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Identifying causal mechanisms in experiments (primarily) based on inverse probability weighting

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  • Huber, Martin

Abstract

This paper demonstrates the identification of causal mechanisms in experiments with a binary treatment, (primarily) based on inverse probability weighting. I.e., we consider the average indirect effect of the treatment, which operates through an intermediate variable (or mediator) that is situated on the causal path between the treatment and the outcome, as well as the (unmediated) direct effect. Even under random treatment assignment, subsequent selection into the mediator is generally non-random such that causal mechanisms are only identified when controlling for confounders of the mediator and the outcome. To tackle this issue, units are weighted by the inverse of their conditional treatment propensity given the mediator and observed confounders. We show that the form and applicability of weighting depend on whether the confounders are themselves influenced by the treatment or not. A simulation study gives the intuition for these results and an empirical application to the direct and indirect health effects (through employment) of the U.S. Job Corps program is also provided.

Suggested Citation

  • Huber, Martin, 2012. "Identifying causal mechanisms in experiments (primarily) based on inverse probability weighting," Economics Working Paper Series 1213, University of St. Gallen, School of Economics and Political Science, revised May 2013.
  • Handle: RePEc:usg:econwp:2012:13
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    File URL: http://ux-tauri.unisg.ch/RePEc/usg/econwp/EWP-1213.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Chlond, Bettina & Gavard, Claire & Jeuck, Lisa, 2021. "Supporting residential energy conservation under constrained public budget: Cost-effectiveness and redistribution analysis of public financial schemes in France," ZEW Discussion Papers 21-056, ZEW - Leibniz Centre for European Economic Research.
    2. Markus Frölich & Martin Huber, 2017. "Direct and indirect treatment effects–causal chains and mediation analysis with instrumental variables," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 79(5), pages 1645-1666, November.
    3. Martin Huber & Michael Lechner & Giovanni Mellace, 2016. "The Finite Sample Performance of Estimators for Mediation Analysis Under Sequential Conditional Independence," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 34(1), pages 139-160, January.
    4. Martin Huber & Michael Lechner & Giovanni Mellace, 2017. "Why Do Tougher Caseworkers Increase Employment? The Role of Program Assignment as a Causal Mechanism," The Review of Economics and Statistics, MIT Press, vol. 99(1), pages 180-183, March.
    5. Bettina Chlond & Claire Gavard & Lisa Jeuck, 2023. "How to Support Residential Energy Conservation Cost-Effectively? An analysis of Public Financial Schemes in France," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 85(1), pages 29-63, May.
    6. Frank Nagle, 2019. "Open Source Software and Firm Productivity," Management Science, INFORMS, vol. 65(3), pages 1191-1215, March.
    7. Eva Deuchert & Martin Huber, 2017. "A Cautionary Tale About Control Variables in IV Estimation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(3), pages 411-425, June.
    8. Giovanni Mellace & Alessandra Pasquini, 2019. "Identify More, Observe Less: Mediation Analysis Synthetic Control," CEIS Research Paper 474, Tor Vergata University, CEIS, revised 20 Nov 2019.
    9. Martin Huber, 2015. "Causal Pitfalls in the Decomposition of Wage Gaps," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 33(2), pages 179-191, April.
    10. Mellace, Giovanni & Pasquini, Alessandra, 2019. "Identify More, Observe Less: Mediation Analysis: Mediation Analysis Synthetic Control," Discussion Papers on Economics 12/2019, University of Southern Denmark, Department of Economics.
    11. Hofer, Katharina E., 2015. "Does Female Suffrage Increase Public Support for Government Spending? Evidence from Swiss Ballots," Economics Working Paper Series 1502, University of St. Gallen, School of Economics and Political Science.
    12. repec:hhs:ifauwp:2025_012 is not listed on IDEAS

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    More about this item

    Keywords

    Causal mechanisms; mediation analysis; direct and indirect effects; experiment; inverse probability weighting;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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