{smcl}
help for {cmd:nnmatch}
{title:Nearest Neighbor Matching Estimation for Average Treatment Effects}
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{cmd: nnmatch} {it: depvar treatvar varlist_nnmatch} [{bf:if} {it:exp}] [{bf:in} {it:range}]
[{bf:pw}] [{bf:, tc(}{it:ate} |{it:att} |{it:atc}{bf:)} {bf:m(}{it:#}{bf:)}
{cmdab:met:ric}{bf:(}{it:maha} |{it:matname}{bf:)} {cmdab:ex:act(}{it:varlist_ex}{bf:)}
{cmdab:bias:adj(}{it:bias} |{it:varlist_adj}{bf:)} {cmdab:rob:ust(}{it:#_v}{bf:)}
{cmdab:pop:ulation} {cmdab:l:evel(}{it:#}{bf:)}
{cmdab:k:eep(}{it:filename}{bf:) replace}]
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{it:depvar}, {it:varlist_nnmatch}, and elements of {cmd:biasadj(}{it:varlist_adj}{bf:)} and
{cmd:exact(}{it:varlist_ex}{bf:)} must be numeric variables.
{it:treatvar} must be a {0,1} variable.
{title:Description}
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{cmd:nnmatch} estimates the average treatment effect on {it:depvar}
by comparing outcomes between treated and control observations (as defined by {it:treatvar}),
using nearest neighbor matching across the variables defined in {it:varlist_nnmatch}.
{cmd:nnmatch} can estimate either the treatment effect for the treated observations,
for the controls, or for the sample as a whole.
The program pairs observations to the closest {it:m} matches in the opposite treatment group
to provide an estimate of the counterfactual treatment outcome. The program allows for
matching over a multi-dimensional set of variables({it:varlist_nnmatch}), giving options
for the weighting matrix to be used in determining the optimal matches. It also allows
exact matching (or as close as possible) on a subset of variables. In addition, the program
allows for bias correction of the treatment effect, and estimation of either the sample or
population variance, with or without assuming a constant treatment effect (homoskedasticity).
Finally it allows observations to be used as a match more than once, thus making the order of
matching irrelevant. See Imbens et al. (Stata Journal 2004) for greater detail.
{title:Options}
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{cmd:tc(}{it:ate|att|atc}{bf:)} specifies which treatment effect is to be estimated:
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{it:ate}: the average treatment effect,
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{it:att}: the average treatment effect for the treated, or
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{it:atc}: the average treatment effect for the controls.
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If no option is specified, the average treatment effect, {it:ate}, is assumed. In this case
all observations are matched to their nearest {it:m} neighbors of the opposite treatment group.
In estimating the {it:att} or {it:atc}, only the treated or controls, respectively, are matched.
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{cmd:m(}{it:#}{bf:)} specifies the number of matches to be made per observation. If two observations
of the opposite treatment group
are equally close to that being matched, both will be used. Thus the number of matches per observation will be
greater than or equal to {it:m}. If the average treatment effect is selected, {it:m} must be less than or equal to
the smaller of {it:N0} and {it:N1}, where {it:N0} is the number of control observations in the dataset, and {it:N1} is the
number of treatment observations. If {cmd:tc(}{it:att}{bf:)} is selected, {bf:m} need only be less than or equal to
{it:N0}; if {cmd:tc(}{it:atc}{bf:)} is selected, {bf:m} must be less than or equal to {it:N1}.
If {cmd:m(}{it:#}{bf:)} is not specified, 1 is assumed.
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{bf:metric(}{it:maha|matname}{bf:)} specifies the weighting matrix to be used when {it:k},
the number of elements of {it:varlist_nnmatch}, is greater than 1.
The {cmd:metric} option specifies the relative weight to be placed
on each variable in {it:varlist_nnmatch} in defining nearest neighbor matches.
Two options are available:
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(1) {cmd:metric(}{it:maha}{bf:)} specifies the Mahalanobis metric, the inverse of the sample
variance/covariance matrix of the {it:k} variables in {it:varlist_nnmatch}.
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(2) {cmd:metric(}{it:matname}{bf:)} allows for a user-defined weight matrix {it:matname},
where {it:matname} is an already-specified {it:k}-dimensional, symmetric and positive semi-definite matrix.
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If no option is specified, the default is to use the {it:k} x {it:k} diagonal matrix of the inverse sample standard errors of the
{it:k} variables in {it:varlist_nnmatch}.
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{cmd:exact(}{it:varlist_ex}{bf:)} allows the user to specify exact matching (or as exact as possible)
on one or more variables. The exact-matching variables need not overlap with the elements of
{it:varlist_nnmatch}. In practice, however, the exact matching option adds these variables to the original
{it:k} x {it:k} {it:varlist_nnmatch} matrix, but in the weight matrix multiplies each exact element
by 1000 relative to the weights placed on the elements of {it:varlist_nnmatch}. (Regardless of the
{cmd:metric()} option chosen for the {it:varlist_nnmatch} variables, the exact match variables
are normalized via the default option - the inverse sample errors.) Because for each matched
observation there may not exist members of the opposite treatment group with equal values of the
exact-matching variables, matching may not be exact across the full dataset. The output lists the
percentage of matches (across the paired observations, greater than or equal to {it:N}*{it:m} in
number) that match exactly.
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{cmd:biasadj(}{it:bias} | {it:varlist_adj}{bf:)} The simple matching estimator estimates
the average treatment effect by calculating the average, over the {it:N} observations being
matched, of the difference between the {it:depvar} outcome for observation {it:i}, and the
average outcomes for its {it:m} matches in the opposite treatment group. However, the simple
matching estimator will be biased if matching is not exact. This option regression-adjusts
the results using either the original matching variable(s), {it:varlist_nnmatch} (if {cmd:baisadj(}{it:bias}{bf:)}
is selected), or a newly-specified set of variables, {it:varlist_adj}, (if {cmd:baisadj(}{it:varlist_adj}{bf:)} is chosen).
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{cmd:robust(}{it:#_v}{bf:)} By default {cmd:nnmatch} assumes homoskedastic errors (a constant treatment
effect). However, the user can allow for heteroskedastic errors by selecting the {cmd:robust(}{it:#_v}{bf:)} option.
The program does this by conducting a second matching process (again across the elements of {it:varlist_nnmatch}),
this time matching observations in the same treatment group, to compare variability
in outcomes ({it:depvar}) for observations with approximately the same {it:varlist_nnmatch} values.
{cmd:robust(}{it:#_v}{bf:)} allows the user to choose how many matches are used in this process.
If {cmd:robust} is not selected, or {it:#_v} equals zero, homoskedastic errors are estimated.
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{cmd:population} allows the user to specify the calculation of the population variance
rather than the sample variance. If {bf:population} is not selected, sample variance
is assumed.
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{cmd:level(}{it:#}{bf:)} specifies the confidence level, in percent, for confidence intervals.
The default is {bf:level(95)} or as set by {bf:set level}.
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{cmd:keep(}{it:filename}{bf:) replace} In the estimation process, {cmd:nnmatch} creates
a temporary dataset holding, for each observation {it:i} being matched, a new observation
holding {it:i}'s outcome variable ({it:depvar}) and matching variable(s), {it:varlist_nnmatch},
values, and the outcome and {it:varlist_nnmatch} values for its {it:m} closest matches.
Thus, the new dataset will hold at least (but potentially more than) {it:N}*{it:m}
observations. If {cmd:biasadj(}{it:varlist_adj}{bf:)} or {cmd:exact(}{it:varlist_ex}{bf:)}
are selected, the temporary dataset will also hold these values for each observation {it:i} and
its match(es) {it:j}. {cmd:keep(}{it:filename}{bf:)} allows the user to save this
temporary dataset.
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If {cmd:keep(}{it:filename}{bf:)} is selected, each observation of {it:filename}.dta will hold the following variables:
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{it:t}: The treatment group indicator, {it:treatvar}, for the observation being matched, {it:i}.
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{it:y}: The observed outcome variable, {it:depvar}({it:i}).
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{it:x}: The {it:varlist_nnmatch} values for observation {it:i}.
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{it:id}: The identification code for the observation being matched, {it:i}.
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(When the command {cmd:nnmatch} is given, the program creates a temporary variable,
{it:id} = {1,2,...N}, based on the original sort order.)
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{it:index}: The identification code for {it:j}, the match for observation {it:i}.
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{it:dist}: The estimated distance between observation {it:i} and its match {it:j}, based on the
{it: varlist_nnmatch} values of each and the selected weight matrix.
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{it:k_m}: The number of times observation {it:i} is itself used as a match for any observation {it:l}
of the opposite treatment group, each time weighted by the total number of matches for the given observation
{it:l}.
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(For example, if observation {it:i} is one of three matches for observation {it:l}, it receives a
value of 1/3 for that match. {it:k_m}({it:i}) is the sum, across all observations {it:l}, of this value.
Thus the sum of {it:k_m} across
all observations {it:i} will equal {it:N} (or {it:N0} or {it:N1}, if the {it:atc} or {it:att}, respectively,
are estimated). Note that this value refers to {it:i}'s use as a match, not to its matches {it:j},
so the value of {it:k_m} is equal across all observations in the temporary dataset that pertain to the
matching of observation {it:i}.
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{it:w_id}: Weight for observation {it:i}, if weights are selected.
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{it:w_index}: Weight of observation {it:j}, the match for observation {it:i}, if weights are selected.
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{it:`y'_0}: The inferred {it:depvar} value if observation {it:i} were in the control group.
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(If observation {it:i} is in fact a control observation, `y'_0 = `y'({it:i}). If {it:i} is
a treated observation, `y'_0 = `y'({it:j}).)
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{it:`y'_1}: Inferred {it:depvar} value if {it:i} were in the treated group.
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{it:`x'_0m}: Values of {it:varlist_nnmatch} for {it:i}'s `control' observation. Namely, if {it:i} is a
control observation, {it:`x'_0m} = {it:x_i} for each element {it:x} of {it:varlist_nnmatch}. If {it:i}
is a treatment observation, {it:`x'_0m} will equal {it:x_j}.
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{it:`x'_1m}: Values of {it:varlist_nnmatch} for {it:i}'s `treatment' observation.
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{it:`b'_0b}: Values of the bias-adjustment variables (if {cmd:biasadj(}{it:varlist_adj}{bf:)} is selected)
for {it:i}'s `control' observation, where {it:`b'} represents each element of the bias-adjustment variables.
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{it:`b'_1b}: Bias-adjustment variables for {it:i}'s `treatment' observation.
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{it:`e'_0e}: Values of the exact-matching variables (if {cmd:exact(}{it:varlist_ex}{bf:)} is selected)
for {it:i}'s `control' observation, where {it:`e'} represents each element of the exact-matching variables.
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{it:`e'_1e}: Exact-matching variables for {it:i}'s `treatment' observation.
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{cmd:replace} If {cmd:keep(}{it:filename}{bf:)} is selected, and {it:filename}.dta already
exists, {cmd:replace} must be selected for {it:filename}.dta to be saved.
{title:Weights}
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{cmd:nnmatch} allows users to define weights, used as {it:pweights}. In particular, when determining
the {it:m} closest matches, if weights are selected, the program will choose the closet observations,
{it:j}, such that their summed weights are equal to or just exceed {it:m}. If robust standard errors
are chosen, a similar approach will be taken in choosing the closest matches in the variance calculation step.
{title:Examples: match}
nnmatch y t x1 x2
nnmatch y t x1, m(3)
nnmatch y t x1 x2, tc(att)
nnmatch y t x1 x2, tc(atc) met(maha) bias(bias) robust(4)
nnmatch y t x1 x2, met({it:matname}) bias(x1 x3) keep(artdata) replace
nnmatch y t x1 x2 [w=w], met({it:matname}) bias(x1 x3) exact(x4) pop