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Economic Impact Studies: Practical Tips & Examples - Michael Moore
Economic Impact Studies: Practical Tips & Examples - Michael Moore
Economic Impact Studies: Practical Tips & Examples - Michael Moore
Economic Impact Studies: Practical Tips & Examples - Michael Moore
Economic Impact Studies: Practical Tips & Examples - Michael Moore
Economic Impact Studies: Practical Tips & Examples - Michael Moore
Economic Impact Studies: Practical Tips & Examples - Michael Moore
Economic Impact Studies: Practical Tips & Examples - Michael Moore
Economic Impact Studies: Practical Tips & Examples - Michael Moore
Economic Impact Studies: Practical Tips & Examples - Michael Moore
Economic Impact Studies: Practical Tips & Examples - Michael Moore
Economic Impact Studies: Practical Tips & Examples - Michael Moore
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Economic Impact Studies: Practical Tips & Examples - Michael Moore

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  • 1. Quasi-Experiments in Empirical Economics: An Application to Extreme Levels of Lake Michigan
    Michael R. Moore
    School of Natural Resources and Environment
    University of Michigan
  • 2. Outline
    Quasi-experiments in empirical economics
    Application to extremely low levels of Lake Michigan
    Research question: did the extremely low levels
    of Lake Michigan in 2000-07 cause economic
    impacts in Lake Michigan coastal counties?
  • 3. Quasi-experiment
    Experiment
    Scientific method of control group, treatment group, and experimental treatment
    What is the effect of the treatment on the treatment group?
    Quasi-experiment
    Research design of groups and a treatment not arranged in advance
    A by-product of public policy, public program, or nature
    Desirable feature: establishes causal evidence, not simply association evidence
  • 4. Average Treatment Effect (ATE): what is the effect of the
    treatment on an outcome variable in the treated counties?
    ATE = [(Average 4 – Average 3) – (Average 2 – Average 1)]
    (approximated ATE)
  • 5. Low lake levels(Michigan Sea Grant Archives)
  • 6. Policy dialogues on lake levels (IJC)
    Lake Ontario – St. Lawrence River Study (2006)
    Lake Ontario is a regulated lake
    “Lake levels are too even; not enough fluctuation”
    Upper Great Lakes Study (2012)
    Lake Superior is regulated; Lakes Michigan-Huron and Erie are unregulated
    Joint management of these lake levels
    “levels of Lake Michigan-Huron are too extreme”
  • 7. Great Lakes lake levels, 1960-2007
    Michigan-Huron
    Erie
    Superior
    Ontario
  • 8. Extremely low lake levels as a quasi experiment
    Control group:
    Counties adjacent to
    Lakes Ontario and Erie
    Treatment group:
    Counties adjacent to Lake Michigan-Huron
    Treatment:
    2000-07 episode of extremely low levels
  • 9. Data: NAICS Sector 72, Accommodation and Food Services
    County-level data for 1990-2007
    Outcome variables: establishments, employment, and wage rate in Sector 72
    We expect the Average Treatment Effects to be negative
  • 10. Results
    Approximated Average Treatment Effects:
    Establishments (number of establishments)
    ATE: [(239 - 213) – (590 - 567)] = 3
    Employment (number of employees)
    ATE: [(4240 - 3704) – (10481 - 9554)] = -391
    Wage Rate (cents per hour)
    ATE: [(873 - 648) – (860 - 661)] = 26
  • 11. Summary and Conclusions
  • 12. Thank you!

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