Cross-Validating Synthetic Controls
Martin Becker (),
Stefan KlÃ¶ÃŸner () and
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Martin Becker: Saarland University
Stefan KlÃ¶ÃŸner: Saarland University
Economics Bulletin, 2018, vol. 38, issue 1, 603-609
While the literature on synthetic control methods mostly abstracts from out-of-sample measures, Abadie et al. (2015) have recently introduced a cross-validation approach. This technique, however, is not well-defined since it hinges on predictor weights which are not uniquely defined. We fix this issue, proposing a new, well-defined cross-validation technique, which we apply to the original Abadie et al. (2015) data. Additionally, we discuss how this new technique can be used for comparing different specifications based on out-of-sample measures, avoiding the danger of cherry-picking.
Keywords: Synthetic Control Methods; Cross-Validation; Specification Search (search for similar items in EconPapers)
JEL-codes: C5 C2 (search for similar items in EconPapers)
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Working Paper: Cross-Validating Synthetic Controls (2017)
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