infonet-economy

In this paper the finite-sample properties of matching and weighting estimators, often used for estimating average treatment effects, are analyzed. Potential and feasible precision gains relative to pair-matching are examined. Local linear matching (with and without trimming), k-nearest neighbour matching, and particularly the weighting estimators performed worst. Ridge matching, on the other hand, leads to an about 25% smaller MSE vis-a-vis pair-matching. In addition, ridge matching is least sensitive to the design choice. Download Discussion Paper: (pdf, 516 kb)