Re: Synthetic Control Method (Abadie et al. 2010)

Link to the original paper here.

--------------------------------------------------------------------------------------
      name:  <Solomon Negash>
       log:  ~\myReplications\synthetic-control\synthdid.smcl
  log type:  smcl
 opened on:  16 Dec 2018, 18:24:07

*** Replication of Synthetic Control method - the last graphs 4-7

*** 1. Load dataset, tsset and loop through all units and store the results of synth using the keep option.

. sysuse smoking, clear
(Tobacco Sales in 39 US States)
. tsset state year
       panel variable:  state (strongly balanced)
        time variable:  year, 1970 to 2000
                delta:  1 unit
. forval i=1/39{
    qui synth cigsale retprice cigsale(1988) cigsale(1980) cigsale(1975), ///
    xperiod(1980(1)1988) trunit(`i') trperiod(1989) keep(synth_`i', replace)
    }

*** 2.  Quitely loop through all saved datasets and create the relevant variables (years and treatment effects). Drop missing observations.

. qui forval i=1/39{
   use synth_`i', clear
   rename _time years
   gen tr_effect_`i' = _Y_treated - _Y_synthetic
   keep years tr_effect_`i'
   drop if missing(years)
   save synth_`i', replace
 }

*** 3. Load the first dataset from step 2 and merge with the rest of datasets.
. use synth_1, clear
(Tobacco Sales in 39 US States)
. forval i=2/39{
    qui merge 1:1 year using synth_`i', nogenerate
    label var tr_effect_`i' "tr_effect_`i'" 
  }

** Rename tr_effect_i to tte_j by ranking based on MSPE scores. 

. qui rename tr_effect_17 tte_1
.	(...)

*** 4. Plot 
**Figure 4 (38 control states)
. set scheme s1mono 
. local lp
. forval i=1/38 {
    local lp `lp' line tte_`i' years, lcolor(gs12) || }
  twoway `lp' || line tte_3 years, lcolor(black) lwidth(medium) text(-40 1984 "Passage of Proposition 99 --->", size(*0.75)) ///
   legend(off) yline(0, lcolor(black) lwidth(thick) lpattern(dash)) xline(1989, lwidth(medium) lpattern(dash)) ///
   caption(Re: Figure 4. Per-cap cig sales gaps in California & placebo gaps in 38 control states.)

. graph export synth38.png, replace
(file synth38.png written in PNG format)
* <image src="synth38.png" width="358" height="300"



**Figure 5 (34 control states)

. drop tte_35 tte_36 tte_37 tte_38 tte_39 
. local lp
. forval i=1/34 {
      local lp `lp' line tte_`i' years, lcolor(gs12) || 
   }
. twoway `lp' || line tte_3 years, lcolor(black) lwidth(medium) text(-40 1984 "Passage of Proposition 99 --->", size(*0.75)) ///
   legend(off) yline(0, lcolor(black) lwidth(thick) lpattern(dash)) xline(1989, lwidth(medium) lpattern(dash)) ///
   caption(Re: Figure 5. Per-cap cig sales gaps in California & placebo gaps in 34 control states)

. graph export synth34.png, replace
(file synth34.png written in PNG format)
* <image src="synth34.png" width="358" height="300">



**Figure 6 (29 control states)

. drop tte_30 tte_31 tte_32 tte_33 tte_34
. local lp
. forval i=1/29 {
      local lp `lp' line tte_`i' years, lcolor(gs12) || 
  }
. twoway `lp' || line tte_3 years, lcolor(black) lwidth(medium) text(-40 1984 "Passage of Proposition 99 --->", size(*0.75)) ///
   legend(off) yline(0, lcolor(black) lwidth(thick) lpattern(dash)) xline(1989, lwidth(medium) lpattern(dash)) ///
   caption(Re: Figure 6. Per-cap cig sales gaps in California & placebo gaps in 29 control states)
. graph export synth30.png, replace
(file synth30.png written in PNG format)
 * <image src="synth30.png" width="358" height="300">



**Figure 7 (19 control states)

. drop tte_20 tte_21 tte_22 tte_25 tte_23 tte_24 tte_26 tte_27 tte_28
. local lp
. forval i=1/19 {
      local lp `lp' line tte_`i' years, lcolor(gs12) || 
   }
. twoway `lp' || line tte_3 years, lcolor(black) lwidth(medium) text(-40 1984 "Passage of Proposition 99 --->", size(*0.75)) ///
   legend(off) yline(0, lcolor(black) lwidth(thick) lpattern(dash)) xline(1989, lwidth(medium) lpattern(dash)) ///
   caption(Re: Figure 7. Per-cap cig sales gaps in California & placebo gaps in 19 control states)
. graph export synth19.png, replace
(file synth19.png written in PNG format)
** <image src="synth19.png" width="358" height="300">



. log close 
      name:  <Solomon Negash>
       log:  ~\myReplications\synthetic-control\synthdid.smcl
  log type:  smcl
 closed on:  16 Dec 2018, 18:24:21
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