1307 E 60th St, Chicago, IL 60637
chicago, il 60637
Institutional Affiliation: Univ of Chicago
NBER Working Papers and Publications
|January 2020||Combining Matching and Synthetic Control to Trade oﬀ Biases from Extrapolation and Interpolation|
with , , : w26624
The synthetic control method is widely used in comparative case studies to adjust for diﬀerences in pre-treatment characteristics. A major attraction of the method is that it limits extrapolation bias that can occur when untreated units with diﬀerent pre-treatment characteristics are combined using a traditional adjustment, such as a linear regression. Instead, the SC estimator is susceptible to interpolation bias because it uses a convex weighted average of the untreated units to create a synthetic untreated unit with pre-treatment characteristics similar to those of the treated unit. More traditional matching estimators exhibit the opposite behavior: they limit interpolation bias at the potential expense of extrapolation bias. We propose combining the matching and synthetic control estim...