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Evaluating Program Impact and the Endogeneity Problem: Instrumental Variables
Gustavo Angeles MEASURE Evaluation University of North Carolina at Chapel Hill Workshop on Impact Evaluation of Population, Health and Nutrition Programs Accra, Ghana July 18-29, 2016
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Remember the simple conceptual framework and its associated empirical model
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Characteristics / Health Service supply - Rurality - Health facilities (HF) - Program - Sanitation
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Remember the simple conceptual framework and its associated empirical model
Unobserved factors in green Observed? Yes No Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Characteristics / Health Service supply - Rurality - Health facilities (HF) - Program - Sanitation Observed? Yes No
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Remember the simple conceptual framework and its associated empirical model
Unobserved factors in green Observed? Yes No Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Characteristics / Health Service supply - Rurality - Health facilities (HF) - Program - Sanitation Observed? Yes No Useij = α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj
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Remember the simple conceptual framework and its associated empirical model
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Characteristics / Health Service supply - Rurality - Health facilities (HF) - Program - Sanitation Useij = α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj What if? ↑Edu
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Remember the simple conceptual framework and its associated empirical model
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Characteristics / Health Service supply - Rurality - Health facilities (HF) - Program - Sanitation Useij = α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj What if? ↑Edu → ∆ Use
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Remember the simple conceptual framework and its associated empirical model
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Characteristics / Health Service supply - Rurality - Health facilities (HF) - Program - Sanitation Useij = α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj What if? ↑Edu → ∆ Use ↑HF
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Remember the simple conceptual framework and its associated empirical model
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Characteristics / Health Service supply - Rurality - Health facilities (HF) - Program - Sanitation Useij = α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj What if? ↑Edu → ∆ Use ↑HF → ∆ Use
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Remember the simple conceptual framework and its associated empirical model
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Characteristics / Health Service supply - Rurality - Health facilities (HF) - Program - Sanitation Useij = α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj What if? ↑Edu → ∆ Use ↑HF → ∆ Use ↑Prog
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Remember the simple conceptual framework and its associated empirical model
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Characteristics / Health Service supply - Rurality - Health facilities (HF) - Program - Sanitation Useij = α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj What if? ↑Edu → ∆ Use ↑HF → ∆ Use ↑Prog → ∆ Use
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Remember the simple conceptual framework and its associated empirical model
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Characteristics / Health Service supply - Rurality - Health facilities (HF) - Program - Sanitation Useij = α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj What if? ↑Edu → ∆ Use ↑HF → ∆ Use ↑Prog → ∆ Use Then, we have Direct and Unique relationships between each determinant and “Use”. The, we can estimate the effect of the Program on Use.
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Now, remember a simple modification: Conceptual framework for targeted program placement
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program
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A simple modification: Conceptual Framework 2
What do we observe? Observed? YES NO Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Observed? YES NO Community Charact. - Rurality - Health facilities (HF) - Sanitation Program
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A simple modification: Conceptual Framework 2
What is the associated empirical model? Observed? YES NO Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Observed? YES NO Community Charact. - Rurality - Health facilities (HF) - Sanitation Program Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj
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A simple modification: Conceptual Framework 2
What is the empirical model? Observed? YES NO Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Observed? YES NO Community Charact. - Rurality - Health facilities (HF) - Sanitation Program Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj
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A simple modification: Conceptual Framework 2
What is the empirical model? Observed? YES NO Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Observed? YES NO Community Charact. - Rurality - Health facilities (HF) - Sanitation Program Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij,+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj Now the empirical model has two equations. *** Equation (1) is exactly as in previous slides for the first conceptual framework.
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A simple modification: Conceptual Framework 2
What can we say about the relationships in the model? Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij,+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu
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A simple modification: Conceptual Framework 2
What can we say about the relationships in the model? Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij,+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu → ∆ Use
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A simple modification: Conceptual Framework 2
What can we say about the relationships in the model? Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij,+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu → ∆ Use ↑Risk
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A simple modification: Conceptual Framework 2
What can we say about the relationships in the model? Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij,+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu → ∆ Use ↑Risk → ∆ Use
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A simple modification: Conceptual Framework 2
What can we say about the relationships in the model? Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij,+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu → ∆ Use ↑Risk → ∆ Use ↑HF
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A simple modification: Conceptual Framework 2
What can we say about the relationships in the model? Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij,+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu → ∆ Use ↑Risk → ∆ Use ↑HF → ∆ Prog → ∆ Use ∆ Use ∆ Use
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A simple modification: Conceptual Framework 2
What can we say about the relationships in the model? Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij,+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu → ∆ Use ↑Risk → ∆ Use ↑HF → ∆ Prog → ∆ Use ∆ Use Now we don’t have a unique relationship between the “HF” and “Use”!! ∆ Use
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A simple modification: Conceptual Framework 2
What can we say about the relationships in the model? Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu → ∆ Use ↑Risk → ∆ Use ↑HF → ∆ Prog → ∆ Use ∆ Use A change in “HF” generates two effects: 1. Change “Prog” which changes “Use”. 2. Change “Use”. Direct Effect of “HF” We only observe the net effect in Use. We don’t observe the separate Direct and Indirect effects on Use. A simple analysis relates change in “Prog” to the observed change on “Use”, then it incorrectly estimates the impact of “Prog” on “Use”! ∆ Use
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A simple modification: Conceptual Framework 2
What can we say about the relationships in the model? Endogenetity Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu → ∆ Use ↑Risk → ∆ Use ↑HF → ∆ Prog → ∆ Use ∆ Use This problem is caused by unobserved factors that influence both the outcome and program. ∆ Use
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A simple modification: Conceptual Framework 2
What can we say about the relationships in the model? Endogenetity Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu → ∆ Use ↑Risk → ∆ Use ↑HF → ∆ Prog → ∆ Use ∆ Use This problem is caused by unobserved factors that influence both the outcome and program. They are: HF and San. Sometimes they are called The Common Unobservables ∆ Use
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A Simple modification: Conceptual Framework 2
What can we say about the relationships in the model? Endogenetity Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu → ∆ Use ↑Risk → ∆ Use ↑HF → ∆ Prog → ∆ Use ∆ Use This problem is caused by unobserved factors that influence both the outcome and program. They are: HF and San. Sometimes they are called The Common Unobservables Notice that there are other unobservables that do not generate endogeneity: Risk and Gen. ∆ Use
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How is this typically presented in the standard model?
Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj Notice that the Common Unobservables (HF and San) are part of the error term in the main equation, which is represented by εij in the standard model, Useij = α0 + α1Ageij + α2Eduij + α3SESij + α4Rurj + α5Progj + εij Since the Common Unobservables influence Progj and εij ,they are correlated: Corr (Progj , εij ) ≠ 0. So, estimating the main equation by simple OLS will produce biased and inconsistent estimates of α5 .
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Endogenetity “Houston, we have a problem.” What can we do?
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Finding a solution: Let’s go back to the conceptual framework
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program .
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Finding a solution: Let’s go back to the conceptual framework and find a special determinant Z
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation - Z Program Let’s find a factor, called Z, with the following characteristics: It influences Program directly It does not influence Use directly, only through Program It is not influenced by other factors.
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Finding a solution: The associated empirical model
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation - Z Program This is the new empirical model: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β4Zj + β2HFj + β3Sanj
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Finding a solution: What are the new relationships in this model, with Z in it?
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation - Z Program This is the new empirical model: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β4Zj + β2HFj + β3Sanj What if? ↑ Z
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Finding a solution: What are the new relationships in this model, with Z in it?
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation - Z Program This is the new empirical model: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β4Zj + β2HFj + β3Sanj What if? ↑ Z → ∆ Prog
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Finding a solution: What are the new relationships in this model, with Z in it?
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation - Z Program This is the new empirical model: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β4Zj + β2HFj + β3Sanj What if? ↑ Z → ∆ Prog → ∆ Use
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Finding a solution: What are the new relationships in this model, with Z in it?
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation - Z Program This is the new empirical model: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β4Zj + β2HFj + β3Sanj What if? ↑ Z → ∆ Prog → ∆ Use Now we have a direct and unique relationship between Z, Prog and Use, all of which are observed. Now we can estimate the impact of Prog on Use!
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Finding a solution: What is the new Let’s go back to the conceptual framework and find a special determinant Z Z is called an “Instrumental Variable.” It provides an observed source of variation in Prog, which is independent of any other factor, and therefore allows us to identify the impact of Prog on Use. Key Conditions: Z influences Prog directly 2) Z influences Use only through Prog. 3) Z is not caused by other factors influencing Prog or Use; it is exogeneous. In other words, “Z belongs in the Prog equation but does not belong in the Use equation.” It is “excluded” from the Use equation so, Z has an “Exclusion Restriction.” Important: Z needs to be in your dataset.
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Finding a solution: What is the new Let’s go back to the conceptual framework and find a special determinant Z What kind of determinants are these? You need to understand: - The program allocation process - The public services allocation process - The process that determines the outcome How do program managers decide in which communities to place the intervention? The severity of the health problem The cost of implementing the intervention: The presence of other public infrastructure Easy access, roads Presence of the implementer’s infrastructure Existing contacts in the communities Political alignment
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The case of individual self-selection
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program This is the empirical model: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progij+α6Riskij+α7Genij+α8HFj+α9Sanj Progij = β0 +β1Ageij +β2Eduij +β3SESij + β4Riskij+ β5Genij
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The case of individual self-selection
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program This is the empirical model: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progij = β0 +β1Ageij +β2Eduij +β3SESij + β4Riskij+ β5Genij What if? ↑Risk → ∆ Prog → ∆ Use ∆ Use Now we don’t have a unique relationship between the “Risk” and “Use”. ∆ Use
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“Houston, we have a problem”, what can we do?
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments - Z Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program This is the empirical model: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progij = β0 +β1Ageij +β2Eduij +β3SESij + β4Riskij+ β5Genij Let’s find a factor Z that influences the exposure to the program but not the outcome
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“Houston, we have a problem”, what can we do?
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments - Z Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program This is the new empirical model: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progij = β0 +β1Ageij +β2Eduij +β3SESij + β6Zij + β4Riskij+ β5Genij
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“Houston, we have a problem”, what can we do?
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments - Z Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program This is the new empirical model: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progij = β0 +β1Ageij +β2Eduij +β3SESij + β6Zij + β4Riskij+ β5Genij What if? ↑ Z → ∆ Prog → ∆ Use
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“Houston, we have a problem”, what can we do?
Individual / Household Characteristics - Age - Education - Household wealth/SES - Risk aversion - Biological endowments - Z Use of FP Methods Community Charact. - Rurality - Health facilities (HF) - Sanitation Program This is the new empirical model: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progij = β0 +β1Ageij +β2Eduij +β3SESij + β6Zij + β4Riskij+ β5Genij What if? ↑ Z → ∆ Prog → ∆ Use Now we have a direct and unique relationship between Z, Prog and Use, all of which are observed. Now we can estimate the impact of Prog on Use!
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Finding a Z What kind of determinants are these?
You need to understand what influences the decision of participate into the program, or the exposure to the program. Example: I. Evaluating the impact of a communication campaign on contraceptive use Problem for the evaluator: The program variable was “I recall listening to the FP message” But, it could be endogeneous, those who recall the message are those more motivated to use FP; those not recalling the message could’ve been exposed to the FP message but they are also not motivated to use FP Use = f(Recall FP message, other factors) They used as instrumental variable: Having a radio Recall FP message = f (Have Radio, other factors)
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Finding a Z II. Randomized promotion
In the target population, randomly allocate promotion of the program. The promotion is the instrument: It influences participation It does not influences the outcome directly It is not influenced by other factors Promotion alternatives: Pamphlets, encouragement, in-kind incentives to participation Example: Impact of community-based school management on school outcomes in Nepal. The program: local administration of school system (status quo: centralized system) Evaluation problem: self-selection of communities; experimental design not possible Randomized promotion: NGO helped communities with enrollment paperwork - 40 communities offered help with paperwork (15 participated) - 40 communities not offered help (5 participated) Results: Improvements in infrastructure, teacher’s absenteeism, not much student performance.
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Finding a Z II. Randomized promotion Other examples:
Newman, Pradhan, Rawlings, Ridder, Coa, and Evia “An Impact Evaluation of Education, Health, and Water Supply Investments by the Bolivian Social Investment Fund.” World Bank Economic Review 16 (2): 241–74. Gertler, Martinez, and Vivo “Child-Mother Provincial Investment Project Plan Nacer.” University of California Berkeley and World Bank, Washington, DC.
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Instrumental Variables Methods
For finding Z, think about: - The cost and benefits associated with placing program services for the program implementing agency. - Factors that influence participation into the program. Instrumental variables have to be justified conceptually and statistically. Instrumental variables are hard to find, particularly in retrospective evaluations when data have been already collected. Historically, IV methods were adopted in evaluation practice because of difficulties implementing experimental designs. However, any evaluator using IV methods will have to provide evidence of the validity of the chosen instrumental variables. Disappointment with IV methods have fueled recent emphasis on experimental designs.
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Some terminology issues
Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj + α6Riskij+α7Genij + α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj Usually written as: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj + µj + εij Progj = β0 + β1Rurj µj
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Some terminology issues
Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj + α6Riskij+α7Genij + α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj Usually written as: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj + µj + εij Progj = β0 + β1Rurj µj
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Some terminology issues
Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj + α6Riskij+α7Genij + α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj Usually written as: Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj + µj + εij Progj = β0 + β1Rurj µj
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Some terminology issues
Useij=α0+α1Ageij+α2Eduij+α3SESij+α4Rurj+α5Progj+α6Riskij+α7Genij+α8HFj+α9Sanj Progj = β0 + β1Rurj + β2HFj + β3Sanj What if? ↑Edu → ∆ Use ↑Risk → ∆ Use ↑HF → ∆ Prog → ∆ Use ∆ Use This problem is caused by unobserved factors that influence both the outcome and program. They are: HF and San. Notice that there are other unobservables that do not generate endogeneity: Risk and Gen. ∆ Use
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This presentation was produced with the support of the United States Agency for International Development (USAID) under the terms of MEASURE Evaluation cooperative agreement AID-OAA-L MEASURE Evaluation is implemented by the Carolina Population Center, University of North Carolina at Chapel Hill in partnership with ICF International; John Snow, Inc.; Management Sciences for Health; Palladium; and Tulane University. Views expressed are not necessarily those of USAID or the United States government.
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