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PreprintCC BY 4.0arXiv

Compositional Synthetic Controls

Abstract

When applying synthetic control to compositional outcomes (budget, vote shares), researchers commonly minimize Euclidean distances between raw shares. I propose constructing synthetic controls in Aitchison geometry, using centered log-ratio coordinates to select donor weights and form counterfactuals. This approach respects proportional comparisons and is exactly invariant to common multiplicative changes in relative odds. Under a multinomial-choice model, its weights summarize similarity in relative utility indices. Monte Carlo simulations, including a CES allocation model, show that this method performs better when relative incentives determine shares. An application to U.S. school finance demonstrates that this choice can alter reported inference.

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BibTeX
@misc{boussim2026compositional,
  title = {{Compositional Synthetic Controls}},
  author = {Onil Boussim},
  howpublished = {arXiv},
  year = {2026},
  month = sep,
  doi = {10.48550/arxiv.2607.16991},
  eprint = {2607.16991},
  archivePrefix = {arXiv},
  url = {https://arxiv.org/abs/2607.16991},
  note = {CC BY 4.0},
}
RIS
TY  - UNPB
TI  - Compositional Synthetic Controls
AU  - Onil Boussim
PY  - 2026
DA  - 2026/09/17
PB  - arXiv
DO  - 10.48550/arxiv.2607.16991
UR  - https://arxiv.org/abs/2607.16991
AB  - When applying synthetic control to compositional outcomes (budget, vote shares), researchers commonly minimize Euclidean distances between raw shares. I propose constructing synthetic controls in Aitchison geometry, using centered log-ratio coordinates to select donor weights and form counterfactuals. This approach respects proportional comparisons and is exactly invariant to common multiplicative changes in relative odds. Under a multinomial-choice model, its weights summarize similarity in relative utility indices. Monte Carlo simulations, including a CES allocation model, show that this method performs better when relative incentives determine shares. An application to U.S. school finance demonstrates that this choice can alter reported inference.
ER  -