In my experience, it depends on your site and your audience.

On one of my sites, I'm fairley certain I get few female visitors. For some reason I was seeing a high occurrence of women's clothing, purses, jewelery and fashion ads. I suspected they were lowbidding ads since the site is niche with a small topic related publisher inventory.

After blocking the related categories, I saw CPC immediately improve.

Yep. It does depend.

I've only ever seen numbers drop when blocking categories.

After blocking the related categories, I saw CPC immediately improve.

I caution anyone from making attribution of this type with AdSense. Earnings are highly variable on the best of days, it is nearly impossible to attribute any change in earnings or earning related metrics such as CPC/CTR or RPM to a specific action.

You can easily test blocking categories with the A-B testing feature in Optimizations - Experiments. It is easy to setup. I'm still not certain that it will be fully accurate as demand and supply by category varies over time (seasonality) but it should give you a pretty good idea and prevent you from making any decision errors.

All this said, I don't disagree with Keyplyr's statement. I have also see many low quality shopping ads for women's clothing and apparel. I am certain that these advertisers are bottom fishing or low bidding. My opinion is that this is best addressed by using the Ad-Balancer feature as it does not discriminate on ad category. It simply blocks but does not replace the lowest bidding ads. Remember that Adsense is auction based. Blocking ads will result in the next highest bid (but still lower bid) to appear in its place. If demand is low and many of these low-bid ads are appearing simply blocking the particular ads such that they can replaced with others will likely not result in better ads but worse ads appearing and lower earnings. Ad-Balancer suppresses supply to better match demand thus keeping prices stable.

I have blocked some categories, such as beauty and dieting products as the ads were almost all very spammy. The ads consumed relatively many impressions but contributed very little in terms of income. I doubt that the blocking improved my earnings directly but blocking spam ads is required to protect my brand and websites reputation and this certainly has a positive impact on earnings in long run.

Alright, thank you. I was worried that if I did block ads it would decrease the overall bids. If I were to block any ads, should it be the lowest paying ads or the ones I earn the least from?

. If I were to block any ads, should it be the lowest paying ads or the ones I earn the least from?

There is no way to know what specific ad are paying, that I am aware of. I assume you don't me ad but category.

You can get an idea of RPM by category. For each category you are given % of total impressions and % of total earnings.

[(% of total earnings * total earnings) / (% of total impressions * total impression) ] * 1000 = RPM for the specific category.

Side note: the categories are not mutually exclusive (i.e: one ad can be in many categories) so if one sums the % of impressions for all the category one will arrive at a number greater than 100%.

Now to answer the question, as I mentioned in my post above I would block ads with ad-balancer first and then block ads or category of ads only if they are consistently spammy. I would base my decision on the spamminess (is that even a word). Basing yourself on RPM is not recommended, as I explained the system is auction based so it is very unlikely that blocking will produce better earnings outcome than not blocking.

If you block the ads that pay the least but still get many impressions, you will reduce demand and it will result in lower prices.
If you block the ads that pay the least but still get few impressions, you wont reduce demand by much but it is unlikely to make any significant difference.
You obviously don't want to block the ads that pay the most and get many impressions, those are your cash cows.
You don't want block the ads that pay the most but get few impressions as these are exactly the ads you would like to get more of.
Conclusion, blocking ads based on earnings(RPM) cannot produce a better result than not blocking.