Alternative approaches to evaluation in empirical microeconomics: Journal of Human Resources

Monica Costa-Dias, Richard Blundell

Research output: Contribution to journalReview article (Academic Journal)peer-review

430 Citations (Scopus)

Abstract

This paper reviews a range of the most popular policy evaluation methods in empirical microeconomics: social experiments, natural experiments, matching methods, instrumental variables, discontinuity design and control functions. It discusses the identification of both the traditionally used average parameters and more complex distributional parameters. In each case, the necessary assumptions and the data requirements are considered. The adequacy of each approach is discussed drawing on the empirical evidence from the education and labor market policy evaluation literature. We also develop an education evaluation model which we use to carry through the discussion of each alternative approach. A full set of STATA datasets are provided free online which contain Monte-Carlo replications of the various specifications of the education evaluation model. There are also a full set of STATA .do files for each of the estimation approaches described in the paper. The .do-files can be used together with the datasets to reproduce all the results in the paper.
Original languageEnglish
Pages (from-to)565-640
Number of pages76
JournalJournal of Human Resources
Volume44
Issue number3
DOIs
Publication statusPublished - 2009

Keywords

  • natural experiments
  • social experiments
  • Evaluation methods
  • matching
  • instrumental variables

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