arXiv 3 Jun 2023 · Econometrics · 1 citations (OpenAlex)
arXiv:2306.01967 · PDF · DOI · OpenAlex · Extracted main text
The synthetic control estimator (Abadie et al., 2010) is asymptotically unbiased assuming that the outcome is a linear function of the underlying predictors and that the treated unit can be well approximated by the synthetic control before the treatment. When the outcome is nonlinear, the bias of the synthetic control estimator can be severe. In this paper, we provide conditions for the synthetic control estimator to be asymptotically unbiased when the outcome is nonlinear, and propose a flexible and data-driven method to choose the synthetic control weights. Monte Carlo simulations show that compared with the competing methods, the nonlinear synthetic control method has similar or better performance when the outcome is linear, and better performance when the outcome is nonlinear, and that the confidence intervals have good coverage probabilities across settings. In the empirical application, we illustrate the method by estimating the impact of the 2019 anti-extradition law amendments bill protests on Hong Kong's economy, and find that the year-long protests reduced real GDP per capita in Hong Kong by 11.27% in the first quarter of 2020, which was larger in magnitude than the economic decline during the 1997 Asian financial crisis or the 2008 global financial crisis.
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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.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Abadie, A. and L’Hour, J (2020) A penalized synthetic control estimator for disaggregated data | 1.000 | 7 | 4 | 100% |
| 2 | Doudchenko, N. and Imbens, G. W (2017) Balancing, regression, difference-in-differences and synthetic control methods: A synthesis | 1.000 | 7 | 3 | 100% |
| 3 | Abadie, A., Diamond, A., and Hainmueller, J (2015) Comparative politics and the synthetic control method | 1.000 | 5 | 3 | 100% |
| 4 | Abadie, A., Diamond, A., and Hainmueller, J (2010) Synthetic control methods for comparative case studies: Estimating the effect of California’s tobacco control program | 0.965 | 20 | 8 | 90% |
| 5 | Abadie, A (2021) Using synthetic controls: Feasibility, data requirements, and methodological aspects | 0.811 | 4 | 2 | 100% |
| 6 | Botosaru, I. and Ferman, B (2019) On the role of covariates in the synthetic control method | 0.737 | 3 | 3 | 67% |
| 7 | Ferman, B. and Pinto, C (2017) Placebo tests for synthetic controls | 0.644 | 2 | 2 | 100% |
| 8 | Abadie, A. and Imbens, G. W (2006) Large sample properties of matching estimators for average treatment effects | 0.511 | 3 | 2 | 33% |
| 9 | ABC (2019) Hong Kong university siege ends as officials are left with devastating aftermath | 0.405 | 1 | 1 | 100% |
| 10 | AP (2016) Hong Kong unsettled by case of 5 missing booksellers | 0.405 | 1 | 1 | 100% |
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