A Matching Estimator Based on a Bilevel Optimization Problem
This paper proposes a novel matching estimator where neighbors used and weights are endogenously determined by optimizing a covariate balancing criterion. The estimator is based on finding, for each unit that needs to be matched, sets of observations such that a convex combination of them has the same covariate values as the unit needing matching or with minimized distance between them. We implement the proposed estimator with data from the National Supported Work…