SYLLABUS

1. Objectifs du cours

In this course, we study the main methods used by economists to evaluate public policies using applied microeconometrics. We focus on quasi-experimental methods, that is methods for observational data. (DD, IV, RDD). Each method is illustrated by empirical studies of public policies published in peer-reviewed scientific journals. The policies studied are related to the labor market, the educational system, the taxation system, the environment, the electoral system, or the health sector, in France or abroad over the last twenty years.
Courses objective: Public policy evaluation I, taught by Bastien Michel and Public policy evaluation II, taught by Nicolas Pistolesi, aim at trainning students to develop a critical eye and assess the credibility of any study of public policy evaluation. After these courses, students should be able design a relevant framework based on available data and propose a credible empirical approach to evaluate economic policies.

2. Description du cours

We present the main methods in applied microeconomics of policies evaluation.

Prerequisites  :
Students should master courses in statistics at undergraduate level as well as the linear econometrics course from master 1 semester one. The course is a follow-up of «Public Policy Evaluation I » from the first semester taught by Bastien Michel. Students should be able to read research articles in English.

Practical information about the sessions:
Classes take place in person. Tutorials take place in the computer lab using the software Stata.

3. Plan du cours

• Chapter 1: Difference-in-Differences
• 1. Difference-in-differences in a regression framework
• 2. Difference-in-differences extensions
• 3. Examples: Card (1990), Card (1994), Carpenter Dobkin (2011), Di Tella et al. (2004), Duflo (2001)
• Chapter 2 : Instrumental variables
• 1. Definition of the IV estimator
• 2. Two-stage least squares
• 3. Weak Instruments
• 4. Local average treatment effects
• 5. Examples : Angrist (1990), Angrist & Krueger (1991), Angrist & Evans (1998)
• Chapter 3 : Regression discontinuity design
• 1. Formalizing RDD
• 2. RDD in practice
• 3. Testing the validity of the RD design
• 4 Examples : Abdulkadiroglu et al. (2014), Bleemer & Mehta (2022), Carpenter & Dobkin (2009), Pons & Tricaud (2018)

4. Compétences visées

• Mastering applied microeconomics methods

Consulter la fiche RNCP de cette formation

5. Modalités pédagogiques

Mode d'enseignement : Présentiel

Langue(s) utilisée(s) : francais

Méthodes pédagogiques : Cours magistral, Travaux Dirigés

6. Modalités d'évaluation

Examen écrit sur table

7. Bibliographie

• Textbooks: The two main references for this course are:
• Angrist, J. D. Mastering'metrics: The path from cause to effect. Princeton University Press 2014.
• Cunningham, Scott, Causal Inference the mixtape. Yale University Press 2021.
• Additionnal (non mandatory) readings:
• Angrist, Joshua D., and Jörn-Steffen Pischke. Mostly harmless econometrics: An empiricist's companion. Princeton university press, 2009.
• Huntington-Klein, Nick. The effect: An introduction to research design and causality. Chapman and Hall/CRC, 2021.
• Wooldridge, Jeffrey. Introduction à l'économétrie: une approche moderne. De Boeck Supérieur, 2018.
• Research papers :
• Difference-in-Differences
• Autor, D. H. (2003). Outsourcing at will: The contribution of unjust dismissal doctrine to the growth of employment outsourcing. Journal of labor economics, 21(1), 1-42.
• Bertrand, M., Duflo, E., & Mullainathan, S. (2004). How much should we trust differences-in-differences estimates?. The Quarterly journal of economics, 119(1), 249-275.
• Card, David. (1990) "The impact of the Mariel boatlift on the Miami labor market." ILR Review 43.2: 245-257.
• Di Tella, Rafael, and Ernesto Schargrodsky. (2004) "Do police reduce crime? Estimates using the allocation of police forces after a terrorist attack." American Economic Review 94.1: 115-133.
• Duflo, Esther. (2001) "Schooling and labor market consequences of school construction in Indonesia: Evidence from an unusual policy experiment." American Economic Review 91.4: 795-813.
• Instrumental variables
• Angrist, Joshua D. (1990) "Lifetime earnings and the Vietnam era draft lottery: evidence from social security administrative records." American Economic Review : 313-336.
• Angrist, Joshua, and William N. Evans. (1996) "Children and their parents' labor supply: Evidence from exogenous variation in family size.".
• Kling, J. R. (2006). Incarceration length, employment, and earnings. American Economic Review 96, 863–876.
• Regression discontinuity design
• Abdulkadiroğlu, A., Angrist, J., & Pathak, P. (2014). The elite illusion: Achievement effects at Boston and New York exam schools. Econometrica, 82(1), 137-196.
• Bleemer, Z., & Mehta, A. (2022). Will studying economics make you rich? A regression discontinuity analysis of the returns to college major. American Economic Journal: Applied Economics, 14(2), 1-22.
• Carpenter, Christopher, and Carlos Dobkin. (2009) "The effect of alcohol consumption on mortality: regression discontinuity evidence from the minimum drinking age." American Economic Journal: Applied Economics 1.1: 164-182.
• Hahn, J., Todd, P., & Van der Klaauw, W. (2001). Identification and estimation of treatment effects with a regression-discontinuity design. Econometrica, 69(1), 201-209.
• Lee, D. S. (2008). Randomized experiments from non-random selection in US House elections. Journal of Econometrics, 142(2), 675-697.
• Lee, D. S., & Lemieux, T. (2010). Regression discontinuity designs in economics. Journal of economic literature, 48(2), 281-355.
• McCrary, J. (2008). Manipulation of the running variable in the regression discontinuity design: A density test. Journal of econometrics, 142(2), 698-714.
• Pons, Vincent, and Clémence Tricaud. (2018) "Expressive voting and its cost: Evidence from runoffs with two or three candidates." Econometrica 86.5: 1621-1649.