{"title":"Optimal initial donor selection for the synthetic control method","authors":"Giovanni Cerulli","doi":"10.1016/j.econlet.2024.111976","DOIUrl":null,"url":null,"abstract":"<div><p>This paper argues that the performance of the Synthetic Control Method (SCM) can depend on the initial set of control units (donors) due to a bias–variance trade-off. A forward stepwise selection algorithm, validated via cross-validation, may reduce prediction error by suggesting to use fewer donors.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"244 ","pages":"Article 111976"},"PeriodicalIF":2.1000,"publicationDate":"2024-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economics Letters","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0165176524004609","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This paper argues that the performance of the Synthetic Control Method (SCM) can depend on the initial set of control units (donors) due to a bias–variance trade-off. A forward stepwise selection algorithm, validated via cross-validation, may reduce prediction error by suggesting to use fewer donors.
期刊介绍：
Many economists today are concerned by the proliferation of journals and the concomitant labyrinth of research to be conquered in order to reach the specific information they require. To combat this tendency, Economics Letters has been conceived and designed outside the realm of the traditional economics journal. As a Letters Journal, it consists of concise communications (letters) that provide a means of rapid and efficient dissemination of new results, models and methods in all fields of economic research.
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