ECONOMIC IMPACTS OF SEMI-SUBSISTENCE FARM SUPPORT MEASURE OF LATVIAN RURAL DEVELOPMENT PROGRAMME 2007-2013

The evaluation of EU Member States' co-founded programmes was assigned particular importance in recent years. The core question to be answered in programme evaluation is whether the stated objectives are accomplished by particular intervention. Until recently, the use of 'naive' estimates was common in the evaluations of EU Member States Rural Development Programmes. The use of these estimates leads to potentially substantial selection bias resulting from using the outcomes of non-participants as a proxy for the possible outcomes of participants in the case of non-participation. The effectiveness of interventions on outcomes of interest can be better evaluated by propensity score matching (PSM). The objective of the study is to determine the net average effects from semi-subsistence farm support measure of the Latvian Rural Development Programme 2007 - 2013. To reach the research objective, propensity scores based on the most important characteristics were calculated for participants and non-participants of the measure and average treatment effects for gross value added were evaluated by matching methods. The research results show that the positive programme effects evaluated by 'naive' estimators are overestimated in comparison with the results obtained by more rigorous PSM method.