TITLE:
Heterogenous Treatment Effect in Development Policy: A Randomized Experiment in Morocco on Those Who Take up the Microcredit
AUTHORS:
Kehong Qing
KEYWORDS:
Microcredit, DID Estimation, Heterogenous Treatment Effect, Policy Implementation
JOURNAL NAME:
Modern Economy,
Vol.14 No.7,
July
13,
2023
ABSTRACT: Randomized experiments are widely used in analyzing policy implementation and evaluation as researchers can estimate the
average treatment effect between the control and treated groups. Sometimes,
treatment effects are variable in different subgroups.
The nonrandom variability defined by heterogeneous treatment effect is not
like the random variability which is not correlated with explanatory variables and
can be fixed by statistical methods, but it estimates individual treatment effects
depending on individuals’ characteristics within a subgroup. Using DID estimation,
we will uncover treatment effects and heterogeneity in policy evaluation, helping
policymakers to evaluate the efficacy of policy implementation. The study is mainly
based on the effects of microcredit in 162 villages in Al Amana, a rural area in
the Kingdom of Morocco (Crépon et al., 2015).