Impact Evaluation in International Development by Paul Glewwe & Petra Todd

Author:Paul Glewwe & Petra Todd
Language: eng
Format: epub

The synthetic control approach finds optimal weights wj, j = 2, … J, which are restricted to be nonnegative and sum to one. One approach for choosing the weights is to minimize the distance between the outcome variables Y that are observed for the treated region (region 1) in periods before receiving the treatment (periods 1 to T0) and the weighted average of the values for the J nontreated regions for the same periods. That is, the optimal weights (denoted by wj) are chosen so that the following equalities hold:

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