Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/286543 
Year of Publication: 
2021
Citation: 
[Journal:] SERIEs - Journal of the Spanish Economic Association [ISSN:] 1869-4195 [Volume:] 12 [Issue:] 4 [Year:] 2021 [Pages:] 549-584
Publisher: 
Springer, Heidelberg
Abstract: 
The synthetic control method (SCM) is widely used to evaluate causal effects under quasi-experimental designs. However, SCM suffers from weaknesses that compromise its accuracy, stability and meaningfulness, due to the nested optimization problem of covariate relevance and counterfactual weights. We propose a decoupling of both problems. We evaluate the economic effect of government formation deadlock in Spain-2016 and find that SCM method overestimates the effect by 0.23 pp. Furthermore, we replicate two studies and compare results from standard and decoupled SCM. Decoupled SCM offers higher accuracy and stability, while ensuring the economic meaningfulness of covariates used in building the counterfactual.
Subjects: 
Synthetic control
SHAP
Regularization
Quasi-experiments ·Causality
Government
JEL: 
C32
E65
H11
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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