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A Note on the Common Support Problem in Applied Evaluation Studies

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abstract This paper advocates the use a nonparametric bound analysis to check the robustness of the results of applied evaluation studies to the problem of a lack of common support. The typical responses by researchers of either ignoring it, or obtaining estimates only for the subpopulation within the common support, can both be misleading: Ignoring the problem may result in biases because the comparison group may not be comparable. Deleting observations at best yields an estimator that is consistent for the common support. When treatment effects are hetereogenous inside and outside the common support this estimator is inconsistent. Furthermore, useful information is ignored, because the response of the treated to the treatment can be estimated even outside the common support. This information can be used to derive bounds with width depending on the configuration of the data. The application to an evaluation study of Swiss active labour market policies shows that the relevance of the bounds for changing the interpretation of the results depends very much on the particular data configuration.
   
type journal paper
   
keywords Bounds, matching, propensity score, treatment effects.
JEL Classification: C10, C50, J60, J68
   
language English
kind of paper journal article
date of appearance 1-6-2008
journal Annales d'Economie et de Statistique
publisher Annales (Frankreich)
ISSN 0769-489X
volume of journal 2008
number of issue 91-92
page(s) 217-235
review blind review
   
citation Lechner, M. (2008). A Note on the Common Support Problem in Applied Evaluation Studies. Annales d'Economie et de Statistique, 2008(91-92), 217-235.