Propensity Score Matching
Propensity Score Matching (PSM) is a quasi-experimental impact evaluation technique which attempts to estimate the effects of a treatment by matching control group participants to treatment group participants based on propensity score(predicted probability of participation based on observed characteristics). This is done to reduce the selection bias that may be present in non-experimental data.
- The efficacy of a PSM design depends mostly on how well the observed characters determine program participation. If the bias from unobserved characteristics are likely to be very small, PSM provides us with good estimates and if the bias from unobserved characteristics are large, then the estimates from the PSM can be sizably biased.
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This article is part of the topic Quasi-Experimental Methods.