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Synthetic Controls with Staggered Adoption

Author

Listed:
  • Eli Ben-Michael
  • Avi Feller
  • Jesse Rothstein
Abstract
Staggered adoption of policies by different units at different times creates promising opportunities for observational causal inference. Estimation remains challenging, however, and common regression methods can give misleading results. A promising alternative is the synthetic control method (SCM), which finds a weighted average of control units that closely balances the treated unit's pre-treatment outcomes. In this paper, we generalize SCM, originally designed to study a single treated unit, to the staggered adoption setting. We first bound the error for the average effect and show that it depends on both the imbalance for each treated unit separately and the imbalance for the average of the treated units. We then propose "partially pooled" SCM weights to minimize a weighted combination of these measures; approaches that focus only on balancing one of the two components can lead to bias. We extend this approach to incorporate unit-level intercept shifts and auxiliary covariates. We assess the performance of the proposed method via extensive simulations and apply our results to the question of whether teacher collective bargaining leads to higher school spending, finding minimal impacts. We implement the proposed method in the augsynth R package.

Suggested Citation

  • Eli Ben-Michael & Avi Feller & Jesse Rothstein, 2019. "Synthetic Controls with Staggered Adoption," Papers 1912.03290, arXiv.org, revised Jan 2021.
  • Handle: RePEc:arx:papers:1912.03290
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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