Panel Data Propensity Score Matching

Panel data propensity score matching combines the bias-reduction of PSM with the longitudinal structure of panel data, enabling causal estimation of treatment effects by matching treated and control units on observable pre-treatment characteristics and then differencing within matched pairs over time. Developed in the framework of Heckman, Ichimura, and Todd (1998), it is especially valuable when randomisation is infeasible and both selection on observables and time-varying confounding must be addressed simultaneously.