13 February 2007
I've decided to start a little series of entries under the header `Adventures in Identification.' The title is inspired by the increasing trend in the social sciences, in particular economics, public health, also political science, sociology, etc. to look for natural or quasi-experiments to identify causal effects in observational settings. Although there are of course plenty of bad examples of this type of study, I think the general line of research is very promising and the rising interest in issues of identification is commendable. Natural experiments often provide the only credible alternative to answer many of the questions we care about in the social sciences, where real experiments are often unethical or infeasible (or both) and observational data usually has selection bias written all over it. Enough said, let's jump right into the material: `Adventures in Identification I: Voting After the Bomb -- a Macabre Natural Experiments in electoral politics.
A recent question in political science and also economics is how terrorism effects democratic elections. Now clearly this seems a fairly tricky question to get some (identification) handle on. Heretic graduate students riding on their Rubin horses around IQSS will tell you two minutes into your talk that you can't just run a regression and call it `causal.' One setting where an answer may be (partly) possible is the case of the Spanish congressional elections in 2004. The incumbent conservative party led by Prime Minister Jose Maria Aznar had been favored to win by a comfortable margin according to opinion polls. On March 11, however, Islamic terrorists deposited nine backpacks full of explosive in several commuter trains in Madrid. The explosions killed 191 people and wounded 1,500. Three days later Spain's socialists under the lead of Jose-Luis Rodriguez Zapatero scored a stunning victory in the elections. Turnout was high and many have argued that voters seemingly expressed anger with the government, accusing it of provoking the Madrid attacks by supporting the U.S.-led war in Iraq, which most Spaniards opposed.
Now the question is how (if at all) the terrorist attacks affected the election result. As usual, only one potential outcome is observed and the crucial question is what the election results would have been like in the absence of the attacks. One could do a simple before and after study imputing this missing potential outcome based on some extrapolated pre-attacks trend in opinion polls. But then the question remains whether these opinion polls are an accurate representation of how people would have voted on election day. A difference-in-differences design seems better suited, but given that the attacks probably affected all voters a control group is hard to come by.
In a recent paper, Jose G. Montalvo, actually found a control group. Turns out that at the time the attacks hit, Spanish residents abroad had already cast their absentee ballots. Thus, they were not affected in their decision by the attacks. The author then sets up a diff-in-diffs exploiting voting trends in the treated group (Spanish residents) and the control group (Spanish citizens in a foreign country). He finds that the attacks had a large effect on the result to the benefit of the opposition party. Interestingly, this result seems to be different from the findings of other simple before and after studies on the topic (although I can't say because I have not read the other papers cited).
Of course, the usual disclaimers about DID estimates apply. Differential trends between the groups may exist if foreign residents perceived terrorism differently than Spanish residents over time. Foreign residents are probably very different than Spanish residents. But to the defense of the author, the results seem fairly robust given the checks he presents. And hey, it's a though question to ask and this provides a more appropriate way to get a handle on identifying the counterfactual outcome then simply comparing before and after.