Casual Modeling

Casual Modeling is a very common task in economics/government/business analytics. In this project, my objective is to estimate the casual impact of Progresa program on the schooling outcomes of individuals in Mexico. I have focussed on the impact of the program on the poor, since only the poor were eligible to receive the Progresa assistance.
To analyze the casual effect, I have used the following estimators -

  • Before-After estimator
  • Cross-sectional estimator
  • Differences-in-differences estimator
Lastly, I have clearly stated the underlying assumptions behind each estimator and compared the results of all three estimators. Background Information - Progresa was a a government social assistance program in Mexico. This program, as well as the details of its impact, are described in the paper "School subsidies for the poor: evaluating the Mexican Progresa poverty program", by Paul Shultz.

The timeline of the program was:
  • Baseline survey conducted in 1997
  • Intervention begins in 1998, "Wave 1" of data collected in 1998
  • "Wave 2 of data" collected in 1999
  • Evaluation ends in 2000, at which point the control villages were treated.
Each row in the data corresponds to an observation taken for a given child for a given year. There are two years of data (1997 and 1998), and just under 40,000 children who are surveyed in both years. For each child-year observation, the following variables are collected:
year: year in which data is collected
sex: male = 1
indig: indigenous = 1
dist_sec: nearest distance to a secondary school
sc: enrolled in school in year of survey (=1)
grc: grade enrolled
fam_n: family size
min_dist: min distance to an urban center
dist_cap: min distance to the capital
poor: poor = "pobre", not poor = "no pobre"
progresa: treatment = "basal", control = "0"
hohedu: years of schooling of head of household
hohwag: monthly wages of head of household
welfare_index: welfare index used to classify poor
hohsex: gender of head of household (male=1)
hohage: age of head of household
age: years old
folnum: individual id
village: village id
sc97 enrolled in school in 1997 (=1)

The project files can be found here.