Context-dependent Causality (the Non-Nonotonic Case)

Nir Billfeld, Moshe Kim

arXiv 7 Apr 2024 · Econometrics

arXiv:2404.05021 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We develop a novel identification strategy as well as a new estimator for context-dependent causal inference in non-parametric triangular models with non-separable disturbances. Departing from the common practice, our analysis does not rely on the strict monotonicity assumption. Our key contribution lies in leveraging on diffusion models to formulate the structural equations as a system evolving from noise accumulation to account for the influence of the latent context (confounder) on the outcome. Our identifiability strategy involves a system of Fredholm integral equations expressing the distributional relationship between a latent context variable and a vector of observables. These integral equations involve an unknown kernel and are governed by a set of structural form functions, inducing a non-monotonic inverse problem. We prove that if the kernel density can be represented as an infinite mixture of Gaussians, then there exists a unique solution for the unknown function. This is a significant result, as it shows that it is possible to solve a non-monotonic inverse problem even when the kernel is unknown. On the methodological front we leverage on a novel and enriched Contaminated Generative Adversarial (Neural) Networks (CONGAN) which we provide as a solution to the non-monotonic inverse problem.

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