Exploring the Usefulness of a Non-Random Holdout Sample for Model Validation: Welfare Effects on Female Behavior

Michael Keane () and Kenneth Wolpin ()
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Kenneth Wolpin: Department of Economics, University of Pennsylvania

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: Opportunities for external validation of behavioral models in the social sciences that are based on randomized social experiments or on large regime shifts, that can be treated as experiments for the purpose of model validation, are extremely rare. In this paper, we consider an alternative approach, namely mimicking the essential element of regime change by non-randomly holding out from estimation a portion of the sample that faces a significantly different policy regime. The non-random holdout sample is used for model validation/selection. We illustrate the non-random holdout sample approach to model validation in the context of a model of welfare program participation. The policy heterogeneity that we exploit to generate a non-random holdout sample takes advantage of the wide variation across states that has existed in welfare policy.

Keywords: Model validation; Hold-out sample; Public welfare (search for similar items in EconPapers)
JEL-codes: C52 C53 J1 J2 (search for similar items in EconPapers)
Pages: 85 pages
Date: 2006-05-01
New Economics Papers: this item is included in nep-ecm
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Citations: View citations in EconPapers (20)

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Related works:
Journal Article: EXPLORING THE USEFULNESS OF A NONRANDOM HOLDOUT SAMPLE FOR MODEL VALIDATION: WELFARE EFFECTS ON FEMALE BEHAVIOR (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:06-006

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