Faculty of Economics and Business Administration Publications Database

Comparing methods to separate treatment from self-selection effects in an online banking setting

Gensler, Sonja
Leeflang, Peter
Volume: 66
Number: 9
Pages: 1272 - 1278
Month: September
ISSN-Print: 0148-2963
Link External Source: Online Version
Year: 2013
Keywords: Self-selection effects; Matching methods; Instrumental variables method; Control function method; Online use
Abstract: The literature discusses several methods to control for self-selection effects but provides little guidance on which method to use in a setting with a limited number of variables. The authors theoretically compare and empirically assess the performance of different matching methods and instrumental variable and control function methods in this type of setting by investigating the effect of online banking on product usage. Hybrid matching in combination with the Gaussian kernel algorithm outperforms the other methods with respect to predictive validity. The empirical finding of large self-selection effects indicates the importance of controlling for these effects when assessing the effectiveness of marketing activities.