The Optimal Choice of Controls and Pre-Experimental Observations

In this note we consider the optimal experimental design for cases in which the data may consist of both cross-sectional and panel observations. Our results generalize those of Aigner and Balestra (1988) on the choice of controls and pre-experimental observations by avoiding the assumption that the marginal costs of additional observations on the same unit are negligible. We derive conditions under which the panel design considered by Aigner and Balestra is nevertheless optimal as well as conditions under which reinterviews are inefficient.