Building Bridges Between Structural and Program Evaluation Approaches to Evaluating Policy.

Area of Science:

• Economics
• Econometrics
• Policy Analysis

Background:

• Traditional economic policy analysis relies on either structural or program evaluation approaches.
• Each approach has limitations in scope and interpretability.
• A need exists for a more comprehensive policy analysis framework.

Purpose of the Study:

• To propose a novel, integrated approach to economic policy analysis.
• To combine the strengths of the structural and program evaluation methodologies.
• To enhance the utility of the Local Average Treatment Effect (LATE) in policy research.

Main Methods:

• Comparative analysis of structural and program evaluation approaches.
• Development of a hybrid methodology for economic policy analysis.
• Explicitly defining the economic underpinnings of LATE.

Main Results:

• The proposed integrated approach offers a "third way" for policy analysis.
• Making the economics of LATE explicit increases its interpretability.
• The enhanced LATE framework expands the range of answerable policy questions.

Conclusions:

• The integrated approach provides a more robust and versatile tool for economic policy analysis.
• Explicitly defining LATE's economic assumptions improves its practical application.
• This methodology broadens the scope of economic policy evaluation.