SEARCH

SEARCH BY CITATION

Keywords:

  • impact evaluation;
  • treatment effect;
  • propensity score matching;
  • covariate selection;
  • Monte Carlo

Propensity score matching is a widely-used method to measure the effect of a treatment in social as well as medicine sciences. An important issue in propensity score matching is how to select conditioning variables in estimation of the propensity scores. It is commonly mentioned that variables which affect both program participation and outcomes are selected. Using Monte Carlo simulation, this paper shows that efficiency in estimation of the Average Treatment Effect on the Treated can be gained if all the available observed variables in the outcome equation are included in the estimation of propensity scores. This result still holds in the presence of non-sampling errors in the observed control variables.