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Identification and Inference for Synthetic Controls with Confounding

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arxiv 2312.00955 v1 pith:3X4VFP6G submitted 2023-12-01 econ.EM math.STstat.MEstat.TH

classification econ.EMmath.STstat.MEstat.TH
keywords confoundinginferencetreatmentfactorssyntheticconfounderscontroldepends
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This paper studies inference on treatment effects in panel data settings with unobserved confounding. We model outcome variables through a factor model with random factors and loadings. Such factors and loadings may act as unobserved confounders: when the treatment is implemented depends on time-varying factors, and who receives the treatment depends on unit-level confounders. We study the identification of treatment effects and illustrate the presence of a trade-off between time and unit-level confounding. We provide asymptotic results for inference for several Synthetic Control estimators and show that different sources of randomness should be considered for inference, depending on the nature of confounding. We conclude with a comparison of Synthetic Control estimators with alternatives for factor models.

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Cited by 2 Pith papers

Reviewed papers in the Pith corpus that reference this work. Sorted by Pith novelty score. Full citation record

  1. Efficient Difference-in-Differences and Event Study Estimators

    econ.EM 2025-06 accept novelty 8.0 of 10

    The authors derive closed-form efficient influence functions for DiD and event study parameters under parallel trends, yielding estimators that achieve the smallest possible asymptotic variance.

  2. Learning about Treatment Effects in Panels under Unknown Interference

    econ.EM 2026-08 conditional novelty 6.0 of 10

    Under unknown interference, the sharp identified set for a panel treatment effect is characterized exactly by feasibility of a finite linear system, enabling uniform candidatewise bootstrap inference.

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