Lecture 13 - PAM 3300 LaLonde(1986 Evaluation of Evaluation...

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PAM 3300: LaLonde (1986) Evaluation of Evaluation Methodology
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LaLonde (1986): Does statistical control work? “Evaluating the Econometric Evaluations of Training Programs with Experimental Data” How could we know whether statistical control (e.g. multiple regression) methods work? We can tell stories about whether things left out of the regression (the error term) are correlated with the treatment, but if we can’t observe them this is only a story. LaLonde’s idea: suppose we have data on the causal effect of a program from a randomized trial (the NSW Demonstration) but also have survey data about earnings outcomes and other individual characteristics from a ‘similar’ population. We can compute the ‘true’ effect of the program by comparing means of treated and untreated, aided by randomization control. Then we can use data on those treated in the experiment and compare them to people in the survey data, using regression to control for differences. If statistical control (regression) ‘works’, then we should estimate the same effect of NSW participation.
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Setting: The National Supported Work Demonstration
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