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Optimal selection of the number of control units in kNN algorithm to estimate average treatment effects

Andrés Ramírez-Hassan, Raquel Vargas-Correa, Gustavo García, Daniel Londoño

arXiv 14 Aug 2020 · Econometrics

arXiv:2008.06564 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We propose a simple approach to optimally select the number of control units in k nearest neighbors (kNN) algorithm focusing in minimizing the mean squared error for the average treatment effects. Our approach is non-parametric where confidence intervals for the treatment effects were calculated using asymptotic results with bias correction. Simulation exercises show that our approach gets relative small mean squared errors, and a balance between confidence intervals length and type I error. We analyzed the average treatment effects on treated (ATET) of participation in 401(k) plans on accumulated net financial assets confirming significant effects on amount and positive probability of net asset. Our optimal k selection produces significant narrower ATET confidence intervals compared with common practice of using k=1.

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15
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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
1Athey, S., Imbens, G., and Ramachandra, V (2015) Machine learning methods for estimating heterogeneous causal effects0.8434375%
2Abadie, A. and Imbens, G (2006) Large sample properties of matching estimators for average treatment effects0.8115280%
3Hastie, T., Tibshirani, R., and Friedman, J (2009) The Elements of Statistical Learning Data Mining, Inference, and Prediction0.73732100%
4Abadie, A. and Imbens, G (2016) Matching on the estimated propensity score0.64422100%
5Cameron, C. and Trivedi, K (2005) Microeconometrics: Methods and Applications0.64422100%
6Otsu, T. and Rai, Y (2017) Bootstrap inference of matching estimators for average treatment effects0.58531100%
7Rosenbaum, P. R. and Rubin, D. B (1983) The central role of the propensity score in observational studies for causal effects0.58531100%
8Abadie, A. and Imbens, G (2011) Bias-corrected matching estimators for average treatment effects0.5112250%
9Benjamin, D (2003) Does 401(k) eligibility increase savings? Evidence from propensity score subclassification0.51121100%
10Conley, T., Hansen, C., and Rossi, P (2012) Plausibly exogenous0.51121100%

Showing the top 10 of 15 scored citations.