Cemmap Working Paper (CWP05/08)

Dynamic policy analysis

Date: 11 February 2008
Publisher: Springer
DOI: 10.1920/wp.cem.2008.0508

This chapter studies the microeconometric treatment-effect and structural approaches to dynamic policy evaluation. First, we discuss a reduced-form approach based on a sequential randomization or dynamic matching assumption that is popular in biostatistics. We then discuss two complementary approaches for treatments that are single stopping times and that allow for non- trivial dynamic selection on unobservables. The first builds on continuous-time duration and event-history models. The second extends the discrete-time dynamic discrete-choice literature.