citation

  • Costas Meghir, 2006. "Dynamic models for policy evaluation," IFS Working Papers W06/08, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:06/08
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    References listed on IDEAS

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    3. Cahuc, Pierre & Le Barbanchon, Thomas, 2010. "Labor market policy evaluation in equilibrium: Some lessons of the job search and matching model," Labour Economics, Elsevier, vol. 17(1), pages 196-205, January.
    4. Helena Skyt Nielsen & Juanna Schrøter Joensen, 2011. "More Successful because of Math: Combining a Natural Experiment and a Structural Dynamic Model to Explore the Underlying Channels," 2011 Meeting Papers 995, Society for Economic Dynamics.
    5. Pierre Cahuc & Bruno Crépon & Julien Guitard & Marc Gurgand, 2008. "Policy Evaluation in Equilibrium The Case of Job Searcg Counseling in France," Working Papers 2008-13, Center for Research in Economics and Statistics.
    6. Sebastian Galiani & Juan Pantano, 2021. "Structural Models: Inception and Frontier," NBER Working Papers 28698, National Bureau of Economic Research, Inc.

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