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A note on the impact evaluation of public policies: the counterfactual analysis

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  • Loi, Massimo
  • Rodrigues, Margarida

Abstract

This report describes concisely, and in an intuitive way, the policy evaluation framework and the different counterfactual analysis evaluation strategies: propensity score matching, regression discontinuity design, differences-in-differences and instrumental variables. For each method we present the main assumptions it relies on and the data requirements. These methodologies apply to any type of policy and, in general, to any type of intervention. A selection of papers applying this approach in the context of labour market interventions is also included.

Suggested Citation

  • Loi, Massimo & Rodrigues, Margarida, 2012. "A note on the impact evaluation of public policies: the counterfactual analysis," MPRA Paper 42444, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:42444
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    File URL: https://mpra.ub.uni-muenchen.de/42444/1/MPRA_paper_42444.pdf
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    References listed on IDEAS

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    13. Brian Bell & Richard Blundell & John Reenen, 1999. "Getting the Unemployed Back to Work: The Role of Targeted Wage Subsidies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 339-360, August.
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    18. Marco Caliendo & Reinhard Hujer & Stephan L. Thomsen, 2008. "The employment effects of job-creation schemes in Germany: A microeconometric evaluation," Advances in Econometrics, in: Modelling and Evaluating Treatment Effects in Econometrics, pages 381-428, Emerald Group Publishing Limited.
    19. Peter Z. Schochet & John Burghardt & Sheena McConnell, 2008. "Does Job Corps Work? Impact Findings from the National Job Corps Study," American Economic Review, American Economic Association, vol. 98(5), pages 1864-1886, December.
    20. Shahidur R. Khandker & Gayatri B. Koolwal & Hussain A. Samad, 2010. "Handbook on Impact Evaluation : Quantitative Methods and Practices," World Bank Publications - Books, The World Bank Group, number 2693.
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    2. Liesbeth Colen & Sergio Gomez Y Paloma & Uwe Latacz-Lohmann & Marianne Lefebvre & Sophie Thoyer & Raphaële Préget, 2015. "(How) can economic experiments inform EU agricultural policy?," JRC Research Reports JRC97340, Joint Research Centre.
    3. Javier Castaño & Maria Blanco & Pilar Martinez, 2019. "Reviewing Counterfactual Analyses to Assess Impacts of EU Rural Development Programmes: What Lessons Can Be Learned from the 2007–2013 Ex-Post Evaluations?," Sustainability, MDPI, vol. 11(4), pages 1-22, February.
    4. Sara Pavone & Elena Ragazzi & Lisa Sella, 2015. "Sostenere le imprese agro-industriali in Piemonte: un?analisi controfattuale," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2015(3 Suppl.), pages 129-143.
    5. Brunetti, Irene & Corsini, Lorenzo, 2014. "Workplace Training Programs: Instruments for Human Capital Improvements or Screening Devices?," MPRA Paper 55943, University Library of Munich, Germany.
    6. Adejumo, O. & Okoruwa, V. & Abass, A., 2018. "Improved Post-Harvest Technology: What Impact on Nigeria s Smallholder Cassava Starch Processors Welfare?," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277054, International Association of Agricultural Economists.
    7. Adenuga, Adewale H. & Jack, Claire & Ashfield, Austen & Wallace, Michael, 2021. "Estimating the impact of membership of participatory extension programme across different enterprise groups: a conditional difference-in-differences approach," 95th Annual Conference, March 29-30, 2021, Warwick, UK (Hybrid) 311082, Agricultural Economics Society - AES.
    8. Andrea Pronti & Julio Berbel, 2020. "Analysis of the impact of a volumetric tariff for irrigation in Northern Italy through the “Inverse DiD†approach," SEEDS Working Papers 1320, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jul 2020.
    9. Darius Erlangga & Marc Suhrcke & Shehzad Ali & Karen Bloor, 2019. "The impact of public health insurance on health care utilisation, financial protection and health status in low- and middle-income countries: A systematic review," PLOS ONE, Public Library of Science, vol. 14(8), pages 1-20, August.
    10. Jelica Rastoka & Saša Petković & Dragana Radicic, 2022. "Impact of Entrepreneurship on the Quality of Public Health Sector Institutions and Policies," IJERPH, MDPI, vol. 19(3), pages 1-25, January.
    11. Whelan, Adele & McGuinness, Seamus & Barrett, Alan, 2021. "Review of International Approaches to Evaluating Rural and Community Development Investment and Supports," Research Series, Economic and Social Research Institute (ESRI), number RS124.
    12. Nemlioglu, Ilayda & Mallick, Sushanta, 2021. "Effective innovation via better management of firms: The role of leverage in times of crisis," Research Policy, Elsevier, vol. 50(7).
    13. Dvouletý Ondřej & Čadil Jan & Mirošník Karel, 2019. "Do Firms Supported by Credit Guarantee Schemes Report Better Financial Results 2 Years After the End of Intervention?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(1), pages 1-20, January.
    14. Abdulrahman Alrabiah & Steve Drew, 2020. "Proactive Management of Regulatory Policy Ripple Effects via a Computational Hierarchical Change Management Structure," Risks, MDPI, vol. 8(2), pages 1-29, May.
    15. Adewale H. Adenuga & Claire Jack & Austen Ashfield & Michael Wallace, 2021. "Assessing the Impact of Participatory Extension Programme Membership on Farm Business Performance in Northern Ireland," Agriculture, MDPI, vol. 11(10), pages 1-12, September.

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    More about this item

    Keywords

    counterfactual analysis; propensity score matching; regression discontinuity; difference in difference; instrumental variables;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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