Transcription of Instrumental Variables Method for Impact Evaluation
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Instrumental Variables Method for Impact Evaluation
Instrumental Variable Method for Impact Evaluation SA. Quimbo 1 September 2014 Asian Development Bank Why IE? To estimate the treatment effect of an intervention T on an outcome Y Examples: What is the effect of a credit program participation on consumption? On health? What is the effect of a conditional cash transfer program on consumption? education? maternal outcomes? What is the effect of a subsidy on health insurance premiums on enrolment? The Main Challenge: Finding the Counterfactual Key Question: What would have happened to the beneficiaries if the program had not existed? Ideal Strategy Source: Khandker (2006) Ideal Strategy Randomized evaluations: Allocate a program randomly across a sample of observations Two groups: control (counterfactual) and treatment groups Control and treatment groups have the same expected outcome in the absence of the program Challenges: ethical considerations, finding the equivalent group, costs Typical Case Reality: most programs require participation among a group of eligible individuals or households Example: Micro-credit program Targeted to eligible households Voluntary participation among the eligible or non-eligible Less-than-ideal Strategy Time Source: Khandker (2006) Projection for b
Instrumental Variable Method for Impact Evaluation SA. Quimbo 1 September 2014 Asian Development Bank . ... Implementing this in STATA • Option 1 reg t z X predict that ... “Impact Evaluation: Instrumental Variable Method” (presentation by Khandker in June 2006)
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