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Identification and Estimation of Causal Mechanisms and Net Effects of a Treatment under Unconfoundedness

  • Flores, Carlos A.

    ()

    (California Polytechnic State University)

  • Flores-Lagunes, Alfonso

    ()

    (Syracuse University)

An important goal when analyzing the causal effect of a treatment on an outcome is to understand the mechanisms through which the treatment causally works. We define a causal mechanism effect of a treatment and the causal effect net of that mechanism using the potential outcomes framework. These effects provide an intuitive decomposition of the total effect that is useful for policy purposes. We offer identification conditions based on an unconfoundedness assumption to estimate them, within a heterogeneous effect environment, and for the cases of a randomly assigned treatment and when selection into the treatment is based on observables. Two empirical applications illustrate the concepts and methods.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4237.

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Length: 41 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4237
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  1. Manski, C.F., 1989. "Nonparametric Bounds On Treatment Effects," Working papers 8909, Wisconsin Madison - Social Systems.
  2. Rajeev H. Dehejia & Sadek Wahba, 1998. "Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs," NBER Working Papers 6586, National Bureau of Economic Research, Inc.
  3. Currie, Janet & Neidell, Matthew, 2007. "Getting inside the "Black Box" of Head Start quality: What matters and what doesn't," Economics of Education Review, Elsevier, vol. 26(1), pages 83-99, February.
  4. Ronald G. Ehrenberg & George Jakubson & Jeffrey Groen & Eric So & Joseph Price, 2006. "Inside the Black Box of Doctoral Education: What Program Characteristics Influence Doctoral Students' Attrition and Graduation Probabilities?," NBER Working Papers 12065, National Bureau of Economic Research, Inc.
  5. Donald B. Rubin, 2005. "Causal Inference Using Potential Outcomes: Design, Modeling, Decisions," Journal of the American Statistical Association, American Statistical Association, vol. 100, pages 322-331, March.
  6. Guido Imbens, 2000. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," Econometric Society World Congress 2000 Contributed Papers 1166, Econometric Society.
  7. Lorraine Dearden & Javier Ferri & Costas Meghir, 2002. "The Effect Of School Quality On Educational Attainment And Wages," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 1-20, February.
  8. Flores-Lagunes, Alfonso & Gonzalez, Arturo & Neumann, Todd C., 2005. "Learning but Not Earning? The Value of Job Corps Training for Hispanic Youths," IZA Discussion Papers 1638, Institute for the Study of Labor (IZA).
  9. Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers 0118, National Bureau of Economic Research, Inc.
  10. Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, vol. 74(1), pages 235-267, 01.
  11. repec:oup:restud:v:65:y:1998:i:2:p:261-94 is not listed on IDEAS
  12. Pagan,Adrian & Ullah,Aman, 1999. "Nonparametric Econometrics," Cambridge Books, Cambridge University Press, number 9780521586115, 1.
  13. Dan A. Black & Jeffrey Smith, 2003. "How Robust is the Evidence on the Effects of College Quality? Evidence From Matching," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20033, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
  14. Guido W. Imbens, 2009. "Better LATE Than Nothing: Some Comments on Deaton (2009) and Heckman and Urzua (2009)," NBER Working Papers 14896, National Bureau of Economic Research, Inc.
  15. David Card & Dean R. Hyslop, 2005. "Estimating the Effects of a Time-Limited Earnings Subsidy for Welfare-Leavers," Econometrica, Econometric Society, vol. 73(6), pages 1723-1770, November.
  16. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
  17. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
  18. Bruce D. Meyer, 1995. "Lessons from the U.S. Unemployment Insurance Experiments," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 91-131, March.
  19. Mealli, Fabrizia & Rubin, Donald B., 2003. "Assumptions allowing the estimation of direct causal effects," Journal of Econometrics, Elsevier, vol. 112(1), pages 79-87, January.
  20. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  21. Douglas Almond & Kenneth Y. Chay & David S. Lee, 2005. "The Costs of Low Birth Weight," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 1031-1083.
  22. Jinyong Hahn, 1998. "On the Role of the Propensity Score in Efficient Semiparametric Estimation of Average Treatment Effects," Econometrica, Econometric Society, vol. 66(2), pages 315-332, March.
  23. repec:oup:restud:v:64:y:1997:i:4:p:487-535 is not listed on IDEAS
  24. Lars Skipper & Marianne Simonsen, 2006. "The costs of motherhood: an analysis using matching estimators," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(7), pages 919-934.
  25. Donald B. Rubin, 2004. "Direct and Indirect Causal Effects via Potential Outcomes," Scandinavian Journal of Statistics, Danish Society for Theoretical Statistics;Finnish Statistical Society;Norwegian Statistical Association;Swedish Statistical Association, vol. 31(2), pages 161-170.
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