Panel Data Approach vs. Synthetic Control Method

41 Pages Posted: 28 Nov 2017

See all articles by Shui Ki Wan

Shui Ki Wan

Hong Kong Baptist University (HKBU)

Yimeng Xie

University of Southern California

Cheng Hsiao

University of Southern California - Department of Economics; National Taiwan University; National Bureau of Economic Research (NBER)

Date Written: November 3, 2017

Abstract

We explore the pros and cons of two counterfactual analysis methodologies – the panel data approach (PDA) and the synthetic control method (SCM) through a discussion of the differences in their underlying assumptions and a series of simulations.

Keywords: Counterfactual analysis; Panel data approach; Synthetic control

JEL Classification: C3, C5

Suggested Citation

Wan, Shui Ki and Xie, Yimeng and Hsiao, Cheng, Panel Data Approach vs. Synthetic Control Method (November 3, 2017). USC-INET Research Paper No. 17-33, Available at SSRN: https://ssrn.com/abstract=3076068 or http://dx.doi.org/10.2139/ssrn.3076068

Shui Ki Wan (Contact Author)

Hong Kong Baptist University (HKBU)

Department of Economics
Kowloon, Hong Kong
Hong Kong

Yimeng Xie

University of Southern California ( email )

Los Angeles, CA
United States

Cheng Hsiao

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States

National Taiwan University

1 Sec. 4, Roosevelt Road
Taipei, 106
Taiwan

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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