Abstract

This paper defends the use of quasi-experiments for causal estimation in economics against the widespread objection that quasi-experimental estimates lack external validity. The defence is that quasi-experimental replication of estimates can yield defeasible evidence for external validity. The paper then develops a different objection. The stable unit treatment value assumption, on which quasi-experiments rely, is argued to be implausible due to the influence of social interaction effects on economic outcomes. A more plausible stable marginal unit treatment value assumption is proposed, but it is demonstrated to severely limit the usefulness of quasi-experiments for economic policy evaluation.