A mixed placebo test for synthetic control method

Qiang Chen and Guanpeng Yan

Economics Letters, 2023, vol. 224, issue C

Abstract: The in-space placebo test for synthetic control method uses fake treatment units for inference, while the in-time placebo test uses a fake treatment time. However, while the former produces p-values, the latter does not. We propose a mixed placebo test which combines both in-time and in-space placebo tests such that it uses a fake treatment time and fake treatment units simultaneously. An important advantage of mixed placebo test is that it formalizes the in-time placebo test by providing p-values. We demonstrate the use of mixed placebo test by revisiting the example of California’s tobacco control program (Abadie et al., 2010).

Keywords: Synthetic control method; In-time placebo test; Mixed placebo test (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:224:y:2023:i:c:s0165176523000290

DOI: 10.1016/j.econlet.2023.111004

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