Social Impact Evaluation. VOLUME II. Use of STATA with Methods: Instrumental Variable Estimation and Regression Discontinuity

In the business and industrial world, the design and implementation of projects usually consider the economic, financial, and even political or environmental impact when introducing innovations. However, in the first twenty years of the 21st century, various events have demonstrated that the evaluation of social impact in generating well-being is of vital importance. In fact, in the times of the new normal expected in the post-COVID-19 era, this becomes particularly relevant since all policies and actions issued by companies and governments must have the necessary approval of a social impact evaluation for the introduction of innovations.

For this reason, this work is a continuation of Volume I and is aimed at describing to both insiders and outsiders what social impact is, its characteristics, conditions, and implications, the main methods used to calculate it, as well as the opportunities that loom in the post-COVID-19 era, which demands that the resources and actions of innovation design and implementation reflect high standards of social impact that promote well-being, particularly in emerging countries.

To achieve this, this work is divided into a collection of two volumes, with Volume II covering:

Chapter 6. Instrumental Variable Estimation (IV). This chapter introduces the reader to the types of estimations, the two-stage least squares approach, what imperfect compliance and weak instruments mean in the estimates, the marginal treatment effect, and the significance of random promotion in the technique. The chapter concludes with the scope and limitations, as well as an application example in STATA.

Chapter 7. Regression Discontinuity (RD). This chapter is designed to present the theory of regression discontinuity, both sharp and fuzzy, the steps involved in its application, possible variations, the verification of the design's validity, the advantages and disadvantages of the technique, comparisons with other methods (pipeline), limitations and scope of the technique, and a checklist. An example using STATA is included.

Chapter 8. Choosing the Method to Use. Given the variety of techniques available, this chapter is designed to help the reader identify the most appropriate one by explaining the importance of determining comparison groups, the implications of prospective studies, how to create a comparison group, and the identification and prioritization of beneficiaries. This serves as a basis for comparing and supporting impact evaluation methods, determining the minimum intervention unit, and how to achieve and avoid implementation difficulties. Considering human intervention, the chapter discusses how behavior and its unintended effects intervene, the imperfection of compliance, indirect or spillover effects, and sample attrition. Design suggestions are provided, as well as considering the effects and their persistence over time. The possibility of combining various treatment options in impact evaluation at different treatment levels and adapting the evaluation of multiple interventions is also explained.

Chapter 9. Sample Selection and Data Collection Design. To support a project prospectus, this chapter provides elements for determining the sample using the most well-known sampling methods, the calculation of sample power, and the treatment vs. comparison groups. Potential errors to avoid are cited, what statistical power is and how to calculate it is defined, the meaning of clusters related to random assignment, recommendations for data collection, and how to make them indicators that measure.

Chapter 10. Project Management Guidelines for Impact Evaluation. This chapter highlights the importance of innovation projects in social impact, how society becomes more involved and participatory in the stages of innovation projects, specifies the company's social commitment, and generally outlines the UN's sustainable development goals and community capital. With this reference, the components of the impact evaluation management team are specified, suggesting how to establish collaborations and determine both a timeline and a budget for an impact evaluation project management.

Chapter 11. Social Impact Evaluation in the Post-COVID-19 Era. Finally, the work concludes with a general description of the COVID-19 phenomenon worldwide and its economic impact, international trade, and the internet. For Latin America and the Caribbean, the opportunities for social impact evaluation in the introduction of innovations in health, education, employment, poverty, and SMEs are described. The chapter concludes with a report on the post-COVID-19 world, the social impact of COVID-19 in Mexico, and the operational structure and strategies in response to COVID-19, which form the basis for introducing social impact evaluation in the introduction of innovations in the post-COVID-19 era.