Regional Perspectives on Policy Evaluation PDF
Preview Regional Perspectives on Policy Evaluation
SPRINGER BRIEFS IN REGIONAL SCIENCE Marco Percoco Regional Perspectives on Policy Evaluation SpringerBriefs in Regional Science Series editors Henk Folmer, Groningen, The Netherlands Mark Partridge, Columbus, USA Gilles Duranton, Ontario, Canada Daniel P. McMillan, Urbana, USA Andrés Rodríguez-Pose, London, UK Henry W.C. Yeung, Singapore, Singapore SpringerBriefs present concise summaries of cutting-edge research and practical applicationsacrossawidespectrumoffields.Featuringcompact,authoredvolumes of50to125pages,theseriescoversarangeofcontentfromprofessionaltoacademic. SpringerBriefsinRegionalScienceshowcaseemergingtheory,empiricalresearch and practical application, lecture notes and reviews in spatial and regional science fromaglobalauthorcommunity. More information about this series at http://www.springer.com/series/10096 Marco Percoco Regional Perspectives on Policy Evaluation 123 MarcoPercoco InstitutionalAnalysis and Public Management BocconiUniversity Milan Italy ISSN 2192-0427 ISSN 2192-0435 (electronic) ISBN 978-3-319-09518-9 ISBN 978-3-319-09519-6 (eBook) DOI 10.1007/978-3-319-09519-6 LibraryofCongressControlNumber:2014945808 SpringerChamHeidelbergNewYorkDordrechtLondon ©TheAuthor(s)2014 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpartof the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation,broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,andtransmissionor informationstorageandretrieval,electronicadaptation,computersoftware,orbysimilarordissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purposeofbeingenteredandexecutedonacomputersystem,forexclusiveusebythepurchaserofthe work. Duplication of this publication or parts thereof is permitted only under the provisions of theCopyright Law of the Publisher’s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the CopyrightClearanceCenter.ViolationsareliabletoprosecutionundertherespectiveCopyrightLaw. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publicationdoesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexempt fromtherelevantprotectivelawsandregulationsandthereforefreeforgeneraluse. While the advice and information in this book are believed to be true and accurate at the date of publication,neithertheauthorsnortheeditorsnorthepublishercanacceptanylegalresponsibilityfor anyerrorsoromissionsthatmaybemade.Thepublishermakesnowarranty,expressorimplied,with respecttothematerialcontainedherein. Printedonacid-freepaper SpringerispartofSpringerScience+BusinessMedia(www.springer.com) To Sara and Mariacarla Preface Regionalpoliciesintheformofdevelopment,health,educationandenvironmental policies, amongst others, are widespread around the world and constitute a con- siderableamountoftime,effortandexpenditurefrombothlocalandnationalpolicy makers. The evaluation of public interventions should therefore be at the heart of modern evidence-based policy making, both before actions being implemented for projectedoutcomes(ex-anteevaluation)andfollowingtheintroductionofapolicy, in order to identify its eventual effects (ex-post evaluation). In most of the cases, scholars and evaluators use (or should use) quasi-experimental (counterfactual) designs in which, through statistical techniques, they try to simulate laboratory experiments. Policy evaluation is also currently gaining wide consensus also among regional policy makers as a part of the tools needed for setting place-based policies. As evidence of this trend, the largest development programme in the world, the European Cohesion Policy, has introduced counterfactual evaluation based on an institutional approach. This book is a short introduction to counterfactual methods that are useful for regional scientists. As in the spirit of SpringerBriefs, this work has been written from the point of view accepting that readers were already familiar with the econometrics behind formulas and methods, rendering the work’s focus more on the interpretation of parameters from a policy perspective. Particular attention is devoted to new methods and applications, whereas classical approaches have been given less space. The book is organised into six chapters. Chapter 1 is an introduction to policy evaluation and to the linear regression model. Chapter 2 presents the interrupted series approach in the form of regression discontinuity design with a significant focusonheterogeneity.Thepropensityscorematchingmethodologyisdiscussedin Chap. 3, along with the heterogeneity of the treatment in the form of different regional development strategies. Chapter 4 presents the difference-in-differences vii viii Preface methodology,whilethesyntheticcontrolapproachispresentedinChap. 5.Finally, Chap. 6discussesanissueofgreatimportanceforpolicy-making,butwhichhasto date received little attention, that is ex-ante evaluation. ThisbookisdedicatedtomywifeSaraandmydaughterMariacarla,whomake my days full of joy and remind me what really counts in life. Acknowledgments This book was written based on lecture notes for the “Policy evaluation” course IhavebeenteachingtograduatestudentsatUniversitàBocconiduringthepastfew years. I thank students for having had the patience to attend my classes and my colleaguesforstimulatingdiscussionsaboutthetopic.Furthermore,Iwouldliketo thank the Department of Geography and Environment at the London School of Economics for its hospitality during the final period of composition of the manuscript. Finally, financial support from Università Bocconi is gratefully acknowledged. ix Contents 1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Linear Regression for Causal Inference. . . . . . . . . . . . . . . . . . . 4 1.3 Instrumental Variable Estimates and LATE. . . . . . . . . . . . . . . . 6 1.4 Treatment Definition in a Spatial Context: Open Issues . . . . . . . 7 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2 Regression Discontinuity Design: When Series Interrupt . . . . . . . . 9 2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.2 The Basic Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.2.1 Example: The Effect of the Point-Record Driving License on Car Accidents. . . . . . . . . . . . . . . . . . . . . . . 11 2.2.2 Example: The Impact of European Cohesion Policy on Regional Growth . . . . . . . . . . . . . . . . . . . . . . . . . . 13 2.3 Regression Discontinuity with Heterogeneous Effects. . . . . . . . . 15 2.3.1 Example: EU Cohesion Policy, Economic Structure and Regional Growth. . . . . . . . . . . . . . . . . . . . . . . . . . 16 2.4 Sensitivity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 3 Propensity Score Matching: When Units Meet. . . . . . . . . . . . . . . . 21 3.1 The Standard Propensity Score Matching Technique . . . . . . . . . 21 3.1.1 Example: The Effect of Urban Growth Controls on Housing Prices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 3.2 Propensity Score Matching with Heterogeneity: An Example. . . . 24 3.3 Oaxaca-Blinder Regressions and the Highways Example. . . . . . . 26 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 xi
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