This document aims to provide a Toolbox for the use of Counterfactual Impact Evaluation (CIE) methods in the case of regional State aid interventions. In particular, it seeks to assist Member States (MS) policy officers that are in charge of writing Terms of Reference for the tendering out of Evaluation reports of State aid schemes.

The Toolbox does not discuss in rigorous terms the statistical methods that are generally employed in State aid evaluations. Rather, it seeks to provide a practical introduction to a few issues that require attention at the Terms of Reference stage especially by means of practical examples. In particular, the Toolbox focuses on the major milestones that characterize Evaluation reports and that, therefore, should be included also in the Terms of Reference.
The Toolbox discusses the intervention logic of the State aid schemes, the distinction between direct and indirect effects, the concept of proportionality and appropriateness of the intervention, as well as the extent to which it is possible to measure them, in relation to the existence of certain types of data and to the conditions for applying statistical tools.

Then, the Toolbox presents the conditions under which it is possible to select an appropriate control group, i.e. a group of observational units (regions, firms or individuals) that are not subject to the intervention and to which aided units are compared. In particular, the toolbox helps identify those specific characteristics of the intervention that might ease the application of definite statistical methods and that are relatively more likely to identify the causal effect of the intervention. It is important to realize that certain methods, though preferable to others from a theoretical point of view, may not be feasible, unless specific data are available and/or given characteristics of the intervention apply in the specific case at hand.