Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs

24 Pages Posted: 20 Jul 2000 Last revised: 9 Oct 2010

See all articles by Rajeev H. Dehejia

Rajeev H. Dehejia

New York University (NYU) - Robert F. Wagner Graduate School of Public Service; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA); CESifo

Sadek Wahba

Morgan Stanley

Date Written: June 1998

Abstract

This paper uses propensity score methods to address the question: how well can an observational study estimate the treatment impact of a program? Using data from Lalonde's (1986) influential evaluation of non-experimental methods, we demonstrate that propensity score methods succeed in estimating the treatment impact of the National Supported Work Demonstration. Propensity score methods reduce the task of controlling for differences in pre-intervention variables between the treatment and the non-experimental comparison groups to controlling for differences in the estimated propensity score (the probability of assignment to treatment, conditional on covariates). It is difficult to control for differences in pre-intervention variables when they are numerous and when the treatment and comparison groups are dissimilar, whereas controlling for the estimated propensity score, a single variable on the unit interval, is a straightforward task. We apply several methods, such as stratification on the propensity score and matching on the propensity score, and show that they result in accurate estimates of the treatment impact.

Suggested Citation

Dehejia, Rajeev H. and Wahba, Sadek, Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs (June 1998). NBER Working Paper No. w6586. Available at SSRN: https://ssrn.com/abstract=226310

Rajeev H. Dehejia (Contact Author)

New York University (NYU) - Robert F. Wagner Graduate School of Public Service ( email )

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HOME PAGE: http://users.nber.org/~rdehejia/

National Bureau of Economic Research (NBER) ( email )

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HOME PAGE: http://users.nber.org/~rdehejia/

Institute for the Study of Labor (IZA) ( email )

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CESifo ( email )

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Germany

Sadek Wahba

Morgan Stanley ( email )

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New York, NY 10036
United States

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