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causalfe: Causal Forests with Fixed Effects in Python

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  • Harry Aytug

Abstract

The causalfe package provides a Python implementation of Causal Forests with Fixed Effects (CFFE) for estimating heterogeneous treatment effects in panel data settings. Standard causal forest methods struggle with panel data because unit and time fixed effects induce spurious heterogeneity in treatment effect estimates. The CFFE approach addresses this by performing node-level residualization during tree construction, removing fixed effects within each candidate split rather than globally. This paper describes the methodology, documents the software interface, and demonstrates the package through simulation studies that validate the estimator's performance under various data generating processes.

Suggested Citation

  • Harry Aytug, 2026. "causalfe: Causal Forests with Fixed Effects in Python," Papers 2601.10555, arXiv.org.
  • Handle: RePEc:arx:papers:2601.10555
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    File URL: http://arxiv.org/pdf/2601.10555
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    References listed on IDEAS

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    1. Mark Kattenberg & Bas Scheer & Jurre Thiel, 2023. "Causal forests with fixed effects for treatment effect heterogeneity in difference-in-differences," CPB Discussion Paper 452, CPB Netherlands Bureau for Economic Policy Analysis.
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