Week 10- Policy Evaluation Flashcards

1
Q

What are public policies designed for?

A

Public policy programmes are usually designed to change a specific outcome, eg education policy to improve learning.

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2
Q

What is the purpose of policy evaluation?

A

Policy evaluation attempts to determine whether the policy objectives have been achieved.

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3
Q

What is impact evaluation? Give 2 examples of impact evaluation

A

Impact evaluation is a specific type of policy evaluation which aims to ascertain answers to cause-effect questions:
• Do vocational training programmes cause an increase trainee incomes?
• What is the causal effects of scholarships on school attendance and achievement?

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4
Q

What types of effectiveness can we consider when we do policy evaluation?

A
  • Absolute effectiveness

* Relative effectiveness (effectiveness relative to what would have happened)

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5
Q

What does ROAMEF stand for in the Central Government Guidance On Appraisal And Evaluation?

A
  • Rational
  • Objective
  • Appraisal
  • Monitoring
  • Evaluation
  • Feedback
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6
Q

At what stage in ROAMEF does implementation of the policy occur?

A

The implementation of the policy occurs during the monitoring stage.

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7
Q

What is the definition of causality?

A

X is a cause of Y if …. Y would not have occurred without X.

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8
Q

If we want to establish the effect of a training program on an individuals income, is observing a rise in a trainees income after training sufficient to assume that the training causes a rise in trainees income?

A

No, this is not sufficient, as income may have risen in spite of training, and we need to establish to what extent the training contributed to the change in income.

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9
Q
  • What type of questions are causal questions?
  • Give an example
  • What can these scenarios be thought of as?
A
  • Causal questions are “what-if” questions
  • What if an individual attended private school vs state school?
  • These scenarios can be thought of as treatments or interventions
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10
Q

So how do we calculate/write the causal effect of an outcome? Explain this equation

A
  • 𝛿 = (𝑌|𝐷 = 1) − (𝑌|𝐷 = 0)
  • 𝛿 if the causal effect of a policy, D.
  • Y is the outcome of interest.
  • 𝛿 is the difference between outcomes with and without the policy change (e.g. the training programme).
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11
Q
  • What is the Fundamental Problem of Causal Inference (Holland, 1968)?
  • Give an example of this
A
  • It is impossible to calculate unit level causal effects because we can never observe the same individual in both states of the world at a given point in time
  • Eg we cannot observe an individual as being enrolled in a training programme and not being enrolled in a training programme at the same time.
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12
Q

How do we overcome the Fundamental Problem of Causal Inference (Holland, 1968)?

A
  • We establish a counterfactual- the outcome where the intervention didn’t happen
  • We find an approximation for (𝑌|𝐷 = 0) - eg the outcome without training
  • We find approximation by finding a comparison group similar to those we are “treating”. These serve as an estimate of the counterfactuals
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13
Q

What are the 3 necessary requirements for a comparison group to be valid? What would observed differences then be as a result of?

A

1) Average characteristics between both treated and control are the same
2) Treatments and Controls must have reacted the same in the presence of a treatment
3) Treatments and control groups not exposed to different interventions
• Observed differences are as a result of the policy intervention

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14
Q

What are 2 potentially problematic methods to finding a counterfactual?

A
  • Before-After Comparisons

* Treated vs Non-Treated

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15
Q

What are Before-After Comparisons?

A
  • Impact of a policy change by looking at changes overtime of participants outcomes of interest
  • In this case the counterfactual is outcome for the same individual/unit prior to the intervention
  • Assumption: The outcome for the individual would have been the same as it was before the intervention
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16
Q
  • What is the main limitation of Before-After Comparisons?

* Why?

A
  • This is the main limitation with this approach as it rarely is the case
  • This could result in significant under/over estimation of the policy
17
Q

What is the Treated vs Non-Treated method?

A
  • Comparing treated individuals with those who were not treated
  • However, those who enrol might have different • characteristics to those who do not enrol
  • The counterfactual in this case is the outcome for units who do not decide to enrol in the program
  • Assumption: The trends are the same
18
Q

In Enrolled vs Non-Enrolled, what causes bias impact estimates?

A

Selection bias

19
Q
  • What is the effect of positive selection bias on the impact?
  • What is the effect of negative selection bias on the impact?
A
  • Positive selection bias overestimates the impact

* Negative selection bias will underestimate the impact

20
Q

What does random assignment do?

A

Distributes resources evenly among equally deserving populations

21
Q
  • Does random assignment provide a good counterfactual?

* Why/Why not?

A
  • Yes

* As it generates a comparison group of similar characteristics on average

22
Q

Using randomised selection, what does it mean to say that the treatment and comparison groups will be statistically identical? What is the meaning of this?

A
  • Average observable characteristics – age, gender, education…
  • Average unobservable characteristics – motivation, ability, preferences…
  • ∴ randomised selection is a good counterfactual as only remaining differences between the groups will be participation in the training programme
23
Q

Using randomised selections, how do we work out the causal impacts?

A

The causal impact is the difference between the average outcomes of each group after the programme.

24
Q

What are the advantages and disadvantages of randomised selection?

A
  • Advantages- Internal validity: The estimated impact is the true impact of the programme on that particular population.
  • Disadvantages- External Validity: It is hard to generalise the result to other populations, if other populations are different.
25
Q

Give examples of why randomisation is not always applicable/ feasible /desirable.

A

• Programme may have already have finished – retrospective evaluation
• Non-excludable National policies: For example, smoking bans, mobile phone and driving legislations.
• Unfeasible to randomise: For example, road tunnel or
infrastructure projects.
• Ethical Reasons – Health problems…

26
Q
  • What is Difference-in-Difference?
  • What does it do
  • When is DID useful?
A
  • DID is a non-experimental method for impact evaluation.
  • It explores changes in outcomes overtime between treated and non-treated groups.
  • It is useful when randomisation is not possible and eligibility rules are not clear.
27
Q

Explain how DID works.

A

DID performs a comparison between:
• Before/after changes of the outcome for participants (treated group)
• Before/after changes of the outcome for non-participants (comparison group)
-The first difference controls for any factors which are constant for participants.
-The second difference controls for any factors which vary over time at the same rate for participants and non-participants.
-This gives the difference as the impact of the policy.

28
Q

What is crucial in dealing with DID?

A

The idea of common trends, they are to be parallel. If they are not parallel then DID isn’t a valid estimate as the counterfactual is not valid.

29
Q

How do we calculate DID?

A

DD = (𝑦𝑃𝑜𝑠𝑡𝑇𝑟𝑒𝑎𝑡−𝑦𝑃𝑟𝑒 𝑇𝑟𝑒𝑎𝑡)-(𝑦𝑃𝑜𝑠𝑡𝐶𝑜𝑚𝑝−𝑦𝑃𝑟𝑒𝐶𝑜𝑚𝑝)

30
Q

In DID what is the counterfactual?

A

The counterfactual is the trend in outcomes for the comparison group

31
Q

When is DID a promising method?

A

1) The characteristics of the treatment and comparison groups can be assumed to be constant over the period of analysis.
2) DID requires a baseline (pre-program) data.
3) Difference in outcomes over time of the treatment and comparison groups would have changed at the same rate in the absence of the program.

32
Q

What are the advantages and disadvantages of DID?

A

Advantage: it is a generally applicable method
Disadvantage: Several factors can make the trends in the outcomes of the treated and comparison groups vary:
DID attributes any difference in trends to the programme so even when trends are parallel before the start of the intervention, bias in the estimation may still appear

33
Q

What is the Ashenfelters dip?

A
  • Ashenfelter noted that training program participants often experienced a dip in earning prior to the programme.- possibly because some people lose their jobs shortly before joining the treatment group.
  • This leads to an upward-bias of the DID estimate of the program.