The Much Quieter Revolution of Synthetic Control: Episode I
An Abadie, Diamond and Hainmueller explainer
An Introduction to Synthetic Control
Though sometimes large social programs and public policy changes are randomized, that is more the exception than the rule. Most of the time, policy change occurs in a political environment where people fight for resources using votes, democracy, budgets and politicians, all governed by regional institutions, charters and rules. Understanding the causal effect of an intervention is hard enough with randomization, but it is extremely difficult to find a way in the swirling winds of American federalism. And yet, since the benefit of understanding these programs are so large and so important, generations of scientists have developed tools for handling these kinds of situations, and synthetic control is one of them.
Synthetic control is an econometric estimator that appeared in a 2003 article in the American Economic Review. The method has become popular across the social sciences for its usefulness at estimating causal effects with panel data, and that…
Keep reading with a 7-day free trial
Subscribe to Scott's Substack to keep reading this post and get 7 days of free access to the full post archives.