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Imputation of Counterfactual Outcomes when the Errors are Predictable

Silvia Goncalves, Serena Ng

arXiv 12 Mar 2024 · Econometrics · publishedJournal of Business and Economic Statistics (2024) · 4 citations (OpenAlex)

arXiv:2403.08130 · PDF · DOI · OpenAlex · Extracted main text

Abstract

A crucial input into causal inference is the imputed counterfactual outcome. Imputation error can arise because of sampling uncertainty from estimating the prediction model using the untreated observations, or from out-of-sample information not captured by the model. While the literature has focused on sampling uncertainty, it vanishes with the sample size. Often overlooked is the possibility that the out-of-sample error can be informative about the missing counterfactual outcome if it is mutually or serially correlated. Motivated by the best linear unbiased predictor (\blup) of \citet{goldberger:62} in a time series setting, we propose an improved predictor of potential outcome when the errors are correlated. The proposed \pup\; is practical as it is not restricted to linear models, can be used with consistent estimators already developed, and improves mean-squared error for a large class of strong mixing error processes. Ignoring predictability in the errors can distort conditional inference. However, the precise impact will depend on the choice of estimator as well as the realized values of the residuals.

Citation extraction

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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
1Goldberger (1962) Best Linear Unbiased Prediction in the Generalized Linear Regression Model1.00054100%
2Fan, Masini, and Medeiros (2022) Do We Exploit All Information for Counterfactual Analysis? Benefits of Factor Models and Idiosyncractic Correction0.84333100%
3Bai and Ng (2021) Matrix Completion, Counterfactuals, and Factor Analysis of Missing Data0.81142100%
4Chernozhukov, Wüthrich, and Zhu (2021) An Exact and Robust Conformal Inference Method for Counterfactual and Synthetic Controls0.73732100%
5Ferman and Pinto (2021) Synthetic Controls with Imperfect Pretreatment Fit0.51121100%
6Arkhangelsky, Athey, Hirshberg, Imbens, and Wager (2021) Syntheticx Difference-in-Differences0.51121100%
7Abadie, Diamond, and Hainmueller (2010) Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program0.40511100%
8Abadie and Gardeazabal (2003) The Economic Costs of Conflict: A Case Study of the Basque Country0.40511100%
9Athey, Bayati, Doudchenko, Imbens, and Khosravi (2021) Matrix Completion Methods for Causal Panel Data Models0.40511100%
10Baltagi (2013) Panel Data Forecasting0.40511100%

Showing the top 10 of 31 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
1Inference with few treated units0.87452
2Difference-in-differences with as few as two cross-sectional units – A new perspective to the democracy–growth debate0.00022