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Panel Parametric, Semi-parametric and Nonparametric Construction of Counterfactuals - California Tobacco Control Revisited

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Abstract

We consider panel parametric, semi-parametric and nonparametric methods of constructing counterfactuals. Through extensive simulations, no method is able to dominate other methods. In general, we fi?nd that if the observed data are stationary, the panel semi- parametric method appears capable of generating counterfactuals close to the (true) data generating process in a wide array of situations. If the data are nonstationary, then the panel nonparametric method appears to dominate the parametric or semi-parametric approaches. We also suggest a model averaging method as a robust method to generate counterfactuals. We compare the different estimates of the impact of California Tobacco Control Program on per capita cigarette consumption.

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  • Cheng Hsiao & Qiankun Zhou, 2018. "Panel Parametric, Semi-parametric and Nonparametric Construction of Counterfactuals - California Tobacco Control Revisited," Departmental Working Papers 2018-02, Department of Economics, Louisiana State University.
    • Handle: RePEc:lsu:lsuwpp:2018-02
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    Cited by:

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    3. Eli Ben-Michael & Avi Feller & Jesse Rothstein, 2021. "The Augmented Synthetic Control Method," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 116(536), pages 1789-1803, October.

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