Optimal treatment assignment of a threshold-based policy: empirical protocol and related issues

In the footsteps of the recent literature on empirical welfare maximization, this article wants to contribute by stressing the policy-maker empirical perspective and related issues arising when carrying out optimal policy assignment in practice. By focusing on the class of threshold-based policies, we first set out the theoretical underpinnings of the policy-maker selection problem, to then offer a solution to this via an implementation protocol applied to the popular LaLonde training programme database. This article traces a general application procedure and discusses, in particular, problems of angle solution typically arising in real applications of optimal policy assignment.