What is synthetic control?

hard

Answer

$Construct a weighted combination of untreated units that reproduces the pre-treatment trajectory of the treated unit.$
$Weights \geq 0, sum to 1, chosen to minimize pre-treatment fit error on X and Y.$
$Post-treatment gap between treated and synthetic = causal effect estimate.$
$Uses: single-treated-unit policy analysis (California smoking ban, German reunification).$
$Modern extensions: generalized synthetic control, augmented synthetic control (Ben-Michael), matrix completion methods.$

Check yourself — multiple choice

Random
Weighted combination of untreated units matching treated pre-trajectory; post-treatment gap = effect; single-treated-unit policy analysis
Same as DID
Not real

Synthetic control: weighted control units match pre-treatment; post gap = effect.

#causal-inference#quasi-experimental

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