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Regression to the Mean's Impact on the Synthetic Control Method: Bias and Sensitivity Analysis

Nicholas Illenberger, Dylan S. Small, Pamela A. Shaw

arXiv 10 Sep 2019 · Statistics — Methodology · 2 citations (OpenAlex)

arXiv:1909.04706 · PDF · DOI · OpenAlex · Extracted main text

Abstract

To make informed policy recommendations from observational data, we must be able to discern true treatment effects from random noise and effects due to confounding. Difference-in-Difference techniques which match treated units to control units based on pre-treatment outcomes, such as the synthetic control approach have been presented as principled methods to account for confounding. However, we show that use of synthetic controls or other matching procedures can introduce regression to the mean (RTM) bias into estimates of the average treatment effect on the treated. Through simulations, we show RTM bias can lead to inflated type I error rates as well as decreased power in typical policy evaluation settings. Further, we provide a novel correction for RTM bias which can reduce bias and attain appropriate type I error rates. This correction can be used to perform a sensitivity analysis which determines how results may be affected by RTM. We use our proposed correction and sensitivity analysis to reanalyze data concerning the effects of California's Proposition 99, a large-scale tobacco control program, on statewide smoking rates.

Citation extraction

24
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appendix boundary found by appendix_command · 97% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Alberto Abadie, Alexis Diamond, and Jens Hainmueller (2010) Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program1.00055100%
2Jamie R Daw and Laura A Hatfield (2018) Matching and Regression to the Mean in Difference-in-Differences Analysis0.92844100%
*unmatched citation key *0.40511100%
4Alberto Abadie (2005) Semiparametric Difference-in-Differences Estimators0.40511100%
5Joshua D Angrist and Jörn-Steffen Pischke (2008) Mostly Harmless Econometrics: An Empiricist's Companion0.40511100%
6Sunil Arya, David M Mount, Nathan Netanyahu, Ruth Silverman, and Ang… (1994) An Optimal Algorithm for Approximate Nearest Neighbor Searching in Fixed Dimensions0.40511100%
7Charles C Branas, Rose A Cheney, John M MacDonald, Vicky W Tam, Tara… (2011) A Difference-in-Differences Analysis of Health, Safety, and Greening Vacant Urban Space0.40511100%
8Rita Hamad, Akansha Batra, Deborah Karasek, Kaja Z LeWinn, Nicole R… (2019) The Impact of the Revised WIC Food Package on Maternal Nutrition during Pregnancy and Postpartum0.40511100%
9Rose MC Kagawa, Alvaro Castillo-Carniglia, Jon S Vernick, Daniel Web… (2018) Repeal of Comprehensive Background Check Policies and Firearm Homicide and Suicide0.40511100%
10Timothy L Lash, Matthew P Fox, Richard F MacLehose, George Maldonado… (2014) Good Practices for Quantitative Bias Analysis0.40511100%

Showing the top 10 of 14 scored citations. 1 of these could not be matched to a bibliography entry, so only the citation key is shown.