Lesson 5 · Other Designs and Approaches to Know · Step 4 of 7
The synthetic control method
When one country adopts a policy, no single other country makes a fair comparison. Synthetic control builds one by weighting untreated countries so their combination tracks the treated country before the policy. Synthetic South Africa was mostly Brazil, Argentina and Chile, and it matched cigarette consumption almost exactly from 1980 to 1993. After sharp tax increases, consumption fell to 36% below the synthetic counterfactual by 2004. The method stands on pre-period fit, leave-one-out and placebo checks, and the absence of anything else changing at the same moment.
Also covered: donor pools and weights · pre-intervention fit · leave-one-out and in-space placebos · permutation inference
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Lesson 5 · 7 steps
Research Designs · lesson 5 of 5