A Spatial Perspective on the Econometrics of Program Evaluation

Published in International Regional Science Review, 2019

Recommended citation: Kolak, M., & Anselin, L. (2019). A Spatial Perspective on the Econometrics of Program Evaluation. International Regional Science Review. https://doi.org/10.1177/0160017619869781 https://journals.sagepub.com/doi/full/10.1177/0160017619869781

Spatial effects violate the so-called stable unit treatment value assumption advanced by Rubin as part of the foundational framework for empirical treatment effect analysis. In this article, we consider the role of spatial effects more closely. We provide a brief overview of a number of attempts to extend existing econometric treatment effect evaluation methods with an accounting for spatial aspects and outline and illustrate an alternative approach. Specifically, we propose a spatially explicit counterfactual framework that leverages spatial panel econometrics to account for both SD and SH in treatment choice, treatment variation, and treatment effects. We illustrate this framework with a replication of a well-known treatment effect analysis, that is, the evaluation effect of minimum legal drinking age laws on mortality for US states during the period 1970–1984, a classic textbook example of applied causal inference. We replicate the results available in the literature and compare these to a range of alternative specifications that incorporate spatial effects