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An Exact and Robust Conformal Inference Method for Counterfactual and Synthetic Controls

Victor Chernozhukov, Kaspar Wüthrich, Yinchu Zhu

arXiv 25 Dec 2017 · Econometrics · publishedJournal of the American Statistical Association (2021) · 159 citations (OpenAlex)

arXiv:1712.09089 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We introduce new inference procedures for counterfactual and synthetic control methods for policy evaluation. We recast the causal inference problem as a counterfactual prediction and a structural breaks testing problem. This allows us to exploit insights from conformal prediction and structural breaks testing to develop permutation inference procedures that accommodate modern high-dimensional estimators, are valid under weak and easy-to-verify conditions, and are provably robust against misspecification. Our methods work in conjunction with many different approaches for predicting counterfactual mean outcomes in the absence of the policy intervention. Examples include synthetic controls, difference-in-differences, factor and matrix completion models, and (fused) time series panel data models. Our approach demonstrates an excellent small-sample performance in simulations and is taken to a data application where we re-evaluate the consequences of decriminalizing indoor prostitution. Open-source software for implementing our conformal inference methods is available.

Citation extraction

84
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206
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distinct cited
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Cunningham, S. and Shah, M (2018) Decriminalizing indoor prostitution: Implications for sexual violence and public health0.97112592%
2Doudchenko, N. and Imbens, G. W (2016) Balancing, regression, difference-in-differences and synthetic control methods: A synthesis0.9507386%
3Abadie, A., Diamond, A., and Hainmueller, J (2010) Synthetic control methods for comparative case studies: Estimating the effect of californias tobacco control program0.9507386%
4Abadie, A., Diamond, A., and Hainmueller, J (2015) Comparative politics and the synthetic control method0.8435460%
5Andrews, D. W (2003) End-of-sample instability tests0.82212283%
6Athey, S., Bayati, M., Doudchenko, N., Imbens, G., and Khosravi, K (2018) Matrix completion methods for causal panel data models0.81142100%
7Lei, J., G'Sell, M., Rinaldo, A., Tibshirani, R. J., and Wasserman, L (2018) Distribution-free predictive inference for regression0.7375540%
8Gobillon, L. and Magnac, T (2016) Regional policy evaluation: Interactive fixed effects and synthetic controls0.73732100%
9Hsiao, C., Steve Ching, H., and Ki Wan, S (2012) A panel data approach for program evaluation: Measuring the benefits of political and economic integration of hong kong with mai…0.73732100%
10Li, K. T. and Bell, D. R (2017) Estimation of average treatment effects with panel data: Asymptotic theory and implementation0.73732100%

Showing the top 10 of 84 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Do We Exploit all Information for Counterfactual Analysis? Benefits of Factor Models and Idiosyncratic Correction1.000165
2Debiasing and $t$-tests for synthetic control inference on average causal effects1.00094
3Real-time Program Evaluation using Anytime-valid Rank Tests*1.00083
4Synthetic learner: Model-Free Inference on Treatments over Time1.00063
5Prediction Intervals for Synthetic Control Methods1.00065
6Asymptotically Unbiased Synthetic Control Methods by Moment Matching1.00063
7Distributionally Robust Synthetic Control: Ensuring Robustness Against Highly Correlated Controls and Weight Shifts0.94164
8On the relationship between prediction intervals, tests of sharp nulls and inference on realized treatment effects in settings with few treated units0.92843
91909.039680.87462
10A Method of Moments Approach to Asymptotically Unbiased Synthetic Controls0.87462