Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Mar, 2023, Volume 91, Issue 2

Synthetic Control As Online Linear Regression
p. 465-491

Jiafeng Chen

This paper notes a simple connection between synthetic control and online learning. Specifically, we recognize synthetic control as an instance of Follow‐The‐Leader (FTL). Standard results in online convex optimization then imply that, even when outcomes are chosen by an adversary, synthetic control predictions of counterfactual outcomes for the treated unit perform almost as well as an oracle weighted average of control units' outcomes. Synthetic control on differenced data performs almost as well as oracle weighted difference‐in‐differences, potentially making it an attractive choice in practice. We argue that this observation further supports the use of synthetic control estimators in comparative case studies.

Log In To View Full Content