Propensity score-matching methods for nonexperimental causal studies

Rajeev H. Dehejia, Sadek Wahba

Research output: Contribution to journalReview articlepeer-review

Abstract

This paper considers causal inference and sample selection bias in nonexperimental settings in which (i) few units in the nonexperimental comparison group are comparable to the treatment units, and (ii) selecting a subset of comparison units similar to the treatment units is difficult because units must be compared across a high-dimensional set of pretreatment characteristics. We discuss the use of propensity score-matching methods, and implement them using data from the National Supported Work experiment. Following LaLonde (1986), we pair the experimental treated units with nonexperimental comparison units from the CPS and PSID, and compare the estimates of the treatment effect obtained using our methods to the benchmark results from the experiment. For both comparison groups, we show that the methods succeed in focusing attention on the small subset of the comparison units comparable to the treated units and, hence, in alleviating the bias due to systematic differences between the treated and comparison units.

Original languageEnglish (US)
Pages (from-to)151-161
Number of pages11
JournalReview of Economics and Statistics
Volume84
Issue number1
DOIs
StatePublished - Feb 2002

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Economics and Econometrics

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